$90,000,000
THE MONEY STORE INC.
The Money Store SBA Loan-Backed Adjustable Rate Certificates,
Series 1998-1
UNDERWRITING AGREEMENT
March 17, 1998
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), The
Money Store Investment Corporation, a New Jersey corporation, and The Money
Store of New York, Inc., a New York corporation ("TMSIC" and "MSNY",
respectively, each a "Seller" and together the "Sellers"), hereby confirm their
agreement with Prudential Securities Incorporated (the "Underwriter") with
respect to the delivery by the Sellers, of certificates entitled "The Money
Store SBA Loan-Backed Adjustable Rate Certificates, Series 1998-1, Class A (the
"Class A Certificates") and Class B (the "Class B Certificates," and together
with the Class A Certificates, the "Certificates"), to be issued pursuant to a
Pooling and Servicing Agreement, to be dated as of February 28, 1998 (the
"Pooling and Servicing Agreement"), among the Company, as Representative, TMSIC,
as servicer (in such capacity, the "Servicer"), MSNY and Marine Midland Bank, as
trustee ("Marine Midland" or, in its capacity as trustee under the Pooling and
Servicing Agreement, the "Trustee"). The initial aggregate principal amount of
the Class A Certificates shall be approximately $83,700,000, and the initial
aggregate principal amount of the Class B Certificates shall be approximately
$6,300,000. The Certificates represent the entire beneficial ownership interest
in a trust fund (the "Trust Fund") created by the Sellers which consists
primarily of the right to receive payments and other recoveries attributable to
certain unguaranteed interests (the "Unguaranteed Interests") in a pool of loans
(the "SBA Loans") made pursuant to Section 7(a) of the Small Business Act, as
amended, which are partially guaranteed by the U.S. Small Business
Administration (the "SBA").
As to any SBA Loan, the right to receive the guaranteed portion of the
principal balance thereof together with interest thereon at the per annum rate
in effect from time to time (less certain fees) is referred to herein as the
"Guaranteed Interest." The "Unguaranteed Interest" will equal as to any SBA
Loan, all payments and other recoveries on such SBA Loan not constituting the
Guaranteed Interest therein. The interest accruing on the guaranteed portion of
the principal balance of each SBA Loan in excess of the sum of the interest
payable to the related holder of the Guaranteed Interest net of certain fees is
hereinafter referred to as the "Excess Spread."
Prior to the delivery of the Certificates by the Sellers, and the
public offering thereof by the Underwriter, the Sellers and the Underwriter
shall enter into an agreement substantially in the form of Exhibit A hereto (the
"Pricing Agreement"). The Pricing Agreement shall be between the Sellers and the
Underwriter 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 Sellers, the Servicer, the Trustee and the SBA will enter into a
Multi-Party Agreement, dated February 28, 1998 (the "Multi-Party Agreement"),
which will set forth the relationship of the parties with respect to the SBA
Loans and the proceeds thereof and the consent of the SBA to the transactions
contemplated by the Pooling and Servicing Agreement.
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Pooling and Servicing Agreement.
The Sellers understand that the Underwriter proposes to make a public
offering of the Certificates as soon as the Underwriter deems advisable after
the Pricing Agreement has been executed and delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE
SELLERS.
(a) The Company and the Sellers represent and warrant to the
Underwriter 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 Sellers have filed with the Securities and Exchange
Commission (the "Commission") a registration statement on Form S-3 (No.
333-32775) 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
Underwriter 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 Underwriter for such use) and at Closing
Time 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 the Underwriter expressly for use in the Registration Statement or
Prospectus; and provided further, that neither the Company nor the Sellers
make any representations or warranties as to any information in any
Computational Materials (as defined below) provided by the Underwriter to
the Company pursuant to Section 10. 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 Sellers 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 any Seller to
perform its obligations under the Basic Documents (as defined below) to
which it is a party and (B) there have been no transactions entered into by
the Sellers 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 any Seller to perform its obligations under this Agreement, the
Pricing Agreement, the Pooling and Servicing Agreement and, in the case of
TMSIC and MSNY, the Multi-Party Agreement (this Agreement, the Pricing
Agreement, the Pooling and Servicing Agreement, and the Multi-Party
Agreement being herein referred to, collectively, as the "Basic
Documents").
(iv)Each of the Sellers 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 to which it is a party; and each of the Sellers
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 Seller's ability to perform its obligations
under the Basic Documents to which it is a party, or (B) the business,
properties, financial position, operations or results of operations of the
Seller.
(v)Any person who signed this Agreement on behalf of any Seller,
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 Seller, 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.
(vi)Each Basic Document has been duly and validly authorized by
each Seller that is a party thereto and, when executed and delivered by
each Seller and duly and validly authorized, executed and delivered by the
other parties thereto, will constitute, the valid and binding agreement of
each such Seller, 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 such
Basic Documents conform in all material respects to the statements relating
thereto contained in the Prospectus.
(vii)The Certificates have been duly and validly authorized by
the Servicer and, when executed and delivered by the Servicer and
authenticated by the Trustee as specified in the Pooling and Servicing
Agreement and delivered to the Underwriter pursuant to this Agreement, the
Certificates will be duly and validly issued and outstanding and entitled
to the benefits of the Pooling and Servicing Agreement; and the
Certificates conform in all material respects to all statements relating
thereto contained in the Prospectus.
(viii)Neither the issuance or delivery of the Certificates, nor
the consummation of any other of the transactions herein contemplated or in
any other Basic Document, nor the execution and delivery by each Seller of
the Basic Documents to which it is a party, nor the fulfillment of the
terms of the Certificates or each such Basic Document will result in the
breach of any term or provision of the charter or by-laws of any Seller,
and no Seller is 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 such Seller is
a party or by which it may be bound, or to which any of the property or
assets of such Seller is subject, or (B) any law, decree, order, rule or
regulation applicable to such Seller or the SBA Loans of any court or
supervisory, regulatory, administrative or governmental agency, body or
authority, or arbitrator having jurisdiction over such Seller or their
properties or the SBA Loans, the default in or the breach or violation of
which would have a material adverse effect on such Seller or the ability of
such Seller to perform its obligations under the Basic Documents to which
it is a party; and neither the issuance or delivery of the Certificates,
nor the consummation of any other of the transactions herein contemplated,
nor the fulfillment of the terms of the Certificates or the Basic Documents
will result in such a breach, violation or default which would have such a
material adverse effect.
(ix)Except as described in the Prospectus, there is no action,
suit or proceeding against or investigation of any Seller, now pending, or,
to the knowledge of any Seller, threatened against any Seller, 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 or the Certificates, (2) seeking to
prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by the Basic Documents, (3) which would
materially and adversely affect the performance by any Seller of its
obligations under the Basic Documents to which it is a party, or the
validity or enforceability of any Basic Document or the 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 any Seller 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 such Seller's ability to
perform its obligations under the Basic Documents to which it is a party.
(x)Each Seller possesses 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
it (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 no Seller 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 such Seller to perform its obligations
under the Basic Documents.
(xi)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 may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws.
(xii)At the time of execution and delivery of the Pooling and
Servicing Agreement by the Company, the Sellers and the Trustee, the
Trustee will have acquired good title on behalf of the Trust Fund to the
Unguaranteed Interests, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, and, upon delivery to the
Underwriter of the Certificates, the Underwriter will have good and
marketable title to the Certificates free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xiii)The transfer of the Unguaranteed Interests to the Trust
Fund at Closing Time will be treated by the Sellers for financial
accounting and reporting purposes as a sale of assets and not as a pledge
of assets to secure debt.
(xiv)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 Time shall have been paid at or prior to
Closing Time.
(xv)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 either Seller and
delivered to the Underwriter or counsel for the Underwriter shall be deemed a
representation and warranty by such Seller as to the matters covered thereby.
Section 2. DELIVERY TO THE UNDERWRITER; CLOSING.
(a) On the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, each Seller
agrees to deliver the Certificates to the Underwriter. In the event that the
initial remittance rates and prices 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
Underwriter and the Sellers.
(b) Delivery of the Certificates shall be made at the offices of
Stroock & Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
or at such other place as shall be agreed upon by the Underwriter and the
Sellers, at 11:00 A.M., New York City time, on March 31, 1998, or such other
time not later than ten business days after such date as shall be agreed upon by
the Underwriter and the Sellers (such time and date of payment and delivery
being herein called "Closing Time").
(c) The Certificates will initially be represented as follows:
(i) The Class A Certificates will initially be represented by one
or more certificates registered in the name of Cede & Co., the nominee
of The Depository Trust Company ("DTC").
(ii) The Class B Certificates will initially be represented by
one or more certificates registered in the name of Cede & Co., the
nominee of DTC.
For purposes of this Agreement, all Certificates initially represented
by one or more certificates registered in the name of Cede & Co., the nominee of
DTC, shall be referred to herein, collectively, as 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
in exchange for DTC Certificates only under the limited circumstances specified
in the Pooling and Servicing Agreement. The DTC Certificates to be purchased by
the Underwriter will be delivered by the Sellers to the Underwriter (which
delivery in the case of the DTC Certificates shall be made through the
facilities of DTC) against payment of the purchase price therefor. The
Underwriter hereby agrees, subject to the terms, conditions and provisions
hereof, to purchase from the Sellers the Class A Certificates and the Class B
Certificates at the price of 99.50% of the aggregate initial principal amount of
the Class A and Class B Certificates plus accrued interest on such aggregate
initial principal amount at the weighted average Initial Remittance Rates from
March 15, 1998 to, but not including, the Closing Date. The purchase price shall
be paid by the Underwriter by a same day federal funds wire payable to the order
of the Sellers. The Certificates will be made available for examination by the
Underwriter not later than 10:00 A.M. on the last business day prior to Closing
Time.
(d) The Class A Certificates and the Class B Certificates shall be
offered to the public from time to time for sale in negotiated transactions or
otherwise, at prices determined at the time of sale.
Section 3. COVENANTS OF THE COMPANY AND THE Sellers. The Company and
the Sellers covenant with the Underwriter as follows:
(a) The Sellers will promptly notify the Underwriter, 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 either Seller
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
Sellers 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 Sellers will give the Underwriter notice of their
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 Sellers propose for use by the
Underwriter 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 Underwriter 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 Underwriter or counsel for the
Underwriter shall reasonably object.
(c) The Sellers will deliver to the Underwriter 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 Underwriter may reasonably request.
(d) The Sellers will furnish to the Underwriter, 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 Underwriter 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 Underwriter,
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 Sellers will forthwith amend or
supplement the Prospectus (in form and substance satisfactory to
counsel for the Underwriter) 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 Sellers
will furnish to the Underwriter a reasonable number of copies of such
amendment or supplement.
(f) The Sellers will endeavor, in cooperation with the
Underwriter, 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 Underwriter may designate; provided,
however, that no Seller 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,
each Seller 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 Sellers
will deliver to the Underwriter, as promptly as practicable, such
information concerning the Sellers or the Certificates as the
Underwriter may reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES. The Sellers 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 10); (ii)
the reproducing of the Basic Documents; (iii) the preparation, printing,
issuance and delivery of the certificates for the DTC Certificates to the
Underwriter; (iv) the fees and disbursements of (A) the Underwriter's counsel,
(B) KPMG Peat Marwick, accountants for the Company and issuer of the comfort
letter, (C) the Trustee and its counsel and (D) 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 Underwriter in connection therewith and in connection with the
preparation of the Blue Sky Survey; (vi) the printing (or other reproducing) and
delivery to the Underwriter 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 each of Xxxxx'x Investors Service, Inc. ("Moody's") and Duff & Xxxxxx
Credit Rating Co. ("Duff & Xxxxxx") for rating the Certificates; and (viii) the
reproducing and delivery to the Underwriter of copies of the Blue Sky Survey.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9(a)(i), the Sellers shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
Section 5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The
obligations of the Underwriter hereunder are subject to the accuracy of the
representations and warranties of the Company and the Sellers herein contained,
to the performance by Sellers of their respective obligations hereunder, and to
the following further conditions:
(a) The Registration Statement shall have become effective and,
at Closing Time, 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 Time, the Prospectus shall have been filed with the
Commission in accordance with Rule 424 of the 1933 Act Regulations.
(b) At Closing Time, the Underwriter shall have received:
(i) The favorable opinion, dated as of
Closing Time, of Stroock & Stroock & Xxxxx LLP, counsel for
the Underwriter, to the effect that:
(A) The Registration Statement is
effective under the 1933 Act, and, to the best of
their knowledge and information, 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 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 "Description of the
Agreement and 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," "Federal Income Tax
Consequences," "ERISA Considerations," "Legal
Aspects of the SBA Loans," and "Risk Factors --
The Status of the SBA Loans in the Event of
Bankruptcy of an Originator" and in the Prospectus
Supplement under "Summary of Terms -- Tax
Considerations," "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) TMSIC and MSNY have been duly
organized and are validly existing and are in good
standing under the laws of their jurisdiction of
incorporation. TMS SBA Holdings, Inc. (the "Spread
Account Depositor") has been duly organized and is
validly existing and in good standing under the
laws of the State of Delaware.
(F) Each Seller has the power to
engage in the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates and, with
respect to TMSIC and MSNY, the Multi-Party
Agreement, and has all requisite power, authority
and legal right to execute and deliver this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates and, with
respect to TMSIC and MSNY, the Multi-Party
Agreement, (and any other documents delivered in
connection therewith) and to perform and observe
the terms and conditions of such instruments.
(G) The Pooling and Servicing
Agreement, the Multi- Party Agreement, the
Certificates, the Pricing Agreement and this
Agreement each have been duly authorized, executed
and delivered by each of the Sellers that is a
party thereto. Assuming due authorization,
execution and delivery by the other parties
thereto, the Pooling and Servicing Agreement, the
Certificates, the Multi-Party Agreement, the
Pricing Agreement and this Agreement are legal,
valid and binding agreements enforceable in
accordance with their respective terms against
each Seller that is a party thereto, 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.
(H) This Agreement and the Pooling
and Servicing Agreement have been duly authorized,
executed and delivered by the Company. Assuming
due authorization, execution and delivery by the
other parties thereto, this Agreement and the
Pooling and Servicing Agreement are legal, valid
and binding agreements enforceable in accordance
with their terms against the Company, subject (a)
to the effect of bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium
and similar laws relating to or affecting
creditors' rights generally, (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.
(I) No consent, approval,
authorization or order of any court or
governmental agency or body is required for the
execution, delivery and performance by any Seller
of, or compliance by any Seller with, the Pooling
and Servicing Agreement, the Pricing Agreement,
this Agreement and, with respect to TMSIC and
MSNY, the Multi-Party Agreement, or the offer,
issuance, sale or delivery of the Certificates, or
the consummation of any other transactions by the
Sellers contemplated by the Pooling and Servicing
Agreement, the Pricing Agreement, this Agreement
and, with respect to TMSIC and MSNY, the
Multi-Party 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.
(J) Neither the transfer of the
Unguaranteed Interests to the Trust Fund, the
consummation of the transactions contemplated by,
nor the fulfillment of the terms of, the Pooling
and Servicing Agreement, the Multi-Party
Agreement, the Pricing Agreement and this
Agreement or 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 Certificate of Incorporation
or Bylaws of any Seller, (b) the terms of any
material indenture or other material agreement or
instrument of which counsel has knowledge to which
any Seller is a party or by which it is bound or
to which it is subject or (c) 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 any Seller is subject or by which it is
bound.
(K) The sale of the Certificates
and the delivery of each SBA Note and Mortgage 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 Seller in and
to the Unguaranteed Interest of each SBA Loan,
including, without limitation, the right to
enforce each such SBA Loan in accordance with its
terms to the extent enforceable by the related
Seller at the time of such sale and delivery and
subject to the provisions of the Multi-Party
Agreement. With respect to the transfer of the SBA
Loans by the Sellers, such counsel need express no
opinion as to (i) except for transfers by MSNY,
whether the laws of the State of New York would
apply to the transfer of the related SBA Loans or
(ii) the effectiveness of the transfer of the SBA
Loans under the laws of the jurisdiction in which
TMSIC is located or the jurisdiction in which the
SBA Loans were originated or the right of the
Trustee to enforce such SBA Loans.
(L) The Certificates, assuming due
execution by the Sellers, 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.
(M) Assuming compliance with all
provisions of the Pooling and Servicing Agreement,
for federal income tax purposes, the Trust Fund
will be classified as a "grantor trust" and not as
an association taxable as a corporation. The
"Spread" (as defined in the Registration
Statement) will be treated as "Stripped Coupons"
within the meaning of Section 1286 of the Internal
Revenue Code of 1986, as amended (the "Code"). A
portion of the interest accrued on each SBA Loan
will be treated as a "Stripped Coupon" purchased
by the Class B Certificateholders. Each Class A
Certificateholder will be treated as owning its
pro rata percentage interest in the principal of,
and interest payable on, the Unguaranteed Interest
of each SBA Loan (minus the portion of the
interest payable on such SBA Loan that is treated
as Spread or as a Stripped Coupon purchased by the
Class B Certificateholders) and such interest in
the Unguaranteed Interest of each SBA Loan will be
treated as a "Stripped Bond" within the meaning of
Section 1286 of the Code. Each Class B
Certificateholder will be treated as owning its
pro rata percentage interest in the principal of
the Unguaranteed Interest of each SBA Loan, plus a
disproportionate share of the interest payable on
each SBA Loan. Additionally, the Trust Fund will
not be subject to New York State income or
franchise tax.
(N) Neither the qualification of
the Pooling and Servicing Agreement under the
Trust Indenture Act of 1939, as amended, nor the
registration of the Trust Fund created by such
Agreement under the Investment Company Act of
1940, as amended, is presently required.
In rendering such opinion, Stroock & Stroock & Xxxxx LLP may rely
on certificates of responsible officers of the Company, the Sellers,
the Trustee, and public officials or, as to matters of law other than
New York, California or Federal law, on opinions of other counsel
(copies of which opinions shall be delivered to you).
(ii) The favorable opinion, dated as
of Closing Time, of corporate counsel for the Sellers and the
Company, in form and substance satisfactory to counsel for the
Underwriter, to the effect that:
(A) Each of TMSIC and the Company
has been duly organized and is validly existing
and is in good standing under the laws of the
State of New Jersey.
(B) Each Seller has the power to
engage in the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates and, with
respect to TMSIC and MSNY, the Multi-Party
Agreement, and has all requisite power, authority
and legal right to execute and deliver this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates and, with
respect to TMSIC and MSNY, the Multi-Party
Agreement (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 Multi-Party Agreement,
the Pricing Agreement and the Certificates each
have been duly authorized, executed and delivered
by each of the Sellers that is a party thereto
and, assuming due authorization, execution and
delivery by the other parties thereto, are legal,
valid and binding agreements of each such Seller,
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 each such Seller,
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
Unguaranteed Interests 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,
the Multi-Party Agreement, 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 any Seller, or the terms of any material
indenture or other material agreement or
instrument of which such counsel has knowledge to
which any Seller is 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 any Seller 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 any Seller 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 any Seller or
in any material impairment of the right or ability
of any Seller to carry on its business
substantially as now conducted or result in any
material liability on the part of any Seller or
which would draw into question the validity of
this Agreement, the Pricing Agreement, the
Certificates, the Pooling and Servicing Agreement
or, with respect to TMSIC and MSNY, the
Multi-Party 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 any Seller to
perform under the terms of this Agreement, the
Pooling and Servicing Agreement, the Pricing
Agreement, the Certificates or, with respect to
TMSIC and MSNY, the Multi-Party Agreement.
(F) No consent, approval,
authorization or order of any court or
governmental agency or body is required for the
execution, delivery and performance by any Seller
of, or compliance by any Seller with, this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates or, with
respect to TMSIC and MSNY, the Multi-Party
Agreement, 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 of each SBA Loan
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 the Sellers in and to each such Unguaranteed
Interest including, without limitation, the right
to enforce each such SBA Loan in accordance with
its terms to the extent enforceable by the Sellers
at the time of such delivery.
(iii) The favorable opinion, dated as of
Closing Time, of counsel for the SBA, in form and substance
satisfactory to counsel for the Underwriter, to the effect
that:
(A) the SBA has the full power and
authority and the legal right to execute, deliver
and perform the Multi-Party Agreement, and all
necessary action has been taken by the SBA to
authorize the execution, delivery and performance
of the Multi-Party Agreement by the SBA. The SBA
officers executing and delivering the Multi-Party
Agreement have full authority to act on behalf of
the SBA. The Multi-Party Agreement has been duly
executed and delivered on behalf of the SBA and
constitutes the legal, valid and binding
obligation of the SBA, enforceable against the SBA
in accordance with its terms.
(B) The execution, delivery and
performance of the Multi-Party Agreement by the
SBA will not violate any (i) organizational or
governing documents of the SBA, any law, treaty,
rule or regulation or a final binding
determination of an arbitrator or a determination
of a court or other governmental authority
(whether such governmental authority is the
Federal Government of the United States or any
other nation or government, or other political
subdivision thereof, or any entity exercising
executive, legislative, judicial, regulatory, or
administrative functions of or pertaining to
government) in each case applicable to or binding
upon the SBA or its property or to which the SBA
or any of its property is subject or (ii)
provision of any security issued by SBA or any
agreement, instrument or undertaking to which the
SBA is a party or by which the SBA or any of its
property is bound.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Sellers, the
Trustee, the SBA and public officials. Such opinion may assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the SBA.
(iv) The favorable opinion, dated as of
Closing Time, of Winston & Xxxxxx, counsel for the Trustee, in
form and substance satisfactory to counsel for the
Underwriter.
(v) The favorable opinion, dated as of
Closing Time, of Xxxx X. Xxxxx, Esq., counsel for the Company,
relating to the due organization, valid existence and good
standing of the Company, the corporate power and authority of
the Company to own its assets, conduct its business and
perform its obligations under this Agreement, the due
execution and binding nature of this Agreement and the
non-contravention of this Agreement with respect to the
Company's organizational documents, law, the Company's other
agreements, all in customary form.
In giving its opinion required by subsection (b)(1) 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 Underwriter 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 Underwriter for such use) or at Closing Time, 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 as to which such
counsel need express no view).
(c) At Closing Time the Underwriter shall have received from
Stroock & Stroock & Xxxxx LLP, counsel for the Underwriter, a letter,
dated as of Closing Time, authorizing the Underwriter to rely upon
each opinion delivered by Stroock & Stroock & Xxxxx LLP to each of
Xxxxx'x and Duff & Xxxxxx in connection with the issuance of the
Certificates as though each such opinion was addressed to the
Underwriter and attaching a copy of each such opinion.
(d) At Closing Time 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 any Seller 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 each Seller, dated as of Closing Time, 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 Time; (iii) each of the Sellers has complied with
all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to Closing Time; 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 prior to the delivery of the Prospectus Supplement, the
Underwriter shall have received from KPMG Peat Marwick a letter dated
as of such date and in form and substance satisfactory to the
Underwriter, 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
Servicer's servicing portfolio which are included in the Prospectus
Supplement and which are specified by the Underwriter, and have found
such amounts, percentages and financial information to be in agreement
with the relevant accounting, financial and other records of such
Seller identified in such letter and (ii) certain information
regarding the SBA Loans and the SBA Files which are specified by the
Underwriter and contained in the Prospectus Supplement and setting
forth the results of such specified procedures.
(f) At Closing Time, the Underwriter shall have received from the
Trustee a certificate signed by one or more duly authorized officers
of the Trustee, dated as of Closing Time, as to the due acceptance of
the Pooling and Servicing Agreement by the Trustee and the due
authentication of the Certificates by the Trustee and such other
matters as the Underwriter shall request.
(g) At Closing Time, the Underwriter shall have received a
certificate signed by one or more duly authorized officers of each of
the Sellers, dated as of Closing Time to the effect that:
(i)the representations and warranties of each Seller 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)each Seller has 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 Sellers," "The SBA
Loan Pool" and "The SBA Loan Program," 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 SBA Loan Schedule
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
(v)the copies of the Charter and By-laws of each Seller
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 either Seller which
if adversely determined, individually or in the aggregate, would
adversely affect the Sellers' obligations under the Pooling and
Servicing Agreement, the Pricing Agreement, this Agreement or,
with respect to TMSIC and MSNY, the Multi-Party Agreement;
(vii)each person who, as an officer or representative of any
Seller signed (a) this Agreement, (b) the Pooling and Servicing
Agreement, (c) the Certificates issued thereunder, (d) the
Multi-Party Agreement (e) the Pricing Agreement or (f) 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)except as otherwise set forth in the Pooling and
Servicing Agreement, each of the SBA Loans referred to in the
Pooling and Servicing Agreement was originated by one of the
Sellers;
(ix)a certified true copy of the resolutions of the board of
directors of each Seller 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;
(x)all payments received with respect to the Unguaranteed
Interests 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;
(xi)Each Seller has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied in connection with the issuance, sale and delivery of
the SBA Loans and the Certificates;
(xii)all statements contained in the Prospectus with respect
to the Company and the Sellers 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;
(h) At Closing Time, the Class A Certificates shall
have been rated "Aaa" by Xxxxx'x and "AAA" by Duff & Xxxxxx and the
Class B Certificates shall have been rated "A2" by Xxxxx'x and "A" by
Duff & Xxxxxx.
(i) At Closing Time, the Underwriter shall have
received a copy of the Spread Account Agreement, duly executed and
delivered by the parties thereto, accompanied by an opinion of counsel
relating to the due incorporation, valid existence and good standing of
the Spread Account Depositor, the corporate power and authority of the
Spread Account Depositor to own its assets, conduct its business and
perform its obligations under the Spread Account Agreement, and the due
execution and binding nature of the Spread Account Agreement with
respect to the Spread Account Depositor's organizational documents, law
and the Spread Account Depositor's other agreements, all in customary
form.
(j) At Closing Time, counsel for the Underwriter
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
Underwriter and counsel for the Underwriter.
(k) On or before the Closing Time the Sellers shall
have delivered to the Trustee, to hold in trust for the benefit of the
holders of the Certificates, SBA Loans with aggregate outstanding
unguaranteed interests as of the Cut-Off Date of $55,707,829.59.
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 Underwriter by notice to the Sellers
at any time at or prior to Closing time, 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 Sellers jointly and severally agree to
indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter 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 each Seller; 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 the 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 (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 the 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 the Prospectus or any preliminary prospectus was corrected in the Prospectus.
(b) The Underwriter agrees to indemnify and hold harmless the Company
and the Sellers their directors, each of the Company's and Sellers' officers who
signed the Registration Statement, and each person, if any, who controls the
Company or either Seller 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 (x) the second sentence of the fifth paragraph on the
second page which is located on the inside cover (discussing the risk of a lack
of secondary trading) of the Prospectus (or any amendment or supplement
thereto), (y) the second sentence under "Investment Considerations--Limited
Liquidity" of the Prospectus Supplement and (z) any Computational Materials,
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
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
Sellers jointly and severally, on the one hand, and the Underwriter, 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 Sellers jointly and severally, on the one hand,
and the Underwriter, on the other hand, as incurred, in such proportions that
the Underwriter is responsible for that portion represented by the underwriting
discount on the cover page of the Prospectus bears to the initial public
offering price of the Certificates appearing thereon, (or, with respect to
Computational Materials furnished by the Underwriter, the excess of the
principal amount of the Certificates over the underwriting discount allocated to
such principal amount of Certificates); and the Company and the Sellers 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, the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Certificates
underwritten by the Underwriter and distributed to the public exceeds the amount
of any damages which the 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 the Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as the Underwriter and each respective director of the Sellers, each officer of
the Sellers who signed the Registration Statement, and each respective person,
if any, who controls the Sellers within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Sellers.
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 Sellers submitted pursuant hereto, shall remain operative
and in full force and effect, regardless of any investigation made by or on
behalf of the Underwriter or any controlling person thereof, or by or on behalf
of the Sellers, and shall survive delivery of the Certificates to the
Underwriter.
Section 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the
Company and the Sellers, at any time at or prior to Closing Time (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 or the Sellers
considered as one entity which, in the Underwriter's reasonable judgment,
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
Underwriter's judgment, 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. COMPUTATIONAL MATERIALS. (a) It is understood that the
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) The 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, Peabody
Acceptance Corporation I, Xxxxxx, Xxxxxxx & 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" shall have the meaning
given such term and the term "ABS Term Sheets" 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 the Underwriter.
(iii) The 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 the
Underwriter. The Underwriter shall provide to the Company, for filing on Form
8-K as provided in Section 10(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 the Underwriter does not provide any Computational Materials
to the Company pursuant to subsection (a)(iii) above, the 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 the 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 the 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 is agreement set forth in Section
10(b) to file the Computational Materials by the time specified therein.
(b) The Company shall file the Computational Materials (if any)
provided to it by the Underwriter under Section 10(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 11. NOTICES. All notices and other communi-cations 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
Underwriter shall be directed to Prudential Securities Incorporated, Xxx Xxx
Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxx; and notices to the
Company or any Seller shall be directed to it at 0000 Xxxxxx Xxxxxx, Xxxxx, Xxx
Xxxxxx 00000, Attention: Executive Vice President.
Section 12. PARTIES. This Agreement and the Pricing Agreement shall
each inure to the benefit of and be binding upon the Underwriter, the Company,
the Sellers 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 Underwriter, 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 Underwriter, the Company, the Sellers 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 Sellers shall be jointly and severally liable for all obligations
incurred under this Agreement and the Pricing Agreement.
Section 13. 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 14. 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 and the Sellers a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement between the Underwriter, the Sellers and the Company in
accordance with its terms.
Very truly yours,
THE MONEY STORE
INVESTMENT CORPORATION
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE OF NEW YORK, INC.
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE INC.
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of the date
first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: ________________________
Name:
Title:
$90,000,000
THE MONEY STORE INC.
The Money Store SBA Loan-Backed Adjustable Rate Certificates,
Series 1998-1, Class A
and Class B
PRICING AGREEMENT
March 17, 1998
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated March 17, 1998
(the "Underwriting Agreement"), relating to approximately $90,000,000, aggregate
principal amount of The Money Store SBA Loan-Backed Adjustable Rate
Certificates, Series 1998-1, Class A and Class B (collectively, the
"Certificates"). The approximate initial principal amount of Class A and Class B
Certificates shall be $83,700,000 and $6,300,000, respectively.
Pursuant to Section 2 of the Underwriting Agreement, The Money Store
Investment Corporation and The Money Store of New York, Inc. (collectively the
"Sellers") agree with Prudential Securities Incorporated (the "Underwriter") as
follows:
1. The Initial Remittance Rates on the Class A Certificates and
Class B Certificates shall be 6.18% and 6.60%, respectively, per
annum. Thereafter, the Class A Certificates and the Class B
Certificates shall bear interest as set forth in the Pooling and
Servicing Agreement.
2. The Underwriter shall purchase the Class A and Class B
Certificates for a price equal to 99.50% of the aggregate initial
principal amount of the Class A and Class B Certificates, plus accrued
interest on such aggregate initial principal amount at the weighted
average Initial Remittance Rates from March 15, 1998 to but not
including the Closing Date. The Class A and Class B Certificates shall
be offered by the Underwriter to the public from time to time in
negotiated transactions to be determined at the time of sale.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Sellers a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Sellers in accordance with its terms.
Very truly yours,
THE MONEY STORE
INVESTMENT CORPORATION
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE OF NEW YORK, INC.
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: _______________________________
Name:
Title:
