Mortgage Capital Funding, Inc.
$403,088,874 (Approximate)
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1996-MC2
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Underwriting Agreement
as of December 11, 1996
NationsBanc Capital Markets, Inc.
NationsBank Corporate Center, 11th Floor
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Mail Code: NC1-007-11-07
Charlotte, North Carolina 28255
Citibank, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Mortgage Capital Funding, Inc., a Delaware corporation ("MCFI"),
proposes to sell to NationsBanc Capital Markets, Inc. ("NationsBanc") and
Citibank, N.A. ("Citibank"; NationsBanc and Citibank, in such capacity, each an
"Underwriter" and, together, the "Underwriters"), the respective classes of
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2 which
are identified on Schedule I hereto (collectively, the "Registered
Certificates"), in each case, having the initial aggregate stated principal
amount (a "Class Principal Balance") set forth on Schedule I. The Registered
Certificates, together with the Class X, Class F, Class G, Class H, Class R-I
and Class R-II Certificates issued therewith (the "Privately Offered
Certificates" and, collectively with the Registered Certificates, the
"Certificates"), evidence the entire beneficial ownership interest in the assets
of a trust fund (the "Trust Fund") to be formed by MCFI and consisting primarily
of a pool (the "Mortgage Pool") of commercial and multifamily mortgage loans
(the "Mortgage Loans") that will have, as of the close of business on December
1, 1996 (the "Cut-off Date"), after taking into account all payments of
principal due on the Mortgage Loans on or before such date, whether or not
received, an aggregate principal balance of $458,055,542 (subject to a variance
of plus or minus 5.0%). The Mortgage Loans (or the right to have such
transferred to the Trust Fund) will be acquired by MCFI from Citicorp Real
Estate, Inc. ("CREI"), pursuant to a mortgage loan purchase agreement, dated as
of the date hereof (the "Mortgage Loan Purchase Agreement"), between MCFI and
CREI. Certain of the Mortgage Loans will be acquired by CREI from NationsBanc
Mortgage Capital Corporation ("NMCC"; such Mortgage Loans, the "NMCC Mortgage
Loans"), pursuant to a mortgage loan purchase agreement, dated as of the date
hereof (the "NMCC Purchase Agreement"), between CREI and NMCC. Certain of the
Mortgage Loans will be acquired by CREI from PNC Bank, National Association
("PNC"; such Mortgage Loans, together with all other Mortgage Loans other than
the NMCC Mortgage Loans, the "CREI Mortgage Loans"), pursuant to a mortgage loan
purchase agreement, dated as of the date hereof (the "PNC Purchase Agreement"),
between CREI and PNC. Two separate real estate mortgage investment conduit
("REMIC") elections will be made with respect to the Trust Fund for federal
income tax purposes. The Trust Fund is to be created and the Certificates are to
be issued under a pooling and servicing agreement,
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dated as of December 1, 1996 (the "Pooling and Servicing Agreement"), among MCFI
as sponsor, CREI as mortgage loan seller (in such capacity, the "Mortgage Loan
Seller"), NMCC, as an additional warranting party, GMAC Commercial Mortgage
Corporation as master servicer (in such capacity, the "Master Servicer") and as
special servicer (in such capacity, the "Special Servicer"), LaSalle National
Bank as trustee (in such capacity, the "Trustee") and REMIC administrator (in
such capacity, the "REMIC Administrator"), and ABN AMRO Bank N. V. as fiscal
agent (the "Fiscal Agent").
1. Representations, Warranties and Covenants. ▇▇▇▇ represents and
warrants to, and covenants with, each of the Underwriters that:
(a) A registration statement (File No. 33-63924) on Form S-3 and a
registration statement (File No. 33-25068) on Form S-11 have been filed with the
Securities and Exchange Commission (the "Commission"), and each has become
effective under the Securities Act of 1933, as amended (the "Securities Act");
such registration statements include a prospectus which, as supplemented, shall
be, and may include a preliminary prospectus supplement which, as completed, is
proposed to be, used in connection with the sale of the Registered Certificates.
The registration statements, as amended to the date of this Agreement, are
collectively hereinafter referred to as the "Registration Statements"; such
prospectus (which shall be in the form in which it has most recently been filed,
as the same is proposed to be added to or changed), as first supplemented by a
prospectus supplement relating to the Registered Certificates, filed, or
transmitted for filing, with the Commission pursuant to Rule 424(b) under the
Securities Act and used in connection with the sale of the Registered
Certificates, is hereinafter referred to as the "Prospectus"; and such
prospectus supplement is hereinafter referred to as the "Prospectus Supplement".
Any preliminary form of Prospectus which has heretofore been filed pursuant to
Rule 424 hereinafter is called the "Preliminary Prospectus". Any reference
herein to the terms "amend", "amendment" or "supplement" with respect to the
Registration Statements or the Prospectus shall be deemed to refer to and
include the filing of any document under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), deemed to be incorporated by reference therein
after the date hereof. MCFI will file with the Commission (i) within fifteen
days of the issuance of the Certificates a Current Report on Form 8-K (for
purposes of filing the Pooling and Servicing Agreement and other material
contracts) and (ii) in the time period specified in Section 5(e) hereof, a
Current Report on Form 8-K (for purposes of filing certain Computational
Materials and ABS Term Sheets as described in Section 5(e) hereof).
(b) The Registration Statements, as of the respective dates they
became effective, and the Prospectus, as of the date of the Prospectus
Supplement, and any revisions or amendments thereof or supplements thereto filed
prior to the termination of the offering of the Registered Certificates, as of
their respective effective or issue dates, conformed or will conform in all
material respects to the requirements of the Securities Act and the rules and
regulations of the Commission thereunder applicable to the use of such documents
as of such respective dates, and the Registration Statements and the Prospectus,
as revised, amended or supplemented as of the Closing Date (as defined in
Section 3), will conform in all material respects to the requirements of the
Securities Act and the rules and regulations of the Commission thereunder
applicable to the use of such documents as of the Closing Date; and no such
document, as of such respective dates and, in the case of the Prospectus and any
revisions or amendments thereof or supplements thereto filed prior to the
Closing Date, as of the Closing Date, included or will include any untrue
statement of a material fact or omitted or will omit to state a material fact
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading; provided, however, that MCFI does not make
any representations, warranties or agreements (i) to Citibank as to (A) the
information contained in or omitted from the Prospectus or any revision or
amendment thereof or supplement thereto in reliance upon and in conformity with
information furnished in writing by Citibank to MCFI specifically for use in
connection with the preparation of the Prospectus or any revision or amendment
thereof or supplement thereto or (B) any information in any Computational
Materials and ABS Term Sheets (each as defined in Section 9) provided by
Citibank specifically for use
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in the preparation thereof in connection with the sale of the Registered
Certificates or (ii) to NationsBanc as to (A) the information contained in or
omitted from the Prospectus or any revision or amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing
by NationsBanc specifically for use in connection with the preparation of the
Prospectus or any revision or amendment thereof or supplement thereto or (B) any
information in any Computational Materials and ABS Term Sheets provided by
NationsBanc specifically for use in the preparation thereof in connection with
the sale of the Registered Certificates. There are no contracts or other
documents relating to MCFI of a character required to be described in or to be
filed as exhibits to the Registration Statements, as of the date of the
Prospectus Supplement, which were not described or filed as required.
(c) As of the Closing Date, the Registered Certificates will be duly
authorized, executed and delivered and, assuming authentication in the manner
contemplated in the Pooling and Servicing Agreement, will be validly issued and
outstanding and entitled to the benefits provided by the Pooling and Servicing
Agreement.
(d) KPMG Peat Marwick is an independent public accountant with respect
to MCFI as required by the Securities Act and the rules and regulations
thereunder.
(e) As of the Closing Date, the Pooling and Servicing Agreement will
have been duly authorized, executed and delivered by ▇▇▇▇ and, assuming the
valid authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of MCFI enforceable in
accordance with its terms, except as the same may be limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights and by general principles of equity.
(f) This Agreement has been duly authorized, executed and delivered by
▇▇▇▇ and, assuming the valid authorization, execution and delivery hereof by
each of the Underwriters, constitutes a valid and binding obligation of MCFI
enforceable in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization or other laws relating to or affecting
the enforcement of creditors' rights, by general principles of equity 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 that purport to provide indemnification for securities laws
liabilities.
(g) MCFI has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Prospectus.
(h) MCFI is not aware of (i) any request by the Commission for any
further amendment of the Registration Statements or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statements or the institution
or threatening of any proceeding for that purpose or (iii) any notification with
respect to the suspension of the qualification of the Registered Certificates
for sale in any jurisdiction or the initiation or threatening of any proceeding
for such purpose.
(i) The Registered Certificates and the Pooling and Servicing
Agreement conform in all material respects to the descriptions thereof contained
in the Prospectus.
(j) The issuance and sale of the Registered Certificates to the
Underwriters pursuant to this Agreement, the compliance by MCFI with the other
provisions of this Agreement, the Pooling and Servicing Agreement and the
Registered Certificates and the consummation of the other transactions
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herein or therein contemplated do not, under any statute, regulation or rule of
general applicability or any decision, order, decree or judgment of any judicial
or other governmental body specifically applicable to MCFI, require any consent,
approval, authorization, order, registration or qualification of or with any
court or governmental authority, except (i) such as have been obtained or
effected under the Securities Act (provided that MCFI makes no representations
or warranties as to any consent, approval, authorization, registration or
qualification which may be required under state securities or Blue Sky laws),
(ii) the recordation of the assignments of the Mortgage Loans to the Trustee,
which recordation is to be completed pursuant to the Pooling and Servicing
Agreement on or following the Closing Date, and (iii) such other approvals as
have been obtained.
(k) Neither the execution and delivery of this Agreement and the
Pooling and Servicing Agreement, nor the issuance and delivery of the Registered
Certificates, nor the consummation of any other of the transactions contemplated
herein or therein, nor the fulfillment of the terms of this Agreement and the
Pooling and Servicing Agreement, will conflict with, violate, result in a breach
of or constitute a default under the certificate of incorporation or by-laws of
MCFI, any statute or regulation currently applicable to MCFI, or any order
currently applicable to MCFI of any court, regulatory body, administrative
agency or governmental body having jurisdiction over MCFI, or the terms of any
indenture or other agreement or instrument to which MCFI is a party or by which
it or any of its properties are bound.
(l) There are no actions or proceedings against, or investigations of,
MCFI pending or, to the knowledge of MCFI, threatened, before any court,
administrative agency or other tribunal (i) asserting the invalidity of this
Agreement, the Pooling and Servicing Agreement or the Registered Certificates,
(ii) seeking to prevent the issuance of the Registered Certificates or the
consummation of any of the transactions contemplated by this Agreement or the
Pooling and Servicing Agreement, (iii) that might materially and adversely
affect the performance by MCFI of its obligations under, or the validity or
enforceability of, this Agreement, the Pooling and Servicing Agreement or the
Registered Certificates or (iv) seeking to affect adversely the federal income
tax attributes of the Registered Certificates described in the Prospectus.
(m) MCFI is not, and the issuance and sale of the Registered
Certificates in the manner contemplated by the Prospectus will not cause MCFI to
be, subject to registration or regulation as an investment company or affiliate
of an investment company under the Investment Company Act of 1940, as amended
(the "Investment Company Act").
(n) The transfer of the Mortgage Loans to the Trust Fund and the sale
of the Certificates to the Underwriters, at the Closing Date, will be treated by
MCFI for financial accounting and reporting purposes as a sale of assets and not
as a pledge of assets to secure debt.
2. Purchase and Sale. Subject to the terms and conditions and in
reliance on the representations and warranties herein set forth, MCFI agrees to
sell to each of Citibank and NationsBanc, and Citibank and NationsBanc each
agrees to purchase from MCFI, the portions of the Class Principal Balances of
the respective classes of Registered Certificates set forth on Schedule I
hereto, at the purchase price for each such class as set forth on Schedule I.
3. Delivery and Payment. Delivery of and payment for the Registered
Certificates shall be made in the manner specified below, on the date and at the
time specified in Schedule I hereto, which date and time may be changed by
agreement among the Underwriters and MCFI (such date and time of delivery of and
payment for the Registered Certificates being hereinafter referred to as the
"Closing Date"). Delivery of each Underwriter's allotment of the Registered
Certificates shall be made to the
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related Underwriter against payment by such Underwriter of the purchase price
therefor to or upon the order of MCFI in same-day funds by federal funds wire
(or by such other method as such Underwriter and MCFI may agree). Unless
delivery is made through the facilities of The Depository Trust Company, the
Registered Certificates of each class thereof shall be registered in such names
and in such authorized denominations as the related Underwriter may have
requested not less than three full business days prior to the Closing Date.
▇▇▇▇ agrees to have the Registered Certificates available for
inspection, checking and packaging in New York, New York, at any time before
3:00 p.m. New York City time on the business day prior to the Closing Date.
4. Offering by Underwriters. It is understood that the Underwriters
propose to offer the Registered Certificates for sale as set forth in the
Prospectus, and each Underwriter covenants and agrees that all offers and sales
by such Underwriter shall be made in compliance with the terms of the No-Action
Letters (as defined in Section 9 below). It is further understood that ▇▇▇▇, in
reliance upon a no-filing letter from the Attorney General of the State of New
York granted pursuant to Policy Statement 105, has not filed and will not file
an offering statement pursuant to Section 352-c of the General Business Law of
the State of New York with respect to the Registered Certificates. As required
by Policy Statement 105, each Underwriter therefore covenants and agrees with
MCFI that sales of the Registered 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.
5. Agreements. ▇▇▇▇ agrees with each of the Underwriters that:
(a) MCFI will not file any amendment to the Registration Statements
prior to the Closing Date, and will not file any supplement to the Prospectus
relating to or affecting the Registered Certificates at any time, except as
contemplated by Section 5(e) or unless MCFI has furnished a copy to each
Underwriter for its review prior to filing, and will not file any such proposed
amendment or supplement to which either Underwriter reasonably objects. Subject
to the foregoing sentence, MCFI will cause the Prospectus to be filed, or
transmitted for filing, with the Commission pursuant to Rule 424(b) under the
Securities Act and will promptly advise each Underwriter when the Prospectus has
been so filed, or transmitted for filing, and, prior to the termination of the
offering of the Registered Certificates, will also promptly advise each
Underwriter (i) when any amendment to the Registration Statements relating to
the Registered Certificates has become effective or any revision of or
supplement to the Prospectus has been so filed or transmitted for filing, (ii)
of any request by the Commission for any amendment of the Registration
Statements or the Prospectus or for any additional information, (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statements or the institution or threatening of any proceeding for
that purpose and (iv) of the receipt by MCFI of any notification with respect to
the suspension of the qualification of the Registered Certificates for sale in
any jurisdiction or the institution or threatening of any proceeding for such
purpose. MCFI 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.
(b) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act, (i) 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 a
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading, or (ii) it shall be
necessary to revise, amend or supplement the Prospectus to comply with the
Securities Act or the rules and regulations of the Commission thereunder, MCFI
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promptly will prepare and file with the Commission, subject to paragraph (a) of
this Section 5, a revision, amendment or supplement which will correct such
statement or omission or effect such compliance.
(c) MCFI will furnish to each Underwriter and counsel for such
Underwriter, without charge, signed (if available) copies of the Registration
Statements (including exhibits thereto) and, so long as delivery of a prospectus
relating to the Registered Certificates is required under the Securities Act, as
many copies of the Prospectus and any revisions or amendments thereof or
supplements thereto as may be reasonably requested.
(d) MCFI will use its best efforts to arrange for the qualification of
the Registered Certificates for sale under the laws of such jurisdictions as the
Underwriters may designate, to maintain such qualifications in effect so long as
required for the distribution of the Registered Certificates and to arrange for
the determination of the legality of the Registered Certificates for purchase by
institutional investors; provided, however, that MCFI shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action which would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) MCFI will cause or, if appropriate, will have caused any
Computational Materials and ABS Term Sheets (each as defined in Section 9) with
respect to the Registered Certificates, which are delivered by the Underwriters
to MCFI pursuant to or as contemplated by Section 9, to be filed with the
Commission on a Current Report on Form 8-K (the "Current Report") pursuant to
Rule 13a-11 under the Exchange Act not later than, in each such case, the
business day immediately following the later of (i) the day on which such
Computational Materials or ABS Term Sheets are delivered to counsel for MCFI by
the Underwriters (it being understood that any such material that is delivered
after 10:30 a.m., New York City time, on a business day shall be deemed to have
been delivered on the next business day) and (ii) the date hereof, and will
promptly advise the Underwriters when each such Current Report has been so
filed. Each such Current Report shall be incorporated by reference in the
Prospectus and the Registration Statements. Notwithstanding the two preceding
sentences, MCFI shall have no obligation to file materials provided by the
Underwriters pursuant to or as contemplated by Section 9 which, in the
reasonable determination of MCFI after making reasonable efforts to consult with
the Underwriters, are not required to be filed pursuant to the No-Action Letters
(as defined in Section 9 below), or which contain erroneous information or
contain any untrue statement of a material fact, or which, when read in
conjunction with the Prospectus, omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; it
being understood, however, that MCFI shall have no obligation to review or pass
upon the accuracy or adequacy of, or to correct, any Computational Materials or
ABS Term Sheets provided by the Underwriters to MCFI pursuant to or as
contemplated by Section 9 hereof.
(f) MCFI will make generally available to Registered
Certificateholders as soon as practicable, but in any event not later than
eighteen months after the filing of the Prospectus pursuant to Rule 424(b) under
the Securities Act, an earnings statement (which need not be audited) with
respect to the Mortgage Pool complying with Section 11(a) of the Securities Act
and the rules and regulations of the Commission thereunder (including at the
option of MCFI, Rule 158) which may be the annual report filed with the
Commission and delivered to Registered Certificateholders pursuant to the
Pooling and Servicing Agreement.
6. Conditions to the Obligations of each Underwriter and MCFI. The
obligation of each Underwriter to purchase, and the obligation of MCFI to sell
to such Underwriter, its allotment of the Registered Certificates shall be
subject to the accuracy of the representations and warranties on the part of
MCFI and such Underwriter contained herein as of the date hereof and as of the
Closing Date, to the
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accuracy of the statements of ▇▇▇▇ and such Underwriter made in any officer's
certificate pursuant to the provisions hereof, to the performance by ▇▇▇▇ and
such Underwriter of their respective obligations hereunder and to the following
additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statements shall have been issued and no proceedings for that purpose shall have
been instituted and be pending or shall have been threatened.
(b) MCFI shall have furnished to such Underwriter:
(i) An executed copy of the Pooling and Servicing Agreement;
(ii) An opinion of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., counsel to ▇▇▇▇, dated
the Closing Date, substantially to the effect that:
(A) MCFI is validly existing as a corporation in good
standing under the laws of the State of Delaware, with corporate
power and authority under such laws to own its properties and
assets and conduct its business as described in the Prospectus;
(B) The Registered Certificates have been duly authorized,
executed and delivered and, assuming authentication in the manner
contemplated in the Pooling and Servicing Agreement, are validly
issued and outstanding and entitled to the benefits provided by
the Pooling and Servicing Agreement;
(C) The Pooling and Servicing Agreement has been duly
authorized, executed and delivered by ▇▇▇▇;
(D) The Pooling and Servicing Agreement constitutes a valid
and legally binding agreement of MCFI and is enforceable against
it in accordance with its terms, except as the same may be
limited by bankruptcy, insolvency, reorganization or other
similar laws relating to or affecting the enforcement of
creditor's rights generally and by general principles of equity;
(E) The Pooling and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as amended,
and the Trust Fund is not required to be registered under the
Investment Company Act of 1940, as amended;
(F) The Registration Statements have become effective under
the Securities Act, and, to the best of such counsel's knowledge,
no stop order suspending the effectiveness of either of the
Registration Statements has been issued and no proceedings for
that purpose have been instituted and are pending or have been
threatened under the Securities Act;
(G) Each of the Registration Statements, at the time such
Registration Statement became effective, and the Prospectus, as
of the date of the Prospectus Supplement, and each revision or
amendment thereof or supplement thereto relating to the
Registered Certificates, as of its effective or issue date
(except in each case for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), appeared on their respective
faces to be appropriately responsive in all material respects to
the requirements of the Securities Act
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and the rules and regulations of the Commission thereunder
applicable to such documents as of such respective dates; and the
Prospectus, as revised, amended or supplemented as of the date
hereof (except for accounting, financial and statistical
statements included therein or omitted therefrom, as to which
such counsel expresses no opinion), conforms in all material
respects to the requirements of the Securities Act and the rules
and regulations of the Commission thereunder applicable to use of
the Prospectus (as so revised, amended, or supplemented) as of
the date hereof;
(H) The descriptions in the Prospectus, as of the date
hereof, of the Registered Certificates and the Pooling and
Servicing Agreement are, to the extent that such descriptions
constitute statements of matters of law or legal conclusions with
respect thereto, accurate in all material respects;
(I) Such counsel does not know of any contracts or other
documents relating to MCFI of a character required to be
described in or to be filed as exhibits to the Registration
Statements, as of the date of the Prospectus Supplement, which
were not described or filed as required; and
(J) This Agreement has been duly authorized, executed and
delivered by ▇▇▇▇.
In giving his opinion, counsel to ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq., shall
additionally state that, based on conferences and telephone conversations with
representatives of CREI, NMCC, PNC Bank, the Underwriters, Citibank, MCFI, the
Trustee, the REMIC Administrator, the Fiscal Agent, the Master Servicer, the
Special Servicer and their respective counsel, and without having reviewed any
of the mortgage notes, mortgages or other documents relating to the Mortgage
Loans or made any inquiry of any originator of any Mortgage Loan not referenced
above, nothing has come to such counsel's attention that would lead him to
believe that the Prospectus (except for any accounting, financial or statistical
information included therein, for information relating to the Master Servicer,
the Special Servicer, the REMIC Administrator, the Trustee and the Fiscal Agent
contained in or omitted from the Prospectus, and for information with respect to
the NMCC Mortgage Loans contained in or omitted from the Prospectus, all as to
which such counsel has not been requested to comment), at the date of the
Prospectus Supplement or at the Closing Date, included or includes an untrue
statement of a material fact or omitted or omits to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such opinion may express its 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 may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than MCFI and ▇▇▇▇. Such
opinion may be qualified as an opinion only on the General Corporation Law
of the State of Delaware, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United
States.
(iii) One or more opinions, dated the Closing Date, of ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇, special counsel to MCFI, substantially to the effect that:
(A) The statements in the Prospectus under the headings "ERISA
Considerations", "Material Federal Income Tax Consequences" and
"Certain Federal
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Income Tax Consequences", to the extent that they constitute matters
of New York or federal law or legal conclusions with respect thereto,
provide a fair and accurate summary of such law and conclusions; and
(B) As described in the Prospectus Supplement and assuming
compliance with the provisions of the Pooling and Servicing Agreement,
(1) REMIC I will qualify as a real estate mortgage investment conduit
(a "REMIC") within the meaning of Sections 860A through 860G (the
"REMIC Provisions") of the Internal Revenue Code of 1986, and the
REMIC I Regular Interests will be "regular interests" and the Class
R-I Certificates will evidence the sole class of "residual interests"
in REMIC I (as both terms are defined in the REMIC Provisions in
effect on the Closing Date), and (2) REMIC II will qualify as a REMIC
within the meaning of the REMIC Provisions, and the Class X, Class
A-1, Class A-2, Class A-3, Class B, Class C, Class D, Class E, Class
F, Class G and Class H Certificates will evidence "regular interests"
and the Class R-II Certificates will evidence the sole class of
"residual interests" in REMIC II.
In giving its opinions, special counsel to MCFI, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ &
▇▇▇▇, shall additionally state that, based on conferences and telephone
conversations with representatives of CREI, NMCC, PNC Bank, the Underwriters,
Citibank, MCFI, the Trustee, the Fiscal Agent, the REMIC Administrator, the
Master Servicer, the Special Servicer and their respective counsel, and without
having reviewed any of the mortgage notes, mortgages or other documents relating
to the Mortgage Loans or made any inquiry of any originator of any Mortgage Loan
not referenced above, nothing has come to such special counsel's attention that
would lead it to believe that the Prospectus (other than any accounting,
financial, statistical information included therein, for information relating to
the Master Servicer, the Special Servicer, the REMIC Administrator, the Trustee
and the Fiscal Agent contained in or omitted from the Prospectus, and for
information with respect to the NMCC Mortgage Loans contained in or omitted from
the Prospectus, all as to which such counsel has not been requested to comment),
at the date of the Prospectus Supplement or at the Closing Date, included or
includes an untrue statement of a material fact or omitted or omits to state a
material fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
Such opinion may express its 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 may assume the due
authorization, execution and delivery of the instruments and documents
referred to therein by the parties thereto other than MCFI. Such opinion
may be qualified as an opinion only on the General Corporation Law of the
State of Delaware, the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United
States.
(iv) Such Underwriter shall have received copies of all legal opinion
letters delivered by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ to the Rating Agencies in
connection with the issuance of the Registered Certificates, accompanied in
each case by a letter signed by ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇ stating that such
Underwriter may rely on such opinion letter as if it were addressed to such
Underwriter as of the date thereof;
(v) A good standing certificate regarding MCFI from the Secretary of
State of the State of Delaware, dated not earlier than 30 days prior to the
Closing Date;
-10-
(vi) A certificate of MCFI, dated the Closing Date and signed by an
executive officer or authorized signatory of MCFI, to the effect that the
representations and warranties of MCFI herein are true and correct in all
material respects on and as of the Closing Date with the same effect as if
made on the Closing Date, and ▇▇▇▇ has complied in all material respects
with all agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date; and
(vii) An officer's certificate, dated the Closing Date and signed by
the Secretary or an assistant secretary of MCFI, to the effect that each
individual who, as an officer or representative of MCFI, signed this
Agreement, the Pooling and Servicing Agreement or any other document or
certificate delivered on or before the Closing Date in connection with the
transactions contemplated herein or in the Pooling and Servicing Agreement,
was at the respective times of such signing and delivery, and is as of the
Closing Date, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing on
such documents and certificates are their genuine signatures. Such
certificate shall be accompanied by true and complete copies (certified as
such by the Secretary or an assistant secretary of MCFI) of the certificate
of incorporation and by-laws of MCFI, as in effect on the Closing Date, and
of the resolutions of MCFI and any required shareholder consent relating to
the transactions contemplated in this Agreement and the Pooling and
Servicing Agreement.
(c) The Underwriters shall have received, with respect to each of the
Mortgage Loan Seller, NMCC, the Master Servicer, the Special Servicer, the
Fiscal Agent, the Trustee and the REMIC Administrator, 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)(ii)(D), the
enforceability of the Pooling and Servicing Agreement against such party. 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 this Agreement and 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. Such opinion may be
qualified as an opinion only on the General Corporation Law of the State of
Delaware (if relevant), the laws of each state in which the writer of the
opinion is admitted to practice law and the federal law of the United States.
(d) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, various comfort letters, dated, as
applicable, [the date of the preliminary Prospectus Supplement or the date of
the Prospectus Supplement], in form and substance reasonably satisfactory to
MCFI and the Underwriters, stating in effect that:
(i) 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
caption "Description of the Mortgage Pool" and on Annex A thereto agrees
with the data sheet or computer tape prepared by the Mortgage Loan Seller
and NMCC, 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 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, unless otherwise noted in such
letter.
-11-
(e) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, a letter dated December 11, 1996, in form
and substance reasonably satisfactory to MCFI and the Underwriters, to the
effect that they have performed certain specified procedures, all of which have
been agreed to by MCFI and the Underwriters, as a result of which they confirmed
the information of an accounting, financial or statistical nature included in
the Prospectus Supplement under the caption "Yield and Maturity Considerations".
(f) Such Underwriter shall have delivered to MCFI and to the other
Underwriter an officer's certificate (i) stating that attached thereto are all
of the information, tables, charts and other items that constitute
"Computational Materials" or "ABS Term Sheets" prepared by such Underwriter
which are required to be filed with the Commission pursuant to the terms of the
No-Action Letters and stating that such Underwriter has otherwise complied with
the terms of the No-Action Letters and (ii) representing that (A) other than the
items described in clause (i), no term sheets, collateral information or other
data in written form that would be required to be filed with the Commission
pursuant to the No-Action Letters were furnished by such Underwriter to actual
or potential investors for the Registered Certificates prior to the Closing Date
and (B) to the best knowledge of such officer, the items described in clause (i)
do not include any untrue or misleading statement of a material fact nor, when
taken together with the Prospectus, and in the light of the circumstances in
which the statements in such items were made, omit to state any material fact
required to be stated in such items or necessary to make the statements
contained in such items not misleading.
(g) KPMG Peat Marwick shall have furnished to MCFI and such
Underwriter a letter or letters, each in form and substance satisfactory to
MCFI, relating to the Computational Materials and ABS Terms Sheets of such
Underwriter filed in accordance with Section 5(e) and dated the date of the
related Current Report on Form 8-K and stating in effect that:
(i) using the assumptions and methodology used by such
Underwriter, all of which shall be described by reference in the
letter, they have recalculated the numerical data and dates set forth
in such Computational Materials and ABS Term Sheets of such
Underwriter (or portions thereof) attached to such letter, compared
the results of their calculations to the corresponding items in such
Computational Materials and ABS Term Sheets (or portions thereof) and
found such items to be in agreement with the respective results of
such calculation;
(ii) if such Computational Materials and ABS Term Sheets include
data reflecting the distribution of interest at other than a fixed
rate, or reflecting other characteristics which give rise to the use
of tables in such Computational Materials and ABS Term Sheets, such
letter shall also set forth such other statements as are customarily
set forth by KPMG Peat Marwick in such letter with respect to such
data; and
(iii) 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 such
Computational Materials and ABS Term Sheets agrees with the data sheet
or computer tape prepared by the Mortgage Loan Seller or NMCC, unless
otherwise indicated in such letter.
(h) MCFI and the Underwriters shall have received an opinion of
counsel, dated the Closing Date, from ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇, stating
that, based on conferences and telephone conversations with representatives of
CREI, NMCC, PNC Bank, the Underwriters, Citibank, MCFI, the Trustee, the REMIC
Administrator, the Fiscal Agent, the Master Servicer, the Special Servicer and
their respective counsel, and (with limited exception) without having reviewed
any of the mortgage notes, mortgages or other documents relating to the Mortgage
Loans or made any inquiry of any originator of
-12-
any Mortgage Loan not referenced above, nothing has come to such counsel's
attention that would lead him to believe that the Prospectus (except for any
accounting, financial or statistical information included therein, for
information relating to the Master Servicer, the Special Servicer, the REMIC
Administrator, the Fiscal Agent and the Trustee contained in or omitted from the
Prospectus, and for information with respect to the CREI Mortgage Loans
contained in or omitted from the Prospectus, all as to which such counsel has
not been requested to comment), at the date of the Prospectus Supplement or at
the Closing Date, included or includes an untrue statement of a material fact or
omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(i) 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 MCFI which such Underwriter concludes, in the judgment
of such Underwriter after consultation with MCFI, materially impairs the
investment quality of the Registered Certificates so as to make it impractical
or inadvisable to proceed with the public offering or the delivery of the
Registered Certificates as contemplated by the Prospectus.
(j) The Registered Certificates shall have been assigned ratings no
less than those set forth on Schedule I and such ratings shall not have been
rescinded.
7. Indemnification and Contribution. (a) MCFI agrees to indemnify and
hold harmless each Underwriter and each person who controls such Underwriter
within the meaning of either the Securities Act or the Exchange Act against any
and all losses, claims, damages or liabilities, joint or several, to which it or
any of them may become subject under the Securities Act, the Exchange Act, or
other federal or state statutory law or regulation, at common law or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statements or in the
Prospectus, or in any revision or amendment thereof or supplement thereto, or in
any other filing incorporated by reference therein, or arise out of or are based
upon the omission or alleged omission (in the case of any Computational
Materials or ABS Term Sheets in respect of which MCFI agrees to indemnify any
Underwriter, as set forth below, when such are read in conjunction with the
Prospectus) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party for any legal or other expenses reasonably incurred by it or
him in connection with investigating or defending any such loss, claim, damage,
liability or action; provided that MCFI will not be liable in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) any such untrue statement or alleged untrue statement or omission
or alleged omission made in the Prospectus or any revision or amendment thereof
or supplement thereto in reliance upon and in conformity with written
information furnished to MCFI by or on behalf of such Underwriter (in whatever
capacity) specifically for use in connection with the preparation thereof, (ii)
any such untrue statement or alleged untrue statement or omission or alleged
omission that is covered by the indemnification provided by NMCC pursuant to the
NMCC Purchase Agreement; (iii) any such untrue statement or alleged untrue
statement made in Computational Materials or ABS Term Sheets of such Underwriter
incorporated therein as a result of any filing pursuant to Section 5(e) (except
to the extent any such untrue statement or alleged untrue statement therein
results (or is alleged to have resulted) directly from an error (a "Collateral
Error") in the information concerning the Mortgage Loans furnished by MCFI to
any Underwriter in writing or by electronic transmission that was used in the
preparation of such Computational Materials or ABS Term Sheets), (iv) any
omission or alleged omission to state in Computational Materials or ABS Term
Sheets of such Underwriter incorporated by reference into the Registration
Statements or Prospectus as a result of any filing pursuant to Section 5(e), a
material fact
-13-
that, when read in conjunction with the Prospectus, is required to be stated
therein or necessary to make the statements therein not misleading, or (v) any
breach, inaccuracy or untruth of any of the statements, representations,
warranties and/or covenants made by such Underwriter and set forth in Section
6(f) and/or Section 9(b); and provided further that such indemnity with respect
to any Collateral Error shall not inure to the benefit of any Underwriter (or
any person controlling any Underwriter) from whom the person asserting any loss,
claim, damage or liability received any Computational Materials or ABS Term
Sheets that were prepared on the basis of such Collateral Error, if, prior to
the time of confirmation of the sale of Registered Certificates to such person,
MCFI notified such Underwriter in writing of the Collateral Error or provided in
written or electronic form information superseding or correcting such Collateral
Error (in any such case, a "Corrected Collateral Error"), and such Underwriter
failed to notify such person thereof or to deliver such person corrected
Computational Materials and/or ABS Term Sheets, as applicable. This indemnity
agreement will be in addition to any liability which MCFI may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless MCFI and each of its directors, each of its officers who
signed the Registration Statements or any amendments thereof, and each person
who controls MCFI within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnities from MCFI to the
Underwriters, but only with reference to (i) written information furnished to
MCFI by or on behalf of such Underwriter, specifically for use in connection
with the preparation of the Prospectus or any revision or amendment thereof or
supplement thereto, (ii) any untrue statement or alleged untrue statement or
omission or alleged omission made in Computational Materials or ABS Term Sheets
of such Underwriter incorporated by reference into the Registration Statements
or Prospectus as a result of any filing pursuant to Section 5(e) (except that no
such indemnity shall be available for any losses, claims, damages or
liabilities, or actions in respect thereof resulting from any Collateral Error,
other than a Corrected Collateral Error) and (iii) any breach, inaccuracy or
untruth of any of the statements, representations, warranties and/or covenants
set forth in Section 6(f) and/or Section 9(b). This indemnity agreement will be
in addition to any liability which the Underwriters may otherwise have. MCFI
acknowledges that with respect to Citibank and NationsBanc, the statements set
forth in the first, third and fourth sentences of the final paragraph of the
cover page of the Prospectus Supplement and in the first sentence of the second
paragraph and the first two sentences of the third paragraph under the heading
"Method of Distribution" in the Prospectus Supplement constitute the only
information furnished in writing by or on behalf of Citibank or NationsBanc, as
the case may be, for inclusion in the Prospectus or any revision or amendment
thereof or supplement thereto, and each Underwriter confirms that such
statements attributable thereto are correct.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 7, notify the indemnifying party in writing of the commencement thereof;
but the omission so to notify the indemnifying party will not relieve the
indemnifying party from any liability which it may have to any indemnified party
otherwise than under this Section 7; provided, however, that any increase in
such liability as a result of such failure to notify shall not be an expense of
the indemnifying party. In case any such action is brought against any
indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein, and to
the extent that it may elect by written notice delivered to the indemnified
party promptly after receiving the aforesaid notice from such indemnified party,
to assume the defense thereof, with counsel satisfactory to such indemnified
party; provided that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to those
available to the indemnifying
-14-
party, the indemnified party or parties shall have the right to select separate
counsel to assert such legal defenses and to otherwise participate in the
defense of such action on behalf of such indemnified party or parties. Upon
receipt of notice from the indemnifying party to such indemnified party of its
election so to assume the defense of such action and approval by the indemnified
party of counsel, the indemnifying party will not be liable to such indemnified
party in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence (it being
understood, however, that the indemnifying party shall not be liable for the
expenses of more than one separate counsel, approved by the indemnified party or
parties, representing the indemnified party or parties who are parties to such
action), (ii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of commencement of the action or (iii) the
indemnifying party has authorized the employment of counsel for the indemnified
party at the expense of the indemnifying party; and except that, if clause (i)
or (iii) is applicable, such liability shall be only in respect of the counsel
referred to in such clause (i) or (iii).
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnification provided for in this Section 7 is due
in accordance with its terms but is for any reason held by a court to be
unavailable on grounds of policy or otherwise, MCFI and the related Underwriter
shall each contribute to the aggregate losses, claims, damages and liabilities
(including legal and other expenses reasonably incurred in connection with
investigating or defending same) to which MCFI and such Underwriter may be
subject in such proportion so that such Underwriter is responsible for 0.5%
thereof and ▇▇▇▇ is responsible for the balance; provided that no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls an Underwriter within the meaning of either the
Securities Act or the Exchange Act shall have the same rights to contribution as
such Underwriter, and each person who controls MCFI within the meaning of either
the Securities Act or the Exchange Act, each officer of MCFI who shall have
signed the Registration Statements or any amendments thereof and each director
of MCFI shall have the same rights to contribution as MCFI. Any party entitled
to contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(d), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
(e) The Underwriters further agree as follows:
(i) Citibank will indemnify and hold harmless NationsBanc against
any losses, claims, damages or liabilities to which NationsBanc may
become subject, under the Securities Act or otherwise, insofar as such
losses, claims, damages or liabilities arise out of or are based upon
any untrue statements or misstatements in Computational Materials or
ABS Term Sheets prepared by Citibank and will reimburse NationsBanc
for any legal or other expenses reasonably incurred by NationsBanc in
connection with investigating or defending any such action or claim as
such expenses are incurred.
(ii) NationsBanc will indemnify and hold harmless Citibank
against any losses, claims, damages or liabilities to which Citibank
may become subject, under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities arise out of or are based
upon any untrue statements or misstatements in Computational Materials
or ABS Term Sheets prepared by NationsBanc and will reimburse Citibank
for any legal or other expenses reasonably incurred
-15-
by Citibank in connection with investigating or defending any such
action or claim as such expenses are incurred.
(iii) Promptly after receipt by an indemnified party under clause
(i) or (ii) above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under such clause, notify the
indemnifying party in writing of the commencement thereof; but the
omission to so notify the indemnifying party shall not relieve it from
any liability which it may have to any indemnified party otherwise
than under such clause; provided, however, that any increase in such
liability as a result of such failure to notify shall not be an
expense of the indemnifying party. In case any such action shall be
brought against any indemnified party, and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
shall wish, to assume the defense thereof, with counsel satisfactory
to such indemnified party and, after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party under such clause for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by
such indemnified party, in connection with the defense thereof other
than reasonable costs of investigation. No indemnifying party shall,
without the written consent of the indemnified party, effect the
settlement or compromise of, or consent to the entry of any judgment
with respect to, any pending or threatened action or claim in respect
of which indemnification or contribution may be sought hereunder
(whether or not the indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or
judgment (a) includes an unconditional release of the indemnified
party from all liability arising out of such action or claim and (b)
does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified
party.
(iv) If the indemnification provided in clause (i) or (ii) above,
as the case may be, is unavailable to or insufficient to hold harmless
an indemnified party under such clause in respect of any losses,
claims, damages or liabilities (or actions in respect thereof)
referred to therein, then the indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of
such losses, claims, damages or liabilities (or actions in respect
thereof) in such proportion as is appropriate to reflect both the
relative benefits received by the indemnifying party on the one hand
and the indemnified party on the other from the offering of the
Registered Certificates, in their respective capacity as Underwriter,
and the relative fault of the indemnifying party on the one hand and
indemnified party on the other in connection with the statements which
resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by Citibank on the one
hand and NationsBanc on the other shall be deemed to be in the same
proportion to the amount of Registered Certificates underwritten by
such party. The relative fault shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of
a material fact relates to information supplied by the indemnifying
party on the one hand or the indemnified party on the other and the
parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
parties hereto agree that it would not be just and equitable if
contribution pursuant to this clause (iv) were determined by pro rata
allocation or by any other method of allocation which does not take
into account the equitable considerations referred to above in this
clause (iv). The amount paid or payable by an indemnified party as a
result of the losses, claims, damages or liabilities (or actions in
respect thereof) referred to above in this clause (iv) shall be deemed
to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this clause
(iv), neither
-16-
Citibank nor NationsBanc shall be required to contribute any amount in
excess of the amount by which the total price at which the Registered
Certificates underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages which such
party 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 Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(v) The obligations of Citibank under the foregoing clauses
(i)-(iv) shall be in addition to any liability which Citibank may
otherwise have and shall extend, upon the same terms and conditions,
to each person, if any, who controls NationsBanc within the meaning of
the Securities Act or the Exchange Act and to each director and
officer of NationsBanc, and the obligations of NationsBanc under the
foregoing clauses (i)-(iv) shall be in addition to any liability which
NationsBanc may otherwise have and shall extend, upon the same terms
and conditions, to each person, if any, who controls Citibank within
the meaning of the Securities Act or the Exchange Act and to each
officer and director of Citibank.
8. Fees and Expenses. All costs and expenses in connection with the
transactions herein contemplated shall be allocated and borne as provided in
that certain Agreement Among Underwriters, dated October 30, 1996, between
NationsBanc and Citibank (the "Agreement Among Underwriters").
9. Computational Materials and ABS Term Sheets. (a) Not later than
10:30 a.m., New York City time, on the date hereof, the Underwriters shall
deliver to MCFI five complete copies of all materials provided by the
Underwriters to prospective investors in the Registered Certificates which
constitute either (i) "Computational Materials" within the meaning of the
no-action letter dated May 20, 1994 issued by the Division of Corporation
Finance of the Commission to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Acceptance Corporation I, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ & Co. Incorporated, and ▇▇▇▇▇▇ Structured Asset Corporation and the
no-action letter dated May 27, 1994 issued by the Division of Corporation
Finance of the Commission to the Public Securities Association (together, the
"▇▇▇▇▇▇ Letters") or (ii) "ABS Term Sheets" within the meaning of the no-action
letter dated February 17, 1995 issued by the Division of Corporation Finance of
the Commission to the Public Securities Association (the "PSA Letter" and
together with the ▇▇▇▇▇▇ Letters, the "No-Action Letters"), if the filing of
such materials with the Commission is a condition of the relief granted in such
letters and, in the case of any such materials that constitute "Collateral Term
Sheets" within the meaning of the PSA Letter, such Collateral Term Sheets have
not previously been delivered to MCFI as contemplated by Section 9(b)(i) below.
Each delivery of Computational Materials and/or ABS Term Sheets to MCFI pursuant
to this paragraph (a) shall be effected by delivering four copies of such
materials to counsel for MCFI on behalf of MCFI at the address specified in
Section 16 hereof and one copy of such materials to MCFI.
(b) Each Underwriter represents and warrants to and agrees with ▇▇▇▇,
as of the date hereof and as of the Closing Date, as applicable, that:
(i) if such Underwriter has provided any Collateral Term Sheets
to potential investors in the Registered Certificates prior to the
date hereof and if the filing of such materials with the Commission is
a condition of the relief granted in the PSA Letter, then in each such
case such Underwriter delivered four copies of such materials to
counsel for MCFI on behalf of MCFI at the address specified in Section
16 hereof and one copy of such materials to MCFI no later than 10:30
a.m., New York City time, on the first business day following the date
on which such materials were initially provided to a potential
investor;
-17-
(ii) the Computational Materials (either in original, aggregated
or consolidated form) and ABS Term Sheets furnished to MCFI pursuant
to Section 9(a) or as contemplated in Section 9(b)(i) constitute all
of the materials relating to the Registered Certificates furnished by
such Underwriter (whether in written, electronic or other format) to
prospective investors in the Registered Certificates prior to the date
hereof, except for any Preliminary Prospectus and any Computational
Materials and ABS Term sheets which are not required to be filed with
the Commission in accordance with the No-Action Letters, and all
Computational Materials and ABS Term Sheets provided by such
Underwriter to potential investors in the Registered Certificates
comply with the requirements of the No-Action Letters;
(iii) on the respective dates any such Computational Materials
and/or ABS Term Sheets with respect to the Registered Certificates
referred to in Section 9(b)(ii) were last furnished by such
Underwriter to each prospective investor, on the date of delivery
thereof to MCFI pursuant to or as contemplated by this Section 9 and
on the Closing Date, such Computational Materials and/or ABS Term
Sheets did not and will not include any untrue statement of a material
fact, or, when read in conjunction with the Prospectus, omit to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading;
(iv) at the time any Computational Materials or ABS Term Sheets
with respect to the Registered Certificates were furnished to a
prospective investor and on the date hereof, the Underwriters
possessed, and on the date of delivery of such materials to MCFI
pursuant to or as contemplated by this Section 9 and on the Closing
Date, the Underwriters will possess, the capability, knowledge,
expertise, resources and systems of internal control necessary to
ensure that such Computational Materials and/or ABS Term Sheets
conform to the representations and warranties of the Underwriters
contained in subparagraphs (ii) and (iii) above of this paragraph (b);
(v) all Computational Materials and ABS Term Sheets with respect
to the Registered Certificates furnished by such Underwriter to
potential investors contained and will contain a legend, prominently
displayed on the first page thereof, to the effect that MCFI has not
prepared, reviewed or participated in the preparation of such
Computational Materials or ABS Term Sheets, is not responsible for the
accuracy thereof and has not authorized the dissemination thereof;
(vi) all Collateral Term Sheets with respect to the Registered
Certificates furnished by such Underwriter to potential investors
contained and will contain a legend, prominently displayed on the
first page thereof, indicating that the information contained therein
will be superseded by the description of the Mortgage Loans contained
in the Prospectus and, except in the case of the initial Collateral
Term Sheet, that such information supersedes the information in all
prior Collateral Term Sheets; and
(vii) on and after the date hereof, such Underwriter shall not
deliver or authorize the delivery of any Computational Materials, ABS
Term Sheets or other materials relating to the Registered Certificates
(whether in written, electronic or other format) to any potential
investor unless such potential investor has received a Prospectus
prior to or at the same time as the delivery of such Computational
Materials, ABS Term Sheets or other materials.
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Notwithstanding the foregoing, neither Underwriter makes any
representation or warranty as to whether any Computational Materials or ABS Term
Sheets with respect to the Registered Certificates included or will include any
untrue statement resulting directly from any Collateral Error (except any
Corrected Collateral Error, with respect to materials prepared after the receipt
by the Underwriters from MCFI of notice of such Corrected Collateral Error or
materials superseding or correcting such Corrected Collateral Error).
(c) The Underwriters acknowledge and agree that ▇▇▇▇ has not
authorized and will not authorize the distribution of any Computational
Materials or ABS Term Sheets with respect to the Registered Certificates to any
prospective investor, and agree that any such Computational Materials and/or ABS
Term Sheets furnished to prospective investors shall include a disclaimer in the
form set forth in paragraph (b)(v) above. The Underwriters agree that they will
not represent to potential investors that any Computational Materials and/or ABS
Term Sheets with respect to the Registered Certificates were prepared or
disseminated on behalf of MCFI.
(d) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of the
Underwriters or their counsel to amend or supplement the Prospectus as a result
of an untrue statement of a material fact contained in any Computational
Materials or ABS Term Sheets provided by the Underwriters pursuant to or as
contemplated by this Section 9 or the omission to state a material fact
required, when considered in conjunction with the Prospectus, to be stated
therein or necessary to make the statements therein, when read in conjunction
with the Prospectus, not misleading, or if it shall be necessary to amend or
supplement any Current Report to comply with the Securities Act or the rules
thereunder, the Underwriters, at their expense, allocated between them in
accordance with the NCMI Expense Allocation Percentage and the Citibank Expense
Allocation Percentage (as such terms are defined in the Agreement Among
Underwriters), promptly will prepare and furnish to MCFI for filing with the
Commission an amendment or supplement which will correct such statement or
omission or an amendment which will effect such compliance and shall distribute
such amendment or supplement to each prospective investor in the Registered
Certificates that received such information being amended or supplemented. Each
Underwriter represents and warrants to MCFI, as of the date of delivery of such
amendment or supplement to MCFI, that such amendment or supplement will not
include any untrue statement of a material fact or, when read in conjunction
with the Prospectus, omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. MCFI shall have no
obligation to file such amendment or supplement if MCFI determines that (i) such
amendment or supplement contains any untrue statement of a material fact or,
when read in conjunction with the Prospectus, omits to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading (it being understood, however, that MCFI shall have no obligation to
review or pass upon the accuracy or adequacy of, or to correct, any such
amendment or supplement provided by the Underwriters to MCFI pursuant to this
paragraph (d)) or (ii) such filing is not required under the Securities Act.
Notwithstanding the foregoing, neither Underwriter makes any representation or
warranty as to whether any such amendment or supplement of Computational
Materials or ABS Term Sheets with respect to the Registered Certificates
included or will include any untrue statement resulting directly from any
Collateral Error (except any Corrected Collateral Error, with respect to
materials prepared after the receipt by the Underwriters from MCFI of notice of
such Corrected Collateral Error or materials superseding or correcting such
Corrected Collateral Error).
(e) If, at any time when a prospectus relating to the Registered
Certificates is required to be delivered under the Securities Act prior to 90
days from the date hereof, it shall be necessary in the opinion of MCFI or its
counsel to amend or supplement the Prospectus as a result of an untrue statement
of a material fact contained in any Computational Materials or ABS Term Sheets
provided by the
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Underwriters pursuant to or as contemplated by this Section 9 or the omission to
state therein a material fact required, when considered in conjunction with the
Prospectus, to be stated therein or necessary to make the statements therein,
when read in conjunction with the Prospectus, not misleading, or if it shall be
necessary to amend or supplement any Current Report to comply with the
Securities Act or the rules thereunder, MCFI promptly will notify each
Underwriter of the necessity of such amendment or supplement, and the
Underwriters, at their expense (such expense to be allocated between them based
on the relative fault of the Underwriters) (or, if such amendment or supplement
is necessary due to a Collateral Error (except any Corrected Collateral Error,
with respect to materials prepared after the receipt by the Underwriters from
MCFI of notice of such Corrected Collateral Error or materials superseding or
correcting such Corrected Collateral Error), at the expense of MCFI), shall
prepare and furnish to MCFI for filing with the Commission an amendment or
supplement which will correct such statement or omission or an amendment which
will effect such compliance and shall distribute such amendment or supplement to
each prospective investor in the Registered Certificates that received such
information being amended or supplemented. Notwithstanding the foregoing,
neither Underwriter makes any representation or warranty as to whether any such
amendment or supplement of Computational Materials or ABS Term Sheets with
respect to the Registered Certificates included or will include any untrue
statement resulting directly from any Collateral Error (except any Corrected
Collateral Error, with respect to materials prepared after the receipt by the
Underwriters from MCFI of notice of such Corrected Collateral Error or materials
superseding or correcting such Corrected Collateral Error).
(f) The Underwriters (at their own expense) further agree to provide
to MCFI any accountants' letters obtained relating to the Computational
Materials and/or ABS Term Sheets, which accountants' letters shall be addressed
to MCFI or shall state that MCFI may rely thereon; provided that the
Underwriters shall have no obligation to procure such letter.
10. Termination. This Agreement shall be subject to termination by
notice given to MCFI, if the sale of the Registered Certificates provided for
herein is not consummated because of any failure or refusal on the part of MCFI
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 MCFI
shall be unable to perform in all material respects its obligations under this
Agreement. This Agreement shall also be subject to termination in the absolute
discretion of either of the Underwriters, by notice given to MCFI prior to
delivery of and payment for the Certificates, if prior to such time (i) trading
in securities generally on the New York Stock Exchange shall have been suspended
or materially limited, (ii) a general moratorium on commercial banking
activities in New York shall have been declared by either federal or New York
State authorities, or (iii) there shall have occurred any material outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the reasonable
judgment of either of the Underwriters after consultation with MCFI,
impracticable to market the Registered Certificates.
11. Default by an Underwriter. If either Underwriter shall fail to
purchase and pay for any of the Registered Certificates agreed to be purchased
by such Underwriter hereunder and such failure to purchase shall constitute a
default in the performance of its obligations under this Agreement, the
remaining Underwriter shall be obligated to take up and pay for the Registered
Certificates that the defaulting Underwriter agreed but failed to purchase;
provided, however, that in the event that the initial principal amount of
Registered Certificates that the defaulting Underwriter agreed but failed to
purchase shall exceed 10% of the aggregate Class Principal Balance of all of the
Registered Certificates set forth in Schedule I hereto, the remaining
Underwriter shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Registered Certificates, and if such
nondefaulting Underwriter does not purchase all of the Registered Certificates,
this Agreement will terminate without liability to the nondefaulting Underwriter
or MCFI. In the event of a default by any Underwriter as set
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forth in this Section 11, the Closing Date for the Registered Certificates shall
be postponed for such period, not exceeding seven days, as the nondefaulting
Underwriter shall determine in order that the required changes in the
Registration Statement, the Prospectus or in any other documents or arrangements
may be effected. Nothing contained in this Agreement shall (a) relieve any
defaulting Underwriter of its liability, if any, to MCFI and to any
nondefaulting Underwriter for damages occasioned by its default hereunder or (b)
relieve any Underwriter of such Underwriter's obligations under the Agreement
Among Underwriters, including, without limitation, those set forth in Sections
5(b) and 5(c) thereof.
12. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of
MCFI, the Underwriters and their respective officers, directors, employees and
agents set forth in or made pursuant to this Agreement will remain in full force
and effect, regardless of any investigation made by or on behalf of either
Underwriter, MCFI or any of the officers, directors or controlling persons
referred to in Section 7 hereof, and will survive delivery of and payment for
the Registered Certificates. The provisions of Section 7 hereof shall survive
the termination or cancellation of this Agreement.
13. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors and controlling persons referred to in Section 7 hereof, and
no other person will have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed
in accordance with the substantive laws of the State of New York, applicable to
agreements made and to be performed entirely in said state.
15. Miscellaneous. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject matter
hereof. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated except by a writing signed by the party against whom
enforcement of such change, waiver, discharge or termination is sought. This
Agreement may be signed in any number of counterparts, each of which shall be
deemed an original, which taken together shall constitute one and the same
instrument.
16. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to NationsBanc, will be delivered to
NationsBanc Capital Markets, Inc., NationsBank Corporate Center, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, with a copy to ▇▇▇▇▇▇ ▇. ▇▇▇▇, Esq., at NationsBank Corporate Center,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇; if sent to
Citibank, will be delivered to Citibank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇. Jr.; if sent to MCFI,
will be delivered to MCFI, at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., with a copy to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq. at
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the undersigned a counterpart hereof,
whereupon this letter and your acceptance shall represent a binding agreement
among MCFI and the Underwriters.
Very truly yours,
MORTGAGE CAPITAL FUNDING, INC.
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
NATIONSBANC CAPITAL MARKETS, INC.
By:
---------------------------------
Name:
Title:
CITIBANK, N.A.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
SCHEDULE I
As used in this Agreement, the term "Registration Statements" refers to the
registration statement Nos. 33-25068 and 33-63924 filed by MCFI on Form S-11 and
Form S-3, respectively and declared effective by the Commission.
Title and Description of the Registered Certificates:
-----------------------------------------------------
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1996-MC2,
Class A-1, Class A-2, Class A-3, Class B, Class C, Class D and Class E
Certificates.
Underwriting Agreement, dated as of December 11, 1996
Cut-off Date: December 1, 1996
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Portion of Portion of
Class Principal Class Principal
Balance of Class Balance of Class
Class Initial Class to be Purchased to be Purchased Initial Purchase
Designation Principal Balance (1) by Citibank(1) by NationsBanc(1) Pass-Through Rate Price(2) Rating(3)
----------- --------------------- ----------------- ----------------- ----------------- --------- ---------
Class A-1 $132,607,079 $56,429,484 $76,177,595 6.758% 101.000% AAA/Aaa
Class A-2 $ 24,276,943 $10,330,786 $13,946,157 6.909% 101.000% AAA/Aaa
Class A-3 $166,045,134 $70,658,680 $95,386,454 7.008% 101.000% AAA/Aaa
Class B $ 27,483,332 $11,695,230 $15,788,102 7.136% 101.000% AA/Aa2
Class C $ 22,902,777 $9,746,025 $13,156,752 7.224% 101.000% A/A2
Class D $ 18,322,221 $7,796,820 $10,525,401 7.257% 100.000% BBB/Baa2
Class E $ 11,451,388 $4,873,012 $6,578,376 7.628% 99.859% NR/Baa3
----------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the Class Principal Balance of the relevant class of Registered Certificates to be purchased. In
addition, as to each class of the Registered Certificates, the Underwriters will pay MCFI accrued interest at the initial
Pass-Through Rate therefor from the Cut-off Date to but not including the Closing Date.
(3) By each of Fitch Investors Service, L.P. and ▇▇▇▇▇'▇ Investors Service, Inc ("Moody's") (except with respect to the Class E
Certificates, which are rated solely by Moody's).
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Closing Time, Date and Location: 10:00 a.m. New York City time on December 19,
1996 at the offices of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇.
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Issuance and delivery of Registered Certificates: Each class of Registered
Certificates will be issued as one or more Certificates registered in the name
of Cede & Co., as nominee of The Depository Trust Company. Beneficial owners
will hold interests in such Certificates through the book-entry facilities of
The Depository Trust Company in minimum denominations of initial principal
balance of $100,000 and integral multiples of $1 in excess thereof.
