$140,000,000
THE MONEY STORE INC.
The Money Store SBA Loan-Backed Adjustable Rate Certificates,
Series 1997-1
UNDERWRITING AGREEMENT
September 26, 1997
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), The Money
Store Investment Corporation, a New Jersey corporation, and The Money Store of
New York, Inc., a New York corporation ("TMSIC" and "MSNY", respectively, each a
"Seller" and together the "Sellers"), hereby confirm their agreement with
Prudential Securities Incorporated (the "Underwriter") with respect to the
delivery by the Sellers, of certificates entitled "The Money Store SBA
Loan-Backed Adjustable Rate Certificates, Series 1997-1, Class A (the "Class A
Certificates") and Class B (the "Class B Certificates," and together with the
Class A Certificates, the "Certificates"), to be issued pursuant to a Pooling
and Servicing Agreement, to be dated as of August 31, 1997 (the "Pooling and
Servicing Agreement"), among the Company, as Representative, TMSIC, as servicer
(in such capacity, the "Servicer"), MSNY and Marine Midland Bank, as trustee
("Marine Midland" or, in its capacity as trustee under the Pooling and Servicing
Agreement, the "Trustee"). The initial aggregate principal amount of the Class A
Certificates shall be approximately $130,200,000, and the initial aggregate
principal amount of the Class B Certificates shall be approximately $9,800,000.
The Certificates represent the entire beneficial ownership interest in a trust
fund (the "Trust Fund") created by the Sellers which consists primarily of the
right to receive payments and other recoveries attributable to certain
unguaranteed interests (the "Unguaranteed Interests") in a pool of loans (the
"SBA Loans") made pursuant to Section 7(a) of the Small Business Act, as
amended, which are partially guaranteed by the U.S. Small Business
Administration (the "SBA").
As to any SBA Loan, the right to receive the guaranteed portion of the
principal balance thereof together with interest thereon at the per annum rate
in effect from time to time (less certain fees) is referred to herein as the
"Guaranteed Interest." The "Unguaranteed Interest" will equal as to any SBA
Loan, all payments and other recoveries on such SBA Loan not constituting the
Guaranteed Interest therein. The interest accruing on the guaranteed portion of
the principal balance of each SBA Loan in excess of the sum of the interest
payable to the related holder of the Guaranteed Interest net of certain fees is
hereinafter referred to as the "Excess Spread."
Prior to the delivery of the Certificates by the Sellers, and the public
offering thereof by the Underwriter, the Sellers and the Underwriter shall enter
into an agreement substantially in the form of Exhibit A hereto (the "Pricing
Agreement"). The Pricing Agreement shall be between the Sellers and the
Underwriter and shall specify such applicable information as is indicated in,
and be in substantially the form of, Exhibit A hereto. The offering of the
Certificates will be governed by this Agreement, as supplemented by the Pricing
Agreement. From and after the date of the execution and delivery of the Pricing
Agreement, this Agreement shall be deemed to incorporate the Pricing Agreement.
The Sellers, the Servicer, the Trustee and the SBA will enter into a
Multi-Party Agreement, dated August 31, 1997 (the "Multi-Party Agreement"),
which will set forth the relationship of the parties with respect to the SBA
Loans and the proceeds thereof and the consent of the SBA to the transactions
contemplated by the Pooling and Servicing Agreement.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement.
The Sellers understand that the Underwriter proposes to make a public
offering of the Certificates as soon as the Underwriter deems advisable after
the Pricing Agreement has been executed and delivered.
Section 1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE SELLERS.
(a) The Company and the Sellers represent and warrant to the Underwriter as
of the date hereof and, if the Pricing Agreement is executed on a date other
than the date hereof, as of the date of the Pricing Agreement (such latter date
being hereinafter referred to as the "Representation Date") as follows:
(i) The Sellers have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-3 (No. 333-32775)
including a prospectus, and such amendments thereto as may have been
required to the date hereof, relating to the Certificates and the offering
thereof from time to time in accordance with Rule 415 under the Securities
Act of 1933, as amended (the "1933 Act"), and such registration statement,
as amended, has become effective. Such registration statement, as amended,
and the prospectus relating to the sale of the Certificates constituting a
part thereof as from time to time amended or supplemented (including any
prospectus supplement (the "Prospectus Supplement") filed with the
Commission pursuant to Rule 424 of the rules and regulations of the
Commission under the 1933 Act (the "1933 Act Regulations") and any
information incorporated therein by reference) are respectively referred to
herein as the "Registration Statement" and the "Prospectus." The conditions
of Rule 415 under the 1933 Act have been satisfied with respect to the
Company and the Registration Statement.
(ii) At the time the Registration Statement became effective and at the
Representation Date, the Registration Statement complied and will comply in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading. The
Prospectus, at the Representation Date (unless the term "Prospectus" refers
to a prospectus which has been provided to the Underwriter by the Company
for use in connection with the offering of the Certificates which differs
from the Prospectus on file at the Commission at the time the Registration
Statement became effective, in which case at the time it is first provided
to the Underwriter for such use) and at Closing Time referred to in Section
2 hereof, will not include an untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the representations and warranties in
this subsection shall not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with information furnished to the Company in writing by the
Underwriter expressly for use in the Registration Statement or Prospectus;
and provided further, that neither the Company nor the Sellers make any
representations or warranties as to any information in any Computational
Materials (as defined below) provided by the Underwriter to the Company
pursuant to Section 10. The conditions to the use by the Company of a
registration statement on Form S-3 under the 1933 Act, as set forth in the
General Instructions to Form S-3, have been satisfied with respect to the
Registration Statement and the Prospectus.
(iii) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, except as otherwise stated
therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs or business
prospects of the Sellers and their subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business,
which would have a material adverse effect on the ability of any Seller to
perform its obligations under the Basic Documents (as defined below) to
which it is a party and (B) there have been no transactions entered into by
the Sellers or any of their subsidiaries, other than those in the ordinary
course of business, which would have a material adverse effect on the
ability of any Seller to perform its obligations under this Agreement, the
Pricing Agreement, the Pooling and Servicing Agreement and, in the case of
TMSIC and MSNY, the Multi-Party Agreement (this Agreement, the Pricing
Agreement, the Pooling and Servicing Agreement, and the Multi-Party
Agreement being herein referred to, collectively, as the "Basic
Documents").
(iv) Each of the Sellers has been duly organized and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation with all requisite power and authority to
own, lease and operate its properties and to conduct its business as
described in the Prospectus and to enter into and perform its obligations
under the Basic Documents to which it is a party; and each of the Sellers
is duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is required,
whether by reason of the ownership or leasing of property or the conduct of
business, except where the failure to so qualify would not have a material
adverse effect on, (A) the Seller's ability to perform its obligations
under the Basic Documents to which it is a party, or (B) the business,
properties, financial position, operations or results of operations of the
Seller.
(v) Any person who signed this Agreement on behalf of any Seller, was,
as of the time of such signing and delivery, and is now duly elected or
appointed, qualified and acting, and the Agreement, as so executed, is duly
and validly authorized, executed, and constitutes the valid, legal and
binding agreement of the Company and each Seller, enforceable in accordance
with its terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement
of creditors' rights in general and by general principles of equity
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(vi) Each Basic Document has been duly and validly authorized by each
Seller that is a party thereto and, when executed and delivered by each
Seller and duly and validly authorized, executed and delivered by the other
parties thereto, will constitute, the valid and binding agreement of each
such Seller, enforceable in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization or
other similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity regardless of whether such
enforcement is considered in a proceeding in equity or at law; and such
Basic Documents conform in all material respects to the statements relating
thereto contained in the Prospectus.
(vii) The Certificates have been duly and validly authorized by the
Servicer and, when executed and delivered by the Servicer and authenticated
by the Trustee as specified in the Pooling and Servicing Agreement and
delivered to the Underwriter pursuant to this Agreement, the Certificates
will be duly and validly issued and outstanding and entitled to the
benefits of the Pooling and Servicing Agreement; and the Certificates
conform in all material respects to all statements relating thereto
contained in the Prospectus.
(viii) Neither the issuance or delivery of the Certificates, nor the
consummation of any other of the transactions herein contemplated or in any
other Basic Document, nor the execution and delivery by each Seller of the
Basic Documents to which it is a party, nor the fulfillment of the terms of
the Certificates or each such Basic Document will result in the breach of
any term or provision of the charter or by-laws of any Seller, and no
Seller is in breach or violation of or in default (nor has an event
occurred which with notice or lapse of time or both would constitute a
default) under the terms of (A) any material obligation, agreement,
covenant or condition contained in any material contract, indenture, loan
agreement, note, lease or other material instrument to which such Seller is
a party or by which it may be bound, or to which any of the property or
assets of such Seller is subject, or (B) any law, decree, order, rule or
regulation applicable to such Seller or the SBA Loans of any court or
supervisory, regulatory, administrative or governmental agency, body or
authority, or arbitrator having jurisdiction over such Seller or their
properties or the SBA Loans, the default in or the breach or violation of
which would have a material adverse effect on such Seller or the ability of
such Seller to perform its obligations under the Basic Documents to which
it is a party; and neither the issuance or delivery of the Certificates,
nor the consummation of any other of the transactions herein contemplated,
nor the fulfillment of the terms of the Certificates or the Basic Documents
will result in such a breach, violation or default which would have such a
material adverse effect.
(ix) Except as described in the Prospectus, there is no action, suit or
proceeding against or investigation of any Seller, now pending, or, to the
knowledge of any Seller, threatened against any Seller, before any court,
governmental agency or body (A) which is required to be disclosed in the
Prospectus (other than as disclosed therein) or (B) (1) asserting the
invalidity of any Basic Document or the Certificates, (2) seeking to
prevent the issuance of the Certificates or the consummation of any of the
transactions contemplated by the Basic Documents, (3) which would
materially and adversely affect the performance by any Seller of its
obligations under the Basic Documents to which it is a party, or the
validity or enforceability of any Basic Document or the Certificates or (4)
seeking to adversely affect the federal income tax attributes of the
Certificates described in the Prospectus; all pending legal or governmental
proceedings to which any Seller is a party or of which any of its property
or assets is the subject which are not described in the Prospectus,
including ordinary routine litigation incidental to the business, are,
considered in the aggregate, not material to such Seller's ability to
perform its obligations under the Basic Documents to which it is a party.
(x) Each Seller possesses such licenses, certificates, authorities or
permits issued by the appropriate state or federal regulatory agencies or
governmental bodies necessary to conduct the businesses now conducted by it
(except where the failure to possess any such license, certificate,
authority or permit would not materially and adversely affect the holders
of the Certificates) and no Seller has received any notice of proceedings
relating to the revocation or modification of any such license,
certificate, authority or permit which, singly or in the aggregate, if the
subject of any unfavorable decision, ruling or finding, would materially
and adversely affect the ability of such Seller to perform its obligations
under the Basic Documents.
(xi) No authorization, approval or consent of any court or governmental
authority or agency is necessary in connection with the issuance or sale of
the Certificates hereunder, except such as may be required under the 1933
Act or the 1933 Act Regulations or state securities laws.
(xii) At the time of execution and delivery of the Pooling and
Servicing Agreement by the Company, the Sellers and the Trustee, the
Trustee will have acquired good title on behalf of the Trust Fund to the
Unguaranteed Interests, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity, and, upon delivery to the
Underwriter of the Certificates, the Underwriter will have good and
marketable title to the Certificates free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equity.
(xiii) The transfer of the Unguaranteed Interests to the Trust Fund at
Closing Time will be treated by the Sellers for financial accounting and
reporting purposes as a sale of assets and not as a pledge of assets to
secure debt.
(xiv) Any taxes, fees and other governmental charges that are assessed
and due in connection with the execution, delivery and issuance of the
Basic Documents and the Certificates which have become due or will become
due on or prior to Closing Time shall have been paid at or prior to Closing
Time.
(xv) The Trust Fund is not required to be registered as an "investment
company" under the Investment Company Act of 1940 (the "1940 Act").
(b) Any certificate signed by any officer of either Seller and delivered to
the Underwriter or counsel for the Underwriter shall be deemed a representation
and warranty by such Seller as to the matters covered thereby.
Section 2. DELIVERY TO THE UNDERWRITER; CLOSING.
(a) On the basis of the representations and warranties herein contained and
subject to the terms and conditions herein set forth, each Seller agrees to
deliver the Certificates to the Underwriter. In the event that the initial
remittance rates and prices for each Class of Certificates have not been agreed
upon and the Pricing Agreement has not been executed and delivered by all
parties thereto by the close of business on the fourth business day following
the date of this Agreement, this Agreement shall terminate forthwith, without
liability of any party to any other party, unless otherwise agreed upon by the
Underwriter and the Sellers.
(b) Delivery of the Certificates shall be made at the offices of Stroock &
Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, or at such
other place as shall be agreed upon by the Underwriter and the Sellers, at 11:00
A.M., New York City time, on September 29, 1997, or such other time not later
than ten business days after such date as shall be agreed upon by the
Underwriter and the Sellers (such time and date of payment and delivery being
herein called "Closing Time").
(c) The Certificates will initially be represented as follows:
(i) The Class A Certificates will initially be represented by one or
more certificates registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC").
(ii) The Class B Certificates will initially be represented by one or
more certificates registered in the name of Cede & Co., the nominee of DTC.
For purposes of this Agreement, all Certificates initially represented by
one or more certificates registered in the name of Cede & Co., the nominee of
DTC, shall be referred to herein, collectively, as the "DTC Certificates."
The interests of beneficial owners of the DTC Certificates will be
represented by book entries on the records of DTC and participating members
thereof. Definitive certificates evidencing the Certificates will be available
in exchange for DTC Certificates only under the limited circumstances specified
in the Pooling and Servicing Agreement. The DTC Certificates and Tail
Certificate to be purchased by the Underwriter will be delivered by the Sellers
to the Underwriter (which delivery in the case of the DTC Certificates shall be
made through the facilities of DTC) against payment of the purchase price
therefor. The Underwriter hereby agrees, subject to the terms, conditions and
provisions hereof, to purchase from the Sellers the Class A Certificates and the
Class B Certificates at the price of 99.50% of the aggregate initial principal
amount of the Class A and Class B Certificates plus accrued interest on such
aggregate initial principal amount at the weighted average Initial Remittance
Rates from September 15, 1997 to, but not including, the Closing Date. The
purchase price shall be paid by the Underwriter by a same day federal funds wire
payable to the order of the Sellers. The Certificates will be made available for
examination by the Underwriter not later than 10:00 A.M. on the last business
day prior to Closing Time.
(d) The Class A Certificates and the Class B Certificates shall be offered
to the public from time to time for sale in negotiated transactions or
otherwise, at prices determined at the time of sale.
Section 3. COVENANTS OF THE COMPANY AND THE SELLERS. The Company and the
Sellers covenant with the Underwriter as follows:
(a) The Sellers will promptly notify the Underwriter, and confirm the
notice in writing, (i) of any amendment to the Registration Statement; (ii)
of any request by the Commission for any amendment to the Registration
Statement or any amendment or supplement to the Prospectus or for
additional information; (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
initiation or threatening of any proceedings for that purpose; and (iv) of
the receipt by either Seller of any notification with respect to the
suspension of the qualification of the Certificates for sale in any
jurisdiction or the initiation or threatening of any proceedings for that
purpose. The Sellers will make every reasonable effort to prevent the
issuance of any stop order and, if any stop order is issued, to obtain the
lifting thereof at the earliest possible moment.
(b) The Sellers will give the Underwriter notice of their intention to
file or prepare any amendment to the Registration Statement or any
amendment or supplement to the Prospectus (including any revised prospectus
which the Sellers propose for use by the Underwriter in connection with the
offering of the Certificates which differs from the prospectus on file at
the Commission at the time the Registration Statement becomes effective,
whether or not such revised prospectus is required to be filed pursuant to
Rule 424(b) of the 1933 Act Regulations), will furnish the Underwriter with
copies of any such amendment or supplement a reasonable amount of time
prior to such proposed filing or use, as the case may be, and, unless
required by law to do so, will not file any such amendment or supplement or
use any such prospectus to which the Underwriter or counsel for the
Underwriter shall reasonably object.
(c) The Sellers will deliver to the Underwriter as many signed and as
many conformed copies of the Registration Statement as originally filed and
of each amendment thereto (in each case including exhibits filed therewith)
as the Underwriter may reasonably request.
(d) The Sellers will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the
1933 Act or the Securities Exchange Act of 1934, as amended (the "1934
Act"), such number of copies of the Prospectus (as amended or supplemented)
as the Underwriter may reasonably request for the purposes contemplated by
the 1933 Act or the 1934 Act or the respective applicable rules and
regulations of the Commission thereunder.
(e) If any event shall occur as a result of which it is necessary, in
the reasonable opinion of counsel for the Underwriter, to amend or
supplement the Prospectus in order to make the Prospectus not misleading in
the light of the circumstances existing at the time it is delivered to a
purchaser, the Sellers will forthwith amend or supplement the Prospectus
(in form and substance satisfactory to counsel for the Underwriter) so
that, as so amended or supplemented, the Prospectus will not include an
untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances existing at the time it is delivered to a purchaser, not
misleading, and the Sellers will furnish to the Underwriter a reasonable
number of copies of such amendment or supplement.
(f) The Sellers will endeavor, in cooperation with the Underwriter, to
qualify the Certificates for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United States
as the Underwriter may designate; provided, however, that no Seller shall
be obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified. In each jurisdiction in which the
Certificates have been so qualified, each Seller will file such statements
and reports as may be required by the laws of such jurisdiction to continue
such qualification in effect for a period of not less than one year from
the date hereof.
(g) So long as any Certificates shall be outstanding, the Sellers will
deliver to the Underwriter, as promptly as practicable, such information
concerning the Sellers or the Certificates as the Underwriter may
reasonably request from time to time.
Section 4. PAYMENT OF EXPENSES. The Sellers will pay all expenses incident
to the performance of their obligations under this Agreement, including (i) the
printing (or other reproducing) and filing of the Registration Statement as
originally filed and of each amendment thereto (other than amendments relating
to the filing of Computational Materials pursuant to Section 10); (ii) the
reproducing of the Basic Documents; (iii) the preparation, printing, issuance
and delivery of the certificates for the DTC Certificates to the Underwriter;
(iv) the fees and disbursements of (A) the Underwriter's counsel, (B) KPMG Peat
Marwick, accountants for the Company and issuer of the comfort letter, (C) the
Trustee and its counsel and (D) DTC in connection with the book-entry
registration of the DTC Certificates; (v) the qualification of the Certificates
under state securities laws in accordance with the provisions of Section 3(f)
hereof, including filing fees and the fees and disbursements of counsel for the
Underwriter in connection therewith and in connection with the preparation of
the Blue Sky Survey; (vi) the printing (or other reproducing) and delivery to
the Underwriter of copies of the Registration Statement as originally filed and
of each amendment thereto, of each preliminary prospectus and of the Prospectus
and any amendments or supplements thereto; (vii) the fees charged by each of
Xxxxx'x Investors Service, Inc. ("Moody's") and Duff & Xxxxxx Credit Rating Co.
("Duff & Xxxxxx") for rating the Certificates; and (viii) the reproducing and
delivery to the Underwriter of copies of the Blue Sky Survey.
If this Agreement is terminated by the Underwriter in accordance with the
provisions of Section 5 or Section 9(a)(i), the Sellers shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
Section 5. CONDITIONS OF THE UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company and the Sellers herein contained, to the performance
by Sellers of their respective obligations hereunder, and to the following
further conditions:
(a) The Registration Statement shall have become
effective and, at Closing Time, no stop order suspending the
effectiveness of the Registration Statement shall have been issued
under the 1933 Act or proceedings therefor initiated or threatened by
the Commission. As of the Closing Time, the Prospectus shall have been
filed with the Commission in accordance with Rule 424 of the 1933 Act
Regulations.
(b) At Closing Time, the Underwriter shall have received:
(i) The favorable opinion, dated as of Closing Time, of Stroock &
Stroock & Xxxxx LLP, counsel for the Underwriter, to the effect that:
(A) The Registration Statement is
effective under the 1933 Act, and, to the best of
their knowledge and information, no stop order
suspending the effectiveness of the Registration
Statement has been issued under the 1933 Act or
proceedings therefor initiated or threatened by the
Commission.
(B) At the time the Registration
Statement became effective and at the Representa-
tion Date, the Registration Statement (other than the
financial, numerical, statistical and quanti- tative
information included therein, as to which no opinion
need be rendered) complied as to form in all material
respects with the requirements of the 1933 Act and
the Rules and Regulations thereunder.
(C) The information in the
Prospectus under "Description of the Certificates"
and "The Agreements" and the information in the
Prospectus Supplement under "Description of the
Agreement and the Certificates" insofar as they
constitute summaries of certain provisions of the
Certificates and the Pooling and Servicing Agreement,
summarizes fairly such provisions.
(D) The information in the
Prospectus under "Summary of Terms -- Federal Income
Tax Consequences," "Summary of Terms -- ERISA
Considerations," "Federal Income Tax Consequences,"
"ERISA Considerations," "Legal Aspects of the SBA
Loans," and "Risk Factors -The Status of the SBA
Loans in the Event of Bankruptcy of an Originator"
and in the Prospectus Supplement under "Summary of
Terms -- Tax Considerations," "Summary of Terms --
ERISA Considerations," "Federal Income Tax
Consequences," and "ERISA Considerations," to the
extent that they constitute matters of federal, New
York or California law, summaries of legal matters,
documents or proceedings or legal conclusions, has
been reviewed by them and is correct in all material
respects.
(E) TMSIC and MSNY have been duly
organized and are validly existing and are in good
standing under the laws of their jurisdiction of
incorporation. TMS SBA Holdings, Inc. (the "Spread
Account Depositor") has been duly organized and is
validly existing and in good standing under the laws
of the State of Delaware.
(F) Each Seller has the power to
engage in the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement, the
Pricing Agreement, the Certificates and, with respect
to TMSIC and MSNY, the Multi-Party
Agreement, and has all requisite power, authority
and legal right to execute and deliver this
Agreement, the Pooling and Servicing Agreement, the
Pricing Agreement, the Certificates and, with respect
to TMSIC and MSNY, the Multi-Party Agreement, (and
any other documents delivered in connection
therewith) and to perform and observe the terms and
conditions of such instruments.
(G) The Pooling and Servicing
Agreement, the Multi-Party Agreement, the
Certificates, the Pricing Agreement and this
Agreement each have been duly authorized, executed
and delivered by each of the Sellers that is a party
thereto. Assuming due authorization, execution and
delivery by the other parties thereto, the Pooling
and Servicing Agreement, the Certificates, the Multi-
Party Agreement, the Pricing Agreement and this
Agreement are legal, valid and binding agreements
enforceable in accordance with their respective terms
against each Seller that is a party thereto, as the
case may be, subject (a) to the effect of bankruptcy,
insolvency, reorganization, moratorium and similar
laws relating to or affecting creditors' rights
generally and court decisions with respect thereto,
(b) to the understanding that no opinion is expressed
as to the application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable
securities laws as to rights of indemnity and
contribution thereunder.
(H) This Agreement and the Pooling
and Servicing Agreement have been duly authorized,
executed and delivered by the Company. Assuming due
authorization, execution and delivery by the other
parties thereto, this Agreement and the Pooling and
Servicing Agreement are legal, valid and binding
agreements enforceable in accordance with their terms
against the Company, subject (a) to the effect of
bankruptcy, insolvency, reorganization, fraudulent
conveyance, moratorium and similar laws relating to
or affecting creditors' rights generally, (b) to the
understanding that no opinion is expressed as to the
application of equitable principles in any
proceeding, whether at law or in equity, and (c) to
limitations of public policy under applicable
securities laws as to rights of indemnity and
contribution thereunder.
(I) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by any Seller of, or
compliance by any Seller with, the Pooling and
Servicing Agreement, the Pricing Agreement, this
Agreement and, with respect to TMSIC and MSNY, the
Multi-Party Agreement, or the offer, issuance, sale
or delivery of the Certificates, or the consummation
of any other transactions by the Sellers contemplated
by the Pooling and Servicing Agreement, the Pricing
Agreement, this Agreement and, with respect to TMSIC
and MSNY, the Multi-Party Agreement, except as may
be required under the blue sky laws of any
jurisdiction (as to which such counsel need not
opine) and such other approvals as have been
obtained.
(J) Neither the transfer of the
Unguaranteed Interests to the Trust Fund, the
consummation of the transactions contemplated by, nor
the fulfillment of the terms of, the Pooling and
Servicing Agreement, the Multi-Party Agreement, the
Pricing Agreement and this Agreement
or the Certificates, conflicts or will
conflict with or results or will result in a breach
of or constitutes or will constitute a
default under (a) the Certificate of Incorporation
or Bylaws of any Seller, (b) the terms of any
material indenture or other material agreement or
instrument of which counsel has knowledge to which
any Seller is a party or by which it is bound or to
which it is subject or (c) any statute or order,
rule, regulation, writ, injunction or decree of which
counsel has knowledge of any court, governmental
authority or regulatory body to which any Seller is
subject or by which it is bound.
(K) The sale of the Certificates and
the delivery of each SBA Note and Mortgage as and in
the manner contemplated by the Underwriting Agreement
and the Pooling and Servicing Agreement is sufficient
fully to transfer to the Trustee for the benefit of
the Certificateholders all right, title and interest
of the applicable Seller in and to the Unguaranteed
Interest of each SBA Loan, including, without
limitation, the right to enforce each such SBA Loan
in accordance with its terms to the extent
enforceable by the related Seller at the time of such
sale and delivery and subject to the provisions of
the Multi-Party Agreement. With respect to the
transfer of the SBA Loans by the Sellers, such
counsel need express no opinion as to (i) except
for transfers by MSNY, whether the laws of the
State of New York would apply to the transfer of
the related SBA Loans or (ii) the effectiveness of
the transfer of the SBA Loans under the laws of the
jurisdiction in which TMSIC is located
or the jurisdiction in which the SBA Loans were
originated or the right of the Trustee to
enforce such SBA Loans.
(L) The Certificates, assuming due
execution by the Sellers, due authorization by the
Trustee, and delivery and payment therefore pursuant
to the Underwriting Agreement, will be validly issued
and outstanding and entitled to the benefits of the
Pooling and Servicing Agreement.
(M) Assuming compliance with all
provisions of the Pooling and Servicing Agreement,
for federal income tax purposes, the Trust Fund will
be classified as a "grantor trust" and not as an
association taxable as a corporation. The "Spread"
(as defined in the Registration Statement) will be
treated as "Stripped Coupons" within the meaning of
Section 1286 of the Internal Revenue Code of 1986,
as amended (the "Code"). A portion of the interest
accrued on each SBA Loan will be treated as a
"Stripped Coupon" purchased by the Class B
Certificateholders. Each Class A Certificateholder
will be treated as owning its pro rata percentage
interest in the principal of, and interest payable
on, the Unguaranteed Interest of each SBA Loan (minus
the portion of the interest payable on such SBA Loan
that is treated as Spread or as a Stripped Coupon
purchased by the Class B Certificateholders) and
such interest in the Unguaranteed Interest of each
SBA Loan will be treated as a "Stripped Bond" within
the meaning of Section 1286 of the Code. Each Class B
Certificateholder will be treated as owning its pro
rata percentage interest in the principal of the
Unguaranteed Interest of each SBA Loan, plus a
disproportionate share of the interest payable on
each SBA Loan. Additionally, the Trust Fund will not
be subject to New York State income or
franchise tax.
(N) Neither the qualification of the
Pooling and Servicing Agreement under the Trust
Indenture Act of 1939, as amended, nor the
registration of the Trust Fund created by such
Agreement under the Investment Company Act of 1940,
as amended, is presently required.
In rendering such opinion, Stroock & Stroock & Xxxxx LLP may rely
on certificates of responsible officers of the Company, the Sellers,
the Trustee, and public officials or, as to matters of law other than
New York, California or Federal law, on opinions of other counsel
(copies of which opinions shall be delivered to you).
(ii) The favorable opinion, dated as
of Closing Time, of corporate counsel for the Sellers and the
Company, in form and substance satisfactory to counsel for the
Underwriter, to the effect that:
(A) Each of TMSIC and the Company
has been duly organized and is validly existing and
is in good standing under the laws of the State of
New Jersey.
(B) Each Seller has the power to
engage in the transactions contemplated by this
Agreement, the Pooling and Servicing Agreement,
the Pricing Agreement, the Certificates and,
with respect to TMSIC and MSNY, the Multi-Party
Agreement, and has all requisite power, authority
and legal right to execute and deliver this
Agreement, the Pooling and Servicing Agreement, the
Pricing Agreement, the Certificates and, with respect
to TMSIC and MSNY, the Multi-Party Agreement (and any
other documents delivered in connection therewith)
and to perform and observe the terms and conditions
of such instruments.
(C) This Agreement, the Pooling and
Servicing Agreement, the Multi-Party Agreement, the
Pricing Agreement and the Certificates each have been
duly authorized, executed and delivered by each of
the Sellers that is a party thereto and, assuming due
authorization, execution and delivery by the other
parties thereto, are legal, valid and binding
agreements of each such Seller, as the case may be,
and assuming such agreements were governed by the
laws of the State of New Jersey, would be enforceable
in accordance with their respective terms against
each such Seller, as the case may be, subject (a) to
the effect of bankruptcy, insolvency, reorganization,
moratorium and similar laws relating to or affecting
creditors' rights generally and court decisions with
respect thereto, (b) to the understanding that no
opinion is expressed as to the
application of equitable principles in any
proceeding, whether at law or in equity, and (c)
to limitations of public policy under applicable
securities laws as to rights of indemnity and
contribution thereunder.
(D) Neither the transfer of the
Unguaranteed Interests to the Trust Fund, the
consummation of the transactions contemplated by, nor
the fulfillment of the terms of, this Agreement, the
Pooling and Servicing Agreement, the Multi-Party
Agreement, the Pricing Agreement and
the Certificates, (A) conflicts or will conflict
with or results or will result in a breach of or
constitutes or will constitute a default under the
Certificates of Incorporation or Bylaws of any
Seller, or the terms of any material indenture or
other material agreement or instrument of which such
counsel has knowledge to which any Seller is a party
or by which it is bound or to which it is subject, or
(B) results in, or will result in the creation or
imposition of any lien or encumbrance upon the Trust
Fund or upon the related Certificates, except as
otherwise contemplated by the Pooling and Servicing
Agreement, or (C) any statute or order, rule,
regulations, writ, injunction or decree of any court,
governmental authority or regulatory body to which
any Seller is subject or to which it is bound.
(E) Except as set forth in the
Prospectus Supplement, there is no action, suit,
proceeding or investigation pending or, to the best
of such counsel's knowledge, threatened against any
Seller which, in such counsel's judgment, either in
any one instance or in the aggregate, may result in
any material adverse change in the business,
operation, financial condition, properties or assets
of any Seller or in any material impairment of the
right or ability of any Seller to carry on its
business substantially as now conducted or result in
any material liability on the part
of any Seller or which would draw into
question the validity of this Agreement, the Pricing
Agreement, the Certificates, the Pooling and
Servicing Agreement or, with respect to TMSIC and
MSNY, the Multi- Party Agreement, or of any action
taken or to be taken in connection with the
transactions contemplated thereby, or which would be
likely to impair materially the ability of any Seller
to perform under the terms of this Agreement, the
Pooling and Servicing Agreement, the Pricing
Agreement, the Certificates or, with respect to TMSIC
and MSNY, the Multi-Party Agreement.
(F) No consent, approval,
authorization or order of any court or governmental
agency or body is required for the execution,
delivery and performance by any Seller of, or
compliance by any Seller with, this Agreement, the
Pooling and Servicing Agreement, the Pricing
Agreement, the Certificates or, with respect to TMSIC
and MSNY, the Multi-Party Agreement, or the
consummation of the transactions contemplated
therein, except such as may be required under the
blue sky laws of any jurisdiction and such other
approvals as have been obtained.
(G) The delivery of each SBA Loan as
and in the manner contemplated by the Pooling and
Servicing Agreement is sufficient fully to transfer
to the Trustee for the benefit of the
Certificateholders all right, title and interest
of the Sellers in and to each such Unguaranteed
Interest including, without limitation, the
right to enforce each such SBA Loan in accordance
with its terms to the extent enforceable by the
Sellers at the time of such delivery.
(iii) The favorable opinion, dated as of
Closing Time, of Xxxxxx X. Xxxxxxx, Esq., counsel for
the SBA, in form and substance satisfactory to
counsel for the Underwriter, to the effect that:
(A) the SBA has the full power and
authority and the legal right to execute, deliver and
perform the Multi-Party Agreement, and all necessary
action has been taken by the SBA to authorize the
execution, delivery and performance of the
Multi-Party Agreement by the SBA. The SBA officers
executing and delivering the Multi-Party Agreement
have full authority to act on behalf of the SBA. The
Multi-Party Agreement has been duly executed and
delivered on behalf of the SBA and constitutes the
legal, valid and binding obligation of the SBA,
enforceable against the SBA in accordance with its
terms.
(B) The execution, delivery and
performance of the Multi-Party Agreement by the SBA
will not violate any (i) organizational or governing
documents of the SBA, any law, treaty,
rule or regulation or a final binding determination
of an arbitrator or a determination of a court or
other governmental authority (whether such
governmental authority is the Federal Government of
the United States or any other nation or government,
or other political subdivision thereof, or any entity
exercising executive, legislative, judicial,
regulatory, or administrative functions of or
pertaining to government) in each case applicable to
or binding upon the SBA or its property or to which
the SBA or any of its property is subject or (ii)
provision of any security issued by SBA or any
agreement, instrument or undertaking to which the SBA
is a party or by which the SBA or any of its property
is bound.
In rendering this opinion, such counsel may rely, as to matters
of fact, on certificates of responsible officers of the Company, the
Sellers, the Trustee, the SBA and public officials. Such opinion
may assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto
other than the SBA.
(iv) The favorable opinion, dated as of
Closing Time, of Winston & Xxxxxx, counsel for the Trustee, in
form and substance satisfactory to counsel for the
Underwriter.
(v) The favorable opinion, dated as of
Closing Time, of Xxxx X. Xxxxx, Esq., counsel for the
Company, relating to the due organization, valid existence
and good standing of the Company, the corporate power and
authority of the Company to own its assets, conduct its
business and perform its obligations under this Agreement, the
due execution and binding nature of this Agreement and the
non-contravention of this Agreement with respect to the
Company's organizational documents, law, the Company's other
agreements, all in customary form.
In giving its opinion required by subsection (b)(1) of this Section,
Stroock & Stroock & Xxxxx LLP shall additionally state that nothing has come to
its attention that has caused it to believe that the Registration Statement, at
the time it became effective, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Prospectus, at the
Representation Date (unless the term "Prospectus" refers to a prospectus which
has been provided to the Underwriter by the Company for use in connection with
the offering of the Certificates which differs from the Prospectus on file at
the Commission at the Representation Date, in which case at the time it is first
provided to the Underwriter for such use) or at Closing Time, included an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading (other than the financial, numerical,
statistical and quantitative information contained therein as to which such
counsel need express no view).
(c) At Closing Time the Underwriter shall have received from Stroock &
Stroock & Xxxxx LLP, counsel for the Underwriter, a letter, dated as of
Closing Time, authorizing the Underwriter to rely upon each opinion
delivered by Stroock & Stroock & Xxxxx LLP to each of Xxxxx'x and Duff &
Xxxxxx in connection with the issuance of the Certificates as though each
such opinion was addressed to the Underwriter and attaching a copy of each
such opinion.
(d) At Closing Time there shall not have been, since the date hereof
or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of any Seller and their subsidiaries considered as
one enterprise, whether or not arising in the ordinary course of business,
and the Underwriter shall have received a certificate signed by one or more
duly authorized officers of each Seller, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change; (ii) the
representations and warranties in Section 1(a) hereof are true and correct
in all material respects with the same force and effect as though expressly
made at and as of Closing Time; (iii) each of the Sellers has complied with
all agreements and satisfied all conditions on its part to be performed or
satisfied at or prior to Closing Time; and (iv) no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been initiated or threatened by the
Commission.
(e) At or prior to the delivery of the Prospectus Supplement, the
Underwriter shall have received from KPMG Peat Marwick a letter dated as of
such date and in form and substance satisfactory to the Underwriter, to the
effect that they have carried out certain specified procedures, not
constituting an audit, with respect to (i) certain amounts, percentages and
financial information relating to the Servicer's servicing portfolio which
are included in the Prospectus Supplement and which are specified by the
Underwriter, and have found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and
other records of such Seller identified in such letter and (ii) certain
information regarding the SBA Loans and the SBA Files which are specified
by the Underwriter and contained in the Prospectus Supplement and setting
forth the results of such specified procedures.
(f) At Closing Time, the Underwriter shall have received from the
Trustee a certificate signed by one or more duly authorized officers of the
Trustee, dated as of Closing Time, as to the due acceptance of the Pooling
and Servicing Agreement by the Trustee and the due authentication of the
Certificates by the Trustee and such other matters as the Underwriter shall
request.
(g) At Closing Time, the Underwriter shall have received a certificate
signed by one or more duly authorized officers of each of the Sellers,
dated as of Closing Time to the effect that:
(i) the representations and warranties of each Seller in the
Pooling and Servicing Agreement are true and correct in all
material respects at and on the Closing Date, with the same
effect as if made on the Closing Date;
(ii) each Seller has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied in connection with the sale and delivery of the
Certificates;
(iii) all statements and information contained in the
Prospectus Supplement under the captions "The Sellers," "The
SBA Loan Pool" and "The SBA Loan Program," are true and
accurate in all material respects and nothing has
come to such officer's attention that would lead him
to believe that any of the specified sections
contains any untrue statement of a material fact or
omits to state any material fact necessary in order
to make the statements and information therein, in
the light of the circumstances under which they were
made, not misleading;
(iv) the information set forth in the SBA Loan Schedule
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
(v) the copies of the Charter and By-laws of each Seller
attached to such certificate are true and correct and, are in
full force and effect on the date thereof;
(vi) except as may otherwise be disclosed in the Prospectus,
there are no actions, suits or proceedings pending (nor,
to the best knowledge of such officers, are any
actions, suits or proceedings threatened), against
or affecting either Seller which if adversely
determined, individually or in the aggregate, would
adversely affect the Sellers' obligations under the
Pooling and Servicing Agreement, the Pricing
Agreement, this Agreement or, with respect to TMSIC
and MSNY, the Multi-Party Agreement;
(vii) each person who, as an officer or representative of
any Seller signed (a) this Agreement, (b) the Pooling and
Servicing Agreement, (c) the Certificates issued thereunder,
(d) the Multi-Party Agreement (e) the Pricing
Agreement or (f) any other document delivered prior
hereto or on the date hereof in connection with the
purchase described in this Agreement and the Pooling
and Servicing Agreement, was, at the respective
times of such signing and delivery, and is now duly
elected or appointed, qualified and acting as such
officer or representative;
(viii) except as otherwise set forth in the Pooling and
Servicing Agreement, each of the SBA Loans referred to in the
Pooling and Servicing Agreement was originated by one of the
Sellers;
(ix) a certified true copy of the resolutions of the board of
directors of each Seller with respect to the sale of the
Certificates subject to this Agreement and the Pooling and
Servicing Agreement, which resolutions have not been amended
and remain in full force and effect;
(x) all payments received with respect to the Unguaranteed
Interests after the Cut-Off Date have been deposited in the
Principal and Interest Account, and are, as of the Closing
Date, in the Principal and Interest Account;
(xi) Each Seller has complied with all the agreements and
satisfied all the conditions on its part to be performed or
satisfied in connection with the issuance, sale and delivery
of the SBA Loans and the Certificates;
(xii) all statements contained in the Prospectus with respect
to the Company and the Sellers are true and accurate in all
material respects and nothing has come to such officer's
attention that would lead such officer to believe that the
Prospectus contains any untrue statement of a material fact or
omits to state any material fact;
(h) At Closing Time, the Class A Certificates shall have been rated
"Aaa" by Xxxxx'x and "AAA" by Duff & Xxxxxx and the Class B Certificates
shall have been rated "A2" by Xxxxx'x and "A" by Duff & Xxxxxx.
(i) At Closing Time, the Underwriter shall have received a copy of the
Spread Account Agreement, duly executed and delivered by the parties
thereto, accompanied by an opinion of counsel relating to the due
incorporation, valid existence and good standing of the Spread Account
Depositor, the corporate power and authority of the Spread Account
Depositor to own its assets, conduct its business and perform its
obligations under the Spread Account Agreement, and the due execution and
binding nature of the Spread Account Agreement with respect to the Spread
Account Depositor's organizational documents, law and the Spread Account
Depositor's other agreements, all in customary form.
(j) At Closing Time, counsel for the Underwriter shall have been
furnished with such documents and opinions as they may reasonably require
for the purpose of enabling them to pass upon the issuance and delivery of
the Certificates as herein contemplated and related proceedings, or in
order to evidence the accuracy of any of the representations or warranties,
or the fulfillment of any of the conditions, herein contained; and all
proceedings taken by the Company in connection with the issuance and sale
of the Certificates as herein contemplated shall be satisfactory in form
and substance to the Underwriter and counsel for the Underwriter.
(k) On or before the Closing Time the Sellers shall have delivered to
the Trustee, to hold in trust for the benefit of the holders of the
Certificates, SBA Loans with aggregate outstanding unguaranteed interests
as of the Cut-Off Date of $104,615,625.32.
If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriter by notice to the Sellers at any time at or
prior to Closing time, and such termination shall be without liability of
any party to any other party except as provided in Section 4 hereof.
Section 6. INDEMNIFICATION.
(a) The Company and the Sellers jointly and severally agree to indemnify
and hold harmless the Underwriter and each person, if any, who controls
the Underwriter within the meaning of Section 15 of the 1933 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement
(or any amendment thereto), or the omission or alleged omission therefrom
of a material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) or
the omission or alleged omission therefrom of a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any untrue statement or omission described in clause
(i) above, or any such alleged untrue statement or omission, if such
settlement is effected with the written consent of each Seller; and
(iii) against any and all expense whatsoever, as incurred (including,
subject to Section 6(c) hereof, the reasonable fees and disbursements of
counsel chosen by the Underwriter), reasonably incurred in investigating,
preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or
any claim whatsoever based upon any untrue statement or omission described
in clause (i) above, or any such alleged untrue statement or omission, to
the extent that any such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with the information referred to in clauses (x),
(y) and (z) of the immediately following paragraph; provided, further, such
indemnity with respect to the Prospectus or any preliminary prospectus shall not
inure to the benefit of the Underwriter (or person controlling such Underwriter)
from whom the person suffering any such loss, claim, damage or liability
purchased the Certificates which are the subject thereof if such person did not
receive a copy of the Prospectus at or prior to the confirmation of the sale of
such Certificates to such person in any case where such delivery is required by
the 1933 Act and the untrue statement or omission of a material fact contained
in the Prospectus or any preliminary prospectus was corrected in the Prospectus.
(b) The Underwriter agrees to indemnify and hold harmless the Company and
the Sellers their directors, each of the Company's and Sellers' officers who
signed the Registration Statement, and each person, if any, who controls the
Company or either Seller within the meaning of Section 15 of the 1933 Act
against any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, contained in (x) the second sentence of the fifth paragraph on the
second page which is located on the inside cover (discussing the risk of a lack
of secondary trading) of the Prospectus (or any amendment or supplement
thereto), (y) the second sentence under "Investment Considerations--Limited
Liquidity" of the Prospectus Supplement and (z) any Computational Materials,
except to the extent of any errors in the Computational Materials that are
caused by errors in the pool information provided by the Company to the
Underwriter.
(c) Promptly after receipt by an indemnified party under this Section 6 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 6, notify the indemnifying party in writing of the commencement thereof;
but the omission to so notify the indemnifying party will not relieve the
indemnifying party from any liability that it may have to any indemnified party
except to the extent that it has been prejudiced in any material respect by such
failure or from any liability that it may have otherwise than under this Section
6. In case any such action is brought against any indemnified party and it
notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled to participate therein and, to the extent that it may
elect by written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified party;
provided, however, that, if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party or
parties shall have reasonably concluded that there may be legal defenses
available to it or them and/or other indemnified parties that are different from
or additional to those available to the indemnifying party, the indemnified
party or parties shall have the right to select separate counsel to assert such
legal defenses and to otherwise participate in the defense of such action on
behalf of such indemnified party or parties. Upon receipt of notice from the
indemnifying party to such indemnified party of its election so to assume the
defense of such action and approval by the indemnified party of counsel, the
indemnifying party will not be liable to such indemnified party for any legal or
other expenses other than the reasonable costs of investigation subsequently
incurred in connection with the defense thereof unless (i) the indemnified party
shall have employed separate counsel in connection with the assertion of legal
defenses in accordance with the proviso to the next preceding sentence, (ii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of commencement of the action or (iii) the indemnifying party
has authorized the employment of counsel for the indemnified party at the
expense of the indemnifying party; and except that, if clause (i) or (iii) is
applicable, such liability shall be only in respect of the counsel referred to
in such clause (i) or (iii). After such notice from the indemnifying party to
such indemnified party, the indemnifying party will not be liable for the costs
and expenses of any settlement of such action effected by such indemnified party
without the consent of the indemnifying party.
Section 7. CONTRIBUTION. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 6 hereof is for any reason held to be unenforceable by the indemnified
parties although applicable in accordance with its terms, the Company and the
Sellers jointly and severally, on the one hand, and the Underwriter, on the
other hand, shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by said indemnity agreement
incurred by the Company and the Sellers jointly and severally, on the one hand,
and the Underwriter, on the other hand, as incurred, in such proportions that
the Underwriter is responsible for that portion represented by the underwriting
discount on the cover page of the Prospectus bears to the initial public
offering price of the Certificates appearing thereon, (or, with respect to
Computational Materials furnished by the Underwriter, the excess of the
principal amount of the Certificates over the underwriting discount allocated to
such principal amount of Certificates); and the Company and the Sellers shall be
responsible for the balance; provided, however, that no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the 0000
Xxx) shall be entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation. Notwithstanding the provisions of this
Section 7, the Underwriter shall not be required to contribute any amount in
excess of the amount by which the total price at which the Certificates
underwritten by the Underwriter and distributed to the public exceeds the amount
of any damages which the Underwriter has otherwise been required to pay in
respect of such losses, liabilities, claims, damages and expenses. For purposes
of this Section 7, each person, if any, who controls the Underwriter within the
meaning of Section 15 of the 1933 Act shall have the same rights to contribution
as the Underwriter and each respective director of the Sellers, each officer of
the Sellers who signed the Registration Statement, and each respective person,
if any, who controls the Sellers within the meaning of Section 15 of the 1933
Act shall have the same rights to contribution as the Sellers.
Section 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
All representations, warranties and agreements contained in this Agreement and
the Pricing Agreement, or contained in certificates of officers of the Company
and the Sellers submitted pursuant hereto, shall remain operative and in full
force and effect, regardless of any investigation made by or on behalf of the
Underwriter or any controlling person thereof, or by or on behalf of the
Sellers, and shall survive delivery of the Certificates to the Underwriter.
Section 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the Company
and the Sellers, at any time at or prior to Closing Time (i) if there has been,
since the time of execution of this Agreement or since the respective dates as
of which information is given in the Registration Statement or Prospectus, any
change, or any development involving a prospective change, in or affecting
particularly the business or properties of the Company or the Sellers considered
as one entity which, in the Underwriter's reasonable judgment, materially
impairs the investment quality of the Certificates; (ii) if there has occurred
any suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange or
by any governmental authority; (iii) if any banking moratorium has been declared
by Federal or New York authorities; or (iv) if there has occurred any outbreak
or escalation of major hostilities in which the United States of America is
involved, any declaration of war by Congress, or any other substantial national
or international calamity or emergency if, in the Underwriter's judgment, the
effects of any such outbreak, escalation, declaration, calamity, or emergency
makes it impractical or inadvisable to proceed with completion of the sale of
and payment for the Certificates.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof.
Section 10. COMPUTATIONAL MATERIALS. (a) It is understood that the
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Certificates, subject to the following conditions:
(i) The Underwriter shall comply with all applicable laws and regulations
in connection with the use of Computational Materials including the No-Action
Letter of May 20, 1994 issued by the Commission to Xxxxxx, Peabody Acceptance
Corporation I, Xxxxxx, Xxxxxxx & Co. Incorporated and Xxxxxx Structured Asset
Corporation, as made applicable to other issuers and underwriters by the
Commission in response to the request of the Public Securities Association dated
May 24, 1994, and the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the "Xxxxxx/PSA
Letters").
(ii) As used herein, "Computational Materials" shall have the meaning given
such term and the term "ABS Term Sheets" in the Xxxxxx/PSA Letters, but shall
include only those Computational Materials that have been prepared or delivered
to prospective investors by or at the direction of the Underwriter.
(iii) The Underwriter shall provide the Company with representative forms
of all Computational Materials prior to their first use, to the extent such
forms have not previously been approved by the Company for use by the
Underwriter. The Underwriter shall provide to the Company, for filing on Form
8-K as provided in Section 10(b), copies of all Computational Materials that are
to be filed with the Commission pursuant to the Xxxxxx/PSA Letters. The
Underwriter may provide copies of the foregoing in a consolidated or aggregated
form. All Computational Materials described in this subsection (a)(iii) must be
provided to the Company not later than 10:00 a.m. New York time one business day
before filing thereof is required pursuant to the terms of this Agreement.
(iv) If the Underwriter does not provide any Computational Materials to the
Company pursuant to subsection (a)(iii) above, the Underwriter shall be deemed
to have represented, as of the Closing Date, that it did not provide any
prospective investors with any information in written or electronic form in
connection with the offering of the Certificates that is required to be filed
with the Commission in accordance with the Xxxxxx/PSA Letters.
(v) In the event of any delay in the delivery by the Underwriter to the
Company of all Computational Materials required to be delivered in accordance
with subsection (a)(iii) above, the Company shall have the right to delay the
release of the Prospectus to investors or to the Underwriter, to delay the
Closing Date and to take other appropriate actions in each case as necessary in
order to allow the Company to comply with is agreement set forth in Section
10(b) to file the Computational Materials by the time specified therein.
(b) The Company shall file the Computational Materials (if any) provided to
it by the Underwriter under Section 10(a)(iii) with the Commission pursuant to a
Current Report on Form 8-K no later than 10:00 a.m. on the date required
pursuant to the Xxxxxx/PSA Letters.
Section 11. NOTICES. All notices and other 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
Underwriter shall be directed to Prudential Securities Incorporated, Xxx Xxx
Xxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxx Xxxx; and notices to the
Company or any Seller shall be directed to it at 0000 Xxxxxx Xxxxxx, Xxxxx, Xxx
Xxxxxx 00000, Attention: Executive Vice President.
Section 12. PARTIES. This Agreement and the Pricing Agreement shall each
inure to the benefit of and be binding upon the Underwriter, the Company, the
Sellers and their respective successors. Nothing expressed or mentioned in this
Agreement or the Pricing Agreement is intended or shall be construed to give any
person, firm or corporation, other than the Underwriter, the Company, the
Originators and their respective successors and the controlling persons and
officers and directors referred to in Section 6 and 7 hereof and their heirs and
legal representatives, any legal or equitable right, remedy or claim under or
with respect to this Agreement or the Pricing Agreement or any provision herein
or therein contained. This Agreement and the Pricing Agreement and all
conditions and provisions hereof and thereof are intended to be for the sole and
exclusive benefit of the Underwriter, the Company, the Sellers and their
respective successors, and said controlling persons and officers and directors
and their heirs and legal representatives, and for the benefit of no other
person, firm or corporation. No purchaser of Certificates from the Underwriter
shall be deemed to be a successor by reason merely of such purchase. The Company
and the Sellers shall be jointly and severally liable for all obligations
incurred under this Agreement and the Pricing Agreement.
Section 13. GOVERNING LAW AND TIME. This Agreement and the Pricing
Agreement shall be governed by and construed in accordance with the laws of the
State of New York applicable to agreements made and to be performed in said
State. Unless otherwise set forth herein, specified times of day refer to New
York time.
Section 14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company and the Sellers a counterpart hereof,
whereupon this instrument, along with all counterparts, will become a binding
agreement between the Underwriter, the Sellers and the Company in accordance
with its terms.
Very truly yours,
THE MONEY STORE
INVESTMENT CORPORATION
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE OF NEW YORK, INC.
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE INC.
By: ________________________
Name: Xxxxxxx X. Xxxxxx
Title: Executive Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: ________________________
Name:
Title:
$140,000,000
THE MONEY STORE INC.
The Money Store SBA Loan-Backed Adjustable Rate Certificates,
Series 1997-1, Class A
and Class B
PRICING AGREEMENT
September 26, 1997
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Reference is made to the Underwriting Agreement, dated September 26, 1997
(the "Underwriting Agreement"), relating to approximately $140,000,000,
aggregate principal amount of The Money Store SBA Loan-Backed Adjustable Rate
Certificates, Series 1997-1, Class A and Class B (collectively, the
"Certificates"). The approximate initial principal amount of Class A and Class B
Certificates shall be $130,800,000 and $9,800,000, respectively.
Pursuant to Section 2 of the Underwriting Agreement, The Money Store
Investment Corporation and The Money Store of New York, Inc. (collectively the
"Sellers") agree with Prudential Securities Incorporated (the "Underwriter") as
follows:
1. The Initial Remittance Rates on the Class A
Certificates and Class B Certificates shall be 6.25% and 6.73%,
respectively, per annum. Thereafter, the Class A Certificates and the
Class B Certificates shall bear interest as set forth in the Pooling and
Servicing Agreement.
2. The Underwriter shall purchase the Class A and Class
B Certificates for a price equal to 99.50% of the
aggregate initial principal amount of the Class A and Class B
Certificates, plus accrued interest on such aggregate initial principal
amount at the weighted average Initial Remittance Rates from September
15, 1997 to but not including the Closing Date. The Class A and Class B
Certificates shall be offered by the Underwriter to the public from time
to time in negotiated transactions to be determined at the time of sale.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Sellers a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between
the Underwriter and the Sellers in accordance with its terms.
Very truly yours,
THE MONEY STORE
INVESTMENT CORPORATION
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
THE MONEY STORE OF NEW YORK, INC.
By: _____________________________
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
PRUDENTIAL SECURITIES INCORPORATED
By: _______________________________
Name:
Title:
