EXHIBIT 1.1
$401,250,000 Class AF-1 Adjustable Rate Notes
$133,750,000 Class AF-2 Auction Rate Notes
$360,000,000 Class AV Adjustable Rate Notes
THE MONEY STORE INC.
The Money Store Trust 1998-C
UNDERWRITING AGREEMENT
September 23, 1998
First Union Capital Markets, a division
of Wheat First Securities, Inc., as
Representative of the Several
Underwriters named herein
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Ladies and Gentlemen:
The Money Store Inc., a New Jersey corporation (the "Company"), on
behalf of each of the Originators listed on Annex A hereto (each an "Originator"
and, collectively, the "Originators"), and the Originators propose to cause The
Money Store Trust 1998-C (the "Trust") to issue: Class AF-1 Adjustable Rate
Notes in the aggregate original principal amount of $401,250,000 (the "Class
AF-1 Notes"), Class AF-2 Auction Rate Notes in the aggregate original principal
amount of $133,750,000 (the "Class AF-2 Notes" and together with the Class AF-1
Notes, the "Class AF Notes") and Class AV Adjustable Rate Notes in the aggregate
original principal amount of $360,000,000 (the "Class AV Notes" and together
with the Class AF Notes, the "Notes") and, the Company, the Originators and the
Trust hereby confirm their agreement with First Union Capital Markets, a
division of Wheat First Securities, Inc. ("First Union" or the "Representative")
on behalf of one or more Underwriters listed on Annex B hereto (the
"Underwriters"), to sell the Notes to the Underwriters on the terms and
conditions hereof. The Trust will be formed pursuant to the Trust Agreement (the
"Trust Agreement"), dated as of August 31, 1998 among the Originators and Chase
Manhattan Bank Delaware, as owner trustee (the "Owner Trustee"). The Notes will
be issued pursuant to an Indenture (the "Indenture"), dated as of August 31,
1998, among the Trust and The Bank of New York, as trustee (the "Indenture
Trustee"). The primary assets of the Trust will consist of two separate cross-
supported pools ("Pool I" and "Pool II," respectively, and collectively, the
"Pools") of loans (the "Loans") having the characteristics described in the
Prospectus Supplement (as defined below).
Simultaneously with the issuance and delivery of the Notes as
contemplated herein, the Trust Agreement provides for the issuance of
certificates entitled "The Money Store Trust 1998-C Trust Certificates" (the
"Certificates"). The Certificates will evidence fractional interests in the
Trust (the Notes and the Certificates are collectively referred to as the
"Securities"). The Certificates are not being delivered to the Underwriters
hereunder.
On or prior to the date of issuance of the Notes, the Company will
obtain from MBIA Insurance Corporation ("MBIA") financial guaranty insurance
policies (the "MBIA Policies") on behalf of the Indenture Trustee for the
benefit of the holders of the Notes.
Capitalized terms used herein that are not otherwise defined shall
have the meanings ascribed thereto in the Sale and Servicing Agreement (the
"Sale and Servicing Agreement") dated as of August 31, 1998, among the Trust,
the Company and the Originators.
Prior to the delivery of the Notes by the Trust, and the public
offering thereof by the Underwriters, the Originators, the Company, the Trust
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 offering of the Notes 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, the Trust and the Originators understand that the
Underwriters propose to make a public offering of the Notes 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. 333-60771) including a
prospectus, and such amendments thereto as may have been required to
the date hereof, relating to the Notes 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 Notes
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 Notes
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 the Closing Date referred to in
Section 2 hereof, will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the representations
and warranties in this subsection shall not apply to statements in or
omissions from the Registration Statement or Prospectus made in
reliance upon and in conformity with information furnished to the
Company in writing by any Underwriter through the Representative
expressly for use in the Registration Statement or Prospectus; and
provided further, that neither the Company nor the Originators make
any representations or warranties as to any information in any
Computational Materials (as defined in Section 11 below) provided by
any Underwriter to the Company pursuant to Section 11, except to the
extent of any errors in the Computational Materials that are caused by
errors in the pool information provided by the Company to the
applicable Underwriter. The conditions to the use by the Company of a
registration statement on Form S-3 under the 1933 Act, as set forth in
the General Instructions to Form S-3, have been satisfied with respect
to the Registration Statement and the Prospectus.
(iii) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as
otherwise stated therein, (A) there has been no material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, the Originators
and their subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, which would have a
material adverse effect on the ability of the Company and the
Originators to perform their obligations under the Basic Documents (as
defined below) and, 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 Sale and Servicing Agreement,
the Indenture, the Trust Agreement, and the Insurance Agreement dated
as of September 1, 1998 among the Company, the Originators, the
Custodian, the Indenture Trustee and MBIA (the "Insurance Agreement"),
as applicable (this Agreement, the Pricing Agreement, the Sale and
Servicing Agreement, the Indenture, the Trust Agreement and the
Insurance Agreement being herein referred to, collectively, as the
"Basic Documents") and the Indemnification Agreement to be dated as of
September 28, 1998 (the "Indemnification Agreement") among the
Company, MBIA and 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 to which it is a party 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 to which it is a party; 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) Each of the Basic Documents and the Indemnification
Agreement to which it is a party has been duly and validly authorized
by the Company and the Originators, as the case may be, 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, as the case may be, 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 and the MBIA Policies conform in all material respects to
the statements relating thereto contained in the Prospectus.
(ix) The Notes, when duly and validly executed by the
Indenture Trustee, authenticated and delivered in accordance with the
Indenture, and delivered and paid for pursuant hereto will be validly
issued and outstanding and entitled to the benefits of the Indenture.
The Certificates, when duly and validly executed by the Owner Trustee,
authenticated and delivered in accordance with the Trust Agreement,
and delivered and paid for pursuant thereto will be validly issued and
outstanding and entitled to the benefits of the Trust Agreement. The
Securities conform in all material respects to all statements relating
thereto contained in the Prospectus.
(x) Neither the issuance or delivery of the Notes or the
Certificates, nor the consummation of any other of the transactions
herein contemplated or in any other Basic Document to which it is a
party 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 to which it is a party and, in the case of the
Company, the Indemnification Agreement nor the fulfillment of the
terms of each Basic Document to which it is a party 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 to
which it is a party and, in the case of the Company, the
Indemnification Agreement; and neither the issuance or delivery of the
Notes or Certificates nor the consummation of any other of the
transactions herein contemplated, nor the fulfillment of the terms of
the Notes or 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, the Notes or the Certificates, (2) seeking
to prevent the issuance of the Notes or 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 to which it is a party, or the validity or
enforceability of any Basic Document or the Notes 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
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 to which it is a
party 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 Notes or the Certificates) and neither the Company nor
any of the Originators has received any notice of proceedings relating
to the revocation or modification of any such license, certificate,
authority or permit which, singly or in the aggregate, if the subject
of any unfavorable decision, ruling or finding, would materially and
adversely affect the ability of the Company to perform its obligations
under the Basic Documents 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 Notes 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 Sale and
Servicing Agreement, the Trust will have acquired good title 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 Notes which they purchase, the Underwriters will
have good and marketable title to such Notes free and clear of any
security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(xv) The transfer of the Loans to the Trust at The Closing
Date will be treated by the Company and the Originators for financial
accounting and reporting purposes as a sale of assets and not as a
pledge of assets to secure debt.
(xvi) Each assignment of Mortgage required to be prepared
pursuant to the Sale 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 Sale
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
Securities which have become due or will become due on or prior to The
Closing Date shall have been paid at or prior to The Closing Date.
(xviii) The Trust 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 cause the Trust to sell to each
Underwriter, severally and not jointly, and each of the Underwriters, severally
and not jointly, agrees to purchase from the Trust, the Notes set forth below
its name in Annex B hereto at the price set forth in the Pricing Agreement. In
the event that 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 Notes shall be made at the offices of Stroock &
Stroock & Xxxxx LLP, 000 Xxxxxx Xxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other
place as shall be agreed upon by the Underwriters and the Company, at 11:00
A.M., New York City time, on September 29, 1998, 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 the "Closing Date").
Each Class of Notes will initially be represented by one note
registered in the name of Cede & Co., the nominee of The Depository Trust
Company ("DTC") (the "DTC Notes"). The interests of beneficial owners of the DTC
Notes will be represented by book entries on the records of DTC and
participating members thereof. Definitive certificates evidencing the Notes will
be available only under the limited circumstances specified in the Indenture.
The interest in the DTC Notes to be purchased by the applicable Underwriter will
be delivered by the Trust to the applicable Underwriter (which delivery shall be
made through the facilities of DTC) against payment of the purchase price
therefor as set forth in the Pricing Agreement. The Notes 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 the
Closing Date.
Section 3. COVENANTS OF THE COMPANY AND THE Originators. The Company
and the Originators covenant with each of the Underwriters as follows:
(a) The Company will promptly notify the Representative, as
representative of the Underwriters, and confirm the notice in writing, (i) of
any amendment to the Registration Statement; (ii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information; (iii) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceedings for
that purpose; and (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Notes 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 Notes 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 Notes
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 Notes have been so qualified, the Company and the
Originators will file such statements and reports as may be required by the laws
of such jurisdiction to continue such qualification in effect for a period of
not less than one year from the date hereof.
(g) So long as any Notes 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 Notes 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 Notes to the Underwriters; (iv) the fees and
disbursements of () the Company's counsel, () the Underwriters' counsel, () KPMG
Peat Marwick, accountants for the Company and issuer of the comfort letters, ()
the Owner Trustee and its counsel, () the Indenture Trustee and its counsel, and
() DTC in connection with the book-entry registration of the DTC Notes; (iv) the
qualification of the Notes 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; (v) 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; (vi) the fees charged by any of Xxxxx'x Investors Service,
Inc. ("Moody's) or Standard & Poor's Ratings Services ("Standard & Poor's") for
rating the Notes; and (vii) the reproducing and delivery to the Underwriters of
copies of the Blue Sky Survey.
If this Agreement is terminated by the Representative, as
representative of the Underwriters, in accordance with the provisions of Section
5 or Section 9(a)(i), the Company and the Originators shall reimburse the
Underwriters severally for all of their reasonable out-of-pocket expenses,
including the reasonable fees and disbursements of counsel for the Underwriters.
Section 5. CONDITIONS OF THE UNDERWRITERS' Obligations. The
obligations of the Underwriters hereunder are subject, in the Representative's
sole discretion, to the accuracy of the representations and warranties of the
Company and the Originators herein contained, to the performance by the Company
and the Originators of their respective obligations hereunder, and to the
following further conditions:
(a) The Registration Statement shall have become effective and, on the
Closing Date, no stop order suspending the effectiveness of the Registration
Statement shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission. As of the Closing Date, the
Prospectus shall have been filed with the Commission in accordance with Rule 424
of the 1933 Act Regulations.
(b) On the Closing Date, the Representative, as representative of the
Underwriters, shall have received:
(i) The favorable opinion, dated as of the Closing Date,
of Stroock & Stroock & Xxxxx LLP, counsel for the Company and the
Originators, 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 Securities" and "The Agreements" and the
information in the Prospectus Supplement under "The Transfer
and Servicing Agreements" and "Description of The Notes,"
insofar as they constitute summaries of certain provisions
of the Notes and the Certificates, the Indenture, the Trust
Agreement, the Sale 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 - 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), (i) the Sale and Servicing Agreement, the
Pricing Agreement, the Notes, the Certificates, the
Insurance Agreement, the Indemnification Agreement, and this
Agreement are legal, valid and binding agreements
enforceable in accordance with their respective terms
against the Company and (ii) the Indenture is a legal, valid
and binding Agreement enforceable in accordance with its
terms against the Trust, 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 Sale and
Servicing Agreement, the Notes, the Certificates, the
Insurance Agreement, the Indemnification Agreement, and the
Pricing Agreement or the offer, issuance, sale or delivery
of the Notes, or the consummation of any other transactions
by the Company contemplated by this Agreement, the Sale and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, and the Pricing Agreement, except
as may be required under the blue sky laws of any
jurisdiction (as to which such counsel need not opine) and
such other approvals as have been obtained.
(H) Neither the consummation of the transactions
contemplated by, nor the fulfillment of the terms of, this
Agreement, the Sale and Servicing Agreement, the Pricing
Agreement, the Insurance Agreement, the Indemnification
Agreement, and the Notes, 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 this
Agreement and the Sale and Servicing Agreement is sufficient
fully to transfer to the Trust 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 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 Trust
to enforce such Mortgages.
(J) The Notes, assuming due execution by the Indenture
Trustee, authentication and delivery in accordance with the
Indenture, and delivery and payment therefore pursuant to
this Agreement, will be validly issued and outstanding and
entitled to the benefits of the Indenture and the Sale and
Servicing Agreement.
(K) The Sale and Servicing Agreement is not required to
be qualified under the Trust Indenture Act of 1939, as
amended. The Trust created by the Trust Agreement is not
required to be registered under the Investment Company Act
of 1940, as amended.
(L) The Indenture has been duly qualified under the
Trust Indenture Act.
(M) For federal income tax purposes, the Notes will be
characterized as debt, and the Trust will not be
characterized as an association (or a publicly traded
partnership) taxable as a corporation.
Stroock & Stroock & Xxxxx LLP shall additionally provide an opinion,
in form and substance satisfactory to the Rating Agencies, regarding the
creation, attachment, perfection and priority of a security interest in the
Loans in favor of the Indenture Trustee on behalf of the Noteholders. Such
opinions may contain such assumptions, qualifications and limitations as are
customary in opinions of this type. In rendering such opinion, such counsel may
state that they express no opinion as to the laws of any jurisdiction other than
the federal law of the United States of America and the laws of the States of
New York and California.
In rendering its opinion, 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
Underwriters by the Company for use in connection with the offering of the
Securities 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
Underwriters for such use) or on Closing Date, included an untrue statement of a
material fact or omitted to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading (other than the financial, numerical, statistical and
quantitative information contained therein as to which such counsel need express
no view).
In rendering such opinion, Stroock & Stroock & Xxxxx LLP may rely on
certificates of responsible officers of the Company, the Indenture Trustee, the
Owner 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 and upon which you may rely).
(ii) The favorable opinion, dated as of the Closing Date,
of counsel for the Company and the Originators, in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
(A) The Company has been duly organized and is validly
existing and is in good standing under the laws of the State
of New Jersey. Each Originator has been duly organized under
the laws of its jurisdiction of incorporation and is
qualified to transact business under 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 Sale and Servicing Agreement, the Pricing
Agreement, the Trust Agreement, and have all requisite
power, authority and legal right to execute and deliver this
Agreement, the Sale and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, the Pricing
Agreement, the Trust 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 Sale and Servicing Agreement,
the Pricing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Notes and the Certificates
each have been duly authorized, executed and delivered by
the Company; this Agreement, the Trust Agreement, the
Insurance Agreement, the Indemnification Agreement and the
Sale and Servicing Agreement each have been duly authorized,
executed and delivered by each Originator and, assuming due
authorization, execution and delivery by the other parties
thereto, are legal, valid and binding agreements of the
Company and each Originator, as the case may be, and
assuming such agreements were governed by the laws of the
State of New Jersey, would be enforceable in accordance with
their respective terms against the Company and each
Originator, as the case may be, subject (a) to the effect of
bankruptcy, insolvency, reorganization, moratorium and
similar laws relating to or affecting creditors' rights
generally and court decisions with respect thereto, (b) to
the understanding that no opinion is expressed as to the
application of equitable principles in any proceeding,
whether at law or in equity, and (c) to limitations of
public policy under applicable securities laws as to rights
of indemnity and contribution thereunder.
(D) Neither the transfer of the Loans to the Trust, the
consummation of the transactions contemplated by, nor the
fulfillment of the terms of, this Agreement, the Sale and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Pricing Agreement, the Trust
Agreement, (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 or upon the related Securities, except as
otherwise contemplated by the Sale 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 Trust Agreement, or the Sale 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 Trust Agreement, the Sale and Servicing
Agreement, the Insurance Agreement, the Indemnification
Agreement or the Pricing 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 the Company and each
Originator of, or compliance by the Company and each
Originator with, this Agreement, the Sale and Servicing
Agreement, the Pricing Agreement, the Insurance Agreement,
the Indemnification Agreement, the Trust 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 by TMS Mortgage Inc. of each Mortgage
Note and Mortgage secured by real property located in New
Jersey as and in the manner contemplated by the Sale and
Servicing Agreement is sufficient fully to transfer to the
Trust all right, title and interest of TMS Mortgage Inc. 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 Mortgage Inc. at the time
of such delivery.
(iii) The favorable opinion, dated as of the Closing Date,
of Xxxxxx, Xxxxxx & Xxxxxx LLP, counsel for the Indenture Trustee, in
form and substance satisfactory to counsel for the Underwriters.
(iv) The favorable opinion, dated as of the Closing Date, of
Xxxxxxxxxx Xxxxxxxx LLP, counsel for the Underwriters.
(v) The favorable opinion, dated as of the Closing Date, of
Xxxxxxxx, Xxxxxx & Finger, counsel for the Owner Trustee, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that:
(A) The Owner Trustee is a national banking association
duly formed and validly existing under the laws of the
United States of America.
(B) The Owner Trustee has the full corporate power and
authority to execute and deliver and perform its obligations
under the Trust Agreement.
(C) The Trust Agreement has been duly authorized,
executed and delivered by the Owner Trustee.
(D) The Trust Agreement constitutes the valid and
binding obligations of the Owner Trustee enforceable against
the Owner Trustee in accordance with its terms.
(E) The execution and delivery by the Owner Trustee of
the Trust Agreement, and, on behalf of the Trust, of the
Indenture and the Sale and Servicing Agreement do not
require any consent, approval or authorization of, or any
registration or filing with, any applicable governmental
authority.
(F) Neither the consummation by the Owner Trustee of
the transactions contemplated in the Sale and Servicing
Agreement, the Indenture or the Trust Agreement, nor the
fulfillment of the terms thereof by the Owner Trustee will
conflict with, result in a breach or violation of, or
constitute a default under any law or the charter, by-laws
or other organizational documents of the Owner Trustee or
the terms of any indenture or other agreement or instrument
known to such counsel and to which the Owner Trustee or any
of its subsidiaries is a party or is bound or any judgment,
order or decree known to such counsel to be applicable to
the Owner Trustee or any of its subsidiaries of any court,
regulatory body, administrative agency, governmental body or
arbitrator having jurisdiction over the Owner Trustee or any
of its subsidiaries.
(G) There are no actions, suits or proceedings pending
or, to the best of such counsel's knowledge, threatened
against the Owner Trustee (as owner trustee under the Trust
Agreement or in its individual capacity) before or by any
governmental authority that might materially and adversely
affect the performance by the Owner Trustee of its
obligations under, or the validity or enforceability of, the
Trust Agreement, the Indenture or the Sale and Servicing
Agreement, as applicable.
(H) The execution, delivery and performance by the
Owner Trustee of the Trust Agreement and, on behalf of the
Trust, of the Indenture and the Sale and Servicing Agreement
will not subject any of the property or assets of the Trust
or any portion thereof, to any lien created by or resulting
from any actions of the Owner Trustee that are unrelated to
the transactions contemplated in such agreements.
(I) The Trust has been duly formed and is validly
existing in good standing as a business trust under the
Business Trust Statute. The Trust Agreement authorizes the
Trust to execute and deliver the Trust Agreement, the
Indenture and the Sale and Servicing Agreement, to issue the
Notes, the Certificates and the Voting Interest and to grant
the Trust Estate to the Indenture Trustee as security for
the Notes.
(J) Under Section 3805(b) of the Business Trust
Statute, no creditor of any Noteholder shall have any right
to obtain possession of, or otherwise exercise legal or
equitable remedies with respect to, the property of the
Trust except in accordance with the terms of the Trust
Agreement.
(K) Under Section 3805(c) of the Business Trust
Statute, and assuming that the Sale and Servicing Agreement
conveys good title to the Loans to the Trust as a true sale
and not as a security arrangement, the Trust rather than the
Certificateholders is the owner of the Loans.
(L) The Owner Trustee is not required to hold legal
title to the Trust Estate in order for the Trust to qualify
as a business trust under the Business Trust Statute.
(M) The execution and delivery by the Owner Trustee of
the Trust Agreement and, on behalf of the Trust, the
Indenture and the Sale and Servicing Agreement do not
require any consent, approval or authorization of, or any
registration or filing with, any governmental authority of
the State of Delaware, except for the filing of the
Certificate of Trust with the Secretary of State.
(N) Neither the consummation by the Trust of the
transactions contemplated in the Trust Agreement nor the
fulfillment of the terms thereof by the Trust is prohibited
by the Business Trust Statute or other related laws of the
State of Delaware.
Such opinion may contain such assumptions, qualifications and
limitations as are customary in opinions of this type and are reasonably
acceptable to counsel to the Underwriters. In rendering such opinion, such
counsel may state that they express no opinion as to the laws of any
jurisdiction other than the federal law of the United States of America and the
laws of the State of Delaware.
(vi) The favorable opinion, dated as of the Closing Date, of
Xxxxx Xxxxxxx, Senior Corporate Counsel to the Company, in form and
substance satisfactory to counsel for the Underwriters, to the effect
that, 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 Indenture, the Notes, the Trust Agreement, the
Certificates, the Insurance Agreement, the Indemnification Agreement
or the Sale 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 Sale and Servicing Agreement, the Pricing
Agreement, the Indemnification Agreement, the Indenture, the Notes,
the Trust Agreement or the Certificates.
(vii) The favorable opinion, dated as of the Closing Date,
of Xxxxx Xxxx, special 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
are the valid and binding obligations 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 governmental 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 any of the MBIA Policies constitutes
a security 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 "The
MBIA Policies and MBIA" in the Prospectus Supplement,
relating to the offer and sale of the Notes, to the
Prospectus, 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 Indenture
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.
(viii) The favorable opinion, dated as of the Closing Time,
of counsel for First Union National Bank, Trust Department, as the
Custodian, in form and substance satisfactory to counsel for the
Underwriters.
(c) On the Closing Date, the Representative, as representative of the
Underwriters, shall have received from Stroock & Stroock & Xxxxx LLP a letter,
dated as of The Closing Date, authorizing the Representative, as representative
of the Underwriters, to rely upon each opinion delivered by Stroock & Stroock &
Xxxxx LLP to either of Xxxxx'x or Standard & Poor's in connection with the
issuance of the Notes as though each such opinion was addressed to the
Representative, as representative of the Underwriters, and attaching a copy of
each such opinion.
(d) On the Closing Date there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and the Originators and their subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, and the Underwriter shall have received a certificate signed by one or
more duly authorized officers of the Company and the Originators, dated as of
the Closing Date, to the effect that (i) there has been no such material adverse
change; (ii) the representations and warranties in Section 1(a) hereof are true
and correct in all material respects with the same force and effect as though
expressly made at and as of the Closing Date; (iii) the Company and the
Originators have complied with all agreements and satisfied all conditions on
its part to be performed or satisfied at or prior to the Closing Date; and (iv)
no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been initiated or
threatened by the Commission.
(e) At or before the time of printing of the Prospectus Supplement,
the Representative, as representative of the Underwriters, shall have received
from KPMG Peat Marwick a letter dated as of the Closing Date and in form and
substance satisfactory to the Representative, as representative of the
Underwriters, to the effect that they have carried out certain specified
procedures, not constituting an audit, with respect to (i) certain amounts,
percentages and financial information relating to the Company's servicing
portfolio which are included in the Prospectus and which are specified by the
Representative, as representative of the Underwriters, and have found such
amounts, percentages and financial information to be in agreement with the
relevant accounting, financial and other records of the Company and the
Originators identified in such letter, (ii) the information contained in the
weighted average life tables contained in the Prospectus under the caption
"Maturity, Prepayment and Yield Considerations" and have found such information
to be in agreement with the corresponding information as computed by KPMG Peat
Marwick and (iii) certain information regarding the Loans and the Files which
are specified by the Representative, as representative of the Underwriters,
hereof and setting forth the results of such specified procedures.
Notwithstanding the foregoing, if the letter delivered by KPMG Peat
Marwick on the Closing Date does not cover the information set forth in
subclause (iii), the Company shall cause KPMG Peat Marwick to deliver to the
Representative, as representative of the Underwriters, an additional letter
covering such information within 5 business days of the Closing Date.
(f) On the Closing Date, the Representative, as representative of the
Underwriters, shall have received from the Indenture Trustee a certificate
signed by one or more duly authorized officers of the Indenture Trustee, dated
as of The Closing Date, as to the due acceptance of the Indenture by the
Indenture Trustee, the due authentication of the Notes by the Indenture Trustee,
and such other matters as the Representative, as representative of the
Underwriters, shall request.
(g) On the Closing Date, 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 the Closing Date, to the effect that
the information contained under the caption "The MBIA Policies and MBIA" in the
Prospectus Supplement and the information incorporated by reference therein is
true and accurate in all material respects and such other matters as the
Representative, as representative of the Underwriters, shall request.
(h) On the Closing Date, the Representative, as representative
of the Underwriters, shall have received a certificate signed by one or more
duly authorized officers of the Company and the Originators, dated as of The
Closing Date to the effect that:
(i) the representations and warranties of the Company
and the Originators in each of the Basic Documents 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
Notes;
(iii) all statements and information contained in the
Prospectus Supplement under the captions "The Representative and the
Originators" and "The Loan Pools" 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 Sale and Servicing Agreement
is true and correct in all material respects and the Loans actually
being delivered to the Trust on the Closing Date conform in all
material respects to the Pool information set forth in the Prospectus
Supplement;
(v) the copies of the Charter and By-laws of the Company
and the Originators attached to such certificate are true and correct
and, are in full force and effect on the date thereof;
(vi) except as may otherwise be disclosed in the
Prospectus, there are no actions, suits or proceedings pending (nor, to
the best knowledge of such officers, are any actions, suits or
proceedings threatened), against or affecting the Company or any
Originator which if adversely determined, individually or in the
aggregate, would adversely affect the Company's or such Originator's
obligations under the Basic Documents or the Indemnification Agreement;
(vii) each person who, as an officer or representative of
the Company or of any Originator, signed (a) this Agreement, (b) the
Sale and Servicing Agreement, (c) the Trust Agreement, (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 Sale
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 Securities subject to this Agreement and the Sale 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
Notes;
(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; and
(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.
(i) On the Closing Date, each of the Class AF-1 Notes, Class AF-2
Notes and Class AV Notes shall have been rated "AAA" by Standard & Poor's and
"Aaa" by Xxxxx'x.
(j) On the Closing Date, counsel for the Underwriters shall have been
furnished with such documents and opinions as they may reasonably require for
the purpose of enabling them to pass upon the issuance and delivery of the Notes
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 Notes as herein contemplated shall
be satisfactory in form and substance to the Representative, as representative
of the Underwriters, and counsel for the Underwriters.
(k) On or before the Closing Date, the Company and the Originators
shall have delivered to the Indenture Trustee, to hold in trust for the benefit
of the holders of the Notes and the Certificates, the Loans with aggregate
outstanding principal balances as of the Cut-Off Date of at least
[$895,000,000].
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 The Closing Date, and such termination shall
be without liability of any party to any other party except as provided in
Section 4 hereof.
Section 6. INDEMNIFICATION.
(a) The Company and the Originators jointly and severally agree to
indemnify and hold harmless each of the Underwriters and each person, if any,
who controls each of the Underwriters within the meaning of Section 15 of the
1933 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue statement
or alleged untrue statement of a material fact contained in the
Registration Statement (or any amendment thereto), or the omission or
alleged omission therefrom of a material fact required to be stated
therein or necessary to make the statements therein not misleading or
arising out of any untrue statement or alleged untrue statement of a
material fact contained in any preliminary prospectus or the
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any untrue statement
or omission described in clause (i) above, or any such alleged untrue
statement or omission, if such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including, subject to Section 6(c) hereof, the reasonable fees and
disbursements of counsel chosen by such Underwriter), reasonably
incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based
upon any untrue statement or omission described in clause (i) above,
or any such alleged untrue statement or omission, to the extent that
any such expense is not paid under (i) or (ii) above; provided,
however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission
made in reliance upon and in conformity with the information referred
to in clauses (w), (x), (y) and (z) of the immediately following
paragraph; provided, further, such indemnity with respect to the
Prospectus or any preliminary prospectus shall not inure to the
benefit of any Underwriter (or person controlling such Underwriter)
from whom the person suffering any such loss, claim, damage or
liability purchased the Notes 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 Notes to such person in any case
where such delivery is required by the 1933 Act and the untrue
statement or omission of a material fact contained in any preliminary
prospectus was corrected in the Prospectus.
(b) Each Underwriter agrees to indemnify and hold harmless the Company
and the Originators, their directors, each of the Company's and Originator's
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the 1933 Act against
any and all loss, liability, claim, damage and expense described in the
indemnity contained in subsection (a) of this Section, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue statements or
omissions, contained in (w) the first sentence of the second to last paragraph
on the front cover page of the Prospectus Supplement (discussing the plan of
distribution), (x) the second sentence of the seventh paragraph on the inside
cover of the Prospectus Supplement (discussing the risk of a lack of secondary
trading), (y) the second paragraph under the heading "Underwriting" in the
Prospectus Supplement 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 Notes 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 Notes set forth next to such Underwriter's name on Annex B
hereto over the underwriting discount allocated to such principal amount of
Notes), and the Company and the Originators shall be responsible for the
balance; provided, however, that no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 0000 Xxx) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. Notwithstanding the provisions of this Section 7, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes 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 Notes 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 the Closing Date (i) if there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Registration Statement or Prospectus, any change, or
any development involving a prospective change, in or affecting particularly the
business or properties of the Company and the Originators considered as one
entity or MBIA which, in the reasonable judgment of the Representative, as
representative of the Underwriters, materially impairs the investment quality of
the Notes; (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 0000 Xxx) which,
in the reasonable judgment of the Representative, as representative of the
Underwriters, materially impairs the investment quality or marketability of any
of the Notes 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 Notes.
(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 on the Closing Date to purchase the Notes which it is
obligated to purchase hereunder (the "Defaulted Notes"), 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 Notes 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 The Closing Date for a period not
exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements.
Section 11. COMPUTATIONAL MATERIALS. (a) It is understood that any
Underwriter may prepare and provide to prospective investors certain
Computational Materials (as defined below) in connection with the Company's
offering of the Notes, subject to the following conditions:
(i) Each Underwriter shall comply with all applicable laws
and regulations in connection with the use of Computational Materials
including the No-Action Letter of May 20, 1994 issued by the
Commission to Xxxxxx, Xxxxxxx Acceptance Corporation I, Xxxxxx,
Peabody & Co. Incorporated and Xxxxxx Structured Asset Corporation, as
made applicable to other issuers and underwriters by the Commission in
response to the request of the Public Securities Association dated May
24, 1994, and the No-Action Letter of February 17, 1995 issued by the
Commission to the Public Securities Association (collectively, the
"Xxxxxx/PSA Letters").
(ii) As used herein, "Computational Materials" and the term
"ABS Term Sheets" shall have the meanings given such terms in the
Xxxxxx/PSA Letters, but shall include only those Computational
Materials that have been prepared or delivered to prospective
investors by or at the direction of an Underwriter.
(iii) Each Underwriter shall provide the Company with
representative forms of all Computational Materials prior to their
first use, to the extent such forms have not previously been approved
by the Company for use by such Underwriter. The Underwriter shall
provide to the Company, for filing on Form 8-K as provided in Section
11(b), copies of all Computational Materials that are to be filed with
the Commission pursuant to the Xxxxxx/PSA Letters. The Underwriter may
provide copies of the foregoing in a consolidated or aggregated form.
All Computational Materials described in this subsection (a)(iii) must
be provided to the Company not later than 10:00 a.m. New York time one
business day before filing thereof is required pursuant to the terms
of this Agreement.
(iv) If an Underwriter does not provide any Computational
Materials to the Company pursuant to subsection (a)(iii) above, such
Underwriter shall be deemed to have represented, as of the Closing
Date, that it did not provide any prospective investors with any
information in written or electronic form in connection with the
offering of the Notes 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 First Union, as representative of the
Underwriters, Xxx Xxxxx Xxxxx XX-0, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000, Attention:
Xxxxxxx X. Xxxxx (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 Notes 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 the Trust, the Underwriter and the Company in accordance with its terms.
Very truly yours,
THE MONEY STORE INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
-----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Executive Vice President
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: President
THE MONEY STORE
TRUST 1998-C
By: Chase Manhattan Bank Delaware, not
in its individual capacity but
solely as Owner Trustee
By: /s/ Xxxxx Xxxxx
------------------------------
Name: Xxxxx Xxxxx
Title: Trust Officer
CONFIRMED AND ACCEPTED, as of
the date first above written:
FIRST UNION CAPITAL MARKETS,
a division of Wheat First Securities, Inc.
By: /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
ANNEX A
THE ORIGINATORS
TMS Mortgage Inc.
The Money Store/D.C. Inc.
The Money Store/Minnesota Inc.
The Money Store Home Equity Corp.
The Money Store/Kentucky Inc.
ANNEX B
First Union
Capital Markets
a division of
Wheat First Prudential Xxxxxx Xxxxxx Salomon Bear, Barclays
Securities, Securities Xxxxxxxx Xxxxxxx & Co. Xxxxx Xxxxxx Xxxxxxx & Capital
Inc. Incorporated Inc. Incorporated Inc. Co., Inc. Inc. Total
-----------------------------------------------------------------------------------------------------------------------------------
POOL I NOTES
-------------
Class AF-1 $87,250,000 $88,000,000 $88,000,000 - $88,000,000 - $50,000,000 $401,250,000
Class AF-2 $133,750,000 - - - - - - $133,750,000
POOL II NOTES - - - - - - - -
-------------
Class AV $180,000,000 - - $90,000,000 - $90,000,000 - $360,000,000
Total $401,000,000 $88,000,000 $88,000,000 $90,000,000 $88,000,000 $90,000,000 $50,000,000 $895,000,000
