Exhibit 1.1
$250,000,000
THE MONEY STORE INC.
The Money Store Home Improvement Loan Certificates
Series 1997-II
UNDERWRITING AGREEMENT
June 24, 1997
Xxxxxx Brothers Inc.
as representative of the several Underwriters
Three World Financial Center
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), and
each of the Originators listed on Annex A hereto (each an "Originator" and
collectively, the "Originators") hereby confirm their agreement with Xxxxxx
Brothers Inc. ("Xxxxxx" or the "Representative") on behalf of the several
Underwriters listed on Annex B hereto (the "Underwriters"), with respect to the
delivery by the Company, on behalf of the Originators, of certificates entitled
"The Money Store Home Improvement Loan Certificates Series 1997-II, Class A-1,
Class X-0, Xxxxx X-0, Class M-1, Class M-2 and Class B" (the "Certificates"), to
be issued pursuant to a Pooling and Servicing Agreement, dated as of May 31,
1997 (the "Pooling and Servicing Agreement"), among the Company, as
Representative, Servicer and Claims Administrator, the Originators and The Chase
Manhattan Bank, as trustee ("The Chase Manhattan Bank" or, in its capacity as
trustee under the Pooling and Servicing Agreement, the "Trustee"). The initial
principal amount of each Class of Certificates will be as set forth on Annex B
hereto. The Certificates will consist of (i) three classes of senior
Certificates (the "Senior Certificates"): Class A-1 Certificates, Class A-2
Certificates and Class A-3 Certificates (collectively, the "Class A
Certificates"); and (ii) three classes of subordinated Certificates (the
"Subordinated Certificates"): Class M-1 Certificates and Class M-2 Certificates
(the "Class M Certificates") and Class B Certificates. The primary assets of the
Trust will consist of a pool (the "Pool") of loans (the "Loans") having the
characteristics described herein. The Loans will consist primarily of fixed
rate, single family residential first, second and more junior home improvement
mortgage loans (the "Home Improvement Loans"), certain of which Loans (the "FHA
Loans") are partially insured by the Federal Housing Administration of the
United States Department of Housing and Urban Development under Title I of the
National Housing Act of 1934. The Trust will also include funds on deposit in a
separate trust account (the "Pre-Funding Account") to be established with the
Trustee.
Simultaneously with the issuance and delivery of the Certificates as
contemplated herein, the Company, on behalf of the Originators, will cause to be
issued under the Pooling and Servicing Agreement certificates entitled "The
Money Store Home Improvement Loan Certificates, Series 1997-II, Class R-1 and
Class R-2" (the "Class R Certificates"), and "The Money Store Home Improvement
Loan Certificates, Series 1997-II, Class X" (the "Class X Certificates"). The
Certificates will evidence fractional interests in the Trust Fund. The Class R
Certificates and Class X Certificates will be retained by the Company and TMS
Special Holdings, Inc. and are not being delivered to the Underwriters
hereunder.
An election will be made to treat certain assets of the Trust Fund as
a real estate mortgage investment conduit ("REMIC") within the meaning of
Section 860D of the Internal Revenue Code of 1986, as amended (the "Code").
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
Prior to the delivery of the Certificates by the Company, on behalf of
the Originators, and the public offering thereof by the Underwriters, the
Company and the Representative, as representative of the Underwriters, shall
enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement shall be between the Company and the
Representative, as representative of the Underwriters, and shall specify such
applicable information as is indicated in, and be in substantially the form of,
Exhibit A hereto. The offering of the Certificates will be governed by this
Agreement, as supplemented by the Pricing Agreement. From and after the date of
the execution and delivery of the Pricing Agreement, this Agreement shall be
deemed to incorporate the Pricing Agreement.
The Company and the Originators understand that the Underwriters
propose to make a public offering of the Certificates as soon as the
Underwriters deem advisable after the Pricing Agreement has been executed and
delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
ORIGINATORS.
(a) The Company and the Originators represent and warrant to each of
the Underwriters as of the date hereof and, if the Pricing Agreement is executed
on a date other than the date hereof, as of the date of the Pricing Agreement
(such latter date being hereinafter referred to as the "Representation Date") as
follows:
i) The Company, on behalf of the Originators, has filed with
the Securities and Exchange Commission (the "Commission") a
registration statement on Form S-3 (No. 333-20817) including a
prospectus, and such amendments thereto as may have been required to
the date hereof, relating to the Certificates and the offering thereof
from time to time in accordance with Rule 415 under the Securities Act
of 1933, as amended (the "1933 Act"), and such registration statement,
as amended, has become effective. Such registration statement, as
amended, and the prospectus relating to the sale of the Certificates
constituting a part thereof as from time to time amended or
supplemented (including any prospectus supplement (the "Prospectus
Supplement") filed with the Commission pursuant to Rule 424 of the
rules and regulations of the Commission under the 1933 Act (the "1933
Act Regulations") and any information incorporated therein by
reference) are respectively referred to herein as the "Registration
Statement" and the "Prospectus." The conditions of Rule 415 under the
1933 Act have been satisfied with respect to the Company and the
Registration Statement.
ii) At the time the Registration Statement became effective
and at the Representation Date, the Registration Statement complied
and will comply in all material respects with the requirements of the
1933 Act and the 1933 Act Regulations and did not and will not contain
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. The Prospectus, at the Representation Date
(unless the term "Prospectus" refers to a prospectus which has been
provided to the Representative, as representative of the Underwriters,
by the Company for use in connection with the offering of the
Certificates which differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective, in
which case at the time it is first provided to the Representative, as
representative of the Underwriters, for such use) and at Closing Date
referred to in Section 2 hereof, 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; provided, however, that
the representations and warranties in this subsection shall not apply
to statements in or omissions from the Registration Statement or
Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by any Underwriter through the
Representative expressly for use in the Registration Statement or
Prospectus; and provided further, that neither the Company nor the
Originators make any representations or warranties as to any
information in any Computational Materials (as defined in Section 11
below) provided by any Underwriter to the Company pursuant to Section
11, except to the extent of any errors in the Computational Materials
that are caused by errors in the pool information provided by the
Company to the applicable Underwriter. The conditions to the use by
the Company of a registration statement on Form S-3 under the 1933
Act, as set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Registration Statement and the
Prospectus.
iii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, the Originators
and their subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, which would have a
material adverse effect on the ability of the Company and the
Originators to perform their obligations under the Basic Documents (as
defined below) and (B) there have been no transactions entered into by
the Company or the Originators or any of their subsidiaries, other
than those in the ordinary course of business, which would have a
material adverse effect on the ability of the Company and the
Originators to perform their obligations under this Agreement, the
Pricing Agreement and the Pooling and Servicing Agreement (this
Agreement, the Pricing Agreement and the Pooling and Servicing
Agreement being herein referred to, collectively, as the "Basic
Documents").
iv) The Company has been duly organized and is validly
existing as a corporation in good standing under the laws of the State
of New Jersey with all requisite power and authority to own, lease and
operate its properties and to conduct its business as described in the
Prospectus and to enter into and perform its obligations under the
Basic Documents; and the Company is duly qualified as a foreign
corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by
reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a
material adverse effect on, (A) the Company's ability to perform its
obligations under the Basic Documents, or (B) the business,
properties, financial position, operations or results of operations of
the Company.
v) Each Originator has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with all requisite power and authority
to own, lease and operate its properties and to conduct its business
as described in the Prospectus and to enter into and perform its
obligations under the Basic Documents; and each Originator is duly
qualified as a foreign corporation to transact business and is in good
standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure to so qualify would not
have a material adverse effect on, (A) the Originator's ability to
perform its obligations under the Basic Documents, or (B) the
business, properties, financial position, operations or results of
operations of the Originator.
vi) Any person who signed this Agreement on behalf of the
Company or the Originators, was, as of the time of such signing and
delivery, and is now duly elected or appointed, qualified and acting,
and the Agreement, as so executed, is duly and validly authorized,
executed, and constitutes the valid, legal and binding agreement of
the Company and each Originator, enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles
of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law.
vii) The Pooling and Servicing Agreement has been duly and
validly authorized by the Company and the Originators and, when
executed and delivered by the Company and the Originators and duly and
validly authorized, executed and delivered by the other parties
thereto, will constitute, the valid and binding agreement of the
Company and the Originators, enforceable in accordance with their
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles
of equity regardless of whether such enforcement is considered in a
proceeding in equity or at law; and the Pooling and Servicing
Agreement conforms in all material respects to the statements relating
thereto contained in the Prospectus.
viii) The Certificates, the Class R Certificates and the
Class X Certificates have been duly and validly authorized by the
Company and, when executed and delivered by the Company and
authenticated by the Trustee as specified in the Pooling and Servicing
Agreement and, in the case of the Certificates, delivered to the
Underwriters pursuant to this Agreement, the Certificates, the Class R
Certificates and the Class X Certificates will be duly and validly
issued and outstanding and entitled to the benefits of the Pooling and
Servicing Agreement; and the Certificates, the Class R Certificates
and the Class X Certificates conform in all material respects to all
statements relating thereto contained in the Prospectus.
ix) Neither the issuance or delivery of the Certificates,
the Class R Certificates or the Class X Certificates, nor the
consummation of any other of the transactions herein contemplated or
in any other Basic Document nor the execution and delivery by the
Company and the Originators of the Basic Documents nor the fulfillment
of the terms of the Certificates or each Basic Document will result in
the breach of any term or provision of the charter or by-laws of the
Company and the Originators, and the Company and the Originators are
not in breach or violation of or in default (nor has an event occurred
which with notice or lapse of time or both would constitute a default)
under the terms of (A) any material obligation, agreement, covenant or
condition contained in any material contract, indenture, loan
agreement, note, lease or other material instrument to which the
Company or the Originators are a party or by which it may be bound, or
to which any of the property or assets of the Company or the
Originators are subject, or (B) any law, decree, order, rule or
regulation applicable to the Company and the Originators of any court
or supervisory, regulatory, administrative or governmental agency,
body or authority, or arbitrator having jurisdiction over the Company
or the Originators or their properties, the default in or the breach
or violation of which would have a material adverse effect on the
Company or the Originators or the ability of the Company and the
Originators to perform their obligations under the Basic Documents;
and neither the issuance or delivery of the Certificates, the Class R
Certificates or the Class X Certificates; nor the consummation of any
other of the transactions herein contemplated, nor the fulfillment of
the terms of the Certificates, the Class R Certificates, the Class X
Certificates or the Basic Documents will result in such a breach,
violation or default which would have such a material adverse effect.
x) Except as described in the Prospectus, there is no
action, suit or proceeding against or investigation of the Company or
any Originator, now pending, or, to the knowledge of the Company and
the Originators, threatened against the Company or any Originator,
before any court, governmental agency or body (A) which is required to
be disclosed in the Prospectus (other than as disclosed therein) or
(B) (1) asserting the invalidity of any Basic Document, the
Certificates, the Class R Certificates or the Class X Certificates,
(2) seeking to prevent the issuance of the Certificates, the Class R
Certificates or the Class X Certificates or the consummation of any of
the transactions contemplated by the Basic Documents, (3) which would
materially and adversely affect the performance by the Company or any
Originator of its obligations under the Basic Documents, or the
validity or enforceability of any Basic Document or the Certificates,
the Class R Certificates or the Class X Certificates or (4) seeking to
adversely affect the federal income tax attributes of the Certificates
described in the Prospectus; all pending legal or governmental
proceedings to which the Company or any Originator is a party or of
which any of its property or assets is the subject which are not
described in the Prospectus, including ordinary routine litigation
incidental to the business, are, considered in the aggregate, not
material to the Company's or any Originator's ability to perform its
obligations under the Basic Documents.
xi) The Company and each of the Originators possess such
licenses, certificates, authorities or permits issued by the
appropriate state or federal regulatory agencies or governmental
bodies necessary to conduct the businesses now conducted by them
(except where the failure to possess any such license, certificate,
authority or permit would not materially and adversely affect the
holders of the Certificates) and neither the Company nor any of the
Originators has received any notice of proceedings relating to the
revocation or modification of any such license, certificate, authority
or permit which, singly or in the aggregate, if the subject of any
unfavorable decision, ruling or finding, would materially and
adversely affect the ability of the Company to perform its obligations
under the Basic Documents.
xii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with the
issuance or sale of the Certificates hereunder, except such as have
been obtained or will be obtained prior to the Closing Date and except
as may be required under state securities laws.
xiii) At the time of execution and delivery of the Pooling
and Servicing Agreement by the Company, the Originators and the
Trustee, the Trustee will have acquired good title on behalf of the
Trust Fund to the related Loans, free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity, and,
upon delivery to the Underwriters of the Certificates which they
purchase, the Underwriters will have good and marketable title to such
Certificates free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity.
xiv) The transfer of the Loans to the Trust Fund at Closing
Date will be treated by the Company and the Originators for financial
accounting and reporting purposes as a sale of assets and not as a
pledge of assets to secure debt.
xv) Each assignment of Mortgage required to be prepared
pursuant to the Pooling and Servicing Agreement is based on forms
recently utilized by the applicable Originator with respect to
mortgaged properties located in the appropriate jurisdiction and used
in the regular course of the applicable Originator's business. Upon
execution each such assignment will be in recordable form, and it is
reasonable to believe that it will be sufficient to effect the
assignment of the Mortgage to which it relates as provided in the
Pooling and Servicing Agreement.
xvi) Any taxes, fees and other governmental charges that are
assessed and due in connection with the execution, delivery and
issuance of the Basic Documents and the Certificates which have become
due or will become due on or prior to Closing Date shall have been
paid at or prior to Closing Date.
xvii) The Trust Fund is not required to be registered as an
"investment company" under the Investment Company Act of 1940 (the
"1940 Act").
(b) Any certificate signed by any officer of the Company or any
Originator and delivered to the Representative, as representative of the
Underwriters, or counsel for the Underwriters shall be deemed a representation
and warranty by the Company and such Originator as to the matters covered
thereby.
Section 2. DELIVERY TO THE UNDERWRITERS; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company,
on behalf of the Originators, agrees to sell to each Underwriter, severally and
not jointly, and each of the Underwriters, severally and not jointly, agrees to
purchase from the Company, the Certificates set forth below its name in Annex B
hereto at the price per Class of Certificate set forth below. In the event that
the pass-through rates for each Class of Certificates have not been agreed upon
and the Pricing Agreement has not been executed and delivered by all parties
thereto by the close of business on the fourth business day following the date
of this Agreement, this Agreement shall terminate forthwith, without liability
of any party to any other party, unless otherwise agreed upon by the
Representative, as representative of the Underwriters, and the Company.
(b) Delivery of the Certificates shall be made at the offices of
Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other place as shall be agreed upon by the Underwriters and the Company, at
11:00 A.M., New York City time, on June 30, 1997, or such other time not later
than ten business days after such date as shall be agreed upon by The
Representative, as representative of the Underwriters, and the Company (such
time and date of payment and delivery being herein called "Closing Date").
Each Class of Certificates will initially be represented by one
certificate registered in the name of Cede & Co., the nominee of The Depository
Trust Company ("DTC") (the "DTC Certificates"). The interests of beneficial
owners of the DTC Certificates will be represented by book entries on the
records of DTC and participating members thereof. Definitive certificates
evidencing the Certificates will be available only under the limited
circumstances specified in the Pooling and Servicing Agreement. The interest in
the DTC Certificates to be purchased by the applicable Underwriter will be
delivered by the Company to the applicable Underwriter (which delivery shall be
made through the facilities of DTC) against payment of the purchase price
therefor by a same day federal funds wire payable to the order of the Company,
equal to the sum of (i) 99.700% of the aggregate principal amount of the Class
A-1 Certificates being purchased by such Underwriter, plus interest accrued at
the Class A-1 Pass-Through Rate, (ii) 99.700% of the aggregate principal amount
of the Class A-2 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-2 Pass-Through Rate, (iii) 99.700% of the aggregate
principal amount of the Class A-3 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-3 Pass-Through Rate, (iv)
99.700% of the aggregate principal amount of the Class M-1 Certificates being
purchased by such Underwriter, plus interest accrued at the Class M-1
Pass-Through Rate, (v) 99.700% of the aggregate principal amount of the Class
M-2 Certificates being purchased by such Underwriter, plus interest accrued at
the Class M-2 Pass-Through Rate, (vi) 99.700% of the aggregate principal amount
of the Class B Certificates being purchased by such Underwriter, plus interest
accrued at the Class B Pass-Through Rate. Interest on the Certificates shall
accrue at the applicable Pass-Through Rate in each case from June 1, 1997 to,
but not including, the Closing Date. The purchase price set forth above reflects
the deduction of the underwriter's fee with respect to the principal amount of
each Class of Certificates. The certificates evidencing the Certificates will be
made available for examination and packaging by the Representative, as
representative of the Underwriters, not later than 10:00 A.M. on the last
business day prior to Closing Date.
Section 3. COVENANTS OF THE COMPANY AND THE ORIGINATORS. The Company
and the Originators covenant with each of the Underwriters as follows:
(a) The Company will promptly notify the Representative, as
representative of the Underwriters, and confirm the notice in writing,
(i) of any amendment to the Registration Statement; (ii) of any
request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information; (iii) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement
or the initiation or threatening of any proceedings for that purpose;
and (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Certificates for
sale in any jurisdiction or the initiation or threatening of any
proceedings for that purpose. The Company will make every reasonable
effort to prevent the issuance of any stop order and, if any stop
order is issued, to obtain the lifting thereof at the earliest
possible moment.
(b) The Company will give the Representative, as
representative of the Underwriters, notice of its intention to file or
prepare any amendment to the Registration Statement or any amendment
or supplement to the Prospectus (including any revised prospectus
which the Company proposes for use by the Underwriters in connection
with the offering of the Certificates which differs from the
prospectus on file at the Commission at the time the Registration
Statement becomes effective, whether or not such revised prospectus is
required to be filed pursuant to Rule 424(b) of the 1933 Act
Regulations, will furnish the Representative, as representative of the
Underwriters, with copies of any such amendment or supplement a
reasonable amount of time prior to such proposed filing or use, as the
case may be, and, unless required by law to do so, will not file any
such amendment or supplement or use any such prospectus to which The
Representative, as representative of the Underwriters, or counsel for
the Underwriters shall reasonably object.
(c) The Company will deliver to the Representative, as
representative of the Underwriters, as many signed and as many
conformed copies of the Registration Statement as originally filed and
of each amendment thereto (in each case including exhibits filed
therewith) as the Representative may reasonably request.
(d) The Company will furnish to the Representative, as
representative of the Underwriters, from time to time during the
period when the Prospectus is required to be delivered under the 1933
Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), such number of copies of the Prospectus (as amended or
supplemented) as the Representative may reasonably request for the
purposes contemplated by the 1933 Act or the 1934 Act or the
respective applicable rules and regulations of the Commission
thereunder.
(e) If any event shall occur as a result of which it is
necessary, in the reasonable opinion of counsel for the Underwriters,
to amend or supplement the Prospectus in order to make the Prospectus
not misleading in the light of the circumstances existing at the time
it is delivered to a purchaser, the Company will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to
counsel for the Underwriters) so that, as so amended or supplemented,
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 existing at the
time it is delivered to a purchaser, not misleading, and the Company
will furnish to the Representative, as representative of the
Underwriters, a reasonable number of copies of such amendment or
supplement.
(f) The Company and the Originators will endeavor, in
cooperation with the Representative, as representative of the
Underwriters, to qualify the Certificates for offering and sale under
the applicable securities laws of such states and other jurisdictions
of the United States as the Representative, as representative of the
Underwriters, may designate; provided, however, that neither the
Company nor any Originator shall be obligated to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified. In
each jurisdiction in which the Certificates have been so qualified,
the Company and the Originators will file such statements and reports
as may be required by the laws of such jurisdiction to continue such
qualification in effect for a period of not less than one year from
the date hereof.
(g) So long as any Certificates shall be outstanding, the
Company and the Originators will deliver to the Representative, as
representative of the Underwriters, as promptly as practicable, such
information concerning the Company, the Originators or the
Certificates as the Representative may reasonably request from time to
time.
Section 4. PAYMENT OF EXPENSES. The Company and the Originators will
pay all expenses incident to the performance of their obligations under this
Agreement, including (i) the printing (or other reproducing) and filing of the
Registration Statement as originally filed and of each amendment thereto (other
than amendments relating to the filing of Computational Materials pursuant to
Section 11); (ii) the reproducing of the Basic Documents; (iii) the preparation,
printing, issuance and delivery of the certificates for the DTC Certificates to
the Underwriters; (iv) the fees and disbursements of (A) the Company's counsel,
(B) the Underwriters' counsel, (C) KPMG Peat Marwick, accountants for the
Company and issuer of the comfort letters, (D) the Trustee and its counsel and
(E) DTC in connection with the book-entry registration of the DTC Certificates;
(v) the qualification of the Certificates under state securities laws in
accordance with the provisions of Section 3(f) hereof, including filing fees and
the fees and disbursements of counsel for the Underwriters in connection
therewith and in connection with the preparation of the Blue Sky Survey; (vi)
the printing (or other reproducing) and delivery to the Underwriters of copies
of the Registration Statement as originally filed and of each amendment thereto,
of each preliminary prospectus and of the Prospectus and any amendments or
supplements thereto; (vii) the fees charged by any of Xxxxx'x Investors Service,
Inc. ("Moody's") or Standard & Poor's Rating Services ("Standard & Poor's") for
rating the Certificates; and (viii) the reproducing and delivery to the
Underwriters of copies of the Blue Sky Survey.
If this Agreement is terminated by the Representative, as
representative of the Underwriters, in accordance with the provisions of Section
5 or Section 9(a)(i), the Company and the Originators shall reimburse the
Underwriters severally for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The
obligations of the Underwriters hereunder are subject, in the Representative's
sole discretion, to the accuracy of the representations and warranties of the
Company and the Originators herein contained, to the performance by the Company
and the Originators of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective
and, at Closing Date, no stop order suspending the effectiveness of
the Registration Statement shall have been issued under the 1933 Act
or proceedings therefor initiated or threatened by the Commission. As
of the Closing Date, the Prospectus shall have been filed with the
Commission in accordance with Rule 424 of the 1933 Act Regulations.
(b) At Closing Date, the Representative, as representative
of the Underwriters, shall have received:
i) The favorable opinion, dated as of Closing
Date, of Stroock & Stroock & Xxxxx LLP, counsel for the
Underwriters, to the effect that:
(A) To the best of their knowledge and information, the
Registration Statement is effective under the 1933 Act and no
stop order suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or proceedings
therefor initiated or threatened by the Commission.
(B) At the time the Registration Statement became
effective and at the Representation Date, the Registration
Statement (other than the financial, numerical, statistical and
quantitative information included or incorporated therein, as to
which no opinion need be rendered) complied as to form in all
material respects with the requirements of the 1933 Act and the
Rules and Regulations thereunder.
(C) The information in the Prospectus under
"Description of the Certificates" and "The Agreements" and the
information in the Prospectus Supplement under "The Agreement"
and "Description of The Certificates," insofar as they constitute
summaries of certain provisions of the Certificates and the
Pooling and Servicing Agreement, summarizes fairly such
provisions.
(D) The information in the Prospectus under "Summary of
Terms - Federal Income Tax Consequences," "Summary of Terms -
ERISA Considerations," "Certain Legal Aspects of the Mortgage
Loans" Federal Income Tax Consequences," "ERISA Considerations"
and "Risk Factors - The Status of the Mortgage Loans in the Event
of Bankruptcy of The Representative or an Originator" and in the
Prospectus Supplement under "Summary of Terms - REMIC Election
and Tax Status," "Summary of Terms - ERISA Considerations,"
"Federal Income Tax Consequences," and "ERISA Considerations," to
the extent that they constitute matters of federal, New York or
California law, summaries of legal matters, documents or
proceedings or legal conclusions, has been reviewed by them and
is correct in all material respects.
(E) TMS Special Holdings, Inc. has been duly
incorporated and is validly existing and in good standing under
the laws of the State of Delaware. TMS Mortgage Inc. is qualified
to transact business as a foreign corporation in, and is in good
standing under the laws of, the States of California, Florida and
New York.
(F) Assuming due authorization, execution and delivery
by the other parties thereto (including but not limited to the
Originators), the Pooling and Servicing Agreement, the
Certificates, the Pricing Agreement and this Agreement are legal,
valid and binding agreements enforceable in accordance with their
respective terms against the Company, subject (a) to the effect
of bankruptcy, insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights generally and
court decisions with respect thereto, (b) to the understanding
that no opinion is expressed as to the application of equitable
principles in any proceeding, whether at law or in equity, and
(c) to limitations of public policy under applicable securities
laws as to rights of indemnity and contribution thereunder.
(G) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company of, or
compliance by the Company with, this Agreement, the Pooling and
Servicing Agreement and the Pricing Agreement or the offer,
issuance, sale or delivery of the Certificates, or the
consummation of any other transactions by the Company
contemplated by this Agreement, the Pooling and Servicing
Agreement and the Pricing Agreement, except as may be required
under the blue sky laws of any jurisdiction (as to which such
counsel need not opine) and such other approvals as have been
obtained.
(H) Neither the consummation of the transactions
contemplated by, nor the fulfillment of the terms of, this
Agreement, the Pooling and Servicing Agreement, the Pricing
Agreement, and the Certificates, conflicts or will conflict with
or results or will result in a breach of or constitutes or will
constitute a default under (a) the terms of any material
indenture or other material agreement or instrument of which
counsel has knowledge to which the Company is a party or by which
it is bound or to which it is subject or (b) any statute or
order, rule, regulation, writ, injunction or decree of which
counsel has knowledge of any court, governmental authority or
regulatory body to which the Company is subject or by which it is
bound.
(I) The delivery of each Mortgage Note and Mortgage by
an Originator as and in the manner contemplated by the
Underwriting Agreement and the Pooling and Servicing Agreement is
sufficient fully to transfer to the Trustee for the benefit of
the Certificateholders all right, title and interest of the
applicable Originator in and to each such Loan including, without
limitation, the right to enforce each such Loan in accordance
with its terms to the extent enforceable by the related
Originator at the time of such delivery. With respect to the
transfer of the Loans by the Originators, such counsel shall
express no opinion as to (i) whether the laws of the State of New
York would apply to the transfer of the related Mortgages or (ii)
the effectiveness of the transfer of the Mortgages under the laws
of the jurisdictions in which such Originators are located (other
than Mortgages relating to Mortgaged Properties situated in
California, Florida or New York) or in which the Mortgaged
Properties are situated (other than Mortgaged Properties situated
in California, Florida or New York) or the right of the Trustee
to enforce such Mortgages.
(J) The Certificates, assuming due execution by the
Company, due authorization by the Trustee and delivery and
payment therefore pursuant to the Underwriting Agreement, will be
validly issued and outstanding and entitled to the benefits of
the Pooling and Servicing Agreement.
(K) Assuming compliance with all provisions of the
Pooling and Servicing Agreement, for federal income tax purposes,
the REMIC Trust Fund will qualify as a REMIC and the
Certificates, Class X Certificates and Class R Certificates
offered with respect thereto will be considered to evidence
ownership of "regular interests" or "residual interests,"
respectively, in the REMIC Trust Fund within the meaning of the
REMIC Provisions. Assuming compliance with all provisions of the
Pooling and Servicing Agreement, for New York State and City tax
purposes, the REMIC Trust Fund will be classified as a REMIC and
not as a corporation, partnership or trust, in conformity with
the federal income tax treatment of such assets. Accordingly, the
REMIC will be exempt from all New York State and City taxation
imposed upon its income, franchise or capital stock.
Additionally, the REMIC will be exempt from all State of
California taxation imposed upon its income, franchise or capital
stock, other than the application of the annual minimum tax under
Section 23153 of the California Revenue and Taxation Code.
(L) A Certificate owned by a "domestic building and
loan association" within the meaning of Section 7701(a)(19) of
the Code will be considered in its entirety to represent an
interest in qualified assets within the meaning of Section
7701(a)(19)(C)(xi) of the Code so long as at least 95% of the
REMIC Trust Fund's assets consist of assets described in Section
7701(a)(19)(C)(i) through (x) of the Code. If less than 95% of
the REMIC Trust Fund's assets consist of such items, a
Certificate will be considered qualified assets in the same
proportion as the REMIC Trust Fund's assets which are such items.
A Certificate owned by a real estate investment trust will be
considered in its entirety an interest in "real estate assets"
within the meaning of Section 856(c)(5)(A) of the Code and
interest thereon will be considered in its entirety "interest on
obligations secured by mortgages on real property" within the
meaning of Section 856(c)(3)(B) of the Code in both cases so long
as at least 95% of the REMIC Trust Fund's assets are "real estate
assets" as defined in Section 856(c)(3)(B) of the Code. If less
than 95% of the REMIC Trust Fund's assets are "real estate
assets," a Certificate will be considered "real estate assets"
and the interest thereon will be considered "interest on
obligations secured by mortgages on real property" in the same
proportion as the REMIC Trust Fund's assets which are "real
estate assets." A Certificate will not be considered "residential
loans" for purposes of the residential loan requirement of
Section 593(g)(4)(B) of the Code. A Certificate held by another
REMIC will be a "qualified mortgage" within the meaning of
Section 860G(a)(3) of the Code, assuming it is transferred to the
REMIC on its startup day in exchange for regular or residual
interests in such REMIC.
(M) The Pooling and Servicing Agreement is not required
to be qualified under the Trust Indenture Act of 1939, as
amended. The Trust Fund created by the Pooling and Servicing
Agreement is not required to be registered under the Investment
Company Act of 1940, as amended.
In rendering such opinion, Stroock & Stroock & Xxxxx LLP may
rely on certificates of responsible officers of the Company, the Trustee, and
public officials or, as to matters of law other than New York, Florida,
California or Federal law, on opinions of other counsel (copies of which
opinions shall be delivered to you and upon which you may rely).
ii) The favorable opinion, dated as of Closing Date, of
counsel for the Company and the Originators, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(A) The Company has been duly organized and is validly
existing and is in good standing under the laws of the State of
New Jersey. Each Originator has been duly organized under the
laws of its jurisdiction of incorporation and is qualified to
transact business in the laws of the states in which the
Mortgaged Properties underlying the Loans originated by each such
Originator are located or is otherwise exempt under applicable
law from such qualification. TMS Special Holdings, Inc. has been
duly organized and is validly existing and in good standing under
the laws of the State of Delaware.
(B) The Company and each of the Originators have the
power to engage in the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement, and, in the case
of the Company, the Pricing Agreement and the Certificates, and
have all requisite power, authority and legal right to execute
and deliver this Agreement, the Pooling and Servicing Agreement,
and, in the case of the Company, the Pricing Agreement and the
Certificates (and any other documents delivered in connection
therewith) and to perform and observe the terms and conditions of
such instruments.
(C) This Agreement, the Pooling and Servicing
Agreement, the Pricing Agreement and the Certificates each have
been duly authorized, executed and delivered by the Company; this
Agreement and the Pooling and Servicing Agreement each have been
duly authorized, executed and delivered by each Originator and,
assuming due authorization, execution and delivery by the other
parties thereto, are legal, valid and binding agreements of the
Company and each Originator, as the case may be, and assuming
such agreements were governed by the laws of the State of New
Jersey, would be enforceable in accordance with their respective
terms against the Company and each Originator, as the case may
be, subject (a) to the effect of bankruptcy, insolvency,
reorganization, moratorium and similar laws relating to or
affecting creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no opinion is
expressed as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to limitations
of public policy under applicable securities laws as to rights of
indemnity and contribution thereunder.
(D) Neither the transfer of the Loans to the Trust
Fund, the consummation of the transactions contemplated by, nor
the fulfillment of the terms of, this Agreement, the Pooling and
Servicing Agreement or, in the case of the Company, the Pricing
Agreement and the Certificates, (A) conflicts or will conflict
with or results or will result in a breach of or constitutes or
will constitute a default under the Certificates of Incorporation
or Bylaws of the Company or any Originator, or the terms of any
material indenture or other material agreement or instrument of
which such counsel has knowledge to which the Company or any
Originator are a party or by which it is bound or to which it is
subject, or (B) results in, or will result in the creation or
imposition of any lien or encumbrance upon the Trust Fund or upon
the related Certificates, except as otherwise contemplated by the
Pooling and Servicing Agreement, or (C) any statute or order,
rule, regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which the Company or
any Originator is subject or to which it is bound.
(E) Except as set forth in the Prospectus Supplement,
there is no action, suit, proceeding or investigation pending or,
to the best of such counsel's knowledge, threatened against the
Company or any Originator which, in such counsel's judgment,
either in any one instance or in the aggregate, may result in any
material adverse change in the business, operation, financial
condition, properties or assets of the Company or an Originator
or in any material impairment of the right or ability of the
Company or any Originator to carry on its business substantially
as now conducted or result in any material liability on the part
of the Company or any Originator or which would draw into
question the validity of this Agreement, the Pricing Agreement,
the Certificates, or the Pooling and Servicing Agreement or of
any action taken or to be taken in connection with the
transactions contemplated thereby, or which would be likely to
impair materially the ability of the Company or any Originator to
perform under the terms of this Agreement or the Pooling and
Servicing Agreement, or in the case of the Company, the Pricing
Agreement or the Certificates.
(F) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution, delivery and performance by the Company and each
Originator of, or compliance by the Company and each Originator
with, this Agreement, the Pooling and Servicing Agreement, or, in
the case of the Company, the Pricing Agreement or the
Certificates, or the consummation of the transactions
contemplated therein, except such as may be required under the
blue sky laws of any jurisdiction and such other approvals as
have been obtained.
(G) The delivery by TMS Mortgage Inc. ("TMS") of each
Mortgage Note and Mortgage secured by real property located in
New Jersey as and in the manner contemplated by the Pooling and
Servicing Agreement is sufficient fully to transfer to the
Trustee for the benefit of the Certificateholders all right,
title and interest of TMS in and to each such Loan including,
without limitation, the right to enforce each such Loan in
accordance with its terms to the extent enforceable by TMS at the
time of such delivery.
iii) The favorable opinion, dated as of the Closing Date, of
Xxxxxxx Xxxxxxxx & Xxxx, counsel for the Trustee and the Co-Trustee.
iv) The favorable opinion, dated as of the Closing Date, of
Xxxxxx & Whitney, counsel for the Custodian, in form and substance
satisfactory to counsel for the Underwriters.
v) In giving its opinion required by subsection (b)(i) of this
Section, Stroock & Stroock & Xxxxx LLP shall additionally state that
nothing has come to its attention that has caused it to believe that
the Registration Statement, at the time it became effective, contained
an untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading or that the Prospectus, at the Representation
Date (unless the term "Prospectus" refers to a prospectus which has
been provided to the Representative, as representative of the
Underwriters, by the Company for use in connection with the offering
of the Certificates which differs from the Prospectus on file at the
Commission at the Representation Date, in which case at the time it is
first provided to the Representative, as representative of the
Underwriters, for such use) or at Closing Date, included an untrue
statement of a 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 (other than
the financial, numerical, statistical and quantitative information
contained therein and the information in the Exhibits thereto, as to
which such counsel need express no view).
(c) At Closing Date, the Representative, as representative of the
Underwriters, shall have received from Stroock & Stroock & Xxxxx LLP, counsel
for the Underwriters, a letter, dated as of Closing Date, authorizing the
Representative, as representative of the Underwriters, to rely upon each opinion
delivered by Stroock & Stroock & Xxxxx LLP to any of Moody's or Standard &
Poor's in connection with the issuance of the Certificates as though each such
opinion was addressed to the Representative, as representative of the
Underwriters, and attaching a copy of each such opinion.
(d) At Closing Date there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Originators and their subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Underwriter shall have received a certificate signed by one or
more duly authorized officers of the Company and the Originators, dated as of
Closing Date, to the effect that (i) there has been no such material adverse
change; (ii) the representations and warranties in Section 1(a) hereof are true
and correct in all material respects with the same force and effect as though
expressly made at and as of Closing Date; (iii) the Company and the Originators
have complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Date; and (iv) no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At or before the time of printing of the Prospectus Supplement,
the Representative, as representative of the Underwriters, shall have received
from KPMG Peat Marwick a letter dated as of Closing Date and in form and
substance satisfactory to the Representative, as representative of the
Underwriters, to the effect that they have carried out certain specified
procedures, not constituting an audit, with respect to (i) certain amounts,
percentages and financial information relating to the Company's servicing
portfolio which are included in the Prospectus and which are specified by the
Representative, as representative of the Underwriters, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and the
Originators identified in such letter, (ii) the information contained in the
weighted average life tables contained in the Prospectus under the caption
"Maturity, Prepayment and Yield Considerations" and have found such information
to be in agreement with the corresponding information as computed by KPMG Peat
Marwick and (iii) certain information regarding the Loans and the Files which
are specified by the Representative, as representative of the Underwriters, and
contained in the Current Report on Form 8-K described in Section 5(l) hereof and
setting forth the results of such specified procedures.
Notwithstanding the foregoing, if the letter delivered by KPMG Peat
Marwick on the Closing Date does not cover the information set forth in
subclause (iii), the Company shall cause KPMG Peat Marwick to deliver to the
Representative, as representative of the Underwriters, an additional letter
covering such information within 5 business days of the Closing Date.
(f) At Closing Date, the Representative, as representative of the
Underwriters, shall have received from the Trustee a certificate signed by one
or more duly authorized officers of the Trustee, dated as of Closing Date, as to
the due acceptance of the Pooling and Servicing Agreement by the Trustee, the
due authentication of the Certificates by the Trustee, and such other matters as
the Representative, as representative of the Underwriters, shall request.
(g) Reserved.
(h) At Closing Date, the Representative, as representative of the
Underwriters, shall have received a certificate signed by one or more duly
authorized officers of the Company and the Originators, dated as of Closing Date
to the effect that:
i) the representations and warranties of the
Company and the Originators in the Pooling and Servicing
Agreement are true and correct in all material respects at
and on the Closing Date, with the same effect as if made on
the Closing Date;
ii) the Company and the Originators have complied
with all the agreements and satisfied all the conditions
on its part to be performed or satisfied in connection
with the sale and delivery of the Certificates;
iii) all statements and information contained in the
Prospectus Supplement under the captions "The Representative and the
Originators" and "The Loan Pool" and in the Prospectus under the
captions "The Representative and the Originators" and "Lending
Programs" are true and accurate in all material respects and nothing
has come to such officer's attention that would lead him to believe
that any of the specified sections contains any untrue statement of a
material fact or omits to state any material fact necessary in order to
make the statements and information therein, in the light of the
circumstances under which they were made, not misleading;
iv) the information set forth in the Schedule of Loans
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects and the Loans
actually being delivered to the Trustee at Closing Date conform in all
material respects to the Pool information set forth in the Prospectus
Supplement;
v) the copies of the Charter and By-laws of the
Company and the Originators attached to such certificate
are true and correct and, are in full force and effect on
the date thereof;
vi) except as may otherwise be disclosed in the
Prospectus, there are no actions, suits or proceedings pending (nor, to
the best knowledge of such officers, are any actions, suits or
proceedings threatened), against or affecting the Company or any
Originator which if adversely determined, individually or in the
aggregate, would adversely affect the Company's or such Originator's
obligations under the Pooling and Servicing Agreement, the Pricing
Agreement or this Agreement;
vii) each person who, as an officer or representative of
the Company or of any Originator, signed (a) this Agreement, (b) the
Pooling and Servicing Agreement, (c) the Certificates issued thereunder
or (d) any other document delivered prior hereto or on the date hereof
in connection with the purchase described in this Agreement and the
Pooling and Servicing Agreement, was, at the respective times of such
signing and delivery, and is now duly elected or appointed, qualified
and acting as such officer or representative;
viii) a certified true copy of the resolutions of the
board of directors of the Company and the Originators with respect to
the sale of the Certificates subject to this Agreement and the Pooling
and Servicing Agreement, which resolutions have not been amended and
remain in full force and effect;
ix) all payments received with respect to the Loans
after the Cut-Off Date have been deposited in the Principal and
Interest Account, and are, as of the Closing Date, in the Principal and
Interest Account;
x) the Company has complied, and has ensured that the
Originators have complied, with all the agreements and satisfied, and
has ensured that the Originators have satisfied, all the conditions on
its, and the Originators', part to be performed or satisfied in
connection with the issuance, sale and delivery of the Loans and the
Certificates;
xi) all statements contained in the Prospectus with
respect to the Company and the Originators are true and accurate in all
material respects and nothing has come to such officer's attention that
would lead such officer to believe that the Prospectus contains any
untrue statement of a material fact or omits to state any material
fact;
xii) each Mortgage assignment will be prepared based on
forms recently utilized by the Company with respect to mortgaged
properties located in the appropriate jurisdiction and used in the
regular course of the Company's business. Based on the Company's
experience with such matters, the Company reasonably believes that upon
execution each such assignment will be in recordable form and will be
sufficient to effect the assignment of the Mortgage to which it relates
as provided in the Pooling and Servicing Agreement; and
xiii) the weighted average lives of the Class A-1, Class
X-0, Xxxxx X-0, Class M-1, Class M-2, Class B Certificates, in each
case using the applicable pricing speed and a weighted average coupon
and weighted average maturity based upon the Loans actually delivered
to the Trustee, will not vary by more than 1/10th of one year from 0.99
years, 2.99 years, 5.13 years, 7.90 years, 13.45 years, and 7.66 years,
respectively.
(i) At Closing Date, each Class of Class A Certificates shall have
been rated "AAA" by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. ("S&P") and "Aaa" by Xxxxx'x Investors Service, Inc.
("Moody's"); the Class M-1 Certificates shall have been rated at least "AA" by
S&P and at least "Aa2" by Moody's; the Class M-2 Certificates shall have been
rated at least "A" by S&P and at least "A2" by Moody's; and the Class B
Certificates shall have been rated at least "BBB" by S&P and at least "Baa2" by
Moody's.
(j) At Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and delivery of the
Certificates as herein contemplated and related proceedings, or in order to
evidence the accuracy of any of the representations or warranties, or the
fulfillment of any of the conditions, herein contained; and all proceedings
taken by the Company in connection with the issuance and sale of the
Certificates as herein contemplated shall be satisfactory in form and substance
to the Representative, as representative to the Underwriters, and counsel for
the Underwriters.
(k) On or before the Closing Date the Company and the Originators
shall have delivered to the Trustee, to hold in trust for the benefit of the
holders of the Certificates, the Home Improvement Loans (as defined in the
Prospectus) with aggregate outstanding principal balances as of the Cut-Off Date
of at least $187,500,000. The Company and the Originators shall, immediately
following the sale of the Certificates, cause to be deposited with the Trustee,
for deposit in the Pre-Funding Account (as defined in the Prospectus
Supplement), cash in an amount equal to the sum of (A) the excess of (i) the
aggregate initial principal balance of the Class X-0, Xxxxx X-0, Class A-3,
Class M-1, Class M-2, and Class B Certificates (i.e., $250,000,000 over (ii) the
aggregate discounted outstanding principal balances as of the Cut-Off Date of
the Home Improvement Loans actually delivered to the Trustee.
(l) On or before the Closing Date the Company shall have delivered to
the Representative a Current Report on Form 8-K containing a detailed
description of the Loans actually being delivered to the Trustee at Closing
Date, in form and substance satisfactory to the Representative.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representative, as representative to the Underwriters, by notice to the
Company at any time at or prior to Closing Date, and such termination shall be
without liability of any party to any other party except as provided in Section
4 hereof.
Section 6. INDEMNIFICATION.
(a) The Company and the Originators jointly and severally agree to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls each of the Underwriters within the meaning of Section 15 of the
1933 Act as follows:
i) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact contained in
the Registration Statement (or any amendment thereto), or the omission
or alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading;
ii) against any and all loss, liability, claim, damage
and expense whatsoever, as incurred, to the extent of the aggregate
amount paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened,
or of any claim whatsoever based upon any untrue statement or omission
described in clause (i) above, or any such alleged untrue statement or
omission, if such settlement is effected with the written consent of
the Company; and
iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by such Underwriter), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any untrue statement or omission described in clause (i) above, or
any such alleged untrue statement or omission, to the extent that any
such expense is not paid under (i) or (ii) above; provided, however,
that this indemnity agreement shall not apply to any loss, liability,
claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with the information referred to in
clauses (w), (x), (y) and (z) of the immediately following paragraph;
provided, further, such indemnity with respect to the Prospectus or any
preliminary prospectus shall not inure to the benefit of any
Underwriter (or person controlling such Underwriter) from whom the
person suffering any such loss, claim, damage or liability purchased
the Certificates which are the subject thereof if such person did not
receive a copy of the Prospectus at or prior to the confirmation of the
sale of such Certificates to such person in any case where such
delivery is required by the 1933 Act and the untrue statement or
omission of a material fact contained in any preliminary prospectus was
corrected in the Prospectus.
(b) Each Underwriter agrees to indemnify and hold harmless the Company
and the Originators, their directors, each of the Company's and Originator's
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, contained in (w) the first sentence of the second to last paragraph
on the front cover page of the Prospectus (discussing the plan of distribution),
(x) the second sentence of the fifth paragraph on the inside cover of the
Prospectus (discussing the risk of a lack of secondary trading), (y) the second
paragraph under the heading "Underwriting" in the Prospectus and (z) any
Computational Materials prepared by such Underwriter, except to the extent of
any errors in the Computational Materials that are caused by errors in the pool
information provided by the Company to the applicable Underwriter. The parties
hereto agree that no Underwriter shall be under any liability to the Company,
the Originators or any other person identified in this paragraph (b) for
Computational Materials prepared by any other Underwriter.
(c) Promptly after receipt by an indemnified party under this Section
6 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have otherwise than under this Section
6. 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, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them 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 any legal or
other expenses other than the reasonable costs of investigation subsequently
incurred in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). After such notice from the indemnifying party to
such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Originators jointly and severally, on the one hand, and the Underwriters, on the
other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Originators jointly and severally, on the one
hand, and the Underwriters, on the other hand, as incurred, in such proportions
that each Underwriter is responsible for that portion represented by the
underwriting discount allocated to the principal amount of Certificates set
forth next to each Underwriter's name on Annex B hereto (or, with respect to
Computational Materials furnished by an Underwriter (except to the extent of any
errors in the Computational Materials that are caused by errors in the pool
information provided by the Company to the applicable Underwriter), the excess
of the principal amount of Certificates set forth next to such Underwriter's
name on Annex B hereto over the underwriting discount allocated to such
principal amount of Certificates), and the Company and the Originators shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Certificates set forth next
to the name of such Underwriter on Annex B hereto were offered to the public
exceeds the amount of any damages such Underwriter has otherwise been required
to pay in respect of such losses, liabilities, claims, damages and expenses. For
purposes of this Section 7, each person, if any, who controls any Underwriter
within the meaning of Section 15 of the 1933 Act shall have the same rights to
contribution as such Underwriter and each respective director of the Company and
the Originators, each officer of the Company and the Originators who signed the
Registration Statement, and each respective person, if any, who controls the
Company and the Originators within the meaning of Section 15 of the 1933 Act
shall have the same rights to contribution as the Company and the Originators.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement and the Pricing Agreement, or contained in certificates of officers of
the Company and the Originators submitted pursuant hereto, shall remain
operative and in full force and effect, regardless of any investigation made by
or on behalf of any of the Underwriters or any controlling person thereof, or by
or on behalf of the Company and the Originators, and shall survive delivery of
the Certificates to the Underwriter.
Section 9. TERMINATION OF AGREEMENT.
(a) The Representative, as representative of the Underwriters, may
terminate this Agreement, by notice to the Company and the Originators, at any
time at or prior to Closing Date (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement or Prospectus, any change, or
any development involving a prospective change, in or affecting particularly the
business or properties of the Company and the Originators considered as one
entity which, in the reasonable judgment of the Representative, as
representative of the Underwriters, materially impairs the investment quality of
the Certificates; (ii) if there has occurred any suspension or limitation of
trading in securities generally on the New York Stock Exchange, or any setting
of minimum prices for trading on such exchange or by any governmental authority;
(iii) if any banking moratorium has been declared by Federal or New York
authorities; or (iv) if there has occurred any outbreak or escalation of major
hostilities in which the United States of America is involved, any declaration
of war by Congress, or any other substantial national or international calamity
or emergency if, in the judgment of the Representative, as representative of the
Underwriter, the effects of any such outbreak, escalation, declaration,
calamity, or emergency makes it impractical or inadvisable to proceed with
completion of the sale of and payment for the Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. DEFAULT BY ONE OF THE UNDERWRITERS. If any of the
Underwriters shall fail at Closing Date to purchase the Certificates which it is
obligated to purchase hereunder (the "Defaulted Certificates"), the remaining
Underwriters (the "Non-Defaulting Underwriters") shall have the right, but not
the obligation, within one (1) Business Day thereafter, to make arrangements to
purchase all, but not less than all, of the Defaulted Certificates upon the
terms herein set forth; if, however, the Non-Defaulting Underwriters shall have
not completed such arrangements within such one (1) Business Day period, then
this Agreement shall terminate without liability on the part of the
Non-Defaulting Underwriters.
No action taken pursuant to this Section shall relieve any defaulting
Underwriter from liability in respect of its default.
In the event of any such default which does not result in a
termination of this Agreement, either the Non-Defaulting Underwriters or the
Company shall have the right to postpone Closing Date for a period not exceeding
seven days in order to effect any required changes in the Registration Statement
or Prospectus or in any other documents or arrangements.
Section 11. COMPUTATIONAL MATERIALS. (a) It is understood that any
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Certificates, subject to the following conditions:
i) Each Underwriter shall comply with all applicable
laws and regulations in connection with the use of Computational
Materials including the No- Action Letter of May 20, 1994 issued by the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx, Peabody
& Co. Incorporated and Xxxxxx Structured Asset Corporation, as made
applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May
24, 1994, and the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the
"Xxxxxx/PSA Letters").
ii) As used herein, "Computational Materials" and the
term "ABS Term Sheets" shall have the meanings given such terms in the
Xxxxxx/PSA Letters, but shall include only those Computational
Materials that have been prepared or delivered to prospective investors
by or at the direction of an Underwriter.
iii) Each Underwriter shall provide the Company with
representative forms of all Computational Materials prior to their
first use, to the extent such forms have not previously been approved
by the Company for use by such Underwriter. The Underwriter shall
provide to the Company, for filing on Form 8-K as provided in Section
11(b), copies of all Computational Materials that are to be filed with
the Commission pursuant to the Xxxxxx/PSA Letters. The Underwriter may
provide copies of the foregoing in a consolidated or aggregated form.
All Computational Materials described in this subsection (a)(iii) must
be provided to the Company not later than 10:00 a.m. New York time one
business day before filing thereof is required pursuant to the terms of
this Agreement.
iv) If an Underwriter does not provide any Computational
Materials to the Company pursuant to subsection (a)(iii) above, such
Underwriter shall be deemed to have represented, as of the Closing
Date, that it did not provide any prospective investors with any
information in written or electronic form in connection with the
offering of the Certificates that is required to be filed with the
Commission in accordance with the Xxxxxx/PSA Letters.
v) In the event of any delay in the delivery by any
Underwriter to the Company of all Computational Materials required to
be delivered in accordance with subsection (a)(iii) above, the Company
shall have the right to delay the release of the Prospectus to
investors or to any Underwriter, to delay the Closing Date and to take
other appropriate actions in each case as necessary in order to allow
the Company to comply with its agreement set forth in Section 11(b) to
file the Computational Materials by the time specified therein.
vi) The Company shall file the Computational Materials
(if any) provided to it by each Underwriter under Section 11(a)(iii)
with the Commission pursuant to a Current Report on Form 8-K no later
than 10:00 a.m. on the date required pursuant to the Xxxxxx/PSA
Letters.
Section 12. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriters shall be directed to Xxxxxx, as representative of the Underwriters,
Three World Financial Center, New York, New York 10285, Attention: Syndicate
Department (Fax: 000-000-0000); and notices to the Company or any Originator
shall be directed to it at 0000 Xxxxxx Xxxxxx, Xxxxx, Xxx Xxxxxx 00000,
Attention: Executive Vice President (Fax: 000-000-0000).
Section 13. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriters, the Company,
the Originators and their respective successors. Nothing expressed or mentioned
in this Agreement or the Pricing Agreement is intended or shall be construed to
give any person, firm or corporation, other than the Underwriters, the Company,
the Originators and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and 7 hereof and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
with respect to this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriters, the Company, the Originators and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Certificates from the Underwriter
shall be deemed to be a successor by reason merely of such purchase. The Company
and the Originators shall be jointly and severally liable for all obligations
incurred under this Agreement and the Pricing Agreement.
Section 14. GOVERNING LAW AND TIME. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Unless otherwise set forth herein, specified times of day refer to New
York time.
Section 15. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
among each of the Underwriters and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Treasurer
THE ORIGINATORS LISTED ON
ANNEX A HERETO
By: /s/ Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Treasurer
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXX BROTHERS INC.
By: /s/Xxxxxx X. Xxxxxxx
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
Acting on behalf of itself
and as the representative of
the Underwriters.
ANNEX A
THE ORIGINATORS
The Money Store/Minnesota Inc.
The Money Store/D.C. Inc.
The Money Store/Kentucky Inc.
The Money Store Home Equity Corp.
TMS Mortgage Inc.
ANNEX B
XXXXXX BROTHERS PRUDENTIAL TOTAL
INC. SECURITIES INC.
Class A-1 $ 79,084,000 $ 15,816,000 $94,900,000
Class A-1 $ 51,500,000 $ 10,300,000 $61,800,000
Class A-3 $ 23,063,000 $ 4,612,000 $27,675,000
Class M-1 $ 27,605,000 $ 5,520,000 $33,125,000
Class M-2 $ 15,625,000 $ 3,125,000 $18,750,000
Class B $ 11,459,000 $ 2,291,000 $13,750,000
------------ ------------- -----------
Total $208,336,000 $ 41,664,000 $250,000,000
============ ============ =============
