Mortgage Capital Funding, Inc.
$770,469,899 (Approximate)
Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC2
Class X, Class A-1, Class A-2, Class B, Class C, Class D and Class E
Underwriting Agreement
as of November 20, 1997
NationsBanc Xxxxxxxxxx Securities, Inc.
NationsBank Corporate Center, 11th Floor
000 Xxxxx Xxxxx Xxxxxx
Mail Code: NC1-007-11-07
Charlotte, North Carolina 28255
Citibank, N.A.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Mortgage Capital Funding, Inc., a Delaware corporation ("MCFI"),
proposes to sell to NationsBanc Xxxxxxxxxx Securities, Inc. ("NationsBanc") and
Citibank, N.A. ("Citibank"; NationsBanc and Citibank, in such capacity, each an
"Underwriter" and, together, the "Underwriters"), pursuant to this Underwriting
Agreement (this "Agreement"), the respective classes of Multifamily/Commercial
Mortgage Pass-Through Certificates, Series 1997-MC2 which are identified on
Schedule I hereto (collectively, the "Registered Certificates"), each having the
initial aggregate stated principal amount (the initial "Class Principal
Balance") or, in the case of the Class X Certificates, initial aggregate
notional principal amount (the initial "Class Notional Amount") set forth on
Schedule I. The Registered Certificates, together with the Class F, Class G,
Class H, Class J, Class K, 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 to be created by MCFI (such
trust, the "Trust"; and such assets collectively, the "Trust Fund"). The Trust
Fund consists 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 November 1, 1997 (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,
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an aggregate principal balance of $870,577,289 (subject to a variance of plus or
minus 5.0%). The Mortgage Loans (or the right to have such transferred to the
Trust) 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
"CREI/MCFI Mortgage Loan Purchase Agreement"), between MCFI and CREI. Certain of
the Mortgage Loans will be acquired by CREI from NationsBanc Mortgage Capital
Corporation ("NMCC"; and such Mortgage Loans, the " Direct NMCC Mortgage
Loans"), pursuant to a mortgage loan purchase agreement dated as of the date
hereof (the "NMCC/CREI Mortgage Loan Purchase Agreement"), between CREI and
NMCC. Additionally, certain of the Mortgage Loans will be acquired by CREI from
Midland Commercial Financing Corp. ("Midland Commercial"; and such Mortgage
Loans, the "Midland/NMCC Mortgage Loans"; and, collectively with the Direct NMCC
Mortgage Loans, the "NMCC Mortgage Loans"), pursuant to a mortgage loan purchase
agreement, dated as of the date hereof (the "Midland/CREI Mortgage Loan Purchase
Agreement"), between Midland Commercial and CREI. The Midland/NMCC Mortgage
Loans were acquired by Midland Commercial from NMCC, pursuant to a mortgage loan
purchase agreement, dated as of the date hereof, between Midland Commercial and
NMCC. The Mortgage Loans other than the NMCC Mortgage Loans are collectively
referred to herein as the "CREI Mortgage Loans". Certain of the CREI Mortgage
Loans will be acquired by CREI from PNC Bank, National Association ("PNC Bank"),
pursuant to a mortgage loan purchase agreement, dated as of the date hereof,
between CREI and PNC Bank. 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 is to be created and the Certificates are to be
issued under a pooling and servicing agreement, dated as of November 1, 1997,
(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, Midland Loan Services, L.P. as master servicer (the
"Master Servicer"), CRIIMI MAE Services Limited Partnership as special servicer
(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. XXXX represents and
warrants to, and covenants with, each of the Underwriters that:
(a) A registration statement (File No. 333-24489) on Form S-3 has been
filed with the Securities and Exchange Commission (the "Commission"), and became
effective under the Securities Act of 1933, as amended (the "Securities Act");
such registration statement includes 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.
Such registration statement, as amended to the date of this Agreement, is
hereinafter referred to as the "Registration Statement"; 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
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reference herein to the terms "amend", "amendment" or "supplement" with respect
to the Registration Statement 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
(15) 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 Statement, as of the date it 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 Statement 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 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; 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 or on behalf of Citibank
or CREI 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 or on behalf of Citibank specifically for use 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 or on
behalf of NationsBanc, NMCC or Midland Commercial 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 or on behalf of 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 Statement, as of the date of the Prospectus Supplement, which
were not described or filed as required.
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(c) As of the Closing Date, the Registered Certificates will be duly
authorized by MCFI, and, when the Registered Certificates have been duly
executed and authenticated in the manner contemplated in the Pooling and
Servicing Agreement and have been delivered to and paid for by the Underwriters
pursuant to this Agreement, the Registered Certificates 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 XXXX 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
XXXX 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 Statement or the Prospectus or for any
additional information, (ii) the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement 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) 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").
(j) The transfer of the Mortgage Loans to the Trust 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.
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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 respective portions of the Class Principal
Balance or Class Notional Amount, as the case may be, of each class of
Registered Certificates set forth on Schedule I hereto, at the purchase price
for each such class as set forth on such Schedule I.
3. Delivery and Payment. Delivery of and payment for the Registered
Certificates shall be made in the manner, 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 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 XXXX 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 (3) full business days prior to the
Closing Date.
XXXX 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 XXXX, 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. XXXX agrees with each of the Underwriters that:
(a) MCFI will not file any amendment to the Registration Statement
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
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Certificates, will also promptly advise each Underwriter (i) when any amendment
to the Registration Statement 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 Statement 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 Statement 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
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
Statement (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, has caused any Computational
Materials and ABS Term Sheets (each as defined in Section 9) with respect to the
Registered Certificates, which are or have been 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, if such
filing is subsequent to the date
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hereof, XXXX 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 Statement. 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 of the Securities Act) 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 accuracy of the statements of MCFI and such Underwriter
made in any officer's certificate delivered pursuant to the provisions hereof,
to the performance by XXXX and such Underwriter of their respective obligations
hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement 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 Xxxxxxx X. Xxxxx, Esq., counsel to XXXX,
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;
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(B) The Registered Certificates have been duly
authorized by MCFI and, when the Registered Certificates have
been duly executed and authenticated in the manner
contemplated in the Pooling and Servicing Agreement and have
been delivered to and paid for by the Underwriters pursuant to
this Agreement, the Registered Certificates will be 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 XXXX and, upon the due
authorization, execution and delivery by the other parties
thereto, will constitute a valid, legal and binding agreement
of MCFI, enforceable against MCFI in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights
generally and by general principles of equity, whether
enforcement is sought in a proceeding in equity or at law;
(D) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not required to be
registered under the Investment Company Act of 1940, as
amended;
(E) The Registration Statement has become effective
under the Securities Act, and, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted and are pending or have been
threatened under the Securities Act;
(F) The Registration Statement, at the time the
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 has not been requested to comment), appeared on
their respective faces to be appropriately responsive in all
material respects to the requirements of the Securities Act
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 has not been requested to comment), 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;
(G) The descriptions in the Prospectus, as of the
date hereof, of the Registered Certificates and the Pooling
and Servicing Agreement are, to the extent
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that such descriptions constitute statements of matters of law
or legal conclusions with respect thereto, accurate in all
material respects;
(H) 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
Statement, as of the date of the Prospectus Supplement, which
were not described or filed as required; and
(I) This Agreement has been duly authorized, executed
and delivered by XXXX.
In giving his opinion, counsel to XXXX, Xxxxxxx X. Xxxxx,
Esq., shall additionally state that, based on his review (or review by
attorneys under his supervision) of the statements contained in the
Registration Statement or the Prospectus mentioned in paragraph (F)
above and conferences and telephone conversations with representatives
of CREI, NMCC, PNC Bank, the Underwriters, 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;
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 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 rely on the opinion of Xxxxxx & Xxxxxx referred to in
Section 6(b)(iii) below that relates to the sections of the Prospectus
Supplement under the headings "Certain Federal Income Tax Consequences"
and "ERISA Considerations" and of the accompanying prospectus under the
headings "Material Federal Income Tax Consequences" and "ERISA
Considerations". 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 XXXX. Such opinion
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.
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(iii) One or more opinions, dated the Closing Date, of Xxxxxx
& Xxxxxx, 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 Income Tax Consequences",
to the extent that they describe certain matters of New York
or federal law or legal conclusions with respect thereto,
provide a fair and accurate summary of such matters 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 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
B, Class C, Class D, Class E, Class F, Class G, Class H, Class
J and Class K 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 XXXX, Xxxxxx &
Austin, shall additionally state that, based on conferences and
telephone conversations with representatives of CREI, NMCC, PNC Bank,
the Underwriters, MCFI, the Trustee, the Fiscal Agent, the REMIC
Administrator, 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
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 or statistical
information included therein; 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
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
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by the parties thereto. Such opinion may be qualified as an opinion
only on the laws of the State of New York and the federal law of the
United States.
(iv) Such Underwriter shall have received copies of all legal
opinion letters delivered by Xxxxxx & Xxxxxx to the Rating Agencies in
connection with the issuance of the Registered Certificates,
accompanied in each case by a letter signed by Xxxxxx & Xxxxxx 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;
(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 XXXX 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)(C), 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
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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, the date of the
Prospectus Supplement or other date acceptable to MCFI and the Underwriters, 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(s); 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.
(e) MCFI and the Underwriters shall have received from KPMG Peat
Marwick, certified public accountants, a letter dated November ___, 1997, 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.
-12-
(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 Xxxxxxxxxx, Xxxxxxxxxx & Xxxx, stating
that, based on conferences and telephone conversations with representatives of
CREI, NMCC, PNC Bank, the Underwriters, 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 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; 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 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 XXXX,
-13-
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 Statement 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 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,
in accordance with the terms thereof, covered by the indemnification provided by
NMCC pursuant to the NMCC/CREI Mortgage Loan Purchase Agreement or the
NMCC/Midland Mortgage Loan Purchase Agreement or covered by the indemnification
provided by CREI pursuant to the CREI/MCFI Mortgage Loan Purchase Agreement,
(iii) any such untrue statement or alleged untrue statement made in
Computational Materials or ABS Term Sheets of either Underwriter incorporated by
reference into the Registration Statement or Prospectus 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 either Underwriter incorporated by
reference into the Registration Statement or Prospectus as a result of any
filing pursuant to Section 5(e), a material fact 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)
-14-
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"), including, without
limitation, as part of the Prospectus, and such Underwriter failed to notify
such person thereof or to deliver to such person corrected Computational
Materials and/or ABS Term Sheets, as applicable, or the Prospectus correcting
such Collateral Error, if 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 Statement 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 Statement 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
-15-
indemnified party, to assume the defense thereof, with counsel reasonably
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 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 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 reasonably
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time period 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 XXXX 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 Statement 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).
-16-
(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 thereby 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 thereby 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 clause (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
clause (i) or clause (ii) above 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; 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 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. 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)
-17-
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 the indemnified party.
(iv) If the indemnification provided in clause (i) or clause
(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 Citibank on the one hand and NationsBanc
on the other, in each case as Underwriter, from the offering of the
Registered Certificates, and the relative fault of Citibank on the one
hand and NationsBanc 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
each 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 Citibank on the
one hand or NationsBanc 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 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 sold, 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 clauses (i), (iii) and
(iv) above 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 clauses (ii),
(iii) and (iv) above 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.
-18-
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 November 6, 1997 (the
"Agreement Among Underwriters"), between the 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 (5) 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 Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx,
Xxxxxxx & Co. Incorporated, and Xxxxxx 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
"Xxxxxx 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 Xxxxxx 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 (4) 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 XXXX,
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 (4) 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;
(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
-19-
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.
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
-20-
(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 XXXX 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 NMSI 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).
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(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 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.
-22-
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 or
notional amount, as the case may be, of Registered Certificates that the
defaulting Underwriter agreed but failed to purchase shall exceed 10% of (a) the
aggregate Class Principal Balance of the Class A-1, Class A-2, Class B, Class C,
Class D and Class E Certificates set forth in Schedule I hereto or (b) the Class
Notional Amount of the Class X Certificates set forth in Schedule I hereto, as
the case may be, 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 forth in this Section 11, the Closing Date for the Registered
Certificates shall be postponed for such period, not exceeding seven (7) 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.
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 negotiated, 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 (other than the Agreement Among Underwriters). 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.
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16. Notices. All communications hereunder will be in writing and
effective only upon receipt and, if sent to NationsBanc, will be delivered to
NationsBanc Xxxxxxxxxx Securities, Inc., NationsBank Corporate Center, 000 Xxxxx
Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention: Xx. Xxxxx
X. Xxxxxxx, with a copy to Xxxxxx X. Xxxx, Esq., at NationsBank Corporate
Center, 000 Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000; if
sent to Citibank, will be delivered to Citibank, N.A., 000 Xxxx Xxxxxx, 0xx
xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xx. Xxxxxxx X. Xxxxxxx. Xx.; and if
sent to MCFI, will be delivered to MCFI, at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Xx. Xxxxxxx X. Xxxxxxx, Xx., with a copy to Xxxxxxx X. Xxxxx,
Esq. at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000; or, in each such case, to
such other address as may be forwarded by any such party to the other parties
hereto in writing.
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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:
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
NATIONSBANC XXXXXXXXXX SECURITIES, INC.
By:
Name:
Title:
CITIBANK, N.A.
By:
Name:
Title:
-25-
SCHEDULE I
As used in this Agreement, the term "Registration Statement" refers to the
registration statement No. 333-24489 filed by MCFI on Form S-3 and declared
effective by the Commission.
Title and Description of the Registered Certificates:
Multifamily/Commercial Mortgage Pass-Through Certificates, Series 1997-MC2,
Class X, Class A-1, Class A-2, Class B, Class C, Class D and Class E
Certificates.
Underwriting Agreement, dated as of November 20, 1997
Cut-off Date: November 1, 1997
Portion of Class Portion of Class
Principal Balance Principal Balance
(or, in the case of (or, in the case of
Initial Class Principal Class X, Class Class X, Class
Balance (or, in the case of Notional Amount) of Notional Amount) of
Class Class X, Class Class to be Purchased Class to be Purchased Initial Purchase
Designation Notional Amount)(1) by Citibank(1) by NationsBanc(1) Pass-Through Rate Price(2) Rating(3)
----------- --------------------------- -------------- ----------------- ----------------- -------- ---------
Class A-1 $143,471,137 $76,550,288 $66,920,849 6.525% 100.500% Aaa/AAA
Class A-2 $465,932,965 $248,602,634 $217,330,331 6.664% 100.500 % Aaa/AAA
Class X $870,490,231 $464,457,723 $406,032,508 1.369% TBD Aaa/AAA
Class B $ 52,234,637 $27,870,250 $24,364,387 6.734% 100.500% Aa2/AA
Class C $ 43,528,864 $23,225,208 $20,303,656 6.881% 100.500% A2/A
Class D $ 39,175,978 $20,902,688 $18,273,290 7.117% 100.500% Baa2/BBB
Class E $ 26,117,318 $13,935,125 $12,182,193 7.214% 99.731% Baa3/NR
------------------------
(1) Subject to a variance of plus or minus 5.0%.
(2) Expressed as a percentage of the Class Principal Balance or Class
Notional Amount, as the case may be, 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 Xxxxx'x Investors Service, Inc. and Fitch Investors Service,
L.P. (except with respect to the Class E Certificates, which are rated
by Moody's only).
Closing Time, Date and Location: 10:00 a.m. New York City time on November 25,
1997 at the offices of Sidley & Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
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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 or notional amount, as the case may be, of $100,000 (or $10,000, in the
case of the Class A-1 and Class A-2 Certificates, or $1,000,000, in the case of
the Class X Certificates) and integral multiples of $1 in excess thereof.
