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EXHIBIT 1.2
CITICORP MORTGAGE SECURITIES, INC.
Citicorp Mortgage Securities Trust, Series 2008-1
REMIC Pass-Through Certificates
Subordinated Underwriting Agreement
February
20, 2008
To: Banc
of America Securities LLC, as Subordinated
Underwriter
214
North Tryon Street
Charlotte,
North Carolina 28255
Ladies
and Gentlemen:
Citicorp
Mortgage Securities, Inc., a Delaware corporation
(“CMSI”), proposes to sell to you, as subordinated
underwriter (the “Subordinated Underwriter”), the
offered class B-1, B-2 and B-3 REMIC Pass-Through Certificates
(the “offered class B certificates”) described in
Schedule I. The offered class B certificates evidence
ownership interests in a trust (the “Trust”)
consisting of the mortgage loans described in Schedule I (the
“mortgage loans”) and related property. The
mortgage loans were originated or acquired by the affiliates
of CMSI identified in Schedule I (the
“originators”), and will have, at the close of
business on the “cut-off date” specified in
Schedule I, the aggregate principal balance set forth in
Schedule I. CMSI will elect to treat the Trust, or one or more
segregated pools of assets within the Trust, as one or more
real estate mortgage investment conduits (each a
“REMIC”) for purposes of federal income taxation.
The offered class B certificates are to be issued under a
pooling and servicing agreement (the “Pooling
Agreement”), dated as of the cut-off date, between CMSI,
as Depositor, CitiMortgage, Inc. (“CMI”), as
Servicer and Master Servicer, U.S. Bank National Association,
in its individual capacity and as Trustee (in such capacity,
the “Trustee”), and Citibank, N.A., in its
individual capacity and as Paying Agent, Certificate Registrar
and Authentication Agent.
CMSI,
Citigroup Inc., and the Subordinated Underwriter agree as
follows:
1. Purchase
and Sale
Subject
to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement, CMSI
agrees to sell to the Subordinated Underwriter, and the
Subordinated Underwriter agrees to purchase from CMSI, all of
the offered class B certificates at the purchase price set
forth in Schedule I.
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2. Delivery
and Payment
CMSI
will deliver one or more certificates representing each class
of offered class B certificates to the Subordinated
Underwriter’s account at the office, on the date and at
the time (the “closing date”) specified in
Schedule I against payment by the Subordinated Underwriter of
the purchase price to or upon the order of CMSI in the manner
provided in Schedule I. Unless otherwise specified in Schedule
I, the offered class B certificates will be registered in the
name of Cede & Co., as nominee for The Depository Trust
Company (“DTC”), and the interests of beneficial
owners of such offered class B certificates will be
represented by book entries on the records of DTC and its
participants. Definitive Certificates representing the offered
class B certificates will be available as set forth in
Schedule I.
CMSI
will have the offered class B certificates available for
inspection by the Subordinated Underwriter in New York, New
York, one business day prior to the closing date.
3. Registration
Statement and Prospectus
(a) CMSI
represents and warrants to the Subordinated Underwriter that
CMSI has filed a registration statement (File No. 333-145532),
including a prospectus, with the Securities and Exchange
Commission (the “Commission”) on Form S-3 that is
effective under the Securities Act of 1933, as amended (the
“Securities Act”) and no stop order suspending the
effectiveness of the registration statement has been issued
and no proceedings for that purpose have been initiated by the
Commission. CMSI further represents and warrants to the
Subordinated Underwriter that CMSI is not an “ineligible
issuer” as defined in Rule 405 under the Securities Act,
at the date specified in paragraph 3.ii of such
definition.
Such
registration statement, as revised, amended or supplemented,
including by the filing of the Prospectus (as defined below),
will at the relevant date be the “Registration
Statement” at that date. As used in this Agreement, the
Registration Statement will include, at the date of their
filing, any documents filed under the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) that are
incorporated by reference into the prospectus included in the
Registration Statement pursuant to Item 12 of Form S-3 under
the Securities Act, and the terms “amend,”
“amendment” or “supplement” with
respect to the Registration Statement or the Prospectus will
refer to and include the filing of any document under the
Exchange Act so incorporated by reference.
(b) The
Subordinated Underwriter will advise CMSI of the final
structure of the offered class B certificates sufficiently in
advance of the closing date so that CMSI can prepare a final
prospectus relating to the offered class B certificates (the
“Prospectus”) for delivery to the Subordinated
Underwriter no later than the closing date. CMSI will use its
best efforts to deliver the Prospectus to the Subordinated
Underwriter as soon as reasonably practicable following the
Subordinated Underwriter’s advice of the
final
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structure
of the offered class B certificates. CMSI will file the
Prospectus with the Commission pursuant to and in conformity
with Rule 424 under the Securities Act. References to the
Prospectus at any time will refer to the Prospectus as amended
or supplemented at such time. CMSI will, prior to the
termination of the offering of the offered class B
certificates (the “offering”), promptly advise the
Subordinated Underwriter
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(i)
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when
any amendment to the Registration Statement relating to the offered
class B certificates has become effective or any revision of or
supplement to the Prospectus has been filed,
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(ii)
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of
any request by the Commission for an amendment of the Registration
Statement or the Prospectus or for any additional
information,
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(iii)
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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
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(iv)
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of
the receipt by CMSI of any notification with respect to the
suspension of the qualification of the offered class B certificates
for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose.
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CMSI
will use its best efforts to prevent the issuance of any such
stop order and, if issued, to obtain its withdrawal as soon as
possible. CMSI will not file prior to the termination of the
offering any amendment to the Registration Statement relating
to the offered class B certificates, or any revision of or
supplement to the Prospectus, unless a copy has been furnished
to the Subordinated Underwriter for its review prior to
filing.
(c) CMSI
represents and warrants to the Subordinated Underwriter that
the Registration Statement on each of the date of this
Agreement, the closing date, and each time of sale (as defined
below), and the Prospectus as of its date, the closing date,
and each time of sale following the date of the
Prospectus
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(i)
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will
conform in all material respects to the requirements of the
Securities Act and the applicable rules and regulations of the
Commission,
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(ii)
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the
Registration Statement will not include an untrue statement of a
material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading, and
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(iii)
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the
Prospectus will not include an untrue statement of a material fact
or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, except that CMSI makes
no representation or warranty concerning the statements in Schedule
I under the heading “Subordinated Underwriter’s
Statements to be Included in the Prospectus” furnished to
CMSI by or on behalf of the Subordinated
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3
Underwriter
specifically for use in connection with the preparation of the
Prospectus (the “Subordinated Underwriter supplied
Prospectus information”).
For
purposes of clause (ii) of this section 3(c), the Prospectus
will include static pool information on a website for which a
URL address or hyperlink was provided in the Prospectus but
which information is, pursuant to Item 1105(d) of Regulation
AB, not deemed to be part of the Prospectus or the
Registration Statement.
In
this agreement, “time of sale” means the time of
sale (as such term is used in Rule 159 under the Securities
Act) of the offered class B certificates by the Subordinated
Underwriter to an investor.
(d) The
Subordinated Underwriter represents and warrants to CMSI that
the Subordinated Underwriter supplied Prospectus information
does not include an untrue statement of a material fact or
omit to state a material fact necessary to make the statements
therein in the light of the circumstances under which they are
made, not misleading when considered in conjunction with the
rest of the Prospectus. CMSI acknowledges that the
Subordinated Underwriter supplied Prospectus information
comprises the only written information furnished by or on
behalf of the Subordinated Underwriter for inclusion in the
Prospectus.
(e) If,
at any time when the Prospectus is required to be delivered
under the Securities Act,
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(i)
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an
event occurs as a result of which the Prospectus at such time would
include an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein in the light
of the circumstances under which they were made not misleading,
or
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(ii)
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the
Prospectus must be revised, amended or supplemented to comply with
the Securities Act or the rules and regulations of the Commission
thereunder,
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CMSI
will promptly prepare and file with the Commission a revision,
amendment or supplement that corrects such statement or
omission or effects such compliance. CMSI will consult with
the Subordinated Underwriter, to the extent reasonably
practicable, on the preparation of such revision, amendment or
supplement.
(f) CMSI
will furnish to the Subordinated Underwriter and its counsel,
without charge, so long as delivery of the Prospectus is
required under the Securities Act, as many copies of the
Prospectus and any revisions or amendments thereof or
supplements thereto as reasonably requested.
(g) If
the third anniversary of the effective date of the
Registration Statement occurs within three months after the
closing date, CMSI will take action as necessary to permit the
public offering and sale of the offered class B certificates
as contemplated by this Agreement.
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4. Free
writing prospectuses and loan tape
(a) CMSI
will deliver electronically to the Subordinated Underwriter in
Portable Document Format, not later than two business days
following the date on which CMSI notifies the Subordinated
Underwriter that CMSI has chosen it to underwrite the
offering, and will promptly file with the Commission, a
“free writing prospectus” (as defined in Rule 405
under the Securities Act) containing general information about
the offering, the structure of the transaction (exclusive of a
description of the properties of any particular class of
offered class B certificates), the expected parameters of the
mortgage loan pools, risk factors applicable to the mortgage
loans, transaction parties known to CMSI, the material tax and
ERISA treatment of the Certificates, whether the Certificates
will be “mortgage related securities” as defined
in the Exchange Act, and URL addresses of or hyperlinks to the
core prospectus most recently filed by CMSI with the
Commission and to the portion of CMSI’s static pool
website containing static pool information with respect to
REMIC pass-through certificates of the same asset type (as
determined by CMSI) as the mortgage loans (including all such
static pool information, whether or not included in the
Prospectus or Registration Statement pursuant to Item 1105(d)
or Regulation AB, the “CMSI free writing
prospectus”). CMSI will promptly deliver to the
Subordinated Underwriter electronically in Portable Document
Format updated CMSI free writing prospectuses to correct any
material misstatements, or omissions to state a material fact
necessary to make the statements therein in the light of the
circumstances under which they were made not misleading, in
previous CMSI free writing prospectuses. References to the
CMSI free writing prospectus at any time will refer to the
CMSI free writing prospectus most recently delivered to the
Subordinated Underwriter (including by correction of static
pool information on a website referred to in the CMSI free
writing prospectus) sufficiently prior to such time as to
reasonably permit the Subordinated Underwriter to deliver the
CMSI free writing prospectus to the relevant
investor.
(b) CMSI
represents and warrants to the Subordinated Underwriter
that:
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(i)
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The
CMSI free writing prospectus will conform in all material respects
to the requirements of the Securities Act and the applicable rules
and regulations of the Commission
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(ii)
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At
the time of sale, the CMSI free writing prospectus, and any loan
tape furnished by CMSI to the Subordinated Underwriter (as
supplemented or corrected by CMSI sufficiently prior to such time
as to reasonably permit the Subordinated Underwriter to correct any
statement made to the investor in reliance on the unsupplemented or
uncorrected loan tape), will not contain 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 , except that CMSI makes
no representation or warranty to the extent that such untrue
statement or omission was the result of an untrue statement or
omission in, or a failure to provide structural
information.
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In
this agreement, “structural information” means any
of the following types of information supplied by the
Subordinated Underwriter to the investor, to the extent not
included in the CMSI free writing prospectus:
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·
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The
interest rate or any interest rate formula, the anticipated price
range, the yield to maturity and/or call, the weighted average life
at the pricing speed and under other scenarios that illustrate the
material effects of prepayments or changes in interest rates on the
offered class B certificates (with a description of related
prepayment, collateral and other assumptions), and other pricing
information.
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·
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Principal
and loss allocations to various classes.
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·
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Interest
accrual periods for the offered class B certificates.
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·
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Whether
the offered class B certificates represent interests in the entire
mortgage pool or in one or more mortgage loan groups.
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·
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A
description of third party credit enhancement or derivative
instruments selected by the Subordinated Underwriter for the
offered class B certificates, together with the identity of and
material information about any related provider or counterparty and
the ratings assigned to the provider or counterparty.
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·
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The
identity of and material information about any special servicer or
credit risk manager selected by the Subordinated Underwriter for
the offered class B certificates.
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·
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The
fees and expenses payable to transaction parties.
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(c) CMSI
will provide the Subordinated Underwriter with one or more
loan tapes containing “loan level” listings of the
mortgage loans that may contain “nonpublic personal
information” within the meaning of Regulation S-P of the
Commission. The Subordinated Underwriter acknowledges that, to
the extent the listing of the mortgage loans contains any
nonpublic personal information, the Subordinated Underwriter
will be bound by the provisions of Rule 11 of Regulation S-P
and other applicable law regarding limits on redisclosure and
reuse of such information.
(d) The
Subordinated Underwriter represents and warrants to CMSI that
any written communication containing material information
about CMSI or its affiliates or the offered class B
certificates furnished to a prospective investor by the
Subordinated Underwriter, other than a CMSI free writing
prospectus, the Prospectus, the Registration Statement or the
loan tape most recently furnished by CMSI to the Subordinated
Underwriter (as supplemented or corrected by CMSI prior to
such time)
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(i)
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conformed
to the terms and conditions for a communication in Rule 134 or a
free writing prospectus in Rule 433 under the Securities
Act,
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(ii)
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if
a free writing prospectus, consisted solely of ABS informational
and computational material (as defined in Item 1101(a) of
Regulation AB
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under
the Securities Act) and information regarding status,
oversubscription, allocation and confirmation of sale,
and
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(iii)
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if
a free writing prospectus, did not at the time of sale include any
untrue statement of a material fact or omit any material fact
necessary to make the statements contained therein, when considered
in conjunction with the CMSI free writing prospectus delivered to
the investor, in light of the circumstances under which they were
made, not misleading, except that the
Subordinated Underwriter makes no representation or warranty to the
extent that (A) the misstatement or omission was the result of
a misstatement or omission in information supplied by CMSI to the
Subordinated Underwriter that was not corrected by information
subsequently supplied by CMSI to the Subordinated Underwriter
sufficiently prior to the time of sale as to reasonably permit the
Subordinated Underwriter to correct any statement made to the
investor based on such misstatement, or (B) the free writing
prospectus substantially restates a statement (which statement may
include structural information) in the Prospectus or CMSI free
writing prospectus (a “restatement”), and does not omit
a statement in the Prospectus or CMSI free writing prospectus
necessary to make the restatement, when considered in conjunction
with the free writing prospectus and other information delivered to
the prospective investor, in light of the circumstances under which
the restatement was made, not misleading.
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(e) CMSI
will file a CMSI free writing prospectus containing (i) a
description of the final structure of the offered class B
certificates and (ii) the information contained in the
final loan tape delivered to the Subordinated Underwriter, all
in conformity with Rule 433 under the Securities
Act.
(f) The
Subordinated Underwriter will not sell, and will obligate each
dealer to whom it sells any offered class B certificates
(which obligation may be in the form of a trade stipulation
and which must name CMSI as an intended third party
beneficiary) not to sell any offered class B
certificates
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(i)
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to
any investor who is not an institutional investor unless the sale
is accompanied or preceded by delivery of the Prospectus,
and
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(ii)
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to
any investor prior to the time the Prospectus is filed with the SEC
unless at the time of sale the Subordinated Underwriter delivers to
the investor the CMSI free writing prospectus and the supplemental
information that is then known or available to the Subordinated
Underwriter.
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(g) The
Subordinated Underwriter will file with the Commission not
later than the date of its first use any free writing
prospectus that is distributed by or on behalf of the
Subordinated Underwriter in a manner reasonably designed to
lead to its broad,
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unrestricted
dissemination. CMSI will provide the Subordinated Underwriter
with any filing information needed to complete such
filing.
(h) The
Subordinated Underwriter will, in conformity with Rule 433(g)
under the Securities Act, retain all free writing prospectuses
that it has used in the offering and that are not filed with
the Commission for three years following the initial bona fide
offering of the offered class B certificates. If there is any
litigation or threatened litigation against CMSI or any of its
affiliates with respect to the offering, the Subordinated
Underwriter will, on CMSI’s request, make copies of such
documents available to CMSI.
(i) The
Subordinated Underwriter will promptly provide CMSI with any
information within the Subordinated Underwriter’s
reasonable control that CMSI reasonably requests to enable
CMSI to meet its disclosure and reporting obligations under
the Securities Act and the Exchange Act in connection with the
offered class B certificates. The Subordinated Underwriter
will use its best efforts to cause any credit enhancement
provider, derivative counterparty, special servicer or credit
risk manager arranged by the Subordinated Underwriter in
connection with the offered class B certificates to promptly
provide to CMSI such narrative disclosure, financial
information, including required accountants’ consents,
and other information as CMSI may reasonably request to enable
CMSI to meet its disclosure and reporting obligations under
the Securities Act and the Exchange Act.
5.
Other
representations and warranties
CMSI
represents and warrants to the Subordinated Underwriter
that:
(a) The
class B-1 certificates will, when issued, be a “mortgage
related security,” as defined in section 3(a)(41) of the
Exchange Act, and each of the offered class B certificates,
when validly authenticated, issued and delivered in accordance
with the Pooling Agreement, will be duly and validly issued
and outstanding and entitled to the benefits of the Pooling
Agreement.
(b) Compliance
by CMSI with the provisions of this Agreement and the Pooling
Agreement do not, and will not on the closing date, conflict
with CMSI’s certificate of incorporation or by-laws or
any contract to which CMSI is a party.
(c) On
the closing date, each of this Agreement and the Pooling
Agreement will have been duly authorized, executed and
delivered by CMSI and, assuming the valid execution of such
agreements by the other parties, each such agreement will
constitute a valid and binding agreement of CMSI enforceable
against it 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 equity
principles.
(d) CMSI
has been duly organized and is validly existing 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.
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6. Expenses;
Blue Sky
(a) CMSI
will pay all expenses incidental to the performance of its
obligations under this Agreement, including expenses
of
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(i)
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preparing,
filing and reproducing the Prospectus, of preparing, filing and
reproducing the CMSI free writing prospectus, the Registration
Statement, this Agreement, and the Pooling Agreement,
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(ii)
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KPMG
LLP, and
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(iii)
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preparing
and delivering the offered class B certificates to
DTC,
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provided, however , that except as provided in this section
(a) and in section 10, the Subordinated Underwriter will pay (A)
all of its own expenses, including the fees of Cadwalader,
Wickersham & Taft
LLP and any
other counsel to the Subordinated Underwriter, (B) any transfer
taxes on resale of any of the offered class B certificates by it,
(C) advertising expenses connected with any offers made by the
Subordinated Underwriter, and (D) expenses of printing the
Prospectus.
(b) CMSI
will use its best efforts to arrange for, and will pay all
expenses of, the qualification of the offered class B
certificates for sale under the laws of such jurisdictions as
the Subordinated Underwriter may designate, to maintain such
qualifications in effect so long as required for the
distribution of the offered class B certificates and to
arrange for the determination of the legality of the offered
class B certificates for purchase by institutional investors,
However, CMSI will 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.
(c) If
for any reason other than default by the Subordinated
Underwriter in its obligation to purchase the offered class B
certificates or termination by the Subordinated Underwriter
pursuant to section 11, CMSI does not deliver the offered
class B certificates as provided in this agreement, CMSI will
reimburse the Subordinated Underwriter for its out-of-pocket
expenses (including reasonable fees and disbursements of its
counsel) reasonably incurred by the Subordinated Underwriter
in preparing to purchase the offered class B certificates, but
CMSI will have no further liability to the Subordinated
Underwriter with respect to the offered class B certificates,
except as provided in sections 6(a) and 6(b)
above.
7. No
Fiduciary Relationship
(a) &
