Exhibit 99.3(a)
EXECUTION COPY
MORGAN STANLEY CAPITAL I INC.
MORTGAGE PASS-THROUGH CERTIFICATES
Series 2006-1AR
UNDERWRITING AGREEMENT
New York, New York
January 27, 2006
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Dear Sirs and Madams:
Morgan Stanley Capital I Inc., a Delaware corporation (the
"Company"), proposes to sell to you as representative (the
"Underwriter") the
Morgan Stanley Mortgage Loan Trust 2006-1AR (the "Issuing Entity"),
Mortgage
Pass-Through Certificates, Series 2006-1AR in the classes and in
the
respective original principal or notional amounts and with the
designations
described on Schedule A attached hereto (the "Securities"). The
Securities,
along with the Class 1-B-4, Class 1-B-5, Class 1-B-6, Class B-4,
Class B-5,
Class B-6, Class P-1, Class P-2 and Class C Certificates (the
"Private
Securities"), will be issued pursuant to a pooling and servicing
agreement
dated as of January 1, 2006 (the "Pooling and Servicing Agreement")
among the
Company, as depositor, Wells Fargo Bank, National Association
("Wells Fargo"),
as the master servicer (the "Master Servicer") and as securities
administrator
(the "Securities Administrator"), Morgan Stanley Mortgage Capital
Inc., as
seller ("MSMCI"), and LaSalle Bank National Association, as trustee
(the
"Trustee"). The Securities will represent undivided beneficial
ownership
interests in a trust fund consisting primarily of a pool of
fixed-rate
mortgage loans, adjustable-rate mortgage loans, and hybrid
adjustable-rate
mortgage loans (the "Mortgage Loans"), secured by first liens on
one- to
four-family residential properties. The Mortgage Loans may be sold
to the
Depositor pursuant to various mortgage loan purchase agreements
(such
agreements, the "Mortgage Loan Purchase Agreements" and the
"Servicing
Agreements," respectively) between MSMCI and one or more sellers
(the
"Sellers"), a mortgage loan purchase agreement between MSMCI and
the Depositor
and assignment, assumption and recognition agreements between the
Depositor,
MSMCI, the Trustee and each Seller and/or servicer (each servicer,
a
"Servicer") (collectively, the "Assignment Agreements"), as
applicable.
The Company has filed with the Securities and Exchange
Commission
(the "Commission") a registration statement, including a
prospectus, relating
to the Securities and has filed with the Commission one or more
free writing
prospectuses (together, the "Free Writing Prospectus") and
prospectus
supplement (the "Prospectus Supplement") specifically relating to
the
Securities pursuant to Rule 424 under the Securities Act of 1933
(the
"Securities Act") and the rules and regulations thereunder (the
"Securities
Act Regulations"). The term Registration Statement means such
registration
statement as amended to the date of the Underwriting Agreement. The
term Base
Prospectus means the prospectus included in the Registration
Statement. The
term Prospectus means the Base Prospectus together with the
Prospectus
<PAGE>
Supplement specifically relating to the Securities, as filed with
the
Commission pursuant to Rule 424. The term free writing prospectus
means any
free writing prospectus, as defined in Rule 405 of the Securities
Act. Any
reference in this underwriting agreement (the "Agreement") to the
Registration
Statement or the Prospectus shall be deemed to refer to and include
the
documents incorporated by reference therein pursuant to Item 12 of
Form S-3
under the Securities Act, as of the effective date of the
Registration
Statement or the Prospectus, as the case may be. Terms not
otherwise defined
in this Agreement are used in this Agreement as defined in the
Pooling and
Servicing Agreement.
The term "Disclosure Package" means (i) the Base Prospectus, as
most
recently amended or supplemented immediately prior to the Initial
Sale Time
(as defined herein) and (ii) any Free Writing Prospectus that the
parties
hereto shall hereafter expressly agree to treat as part of the
Disclosure
Package. If, subsequent to the date of this Agreement, the Company
and the
Underwriter have determined that the Disclosure Package included an
untrue
statement of material fact or omitted 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 and have terminated their old
purchase
contracts and entered into new purchase contracts with purchasers
of the
Securities, then the "Disclosure Package" will refer to the
information
available to purchasers at the time of entry into the first such
new purchase
contract, including any information that corrects such material
misstatements
or omissions ("Corrective Information").
I.
The Company represents and warrants to and agrees with the
Underwriter that:
(a) The Registration Statement has become effective; no stop
order
suspending the effectiveness of the Registration Statement is in
effect,
and
no proceedings for such purpose are pending before or threatened
by
the
Commission.
(b) (i) Each part of the Registration Statement, when such part
became effective, did not contain, and each such part, as amended
or
supplemented, if applicable, will not contain any 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,
(ii)
the
Registration Statement, the Disclosure Package and the
Prospectus
comply, and, as amended or supplemented, if applicable, will comply
in
all
material respects with the Securities Act and the applicable
rules
and
regulations of the Commission thereunder and (iii) each of the
Disclosure Package and the Prospectus does not contain and, as
amended or
supplemented, if applicable, will not contain any 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, except that the representations and
warranties
set
forth in this paragraph I(b) do not apply to statements or
omissions
in
the Registration Statement, the Disclosure Package or the
Prospectus
based upon and in conformity with information relating to the
Underwriter
furnished to the Company in writing by the Underwriter expressly
for use
or
incorporation therein.
(c) The Company has been duly incorporated, is validly existing as
a
corporation in good standing under the laws of the State of
Delaware, has
the
corporate
<PAGE>
power and authority to own its property and to conduct its business
as
described in the Prospectus and to enter into and perform its
obligations
under this Agreement and the Pooling and Servicing Agreement.
(d) This Agreement has been duly authorized, executed and
delivered
by
the Company.
(e) Each of the Pooling and Servicing Agreement and the
Assignment
Agreements has been duly authorized, executed and delivered by
the
Company and is a valid and binding agreement of the Company,
enforceable
in
accordance with its terms except as the enforceability thereof may
be
limited by bankruptcy, insolvency or similar laws affecting
creditors'
rights generally and to general principles of equity regardless
of
whether enforcement is sought in a proceeding in equity or at
law.
(f)
The direction by the Company to the Securities Administrator to
execute, authenticate and deliver the Securities has been duly
authorized
by
the Company, and the Securities, when executed and authenticated
in
the
manner contemplated in the Pooling and Servicing Agreement, and
delivered to and paid for by the Underwriter in accordance with the
terms
of
this Agreement, will be validly issued and outstanding and entitled
to
the
benefits of the Pooling and Servicing Agreement.
(g) Neither the execution and delivery by the Company of, nor
the
performance by the Company of its obligations under, this
Agreement, the
Pooling and Servicing Agreement and the Assignment Agreements,
will
contravene any provision of applicable law or the certificate
of
incorporation or by-laws of the Company or any agreement or
other
instrument binding upon the Company that is material to the Company
or
any
judgment, order or decree of any governmental body, agency or
court
having jurisdiction over the Company or any subsidiary, and no
consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
the
Company of its obligations under this Agreement, the Pooling
and
Servicing Agreement and the Assignment Agreements, except such as
may be
required by the securities or Blue Sky laws of the various states
in
connection with the offer and sale of the Securities.
(h) There has not occurred any material adverse change, or any
development involving a prospective material adverse change, in
the
condition, financial or otherwise, or in the earnings, business
or
operations of the Company and its subsidiaries, taken as a whole,
from
that
set forth in the Prospectus.
(i) There are no legal or governmental proceedings pending or
threatened to which the Company is a party or to which any of
the
properties of the Company are subject that are required to be
described
in
the Registration Statement, the Disclosure Package or the
Prospectus
and
that are not so described, nor are there any statutes,
regulations,
contracts or other documents required to be described in the
Registration
Statement, the Disclosure Package or the Prospectus or to be filed
as
exhibits to the Registration Statement that are not described or
filed as
required.
<PAGE>
(j) Each preliminary prospectus filed as part of the
Registration
Statement as originally filed or as a part of any amendment
thereto, or
filed pursuant to Rule 424 under the Securities Act, complied as to
form,
when
so filed, in all material respects with the Securities Act and
the
rules and regulations of the Commission thereunder.
(k) The Company is not an "investment company" or an entity
"controlled" by an "investment company," as such terms are defined
in the
Investment Company Act of 1940, as amended (the "Investment
Company
Act").
(l) the Company is eligible to use Free Writing Prospectuses in
connection with this offering pursuant to Rules 164 and 433 of
the
Securities Act Regulations; any Free Writing Prospectus that the
Company
is
required to file pursuant to Rule 433(d) under the Securities
Act
Regulations has been, or will be, filed with the Commission in
accordance
with
the requirements of the Securities Act and the Securities Act
Regulations; and each Free Writing Prospectus that the Company has
filed,
or
is required to file, pursuant to Rule 433(d) under the Securities
Act
Regulations or that was prepared by or on behalf of or used by
the
Company complies or will comply in all material respects with
the
requirements of the Securities Act and the Securities Act
Regulations.
(m) The characteristics of the Issuing Entity will not subject
the
Issuing Entity to registration as an "investment company" under
the
Investment Company Act.
II.
MSMCI represents and warrants to and agrees with the
Underwriter
that:
(a) MSMCI has been duly incorporated, is validly existing as a
corporation in good standing under the laws of the State of New
York, has
the
corporate power and authority to own its property and to conduct
its
business as described in the Prospectus and to enter into and
perform its
obligations under this Agreement and the Pooling and Servicing
Agreement.
(b) This Agreement has been duly authorized, executed and
delivered
by
MSMCI.
(c) Each of the Pooling and Servicing Agreement, the Mortgage
Loan
Purchase Agreements and the Assignment Agreements has been duly
authorized, executed and delivered by MSMCI and is a valid and
binding
agreement of MSMCI, enforceable in accordance with its terms except
as
the
enforceability thereof may be limited by bankruptcy, insolvency
or
similar laws affecting creditors' rights generally and to
general
principles of equity regardless of whether enforcement is sought in
a
proceeding in equity or at law.
(d) Neither the execution and delivery by MSMCI of, nor the
performance by the Company of its obligations under, the Pooling
and
Servicing Agreement, the Mortgage Loan Purchase Agreements and
the
Assignment Agreements, will contravene any provision of applicable
law or
the
certificate of incorporation or by-laws of MSMCI or any agreement
or
other instrument binding upon MSMCI that is material to MSMCI
or
<PAGE>
any
judgment, order or decree of any governmental body, agency or
court
having jurisdiction over MSMCI or any subsidiary, and no
consent,
approval, authorization or order of, or qualification with, any
governmental body or agency is required for the performance by
MSMCI of
its
obligations under the Pooling and Servicing Agreement, the
Mortgage
Loan
Purchase Agreements and the Assignment Agreements.
III.
The Company hereby agrees to sell the Securities to the
Underwriter,
and the Underwriter, upon the basis of the representations and
warranties
contained in this Agreement, but subject to the conditions stated
in this
Agreement, agrees to purchase the Securities from the Company, for
a purchase
price that is the sum of (i) 101.82% of the original principal
amount of the
Securities and (ii) accrued interest, if any, from the Closing Date
to the
date of payment and delivery.
IV.
A. The Underwriter proposes to make a public offering of the
Securities as soon as the Underwriter deems advisable after this
Agreement has
been executed and delivered. The terms of the public offering of
the
Securities are set forth in the Prospectus.
B. In connection with the offering of the Securities, the
Underwriter may prepare and provide to prospective investors Free
Writing
Prospectuses, or portions thereof, which the Company is required to
file with
the Commission in electronic format and will use reasonable efforts
to provide
to the Company such Free Writing Prospectuses, or portions thereof,
in either
Microsoft Word(R) or Microsoft Excel(R) format and not in a PDF,
except to the
extent that the Company, in its sole discretion, waives such
requirements,
subject to the following conditions (to which such conditions the
Underwriter
agrees):
(i) "Business Day" shall mean any day other than (i) a Saturday
or
Sunday or (ii) a day on which banking institutions in the State of
New
York
or the jurisdiction in which the offeree is located are required
or
authorized by law or executive order to be closed.
(ii) Unless preceded or accompanied by the Base Prospectus, the
Underwriter shall not convey or deliver any written communication
to any
person in connection with the initial offering of the Securities,
unless
such
written communication (1) is made in reliance on Rule 134 of
the
Securities Act Regulations, (2) constitutes a prospectus satisfying
the
requirements of Rule 430B of the Securities Act Regulations or
(3)
constitutes a Free Writing Prospectus and such Free Writing
Prospectus is
attached to this
Agreement as Schedule B. The Underwriter shall not
convey or deliver in connection with the initial offering of
the
Securities any "ABS informational and computational material," as
defined
in
Item 1101(a) of Regulation AB of the Securities Act Regulations
("ABS
Informational and Computational Material"), in reliance upon Rules
167
and
426 of the Securities Act Regulations in lieu of a free writing
prospectus.
<PAGE>
(iii) The Underwriter shall deliver to the Depositor, (a) no
later
than
two Business Days prior to the date of first use thereof, any
Free
Writing Prospectus prepared by or on behalf of such Underwriter
that
contains any "issuer information," as defined in Rule 433(h) of
the
Securities Act Regulations and footnote 271 of the Commission's
Securities Offering Reform Release No. 33-8591 ("Issuer
Information")
(which the parties hereto agree includes, without limitation,
Pool
Information (as defined herein)), and (b) upon first use, any
Free
Writing Prospectus or portion thereof that contains only a
description of
the
final terms of the Securities. Notwithstanding the foregoing,
any
Free
Writing Prospectus that contains only ABS Informational and
Computational Materials shall be delivered by any Underwriter to
the
Company not later than the later of (a) two Business Days prior to
the
due
date for filing of the Prospectus pursuant to Rule 424(b) of
the
Securities Act Regulations and (b) the date of first use of such
Free
Writing Prospectus.
(iv) The Underwriter represents and warrants to the Company that
the
Free
Writing Prospectuses to be furnished to the Company by the
Underwriter pursuant to Section 3(b)(ii) above will constitute all
Free
Writing Prospectuses of the type described in such Section that
were
furnished to prospective investors by such Underwriter in
connection with
its
offer and sale of the Securities.
(v) The Underwriter represents and warrants to the Company that
each
Free
Writing Prospectus required to be provided by it to the Company
pursuant to Section 3(b)(ii) above, did not, as of the Time of
Sale, and
will
not as of the Closing Date, include any untrue statement of a
material fact or, when read in conjunction with the other
information
included in the Disclosure Package, omit any material fact
necessary to
make
the statements contained therein, in light of the circumstances
under which they were made, not misleading; provided however, that
such
Underwriter makes no representation to the extent such
misstatements or
omissions were the result of any inaccurate Issuer Information
supplied
by
the Company to such Underwriter, which information was not
corrected
by
Corrective Information subsequently supplied by the Company to
the
Underwriter prior to the Time of Sale.
(vi) The Company agrees to file with the Commission the
following:
(a) Any Free Writing Prospectus or portion thereof delivered by
the Underwriter to the Company pursuant to Article IV(B)(ii);
and
(b) Any Free Writing Prospectus for which the Company or any
person acting on its behalf provided, authorized or approved
information that is prepared and published or disseminated by a
person unaffiliated with the Company or any other offering
participant that is in the business of publishing, radio or
television broadcasting or otherwise disseminating
communications.
<PAGE>
(vii) Any Free Writing Prospectus required to be filed pursuant
to
Article IV(B)(v) by the Company shall be filed with the Commission
not
later than the date of first use of the Free Writing Prospectus,
except
that:
(a) Any Free Writing Prospectus or portion thereof required to
be filed that contains only the description of the final terms
of
the Securities shall be filed by the Company with the
Commission
within two days of the later of the date such final terms have
been
established for all classes of Securities and the date of first
use;
(b) Any Free Writing Prospectus or portion thereof required to
be filed that contains only ABS Informational and Computational
Material shall be filed by the Company with the Commission not
later
than the later of the due date for filing the final Prospectus
relating to the Securities pursuant to Rule 424(b) of the
Securities
Act Regulations and two Business Days after the first use of
such
Free Writing Prospectus;
(c) Any Free Writing Prospectus required to be filed pursuant
to Article IV(B)(v)(b) shall, if no payment has been made or
consideration has been given by or on behalf of the Company for
the
Free Writing Prospectus or its dissemination, be filed by the
Company with the Commission not later than four Business Days
after
the Company becomes aware of the publication, radio or
television
broadcast or other dissemination of the Free Writing Prospectus;
and
(d) The Company shall not be required to file (1) Issuer
Information contained in any Free Writing Prospectus of an
Underwriter or any other offering participant other than the
Company, if such information is included or incorporated by
reference in a prospectus or Free Writing Prospectus previously
filed with the Commission that relates to the offering of the
Securities or (2) any Free Writing Prospectus or portion
thereof
that contains a description of the Securities or the offering of
the
Securities which does not reflect the final terms thereof.
(viii) The Underwriter shall file with the Commission any Free
Writing Prospectus that is used or referred to by it and
distributed by
or
on behalf of the Underwriter in a manner reasonably designed to
lead
to
its broad, unrestricted dissemination not later than the date of
the
first use of such Free Writing Prospectus.
(ix) Notwithstanding the provisions of Article IV(B)(vii), the
Underwriter shall file with the Commission any Free Writing
Prospectus
for
which such Underwriter or any person acting on its behalf
provided,
authorized or approved information that is prepared and published
or
disseminated by a person unaffiliated with the Company or any
other
offering participant that is in the business of publishing, radio
or
television broadcasting or otherwise disseminating written
communications
and
for which no payment was made or
<PAGE>
consideration given by or on behalf of the Company or any other
offering
participant, not later than four Business Days after such
Underwriter
becomes aware of the publication, radio or television broadcast or
other
dissemination of the Free Writing Prospectus.
(x) Notwithstanding the provisions of Articles IV(B)(v) and
IV(B)(vii), neither the Company nor any Underwriter shall be
required to
file
any Free Writing Prospectus that does not contain substantive
changes from or additions to a Free Writing Prospectus previously
filed
with
the Commission.
(xi) The Company and each Underwriter each agree that any Free
Writing Prospectuses prepared by it shall contain the following
legend:
"The depositor has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents
the
depositor has filed with the SEC for more complete information
about
the issuing entity and this offering. You may get these
documents
for free by visiting EDGAR on the SEC Web site at www.sec.gov.
Alternatively, the depositor, any underwriter or any dealer
participating in the offering will arrange to send you the
prospectus if you request it by calling toll-free
1-866-718-1649."
(xii) The Company and each Underwriter agree to retain all Free
Writing Prospectuses that they have used and that are not required
to be
filed pursuant to this Article IV for a period of three years
following
the
initial bona fide offering of the Securities.
(a) In the event that any Underwriter becomes aware that, as of
the Time of Sale, any Free Writing Prospectus prepared by or on
behalf of such Underwriter and delivered to such investor
contained
any untrue statement of a material fact or, when read in
conjunction
with the other information included in the Disclosure Package,
omitted to state a material fact necessary in order to make the
statements contained therein, in the light of the circumstances
under which they were made, not misleading (such Free Writing
Prospectus, a "Defective Free Writing Prospectus"), such
Underwriter
shall notify the Company thereof within one Business Day after
discovery.
(b) Provided that the Defective Free Writing Prospectus was an
Issuer Free Writing Prospectus or contained Issuer Information,
such
Underwriter shall, if requested by the Company:
(1) Prepare a Free Writing Prospectus with Corrective
Information that corrects the material misstatement in or
omission from the Defective Free Writing Prospectus (such
corrected Free Writing Prospectus, a "Corrected Free Writing
Prospectus");
<PAGE>
(2) Deliver the Corrected Free Writing Prospectus to each
investor which received the Defective Free Writing Prospectus
prior to entering into a contract of sale with such investor;
provided if the Time of Sale has occurred with respect to such
investor, the Underwriter shall provide such investor with (w)
adequate disclosure of the contractual arrangement, (x)
adequate disclosure of the person's rights under the existing
contract of sale at the time termination is sought, (y)
adequate discloser of the new information that is necessary to
correct the misstatements or omissions in the information given
at the ti
