EXECUTION
FIRST UNION COMMERCIAL MORTGAGE SECURITIES, INC.
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES
FUNB SERIES ▇▇▇▇-▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
January 21, 1999
First Union Capital Markets,
a division of Wheat First Securities, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
First Union Commercial Mortgage Securities, Inc., a North Carolina
corporation (the "Company"), has issued its Commercial Mortgage Pass-Through
Certificates, FUNB Series 1999-C1 (the "Certificates"), in 15 classes (each, a
"Class") as designated in the Prospectus Supplement (as defined below). The
Company further proposes to sell to you (each an "Underwriter" and together, the
"Underwriters") on February 4, 1999 (the "Settlement Date") 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 represent in the aggregate the entire beneficial ownership interest
in a trust fund (the "Trust Fund") consisting 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 was created and the
Certificates were issued on December 30, 1998 (the "Closing Date"), and the
Mortgage Pool is being serviced and administered pursuant to a pooling and
servicing agreement (the "Pooling and Servicing Agreement"), dated as of
December 1, 1998, among the Company, First Union National Bank, as master
servicer ("FUNB" or the "Master Servicer"), Lennar Partners, Inc., as special
servicer (the "Special Servicer") and Norwest Bank Minnesota, National
Association, as trustee (the "Trustee"). The Mortgage Loans were owned by First
Union National Bank (in such capacity, the "Mortgage Loan Seller") and were
acquired by the Company on the Closing Date pursuant to a mortgage loan purchase
agreement (the "Mortgage Loan Purchase Agreement"), dated as of
December 1, 1998, between the Mortgage Loan Seller and the Company. The
Underwritten Certificates were acquired by FUNB on the Closing Date and will be
acquired from FUNB by the Company on or prior to the Settlement Date. 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. 333-62671) 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 January 21, 1999 (the "Prospectus Supplement") to the
prospectus dated January 8, 1999 (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. 333-62671), 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 Settlement 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.
(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 Settlement 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 Settlement Date, (i) the Registration Statement, as amended
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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 Settlement 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 Settlement 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) Each of this Agreement, the Pooling and Servicing Agreement and
the Mortgage Loan Purchase Agreement has been duly authorized, executed
and delivered by the Company and each of this Agreement, the Pooling and
Servicing Agreement and the Mortgage Loan Purchase Agreement constitutes
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
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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 Settlement Date, the Underwritten Certificates, the
Pooling and Servicing Agreement and the Mortgage Loan Purchase Agreement
will conform in all material respects to the respective descriptions
thereof contained in the Prospectus. As of the Settlement Date, the
Underwritten Certificates will be duly and validly authorized and, when
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 Settlement Date, to the actual knowledge of the
Company without any independent investigation, there has been no material
adverse change with respect to the Mortgage Pool since the Closing Date.
(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, the
Pooling and Servicing Agreement or the Mortgage Loan Purchase 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, did, 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.
(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, the
Mortgage Loan Purchase 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
(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, the Mortgage Loan
Purchase Agreement or the Underwritten Certificates or (iv) seeking to
affect adversely the federal income tax attributes of the Underwritten
Certificates as
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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 or sale of the Underwritten Certificates pursuant to this
Agreement, except such as have been, or as of the Settlement 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 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 Settlement Date.
(n) [Reserved]
(o) Neither the Company nor the Trust Fund is, and neither the 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 reported the transfer of the
Mortgage Loans to the Trustee in exchange for the Underwritten
Certificates and will report 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
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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. In addition, the Company was solvent at all relevant times
prior to, and was not rendered insolvent by, 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 and did not
transfer 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 Settlement Date, the respective classes of Underwritten
Certificates shall continue to have maintained 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 Certificate Purchase Agreement dated
December 29, 1998, among First Union Commercial Mortgage Securities, Inc.,
as seller, First Union National Bank and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, as initial purchaser (the "Certificate Purchase Agreement"),
were true and correct as of such date, and each Underwriter shall be
entitled to rely upon each such representation and warranty as if such
Underwriter had been a party to the Certificate Purchase Agreement.
(II) FUNB represents and warrants to, and agrees with, each Underwriter,
that:
(a) FUNB is a national banking association validly existing under
the laws of the United States of America and possesses all requisite
authority, power, licenses, permits and franchises to carry on its
business as currently conducted by it and to execute, deliver and comply
with its obligations under the terms of this Agreement.
(b) This Agreement has been duly and validly authorized, executed
and delivered by FUNB and, assuming due authorization, execution and
delivery hereof by the Company and the Underwriters, constitutes a legal,
valid and binding obligation of FUNB, enforceable against FUNB in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other laws
affecting the enforcement of creditors' rights in general, as they may be
applied in the context of the insolvency of a national banking
association, and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law), and by
public policy considerations underlying the securities laws, to the extent
that such public policy considerations limit the enforceability of the
provisions of this Agreement which purport to provide indemnification from
liabilities under applicable securities laws.
(c) The execution and delivery of this Agreement by FUNB and FUNB's
6
performance and compliance with the terms of this Agreement will not (A)
violate FUNB's articles of association or By-Laws, (B) violate any law or
regulation or any administrative decree or order to which it is subject or
(C) constitute a default (or an event which, with notice or lapse of time,
or both, would constitute a default) under, or result in the breach of,
any contract, agreement or other instrument to which FUNB is a party or by
which FUNB is bound.
(d) FUNB is not in default with respect to any order or decree of
any court or any order, regulation or demand of any federal, state,
municipal or other governmental agency or body, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of FUNB or its properties or have
consequences that would materially and adversely affect its performance
hereunder.
(e) FUNB is not a party to or bound by any agreement or instrument
or subject to any articles of association, bylaws or any other corporate
restriction or any judgment, order, writ, injunction, decree, law or
regulation that would materially and adversely affect the ability of FUNB
to perform its obligations under this Agreement or that requires the
consent of any third person to the execution of this Agreement or the
performance by FUNB of its obligations under this Agreement (except to the
extent such consent has been obtained).
(f) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by FUNB of or compliance by FUNB with this Agreement or the
consummation of the transactions contemplated by this Agreement except as
have previously been obtained.
(g) No litigation is pending or, to the best of FUNB's knowledge,
threatened against FUNB that would prohibit its entering into this
Agreement or materially and adversely affect the performance by FUNB of
its obligations under this Agreement.
(h) Each representation and warranty of the Company set forth in
Section 1(I) hereof is true and correct as of the date hereof or as of the
date specified in such representation and warranty.
(III) Each Underwriter represents and warrants to the Company that, as of
the date hereof and as of the Settlement 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 Seller 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 Settlement
Date 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. 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 Settlement 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 Settlement 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 Settlement Date.
References herein, including, without limitation, in the Schedules hereto,
to actions taken or to be taken following the Settlement 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.
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
8
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, Class D and Class 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
▇▇▇▇▇▇, Peabody Acceptance Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co.
Incorporated and ▇▇▇▇▇▇ 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 "▇▇▇▇▇▇/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 ▇▇▇▇▇▇/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 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
9
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, 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
10
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
Settlement 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 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
11
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 Settlement 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 Settlement 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 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.
12
(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 reasonable out-of-pocket 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; the fees
of the Rating Agencies that are rating the Underwritten Certificates; and
the reasonable fees and disbursements of counsel to the Underwriters.
Except as provided above or in Section 7, the Underwriters shall be
responsible for paying all other costs and expenses incurred by them in
connection with the purchase and sale of the Underwritten Certificates.
(f) The Company will enforce the rights of the Underwriters as third
party beneficiaries under the Pooling and Servicing Agreement 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 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 Settlement Date, as of the date the Prospectus
13
Supplement or any supplement thereto is filed with the Commission and as of the
Settlement 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 ▇▇▇▇▇ & ▇▇▇▇, 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
Settlement 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 Settlement Date with the same effect as
if made on the Settlement 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 Settlement Date; and FUNB shall have delivered to you a
certificate of FUNB, signed by an authorized officer of FUNB and dated the
Settlement Date, of the President, a Senior Vice President or a Vice
President of FUNB to the effect that: (i) the representations and
warranties of FUNB in this Agreement are true and correct in all material
respects; and (ii) FUNB has, in all material respects, complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied hereunder at or prior to the Settlement Date;
(d) You shall have received with respect to each of the Company and
FUNB a good standing certificate from the Secretary of State of the State
of North Carolina, dated not earlier than 30 days prior to the Settlement
Date;
(e) (i) 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: (x) each individual who, as an
officer or representative of the Company, signed this Agreement, or any
other document or certificate delivered on or before the Settlement Date
in connection with the transactions contemplated herein, was at the
respective times of such signing and delivery, and is as of the Settlement
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; and (y) 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
14
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 Settlement Date, and of the resolutions of
the Company and any required shareholder consent relating to the
transactions contemplated in this Agreement; and (ii) you shall have
received from the Secretary or an assistant secretary of the FUNB, in his
individual capacity, a certificate, dated the Settlement Date, to the
effect that: (x) each individual who, as an officer or representative of
FUNB, signed this Agreement or any other document or certificate delivered
on or before the Settlement Date in connection with the transactions
contemplated herein, was at the respective times of such signing and
delivery, and is as of the Settlement 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; and (y) no event (including, without limitation, any
act or omission on the part of FUNB) has occurred since the date of the
good standing certificate referred to in paragraph 6(d) above which has
affected the good standing of FUNB under the laws of the United States of
America. Such certificate shall be accompanied by true and complete copies
(certified as such by the Secretary or an assistant secretary of FUNB) of
the articles of association or by-laws of FUNB, as in effect on the
Settlement Date, and of the resolutions of FUNB and any required
shareholder consent relating to the transactions contemplated in this
Agreement;
(f) You shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
counsel for the Company, a favorable opinion, dated the Settlement 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, as of the respective date thereof and at
the date hereof, contained or 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
15
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 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;
(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 or the
Underwritten Certificates, (c) seeking to prevent the sale of the
Underwritten Certificates or the consummation by the Company of any
of the transactions contemplated by 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, this Agreement or the Underwritten
Certificates;
(iv) This Agreement has been duly authorized, executed and
delivered by the Company, and 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) [Reserved]
(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
16
matters of federal law or legal conclusions with respect 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) [Reserved]
(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, 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, REMIC III and REMIC IV 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 R-III Certificates will be the sole class of "residual
interests" in REMIC III, the Class R-IV Certificates will be the
sole class of "residual interests" in REMIC IV and the Class A-1,
Class A-2, Class IO-1, Class B, Class C, Class D, Class E, Class
IO-2, Class F, Class G and Class H Certificates will be the "regular
interests" in REMIC IV; 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 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
17
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 Settlement Date, on any opinion or opinions of such
counsel submitted to any Rating Agency as if addressed to the Underwriters
and dated the Settlement Date;
(g) You shall have received from ▇▇▇▇ ▇▇▇▇▇▇, counsel for the
Company and FUNB, 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.
(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.
(iii) Neither the sale of the Underwritten Certificates, nor
the execution or delivery of or performance under this Agreement,
nor the consummation of any other of the transactions contemplated
herein 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.
(iv) FUNB is a national banking association validly existing
under the laws of the United States of America and possesses all
requisite power and authority to enter into and perform its
obligations under this Agreement.
(v) This Agreement has been duly authorized, executed and
delivered by FUNB.
(vi) This Agreement, upon due authorization, execution and
delivery by the other parties hereto, will constitute a valid, legal
and binding agreement of FUNB, enforceable against FUNB in
accordance with its terms, except as enforceability may be limited
by (a) bankruptcy, insolvency, liquidation, receivership,
moratorium, reorganization or other similar laws affecting the
enforcement of the rights of creditors generally, as they may be
applied in the context of the insolvency of a national banking
association, (b) general principles
18
of equity, regardless of whether enforcement is sought in a
proceeding in equity or at law, and (c) public policy considerations
underlying the securities laws, to the extent that such public
policy considerations limit the enforceability of provisions which
purport to provide indemnification from securities law liabilities.
(vii) No consent, approval, authorization or order of any
federal court or governmental agency or body is required for the
consummation by FUNB of the transactions contemplated by this
Agreement, except such as may be required under the "Blue Sky" laws
of any jurisdiction in connection with the purchase and the offer
and sale of the Certificates by the Underwriters, as to which such
counsel express no opinion.
(viii) The fulfillment of the terms of this Agreement will not
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
material default) under, the articles of association or by-laws of
FUNB or, to such counsel's knowledge, any contract, agreement or
other instrument to which FUNB is a party or by which it is bound,
or any federal statute or regulation applicable to FUNB or, to such
counsel's knowledge, any order of any federal court, regulatory
body, administrative agency or governmental body having jurisdiction
over FUNB.
(ix) 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 FUNB
is a party or of which any of its properties is the subject (a)
which, if determined adversely to FUNB, would have a material
adverse effect on the business or financial condition of FUNB, (b)
asserting the invalidity of this Agreement, (c) seeking to prevent
the consummation by FUNB of any of the transactions contemplated by
this Agreement or (d) which might materially and adversely affect
the performance by FUNB of its obligations under, or the validity or
enforceability of this Agreement.
(h) You shall have received from Deloitte & Touche LLP, certified
public accountants, a letter dated the Settlement 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
Maturity Considerations" and on Annex A agrees with the data sheet
or computer tape prepared by or on behalf of the Mortgage Loan
Seller, unless non-material deviations are otherwise noted in such
letter; and
(2) they have compared the data contained in the data sheet or
computer
19
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
Agencies that the ratings assigned to the Underwritten Certificates on the
Closing Date are as described on Schedule I hereto and that, as of the
Settlement Date, no notice has been given of (i) any intended or possible
downgrading or (ii) any review or possible changes in such ratings;
(j) [Reserved]
(k) You shall have received from the Secretary or an assistant
secretary of the Trustee, in his individual capacity, a certificate, dated
the Settlement Date, to the effect that the information under the heading
"Description of the Certificates - The Trustee" in the Prospectus
Supplement is true and correct in all material respects;
(l) You shall have received from Cadwalader, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇,
counsel for the Trustee, written confirmation that the Underwriters may
rely on the opinion of such counsel delivered on the Closing Date pursuant
to the Certificate Purchase Agreement as if such opinion has been
addressed to the Underwriters;
(m) [Reserved]
(n) You shall have received from the Secretary or an assistant
secretary of the Master Servicer, in his individual capacity, a
certificate, dated the Settlement Date, to the effect that 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;
(o) You shall have received from ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, counsel
for the Master Servicer, written confirmation that the Underwriters may
rely on the opinion of such counsel delivered on the Closing Date pursuant
to the Certificate Purchase Agreement, as if such opinion has been
addressed to the Underwriters;
(p) [Reserved]
(q) You shall have received from the Secretary or an assistant
secretary of the Special Servicer, in his individual capacity, a
certificate, dated the Settlement Date, to the effect that 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;
20
(r) You shall have received from Peabody & ▇▇▇▇▇, counsel for the
Special Servicer, written confirmation that the Underwriters may rely on
the opinion of such counsel delivered on the Closing Date pursuant to the
Certificate Purchase Agreement, as if such opinion has been addressed to
the Underwriters;
(s) [Reserved]
(t) You shall have received from ▇▇▇▇ ▇▇▇▇▇▇, counsel for the
Mortgage Loan Seller, written confirmation that the Underwriters may rely
on any opinion or opinions of such counsel delivered on the Closing Date
pursuant to the Mortgage Loan Purchase Agreement or addressed to any
Rating Agency, in each case as if such opinion were addressed to the
Underwriters;
(u) You shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
counsel for the Company, written confirmation that the Underwriters may
rely on the opinions of such counsel with respect to the transfer of the
Mortgage Loans to the Company and all other opinions delivered to the
Rating Agencies in connection with the transactions contemplated hereby,
as if such opinions had been addressed to the Underwriters;
(v) You shall have received from ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, special
counsel for the Company, written confirmation that the Underwriters may
rely on the opinions of such counsel delivered under the Certificate
Purchase Agreement, as if such opinions had been addressed to the
Underwriters;
(w) You shall have received from ▇▇▇▇ ▇▇▇▇▇▇, counsel for the
Company and FUNB, written confirmation that the Underwriters may rely on
the opinions of such counsel delivered on the Closing Date pursuant to the
Certificate Purchase Agreement, as if such opinions had been addressed to
the Underwriters; and
(x) All proceedings in connection with the transactions contemplated
by this Agreement and all documents incident hereto 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 Underwriters hereunder may be canceled at, or at any time
prior to, the Settlement 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
21
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 and FUNB, jointly and severally, agree to indemnify
and hold harmless each Underwriter, its directors and each person, if any,
who controls any Underwriter within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of (1) 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 or (2) any error in the information
supplied to the Underwriters relating to the Mortgage Loans other
than information contained in the Preliminary Prospectus Supplement
or the Prospectus Supplement (the "Collateral Information");
provided that such Collateral Information is used in a manner not
inconsistent with the 1933 Act; provided, further, that no indemnity
shall be provided if the Collateral Information was corrected and
such corrected materials were supplied to the Underwriters prior to
the dissemination of the materials with respect to which such loss,
liability, claim, damage or expense was incurred; and provided
further, 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
22
whatsoever, as incurred, to the extent of the aggregate amount paid
in 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 or Section 20
of the 1934 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); in addition, each Underwriter, severally but not jointly, shall
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 either Section 15 of the
1933 Act or Section 20 of the 1934 Act, against any and all losses,
liabilities, claims and damages as incurred arising out of any untrue
statement or alleged untrue statement of a material fact or omission or
alleged omission of a material fact contained in any ABS Term Sheets or
Computational Materials which, when read together with any Preliminary
Prospectus Supplement and the Prospectus Supplement, was required to be
stated therein or necessary to make the statements therein not misleading;
provided, that no such material misstatement or
23
omission arises from an error or omission in information relating to the
underlying data regarding the Mortgage Loans or the related Mortgagors or
Mortgaged Properties provided by the Company to such Underwriter; and
provided, further, that any such ABS Term Sheets or Computational
Materials were prepared by such Underwriter and distributed by such
Underwriter. It is hereby acknowledged that (i) the statements set forth
in the second clause of the last paragraph on the cover of the Prospectus
Supplement, (ii) the statements in the third 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 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
24
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.
(d) The indemnity agreements contained in this Section 8 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Company,
the Underwriters, any of their respective directors or officers, or any
person controlling the Company or the Underwriters, and (iii) acceptance
of and payment for any of the Underwritten Certificates.
9. Contribution. (a) 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, or if such
indemnification provided for in Section 8 hereof is insufficient in respect of
any losses, liabilities, claims or damages referred to therein, the Company and
the Underwriters shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Underwriters, as incurred, (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and each Underwriter on the other from the offering of
the Underwritten Certificates or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is appropriate
to reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative fault of the Company on the one hand and
of the Underwriters on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Underwriters, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the ▇▇▇▇
▇▇▇) 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 or Section 20 of the 1934 Act, and such
Underwriter's directors, 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 or Section 20 of the
1934 Act shall have the same rights to contribution as the Company.
(b) The parties hereto agree that it would not be just and equitable
if contribution were determined by pro rata allocation or by any other
method of allocation that does not take account of the considerations
referred to in subsection (a) above. The amount paid or payable by an
indemnified party as a result of the losses, liabilities, claims
25
or damages referred to in Section 8 or this Section 9 shall be deemed to
include any legal fees and disbursements or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending any such claim except where the indemnified party is required to
bear such expenses, which expenses the indemnifying party shall pay as and
when incurred, at the request of the indemnified party, to the extent that
it is reasonable to believe that the indemnifying party will be ultimately
obligated to pay such expenses. In the event that any expenses so paid by
the indemnifying party are subsequently determined to not be required to
be borne by the indemnifying party hereunder, the party which received
such payment shall promptly refund the amount so paid to the party which
made such payment. The remedies provided for in Section 8 and this Section
9 are not exclusive and shall not limit any rights or remedies that may
otherwise be available to any indemnified party at law or in equity.
(c) The contribution agreements contained in this Section 9 shall
remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Company,
the Underwriters, any of their respective directors or officers, or any
person controlling the Company or the Underwriters, and (iii) acceptance
of and payment for any of the Underwritten Certificates.
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 Settlement 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 in
26
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 Settlement 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, FUNB and their respective 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 either Underwriter, 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 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: R. ▇▇▇▇ ▇▇▇▇▇▇▇▇ and to ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇; notices to FUNB
shall be directed to it at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ and notices to the Company shall be
directed to it at First Union Commercial Mortgage Securities, Inc., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: President; or, in
either case, such other address as may hereafter be furnished by the
Underwriters, FUNB or the Company to the other such parties in writing.
14. Parties. This Agreement shall inure to the benefit of and be binding
upon each of the Underwriters, the Company and FUNB 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, the Company and FUNB and their respective successors and the
controlling persons and officers and directors referred to in Sections 8 and 9
27
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 conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriters, the Company and
FUNB 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.
28
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, FUNB and the several Underwriters.
Very truly yours,
FIRST UNION COMMERCIAL MORTGAGE
SECURITIES, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
FIRST UNION NATIONAL BANK
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Vice President
The foregoing Agreement is hereby confirmed and accepted as of the date
first above written.
FIRST UNION CAPITAL MARKETS,
A DIVISION OF WHEAT FIRST
SECURITIES, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Principal
SCHEDULE I
Underwriting Agreement dated January 21, 1999:
As used in this Schedule I, the term "Registration Statement" refers to
registration statement No. 333-62671 filed by the Company on Form S-3 and
declared effective on January 8, 1999. 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 January 21, 1999 to the Basic Prospectus, relating to the mortgage
pass-through certificates being sold pursuant to the Underwriting Agreement (the
"Underwritten Certificates").
Mortgage Pool:
Two hundred and thirty-eight commercial mortgage loans, having an
aggregate principal balance, after giving effect to payments of principal due on
or before February 1, 1999 (the "Cut-Off Date"), of $1,163,518,250 (the "Cut-Off
Date 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 Commercial Mortgage Trust, Commercial Mortgage Pass-Through
Certificates FUNB Series 1999-C1, Class A-1, Class A-2, Class IO-1, Class B,
Class C, Class D and Class E.
Settlement Date
Aggregate Pass- Purchase
Certificate Through Price
Designation Principal Balance Rate Rating (1) Percentage (2)
----------- ----------------- ---- ---------- --------------
Class A-1 $222,414,205 5.73% Aaa/AAA 100.4833%
Class A-2 $608,949,000 6.07% Aaa/AAA 101.4829%
Class IO-1 N/A (3) Aaa/AAAr 6.2560%
Class B $58,273,000 6.22% Aa2/AA 101.4852%
Class C $61,186,000 (4) A2/A 101.4367%
Class D $67,014,000 (4) Baa2/BBB 95.5940%
Class E $17,482,000 (4) Baa3/BBB- 87.0025%
--------------------
(1) By each of ▇▇▇▇▇'▇ Investors Service, Inc. and Standard & Poor's Ratings
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ 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 February 1, 1999, up to, but not including, February 4, 1999.
(3) The Class IO-1 Certificates will not have a Certificate Principal Balance
nor will they entitle the holders thereof to receive distributions of
principal, but are entitled to receive payments on the aggregate interest
accrued at a variable rate on the notional amount of each component of the
Class IO-1 Certificates, as described in the Prospectus Supplement.
(4) The Class C, Class D and Class E Certificates shall each accrue interest
on the respective principal balance thereof from time to time at a
variable rate equal to the Weighted Net Mortgage Rate minus 0.51%, 0.03%
and 0.03%, respectively (as described in the Prospectus Supplement).
Credit Support and Other Terms and Conditions of the Underwritten
Certificates: As described in the Prospectus Supplement.
Closing Time, Settlement Date and Location: 10:00 a.m. (New York City time) on
February 4, 1999 at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇; 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 January 21, 1999
50/50 Split
Approximate Aggregate
Principal or Notional
Amount of Certificates
Underwriters Class to be Purchased
------------ ----- ----------------------
First Union Capital Markets, a division of Wheat First Securities, Inc.
Class A-1 $111,207,105
Class A-2 $304,474,500
Class IO-1 $261,518,304(Notional)
Class B $ 29,136,500
Class C $ 30,593,000
Class D $ 33,507,000
Class E $ 8,741,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Class A-1 $111,207,100
Class A-2 $304,474,500
Class IO-1 $261,518,304(Notional)
Class B $ 29,136,500
Class C $ 30,593,000
Class D $ 33,507,000
Class E $ 8,741,000