Exhibit 1.1
BEAR XXXXXXX MORTGAGE SECURITIES INC.
Mortgage Pass-Through Certificates
TERMS AGREEMENT
Dated: as of February 25, 1998
To: BEAR XXXXXXX MORTGAGE SECURITIES INC.
Re: Underwriting Agreement dated June 25, 1996
Underwriter: Bear, Xxxxxxx & Co. Inc. and First Union Capital Markets, a
division of Wheat First Securities, Inc. (collectively, the
"Underwriter")
Series Designation: Series 1998-1
Class Designation Schedule of the Certificates: Class A-1, Class A-2, Class A-3,
Class A-4, Class A-5, Class A-6, Class A-7, Class A-8, Class A-9, Class A-10,
Class A-11, Class A-12, Class A-13, Class A-14, Class A-15, Class A-16, Class
A-17, Class A-18, Class P, Class X, Class B-1, Class B-2, Class B-3, Class
2-A-1, Class 2-A-2, Class 2-A-3, Class 2-A-4, Class 2-A-5, Class 2-A-6, Class
2-A-7, Class 2-A-8, Class 2-B-1, Class 2-B-2, Class 2-B-3, Class 3-A, Class
3-B-1, Class 3-B-2, Class 3-B-3, Class R-1, Class R-2, Class R-3 and Class R-4
Certificates
Terms of the Certificates to be Purchased by the Underwriter:
Class Original Principal Amount Interest Rate
A-1 $ 49,765,000 6.15%
A-2 $ 29,066,000 6.15%
A-3 $ 10,959,000 6.20%
A-4 $ 54,926,000 6.25%
A-5 $ 49,041,000 6.35%
A-6 $ 43,048,000 6.50%
A-7 $ 5,717,000 6.65%
A-8 (1) 6.75%
A-9 $240,377,000 6.75%
A-10 $ 41,553,000 6.75%
A-11 $ 96,678,264 (2)
A-12 $ 25,064,736 (3)
A-13 $ 8,860,250 7.00%
A-14 $ 17,426,750 7.00%
A-15 $ 1,000,000 6.75%
A-16 $ 1,000,000 7.25%
A-17 $ 4,041,000 5.00%
A-18 $ 79,391,221 6.75%
P $ 269,679 (4)
X (5) (5)
B-1 $ 18,656,900 6.75%
B-2 $ 6,748,300 6.75%
B-3 $ 3,572,600 6.75%
2-A-1 $ 26,972,970 6.40%
2-A-2 $ 31,103,944 6.35%
2-A-3 $ 88,152,745 6.50%
2-A-4 $ 41,525,070 (6)
2-A-5 $ 23,718,000 (7)
2-A-6 $ 41,000,000 (7)
2-A-7 $ 19,488,000 (7)
2-A-8 $ 31,623,346 (7)
2-B-1 $ 5,850,300 (7)
2-B-2 $ 2,688,000 (7)
2-B-3 $ 1,423,000 (7)
3-A $ 43,636,450 (8)
3-B-1 $ 446,400 (8)
3-B-2 $ 156,250 (8)
3-B-3 $ 89,250 (8)
R-1 $ 50 6.75%
R-2 $ 50 6.75%
R-3 $ 50 (7)
R-4 $ 50 (8)
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(1) The notional principal amount (the "Notional Amount") of the Class A-8
Certificates on any Distribution Date will be equal to the sum of (i) the
product of (A) approximately 8.89% and (B) the Current Principal Amount of the
Class A-1 Certificates, (ii) the product of (A) approximately 8.89% and (B) the
Current Principal Amount of the Class A-2 Certificates, (iii) the product of (A)
approximately 8.15% and (B) the Current Principal Amount of the Class A-3
Certificates, (iv) the product of (A) approximately 7.41% and (B) the Current
Principal Amount of the Class A-4 Certificates, (v) the product of (A)
approximately 5.93% and (B) the Current Principal Amount of the Class A-5
Certificates, (vi) the product of (A) approximately 3.70% and (B) the Current
Principal Amount of the Class A-6 Certificates and (vii) the product of (A)
approximately 1.48% and (B) the Current Principal Amount of the Class A-7
Certificates.
(2) During the initial Interest Accrual Period, interest will accrue on the
Class A-11 Certificates at the rate of 6.49375% per annum. During each Interest
Accrual Period thereafter, interest will accrue on the Class A-11 Certificates
at a per annum rate of 0.90% above LIBOR, determined monthly as described
herein, subject to a maximum rate of 8.50% and a minimum rate of 0.90%.
(3) During the initial Interest Accrual Period, interest will accrue on the
Class A-12 Certificates at the rate of 7.738393% per annum. During each Interest
Accrual Period thereafter, interest will accrue on the Class A-12 Certificates
at a per annum rate equal to 29.31428% - (3.85714235 x LIBOR) determined monthly
as described herein, subject to a maximum rate of 29.31428% and a minimum rate
of 0.00%.
(4) The Class P Certificates are principal only Certificates and will not bear
interest.
(5) The Class X Certificates will have a Notional Amount equal to the aggregate
Scheduled Principal Balances of the Group 1 Mortgage Loans and will bear
interest on their Notional Amount at a variable Pass-Through Rate equal to the
weighted average of the excess, if any, of (a) the Net Rates on each Group 1
Mortgage Loan over (b) 6.75% per annum. The Pass-Through Rate for the Class X
Certificates for the initial Interest Accrual Period is expected to be
approximately 0.5998% per annum.
(6) During the initial Interest Accrual Period, interest will accrue on the
Class 2-A-4 Certificates at the rate of approximately 9.00% per annum. During
each Interest Accrual Period thereafter, interest will accrue on the Class 2-A-4
Certificates at a per annum rate equal to a fraction, expressed as a percentage,
the numerator of which is an amount equal to the sum of (i) the product of (A)
the weighted average of the Net Rates of the Group 2 Mortgage Loans and (B) the
Current Principal Amount of the Class 2-A-4 Certificates and (ii) the product of
(A) the excess, if any, of (x) the weighted average of the Net Rates of the
Group 2 Mortgage Loans over (y) the weighted average Pass-Through Rate of the
Class 2-A-1, Class 2-A-2 and Class 2-A-3 Certificates and (B) the aggregate
Current Principal Amounts of the Class 2-A-1, Class 2-A-2 and Class 2-A-3
Certificates, and the denominator of which is the Current Principal Amount of
the Class 2-A-4 Certificates.
(7) These Group 2 Certificates will bear interest at a variable rate equal to
the weighted average of the Net Rates of the Group 2 Mortgage Loans.
(8) All Group 3 Certificates will bear interest at a variable rate equal to the
weighted average of the Net Rates of the Group 3 Mortgage Loans.
The original principal amount of one or more Classes of Certificates
may be increased or decreased by BSMSI by up to 10%, depending upon the Mortgage
Loans actually acquired by BSMSI and delivered to the Trustee. In addition, the
original principal amount of any Class of Certificates may be adjusted, as
necessary, to obtain the required ratings on the Certificates from the Rating
Agencies. Accordingly, any investor's commitments with respect to the
Certificates may be correspondingly decreased or increased.
The Certificates purchased by the Underwriter will be offered from time to time
by the Underwriter in negotiated transactions at varying prices to be determined
at the time of sale.
Defined Terms: Terms not otherwise defined herein shall have the meanings given
to such terms in the Pooling and Servicing Agreement dated as of February 1,
1998, among Bear Xxxxxxx Mortgage Securities Inc., as seller, Norwest Bank
Minnesota, N.A., as master servicer, The Chase Manhattan Bank, as trustee.
Form of Certificates Being Purchased by the Underwriter: Book Entry except for
the Class R-1, Class R-2, Class R-3 and Class R-4 Certificates which will be in
certificated, fully registered form.
Distribution Dates: The 25th day of each month or, if such 25th day is not a
business day, the next succeeding business day commencing in March, 1998.
Certificate Rating for the Certificates Being Purchased by the Underwriters:
Rating
Class S & P Fitch
A-1 AAA AAA
A-2 AAA AAA
A-3 AAA AAA
A-4 AAA AAA
A-5 AAA AAA
A-6 AAA AAA
A-7 AAA AAA
A-8 AAAr AAA
A-9 AAA AAA
A-10 AAA AAA
A-11 AAA AAA
A-12 AAAr AAA
A-13 AAA AAA
A-14 AAA AAA
A-15 AAA AAA
A-16 AAA AAA
A-17 AAA AAA
A-18 AAA AAA
P AAAr AAA
X AAAr AAA
B-1 - AA
B-2 - A
B-3 - BBB
2-A-1 AAA AAA
2-A-2 AAA AAA
2-A-3 AAA AAA
2-A-4 AAA AAA
2-A-5 AAA AAA
2-A-6 AAA AAA
0-X-0 XXX XXX
0-X-0 XXX XXX
0-X-0 - XX
0-X-0 - A
2-B-3 - BBB
3-A AAA AAA
3-B-1 - AA
3-B-2 - A
3-B-3 - BBB
R-1 AAA AAA
R-2 AAA AAA
R-3 AAA AAA
R-4 AAA AAA
Mortgage Assets: The Mortgage Loans to be included in the Trust Fund are as
described in Annex A hereto.
Purchase Price: The aggregate purchase price payable by the Underwriter for the
Certificates covered by this Agreement will be $1,146,180,660.63 (plus
$5,980,071.96 in accrued interest).
Credit Enhancement: None other than the subordination described in the related
Prospectus Supplement.
Closing Date: February 27, 1998, 9:00 a.m., New York time.
Each Underwriter will indemnify and hold harmless any other Underwriter and each
person, if any, who controls such Underwriter within the meaning of either the
Securities Act of 1933, as amended (the "1933 Act") or the Securities Exchange
Act of 1934 (the "1934 Act") (collectively, the "Non-Indemnifying Underwriter")
from and against any and all losses, claims, damages, expenses (including
reasonable attorney's fees) or liabilities ("Liabilities"), joint or several, to
which any Non-Indemnifying Underwriter becomes subject under the 1933 Act, the
1934 Act or other federal or state statute, law or regulation, common law or
otherwise, insofar as such Liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement of a material fact contained in any
computational or other written materials mailed or otherwise transmitted by such
indemnifying Underwriter in connection with the Certificates or in any revision
or amendment thereof or supplement thereto and agrees to reimburse such Non-
Indemnifying Underwriter for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such Liability or action.
This indemnity agreement will be in addition to any liability that any
Underwriter may otherwise have.
The undersigned, as the Underwriter, agrees, subject to the terms and provisions
of the above-referenced Underwriting Agreement, which is incorporated herein in
its entirety and made a part hereof, to purchase the respective principal
amounts of the Classes of the above-referenced Series of Certificates as set
forth herein.
BEAR, XXXXXXX & CO. INC.
By: /S/ XXXXXXX XXXXX
Name: Xxxxxxx Xxxxx
Title: Senior Managing Director
FIRST UNION CAPITAL MARKETS , a division of Wheat First Securities, Inc.
By: /S/ XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
Title: Authorized Officer
Accepted:
BEAR XXXXXXX MORTGAGE SECURITIES INC.
By: /S/ XXXX XXXXXXXX
Name: Xxxx Xxxxxxxx
Title: Vice President
