Exhibit 1.1
$800,000,000
THE MONEY STORE INC.
The Money Store Home Equity Asset Backed Certificates
Series 1997-A
UNDERWRITING AGREEMENT
March 19, 1997
Prudential Securities Incorporated
as representative of the Underwriters
One New York Plaza
New York, New York 10292
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 Prudential
Securities Incorporated ("Prudential" 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 Equity Asset Backed Certificates, Series 1997-A,
Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class A-6, Class A-7,
Class A-8, Class A-9, Class A-10, Class A-11 and Class A-12" (the "Class A
Certificates") to be issued pursuant to a Pooling and Servicing Agreement, to be
dated as of February 28, 1997 (the "Pooling and Servicing Agreement"), among the
Company, as Representative and Servicer, the Originators and The Bank of New
York, as trustee ("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 Class A Certificates will be as set forth on Annex B hereto. The
Class A Certificates represent the senior beneficial interests in a trust fund
(the "Trust Fund") that will consist at the Closing Time (as defined in Section
2 hereof) primarily of three sub-trusts, consisting of one pool of fixed rate
first and second lien home equity mortgage loans (the "Pool I Home Equity
Loans"), one pool of adjustable rate first lien home equity mortgage loans (the
"Pool II Home Equity Loans") and one pool of multifamily mortgage loans (the
"Pool III Multifamily Loans"), amounts to be deposited in the PreFunding Account
and certain related properties. The Pool I Home Equity Loans, Pool II Home
Equity Loans and Pool III Multifamily Loans are referred to herein collectively
as the "Loans". Simultaneously with the issuance and delivery of the Class A
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 Equity Asset Backed Certificates, Series 1997-A,
Class R-1 and Class R-2" (the "Class R Certificates"), and "The Money Store Home
Equity Asset Backed Certificates, Series 1997-A, Class X" (the "Class X
Certificates" and, together with the Class A Certificates and Class R
Certificates, the "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.
On or prior to the date of issuance of the Certificates, the Company
will obtain from MBIA Insurance Corporation ("MBIA") certificate guaranty
insurance policies (the "MBIA Policies") on behalf of the Trustee for the
benefit of the holders of the Class A 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 Class A 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 Class A 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 Class A 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 Class A 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 Class A 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 Class A
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 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 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, in
the case of the Company, the Indemnification Agreement (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, the
Pooling and Servicing Agreement and the Insurance Agreement dated
as of February 28, 1997 among the Company, the Originators, the
Trustee and MBIA (the "Insurance Agreement") (this Agreement, the
Pricing Agreement, the Pooling and Servicing Agreement, and the
Insurance Agreement being herein referred to, collectively, as
the "Basic Documents") and the Indemnification Agreement to be
dated as of March 25, 1997 (the "Indemnification Agreement")
among the Company, MBIA and the Representative, as representative
of the Underwriters.
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 Indemnification
Agreement; 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 and the Indemnification
Agreement, 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) Any person who signs the Indemnification Agreement on
behalf of the Company, will be, as of the time of such signing
and delivery, duly elected or appointed, qualified and acting,
and the Indemnification Agreement, as so executed, will have been
duly and validly authorized, and, when executed, will constitute
the valid, legal and binding agreement of the Company,
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.
viii) The Pooling and Servicing Agreement and the Insurance
Agreement have 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 and the MBIA Policies conform in all
material respects to the statements relating thereto contained in
the Prospectus.
ix) The 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 Class A Certificates,
delivered to the Underwriters 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.
x) 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 and, in the case of
the Company, the Indemnification Agreement, nor the execution and
delivery by the Company and the Originators of the Basic
Documents and, in the case of the Company, the Indemnification
Agreement nor the fulfillment of the terms of the Certificates or
each Basic Document and, in the case of the Company, the
Indemnification Agreement 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, in the case of the Company, the Indemnification
Agreement; 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 and, in the case
of the Company, the Indemnification Agreement will result in such
a breach, violation or default which would have such a material
adverse effect.
xi) 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 Indemnification Agreement 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 the Company or any
Originator of its obligations under the Basic Documents, or the
validity or enforceability of any Basic Document or the
Certificates and, in the case of the Company, the Indemnification
Agreement or (4) seeking to adversely affect the federal income
tax attributes of the Class A 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 and, in the case of the
Company, the Indemnification Agreement.
xii) 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 Class A 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 and the Indemnification Agreement.
xiii) No authorization, approval or consent of any court or
governmental authority or agency is necessary in connection with
the issuance or sale of the Class A 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.
xiv) 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 Class A
Certificates which they purchase, the Underwriters will have good
and marketable title to such Class A Certificates free and clear
of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity.
xv) The transfer of the Loans to the Trust Fund at Closing
Time 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.
xvi) 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.
xvii) Any taxes, fees and other governmental charges that
are assessed and due in connection with the execution, delivery
and issuance of the Basic Documents, the Indemnification
Agreement and the Class A 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.
xviii) 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 Class A Certificates set forth opposite its name
in Annex B hereto at the price per Class of Class A Certificate set forth below.
In the event that the pass-through rates for each Class of Class A 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 Class A 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 Time").
Each Class of Class A 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 Class A 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) 99.875000% 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) 99.850000% 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)
99.768750% 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) 99.775000% of the aggregate principal amount of the
Class A-4 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-4 Pass-Through Rate, (v) 99.718750% of the aggregate
principal amount of the Class A-5 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-5 Pass-Through Rate, (vi)
99.725000% of the aggregate principal amount of the Class A-6 Certificates being
purchased by such Underwriter, plus interest accrued at the Class A-6
Pass-Through Rate, (vii) 99.700000% of the aggregate principal amount of the
Class A-7 Certificates being purchased by such Underwriter, plus interest
accrued at the Class A-7 Pass-Through Rate, (viii) 99.625000% of the aggregate
principal amount of the Class A-8 Certificates being purchased by such
Underwriter, plus interest accrued at the Class A-8 Pass-Through Rate, (ix)
99.650000% of the aggregate principal amount of the Class A-9 Certificates being
purchased by such Underwriter, plus interest accrued at the Class A-9
Pass-Through Rate, (x) 00.000000% of the aggregate principal amount of the Class
A-10 Certificates being purchased by such Underwriter, plus interest accrued at
the Class A-10 Pass-Through Rate, (xi) 99.775000% of the aggregate principal
amount of the Class A-11 Certificates being purchased by such Underwriter, plus
interest accrued at the Class A-11 Pass-Through Rate, and (xii) 99.587500% of
the aggregate principal amount of the Class A-12 Certificates being purchased by
such Underwriter, plus interest accrued at the Class A-12 Pass-Through Rate.
With respect to the Class A-1 through Class A-9 Certificates, inclusive, and the
Class A-12 Certificates, inclusive, interest shall accrue at the applicable
Pass-Through Rate in each case from March 1, 1997 to, but not including, the
Closing Time. With respect to the Class A-10 Certificates, interest shall accrue
at the applicable Pass-Through Rate from March 15, 1997 to, but not including,
the Closing Time. With respect to the Class A-11 Certificates, interest shall
accrue at the applicable Pass-Through Rate from 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 Class A Certificates. The
certificates evidencing the Class A 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 Time.
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 Class A
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 Class A 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 Class A 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 Class A 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 and the
Indemnification Agreement; (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 Class A 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 each of
Xxxxx'x Investors Service, Inc. ("Moody's") and Standard & Poor's Rating
Services ("Standard & Poor's") for rating the Class A 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) (unless, in the case of Section 9(a)(i), such termination
arises from a change or development involving a prospective change in or
affecting the business or properties of MBIA), 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 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 Representative, as representative
of the Underwriters, shall have received:
i) The favorable opinion, dated as of Closing Time, of
Xxxxxxx & 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, the Pooling and
Servicing Agreement, the Insurance Agreement and the MBIA
Policies, 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 Insurance Agreement, the
Indemnification Agreement, 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, the Insurance Agreement,
the Pricing Agreement and the Indemnification 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 Insurance Agreement, the
Pooling and Servicing Agreement, the Pricing Agreement and
the Indemnification 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
Insurance Agreement, the Pricing Agreement, the
Indemnification 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 Class A 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 Class 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 Class A Certificate will be
considered qualified assets in the same proportion as the
REMIC Trust Fund's assets which are such items. A Class 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 Class
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 Class 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 Class 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, Xxxxxxx & Xxxxxxx & 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 Time, 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, the
Insurance Agreement and, in the case of the Company, the
Pricing Agreement, the Indemnification Agreement, the
Auction Agent Agreement and the Certificates, and have all
requisite power, authority and legal right to execute and
deliver this Agreement, the Pooling and Servicing Agreement,
the Insurance Agreement, and, in the case of the Company,
the Pricing Agreement, the Indemnification Agreement, the
Auction Agent 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 Insurance Agreement, the Pricing Agreement,
the Indemnification Agreement, and the Certificates each
have been duly authorized, executed and delivered by the
Company; this Agreement, the Pooling and Servicing Agreement
and the Insurance 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, the Insurance Agreement, or
in the case of the Company, the Pricing Agreement, the
Indemnification 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, the
Insurance Agreement, the Indemnification Agreement 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, the Insurance Agreement or the
Pooling and Servicing Agreement, or in the case of the
Company, the Pricing Agreement, the Indemnification
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, the Insurance Agreement or, in the case of the
Company, the Pricing Agreement, the Indemnification
Agreement or the Certificates, or the consummation of the
transactions contemplated therein, except such as may be
required under the blue sky laws of any jurisdiction and
such other approvals as have been obtained.
(G) The delivery by TMS Mortgage Inc. ("TMS") of
each Mortgage Note and Mortgage secured by real property
located in New Jersey as and in the manner contemplated by
the Pooling and Servicing Agreement is sufficient fully to
transfer to the Trustee for the benefit of the
Certificateholders all right, title and interest of TMS in
and to each such Loan including, without limitation, the
right to enforce each such Loan in accordance with its terms
to the extent enforceable by TMS at the time of such
delivery.
iii) The favorable opinion, dated as of Closing Time, of
Xxxxx Xxxx, counsel for MBIA, in form and substance satisfactory to
counsel for the Underwriters, to the effect that:
(A) MBIA is a stock insurance corporation, duly
incorporated and validly existing under the laws of the
State of New York. MBIA is validly licensed and authorized
to issue the MBIA Policies and perform its obligations under
the MBIA Policies in accordance with the terms thereof,
under the laws of the State of New York.
(B) The execution and delivery by MBIA of the MBIA
Policies, the Insurance Agreement and the Indemnification
Agreement are within the corporate power of MBIA and have
been authorized by all necessary corporate action on the
part of MBIA; the MBIA Policies have been duly executed and
is the valid and binding obligation of MBIA enforceable in
accordance with its terms except that the enforcement of the
MBIA Policies may be limited by laws relating to bankruptcy,
insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and
by general principles of equity.
(C) MBIA is authorized to deliver the Insurance
Agreement and the Indemnification Agreement, and the
Insurance Agreement and the Indemnification Agreement have
been duly executed and are the valid and binding obligations
of MBIA enforceable in accordance with their respective
terms except that the enforcement of the Insurance Agreement
and the Indemnification Agreement may be limited by laws
relating to bankruptcy, insolvency, reorganization,
moratorium, receivership and other similar laws affecting
creditors' rights generally and by general principles of
equity and by public policy considerations relating to
indemnification for securities law violations.
(D) No consent, approval, authorization or order
of any state or federal court or govern-mental agency or
body is required on the part of MBIA, the lack of which
would adversely affect the validity or enforceability of the
MBIA Policies; to the extent required by applicable legal
requirements that would adversely affect the validity or
enforceability of the MBIA Policies, the form of the MBIA
Policies has been filed with, and approved by, all
governmental authorities having jurisdiction over MBIA in
connection with such MBIA Policies.
(E) To the extent the MBIA Policies constitute
securities within the meaning of Section 2(l) of the
Securities Act of 1933, as amended (the "Act"), it is a
security that is exempt from the registration requirements
of the Act.
(F) The information set forth under the caption
"MBIA Policies and MBIA" in the Prospectus Supplement,
relating to the offer and sale of the Class A Certificates,
to the Prospectus forming a part of the Registration
Statement on Form S-3 (No. 333-20817) filed by the Company
with the Securities and Exchange Commission and declared
effective on March 7, 1997, insofar as such statements
constitute a description of the MBIA Policies, accurately
summarizes the MBIA Policies.
In rendering this opinion, such counsel may rely, as to matters of fact, on
certificates of responsible officers of the Company, the Trustee, MBIA 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 MBIA.
iv) The favorable opinion, dated as of Closing Time, of
Xxxxxx, Xxxxxx & Xxxxxx, counsel for the Trustee, in form and
substance satisfactory to counsel for the Underwriters.
v) In giving its opinion required by subsection (b)(i) of
this Section, Stroock & Stroock & Xxxxx LLP shall additionally state
that nothing has come to its attention that has caused it to believe
that the Registration Statement, at the time it became effective,
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a
prospectus which has been provided to the Representative, as
representative of the Underwriters, by the Company for use in
connection with the offering of the Class A 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 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, the
information under the heading "The MBIA Policies and MBIA" therein,
and the information in the Exhibits thereto, as to which such counsel
need express no view).
(c) At Closing Time, the Representative, as representative of the
Underwriters, shall have received from Stroock & Xxxxxxx & Xxxxx LLP, counsel
for the Underwriters, a letter, dated as of Closing Time, authorizing the
Representative, as representative of the Underwriters, to rely upon each opinion
delivered by Stroock & Stroock & Xxxxx LLP to each of Xxxxx'x and 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 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 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 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) 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 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 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 Time 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 Time 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 Time.
(f) At Closing Time, the Representative, as representative of the
Underwriters, shall have received from the Trustee a certificate signed by one
or more duly authorized officers of the Trustee, dated as of Closing 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 Representative, as representative of the Underwriters, shall request.
(g) At Closing Time, the Representative, as representative of the
Underwriters, shall have received a certificate signed by one or more duly
authorized officers of MBIA, dated as of Closing Time, to the effect that the
information contained under the caption "The MBIA Policies and MBIA" in the
Prospectus and in the Exhibits A and B to the Prospectus is true and accurate in
all material respects and such other matters as the Representative, as
representative of the Underwriters, shall request.
(h) At Closing Time, 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 Time
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 Loans" 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 Time 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 Indemnification Agreement,
the Insurance 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, (d) the Insurance Agreement, (e) the Indemnification
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) 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 Class A 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 A-2,
Class A- 3, Class A-4, Class A-5, Class A-6, Class A-7, Class A-8,
Class A-9, Class A-10, Class A-11 and Class A-12 Certificates, in each
case using the applicable pricing speed and a weighted average coupon
(or, in the case of the Pool II Home Equity Loans, the weighted
average margin) and weighted average maturity based upon the Loans
actually delivered to the Trustee, will not vary by more than 1/10th
of one year from 0.54 years, 1.29 years, 2.07 years, 3.07 years, 4.04
years, 5.19 years, 7.20 years, 11.34 years, 6.97 years, 1.95 years,
8.6 years and 6.82 years, respectively.
(i) At Closing Time, each Class of the Class A Certificates shall
have been rated "Aaa" by Xxxxx'x and "AAA" by Standard & Poor's.
(j) At Closing Time, 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 Class
A 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 Class A
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 Time the Company and the Originators
shall have delivered to the Trustee, to hold in trust for the benefit of the
holders of the Certificates, Pool I and Pool II Home Equity Loans and Pool III
Multifamily Loans (as defined in the Prospectus) with aggregate outstanding
principal balances as of the Cut-Off Date of at least $349,608,381.20,
$255,021,932.51 and $9,990,998.35, respectively. The Company and the Originators
shall, immediately following the sale of the Class A 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
A-2, Class A-3, Class A-4, Class A- 5, Class A-6, Class A-7, Class A-8 and Class
A-9 Certificates (i.e., $349,608,381.20) over (ii) the aggregate discounted
outstanding principal balances as of the Cut-Off Date of the Pool I Home Equity
Loans actually delivered to the Trustee, (B) the excess of (i) the aggregate
initial principal balance of the Class A-10 and Class A-11 Certificates (i.e.,
$255,021,932.51) over (ii) the aggregate outstanding principal balances as of
the Cut-Off Date of the Pool II Home Equity Loans actually delivered to the
Trustee, and (C) the excess of (i) the aggregate initial principal balance of
the Class A-12 Certificates (i.e., $9,990,998.35) over (ii) the aggregate
outstanding principal balances as of the Cut-Off Date of the Pool III
Multifamily Loans actually delivered to the Trustee.
(l) On or before the Closing Time 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 Time, 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 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 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 Class A 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 Class A 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 Class A 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 Class A Certificates set forth next to such
Underwriter's name on Annex B hereto over the underwriting discount allocated to
such principal amount of Class A 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 1933 Act) 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 Class A 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 Class A 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 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 and the Originators considered as one
entity or MBIA which, in the reasonable judgment of the Representative, as
representative of the Underwriters, materially impairs the investment quality of
the Class A Certificates; (ii) if there has occurred any downgrading in the
rating of the debt securities of MBIA by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the 1933 Act)
which, in the reasonable judgment of the Representative, as representative of
the Underwriters, materially impairs the investment quality or marketability of
the Class A Certificates or if any debt security of MBIA has been put on the
"watch list" of any such rating organization with negative implications; (iii)
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; (iv) if any banking
moratorium has been declared by Federal or New York authorities; or (v) 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 Class A 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 Time to purchase the Class A 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 Time 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 Class A 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 NoAction Letter of May 20, 1994 issued by the
Commission to Xxxxxx, Xxxxxxx 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" 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 Prudential, as representative of the
Underwriters, Xxx Xxx Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, 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 Class A 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:
PRUDENTIAL SECURITIES INCORPORATED
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
Prudential Salomon
Securities Brothers Bear, Xxxxxxx Xxxxxx Xxxxxxx Xxxxx
Incorporated Inc. & Co. Inc. Brothers Inc. Co. Total
Class A-1 $44,000,000 $18,300,000 $17,000,000 $6,000,000 $9,000,000 $94,300,000
Class A-2 30,000,000 11,600,000 10,500,000 4,000,000 7,000,000 63,100,000
Class A-3 35,000,000 13,800,000 12,000,000 6,000,000 9,000,000 75,800,000
Class A-4 29,000,000 11,600,000 10,500,000 4,000,000 6,000,000 61,100,000
Class A-5 14,500,000 5,600,000 5,000,000 2,000,000 4,000,000 31,100,000
Class A-6 21,000,000 8,500,000 7,500,000 4,000,000 4,000,000 45,000,000
Class A-7 14,000,000 5,600,000 5,000,000 2,000,000 4,000,000 30,600,000
Class A-8 15,000,000 6,000,000 5,000,000 3,000,000 3,000,000 32,000,000
Class A-9 18,000,000 7,000,000 6,000,000 3,000,000 3,000,000 37,000,000
Class A-10 120,000,000 60,000,000 45,000,000 10,000,000 25,000,000 260,000,000
Class A-11 30,000,000 0 0 30,000,000 0 60,000,000
Class A-12 4,500,000 2,000,000 1,500,000 1,000,000 1,000,000 10,000,000
----------- ------------ ------------ ------------ ----------- ------------
Total $375,000,000 $150,000,000 $125,000,000 $75,000,000 $75,000,000 $800,000,000
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