PRUDENTIAL SECURITIES SECURED FINANCING CORPORATION
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2003-PWR1
UNDERWRITING AGREEMENT
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March 7, 2003
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇
Incorporated
4 World Financial Center
New York, New York 10285
Bear, ▇▇▇▇▇▇▇ & Co. Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
CIBC World Markets Corp.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Fargo Brokerage Services, LLC
MAC N9303-090
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Prudential Securities Secured Financing Corporation, a Delaware
corporation (the "Depositor"), proposes to cause the issuance of, and to sell to
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated ("▇▇▇▇▇▇▇ ▇▇▇▇▇"), Bear,
▇▇▇▇▇▇▇ & Co. Inc., CIBC World Markets Corp. and ▇▇▇▇▇ Fargo Brokerage Services,
LLC (collectively, the "Underwriters"), the commercial mortgage pass-through
certificates identified in Schedule I hereto (the "Certificates") pursuant to
this Underwriting Agreement, dated March 7, 2003 (this "Agreement"), between the
Depositor and the Underwriters. The Certificates will evidence beneficial
ownership interests in a trust fund (the "Trust Fund") to be formed by the
Depositor and consisting primarily of a segregated pool (the "Mortgage Pool") of
multifamily and commercial mortgage loans (the "Mortgage Loans").
Certain of the Mortgage Loans (the "Prudential Mortgage Loans") will be
acquired by the Depositor from Prudential Mortgage Capital Funding, LLC ("PMCF")
pursuant to the mortgage loan purchase agreement, dated September 30, 2002 (the
"PMCF Mortgage Loan Purchase Agreement"), between PMCF and the Depositor.
Certain of the Mortgage Loans (the "BSCMI Mortgage Loans"), will be acquired by
the Depositor from Bear, ▇▇▇▇▇▇▇ Commercial Mortgage, Inc. ("BSCMI") pursuant to
the mortgage loan purchase agreement, dated March 7, 2003 (the "BSCMI Mortgage
Loan Purchase Agreement") between the Depositor and BSCMI. Certain of
the Mortgage Loans (the "WFB Mortgage Loans"), will be acquired by the Depositor
from ▇▇▇▇▇ Fargo Bank, National Association ("WFB") pursuant to the mortgage
loan purchase agreement, dated March 7, 2003 (the "WFB Mortgage Loan Purchase
Agreement") between the Depositor and WFB. Certain of the Mortgage Loans (the
"CIBC Mortgage Loans"), will be acquired by the Depositor from CIBC Inc.
("CIBC") pursuant to the mortgage loan purchase agreement, dated March 7, 2003
(the "CIBC Mortgage Loan Purchase Agreement") between the Depositor and CIBC.
PMCF, BSCMI, WFB and CIBC collectively constitute the "Mortgage Loan Sellers";
and the PMCF Mortgage Loan Purchase Agreement, the CIBC Mortgage Loan Purchase
Agreement, the BSCMI Mortgage Loan Purchase Agreement, and the WFB Mortgage Loan
Purchase Agreement collectively constitute the "Mortgage Loan Purchase
Agreements."
The Trust is to be created and the Certificates are to be issued under
a pooling and servicing agreement, dated as of March 1, 2003 (the "Pooling and
Servicing Agreement"), among the Depositor as depositor, Prudential Asset
Resources Inc. as a master servicer, ▇▇▇▇▇ Fargo Bank, National Association as a
master servicer, ARCap Special Servicing, Inc. as special servicer, LaSalle Bank
National Association as trustee, ▇▇▇▇▇ Fargo Bank Minnesota, National
Association, as certificate administrator and as tax administrator, ABN AMRO
Bank N.V., as fiscal agent and Prudential Mortgage Capital Funding, LLC, as
Ballston Common B-Note Holder and Prudential Mortgage Capital Funding, LLC, as
Renaissance B-Note Holder.
Capitalized terms used herein but not otherwise defined herein shall
have the meanings set forth in the Mortgage Loan Purchase Agreements.
The Depositor has filed with the Securities and Exchange Commission
(the "Commission") a registration statement (No. 333-42858) on Form S-3 for the
registration of the Certificates under the Securities Act of 1933, as amended
(the "1933 Act"), which registration statement has become effective. The
Depositor proposes to file with the Commission pursuant to Rule 424(b) under the
1933 Act a supplement to the form of prospectus included in such registration
statement relating to the Certificates and the plan of distribution thereof.
Such registration statement, including the exhibits thereto, as amended at the
date hereof, is hereinafter called the "Registration Statement"; the prospectus
included in the Registration Statement, at the time the Registration Statement,
as amended, became effective, or as subsequently filed with the Commission
pursuant to Rule 424(b) under the 1933 Act, is hereinafter called the "Base
Prospectus"; such form of supplement to the Base Prospectus relating to the
Certificates, in the form in which it shall be first filed with the Commission
pursuant to Rule 424 (including the Base Prospectus as so supplemented) is
hereinafter called the "Prospectus Supplement"; and the Base Prospectus and the
Prospectus Supplement, together, are hereinafter called the "Prospectus". Any
preliminary form of the Prospectus that has heretofore been filed pursuant to
Rule 424(b) is hereinafter called a "Preliminary Prospectus".
1. Representations and Warranties.
(a) The Depositor represents and warrants to the Underwriters as
follows:
(i) The Registration Statement has become effective; no stop
order suspending the effectiveness of the Registration Statement is in effect,
and no proceedings for such purpose are pending or, to the Depositor's
knowledge, threatened by the Commission; the
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Registration Statement as of the effective date thereof (the "Effective Date"),
and the Prospectus, as of the date of the Prospectus Supplement, complied in all
material respects with the applicable requirements of the 1933 Act and the rules
and regulations thereunder (the "1933 Act Regulations"); and the information in
the Registration Statement, as of the Effective Date, did not contain any untrue
statement of a material fact and did not omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading and the information in the Prospectus, as of the date of the
Prospectus Supplement, did not, and as of the Closing Date (as hereinafter
defined) will not, contain an untrue statement of a material fact and did not
and will not omit to state a material fact necessary in order to make the
information therein, in the light of the circumstances under which they were
made, not misleading, provided, however, that the Depositor makes no
representations, warranties or agreements as to (A) the information contained in
the Prospectus or any revision or amendment thereof or supplement thereto in
reliance upon and in conformity with information furnished in writing to the
Depositor by any Underwriter on behalf of itself or the other Underwriters
specifically for use in connection with the preparation of the Prospectus or any
revision or amendment thereof or supplement thereto (the "Underwriter
Information"), or (B) any information contained in or omitted from any
Computational Materials or ABS Term Sheets (each as hereinafter defined)
required to be provided by any Underwriter to the Depositor pursuant to Section
4, and provided, further, that the Depositor makes no representations or
warranties as to any information contained in or omitted from the portions of
the Prospectus Supplement for which the Mortgage Loan Sellers are obligated to
indemnify the Underwriters under the Indemnification Agreements (as defined in
Section 4(b)(iii) hereof) (the "Mortgage Loan Seller Information") and provided,
further, that the Depositor makes no representations or warranties regarding
untrue statements or omissions in the portions of the Prospectus Supplement
under the headings "Yield and Maturity Considerations" that arise out of or are
based upon untrue statements or omissions in the Mortgage Loan Seller
Information. The parties acknowledge that the Underwriter Information consist of
the second, third and fourth sentences of the final paragraph of the cover page,
and the second, fourth and eighth paragraphs of the section titled "Plan of
Distribution" in the Prospectus.
(ii) The Depositor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Delaware with corporate power and authority to enter into and perform its
obligations under this Agreement and the Pooling and Servicing Agreement.
(iii) The execution, delivery and performance of this Agreement
and the Pooling and Servicing Agreement by the Depositor and the consummation of
the transactions contemplated herein and therein by the Depositor and compliance
by the Depositor with its obligations hereunder and thereunder have been duly
authorized by all necessary corporate action and will not (A) contravene any
provision of the certificate of incorporation or by-laws of the Depositor or
applicable law or (B) conflict with or constitute a breach of or default under,
or result in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Depositor pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Depositor
is a party or by which it may be bound or to which any of the property or assets
of the Depositor is subject, which conflict, breach, default, lien, charge or
encumbrance is reasonably likely to materially and adversely affect the
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Depositor's ability to perform its obligations under this Agreement or the
Pooling and Servicing Agreement.
(iv) The Certificates have been duly authorized for issuance and
sale (or will have been so authorized prior to the issuance thereof) pursuant to
this Agreement and the Pooling and Servicing Agreement. When issued,
authenticated and delivered pursuant to the provisions of this Agreement and of
the Pooling and Servicing Agreement against payment of the consideration
therefor in accordance with this Agreement, the Certificates will be duly and
validly issued and outstanding and entitled to the benefits provided by the
Pooling and Servicing Agreement, except as enforceability thereof may be limited
by the effect of (A) bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws affecting the enforcement of the rights of
creditors generally, and (B) general principles of equity, whether enforcement
is sought in a proceeding in equity or at law. The Certificates and the Pooling
and Servicing Agreement conform in all material respects to all statements
relating thereto contained in the Prospectus.
(v) 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 Certificates hereunder, 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 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 yet been completed.
(vi) This Agreement has been, and as of the Closing Date the
Pooling and Servicing Agreement will be, duly authorized, executed and delivered
by the Depositor. This Agreement constitutes, and as of the Closing Date the
Pooling and Servicing Agreement will constitute, a legal, valid and binding
agreement enforceable against the Depositor in accordance with its terms, except
as such enforceability may be limited by the effect of (A) bankruptcy,
insolvency, reorganization, receivership, moratorium or other similar laws
affecting the enforcement of the rights of creditors generally, (B) general
principles of equity, 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
the provisions of this Agreement that purport or are construed to provide
indemnification from securities law liabilities.
(vii) At the time of the execution and delivery of the Pooling
and Servicing Agreement, the Depositor (A) will convey to the Trustee, or cause
to be conveyed to the Trustee, all of the Depositor's right, title and interest
in and to the Mortgage Loans, free and clear of any lien, mortgage, pledge,
charge, encumbrance, adverse claim or other security interest (collectively
"Liens") granted by or imposed upon the Depositor, (B) will not have assigned to
any other person any of its right, title or interest in the Mortgage Loans or in
the Pooling and Servicing Agreement or the Certificates, and (C) will have the
power and authority to transfer or cause to be transferred its right, title and
interest in the Mortgage Loans to the Trustee and to sell the Certificates to
the Underwriters. Upon execution and delivery of the Pooling and Servicing
Agreement by the Trustee, the Trustee will have acquired ownership of all of the
Depositor's right, title and interest in and to the Mortgage Loans except to the
extent disclosed in the
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Prospectus, and upon delivery to the Underwriters of the Certificates pursuant
hereto, each Underwriter will have good title to the Certificates purchased by
such Underwriter, in each case free of Liens granted by or imposed upon the
Depositor.
(viii) The Depositor is not, and the issuance and sale of the
Certificates in the manner contemplated by the Prospectus will not cause the
Depositor or the Trust Fund to be, subject to registration or regulation as an
"investment company" under the Investment Company Act of 1940, as amended (the
"1940 Act").
(ix) Under generally accepted accounting principles ("GAAP") and
for federal income tax purposes, the Depositor will report the transfer of the
Mortgage Loans to the Trustee in exchange for the Certificates and the sale of
the Certificates to the Underwriters pursuant to this Agreement as a sale of the
interest in the Mortgage Loans evidenced by the Certificates. The consideration
received by the Depositor upon the sale of the Certificates to the Underwriters
will constitute at least reasonably equivalent value and fair consideration for
the Certificates. The Depositor will be solvent at all relevant times prior to,
and will not be rendered insolvent by, the sale of the Certificates to the
Underwriters. The Depositor is not selling the Certificates to the Underwriters
with any intent to hinder, delay or defraud any of the creditors of the
Depositor.
(x) The Depositor has not relied on the Underwriters for any
tax, regulatory, accounting or other advice with respect to compliance with or
registration under any statute, rule or regulation of any governmental,
regulatory, administrative or other agency or authority.
(xi) The Trust Fund (other than those portions specified in the
Pooling and Servicing Agreement) will qualify as three separate real estate
mortgage investment conduits (each, a "REMIC") for federal income tax purposes
pursuant to Section 860D of the Internal Revenue Code of 1986, as amended (the
"Code"); the REMIC III Regular Certificates will constitute "regular interests"
in a REMIC; and the Class R Certificates will evidence the sole class of
"residual interests" in each related REMIC.
(xii) There are no legal or governmental proceedings pending or,
to the knowledge of the Depositor, threatened to which the Depositor is a party
or to which any of the properties of the Depositor are subject that are required
to be described in the Prospectus and that are not so described, nor are there
any contracts or other documents to which the Depositor is a party or to which
the Depositor or any of the properties of the Depositor are subject that are
required to be described in the Prospectus.
(xiii) At the Closing Date, the respective classes of
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 (the "Rating Agencies").
(xiv) Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement, the
Pooling and Servicing Agreement and the Certificates payable by the Depositor
(other than income taxes) have been paid or will be paid at or prior to the
Closing Date.
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(xv) None of the Depositor or any of its affiliates does
business with the government of Cuba or with any person or affiliate located in
Cuba within the meaning of Section 517.075, Florida Statutes.
(b) Each Underwriter represents and warrants to the Depositor that, as
of the date hereof and as of the Closing Date, such Underwriter has complied
with all of its obligations hereunder.
2. Purchase and Sale.
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Subject to the terms and conditions herein set forth and in reliance
upon the representations and warranties herein contained, the Depositor shall
sell to the Underwriters, and each Underwriter shall, severally and not jointly,
purchase from the Depositor, at the related purchase price set forth on Schedule
I hereto, Certificates of each class thereof having an actual or notional amount
as set forth on Schedule I hereto opposite their names. There will be added to
the purchase price of the Certificates an amount equal to interest accrued
thereon pursuant to the terms thereof from March 1, 2003 to but excluding the
Closing Date.
3. Delivery and Payment.
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Payment of the aggregate purchase price for, and delivery of, the
Certificates shall be made at 10:00 a.m. New York City time on March 20, 2003,
which date and time may be postponed by agreement between the Underwriters and
the Depositor (such time and date of payment and delivery, the "Closing Date").
Payment shall be made to the Depositor by the Underwriters of the purchase
prices of the Certificates as set forth in Schedule I in immediately available
Federal funds wired to such bank as may be designated by the Depositor, against
delivery of the Certificates. Delivery of the Certificates will be made in
book-entry form through the facilities of The Depository Trust Company ("DTC").
Each class of Certificates will be represented by one or more definitive global
Certificates to be deposited by or on behalf of the Depositor with DTC or the
Trustee. The Certificates will be made available for examination by the
Underwriters not later than 10:00 a.m. New York City time on the last business
day prior to the Closing Date. The closing of the transactions contemplated
hereby shall be made at the offices of ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇ LLP, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, or at such other place as shall be
agreed upon by the Underwriters and the Depositor.
4. Offering by Underwriters.
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(a) It is understood that the Underwriters propose to offer the
Certificates for sale as set forth in the Prospectus. It is further understood
that the Depositor, in reliance upon Policy Statement 105, has not and will not
file an offering statement pursuant to Section 352-e of the General Business Law
of the State of New York with respect to the Certificates. Each Underwriter
severally and not jointly therefore agrees that sales of the 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) In connection with the offering of the Certificates, the
Underwriters may each prepare and provide to prospective investors (i)
computational materials ("Computational Materials") as defined in the No-Action
Letter of May 20, 1994 issued by the Staff of the
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Division of Corporation Finance of the Commission to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance
Corporation I, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & Co. Incorporated and ▇▇▇▇▇▇ Structured Asset
Corporation, as made applicable to other issuers and underwriters by the Staff
of the Division of Corporation Finance of the Commission in response to the
request of the Public Securities Association dated May 24, 1994, as well as the
PSA Letter referred to below and (ii) ABS term sheets ("ABS Term Sheets"), each
as defined in the No-Action Letter of February 17, 1995 issued by the Staff of
the Division of Corporation Finance of the Commission to the Public Securities
Association (the "PSA Letter", and, together with the No-Action Letters
described in clause (i) above, collectively, the "No-Action Letters"), subject
to the following conditions (to which such conditions each Underwriter agrees
(provided that no Underwriter is responsible for any breach of the following
conditions by any other Underwriter)):
(i) All Computational Materials and ABS Term Sheets provided to
prospective investors that are required to be filed pursuant to the No-Action
Letters shall bear a legend substantially in the form attached hereto as Exhibit
A. The Depositor shall have the right to require additional specific legends or
notations to appear on any Computational Materials or ABS Term Sheets, the right
to require changes regarding the use of terminology and the right to determine
the types of information appearing therein. Notwithstanding the foregoing, this
subsection (i) will be satisfied if all Computational Materials and ABS Term
Sheets referred to herein bear a legend in a form previously approved in writing
by the Depositor.
(ii) Each Underwriter shall provide to the Depositor, for filing
on Form 8-K as provided in Section 5(i), copies (in such format as required by
the Depositor) of all Computational Materials and ABS Term Sheets that are
required to be filed with the Commission pursuant to the No-Action Letters. Such
Underwriter may provide copies of the foregoing in a consolidated or aggregated
form including all information required to be filed if filing in such format is
permitted by the No-Action Letters. All Computational Materials and ABS Term
Sheets described in this subsection (ii) must be provided to the Depositor not
later than 10:00 a.m. New York City time one business day before filing thereof
is required pursuant to the terms of this Agreement and in accordance with the
No-Action Letters. None of the Underwriters shall provide to any investor or
prospective investor in the Certificates any Computational Materials or ABS Term
Sheets on or after the day on which Computational Materials or ABS Term Sheets
are required to be provided to the Depositor pursuant to this subsection (ii)
(other than copies of Computational Materials or ABS Term Sheets previously
submitted to the Depositor in accordance with this subsection (ii)) for filing
pursuant to Section 5(i), unless such Computational Materials or ABS Term Sheets
are preceded or accompanied by the delivery of a Prospectus to such investor or
prospective investor.
(iii) All information included in the Computational Materials
and ABS Term Sheets shall be generated based on substantially the same
methodology and assumptions that 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 that are required to be filed were based on
assumptions with respect to, or characteristics of, the mortgage pool that
differ from the mortgage pool information as reflected in the Final Prospectus
Supplement (as defined in the Indemnification Agreements, dated as of March 7,
2003, between the respective Mortgage Loan Sellers, the Depositor and the
Underwriters
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(collectively, as amended or supplemented, the "Indemnification Agreements")) in
any material respect, or on Certificate structuring terms that were revised in
any material respect prior to the printing of the Prospectus, the Underwriter
preparing such materials shall prepare revised Computational Materials or ABS
Term Sheets, as the case may be, based on the final Prospectus Supplement and
structuring assumptions used in the Prospectus, circulate such revised
Computational Materials and ABS Term Sheets to all recipients of the preliminary
versions thereof that indicated orally to the Underwriter they would purchase
all or any portion of the Certificates, and include such revised Computational
Materials and ABS Term Sheets (marked, "as revised") in the materials delivered
to the Depositor pursuant to subsection (ii) above.
(iv) The Depositor 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, at the request of the related
Underwriter, the Depositor will file Computational Materials or ABS Term Sheets
that contain a material error or omission if clearly marked "superseded by
materials dated, ______________" and accompanied by corrected Computational
Materials or ABS Term Sheets that are marked, "material previously dated
__________, as corrected." If, within the period during which the Prospectus
relating to the 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 Depositor or the related Underwriter, to contain a material
error or omission, such 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 that either indicated orally to such Underwriter they would
purchase all or any portion of the Certificates, or actually purchased all or
any portion thereof, and shall deliver copies of such corrected Computational
Materials or ABS Term Sheets (marked, "as corrected") to the Depositor for
filing with the Commission in a subsequent Form 8-K submission (subject to the
Depositor's obtaining an accountant's comfort letter in respect of such
corrected Computational Materials and ABS Term Sheets, which the parties
acknowledge shall be at the expense of PMCF, CIBC, BSCMI, and WFB under the PMCF
Mortgage Loan Purchase Agreement, the BSCMI Mortgage Loan Purchase Agreement,
the CIBC Mortgage Loan Purchase Agreement and the WFB Mortgage Loan Purchase
Agreement, respectively. As of the date that any Underwriter disseminates any
Computational Materials or ABS Term Sheets, such Underwriter shall not have any
knowledge or reason to believe that such Computational Materials or ABS Term
Sheets contained any material error or omission and each Underwriter agrees to
promptly notify the Depositor of any such material error or omission of which
such Underwriter becomes aware. Notwithstanding the foregoing, the Underwriters
make no representation or warranty as to whether any Computational Materials or
ABS Term Sheets (or any written or electronic materials furnished to prospective
investors on which the Computational Materials or ABS Term Sheets are based)
included or will include any inaccurate statement resulting directly from any
error contained in the Prudential Mortgage Loan Information, the CIBC Mortgage
Loan Information, the BSCMI Mortgage Loan Information and the ▇▇▇▇▇ Fargo
Mortgage Loan Information (each as defined in the respective Indemnification
Agreement).
(v) Each Underwriter shall be deemed to have represented, as of
the Closing Date, that, except for Computational Materials and ABS Term Sheets
provided to the Depositor pursuant to subsection (ii) above, such Underwriter
did not provide any prospective investors with any information in written or
electronic form in connection with the offering of the
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Certificates that is required to be filed with the Commission in accordance with
the No-Action Letters.
(vi) In the event of any delay in the delivery by any
Underwriter to the Depositor of Computational Materials and ABS Term Sheets
required to be delivered in accordance with subsection (ii) above, or in the
delivery of the accountant's comfort letter in respect thereof pursuant to
Section 5(i), the Depositor shall have the right to delay the release of the
Prospectus to investors or to the Underwriters, to delay the Closing Date and to
take other appropriate actions in each case as necessary in order to allow the
Depositor to comply with its agreement set forth in Section 5(i) to file the
Computational Materials and ABS Term Sheets by the time specified therein.
(c) Each Underwriter further represents and warrants that, if and to
the extent it has provided any prospective investors with any Computational
Materials or ABS Terms Sheets prior to the date hereof in connection with the
offering of the Certificates, all of the conditions set forth in clause (b)
above have been satisfied with respect thereto.
(d) Each Underwriter further represents and warrants that it has
offered and sold Certificates only to, or directed at, persons who:
(i) are outside the United Kingdom;
(ii) have professional experience in participating in
unregulated collective investment schemes; or
(iii) are persons falling within Article 22(2)(a) through (d) of
the Financial Services and Markets Act 2000 (Promotion of Collective Investment
Schemes)(Exemptions) Order 2001.
5. Covenants of the Depositor.
The Depositor covenants with each Underwriter as follows:
(a) The Depositor will give each of the Underwriters notice of its
intention to file or prepare (i) any amendment to the Registration Statement at
any time prior to the Closing Date or (ii) any amendment or supplement to the
Prospectus (including any revised prospectus that the Depositor proposes for use
by the Underwriters in connection with the offering of the Certificates and that
differs from the prospectus on file at the Commission at the time the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations) at
any time during the period when a prospectus relating to the Certificates is
required to be delivered under the 1933 Act, and the Depositor will furnish the
Underwriters with copies of any such amendment or supplement a reasonable amount
of time prior to such proposed filing or use, as the case may be, and will not
file any such amendment or supplement or use any such prospectus to which the
Underwriters shall reasonably object.
(b) The Depositor will promptly give each Underwriter notice of (i) any
request by the Commission for any
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amendment of the Registration Statement or the Prospectus or for any additional
information relating to the Certificates, (ii) any written notification received
by the Depositor of suspension of qualification of the Certificates for sale in
any jurisdiction or the initiation or threatening of any proceeding for such
purpose and (iii) the issuance by the Commission of any stop order suspending
the effectiveness of the Registration Statement or the institution or, to the
knowledge of the Depositor, threatening any proceeding for that purpose. The
Depositor will use its best efforts to prevent the issuance of any such stop
order and, if issued, to obtain as soon as possible the withdrawal thereof.
(c) The Depositor will cause the Prospectus to be transmitted to the
Commission for filing pursuant to Rule 424(b) under the 1933 Act by means
reasonably calculated to result in filing with the Commission pursuant to said
rule.
(d) The Depositor will furnish to each Underwriter, from time to time
during the period when a prospectus relating to the Certificates is required to
be delivered under the 1933 Act, such number of copies of the Prospectus (as
amended or supplemented) as such Underwriter may reasonably request for the
purposes contemplated by the 1933 Act or the Securities Exchange Act of 1934, as
amended (the "1934 Act") or the respective applicable rules and regulations of
the Commission thereunder.
(e) If, during the period after the first date of the public offering
of the Certificates in which a prospectus relating to the Certificates is
required to be delivered under the 1933 Act, any event shall occur as a result
of which it is necessary to amend or supplement the Prospectus in order to make
the Prospectus not misleading in the light of the circumstances existing at the
time it is delivered to a purchaser, if the Depositor has actual knowledge of
the event, and if the event is not otherwise disclosed in a filing to the
Registration Statement pursuant to Section 13 or 15(d) of the 1934 Act, the
Depositor will forthwith amend or supplement the Prospectus so that, as so
amended or supplemented, the Prospectus will not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances existing at the time it is
delivered to a purchaser, not misleading, and the Depositor will furnish to each
Underwriter a reasonable number of copies of such amendment or supplement.
(f) The Depositor will endeavor to arrange for the qualification of the
Certificates for sale under the applicable securities laws of such states and
other jurisdictions of the United States as the Underwriters may reasonably
designate and will maintain such qualification in effect so long as required for
the initial distribution of Certificates; provided, however, that the Depositor
shall not be obligated to qualify as a foreign corporation in any jurisdiction
in which it is not so qualified or to file a general consent to service of
process in any jurisdiction.
(g) The Depositor will use the net proceeds received by it from the
sale of the Certificates in the manner specified in the Prospectus under "Use of
Proceeds".
(h) Whether or not the transactions contemplated by this Agreement are
consummated, the Depositor will pay or cause to be paid all expenses incident to
the performance of the obligations of the Depositor under this Agreement,
including, without limitation, (i) the fees, disbursements and expenses of the
Depositor's counsel and accountants in connection with the purchase of the
Mortgage Loans and the issuance and sale of the
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Certificates, (ii) all fees and expenses incurred in connection with the
registration and delivery of the Certificates under the 1933 Act, and all other
fees or expenses in connection with the preparation and filing of the
Registration Statement, any preliminary prospectus, the Prospectus and
amendments and supplements to any of the foregoing, including all printing costs
associated therewith, and the mailing and delivering of copies thereof to the
Underwriters and dealers, in the quantities specified above, (iii) all costs and
expenses related to the transfer and delivery of the Certificates to the
Underwriters, including any transfer or other taxes payable thereon, (iv) the
costs of printing or producing any "blue sky" memorandum in connection with the
offer and sale of the Certificates under state securities laws and all expenses
in connection with the qualification of the Certificates for the offer and sale
under state securities laws as provided in Section 5(f), including filing fees
and the reasonable fees and disbursements of counsel for the Underwriters in
connection with such qualification and in connection with the "blue sky"
memorandum, (v) the cost of printing the Certificates, (vi) the upfront costs
and charges of any transfer agent, registrar or depository, (vii) the fees and
expenses of the rating agencies incurred in connection with the issuance and
sale of the Certificates and (viii) all other costs and expenses incident to the
performance of the obligations of the Depositor hereunder for which provision is
not otherwise made in this Section. Except as herein provided, the Underwriters
shall be responsible for the payment of all costs and expenses incurred by them,
including, without limitation, (i) the fees and disbursements of counsel of the
Underwriters and (ii) such additional costs arising out of any Computational
Materials and ABS Term Sheets prepared and/or distributed by the Underwriters,
in connection with the purchase and sale of the Certificates.
(i) The Depositor will file with the Commission within fifteen days of
the issuance of the Certificates a report on Form 8-K setting forth specific
information concerning the Certificates and the Mortgage Pool to the extent that
such information is not set forth in the Prospectus. The Depositor will also
file with the Commission a report on Form 8-K setting forth all Computational
Materials and ABS Term Sheets (as such terms are defined herein) provided to the
Depositor by any Underwriter and identified by it as such within the time period
allotted for such filing pursuant to the No-Action Letters; provided, however,
that such Underwriter must comply with its obligations pursuant to Section 4 and
the Depositor must receive a letter by the Closing Date from
PricewaterhouseCoopers, certified public accountants, satisfactory in form and
substance to the Depositor, to the effect that such accountants have performed
certain specified procedures, all of which have been agreed to by the Depositor,
as a result of which they have determined that the information included in the
Computational Materials and ABS Term Sheets (if any), provided by such
Underwriter to the Depositor for filing on Form 8-K pursuant to Section 4 and
this subsection (i), and that the accountants have examined in accordance with
such agreed upon procedures, is accurate except as to such matters that are not
deemed by the Depositor to be material. The Depositor shall file any corrected
Computational Materials or ABS Term Sheets described in Section 4(b)(iv) as soon
as practicable following receipt thereof.
6. Conditions of Underwriters' Obligations.
---------------------------------------
Each Underwriter's obligation to purchase the Certificates allocated to
it as set forth on Schedule I hereto shall be subject to the accuracy in all
material respects of the representations and warranties on the part of the
Depositor contained herein as of the date hereof and as of the Closing Date, to
the performance by the Depositor in all material respects of its obligations
hereunder and to the following conditions:
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(a) No stop order suspending the effectiveness of the Registration
Statement shall be in effect, and no proceedings for that purpose shall be
pending or, to the Depositor's knowledge, threatened by the Commission and the
Prospectus Supplement shall have been filed or transmitted for filing by means
reasonably calculated to result in a filing with the Commission pursuant to Rule
424(b) under the 1933 Act.
(b) On the Closing Date, such Underwriter shall have received:
(i) One or more opinions, dated the Closing Date, of counsel to the
Depositor, in form and substance satisfactory to such Underwriter,
substantially to the effect that:
(A) The Depositor is a corporation in good standing under the
laws of the State of Delaware.
(B) The Depositor has corporate power and authority to enter
into and perform its obligations under this Agreement and the Pooling
and Servicing Agreement.
(C) Each of this Agreement and the Pooling and Servicing
Agreement has been duly authorized, executed and delivered by the
Depositor. Upon due authorization, execution and delivery by the other
parties thereto, the Pooling and Servicing Agreement will constitute a
valid, legal and binding agreement of the Depositor, enforceable
against the Depositor in accordance with its terms, except as
enforceability may be limited by (1) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other similar
laws affecting the enforcement of the rights of creditors generally,
(2) general principles of equity, whether enforcement is sought in a
proceeding in equity or at law and (3) such other exceptions as are
reasonably acceptable to the Underwriters.
(D) The Certificates, when duly and validly executed,
authenticated and delivered in accordance with the Pooling and
Servicing Agreement and paid for in accordance with this Agreement,
will be entitled to the benefits of the Pooling and Servicing
Agreement.
(E) The Registration Statement was declared effective under the
1933 Act and, to the best of such counsel's knowledge and information,
no stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act and not withdrawn, and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(F) At the time it became effective, the Registration Statement
(other than any financial or statistical information included or
incorporated by reference therein, as to which no opinion need be
rendered) complied as to form in all material respects with the
requirements of the 1933 Act and the 1933 Act Regulations.
(G) To such counsel's knowledge and information, there are no
material contracts, indentures, or other documents of the Depositor
required to be described or referred to in the Registration Statement
or to be filed as exhibits thereto
-12-
other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto.
(H) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and the
issuance and sale of the Certificates in the manner contemplated by the
Prospectus will not cause the Trust Fund to be subject to registration
or regulation as an "investment company" under the Investment Company
Act of 1940, as amended.
(I) 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 Depositor of the transactions contemplated
herein, except (1) such as have been obtained, (2) such as may be
required under the blue sky laws of any jurisdiction in connection with
the purchase and sale of the Certificates by the Underwriters, as to
which no opinion need be expressed and (3) any recordation of the
assignments of the Mortgage Loans to the Trustee pursuant to the
Pooling and Servicing Agreement that has not yet been completed.
(J) Neither the sale of the Certificates to the Underwriters
pursuant to this Agreement, nor the consummation by the Depositor of
any other of the transactions contemplated by, or the fulfillment by
the Depositor of the terms of, this Agreement or the Pooling and
Servicing Agreement, 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, (1) the certificate of incorporation or
by-laws of the Depositor or, (2) to the knowledge of such counsel, any
material indenture, agreement or instrument to which the Depositor is a
party or by which it is bound or, (3) any State of New York or federal
statute or regulation applicable to the Depositor or, (4) to the
knowledge of such counsel, any order of any New York or federal court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Depositor except, in the case of either (2) or
(4), for any conflict, breach, violation or default that, in the
judgment of such counsel, is not reasonably likely to materially and
adversely affect the Depositor's ability to perform its obligations
under this Agreement or the Pooling and Servicing Agreement.
(ii) An opinion, dated the Closing Date, of counsel to the
Underwriters, reasonably acceptable to the Underwriters.
(iii) In giving their opinions required by the foregoing
subsections (i) and (ii) of this Section, counsel to the Depositor and
the Underwriters, respectively, shall in each case additionally state
that nothing has come to such counsel's attention that has caused it to
believe that (i), in the case of counsel to the Depositor, the
Registration Statement or the Prospectus, and (ii) in the case of
counsel to the Underwriters, the Prospectus, (in each case other than
any financial statements and supporting schedules and statistical
and/or accounting information included therein, as to which no
statement need be made), in the case of the Registration Statement, as
of the time it became effective and, in the case of the Prospectus, as
of the date thereof or as of the Closing Date, contained an untrue
statement of a material fact or omitted to state a material fact
necessary to make
-13-
the statements therein, in the light of the circumstances under which
they were made, not misleading. Such statement shall be based upon
conferences and telephone conversations with representatives of the
parties hereto, the Mortgage Loan Sellers, the Master Servicers, the
Special Servicer, the Certificate Administrator, the Tax Administrator,
the Fiscal Agent and the Trustee and such statement may be qualified
that, with limited exception, such counsel will not have reviewed any
loan documents.
Such opinion(s) may express its (their) reliance as to factual
matters on the representations and warranties made by, and on
certificates or other documents furnished by officers and/or authorized
representatives of, the parties to this Agreement and the Pooling and
Servicing Agreement and on certificates furnished by public officials.
Such opinion(s) may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by the
parties thereto other than the party on behalf of which such opinion is
being rendered. Such opinion(s) may be qualified as an opinion only on
the General Corporation Law of the State of Delaware, the laws of the
State of New York and the federal law of the United States.
(c) On the Closing Date, each Underwriter shall have received a
favorable opinion, dated the Closing Date, of special tax and ERISA counsel to
the Depositor (i) regarding the qualification of each of REMIC I, REMIC II and
REMIC III as a real estate mortgage investment conduit within the meaning of
Sections 860A through 860G of the Internal Revenue Code of 1986 and (ii) to the
effect that the statements in the Base Prospectus and the Prospectus Supplement
under the headings "Federal Income Tax Consequences" and "ERISA Considerations",
to the extent that they constitute matters of federal law or legal conclusions
with respect thereto, while not purporting to discuss all possible consequences
of investment in the Certificates, are correct in all material respects with
respect to those consequences or matters that are discussed therein. Such
opinion(s) may express its (their) reliance as to factual matters on the
representations and warranties made by, and on certificates or other documents
furnished by officers and/or authorized representatives of, the parties to this
Agreement and the Pooling and Servicing Agreement and on certificates furnished
by public officials. Such opinion(s) may assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto. Such opinion(s) may be qualified as an opinion only on the federal tax
and ERISA law of the United States.
(d) The Depositor shall have delivered to each Underwriter a
certificate, dated the Closing Date, and signed by the President, a Senior Vice
President or a Vice President of the Depositor, to the effect that:
(i) the representations and warranties of the Depositor in this
Agreement and the Pooling and Servicing Agreement are true and correct
in all material respects; and
(ii) the Depositor 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 Closing Date.
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(e) Each Mortgage Loan Seller shall have delivered to each Underwriter
a certificate, dated the Closing Date, and signed by the President, a Senior
Vice President or a Vice President of the Mortgage Loan Seller to the effect
that:
(i) the representations and warranties of the Mortgage Loan Seller
in Section 4(a) of the respective Mortgage Loan Purchase Agreement are
true and correct in all material respects;
(ii) the Mortgage Loan Seller has, in all material respects,
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied under the respective Mortgage
Loan Purchase Agreement at or prior to the Closing Date;
(iii) since the date of this Agreement and prior to the sale of the
Mortgage Loans under the Agreement, there has been no material adverse
change in the financial condition of the Mortgage Loan Seller.
(f) Reserved.
(g) Reserved.
(h) Reserved.
(i) The Depositor and each Underwriter shall have received from
PricewaterhouseCoopers, certified public accountants, a letter dated the Closing
Date, in form and substance satisfactory to such Underwriter, stating in effect
that:
(i) they have performed certain specified procedures as a result of
which they have determined that certain information of an accounting,
financial or statistical nature set forth in the Prospectus Supplement
agrees with the data sheet or computer tape prepared by or on behalf of
each Mortgage Loan Seller, unless otherwise noted in such letter; and
(ii) they have compared the data contained in the data sheet or
computer tape referred to in the immediately preceding clause (i) to
information contained in the Mortgage Files and in such other sources
as shall be specified by them, and found such data and information to
be in agreement, unless otherwise noted in such letter.
(j) Each Underwriter shall have delivered a certification to the effect
specified in Section 4(b)(v) and the Underwriter and the Depositor shall have
received the accountants' letters specified in Section 5(i).
(k) Each Underwriter shall have received, with respect to each of the
Master Servicers, the Special Servicer, the Certificate Administrator, the Tax
Administrator and the Trustee, a favorable opinion of counsel, dated the Closing
Date, addressing the valid existence of such party under the laws of the
jurisdiction of its organization, the due authorization, execution and delivery
of the Pooling and Servicing Agreement by such party and, subject to the same
limitations as set forth in Section 6(b)(i)(C), the enforceability of the
Pooling and Servicing Agreement against such party and such other opinions as
shall be reasonably requested by such
-15-
Underwriter. Such opinion may express its reliance as to factual matters on
representations and warranties made by, and on certificates or other documents
furnished by, officers and/or authorized representatives of parties to, the
Pooling and Servicing Agreement and on certificates furnished by public
officials. Such opinion may assume the due authorization, execution and delivery
of the instruments and documents referred to therein by the parties thereto
other than the party on behalf of which such opinion is being rendered.
(l) Subsequent to the date hereof, there shall not have occurred any
change, or any development involving a prospective change, in or affecting the
business or properties of the Depositor or a Mortgage Loan Seller (including any
of the Mortgage Loans) which such Underwriter concludes, in the reasonable
judgment of such Underwriter, materially impairs the investment quality of the
Certificates so as to make it impractical or inadvisable to proceed with the
public offering or the delivery of the Certificates as contemplated by the
Prospectus.
(m) The Certificates shall have been assigned ratings by the Rating
Agencies (as defined in the Pooling and Servicing Agreement) no less than those
set forth on Schedule I and such ratings shall not have been withdrawn,
suspended or qualified.
(n) The Underwriters shall have received copies of any opinions of
counsel to the Depositor supplied to the Rating Agencies relating to certain
matters with respect to the Certificates. Any such opinions shall be dated the
Closing Date and addressed to the Underwriters or accompanied by reliance
letters addressed to the Underwriters.
(o) The Depositor shall have furnished to the Underwriters such further
opinions, information, certificates and documents as the Underwriters may
reasonably have requested, and all proceedings in connection with the
transactions contemplated by this Agreement and all documents incident hereto
shall be in all material respects reasonably satisfactory in form and substance
to the Underwriters and their counsel.
7. Indemnification.
---------------
(a) The Depositor shall indemnify and hold harmless each Underwriter
(severally and not jointly), its directors and officers and each person, if any,
who controls such Underwriter within the meaning of either Section 15 of the
1933 Act or Section 20 of the 1934 Act, from and against any and all expenses,
losses, claims, damages and other liabilities (including without limitation the
reasonable costs of investigation and legal defense) (the "Liabilities") caused
by any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement or any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein, not misleading, or caused by any untrue statement or
alleged untrue statement of any material fact contained in the Preliminary
Prospectus or the Prospectus or any omission or alleged omission to state
therein a material fact necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided that,
insofar as the Liabilities (i) are caused by any such untrue statement or
omission or alleged untrue statement or omission with respect to any information
in the Prospectus as to which any Underwriter has agreed to indemnify the
Depositor pursuant to Section 7(b), (ii) are caused by any untrue statements or
alleged untrue statements, or omissions or alleged omissions, in the
Computational Materials or ABS Term
-16-
Sheets relating to the Certificates that were made a part of or incorporated by
reference into the Registration Statement or the Prospectus as a result of any
filing pursuant to Section 5(i) and such misstatement or omission was not also a
misstatement or omission in the Prospectus; or (iii) arise out of or relate to
claims asserted by any person who purchased Certificates that are the subject
thereof if such person did not receive a copy of the Prospectus with the
confirmation of the sale of such Certificates to such person in any case where
the untrue statement or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact contained in the
Preliminary Prospectus was corrected in the Prospectus and the Prospectus was
furnished to such Underwriter, the Depositor shall have no obligation to so
indemnify and hold harmless; and provided, further, that the Depositor shall
have no obligation to so indemnify and hold harmless to the extent that the
Liabilities arise out of or are based upon an untrue statement or omission or an
alleged untrue statement or omission with respect to the Mortgage Loan Seller
Information.
(b) Each Underwriter shall, severally and not jointly, indemnify and
hold harmless the Depositor, its directors and its officers who signed the
Registration Statement and each person, if any, who controls the Depositor
within the meaning of either Section 15 of the 1933 Act or Section 20 of the
1934 Act against any and all Liabilities as incurred, but only with respect to
Liabilities caused by any (i) untrue statements or alleged untrue statements, or
omissions or alleged omissions to state a material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, in the Underwriter Information, and (ii) untrue statements
or alleged untrue statements, or omissions or alleged omissions to state a
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in the Computational
Materials or ABS Term Sheets delivered to purchasers of the Certificates by any
of the Underwriters, if such Computational Materials and ABS Term Sheets were,
in whole or in part, prepared by the indemnifying Underwriter and made a part of
or incorporated by reference into the Registration Statement or the Prospectus
as a result of any filing pursuant to Section 5(i); provided, that no
Underwriter shall be obligated to so indemnify and hold harmless to the extent
such Liabilities are caused by a misstatement or omission resulting from an
error or omission in the Mortgage Loan Seller Information or by any errors in
the mathematical calculations reflected in such Computational Materials and ABS
Term Sheets to the extent such errors result from errors in such Mortgage Loan
Seller Information; and provided, further, that any such omission or alleged
omission relating to the Computational Materials and ABS Term Sheets shall be
determined by reading such Computational Materials and ABS Term Sheets in
conjunction with the Prospectus as an integral document and in the light of the
circumstances under which such statements in the Computational Materials, the
ABS Term Sheets and the Prospectus were made. Notwithstanding the foregoing, the
indemnity in clause (ii) of the immediately preceding sentence will apply only
if such misstatement or omission was not also a misstatement or omission in the
Prospectus. Notwithstanding the foregoing, no Underwriter shall be liable for
any losses, claims, damages, expenses based on or arising from any untrue
statement or omission or alleged untrue statement or omission made in any
Computational Materials or ABS Term Sheets to the extent such untrue statement
or omission or alleged untrue statement or omission is eliminated or remedied in
revised Computational Materials or ABS Term Sheets and such Underwriter has,
prior to confirmation of sale of any of the subject Certificates, complied with
its obligation to circulate the revised Computational Materials and/or ABS Term
Sheets, as applicable, in accordance with Section 4(b)(iii) above.
-17-
(c) Each indemnified party shall give notice in writing 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 Agreement.
Upon request of the indemnified party, the indemnifying party shall retain
counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and any others the indemnifying party may designate in such
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding as incurred. If any action is brought against any indemnified
party and it notifies the indemnifying party of the commencement thereof, the
indemnifying party may participate at its own expense in the defense of any such
action. The indemnifying party may elect to assume the defense thereof, with
counsel reasonably satisfactory to such indemnified party by written notice
delivered to the indemnified party promptly after receiving the aforesaid notice
from the 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, (ii) 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 or (iii) the
indemnifying party shall have failed to designate within a reasonable period of
time counsel reasonably satisfactory to the indemnified party (in which case the
fees and expenses shall be paid as incurred by the indemnifying party). In no
event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from 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. An indemnifying party shall not
be liable for any settlement of any proceeding effected without its written
consent. However, 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.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel for which the indemnifying party is obligated
under this subsection, the indemnifying party agrees that it shall be liable for
any settlement of any proceeding effected without its written consent if (i)
such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. 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 an
unconditional 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.
(d) If the indemnification provided for in this Section 7 is due in
accordance with its terms but is for any reason unavailable to an indemnified
party in respect of any losses, claims, damages or liabilities under subsection
(a) or (b) on grounds of public policy or otherwise, then the indemnifying
party, in lieu of indemnifying such indemnified party, shall contribute to the
amount paid or payable by such indemnified party as a result of such losses,
claims, damages or
-18-
liabilities (i) in such proportion as is appropriate to reflect the relative
benefits received by the Depositor on the one hand and the applicable
Underwriter on the other from the offer and sale of the Certificates pursuant
hereto 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 Depositor on the one hand and of such Underwriter on the other in connection
with the statements or omissions which resulted in such losses, claims, damages
or other liabilities, as well as any other relevant equitable considerations.
The relative benefits received by the Depositor on the one hand, and such
Underwriter on the other, in connection with the offering of the Certificates
underwritten by such Underwriter shall be deemed to be in the same respective
proportions that the total proceeds from the sale of the Certificates
underwritten by such Underwriter (before deducting expenses) received by the
Depositor and the amount by which the total price received by such Underwriter
with respect to the initial resale to investors of the Certificates acquired by
such Underwriter exceeds the total underwriting discounts and commissions
received by such Underwriter, bear to the aggregate offering price of the
Certificates. The relative fault of the Depositor on the one hand and of such
Underwriter 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 Depositor or by such Underwriter, and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) 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 (d) above. The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or other liabilities referred to in this
Section 7 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. 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. Notwithstanding the provisions of this subsection (e), no Underwriter
shall be required to contribute any amount in excess of the amount by which (i)
the total underwriting discounts and commissions and other fees received by such
Underwriter in connection with the offering of the Certificates exceeds (ii) the
amount of damages that such Underwriter has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the 1933 Act) shall be entitled to contribution from any
person who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 7 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.
(f) The indemnity and contribution agreements contained in this Section
7 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by the Depositor, an
Underwriter, any of their respective directors or officers, or any person
controlling the Depositor or such Underwriter within the meaning of either
Section 15 of the 1933 Act or Section 20 of the 1934 Act, and (iii) acceptance
of and payment for any of the Certificates.
-19-
(g) The Underwriters' respective obligations to contribute pursuant to
this Section 7 are several in proportion to the respective amount of
Certificates they have purchased hereunder, and not joint.
(h) Each Underwriter (the "Indemnifying Underwriter") will indemnify
and hold harmless the other Underwriters and each person, if any, who controls
such Underwriter within the meaning of either the 1933 Act or the 1934 Act (the
"Non-Indemnifying Underwriter") from and against any and all losses, claims,
damages or liabilities, joint or several, to which the Non-Indemnifying
Underwriter becomes subject under the 1933 Act, the 1934 Act or other federal or
state statutory law or regulation, common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon (i) any untrue statement of material fact contained in any
computational or other written materials prepared or developed by such
Indemnifying Underwriter, or any member of its selling group, in connection with
the Certificates or in any revision or amendment thereof or supplement thereto
or (ii) the failure of such Indemnifying Underwriter, or any member of its
selling group, to comply with any provision of Section 9, and agrees to
reimburse such Non-Indemnifying Underwriter, as incurred for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action. This agreement will
be in addition to any liability that any Underwriter may otherwise have.
8. Representations and Warranties to Survive Delivery.
--------------------------------------------------
All representations and warranties of the Depositor contained in this
Agreement shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or any controlling person
in respect of such Underwriter, and shall survive delivery of the Certificates
to the Underwriters.
9. Defaulting Underwriter.
----------------------
If, on the Closing Date, any of the Underwriters shall fail or refuse
to purchase Certificates that it has agreed to purchase hereunder on such date,
and the aggregate principal amount of Certificates which such defaulting
Underwriter agreed but failed or refused to purchase is not more than one-tenth
of the aggregate principal amount of Certificates to be purchased on such date,
the other Underwriters shall be obligated to purchase the Certificates which
such defaulting Underwriter agreed but failed or refused to purchase on such
date; provided that in no event shall the principal amount of Certificates that
any Underwriter has agreed to purchase pursuant to Section 3 be increased
pursuant to this Section 9 by an amount in excess of one-ninth of such principal
amount of Certificates, without the written consent of such Underwriter, and
provided further that no Underwriter shall be obligated under this Section 9 to
purchase Certificates of a Class that it is not otherwise obligated to purchase
under this Agreement.
If, on the Closing Date, one of the Underwriters shall fail or refuse
to purchase Certificates that it has agreed to purchase hereunder on such date
and the aggregate principal amount of Certificates with respect to which such
default occurs is more than one-tenth of the aggregate principal amount of
Certificates to be purchased on such date and arrangements satisfactory to the
non-defaulting Underwriters and the Depositor for the purchase of such
-20-
Certificates are not made within 36 hours after such default, this Agreement
shall terminate without liability on the part of any non-defaulting Underwriter
or of the Depositor. In any such case either such non-defaulting Underwriter or
the Depositor shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Prospectus or in any other documents or arrangements may be effected. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.
10. Termination of Agreement.
------------------------
(a) Any Underwriter may terminate its obligations under this Agreement,
by notice to the Depositor, at any time at or prior to the Closing Date if the
sale of the Certificates provided for herein is not consummated because of any
failure or refusal on the part of the Depositor to comply in all material
respects with the terms, or to fulfill in all material respects any of the
conditions of, this Agreement, or if for any reason the Depositor shall be
unable to perform in all material respects its obligations under this Agreement.
(b) Any Underwriter may terminate its obligations under this Agreement
in the absolute discretion of such Underwriter, by notice given to the
Depositor, if (A) after the execution and delivery of this Agreement and prior
to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the National Association of Securities
Dealers, Inc., the Chicago Board of Options Exchange, the Chicago Mercantile
Exchange or the Chicago Board of Trade, (ii) trading of any securities of the
Depositor or its affiliates shall have been suspended on any exchange or in any
over-the-counter market, (iii) a general moratorium on commercial banking
activities in New York shall have been declared by either Federal or State of
New York authorities, or (iv) there shall have occurred any outbreak or
escalation of hostilities or any change in financial markets or any calamity or
crisis that, in the judgment of such Underwriter, is material and adverse and
(B) in the case of any of the events specified in clauses (A)(i) through (iv)
above, such event singly or together with any other such event, makes it, in the
judgment of such Underwriter, impracticable to market the Certificates on the
terms and in the manner contemplated in the Prospectus.
(c) If any Underwriter terminates its obligations under this Agreement
in accordance with Section 10(a), the Depositor shall reimburse such Underwriter
for all reasonable out-of pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been reasonably incurred by such
Underwriter in connection with the proposed purchase and sale of the
Certificates.
11. Notices.
-------
All notices and other communications hereunder shall be in writing and
shall be deemed duly given if sent by facsimile or delivered by courier, in
either case with appropriate confirmation of receipt. Notices to Bear, ▇▇▇▇▇▇▇ &
Co. Inc., shall be directed to Bear, ▇▇▇▇▇▇▇ & Co. Inc., ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Senior Managing
Director, Commercial Mortgage Department (with copies to the attention of ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Managing Director, Legal Department); to ▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇,
-21-
▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated shall be directed to ▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ &
▇▇▇▇▇ Incorporated, 4 World Financial Center, New York, New York 10285,
Attention: Attention: ▇▇▇▇▇▇▇ ▇▇▇▇ (with a copy to ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Lynch,
▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, 4 World Financial Center, New York, New
York 10285); to ▇▇▇▇▇ Fargo Brokerage Services, LLC shall be directed to ▇▇▇▇▇
Fargo Brokerage Services, LLC, MAC N9303-090, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇; to the Depositor
shall be directed to Prudential Securities Secured Financing Corporation, ▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇,
Senior Vice President (with a copy to Prudential Securities Incorporated, One
Seaport Plaza, 30th Floor, New York, New York 10292, Attention: Law Department);
to CIBC World Markets Corp., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: Real Estate Finance Group; and as to any party, to such other address
as may hereafter be furnished by such party to the others in writing.
12. Parties.
-------
This Agreement shall inure to the benefit of and be binding upon the
Underwriters and the Depositor and their respective successors. Nothing
expressed or mentioned in this Agreement is intended or shall be construed to
give any person or entity, other than the Underwriters and the Depositor and
their respective successors and the controlling persons and officers and
directors referred to in Section 7 and their respective successors, 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 and the Depositor and their respective
successors, and said controlling persons and officers and directors and their
respective successors, heirs and legal representatives, and for the benefit of
no other person or entity. No purchaser of Certificates from the Underwriters
shall be deemed to be a successor by reason merely of such purchase.
13. Governing Law.
-------------
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York applicable to agreements made and to be
performed in said State.
14. Miscellaneous.
-------------
This Agreement supersedes all prior or contemporaneous agreements and
understandings between the parties hereto relating to the subject matter hereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated except by a writing signed by the party against whom enforcement of
such amendment, waiver, discharge or termination is sought. This Agreement may
be signed in any number of duplicate originals, each of which shall be deemed an
original, which taken together shall constitute one and the same instrument.
[signature page follows]
-22-
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Depositor a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriters and the Depositor in accordance with its
terms.
Very truly yours,
PRUDENTIAL SECURITIES SECURED
FINANCING CORPORATION
By:
----------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
▇▇▇▇▇▇▇ LYNCH, ▇▇▇▇▇▇, ▇▇▇▇▇▇ &
▇▇▇▇▇ INCORPORATED
By:
-------------------------------------
Name:
Title:
BEAR, ▇▇▇▇▇▇▇ & CO. INC.
By:
-------------------------------------
Name:
Title:
CIBC WORLD MARKETS CORP.
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇ FARGO BROKERAGE
SERVICES, LLC
By:
-------------------------------------
Name:
Title:
S-1
EXHIBIT A
---------
FORM OF LEGEND TO
COMPUTATIONAL MATERIALS AND ABS TERM SHEETS
This information has been prepared in connection with the issuance of the
securities referenced above and is based in part on information provided by the
mortgage loan sellers with respect to the expected characteristics of the
mortgage loans (the "Mortgage Loans") in which these securities will represent
undivided beneficial interests. The actual characteristics and performance of
the Mortgage Loans will differ from the assumptions used in preparing these
materials, which are hypothetical in nature. Changes in the assumptions may have
a material impact on the information set forth in these materials. No
representation is made that any performance or return hypothesized herein will
be achieved. For example, it is very unlikely that the Mortgage Loans will
prepay at a constant rate or follow a predictable pattern. NO REPRESENTATION IS
MADE AS TO THE APPROPRIATENESS, USEFULNESS, ACCURACY OR COMPLETENESS OF THESE
MATERIALS OR THE ASSUMPTIONS ON WHICH THEY ARE BASED. Additional information is
available upon request. These materials do not constitute an offer to buy or
sell or a solicitation of an offer to buy or sell any security or instrument in
any jurisdiction or to participate in any particular trading strategy. ANY SUCH
OFFER TO BUY OR SELL ANY SECURITY WOULD BE MADE ONLY PURSUANT TO A DEFINITIVE
PROSPECTUS AND PROSPECTUS SUPPLEMENT PREPARED BY THE ISSUER WHICH WOULD CONTAIN
MATERIAL INFORMATION NOT CONTAINED IN THESE MATERIALS. SUCH PROSPECTUS AND
PROSPECTUS SUPPLEMENT WILL CONTAIN ALL MATERIAL INFORMATION IN RESPECT OF ANY
SUCH SECURITY OFFERED THEREBY AND ANY DECISION TO INVEST IN SUCH SECURITIES
SHOULD BE MADE SOLELY IN RELIANCE UPON SUCH PROSPECTUS AND PROSPECTUS
SUPPLEMENT. ANY CAPITALIZED TERMS USED BUT NOT DEFINED HEREIN ARE TO BE READ IN
CONJUNCTION WITH SUCH PROSPECTUS AND PROSPECTUS SUPPLEMENT. In the event of any
such offering, these materials, including any description of the Mortgage Loans
contained herein, shall be deemed superseded in their entirety by such
Prospectus and Prospectus Supplement. NOT FOR DISTRIBUTION TO PRIVATE CUSTOMERS
AS DEFINED BY THE U.K. SECURITIES AND FUTURES AUTHORITY. [To be inserted for any
collateral term sheet subsequent to the initial term sheet: This Collateral
termsheet supercedes any prior collateral term sheet delivered in connection
with the issuance of securities referenced above.]
SCHEDULE I
----------
Prudential Securities Secured Financing Corporation Commercial Mortgage
Pass-Through Certificates, Series 2003-PWR1, Class A-1, Class A-2, Class B and
Class C
====================================================================================================================================
Amount to be Purchased By Amount to be Amount to be Amount to be Purchased
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇ Purchased By Bear, Purchased By By ▇▇▇▇▇ Fargo Brokerage
Class of Certificates & ▇▇▇▇▇ Incorporated ▇▇▇▇▇▇▇ & Co. Inc. CIBC World Markets Corp. Services, LLC
------------------------------------------------------------------------------------------------------------------------------------
A-1 $121,922,000 $121,922,000 $25,000,000 $0
------------------------------------------------------------------------------------------------------------------------------------
A-2 $234,122,000 $234,122,000 $50,000,000 $0
------------------------------------------------------------------------------------------------------------------------------------
B $16,200,500 $16,200,500 $0 $0
------------------------------------------------------------------------------------------------------------------------------------
C $18,000,500 $18,000,500 $0 $0
------------------------------------------------------------------------------------------------------------------------------------
Total $427,815,000 $427,815,000 $0 $0
====================================================================================================================================
SCHEDULE I (CONTINUED)
----------------------
===========================================================================================================================
Class Initial Aggregate Initial Purchase
Designation Principal Amount of Class(1) Pass-Through Rate Price(2) Rating(3) (Fitch/S&P)
---------------------------------------------------------------------------------------------------------------------------
A-1 $268,984,000 3.669% 100.49797% AAA/AAA
---------------------------------------------------------------------------------------------------------------------------
A-2 $518,244,000 4.493% 100.54646% AAA/AAA
---------------------------------------------------------------------------------------------------------------------------
B $32,401,000 4.607% 100.54441% AA/AA
---------------------------------------------------------------------------------------------------------------------------
C $36,001,000 4.706% 100.54563% A/A
===========================================================================================================================
----------------------
(1) Subject to a variance of plus or minus 5.0%
(2) Expressed as a percentage of the aggregate stated amount of the
relevant class of Certificates to be purchased. The purchase price for
each class of the Certificates will include accrued interest at the
initial Pass-Through Rate therefor on the aggregate stated amount
thereof to be purchased from March 1, 2003 to but not including the
Closing Date.
(3) By each of Fitch, Inc. ("Fitch") and Standard & Poor's Ratings Services
("S&P").