Exhibit 1.1
$175,000,000
THE MONEY STORE INC.
The Money Store Home Improvement Loan Certificates
Series 1997-I
UNDERWRITING AGREEMENT
March 25, 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-I, Class A-1,
Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class B-1 and Class B-2" (the
"Certificates"), to be issued pursuant to a Pooling and Servicing Agreement,
dated as of February 28, 1997 (the "Pooling and Servicing Agreement"), among the
Company, as Representative, Servicer and Claims Administrator, the Originators
and The Bank of New York, as trustee ("The Bank of New York" 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) four classes of subordinated Certificates (the
"Subordinated Certificates"): Class M-1 Certificates and Class M-2 Certificates
(the "Class M Certificates") and Class B-1 Certificates and Class B-2
Certificates (the "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-I, Class R-1 and
Class R-2" (the "Class R Certificates"), and "The Money Store Home Improvement
Loan Certificates, Series 1997-I, 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.
The holders of the Class B-2 Certificates will each have the benefit
of a limited guaranty of the Company to protect against losses that would
otherwise be borne by the holders of the Class B-2 Certificates. 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 opposite 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 Underwriter and the Company, at
11:00 A.M., New York City time, on March 31, 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) 99.99809% 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) 99.99215% 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) 99.98333% 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)
99.97125% 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) 99.97407% 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) 99.99464% of the aggregate principal
amount of the Class B-1 Certificates being purchased by such Underwriter, plus
interest accrued at the Class B-1 Pass-Through Rate, and (vii) 99.97169% of the
aggregate principal amount of the Class B-2 Certificates being purchased by such
Underwriter, plus interest accrued at the Class B-2 Pass-Through Rate. Interest
on the Certificates shall accrue at the applicable Pass-Through Rate in each
case from March 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) The Company and the Originators will file with the Commission such
reports on Form SR as may be required pursuant to Rule 463 under the 1933 Act.
(h) 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 letter, (D) the Trustee and the Co-Trustee and
their respective 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 "Description of 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 -16-
Jersey as and in the manner contemplated by the Pooling and Servicing
Agreement is sufficient fully to transfer to the Co-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 Closing Date, of Xxxxxx &
Xxxxxxx, counsel for the Trustee and the Custodian, in form and substance
satisfactory to counsel for the Underwriters.
iv) 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 at 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 each of the Trustee and the Co-Trustee a
certificate signed by one or more duly authorized officers of each of the
Trustee and the Co-Trustee, dated as of Closing Date, as to the due acceptance
of the Pooling and Servicing Agreement by the Trustee and Co-Trustee,
respectively, and the due authentication of the Certificates by the Trustee and
the Co-Trustee, respectively, 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-1, Class B-2 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 1.00 years, 3.00 years, 5.39 years, 8.20
years, 13.86 years, 5.28 years and 11.03 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 "A" by S&P and
"A2" by Moody's; the Class B-1 Certificates shall have been rated "BBB" by S&P
or "Baa1" by Moody's; and the Class B-2 Certificates shall have been rated "BBB"
by S&P and "Baa3" 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 $131,250,040.60. 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 A-1, Class X-0, Xxxxx X-0,
Class M-1, Class M-2, Class B-1 and Class B-2 Certificates (i.e.,
$131,250,040.60) 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 (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 (x) the second sentence of the third paragraph on the
third page which is located on the inside cover (discussing the risk of a lack
of secondary trading) of the Prospectus, (y) the second and third paragraphs
under the heading "Underwriting" in the Prospectus (or any amendment or
supplement thereto) 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:------------------------
Xxxxxx Dear
Executive Vice President
THE ORIGINATORS LISTED ON
ANNEX A HERETO
By:-------------------------
Xxxxxx Dear
Executive Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
XXXXXX BROTHERS INC.
By:--------------------
Name:
Title:
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 Inc.
-------------
Class A-1 $ 48,000,000
Class A-2 53,700,000
Class A-3 19,487,000
Class M-1 25,375,000
Class M-2 12,250,000
Class B-1 9,625,000
Class B-2 6,563,000
Total $175,000,000
