Exhibit 1.1
Execution
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
SERIES 0000-X0
XXXXXXXXXXXX XXXXXXXXX
Xxxxxxxxx, Xxxxx Xxxxxxxx
May 21, 1998
Xxxxxx Brothers Inc.
Three World Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Representative of the several
Underwriters named in Schedule
II hereto
Dear Sirs:
First Union Commercial Mortgage Securities, Inc., a North Carolina
corporation (the "Company"), proposes to issue its Commercial Mortgage
Pass-Through Certificates, Series 1998-C2 (the "Certificates"), in 18 classes
(each, a "Class") as designated in the Prospectus Supplement (as defined below).
The Company further proposes to sell to the Underwriters named in Schedule II
hereto, for whom you are acting as Representative, the Certificates set forth in
Schedule I hereto (the "Underwritten Certificates") in the respective original
principal and notional amounts set forth in Schedule I. The Certificates will
represent in the aggregate the entire beneficial ownership interest in a trust
fund (the "Trust Fund") consisting primarily of a segregated pool (the "Mortgage
Pool") of mortgage loans (the "Mortgage Loans") secured by first liens on the
borrowers' fee or leasehold interests in multifamily and commercial properties
(the "Mortgaged Properties"). The Trust Fund will be created, the Certificates
will be issued and the Mortgage Pool will be serviced and administered pursuant
to a pooling and servicing agreement (the "Pooling and Servicing Agreement"), to
be dated as of the Cut-off Date among the Company, First Union National Bank, as
master servicer (the "Master Servicer"), CRIIMI MAE Services Limited
Partnership, as special servicer (the "Special Servicer") and Norwest Bank
Minnesota, National Association, as trustee (the "Trustee"). Certain of the
Mortgage Loans (the "LBHI Mortgage Loans") are owned, as of the date hereof, by
Xxxxxx Brothers Holdings Inc., doing business as Xxxxxx Capital, a division of
Xxxxxx Brothers Holdings Inc. ("LBHI"), certain other of the Mortgage Loans (the
"BofA Mortgage Loans") are owned, as of the date hereof, by Bank of America
NT&SA ("BofA") and the remainder of the Mortgage Loans (the "First Union
Mortgage Loans") are owned by First Union National Bank ("First Union"; and
together with LBHI and BofA, the "Mortgage Loan Sellers"). The Mortgage Loans
will be acquired by the Company, on
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or before the Closing Date (as hereinafter defined), pursuant to (i) in the case
of the LBHI Mortgage Loans, a mortgage loan purchase agreement (the "LBHI
Mortgage Loan Purchase Agreement"), dated as of May 1, 1998, between the Company
and LBHI, (ii) in the case of the First Union Mortgage Loans, a mortgage loan
purchase agreement (the "First Union Mortgage Loan Purchase Agreement"), dated
as of May 1, 1998, between First Union National Bank and the Company and (iii)
in the case of the BofA Mortgage Loans, a mortgage loan purchase agreement (the
"BofA Mortgage Loan Purchase Agreement"), dated as of May 1, 1998, between the
Company and BofA. The Underwritten Certificates and the Mortgage Pool are
described more fully in Schedule I hereto and in a registration statement
furnished to you by the Company.
Capitalized terms used but not otherwise defined herein shall have
the respective meanings assigned to them in the Pooling and Servicing Agreement.
1. Representations and Warranties. (I) The Company represents and
warrants to, and agrees with, each Underwriter that:
(a) The Company has filed with the Securities and Exchange
Commission (the "Commission") a registration statement (No. 333-48943) on
Form S-3 for the registration of Commercial Mortgage Pass-Through
Certificates, issuable in series, including the Underwritten Certificates,
under the Securities Act of 1933, as amended (the "1933 Act"), which
registration statement has become effective and a copy of which, as
amended to the date hereof, has heretofore been delivered to you. The
Company meets the requirements for use of Form S-3 under the 1933 Act, and
such registration statement, as amended at the date hereof, meets the
requirements set forth in Rule 415(a)(1)(x) under the 1933 Act and
complies in all other material respects with the 1933 Act and the rules
and regulations thereunder. The Company proposes to file with the
Commission, with your consent, pursuant to Rule 424 under the 1933 Act, a
supplement dated May 21, 1998 (the "Prospectus Supplement") to the
prospectus dated May 11, 1998 (the "Basic Prospectus"), relating to the
Underwritten Certificates and the method of distribution thereof, and has
previously advised you of all further information (financial and other)
with respect to the Underwritten Certificates and the Mortgage Pool to be
set forth therein. Such registration statement (No. 333-48943), including
all exhibits thereto, is referred to herein as the "Registration
Statement"; and the Basic Prospectus and the Prospectus Supplement,
together with any amendment thereof or supplement thereto authorized by
the Company prior to the Closing Date for use in connection with the
offering of the Underwritten Certificates, are hereinafter called the
"Prospectus". Any preliminary form of the Prospectus Supplement that has
heretofore been filed pursuant to Rule 424 or, prior to the effective date
of the Registration Statement, pursuant to Rule 402(a) or 424(a), is
hereinafter called a "Preliminary Prospectus Supplement". If so stated in
the Prospectus Supplement, the Company will file with the Commission
within fifteen days of the issuance of the Underwritten Certificates a
report on Form 8-K ("8-K") setting forth specific information concerning
the Mortgage Pool and the Underwritten Certificates to the extent that
such information is not set forth in the Prospectus Supplement.
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(b) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of
the date on which, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, as of the date on which any
supplement to the Prospectus Supplement is filed with the Commission, and
as of the Closing Date, (i) the Registration Statement, as amended as of
any such time, and the Prospectus, as amended or supplemented as of any
such time, complies and will comply in all material respects with the
applicable requirements of the 1933 Act and the rules and regulations
thereunder, (ii) the Registration Statement, as amended as of any such
time, does not contain and will not contain any untrue statement of a
material fact and does not omit and will not omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading, and (iii) the Prospectus, as amended or
supplemented as of any such time, does not contain and will not contain
any untrue statement of a material fact and does not omit and will not
omit to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representations
or warranties as to statements contained in or omitted from the
Registration Statement or the Prospectus or any amendment or supplement
thereto made in reliance upon and in conformity with information furnished
in writing to the Company by or on behalf of any Underwriter through you
specifically for use in the Registration Statement and the Prospectus
(such information being identified in Section 8(b)).
(c) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of North
Carolina with corporate power and authority to own, lease or operate its
properties and to conduct its business as now conducted by it and to enter
into and perform its obligations under this Agreement and the Pooling and
Servicing Agreement; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of
the ownership or leasing of property or the conduct of business.
(d) As of the date hereof, as of the date on which the Prospectus
Supplement is first filed pursuant to Rule 424 under the 1933 Act, as of
the date on which, prior to the Closing Date, any amendment to the
Registration Statement becomes effective, as of the date on which any
supplement to the Prospectus Supplement is filed with the Commission, and
as of the Closing Date, there has not and will not have been (i) any
request by the Commission for any further amendment to the Registration
Statement or the Prospectus or for any additional information, (ii) any
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threat of any
proceeding for that purpose or (iii) any notification with respect to the
suspension of the qualification of the Underwritten Certificates for sale
in any jurisdiction or any initiation or threat of any proceeding for such
purpose.
(e) This Agreement has been duly authorized, executed and delivered
by the Company, and the Pooling and Servicing Agreement, when executed and
delivered as
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contemplated hereby and thereby, will have been duly authorized, executed
and delivered by the Company; and this Agreement constitutes, and the
Pooling and Servicing Agreement, when so executed and delivered will
constitute, legal, valid and binding agreements of the Company,
enforceable against the Company in accordance with their respective terms,
except as enforceability may be limited by (i) bankruptcy, insolvency,
reorganization, receivership, moratorium or other similar laws affecting
the enforcement of the rights of creditors generally, (ii) general
principles of equity, whether enforcement is sought in a proceeding in
equity or at law, and (iii) public policy considerations underlying the
securities laws, to the extent that such public policy considerations
limit the enforceability of the provisions of this Agreement or the
Pooling and Servicing Agreement that purport to provide indemnification
from securities law liabilities.
(f) As of the Closing Date, the Underwritten Certificates and the
Pooling and Servicing Agreement will conform in all material respects to
the respective descriptions thereof contained in the Prospectus. As of the
Closing Date, the Underwritten Certificates will be duly and validly
authorized and, when duly and validly executed, authenticated and
delivered in accordance with the Pooling and Servicing Agreement to you
against payment therefor as provided herein, will be duly and validly
issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement.
(g) As of the Closing Date, each of the Mortgage Loans will meet the
criteria for selection described in the Prospectus, and on the Closing
Date the representations and warranties of the Company with respect to the
Mortgage Loans contained in the Pooling and Servicing Agreement will be
true and correct in all material respects.
(h) The Company is not in violation of its certificate of
incorporation or by-laws or in default under any agreement, indenture or
instrument the effect of which violation or default would be material to
the Company or which violation or default would have a material adverse
affect on the performance of its obligations under this Agreement or the
Pooling and Servicing Agreement. Neither the issuance and sale of the
Underwritten Certificates, nor the execution and delivery by the Company
of this Agreement or the Pooling and Servicing Agreement, nor the
consummation by the Company of any of the transactions herein or therein
contemplated, nor compliance by the Company with the provisions hereof or
thereof, does or will conflict with or result in a breach of any term or
provision of the certificate of incorporation or by-laws of the Company or
conflict with, result in a breach, violation or acceleration of, or
constitute a default under, the terms of any indenture or other agreement
or instrument to which the Company is a party or by which it or any
material asset is bound, or any statute, order or regulation applicable to
the Company of any court, regulatory body, administrative agency or
governmental body having jurisdiction over the Company.
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(i) There is no action, suit or proceeding against the Company
pending, or, to the knowledge of the Company, threatened, before any
court, arbitrator, administrative agency or other tribunal (i) asserting
the invalidity of this Agreement, the Pooling and Servicing Agreement or
the Underwritten Certificates, (ii) seeking to prevent the issuance of the
Underwritten Certificates or the consummation of any of the transactions
contemplated by this Agreement or the Pooling and Servicing Agreement,
(iii) that might materially and adversely affect the performance by the
Company of its obligations under, or the validity or enforceability of,
this Agreement, the Pooling and Servicing Agreement or the Underwritten
Certificates or (iv) seeking to affect adversely the federal income tax
attributes of the Underwritten Certificates as described in the
Prospectus.
(j) There are no contracts, indentures or other documents of a
character required by the 1933 Act or by the rules and regulations
thereunder to be described or referred to in the Registration Statement or
the Prospectus or to be filed as exhibits to the Registration Statement
which have not been so described or referred to therein or so filed or
incorporated by reference as exhibits thereto.
(k) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
offering, issuance or sale of the Underwritten Certificates pursuant to
this Agreement and the Pooling and Servicing Agreement, except such as
have been, or as of the Closing Date will have been, obtained or such as
may otherwise be required under applicable state securities laws in
connection with the purchase and offer and sale of the Underwritten
Certificates by the Underwriters and any recordation of the respective
assignments of the Mortgage Loans to the Trustee pursuant to the Pooling
and Servicing Agreement that have not been completed.
(l) The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate state, federal or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by it, and the Company has not received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
and adversely affect the condition, financial or otherwise, or the
earnings, business affairs or business prospects of the Company.
(m) Any taxes, fees and other governmental charges in connection
with the execution and delivery of this Agreement and the Pooling and
Servicing Agreement or the execution, delivery and sale of the
Underwritten Certificates (other than such federal, state and local taxes
as may be payable on the income or gain recognized therefrom) have been or
will be paid at or prior to the Closing Date.
(n) Immediately prior to the assignment of the Mortgage Loans to the
Trustee, the Company will have good title to, and will be the sole owner
of, each
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Mortgage Loan, free and clear of any pledge, mortgage, lien, security
interest or other encumbrance.
(o) Neither the Company nor the Trust Fund is, and neither the
issuance and sale of the Underwritten Certificates in the manner
contemplated by the Prospectus nor the activities of the Trust Fund
pursuant to the Pooling and Servicing Agreement will cause the Company or
the Trust Fund to be, an "investment company" or under the control of an
"investment company" as such terms are defined in the Investment Company
Act of 1940, as amended (the "Investment Company Act").
(p) Under generally accepted accounting principles ("GAAP") and for
federal income tax purposes, the Company will report the transfer of the
Mortgage Loans to the Trustee in exchange for the Underwritten
Certificates and the sale of the Underwritten Certificates to the
Underwriters pursuant to this Agreement as a sale of the interests in the
Mortgage Loans evidenced by the Underwritten Certificates. The
consideration received by the Company upon the sale of the Underwritten
Certificates to the Underwriters will constitute reasonably equivalent
value and fair consideration for the Underwritten Certificates. The
Company will be solvent at all relevant times prior to, and will not be
rendered insolvent by, the sale of the Underwritten Certificates to the
Underwriters and the transfer of the Mortgage Loans to the Trustee on
behalf of the Trust Fund. The Company is not selling the Underwritten
Certificates to the Underwriters or transferring the Mortgage Loans to the
Trustee on behalf of the Trust Fund with any intent to hinder, delay or
defraud any of the creditors of the Company.
(q) At the Closing Date, the respective classes of Underwritten
Certificates shall have been assigned ratings no lower than those set
forth in Schedule I hereto by the nationally recognized statistical rating
organizations identified in Schedule I hereto (individually and
collectively, the "Rating Agency").
(r) At the Closing Date, each of the representations and warranties
of the Company set forth in the Pooling and Servicing Agreement will be
true and correct in all material respects.
(II) Each Underwriter represents and warrants to the Company that,
as of the date hereof and as of the Closing Date, (i) such Underwriter has
complied in all material respects with all of its obligations under Section 4
hereof and (ii) with respect to all Computational Materials and ABS Term Sheets,
if any, provided by such Underwriter to the Company pursuant to Section
4(b)(iv), such Computational Materials and ABS Term Sheets are accurate in all
material respects (taking into account the assumptions explicitly set forth or
otherwise referred to in the Computational Materials or ABS Term Sheets or in
the Prospectus Supplement or the Preliminary Prospectus Supplement, and provided
that the underlying data regarding the Mortgage Loans, and the related
Mortgagors and Mortgaged Properties, provided to the Underwriters by the
Mortgage Loan Sellers is accurate and complete in all material respects) and
constitute a complete set of all Computational Materials and ABS Term Sheets
that are required to be filed with the Commission pursuant to the No-Action
Letters (as defined herein).
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2. Purchase and Sale. Subject to the terms and conditions and in
reliance upon the representations and warranties set forth herein, the Company
agrees to sell to the Underwriters, and the Underwriters agree, severally and
not jointly, to purchase from the Company, at the applicable purchase prices set
forth in Schedule I hereto, the respective principal and notional amounts of the
Underwritten Certificates set forth opposite the name of each Underwriter set
forth in Schedule II hereto, and any additional portions of the Underwritten
Certificates that any such Underwriter may be obligated to purchase pursuant to
Section 10, in all cases plus accrued interest as set forth in Schedule I.
3. Delivery and Payment. Delivery of and payment for the
Underwritten Certificates shall be made in the manner, at the location(s), on
the date and at the time specified in Schedule I hereto (or such later date not
later than ten business days after such specified date as you shall designate),
which date and time may be changed by agreement between you and the Company or
as provided in Section 10 hereof (such date and time of delivery and payment for
the Underwritten Certificates being herein called the "Closing Date"). Delivery
of the Underwritten Certificates shall be made either directly to you or through
the facilities of The Depository Trust Company ("DTC"), as specified in Schedule
I hereto, for the respective accounts of the Underwriters against payment by the
respective Underwriters through you of the purchase price therefor in
immediately available funds wired to such bank as may be designated by the
Company, or such other manner of payment as may be agreed upon by the Company
and you. Any Class of Underwritten Certificates to be delivered through the
facilities of DTC shall be represented by one or more global Certificates
registered in the name of Cede & Co., as nominee of DTC, which global
Certificate(s) shall be placed in the custody of DTC not later than 10:00 a.m.
(New York City time) on the Closing Date pursuant to a custodial arrangement to
be entered into between the Trustee or its agent and DTC. Unless delivered
through the facilities of DTC, the Underwritten Certificates shall be in fully
registered certificated form, in such denominations and registered in such names
as you may have requested in writing not less than one full business day in
advance of the Closing Date.
The Company agrees to have the Underwritten Certificates, including
the global Certificates representing the Underwritten Certificates to be
delivered through the facilities of DTC, available for inspection, checking and,
if applicable, packaging by you in New York, New York, not later than the close
of business (New York City time) on the business day preceding the Closing Date.
References herein, including, without limitation, in the Schedules
hereto, to actions taken or to be taken following the Closing Date with respect
to any Underwritten Certificates that are to be delivered through the facilities
of DTC shall include, if the context so permits, actions taken or to be taken
with respect to the interests in such Certificates as reflected on the books and
records of DTC.
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4. Offering by Underwriters.
(a) It is understood that the Underwriters propose to offer the
Underwritten Certificates for sale to the public, including, without
limitation, in and from the State of New York, as set forth in the
Prospectus Supplement. It is further understood that the Company, in
reliance upon an exemption from the Attorney General of the State of New
York to be granted pursuant to Policy Statement 104 and 105, has not and
will not file the offering pursuant to Section 352-e of the General
Business Law of the State of New York with respect to the Underwritten
Certificates which are not "mortgage related securities" as defined in the
1934 Act (as defined below). Each of the Underwriters therefore covenants
and agrees with the Company that sales of the Class C, D and E
Certificates made by such Underwriter in and from the State of New York
will be made only to institutional investors within the meaning of Policy
Statement 105.
(b) Each Underwriter may prepare and provide to prospective
investors certain Computational Materials, Structural Term Sheets or
Collateral Term Sheets in connection with its offering of the
Certificates, subject to the following conditions:
(i) Such Underwriter shall comply with the requirements of the
no-action letter, dated May 20, 1994, issued by the Commission to
Xxxxxx, Peabody Acceptance Corporation I, Xxxxxx, Xxxxxxx & Co.
Incorporated and Xxxxxx Structured Asset Corporation, as made
applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association, dated
May 25, 1994 (collectively, the "Xxxxxx/PSA Letter"), and the
requirements of the no-action letter, dated February 17, 1995,
issued by the Commission to the Public Securities Association (the
"PSA Letter" and, together with the Xxxxxx/PSA Letter, the
"No-Action Letters").
(ii) For purposes hereof, "Computational Materials" shall have
the meaning given such term in the No-Action Letters, but shall
include only those Computational Materials that have been prepared
or delivered to prospective investors by or at the direction of such
Underwriter. For purposes hereof, "ABS Term Sheets," "Structural
Term Sheets" and "Collateral Term Sheets" shall have the meanings
given such terms in the PSA Letter but shall include only those ABS
Term Sheets, Structural Term Sheets or Collateral Term Sheets that
have been prepared for or delivered to prospective investors by or
at the direction of such Underwriter.
(iii) All Computational Materials and ABS Term Sheets provided
to prospective investors shall bear a legend in a form previously
approved by the Company or its counsel.
(iv) Such Underwriter shall not distribute any such
Computational Materials or ABS Term Sheets unless the forms and
methodology thereof are in accordance with this Agreement. Such
Underwriter shall provide to the
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Company, for filing on Form 8-K as provided in Section 5(g), copies
(in such format as required by the Company) of all Computational
Materials and ABS Term Sheets. The Underwriter may provide copies of
the foregoing in a consolidated or aggregated form including all
information required to be filed. All Computational Materials and
ABS Term Sheets described in this subsection (iv) must be provided
to the Company (a) in paper or electronic format suitable for filing
with the Commission and (b) not later than 10:00 a.m. (New York City
time) on a business day that is not less than one business day
before filing thereof is required pursuant to the terms of the
No-Action Letters.
(v) All information included in the Computational Materials
and ABS Term Sheets shall be generated based on substantially the
same methodology and assumptions as are used to generate the
information in the Prospectus Supplement as set forth therein;
provided that the Computational Materials and ABS Term Sheets may
include information based on alternative methodologies or
assumptions if specified therein. If any Computational Materials or
ABS Term Sheets were based on assumptions with respect to the
Mortgage Pool that differ from the final Pool Information in any
material respect or on Underwritten Certificate structuring
assumptions (except in the case of Computational Materials when the
different structuring terms were hypothesized and so described) that
were revised in any material respect prior to the printing of the
Prospectus, then to the extent that it has not already done so, such
Underwriter shall immediately inform the Company and, upon the
direction of the Company, and if not corrected by the Prospectus,
shall prepare revised Computational Materials and ABS Term Sheets,
as the case may be, based on the final Pool Information and
structuring assumptions, circulate such revised Computational
Materials and ABS Term Sheets to all recipients of the preliminary
versions thereof, and include such revised Computational Materials
and ABS Term Sheets (marked, "as revised") in the materials
delivered to the Company pursuant to subsection (iv) above.
(vi) The Company shall not be obligated to file any
Computational Materials or ABS Term Sheets that have been determined
to contain any material error or omission, provided that the Company
will file Computational Materials or ABS Term Sheets that contain a
material error or, when read together with the Prospectus, a
material omission if clearly marked (A) "superseded by materials
dated ____________ __" and accompanied by corrected Computational
Materials or ABS Term Sheets that are marked "material previously
dated ___________ __, as corrected", or (B) if the material error or
omission is to be corrected in the Prospectus, "superseded by
materials contained in the Prospectus." If, within the period during
which the Prospectus relating to the Underwritten Certificates is
required to be delivered under the 1933 Act, any Computational
Materials or ABS Term Sheets are determined, in the reasonable
judgment of the Company or such Underwriter, to contain a material
error or, when read together with the Prospectus, a material
omission,
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then (unless the material error or omission was corrected in the
Prospectus) the Underwriter shall prepare a corrected version of
such Computational Materials or ABS Term Sheets, shall circulate
such corrected Computational Materials or ABS Term Sheets to all
recipients of the prior versions thereof, and shall deliver copies
of such corrected Computational Materials or ABS Term Sheets
(marked, "as corrected") to the Company for filing with the
Commission in a subsequent Form 8-K submission (subject to the
Company's obtaining an accountant's comfort letter in respect of
such corrected Computational Materials and ABS Term Sheets, which
shall be at the expense of such Underwriter).
(vii) Such Underwriter shall be deemed to have represented, as
of the Closing Date, that except for Computational Materials and/or
ABS Term Sheets provided to the Company pursuant to subsection (iv)
above, such Underwriter did not provide any prospective investors
with any information in written or electronic form in connection
with the offering of the Underwritten Certificates that is required
to be filed with the Commission in accordance with the No-Action
Letters.
(viii) In the event of any delay in the delivery by such
Underwriter to the Company of all Computational Materials and ABS
Term Sheets required to be delivered in accordance with subsection
(iv) above, the Company shall have the right to delay the release of
the Prospectus to investors or to the Underwriter, to delay the
Closing Date and to take other appropriate actions in each case as
necessary in order to allow the Company to comply with its agreement
set forth in Section 5(g) to file the Computational Materials and
ABS Term Sheets by the time specified therein.
(ix) Computational Materials and ABS Term Sheets may be
distributed by the Underwriter through electronic means in
accordance with SEC Release No. 33-7233 (the "Release").
(c) Each Underwriter further agrees that it shall promptly provide
the Company with such information as to matters of fact as the Company may
reasonably request to enable it to comply with its reporting requirements
with respect to each class of Underwritten Certificates to the extent such
information can in the good faith judgment of the Underwriter be
determined by it.
5. Covenants of the Company. The Company covenants and agrees with
the Underwriters that:
(a) The Company will not file any amendment to the Registration
Statement or any supplement to the Basic Prospectus relating to or
affecting the Underwritten Certificates, unless the Company has furnished
a copy to you for your review prior to filing, and will not file any such
proposed amendment or supplement to which you reasonably object. Subject
to the foregoing sentence, the Company will cause the
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Prospectus Supplement to be transmitted to the Commission for filing
pursuant to Rule 424 under the 1933 Act or will cause the Prospectus
Supplement to be filed with the Commission pursuant to said Rule 424. The
Company promptly will advise you or counsel for the Underwriters (i) when
the Prospectus Supplement shall have been filed or transmitted to the
Commission for filing pursuant to Rule 424, (ii) when any amendment to the
Registration Statement shall have become effective, (iii) of any request
by the Commission to amend the Registration Statement or supplement the
Prospectus Supplement or for any additional information in respect of the
offering contemplated hereby, (iv) of the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement
or any post-effective amendment thereto which shall have become effective
on or prior to the Closing Date or the institution or threatening of any
proceeding for that purpose, and (v) of the receipt by the Company of any
notification with respect to the suspension of the qualification of the
Underwritten Certificates for sale in any jurisdiction or the institution
or threatening of any proceeding for that purpose. The Company will use
its best efforts to prevent the issuance of any such stop order or
suspension and, if issued, to obtain as soon as possible the withdrawal
thereof.
(b) If, at any time when a prospectus relating to the Underwritten
Certificates is required to be delivered under the 1933 Act, any event
occurs as a result of which the Prospectus, as then amended or
supplemented, would include any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading, or if it shall be necessary to amend or supplement the
Prospectus to comply with the 1933 Act or the rules and regulations
thereunder, the Company promptly will prepare and file with the
Commission, at the expense of the Company, subject to paragraph (a) of
this Section 5, an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance
and, if such amendment or supplement is required to be contained in a
post-effective amendment to the Registration Statement, the Company will
use its best efforts to cause such amendment to the Registration Statement
to be made effective as soon as possible.
(c) The Company will furnish to you and to counsel for the
Underwriters, without charge, signed copies of the Registration Statement
(including exhibits thereto) and each amendment thereto which shall become
effective on or prior to the Closing Date, and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and each
such amendment and, so long as delivery of a prospectus by an Underwriter
or dealer may be required by the 1933 Act, as many copies of any
Preliminary Prospectus Supplement, the Prospectus Supplement and the Basic
Prospectus and any amendments and supplements thereto as you may
reasonably request.
(d) The Company will furnish such information, execute such
instruments and take such action, if any, as may be required to qualify
the Underwritten Certificates for sale under the laws of such
jurisdictions as you may designate and will
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maintain such qualifications in effect so long as required for the
distribution of the Underwritten Certificates; provided, however, that the
Company shall not be required to qualify to do business in any
jurisdiction where it is not now qualified or to take any action that
would subject it to general or unlimited service of process in any
jurisdiction where it is not now subject to such service of process.
(e) The Company will pay, or cause to be paid, all costs and
expenses in connection with the transactions herein contemplated,
including, but not limited to, the fees and disbursements of its counsel;
the costs and expenses of printing (or otherwise reproducing) and
delivering the Pooling and Servicing Agreement and the Underwritten
Certificates; the fees and disbursements of accountants for the Company;
the costs and expenses in connection with the qualification or exemption
of the Underwritten Certificates under state securities or "blue sky"
laws, including filing fees and reasonable fees and disbursements of
counsel in connection therewith, in connection with the preparation of any
blue sky survey and in connection with any determination of the
eligibility of the Underwritten Certificates for investment by
institutional investors and the preparation of any legal investment
survey; the expenses of printing any such blue sky survey and legal
investment survey; the cost and expenses in connection with the
preparation, printing and filing of the Registration Statement (including
exhibits thereto), the Basic Prospectus, the Preliminary Prospectus
Supplement, if any, and the Prospectus Supplement, the preparation and
printing of this Agreement and the delivery to the Underwriters of such
copies of the Basic Prospectus and each Preliminary Prospectus Supplement,
if any, and Prospectus Supplement as you may reasonably request; and the
fees of the Rating Agency that are rating the Underwritten Certificates.
Except as provided above or in Section 7, the Underwriters shall be
responsible for paying all costs and expenses incurred by them in
connection with the purchase and sale of the Underwritten Certificates.
(f) The Company will enter into the Pooling and Servicing Agreement
on or prior to the Closing Date, will enforce the rights of the
Underwriters as third party beneficiaries thereunder as set forth in
Section 11.09 thereof and will not consent to any amendment of the Pooling
and Servicing Agreement that would adversely affect such rights of the
Underwriters.
(g) The Company shall, as to itself, and the Company, or pursuant to
the Pooling and Servicing Agreement the Trustee will be required to, as to
the Trust Fund, satisfy and comply with all reporting requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations thereunder. The Company will also file with the
Commission a report on Form 8-K setting forth all Computational Materials
and ABS Term Sheets provided to the Company by an Underwriter and
identified by it as such within the time period allotted for such filing
pursuant to the No-Action Letters; provided, however, that prior to such
filing of the Computational Materials and ABS Term Sheets by the Company,
each Underwriter must comply with its obligations pursuant to Section
4(b). The Company shall file any
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corrected Computational Materials described in Section 4(b)(vi) as soon as
practicable following receipt thereof.
6. Conditions to the Obligations of the Underwriters. The obligation
of each Underwriter hereunder to purchase its allocated share of the
Underwritten Certificates shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the date hereof, as of the date of the effectiveness of any amendment to the
Registration Statement filed prior to the Closing Date, as of the date the
Prospectus Supplement or any supplement thereto is filed with the Commission and
as of the Closing Date, to the accuracy of the statements of the Company made in
any certificates delivered pursuant to the provisions hereof, to the performance
by the Company of its obligations hereunder and to the following additional
conditions:
(a) The Registration Statement shall have become effective and no
stop order suspending the effectiveness of the Registration Statement, as
amended from time to time, shall have been issued and not withdrawn and no
proceedings for that purpose shall have been instituted or, to the
Company's knowledge, threatened; and the Prospectus Supplement shall have
been filed or transmitted for filing with the Commission in accordance
with Rule 424 under the 1933 Act;
(b) You shall have received from Sidley & Austin, counsel for the
Underwriters, a favorable opinion, dated the Closing Date, as to such
matters regarding the Underwritten Certificates as you may reasonably
request;
(c) The Company shall have delivered to you a certificate of the
Company, signed by an authorized officer of the Company and dated the
Closing Date, to the effect that: (i) the representations and warranties
of the Company in this Agreement are true and correct in all material
respects at and as of the Closing Date with the same effect as if made on
the Closing Date; and (ii) the Company has in all material respects
complied with all the agreements and satisfied all the conditions on its
part that are required hereby to be performed or satisfied at or prior to
the Closing Date;
(d) You shall have received with respect to the Company a good
standing certificate from the Secretary of State of the State of North
Carolina, dated not earlier than 30 days prior to the Closing Date;
(e) You shall have received from the Secretary or an assistant
secretary of the Company, in his individual capacity, a certificate, dated
the Closing Date, to the effect that: (i) each individual who, as an
officer or representative of the Company, signed this Agreement, the
Pooling and Servicing Agreement or any other document or certificate
delivered on or before the Closing Date in connection with the
transactions contemplated herein or in the Pooling and Servicing
Agreement, was at the respective times of such signing and delivery, and
is as of the Closing Date, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents and certificates are their genuine signatures;
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and (ii) no event (including, without limitation, any act or omission on
the part of the Company) has occurred since the date of the good standing
certificate referred to in paragraph 6(d) above which has affected the
good standing of the Company under the laws of the State of North
Carolina. Such certificate shall be accompanied by true and complete
copies (certified as such by the Secretary or an assistant secretary of
the Company) of the certificate of incorporation and by-laws of the
Company, as in effect on the Closing Date, and of the resolutions of the
Company and any required shareholder consent relating to the transactions
contemplated in this Agreement and the Pooling and Servicing Agreement;
(f) You shall have received from Xxxxxxx Xxxx & Xxxxxxxxx, special
counsel for the Company, a favorable opinion, dated the Closing Date and
satisfactory in form and substance to you and counsel for the
Underwriters, to the effect that:
(i) The Registration Statement and any amendments thereto have
become effective under the 1933 Act; to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement, as amended, has been issued and not
withdrawn, no proceedings for that purpose have been instituted or
threatened and not terminated; and the Registration Statement, the
Basic Prospectus, the Prospectus Supplement and each amendment or
supplement thereto, as of their respective effective or issue dates
(other than the financial statements, schedules and other financial
and statistical information contained therein as to which such
counsel need express no opinion), complied as to form in all
material respects with the applicable requirements of the 1933 Act
and the rules and regulations thereunder; and such counsel has no
reason to believe that (A) the Registration Statement (which, for
purposes of this clause, shall be deemed not to include any exhibits
filed therewith), or any amendment thereto, at the time it became
effective, contained or, as of the date of such opinion, contains
any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to make
the statements therein not misleading, or that (B) the Prospectus,
as amended or supplemented, contains any untrue statement of a
material fact or omits to state a material fact necessary in order
to make the statements therein, in light of the circumstances under
which they were made, not misleading (other than the financial
statements, schedules and other financial and statistical
information contained therein as to which such counsel need express
no opinion);
(ii) To the best knowledge of such counsel, there are no
material contracts, indentures or other documents of a character
required to be described or referred to in the Registration
Statement, as amended, or the Prospectus Supplement or to be filed
as exhibits to the Registration Statement, as amended, other than
those described or referred to therein or filed or incorporated by
reference as exhibits thereto;
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(iii) To the best knowledge of such counsel, there are no
actions, proceedings or investigations pending before or threatened
by any court, administrative agency or other tribunal to which the
Company is a party or of which any of its properties is the subject
(a) which if determined adversely to the Company would have a
material adverse effect on the business or financial condition of
the Company, (b) asserting the invalidity of this Agreement, the
Pooling and Servicing Agreement or the Underwritten Certificates,
(c) seeking to prevent the issuance of the Underwritten Certificates
or the consummation by the Company of any of the transactions
contemplated by the Pooling and Servicing Agreement or this
Agreement, as the case may be, or (d) which might materially and
adversely affect the performance by the Company of its obligations
under, or the validity or enforceability of, the Pooling and
Servicing Agreement, this Agreement or the Underwritten
Certificates;
(iv) Each of this Agreement and the Pooling and Servicing
Agreement has been duly authorized, executed and delivered by the
Company, and each of this Agreement and the Pooling and Servicing
Agreement constitutes a valid, legal, binding and enforceable
agreement of the Company, subject, as to enforceability, to
bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally, to general principles of
equity regardless of whether enforcement is sought in a proceeding
in equity or at law and public policy considerations underlying the
securities laws, to the extent that such public policy
considerations limit the enforceability of the provisions of this
Agreement that purports to provide indemnification from securities
law liabilities;
(v) The Underwritten Certificates, when duly and validly
executed and authenticated in the manner contemplated in the Pooling
and Servicing Agreement and delivered and paid for by the
Underwriters as provided herein, will be duly and validly issued and
outstanding and entitled to the benefits of the Pooling and
Servicing Agreement;
(vi) The statements set forth in the Prospectus Supplement
under the headings "Description of the Certificates" and "Servicing
of the Mortgage Loans" and in the Basic Prospectus under the
headings "Description of the Certificates" and "Description of the
Pooling Agreements", insofar as such statements purport to summarize
certain provisions of the Underwritten Certificates and the Pooling
and Servicing Agreement, are true and correct in all material
respects;
(vii) The statements set forth in the Basic Prospectus and the
Prospectus Supplement under the headings "Material Federal Income
Tax Consequences", "ERISA Considerations" and "Legal Investment", to
the extent that they constitute matters of federal law or legal
conclusions with respect
-15-
thereto, are correct in all material respects with respect to those
consequences or aspects that are discussed;
(viii) Any Class of Underwritten Certificates will be
"mortgage related securities", as defined in Section 3(a)(41) of the
1934 Act, so long as such Certificates are rated "AAA" or "AA" (or
its equivalent) by at least one nationally recognized statistical
rating organization;
(ix) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and
neither the Company nor the Trust Fund is required to be registered
under the Investment Company Act;
(x) No consent, approval, authorization or order of any State
of New York or federal court or governmental agency or body is
required for the consummation by the Company of the transactions
contemplated herein or in the Pooling and Servicing Agreement,
except (A) such as have been obtained under the 1933 Act, (B) such
as may be required under the blue sky laws of any jurisdiction in
connection with the offer and sale of the Underwritten Certificates
by the Underwriters, as to which such counsel need express no
opinion; and (C) any recordation of the assignments of the Mortgage
Loans pursuant to the Pooling and Servicing Agreement that has not
yet been completed.
(xi) Assuming compliance with all provisions of the Pooling
and Servicing Agreement, for federal income tax purposes, REMIC I,
REMIC II and REMIC III will each qualify as a real estate mortgage
investment conduit (a "REMIC") under the Internal Revenue Code of
1986 (the "Code"), the Class R-I Certificates will be the sole class
of "residual interests" in REMIC I, the Class R-II Certificates will
be the sole class of "residual interests" in REMIC II, the Class
A-1, Class A-2, Class B, Class C, Class D, Class E, Class IO, Class
F, Class G, Class H, Class J, Class K, Class L, Class M and Class N
Certificates will be the "regular interests" in REMIC III, and the
Class R-III Certificates will be the sole class of "residual
interests" in the REMIC III; and
(xii) The Certificates conform in all material respects to the
description thereof contained in the Prospectus; and the Pooling and
Servicing Agreement conforms in all material respects to the
description thereof contained in the Prospectus.
With respect to such opinion, such counsel may express its reliance
as to factual matters on the representations and warranties made by, and
on certificates or other documents furnished by officers of, the parties
to this Agreement and the Pooling and Servicing Agreement; may assume the
due authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than the
-16-
Company; may qualify such opinion only as to the federal laws of the
United States of America, the laws of the State of New York, the laws of
the State of North Carolina and the corporation law of the State of
Delaware; and may, to the extent deemed necessary by such counsel, rely on
the opinion of counsel in the regular employ of the Company or any
affiliate of the Company or independent North Carolina counsel. Such
counsel shall also confirm that the Underwriters may rely, on and as of
the Closing Date, on any opinion or opinions of such counsel submitted to
any Rating Agency as if addressed to the Underwriters and dated the
Closing Date;
(g) You shall have received from Xxxx Xxxxxx, counsel for the
Company, a favorable opinion, dated the Closing Date and satisfactory in
form and substance to you and counsel for the Underwriters, to the effect
that:
(i) The Company is a corporation in good standing under the
laws of the State of North Carolina and has the corporate power and
authority to enter into and perform its obligations under this
Agreement and the Pooling and Servicing Agreement;
(ii) No consent, approval, authorization or order of the State
of North Carolina is required for the consummation by the Company of
the transactions contemplated herein or in the Pooling and Servicing
Agreement; and
(iii) Neither the issuance and sale of the Underwritten
Certificates, nor the execution or delivery of or performance under
this Agreement or the Pooling and Servicing Agreement, nor the
consummation of any other of the transactions contemplated herein or
therein will conflict with or result in a breach or violation of any
term or provision of, or constitute a default (or an event which
with the passing of time or notification, or both, would constitute
a default) under, the certificate of incorporation or by-laws of the
Company, or, to the knowledge of such counsel, any indenture or
other agreement or instrument to which the Company is a party or by
which it is bound, or any State of North Carolina or federal statute
or regulation applicable to the Company, or, to the knowledge of
such counsel, any order of any State of North Carolina or federal
court, regulatory body, administrative agency or governmental body
having jurisdiction over the Company;
(h) You shall have received from Deloitte & Touche LLP, certified
public accountants, a letter dated the Closing Date and satisfactory in
form and substance to you and counsel for the Underwriters, to the
following effect:
(1) they have performed certain specified procedures as a
result of which they have determined that the information of an
accounting, financial or statistical nature set forth in the
Prospectus Supplement under the captions "Summary of the Prospectus
Supplement," "Description of the Mortgage Pool" and "Yield and
-17-
Maturity Considerations" and on Annex A agrees with the data sheet
or computer tape prepared by or on behalf of the Mortgage Loan
Sellers, unless non-material deviations are otherwise noted in such
letter; and
(2) they have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause (1) to
information contained in an agreed upon sampling of the Mortgage
Loan files and in such other sources as shall be specified by them,
and found such data and information to be in agreement in all
material respects, unless non-material deviations are otherwise
noted in such letter;
(i) You shall have received written confirmation from the Rating
Agency that the Underwritten Certificates have been assigned the rating or
ratings specified in Schedule I hereto, which rating or ratings shall not
have been withdrawn;
(j) You shall have received with respect to the Trustee a good
standing or similar certificate from the Secretary of State of the state
of its organization or, if not applicable, an appropriate federal
official, dated not earlier than 30 days prior to the Closing Date.
(k) You shall have received from the Secretary or an assistant
secretary of the Trustee, in his individual capacity, a certificate, dated
the Closing Date, to the effect that: (i) each individual who, as an
officer or representative of the Trustee, signed the Pooling and Servicing
Agreement or any other document or certificate delivered on or before the
Closing Date in connection with the transactions contemplated in the
Pooling and Servicing Agreement or this Agreement was at the respective
times of such signing and delivery, and is as of the Closing Date, duly
elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents or certificates are their genuine signatures; (ii) the
information under the heading "Description of the Certificates- The
Trustee" in the Prospectus Supplement is true and correct in all material
respects; and (iii) no event (including, without limitation, any act or
omission on the part of the Trustee) has occurred since the date of the
good standing or similar certificate referred to in paragraph 6(j) above
which has affected the good standing of the Trustee under laws of the
United States;
(l) You shall have received from Cadwalader, Xxxxxxxxxx & Xxxx
counsel for the Trustee, a favorable opinion, dated the Closing Date, in
form and substance satisfactory to you and counsel for the Underwriters,
addressing such matters as you and such counsel may reasonably require for
the purpose of enabling you and such counsel to pass upon the issuance and
sale of the Underwritten Certificates as herein contemplated and related
proceedings;
-18-
(m) You shall have received with respect to the Master Servicer a
good standing or similar certificate from the Office of the Comptroller of
the Currency, dated not earlier than 30 days prior to the Closing Date;
(n) You shall have received from the Secretary or an assistant
secretary of the Master Servicer, in his individual capacity, a
certificate, dated the Closing Date, to the effect that: (i) each
individual who, as an officer or representative of the Master Servicer,
signed the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated in the Pooling and Servicing Agreement and this
Agreement was at the respective times of such signing and delivery, and is
as of the Closing Date, duly elected or appointed, qualified and acting as
such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures; (ii) the
information relating to the Master Servicer under the heading "Servicing
of the Mortgage Loans- The Master Servicer and Special Servicer" in the
Prospectus Supplement, is true and correct in all material respects; and
(iii) no event (including without limitation, any act or omission on the
part of the Master Servicer) has occurred since the date of the good
standing or similar certificate referred to in paragraph 6(m) above which
has affected the good standing of the Master Servicer under the laws of
the United States.
(o) You shall have received from Xxxxxxxxxx Xxxxxxxx, LLP, counsel
for the Master Servicer, a favorable opinion, dated the Closing Date, in
form and substance satisfactory to you and counsel for the Underwriters,
addressing such matters as you and such counsel may reasonably require for
the purpose of enabling you and such counsel to pass upon the issuance and
sale of the Underwritten Certificates as herein contemplated and related
proceedings;
(p) You shall have received with respect to the Special Servicer a
good standing or similar certificate from the Secretary of State of the
state of its organization or, if not applicable, an appropriate federal
official, dated not earlier than 30 days prior to the Closing Date;
(q) You shall have received from the Secretary or an assistant
secretary of the Special Servicer, in his individual capacity, a
certificate, dated the Closing Date, to the effect that: (i) each
individual who, as an officer or representative of the Special Servicer,
signed the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated in the Pooling and Servicing Agreement was at
the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on
such documents are their genuine signatures; (ii) the information relating
to the Special Servicer under the heading "Servicing of the Mortgage
Loans- The Master Servicer and Special Servicer" in the Prospectus
Supplement, is true and correct in all material respects; and (iii) no
event (including without limitation, any act or
-19-
omission on the part of the Special Servicer) has occurred since the date
of the good standing or similar certificate referred to in paragraph 6(p)
above which has affected the good standing of the Special Servicer under
the laws of the State of Maryland.
(r) You shall have received from Peabody & Xxxxx, counsel for the
Special Servicer, a favorable opinion, dated the Closing Date, in form and
substance satisfactory to you and counsel for the Underwriters, addressing
such matters as you and such counsel may reasonably require for the
purpose of enabling you and such counsel to pass upon the issuance and
sale of the Underwritten Certificates as herein contemplated and related
proceedings;
(s) You shall have received from each Mortgage Loan Seller and its
officers all such certificates as may be required to be delivered thereby
under the related Mortgage Loan Purchase Agreement;
(t) You shall have received from Xxxx Xxxxxx, Xxxxxxxxxxx Xxxx and
Xxx Xxxxxx counsel for First Union, LBHI and BofA respectively, written
confirmation that the Underwriters may rely, as of the date rendered, on
any opinion or opinions of such counsel required to be delivered under the
Mortgage Loan Purchase Agreements or addressed to any Rating Agency, in
each case as if such opinion were addressed to the Underwriters;
(u) You shall have received (A) from Xxxxxxx Xxxx & Xxxxxxxxx,
special counsel for the Company, a favorable opinion, dated the Closing
Date and satisfactory in form and substance to you and counsel for the
Underwriters, with respect to the transfer of the LBHI Mortgage Loans and
the First Union Mortgage Loans from LBHI and First Union , respectively to
the Company; (B) from Xxxxx, Xxxxx & Xxxxx, counsel for BofA, a favorable
opinion, dated the Closing Date and satisfactory in form and substance to
you and counsel for the Underwriters, with respect to the transfer of the
BofA Mortgage Loans from BofA to the Company and (C) all other opinions
delivered to the Rating Agencies in connection with the transactions
contemplated hereby; and
(v) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto, including, without
limitation, the Pooling and Servicing Agreement and the Mortgage Loan
Purchase Agreement, shall be satisfactory in form and substance to you and
counsel for the Underwriters, and you and such counsel shall have received
such additional information, certificates and documents as you or they may
have reasonably requested.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
if the Company is in breach of any covenants or agreements contained herein or
if any of the opinions and certificates referred to above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to you and counsel for the Underwriters, this Agreement and all
obligations of the
-20-
Underwriters hereunder may be canceled at, or at any time prior to, the Closing
Date by you. Notice of such cancellation shall be given to the Company in
writing, or by telephone or telegraph confirmed in writing.
7. Reimbursement of Underwriters' Expenses. If the sale of the
Underwritten Certificates provided for herein is not consummated because any
condition to the obligations of the Underwriters set forth in Section 6 is not
satisfied or because of any refusal, inability or failure on the part of the
Company to perform any agreement herein or comply with any provision hereof,
other than by reason of a default by any of the Underwriters, the Company will
reimburse the Underwriters severally, upon demand, for all out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by them in connection with the proposed purchase and sale of
the Underwritten Certificates.
8. Indemnification.
(a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not
misleading or arising out of any untrue statement or alleged untrue
statement of a material fact contained in the Basic Prospectus, any
Preliminary Prospectus Supplement or the Prospectus Supplement (or
any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading; provided, that the foregoing
indemnity with respect to the Basic Prospectus or any Preliminary
Prospectus Supplement shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting claims giving rise to
any such losses, claims, damages, expenses or liabilities purchased
Underwritten Certificates if such untrue statement or omission or
alleged untrue statement or omission made in any Preliminary
Prospectus Supplement is eliminated or remedied in the Prospectus
and, if required by law, a copy of the Prospectus shall not have
been furnished to such person at or prior to the written
confirmation of the sale of such Certificates to such person;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate
amount paid in
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settlement of any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, if such settlement
is effected with the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen by such
Underwriter or, if more than one Underwriter is involved, by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission,
or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information (as specified
in Section 8(b) below) furnished to the Company by any Underwriter
expressly for use in the Registration Statement (or any amendment thereto)
or in the Basic Prospectus, any Preliminary Prospectus Supplement or the
Prospectus Supplement (or any amendment or supplement thereto).
(b) Each Underwriter, severally but not jointly, agrees to indemnify
and hold harmless the Company, its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of Section 15 of the 1933 Act against any
and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but
only with respect to untrue statements or omissions, or alleged untrue
statements or omissions, made in the Registration Statement (or any
amendment thereto) or in the Basic Prospectus, any Preliminary Prospectus
Supplement or the Prospectus Supplement (or any amendment or supplement
thereto) in reliance upon and in conformity with written information
furnished to the Company by such Underwriter expressly for use in the
Registration Statement (or any amendment thereto) or in the Basic
Prospectus, such Preliminary Prospectus Supplement or the Prospectus
Supplement (or any amendment or supplement thereto); provided that in no
event shall either Underwriter be liable for any such loss, liability,
claim, damage or expense if such untrue statement or omission or alleged
untrue statement or omission resulted from an untrue statement or omission
in the underlying data regarding the Mortgage Loans, or the related
Mortgagors or Mortgaged Properties provided to the Underwriters by the
Mortgage Loan Sellers. It is hereby acknowledged that (i) the statements
set forth in the first sentence of the penultimate paragraph on the cover
of the Prospectus Supplement, (ii) the statements in the third, fourth and
fifth paragraphs under the caption "Method of Distribution" in the
Prospectus Supplement and (iii) the statements in any Computational
Materials and ABS Term Sheets delivered by the Underwriters to
-22-
the Company for filing with the Commission pursuant to this Agreement and
the No-Action Letters, constitute the only written information furnished
to the Company by the Underwriters expressly for use in the Registration
Statement (or any amendment thereto) or in the Basic Prospectus, the
Preliminary Prospectus Supplement or the Prospectus Supplement (or any
amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but
failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have otherwise than on
account of this indemnity agreement. An indemnifying party may participate
at its own expense in the defense of any such action and, to the extent
that it may elect by written notice delivered to the indemnified party
promptly after receiving the aforesaid notice from the indemnified party,
to assume the defense thereof, with counsel satisfactory to such
indemnified party. In any such proceeding, any indemnified party shall
have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such indemnified party unless (i)
the indemnifying party and the indemnified party shall have agreed to the
retention of such counsel, or (ii) the indemnifying party shall not have
assumed the defense of such action, with counsel satisfactory to the
indemnified party, within a reasonable period following the indemnifying
party's receiving notice of such action, or (iii) the named parties to any
such proceeding (including any impleaded parties) include both the
indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. In no event shall the
indemnifying party or parties be liable for fees and expenses of more than
one counsel (or, in the event the Company is the indemnifying party, one
counsel for each Underwriter) (in addition to any local counsel) separate
from its or their own counsel for all indemnified parties in connection
with any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances.
Unless it shall assume the defense of any proceeding, an indemnifying
party shall not be liable for any settlement of any proceeding effected
without its written consent but, if settled with such consent or if there
be a final judgment for the plaintiff, the indemnifying party shall
indemnify the indemnified party from and against any loss or liability by
reason of such settlement or judgment. If an indemnifying party assumes
the defense of any proceeding, it shall be entitled to settle such
proceeding with the consent of the indemnified party or, if such
settlement provides for release of the indemnified party in connection
with all matters relating to the proceeding that have been asserted
against the indemnified party in such proceeding by the other parties to
such settlement, without the consent of the indemnified party.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Underwriters shall contribute to the aggregate losses,
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liabilities, claims, damages and expenses of the nature contemplated by said
indemnity agreement incurred by the Company and the Underwriters, as incurred,
in such proportions that each Underwriter is responsible for that portion
represented by the percentage that such Underwriter's share of the underwriting
discounts and commissions pertaining to the Underwritten Certificates bears to
the aggregate of the initial public offering prices of the Underwritten
Certificates and the Company is responsible for the balance; provided, however,
that no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 0000 Xxx) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation; and provided, further,
that in no event shall either Underwriter be obligated to contribute more than
its share of the underwriting discounts and commissions pertaining to the
Underwritten Certificates. It is hereby acknowledged that the respective
Underwriters' obligations under this Section 9 shall be several and not joint.
For purposes of this Section, each person, if any, who controls an Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter, and each director of the Company, each officer
of the Company who signed the Registration Statement, and each person, if any,
who controls the Company within the meaning of Section 15 of the 1933 Act shall
have the same rights to contribution as the Company.
10. Default by an Underwriter. If any one or more Underwriters shall
fail to purchase and pay for any of the Underwritten Certificates agreed to be
purchased by such Underwriter or Underwriters hereunder and such failure to
purchase shall constitute a default in the performance of its or their
obligations under this Agreement, the remaining Underwriters shall be obligated
severally (in the respective proportions which the portion of the Underwritten
Certificates set forth opposite their names in Schedule II hereto bears to the
aggregate amount of Underwritten Certificates set forth opposite the names of
all the remaining Underwriters) to purchase the Underwritten Certificates that
the defaulting Underwriter or Underwriters agreed but failed to purchase;
provided, however, that in the event that the amount of Underwritten
Certificates that the defaulting Underwriter or Underwriters agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Underwritten
Certificates set forth in Schedule II hereto, the remaining Underwriters shall
have the right to purchase all, but shall not be under any obligation to
purchase any, of the Underwritten Certificates, and if such nondefaulting
Underwriters do not purchase all of the Underwritten Certificates, this
Agreement will terminate without liability to any nondefaulting Underwriter or
the Company, except as provided in Section 11 or Section 12. In the event of a
default by any Underwriter as set forth in this Section 10, the Closing Date for
the Underwritten Certificates shall be postponed for such period, not exceeding
ten business days, as you shall determine in order that the required changes in
the Registration Statement and the Prospectus Supplement or in any other
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Underwriter of its liability, if any, to the
Company and any nondefaulting Underwriter for damages occasioned by its default
hereunder.
11. Representations, Warranties and Agreements to Survive Delivery.
All representations, warranties and agreements contained in this Agreement, or
contained in certificates of officers of the Company submitted pursuant hereto,
shall remain operative and
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in full force and effect, regardless of any investigation made by or on behalf
of any Underwriter, or by or on behalf of the Company, or by or on behalf of any
of the controlling persons and officers and directors referred to in Sections 8
and 9, and shall survive delivery of the Underwritten Certificates to the
Underwriters.
12. Termination of Agreement; Survival.
(a) The Underwriters may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Date (i) if there has
been, since the date of this Agreement or since the respective dates as of
which information is given in the Registration Statement and the
Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii) if there has
occurred any outbreak of hostilities or escalation thereof or other
calamity or crisis the effect of which is such as to make it, in the
reasonable judgment of the Representative, impracticable to market the
Underwritten Certificates or to enforce contracts for the sale of the
Underwritten Certificates, or (iii) if trading generally on the New York
Stock Exchange has been suspended, or if a banking moratorium has been
declared by either federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party,
except as provided in Section 11 or Section 12 (c).
(c) The provisions of Section 5(e) regarding the payment of costs
and expenses and the provisions of Sections 8 and 9 hereof shall survive
the termination of this Agreement.
13. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriters shall be
directed to you at Three World Financial Center, New York, New York 10285,
attention: Xxxxx X. Xxxxxxxxx; and notices to the Company shall be directed to
it at First Union Commercial Mortgage Securities, Inc., Xxx Xxxxx Xxxxx Xxxxxx,
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000, attention of President; or, in either
case, such other address as may hereafter be furnished by either the
Representative or the Company to the other such party in writing.
14. Parties. This Agreement shall inure to the benefit of and be
binding upon each of the Underwriters and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriters and the Company and their respective successors and the controlling
persons and officers and directors referred to in Sections 8 and 9 and their
heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This
Agreement and all
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conditions and provisions hereof are intended to be for the sole and exclusive
benefit of the Underwriters and the Company and their respective successors, and
said controlling persons and officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation. No
purchaser of Underwritten Certificates from any Underwriter shall be deemed to
be a successor by reason merely of such purchase.
15. Applicable Law; Counterparts. This Agreement will be governed by
and construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely in said State. This Agreement may
be executed in any number of counterparts, each of which shall for all purposes
be deemed to be an original and all of which shall together constitute but one
and the same instrument.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us a counterpart hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the several Underwriters.
Very truly yours,
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
By:
-----------------------------------------
Name: Xxxxx Xxxxxxxxx
Title: Vice President
The foregoing Agreement is hereby confirmed and accepted as of the
date first above written.
XXXXXX BROTHERS INC.
By:
-----------------------------------------
Name:
Title:
For itself and the other Underwriters named in Schedule II to the
foregoing Agreement.
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SCHEDULE I
Underwriting Agreement dated May 21, 1998:
As used in this Schedule I, the term "Registration Statement" refers
to registration statement No. 333-48943 filed by the Company on Form S-3 and
declared effective on May 6, 1998. The term "Basic Prospectus" refers to the
form of prospectus in the Registration Statement or such later form as most
recently filed by the Company pursuant to Rule 424(b) under the Securities Act
of 1933, as amended. The term "Prospectus Supplement" refers to the supplement
dated May 21, 1998 to the Basic Prospectus, relating to the mortgage
pass-through certificates being sold pursuant to the Underwriting Agreement (the
"Underwritten Certificates").
Mortgage Pool:
Approximately 664 commercial mortgage loans, having an aggregate
principal balance, after giving effect to payments of principal due on or before
May 1, 1998 (the "Cut-off Date"), of approximately $3,408,048,239 (the "Initial
Pool Balance"), and otherwise complying in all material respects with the
description thereof set forth in the Prospectus Supplement.
Title, Purchase Price and Description of Underwritten Certificates:
First Union-Xxxxxx Brothers-Bank of America Commercial Mortgage Trust,
Commercial Mortgage Pass-Through Certificates, Series 1998-C2, Class A-1, Class
A-2, Class B, Class C, Class D, Class E and Class IO.
Initial
Aggregate Pass Purchase
Certificate Through Price
Designation Principal Balance Rate Rating Percentage
----------- ----------------- ---- ------ ----------
Class A-1 760,000,000 6.280% Aaa/AAA (1) 100.4850%
Class A-2 1,693,794,000 6.560% Aaa/AAA (1) 101.4970%
Class B 170,403,000 6.640% Aa2/AA (1) 100.9899%
Class C 170,402,000 6.730% Aa3/A (1) 99.9763%
Class D 204,483,000 6.778% Baa2/BBB(1) 96.7074%
Class E 68,161,000 6.778% Baa3/BBB-(1) 93.224%
Class IO (3) (3) Aaa/AAAr(1) N/A
----------
(1) By each of Xxxxx'x Investors Service, Inc. and Standard & Poor's Ratings
Services, a division of The XxXxxx-Xxxx Companies, Inc.
(2) There shall be added to the purchase price for each Class of Underwritten
Certificates accrued interest, if any, at the initial Pass-Through Rate
for such Class from May 1, 1998 up to, but not including, the Closing
Date.
(3) The Class IO Certificates will not have a Certificate Principal Balance
nor will they entitle the holders thereof to receive distributions of
principal.
Credit Support and Other Terms and Conditions of the Underwritten
Certificates: As described in the Prospectus Supplement.
Closing Time, Date and Location: 10:00 a.m. (New York City time) on May 28, 1998
at the offices of Xxxxxxx Xxxx & Xxxxxxxxx, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000-0000; except that delivery of the Underwritten Certificates shall be
made through the facilities of The Depository Trust Company.
Initial Public Offering Price: The Underwritten Certificates will be offered to
the public in negotiated transactions or otherwise at varying prices to be
determined at the time of sale.
SCHEDULE II
Underwriting Agreement dated May 21, 1998
50/50 Split
Approximate Aggregate
Principal or Notional
Amount of Certificates to
Underwriters Class be Purchased
------------ ----- ------------
First Union Capital Markets, a division of Wheat First Securities, Inc.
Class A-1 $ 380,000,000
Class A-2 $ 846,897,000
Class B $ 85,201,500
Class C $ 85,201,000
Class D $ 102,241,500
Class E $ 34,080,500
Class IO $ 1,704,024,195
Xxxxxx Brothers Inc.
Class A-1 $ 380,000,000
Class A-2 $ 846,897,000
Class B $ 85,201,500
Class C $ 85,201,000
Class D $ 102,241,500
Class E $ 34,080,500
Class IO $ 1,704,024,195
