XXXXXXX XXXXXXXX MORTGAGE SECURITIES VII, INC.
$650,344,000 (APPROXIMATE)
COMMERCIAL MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 1999-C1
CLASS A-1, CLASS A-2, CLASS X, CLASS B,
CLASS C, CLASS D, CLASS E AND CLASS F
UNDERWRITING AGREEMENT
as of August 5, 1999
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Banc of America Securities LLC
000 Xxxxx Xxxxx Xxxxxx
XXX-000-00-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Ladies and Gentlemen:
Salomon Brothers Mortgage Securities VII, Inc., a Delaware corporation
("SBMS"), proposes to sell to Xxxxxxx Xxxxx Xxxxxx Inc. ("Salomon") and Banc of
America Securities LLC ("BOA"; Xxxxxxx and XXX, each an "Underwriter" and,
together, the "Underwriters"), pursuant to this Underwriting Agreement (this
"Agreement"), the classes of Commercial Mortgage Pass-Through Certificates,
Series 1999-C1 that 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 G, Class H, Class J, Class K, Class L, Class M, Class R-I, Class
R-II, Class R-III and Class Y 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 to be created by SBMS (such trust, the "Trust"; and such assets
collectively, the "Trust Fund"). The Trust Fund consists primarily of a pool
(the "Mortgage Pool") of multifamily and commercial mortgage loans (the
"Mortgage Loans") that will have, as of the close of business on August 1, 1999
(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 $734,852,899 (subject to a variance of plus or minus 5.0%). Certain of the
Mortgage Loans (or the right to have such transferred to the Trust) will be
acquired by SBMS from Salomon Brothers Realty Corp. ("SBRC"; and such Mortgage
Loans, the "SBRC Mortgage Loans"), pursuant to a mortgage loan purchase
agreement, dated as of the date hereof (the "SBRC/SBMS Mortgage Loan Purchase
Agreement"), between SBRC and SBMS. The remaining Mortgage Loans will be
acquired by SBMS from Llama Capital Mortgage Company Limited Partnership
("LCMC"; and such remaining Mortgage Loans, the "LCMC Mortgage Loans"), pursuant
to a mortgage loan purchase agreement dated as of the date hereof (the
"LCMC/SBMS Mortgage Loan Purchase Agreement") between LCMC and SBMS. At least
three separate real estate mortgage investment conduit ("REMIC") elections will
be made with respect to the Trust Fund for federal income tax purposes. In
addition, certain Trust Fund assets will constitute two separate grantor trusts
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 the
Cut-off Date (the "Pooling and Servicing Agreement"), among SBMS as depositor,
SBRC and LCMC as mortgage loan sellers (in such capacity, each, a "Mortgage Loan
Seller" and together, the "Mortgage Loan Sellers"), GMAC Commercial Mortgage
Corporation, as master servicer (the "Master Servicer"), BNY Asset Solutions
LLC, as special servicer (the "Special Servicer") and The Chase Manhattan Bank
as trustee (in such capacity, the "Trustee"). Capitalized terms used but not
defined herein have the meanings assigned thereto in the Pooling and Servicing
Agreement.
1. REPRESENTATIONS, WARRANTIES AND COVENANTS. SBMS represents and
warrants to, and covenants with, each of the Underwriters that:
(a) A registration statement (File No. 333-72647) on Form S-3 has been
filed with the Securities and Exchange Commission (the "Commission"), and has
become 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 that 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 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. SBMS 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
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(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 SBMS does not make any representations, warranties or agreements 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 the Underwriters or the
Mortgage Loan Sellers 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 the Salomon to prospective investors in
connection with the sale of the Registered Certificates. There are no contracts
or other documents relating to SBMS 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.
(c) As of the Closing Date, the Registered Certificates will be duly
authorized by SBMS, 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) Xxxxxx Xxxxxxxx LLP ("Xxxxxx Xxxxxxxx") is an independent public
accountant with respect to SBMS 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 SBMS and, assuming the
valid authorization, execution and delivery thereof by the other parties
thereto, will constitute a valid and binding agreement of SBMS enforceable in
accordance with its terms, except as enforcement thereof 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.
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(f) This Agreement has been duly authorized, executed and delivered by
SBMS and, assuming the valid authorization, execution and delivery hereof by
each of the Underwriters, constitutes a valid and binding obligation of SBMS
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 or are construed to provide indemnification for
securities laws liabilities.
(g) SBMS 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) SBMS 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) SBMS is not, and the issuance and sale of the Registered
Certificates in the manner contemplated by the Prospectus will not cause SBMS 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 each of the Underwriters, at the Closing Date, will be treated
by SBMS 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, SBMS agrees to
sell to each of the Underwriters, and each of the Underwriters, severally and
not jointly, agrees to purchase from SBMS, the respective portions of the Class
Principal Balance or Class Notional Amount of each class of Registered
Certificates specified 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 SBMS (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 SBMS in same-day funds by
federal funds wire (or by such other method as such
4
Underwriter and SBMS 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.
SBMS 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 THE UNDERWRITERS. It is understood that the Underwriters
propose to offer the Registered Certificates for sale as set forth in the
Prospectus. It is further understood that SBMS, in reliance upon 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 SBMS 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. SBMS agrees with each of the Underwriters that:
(a) SBMS will not file any amendment to the Registration Statement
subsequent to the date hereof and 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 SBMS
has furnished a copy to Xxxxxxx for its review prior to filing, and will not
file any such proposed amendment or supplement to which Xxxxxxx reasonably
objects. Subject to the foregoing sentence, SBMS 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 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 SBMS 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. SBMS 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
5
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, SBMS promptly will prepare and file
with the Commission, subject to paragraph (a) of this Section 5, a revision,
amendment or supplement that will correct such statement or omission or effect
such compliance.
(c) Upon request, SBMS 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) SBMS will use its best efforts to arrange for the qualification of
the Registered Certificates for sale under the laws of such jurisdictions
Salomon 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 SBMS shall not be required to
qualify to do business in any jurisdiction where it is not now so qualified or
to take any action that would subject it to general or unlimited service of
process in any jurisdiction where it is not now so subject.
(e) SBMS 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
SBMS 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 SBMS 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 hereof, SBMS will promptly advise the
Underwriters when each such Current Report has been so filed. If any Collateral
Term Sheet (as defined in Section 9) is provided by the Underwriter to potential
investors in the Registered Certificates, SBMS will cause each such Collateral
Term Sheet that is delivered by the Underwriter to SBMS to be filed with the
Commission on a Current Report pursuant to Rule 13a-11 under the Exchange Act on
the business day immediately following the day on which such Collateral Term
Sheet is delivered to counsel for SBMS by the Underwriter (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). The parties agree that any material described in this Section 5(e) that is
delivered after 2:00 p.m., New York City time, on a business day shall be deemed
to have been delivered on the next business day. Each such Current Report shall
be incorporated by reference in the Prospectus and the Registration Statement.
Notwithstanding the foregoing, SBMS 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 SBMS after making reasonable efforts to
consult with the Underwriters, are not required to be filed
6
pursuant to the No-Action Letters (as defined in Section 9), 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 SBMS 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 SBMS
pursuant to or as contemplated by Section 9 hereof.
(f) SBMS 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 SBMS, Rule
158 of the Securities Act) which may be the annual report filed with the
Commission with respect to the Trust.
6. CONDITIONS TO THE OBLIGATIONS OF EACH UNDERWRITER AND SBMS. The
obligation of each Underwriter to purchase from SMBS, and the obligation of SBMS
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
SBMS and such Underwriter contained herein as of the date hereof and as of the
Closing Date, to the accuracy of the statements of SBMS and such Underwriter
made in any officer's certificate delivered pursuant to the provisions hereof,
to the performance by SBMS 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) SBMS shall have furnished to such Underwriter:
(i) An executed copy of the Pooling and Servicing Agreement;
(ii) An opinion of Xxxxxx & Xxxxxx, counsel for SBMS, dated
the Closing Date, substantially to the effect that:
(A) SBMS 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 enter into
and perform its obligations under the Pooling and Servicing
Agreement;
7
(B) The Registered Certificates have been duly
authorized by SBMS 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 SBMS and, upon the due
authorization, execution and delivery by the other parties
thereto, will constitute a valid, legal and binding agreement
of SBMS, enforceable against SBMS 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 it 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 and for Computational Materials
and ABS Term Sheets, 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;
8
(G) No consent, approval, authorization or order of
any federal or State of New York court or agency or other
governmental body is required for the consummation by SBMS of
the transactions contemplated by the terms of this Agreement,
except such as may be required under the securities or "blue
sky" laws of any state in connection with the purchase and the
offer and sale of the Registered Certificates by the
Underwriters as to which such counsel need not express any
opinion, and except such as have been obtained;
(H) Neither the sale of the Registered Certificates
to the Underwriters pursuant to this Agreement nor the
consummation of any other of the transactions contemplated by
or the fulfillment by SBMS of the terms of this Agreement will
result in a breach of any term or provision of the certificate
of incorporation or by-laws of SBMS or any federal or State of
New York statute or regulation, except such counsel need
express no opinion as to compliance with the securities laws
of New York and other particular States in connection with the
purchase and sale of the Registered Certificates by the
Underwriter;
(I) Such counsel does not know , having made no
independent investigation, of any contracts or other documents
relating to SBMS 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, that were not described
or filed as required; and
(J) This Agreement has been duly authorized, executed
and delivered by SBMS;
(K) The statements in the Prospectus under the
headings "ERISA Considerations", "Certain ERISA
Considerations", "Material Federal Income Tax Consequences"
and "Certain Federal Income Tax Consequences", to the extent
that they describe certain matters of federal law or legal
conclusions with respect thereto, while not discussing all
possible consequences of an investment in the Registered
Certificates to all investors, provide a fair and accurate
summary of such matters and conclusions set forth under such
headings;
(L) 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), (2) REMIC
II will qualify as a REMIC within the meaning of the REMIC
Provisions, and the REMIC II
9
Regular Interests will be "regular interests" and the Class
R-II Certificates will evidence the sole class of "residual
interests" in REMIC II and (3) REMIC III will qualify as a
REMIC within the meaning of the REMIC Provisions, and the
Class A-1, Class A-2, Class X, Class B, Class C, Class D,
Class E, Class F, Class G, Class H, Class J, Class K, Class L
and Class M Certificates will evidence "regular interests" and
the Class R-III Certificates will evidence the sole class of
"residual interests" in REMIC III;
(M) Assuming compliance with the provisions of the
Pooling and Servicing Agreement, for City and State of New
York income and corporation franchise tax purposes, REMIC I,
REMIC II and REMIC III will each be classified as a REMIC and
not as a corporation, partnership or trust, in conformity with
the federal income tax treatment of REMIC I, REMIC II and
REMIC III. Accordingly, the Trust Fund will be exempt from all
City and State of New York taxation imposed on its income,
franchise or capital stock, and its assets will not be
included in the calculation of any franchise tax liability;
and
(N) The statements set forth in the Prospectus
Supplement under the headings "Description of the Offered
Certificates" and "Servicing of the Mortgage Loans" and in the
Prospectus under the headings "Description of the
Certificates" and "Description of the Agreements", insofar as
such statements purport to summarize certain material
provisions of the Registered Certificates and the Pooling and
Servicing Agreement, provide a fair and accurate summary of
such provisions.
In giving its opinions, Xxxxxx & Xxxxxx, counsel to SBMS,
shall additionally state that, based on conferences and telephone
conversations with representatives of the Mortgage Loan Sellers, the
Underwriters, SBMS, the Trustee, the Master Servicer, the Special
Servicer and their respective counsel (but 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 it to believe that the Prospectus (other
than: any accounting, financial or statistical information contained in
or omitted from the Prospectus and information incorporated by
reference into the Prospectus and any information relating to the
characteristics of the Mortgage Loans and the related borrowers and
mortgaged properties, 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
10
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.
Such opinion may be qualified as an opinion only on the laws of the
State of New York, the General Corporation Law of the State of Delaware
and the federal law of the United States.
(iii) 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;
(iv) Good standing certificates regarding SBMS, each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and
the Trustee from the Secretary of State (or other appropriate
authority) of the jurisdiction under which each such entity has been
formed, dated not earlier than 30 days prior to the Closing Date;
(v) Certificates of SBMS, each of the Mortgage Loan Sellers,
the Master Servicer, the Special Servicer and the Trustee, each dated
the Closing Date and signed by an executive officer or authorized
signatory of such party, to the effect that the representations and
warranties of such party herein and/or in the Pooling and Servicing
Agreement, as applicable, 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 SBMS 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
(vi) Officer's certificates, dated the Closing Date and signed
by the Secretary or an assistant secretary of SBMS, each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and
the Trustee, to the effect that each individual who, as an officer or
representative of such party, 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 such party) of
the organizational documents of such party, as in effect on the Closing
Date, and of the resolutions of such party and any required
shareholder, member or partner consent relating to the transactions
contemplated in this Agreement and the Pooling and Servicing Agreement.
11
(c) The Underwriters shall have received, with respect to each of the
Mortgage Loan Sellers, the Master Servicer, the Special Servicer and the
Trustee, a favorable opinion of counsel, dated the Closing Date, addressing the
valid existence and good standing 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 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 laws of the jurisdiction in which the party on whose
behalf such opinion is being rendered is organized, the laws of the State of New
York and the federal law of the United States.
(d) SBMS and the Underwriters shall have received from Xxxxxx Xxxxxxxx,
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 SBMS and the Underwriters, in form and
substance reasonably satisfactory to SBMS 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 Sellers, 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) SBMS and the Underwriters shall have received from Xxxxxx Xxxxxxxx,
certified public accountants, a letter dated on or about the Closing Date, in
form and substance reasonably satisfactory to SBMS and the Underwriters, to the
effect that they have performed certain specified procedures, all of which have
been agreed to by SBMS 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) Each Underwriter shall have delivered to SBMS 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
12
Underwriter that 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,
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.
(g) Xxxxxx Xxxxxxxx shall have furnished to SBMS and each Underwriter a
letter or letters, each in form and substance satisfactory to SBMS, relating to
the Computational Materials and ABS Terms Sheets of such Underwriter filed in
accordance with Section 5(f), 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 that 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 Xxxxxx Xxxxxxxx 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 each Mortgage Loan Seller, unless
otherwise indicated in such letter.
(h) The Underwriters shall have received an opinion of Xxxxxxx & Xxxxx
L.L.P., counsel to the Underwriters, in form and substance satisfactory to them.
(i) SBMS and the Underwriters shall have received an opinion of
counsel, dated the Closing Date, from Xxxxxxx & Xxxxx L.L.P., stating that,
based on conferences and telephone conversations with representatives of the
Mortgage Loan Sellers, the Underwriters, SBMS, the Trustee, the Master Servicer,
the Special Servicer and their respective counsel, and further based on a review
of certain legal documents relating to the Mortgage Loans and a compilation of
the information in the loan summaries for the Mortgage Loans (but otherwise
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), nothing has come to such counsel's attention
13
that would lead him to believe that the Prospectus (except for: any accounting,
financial or statistical information contained in or omitted from the Prospectus
and information incorporated by reference into 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.
(j) 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 SBMS that Xxxxxxx concludes, in its opinion after
consultation with SBMS, 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.
(k) 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 or qualified.
7. INDEMNIFICATION AND CONTRIBUTION. (a) SBMS 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 SBMS agrees to indemnify such
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 SBMS 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 SBMS 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
SBRC pursuant to the SBRC/SBMS Mortgage Loan Purchase Agreement or by LCMC
pursuant to the LCMC/SBMS Mortgage Loan Purchase Agreement, (iii) any such
untrue statement or alleged untrue statement is made in any Computational
Materials or ABS Term Sheets provided by either such Underwriter or the other
Underwriter to prospective investors in connection with the sale of the
Registered Certificates and incorporated by reference into
14
the Registration Statement or Prospectus as a result of any filing pursuant to
Section 5(e), (iv) any omission or alleged omission to state in any
Computational Materials or ABS Term Sheets provided by either such Underwriter
or the other Underwriter to prospective investors in connection with the sale of
the Registered Certificates and 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) and/or Section 9(b). This indemnity agreement will be in addition to any
liability that SBMS may otherwise have.
(b) Each Underwriter, severally and not jointly, agrees to indemnify
and hold harmless SBMS and each of its directors, each of its officers who
signed the Registration Statement or any amendments thereof, and each person who
controls SBMS within the meaning of either the Securities Act or the Exchange
Act, to the same extent as the foregoing indemnities from SBMS to the
Underwriters, but only with reference to (i) written information furnished to
SBMS 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
provided by such Underwriter to prospective investors in connection with the
sale of the Registered Certificates and 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 (as defined below), other than a Corrected Collateral Error
(as defined below)) 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 that the Underwriters may otherwise have. SBMS acknowledges that the
statements set forth in the third sentence of the final paragraph on the cover
page of the Prospectus Supplement, in the second sentence under the heading
"Risk Factors -- Risks Related to the Offered Certificates -- Many Factors,
Including Lack of Liquidity, Can Adversely Affect the Market Value of Your
Certificates", and in the first two sentences of the second paragraph, the first
sentence of the third paragraph and the first sentence of the fifth paragraph
under the heading "Method of Distribution" in the Prospectus Supplement,
constitute the only information furnished in writing by or on behalf of either
Underwriter 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.
As used herein, "Collateral Error" shall mean any error in the
information concerning the Mortgage Loans furnished by either Mortgage Loan
Sellers to SBMS or either Underwriter in writing or by electronic transmission
that was used in the preparation of any Computational Materials or ABS Term
Sheets; and "Corrected Collateral Error" shall mean any Collateral Error as to
which the Underwriter, not later than the date hereof, was notified in writing
or provided in
15
written or electronic form information superseding or correcting such Collateral
Error, including, without limitation, as part of the Prospectus.
(c) Promptly after receipt by an indemnified party under this Section 7
of notice of the commencement of any suit, action, proceeding (including,
without limitation, any governmental or regulatory investigation), claim or
demand, 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
that 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
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 that 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 for legal expenses of other counsel or other expenses, in
each case subsequently incurred by 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 (in addition to any local 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). 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 the indemnified
party.
16
(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, SBMS and each 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 SBMS and such Underwriter may be
subject in such proportion so that such Underwriter is responsible for 0.5%
thereof and SBMS is responsible for the balance; provided, however, that if such
allocation is not permitted by applicable law, then the indemnifying party shall
contribute in such proportion as is appropriate to reflect not only the relative
benefits referred to above but also the relative fault of SBMS on the one hand
and the related Underwriter on the other in connection with the statements or
omissions that resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. Notwithstanding the foregoing
provisions of this Section 7(d), neither Xxxxxxx nor BOA 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 statement or omission or alleged untrue
statement or omission. The relative fault of SBMS on the one hand and an
Underwriter on the other shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by SBMS or by such Underwriter and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. Notwithstanding the foregoing, however, 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 SBMS within the meaning of either
the Securities Act or the Exchange Act, each officer of SBMS who shall have
signed the Registration Statement or any amendments thereof and each director of
SBMS shall have the same rights to contribution as SBMS. 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) Xxxxxxx will indemnify and hold harmless BOA against any
losses, claims, damages or liabilities to which BOA 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 Xxxxxxx and will reimburse BOA for any legal or
other expenses reasonably
17
incurred thereby in connection with investigating or defending any such
action or claim as such expenses are incurred.
(ii) BOA will indemnify and hold harmless Xxxxxxx against any
losses, claims, damages or liabilities to which Xxxxxxx 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 XXX and will reimburse Xxxxxxx 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) 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.
18
(iv) If the indemnification provided in clause (i) or clause
(ii) above, as the case may be, is due in accordance with its terms in
respect of any losses, claims, damages or liabilities (or actions in
respect thereof) referred to therein, but is for any reason held by a
court to be unavailable on grounds of public policy or otherwise, 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 Xxxxxxx
on the one hand and BOA on the other, in each case as Underwriter, from
the offering of the Registered Certificates, and the relative fault of
Xxxxxxx on the one hand and BOA 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
Xxxxxxx on the one hand and BOA 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
Xxxxxxx on the one hand or BOA 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 Xxxxxxx nor
BOA 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 Salomon under clauses (i), (iii) and
(iv) above shall be in addition to any liability which Xxxxxxx may
otherwise have and shall extend, upon the same terms and conditions, to
each person, if any, who controls BOA within the meaning of the
Securities Act or the Exchange Act, and the obligations of BOA under
clauses (ii), (iii) and (iv) above shall be in addition to any
liability which BOA may otherwise have and shall extend, upon the same
terms and conditions, to each person, if any, who controls Xxxxxxx
within the meaning of the Securities Act or the Exchange Act.
8. FEES AND EXPENSES. (a) Except as provided in Section 8(b)
or any other particular section hereof, costs and expenses incurred in
connection with the transactions
19
herein contemplated shall be borne by the party that incurred such cost
or expense, provided that expenses incurred by or on behalf of the
Underwriters shall be borne by Xxxxxxx.
(b) If this Agreement shall be terminated by either
Underwriter because of any failure or refusal on the part of SBMS to
comply with the terms or to fulfill any of the conditions of this
Agreement or if for any reason SBMS shall be unable to perform its
obligations under this Agreement or any condition of such Underwriter's
obligations cannot be fulfilled, SBMS agrees to reimburse or cause the
reimbursement of such Underwriter for all out-of-pocket expenses
(including the reasonable fees and expenses of its counsel) reasonably
incurred by such Underwriter in connection with this Agreement or the
offering contemplated hereunder.
9. COMPUTATIONAL MATERIALS AND ABS TERM SHEETS. (a) Not later
than 10:30 a.m., New York City time, on the date hereof, each
Underwriter shall deliver to SBMS five (5) complete copies of all
materials provided by such Underwriter to prospective investors in the
Registered Certificates that 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 noaction
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 SBMS as contemplated by Section
9(b)(i) below. Each delivery of Computational Materials pursuant to
this paragraph (a) shall be effected by delivering four (4) copies of
such materials to counsel for SBMS and one copy of such materials to
SBMS. Each delivery of ABS Term Sheets pursuant to this paragraph (a)
shall be effected by delivering such materials to counsel for SBMS on
behalf of SBMS at the address specified in Section 17 hereof in a
format that will permit such materials to be promptly filed
electronically with the Commission.
(b) Each Underwriter represents and warrants to and agrees
with SBMS, 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 such materials in the format
contemplated by Section 9(a) to counsel for SBMS on behalf of
SBMS at
20
the address specified in Section 17 hereof 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 SBMS 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 that 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 SBMS 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,
such Underwriter possessed, and on the date of delivery of
such materials to SBMS pursuant to or as contemplated by this
Section 9 and on the Closing Date, such Underwriter 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 such Underwriter 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 SBMS 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
21
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 (except any Corrected Collateral Error, with respect
to materials prepared after the receipt by the Underwriters from SBMS
or either Mortgage Loan Seller of notice of such Corrected Collateral
Error or materials superseding or correcting such Corrected Collateral
Error).
(c) The Underwriters acknowledge and agree that SBMS 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 SBMS.
(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 (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 SBMS or either Mortgage Loan
Seller of notice of such Corrected Collateral Error or materials
superseding
22
or correcting such Corrected Collateral Error), at the expense of
SBMS), shall promptly prepare and furnish to SBMS for filing with the
Commission an amendment or supplement that will correct such statement
or omission or an amendment that 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. The Underwriters represent and warrant to
SBMS, as of the date of delivery of such amendment or supplement to
SBMS, 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. SBMS shall
have no obligation to file such amendment or supplement if SBMS
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 SBMS 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 SBMS pursuant
to this paragraph (d)) or (ii) such filing is not required under the
Securities Act. Notwithstanding the foregoing, the Underwriters make no
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 SBMS or either Mortgage Loan
Seller 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 SBMS 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, SBMS promptly will notify the Underwriters of the
necessity of such amendment or supplement, and the Underwriters, at
their expense (allocated 90% to Solomon and 10% to BOA) (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 SBMS or either the Mortgage
Loan Seller of notice of such Corrected Collateral Error or materials
superseding or correcting such Corrected Collateral Error), at the
expense of SBMS), shall promptly prepare and furnish to SBMS for filing
with the Commission an amendment or supplement that will correct such
statement or omission or an amendment that will effect such compliance
and
23
shall distribute such amendment or supplement to each prospective
investor in the Registered Certificates that received such information
being amended or supplemented. The Underwriters represent and warrant
to SBMS, as of the date of delivery of such amendment or supplement to
SBMS, 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.
Notwithstanding the foregoing, the Underwriters make no 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 Underwriter from SBMS or either Mortgage Loan Seller 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 SBMS any accountants' letters obtained relating to the
Computational Materials and/or ABS Term Sheets, which accountants'
letters shall be addressed to SBMS or shall state that SBMS 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 SBMS, if the sale of the Registered
Certificates provided for herein is not consummated because of any
failure or refusal on the part of SBMS 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 SBMS 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 Salomon, by notice given to SBMS 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
Xxxxxxx after consultation with SBMS, 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 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, Class E and Class F Certificates
set forth
24
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 SBMS. In the
event of a default by an 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
relieve any defaulting Underwriter of its liability, if any, to SBMS
and to any nondefaulting Underwriter for damages occasioned by its
default hereunder.
12. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other
statements of SBMS, 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 the Underwriters, SBMS 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 Sections 7 and 8(b) 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. [RESERVED.]
16. MISCELLANEOUS. This Agreement supersedes all prior or
contemporaneous agreements and understandings relating to the subject
matter hereof (other than the Term Sheet). 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, and that taken together shall constitute one and the same
instrument.
17. NOTICES. All communications hereunder will be in writing
and effective only upon receipt and, if sent to the Underwriters, will
be delivered to Xxxxxxx Xxxxx Xxxxxx
25
Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxx
Xxxxxx and BOA, 000 Xxxxx Xxxxx Xxxxxx, XX0-000-00-00, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000; and, if sent to SBMS, will be delivered to Salomon
Brothers Mortgage Securities IV, Inc., 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxx Xxxxxx; or, in each such case, to
such other address as may be forwarded by any such party to the other
parties hereto in writing.
26
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 SBMS and the Underwriters.
Very truly yours,
XXXXXXX XXXXXXXX MORTGAGE
SECURITIES VII, INC.
By: Xxxxxx Xxxxxx
----------------------------
Name: Xxxxxx Xxxxxx
Title: Assistant Vice President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By:
-------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By:
-------------------------------------
Name:
Title:
27
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 SBMS and the Underwriters.
Very truly yours,
XXXXXXX XXXXXXXX MORTGAGE
SECURITIES VII, INC.
By:
----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By: Xxxxx X Xxxxxxx
-------------------------------------
Name: Xxxxx X Xxxxxxx
Title: Managing Director
BANC OF AMERICA SECURITIES LLC
By:
-------------------------------------
Name:
Title:
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 SBMS, Citicorp and the Underwriters.
Very truly yours,
XXXXXXX XXXXXXXX MORTGAGE
SECURITIES VII, INC.
By:
----------------------------
Name:
Title:
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
XXXXXXX XXXXX XXXXXX INC.
By:
-------------------------------------
Name:
Title:
BANC OF AMERICA SECURITIES LLC
By: Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Managing Director
SCHEDULE I
As used in this Agreement, the term "Registration Statement" refers to the
registration statement No. 333-72647 filed by SBMS on Form S-3 and declared
effective by the Commission.
TITLE AND DESCRIPTION OF THE REGISTERED CERTIFICATES: Commercial Mortgage
Pass-Through Certificates, Series 1999-C1, Class A-1, Class A-2, Class X, Class
B, Class C, Class D, Class E and Class F Certificates.
Underwriting Agreement, dated as of August 5, 1999
Cut-off Date: August 1, 1999
-----------------------------------------------------------------------------------------------------------
Initial Class Principal
Balance (or, in the case
Class of Class X, Class Initial
Designation Purchase Price Notional Amount)(1)(2) Pass-Through Rate Rating(3)
----------- -------------- ---------------------- ----------------- ---------
Class A-1 100.0000% $167,874,000 7.0750% Aaa/AAA
Class A-2 98.5432% $355,708,000 7.1500% Aaa/AAA
Class X .056448% $734,852,898 0.1980% Aaa/AAA
Class B 97.5675% $ 38,580,000 7.3563% Aa2/AA
Class C 96.2316% $ 38,580,000 7.3563% A2/A
Class D 94.6087% $ 11,023,000 7.3563% A3/A-
Class E 91.8727% $ 27,557,000 7.3563% Baa3/BBB
Class F 85.1152% $ 11,022,000 7.3563% Baa2/BBB-
----------
(1) Subject to a variance of plus or minus 5.0%.
(2) Subject to rounding to the nearest whole dollar, Xxxxxxx Xxxxx
Barney Inc. will acquire 90% and Banc of America Securities
LLC will acquire 10% of the Class Principal Balance of the
Class A-1 and Class A-2 Certificates. Xxxxxxx Xxxxx Xxxxxx
Inc. will acquire 100% of the Class Principal Balance or Class
Notional Amount, as the case may be, of each remaining class
of Registered Certificates.
(3) By each of Xxxxx'x Investors Service, Inc. and Fitch IBCA, Inc.
Purchase Price: The purchase prices set forth in the above schedule for
each Class of Certificates, plus interest on the Class Principal
Balance of each Class of Certificates and also on the Class Notional
Amount of the Class X Certificates, in each case at the initial
Pass-Through Rate for the applicable Class, from the Cut-off Date to
but not including the Closing Date.
-------------------------------------------------------------------------------
Closing Time, Date and Location: 10:00 a.m. New York City time on August 20,
1999 at the offices of Sidley & Austin, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000.
-------------------------------------------------------------------------------
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 $10,000 (or $1,000,000, in the
case of the Class X Certificates) and integral multiples of $1 in
excess thereof.
