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EXHIBIT 1.2
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1998-3
UNDERWRITING AGREEMENT
September 17, 1998
XXXXXXX XXXXX XXXXXX INC.
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has authorized
the issuance and sale of Mortgage Loan Asset-Backed Certificates, Series 1998-3
(the "Certificates"), consisting of (i) the Class A-1 Group I Certificates (the
"Class A-1 Certificates") , (ii) the Class A-2 Group II Certificates (the "Class
A-2 Certificates" together with the Class A-1 Certificates, the "Offered
Certificates") and (iii) the residual class with respect to each REMIC held by
the Trust (the "Class R Certificates"). Only the Class A-2 Certificates are
offered by Xxxxxxx Xxxxx Barney Inc. (the "Underwriter") pursuant to this
agreement.
The Offered Certificates will be issued by the Advanta Mortgage Loan
Trust 1998-3 (the "Trust"), and will evidence in the aggregate the beneficial
interest in a sub-trust of a trust estate (the "Trust Estate") consisting
primarily of a pool (the "Group II Mortgage Pool") of closed-end mortgage loans
having fixed rates of interest (the "Group II Mortgage Loans") and certain
related property. The Group II Mortgage Loans shall have, as of September 23,
1998 (the "Closing Date"), an aggregate principal balance of approximately
$500,000,000. The Offered Certificates are to be issued under a pooling and
servicing agreement, to be dated as of September 1, 1998 (the "Pooling and
Servicing Agreement"), among the Company, as sponsor, Advanta Mortgage Corp.
USA, as master servicer, and Bankers Trust Company of California, N.A., as
trustee (the "Trustee").
On or prior to the date of issuance of the Certificates, the Company
will obtain a guaranty insurance policy (the "Policy") issued by MBIA Insurance
Corporation (the "Insurer") which will unconditionally and irrevocably guarantee
to the Trustee for the benefit of the holders of Class A-2 Certificates the
amount by which the Group II Insured Distribution Amount (as defined in the
Pooling and Servicing Agreement) for the
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Class A-2 Certificates exceeds the Group II Total Available Funds (as defined in
the Pooling and Servicing Agreement) amount for each such group.
The Offered Certificates are more fully described in a Registration
Statement which the Company has furnished to the Underwriter. Capitalized terms
used but not defined herein shall have the meanings given to them in the Pooling
and Servicing Agreement.
Simultaneously with the execution of the Pooling and Servicing
Agreement, the Company will enter into a conveyance agreement pursuant to the
Master Loan Transfer Agreement dated as of September 23, 1998 among the Trustee,
the Affiliate and the Affiliated Originators named thereon (together, the
"Purchase Agreement"), pursuant to which the Affiliated Originators will
transfer to the Company all of their right, title and interest in and to the
Mortgage Loans as of the Closing Date.
The Company will also enter into an Indemnification Agreement (the
"Indemnification Agreement") dated as of September 10, 1998 among the
Underwriter, the Company and the Insurer, governing the liability of the several
parties with respect to the losses resulting from material misstatements or
omissions contained in the Prospectus Supplement.
Section I. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with the Underwriter that:
A. Registration Statements on Form S-3, as amended by
Post-Effective Amendments thereto, have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933 (the "Securities Act") and the rules and regulations (the "Rules
and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and (iii) become effective under
the Securities Act. Copies of such Registration Statements have been
delivered by the Company to the Underwriter. As used in this Agreement,
"Effective Time" means the date and the time as of which such
Registration Statements, or the most recent post-effective amendment
thereto, if any, was declared effective by the Commission; "Effective
Date" means the date of the Effective Time; "Preliminary Prospectus"
means each prospectus included in such Registration Statements, or
amendments thereof, including a preliminary prospectus supplement
which, as completed, is proposed to be used in connection with the sale
of the Offered Certificates and any prospectus filed with the
Commission by the Company with the consent of the Underwriters pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement"
means such registration statements, as amended by all Post-Effective
Amendments thereto heretofore filed with the Commission, at the
Effective Time, including any documents incorporated by reference
therein at such time; and "Prospectus" means such final prospectus, as
first supplemented by a
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prospectus supplement (the "Prospectus Supplement") relating to the
Offered Certificates, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
Reference made herein to any Preliminary Prospectus or to the
Prospectus shall be deemed to refer to and include any documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under
the Securities Act, as of the date of such Preliminary Prospectus or
the Prospectus, as the case may be, and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be
deemed to refer to and include any document filed under the Securities
Exchange Act of 1934 (the "Exchange Act") after the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and
incorporated by reference in such Preliminary Prospectus or the
Prospectus, as the case may be; and any reference to any amendment to
the Registration Statement shall be deemed to include any report of the
Company filed with the Commission pursuant to Section 13(a) or 15(d) of
the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. The Commission has not issued
any order preventing or suspending the use of any Preliminary
Prospectus. There are no contracts or documents of the Company which
are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations which have
not been so filed or incorporated by reference therein on or prior to
the Effective Date of the Registration Statements. The conditions for
use of Form S-3, as set forth in the General Instructions thereto, have
been satisfied.
To the extent that the Underwriter (i) has provided to the
Company Collateral term sheets (as hereinafter defined) that the
Underwriter has provided to a prospective investor, the Company has
filed such Collateral term sheets as an exhibit to a report on Form 8-K
within two business days of its receipt thereof, or (ii) has provided
to the Company Structural term sheets or Computational Materials (each
as defined below) that the Underwriter has provided to a prospective
investor, the Company will file or cause to be filed with the
Commission a report on Form 8-K containing such Structural term sheet
and Computational Materials, as soon as reasonably practicable after
the date of this Agreement, but in any event, not later than the date
on which the Prospectus is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to
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make the statements therein not misleading. The Prospectus as of its
date, and as amended or supplemented as of the Closing Date does not
and will not contain any 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 that no representation or warranty is made as
to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company in writing by the Underwriter
expressly for use therein.
C. The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents 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; and any further documents
so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder 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.
D. Since the respective dates as of which information is given
in the Prospectus, there has not been any material adverse change in
the general affairs, management, financial condition, or results of
operations of the Company, otherwise than as set forth or contemplated
in the Prospectus as supplemented or amended as of the Closing Date.
E. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority necessary
to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the Indemnification
Agreement, the Insurance Agreement, and the Purchase Agreement, and to
cause the Class A-2 Certificates to be issued.
F. There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other
tribunal to which the Company is a party or of which any of its
properties is the
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subject (a) which if determined adversely to the Company would have a
material adverse effect on the business or financial condition of the
Company, (b) which asserts the invalidity of this Agreement, the
Insurance Agreement, the Pooling and Servicing Agreement, the
Indemnification Agreement, the Purchase Agreement, or the Certificates,
(c) which seeks to prevent the issuance of the Certificates or the
consummation by the Company of any of the transactions contemplated by
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement or this Agreement, as
the case may be, or (d) which might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, the Purchase Agreement, this
Agreement or the Certificates.
G. This Agreement has been, and the Pooling and Servicing
Agreement, the Indemnification Agreement, the Insurance Agreement, and
the Purchase Agreement when executed and delivered as contemplated
hereby and thereby will have been, duly authorized, executed and
delivered by the Company, and this Agreement constitutes, and the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement when executed and
delivered as contemplated herein, will constitute, legal, valid and
binding instruments enforceable against the Company in accordance with
their respective terms, subject as to enforceability to (x) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (z) with respect to rights of indemnity under
this Agreement, the Indemnification Agreement and limitations of public
policy under applicable securities laws.
H. The execution, delivery and performance of this Agreement,
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement by the Company and
the consummation of the transactions contemplated hereby and thereby,
and the issuance and delivery of the Certificates do not and will not
conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which
the Company is a party, by which the Company is bound or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Company
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any
of its properties or assets.
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I. Arthur Xxxxxxxx LLP are independent public accountants with
respect to the Company as required by the Securities Act and the Rules
and Regulations.
J. The direction by the Company to the Trustee to execute,
authenticate, issue and deliver the Class A-2 Certificates has been
duly authorized by the Company, and assuming the Trustee has been duly
authorized to do so, when executed, authenticated, issued and delivered
by the Trustee in accordance with the Pooling and Servicing Agreement,
the Class A-2 Certificates will be validly issued and outstanding and
will be entitled to the benefits provided by the Pooling and Servicing
Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States is required for the issuance of the Class A-2
Certificates and the sale of the Class A-2 Certificates to the
Underwriter, or the consummation by the Company of the other
transactions contemplated by this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification Agreement and
the Purchase Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under State securities or Blue Sky laws in connection with the purchase
and distribution of the Class A-2 Certificates by the Underwriters or
as have been obtained.
L. The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate State, Federal or
foreign regulatory agencies or bodies necessary to conduct the business
now conducted by it and as described in the Prospectus, and the Company
has not received notice of any proceedings relating to the revocation
or modification of any such license, certificate, authority or permit
which if decided adversely to the Company would, singly or in the
aggregate, materially and adversely affect the conduct of its business,
operations or financial condition.
M. At the time of execution and delivery of the Pooling and
Servicing Agreement, the Company will: (i) have good title to the
interest in the Mortgage Loans conveyed by the Affiliated Originators,
free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"); (ii)
not have assigned to any person any of its right, title or interest in
the Mortgage Loans, in the Purchase Agreement, in the Pooling and
Servicing Agreement or in the Class A-2 Certificates being issued
pursuant thereto; and (iii) have the power and authority to sell its
interest in the Mortgage Loans to the Trustee and to sell the Class A-2
Certificates to the Underwriters. Upon execution and delivery of the
Pooling and Servicing Agreement by the Trustee, the Trustee will have
acquired beneficial ownership of all of the Company's right, title and
interest in and to the Mortgage Loans. Upon
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delivery to the Underwriter of the Class A-2 Certificates, the
Underwriter will have good title to the Class A-2 Certificates, free of
any Liens.
N. As of the opening of business on September 1, 1998 ( the
"Cut-Off Date"), each of the Mortgage Loans will meet the eligibility
criteria described in the Prospectus and will conform to the
descriptions thereof contained in the Prospectus.
O. Neither the Company nor the Trust created by the Pooling
and Servicing Agreement is an "investment company" within the meaning
of such term under the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations of the Commission thereunder.
P. At the Closing Date, the Class A-2 Certificates and the
Pooling and Servicing Agreement will conform in all material respects
to the descriptions thereof contained in the Prospectus.
Q. At the Closing Date, the Class A-2 Certificates shall have
been rated in the highest rating category by at least two nationally
recognized rating agencies.
R. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement,
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and the Class A-2
Certificates have been paid or will be paid at or prior to the Closing
Date.
S. At the Closing Date, each of the representations and
warranties of the Company set forth in the Pooling and Servicing
Agreement will be true and correct in all material respects.
Any certificate signed by an officer of the Company and delivered to
the Underwriter or counsel for the Underwriter in connection with an offering of
the Class A-2 Certificates shall be deemed, and shall state that it is, a
representation and warranty as to the matters covered thereby to each person to
whom the representations and warranties in this Section I are made.
Section II. Purchase and Sale. The commitment of the Underwriter to
purchase the Class A-2 Certificates pursuant to this Agreement shall be deemed
to have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth. The
Company agrees to instruct the Trustee to issue and agrees to sell to the
Underwriter, and the Underwriter agrees (except as provided in Sections X and XI
hereof) to purchase from the Company the aggregate initial principal amount of
Class A-2 Certificates set forth on Schedule A, at the purchase price set forth
in Schedule A.
Section III. Delivery and Payment. Delivery of and payment for the
Class A-2 Certificates to be purchased by the Underwriter shall be made at the
offices of
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Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such
other place as shall be agreed upon by the Underwriter and the Company at 10:00
A.M. New York City time on September 23, 1998 or at such other time or date as
shall be agreed upon in writing by the Underwriter and the Company. Payment
shall be made to the Company by wire transfer of same day funds payable to the
account of the Company. Delivery of the Offered Certificates shall be made to
the account of the Underwriter against payment of the purchase price thereof.
The Class A-2 Certificates shall be in such denominations and registered in such
names as the Underwriter may request in writing at least two business days prior
to the Closing Date. The Class A-2 Certificates will be made available for
examination by the Underwriter no later than 2:00 p.m. New York City time on
business day prior to the Closing Date.
Section IV. Offering by the Underwriter. It is understood that, subject
to the terms and conditions hereof, the Underwriter proposes to offer the Class
A-2 Certificates for sale to the public as set forth in the Prospectus.
Section V. Covenants of the Company. The Company agrees as follows:
A. To prepare the Prospectus in a form approved by the
Underwriter and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than the Commission's close of business on
the second business day following the execution and delivery of this
Agreement; to make no further amendment or any supplement to the
Registration Statement or to the Prospectus prior to the Closing Date
except as permitted herein; to advise the sentative, promptly after it
receives notice thereof, of the time when any amendment to the
Registration Statement has been filed or becomes effective or any
supplement to the Prospectus or any amended Prospectus has been filed
and to furnish the Underwriter with copies thereof; to file promptly
all reports and any definitive proxy or information statements required
to be filed by the Company with the Commission pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the Prospectus and, for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Class A-2
Certificates, to promptly advise the Underwriter of its receipt of
notice of the issuance by the Commission of any stop order or of: (i)
any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus; (ii) the suspension of the qualification
of the Class A-2 Certificates for offering or sale in any jurisdiction;
(iii) the initiation of or threat of any proceeding for any such
purpose; (iv) any request by the Commission for the amending or
supplementing of the Registration Statement or the Prospectus or for
additional information. In the event of the issuance of any stop order
or of any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending any such qualification, the
Company promptly shall use its best efforts to obtain the withdrawal of
such order or suspension.
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B. To furnish promptly to the Underwriter and to counsel for
the Underwriter a signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
C. To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with
the Commission and each amendment thereto (in each case including
exhibits); (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto). If the
delivery of a prospectus is required at any time prior to the
expiration of nine months after the Effective Time in connection with
the offering or sale of the Class A-2 Certificates, and if at such time
any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, the
Company shall notify the Underwriter and, upon the Underwriter's
request, shall file such document and prepare and furnish without
charge to the Underwriters and to any dealer in securities as many
copies as the Underwriter may from time to time reasonably request of
an amended Prospectus or a supplement to the Prospectus which corrects
such statement or omission or effects such compliance, and in case the
Underwriter is required to deliver a Prospectus in connection with
sales of any of the Class A-2 Certificates at any time nine months or
more after the Effective Time, upon the request of the Underwriter but
at the expense of the Underwriter, the Company shall prepare and
deliver to the Underwriter as many copies as the Underwriter may
reasonably request of an amended or supplemented Prospectus complying
with Section 10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Underwriter,
be required by the Securities Act or requested by the Commission.
E. Prior to filing with the Commission any (i) Preliminary
Prospectus, (ii) amendment to the Registration Statement or supplement
to the Prospectus, or document incorporated by reference in the
Prospectus, or (iii) Prospectus pursuant to Rule 424 of the Rules and
Regulations, to
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furnish a copy thereof to the Underwriter and counsel for the
Underwriter and obtain the consent of the Underwriter to the filing.
F. To make generally available to holders of the Class A-2
Certificates as soon as practicable, but in any event not later than 90
days after the close of the period covered thereby, a statement of
earnings of the Trust (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than
the first day of the first fiscal quarter following the Closing Date.
G. To use its best efforts, in cooperation with the
Underwriter, to qualify the Class A-2 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,
and maintain or cause to be maintained such qualifications in effect
for as long as may be required for the distribution of the Class A-2
Certificates. The Company will file or cause the filing of such
statements and reports as may be required by the laws of each
jurisdiction in which the Class A-2 Certificates have been so
qualified.
H. Not, without the Underwriter's prior written consent, to
publicly offer or sell or contract to sell any mortgage pass-through
securities, collateralized mortgage obligations or other similar
securities representing interests in or secured by other
mortgage-related assets originated or owned by the Company for a period
of 5 business days following the commencement of the offering of the
Class A-2 Certificates to the public.
I. So long as the Class A-2 Certificates shall be outstanding,
to deliver to the Underwriter as soon as such statements are furnished
to the Trustee: (i) the annual statement as to compliance delivered to
the Trustee pursuant to Section 8.16 of the Pooling and Servicing
Agreement; (ii) the annual statement of a firm of independent public
accountants furnished to the Trustee pursuant to Section 8.17 of the
Pooling and Servicing Agreement; and (iii) the Monthly Statement
furnished to the Certificateholders pursuant to Section 7.8 of the
Pooling and Servicing Agreement.
J. To apply the net proceeds from the sale of the Class A-2
Certificates in the manner set forth in the Prospectus.
Section VI. Conditions to the Underwriter's Obligations. The
obligations of the Underwriter to purchase the Class A-2 Certificates pursuant
to this Agreement are subject to: (i) the accuracy on and as of the Closing Date
of the representations and warranties on the part of the Company herein
contained; (ii) the
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performance by the Company of all of their respective obligations hereunder; and
(iii) the following conditions as of the Closing Date:
A. The Underwriter shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus shall have been complied with.
B. The Underwriter shall not have discovered and disclosed to
the Company on or prior to the Closing Date that the Registration
Statement or the Prospectus or any amendment or supplement thereto
contains an untrue statement of a fact or omits to state a fact which,
in the opinion of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriter, is
material and is required to be stated therein or is necessary to make
the statements therein not misleading.
C. All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the Pooling
and Servicing Agreement, the Purchase Agreement, the Insurance
Agreement, the Indemnification Agreement, the Class A-2 Certificates,
the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to counsel for the
Underwriter, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
D. The Underwriter shall have received the favorable opinion
of Xxxxx Xxxxxxxxxx LLP, special counsel to the Company with respect to
the following items, dated the Closing Date, to the effect that:
1. The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, and is qualified to do business in each state necessary to
enable it to perform its obligations as Sponsor under the Pooling and
Servicing Agreement. The Company has the requisite power and authority
to execute and deliver, engage in the transactions contemplated by, and
perform and observe the conditions of, this Agreement, the Insurance
Agreement, the Pooling and Servicing Agreement, the Indemnification
Agreement and the Purchase Agreement.
2. This Agreement, the Certificates, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification Agreement and
the Purchase Agreement have been duly and validly authorized, executed
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and delivered by the Company, all requisite corporate action having
been taken with respect thereto, and each (other than the Certificates)
constitutes the valid, legal and binding agreement of the Company.
3. Neither the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates nor the execution, delivery or
performance by the Company of the Pooling and Servicing Agreement, this
Agreement, the Insurance Agreement, the Indemnification Agreement or
the Purchase Agreement (A) conflicts or will conflict with or results
or will result in a breach of, or constitutes or will constitute a
default under, (i) any term or provision of the certificate of
incorporation or bylaws of the Company; (ii) any term or provision of
any material agreement, contract, instrument or indenture, to which the
Company is a party or is bound and known to such counsel; or (iii) any
order, judgment, writ, injunction or decree of any court or
governmental agency or body or other tribunal having jurisdiction over
the Company and known to such counsel; or (B) results in, or will
result in the creation or imposition of any lien, charge or encumbrance
upon the Trust Estate or upon the Class A-2 Certificates, except as
otherwise contemplated by the Pooling and Servicing Agreement.
4. The endorsement and delivery of each Note, and the
preparation, delivery and recording of an Assignment with respect to
each Mortgage is sufficient to fully transfer to the Trustee for the
benefit of the Owners all right, title and interest of the Company in
the Note and Mortgage, as noteholder and mortgagee or assignee thereof,
subject to any exceptions set forth in such opinion, and will be
sufficient to permit the Trustee to avail itself of all protection
available under applicable law against the claims of any present or
future creditors of the Company and to prevent any other sale,
transfer, assignment, pledge or other encumbrance of the Mortgage Loans
by the Company from being enforceable.
5. No consent, approval, authorization or order of,
registration or filing with, or notice to, courts, governmental agency
or body or other tribunal is required under the laws of the State of
New York, for the execution, delivery and performance of the Pooling
and Servicing Agreement, this Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement or the offer,
issuance, sale or delivery of the Class A-2 Certificates or the
consummation of any other transaction contemplated thereby by the
Company, except such which have been obtained.
6. There are no actions, proceedings or investigations, to
such counsel's knowledge, pending or threatened against the Company
before any court, governmental agency or body or other tribunal (i)
asserting the invalidity of the Pooling and Servicing Agreement, the
Insurance Agreement, the Indemnification Agreement, this Agreement, the
Purchase
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Agreement or the Class A-2 Certificates, (ii) seeking to prevent the
issuance of the Certificates or the consummation of any of the
transactions contemplated by the Pooling and Servicing Agreement, the
Insurance Agreement, the Indemnification Agreement, or this Agreement,
(iii) which would materially and adversely affect the performance by
the Company of obligations under, or the validity or enforceability of,
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Class A-2 Certificates, the Purchase
Agreement or this Agreement or (iv) that would adversely affect the
status of the Trust Estate as a "real estate mortgage investment
conduit" ("REMIC") as such term is defined in the Internal Revenue Code
of 1986, as amended.
7. To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the effectiveness
of the Registration Statement or any order directed to any prospectus
relating to the Class A-2 Certificates (including the Prospectus), and
has not initiated or threatened any proceeding for that purpose.
8. The Registration Statement and the Prospectus (other than
the financial and statistical data included therein, as to which such
counsel need express no opinion), including the Incorporated Documents,
as of the date on which the Registration Statement was declared
effective and as of the date hereof, comply as to form in all material
respects with the requirements of the 1933 Act and the rules and
regulations thereunder and the Exchange Act and the rules and
regulations thereunder, and such counsel does not know of any amendment
to the Registration Statement required to be filed, or of any
contracts, indentures or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement which has not been filed or
described as required.
9. Neither the qualification of the Pooling and Servicing
Agreement under the Trust Indenture Act of 1939 nor the registration of
the Trust created by such Pooling and Servicing Agreement under the
Investment Company Act of 1940 is presently required.
10. The statements in the Prospectus set forth under the
captions "DESCRIPTION OF THE SECURITIES," "THE POOLING AND SERVICING
AGREEMENT" and the statements in the Prospectus Supplement set forth
under the caption "DESCRIPTION OF THE CERTIFICATES," to the extent such
statements purport to summarize certain provisions of the Class A-2
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
11. The statements in the Prospectus and Prospectus Supplement
set forth under the captions "ERISA CONSIDERATIONS," "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES," and the statements in the
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Prospectus set forth under the caption "CERTAIN LEGAL ASPECTS OF THE
MORTGAGE LOANS AND RELATED MATTERS," to the extent that they constitute
matters of federal, New York or California law, or federal, New York or
California legal conclusions provide a fair and accurate summary of
such law or conclusions.
12. Assuming that (a) the Trustee causes the Trust created
under the Pooling and Servicing Agreement to elect, as the Trustee has
covenanted to do in the Pooling and Servicing Agreement, to be treated
as a REMIC and (b) the parties to the Pooling and Servicing Agreement
comply with the terms thereof, the Trust will be treated as a REMIC,
the Class A-2 Certificates issued pursuant to the Pooling and Servicing
Agreement will be treated as the "regular interests" in the REMIC and
the Class R Certificates issued pursuant to the Pooling and Servicing
Agreement will be treated as the sole "residual interest" in the REMIC.
The Trust will not be subject to tax upon its income or assets by any
taxing authority of the State of New York or New York City or of the
State of California (except that no opinion need be expressed with
respect to any minimum tax).
13. Such opinion shall also relate to comparable matters with
respect to the Affiliated Originators and Advanta Mortgage Holding
Company.
14. No information has come to such counsel's attention which
causes them to believe that the Prospectus (other than the financial
statement and other financial and statistical data contained therein,
as to which such counsel need express no opinion), as of the date
thereof, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
15. Such other matters as the Underwriter may reasonably
request.
In rendering its opinions, the counsel described above may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee and public officials. Such opinions may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
E. The Underwriter shall have received letters, including
bring-down letters, from Xxxxxx Xxxxxxxx LLP, dated on or before the
Closing Date, in form and substance satisfactory to the Underwriter and
counsel for the Underwriter, to the effect that they have performed
certain specified procedures requested by the Underwriter with respect
to the information set forth in the Prospectus and certain matters
relating to the Company.
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F. The Class A-2 Certificates shall have received the ratings
listed on Schedule A hereto, and such ratings shall not have been
rescinded or downgraded. The Underwriter and counsel for the
Underwriter shall have received copies of any opinions of counsel
supplied to the rating organizations relating to any matters with
respect to the Class A-2 Certificates. Any such opinions shall be dated
the Closing Date and addressed to the Underwriter or accompanied by
reliance letters to the Underwriter or shall state that the Underwriter
may rely upon them.
G. The Underwriter shall have received from the Company a
certificate, signed by the president, a senior vice president or a vice
president of the Company, dated the Closing Date, to the effect that
the signer of such certificate has carefully examined the Registration
Statement, the Pooling and Servicing Agreement and this Agreement and
that, to the best of his or her knowledge based upon reasonable
investigation:
1. the representations and warranties of the Company in this
Agreement, as of the Closing Date, and in the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification Agreement, the
Purchase Agreement and in all related agreements, as of the date
specified in such agreements, are true and correct, and the Company has
complied with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the Closing Date;
2. there are no actions, suits or proceedings pending, or to
the best of such officer's knowledge, threatened against or affecting
the Company which if adversely determined, individually or in the
aggregate, would be reasonably likely to adversely affect the Company's
obligations under the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, this Agreement or the
Purchase Agreement in any material way; and no merger, liquidation,
dissolution or bankruptcy of the Company is pending or contemplated;
3. the information contained in the Registration Statement and
the Prospectus relating to the Company, the Mortgage Loans or the
servicing procedures of it or its affiliates or subservicer is true and
accurate in all material respects and nothing has come to his or her
attention that would lead such officer to believe that the Registration
Statement or Prospectus includes any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein not misleading;
4. the information set forth in the Schedule of Mortgage Loans
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
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5. there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Company since
June 30, 1998, and no such amendment has been authorized. No event has
occurred since June 30, 1998, which has affected the good standing of
the Company under the laws of the State of Delaware;
6. there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
June 30, 1998;
7. on or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act;
and
8. each person who, as an officer or representative of the
Company, signed or signs the Registration Statement, the Pooling and
Servicing Agreement, the Insurance Agreement, the Indemnification
Agreement, this Agreement, or any other document delivered pursuant
hereto, on the date of such execution, or on the Closing Date, as the
case may be, in connection with the transactions described in the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and this 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, and the signatures of such persons appearing on such
documents are their genuine signatures.
The Company shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and bylaws which
are in full force and effect on the date of such certificate and a certified
true copy of the resolutions of its Board of Directors with respect to the
transactions contemplated herein.
H. The Underwriter shall have received a favorable opinion of
counsel to the Trustee, dated the Closing Date and in form and
substance satisfactory to the Underwriter, to the effect that:
1. the Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and has the power and authority to enter into and to take
all actions required of it under the Pooling and Servicing Agreement;
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2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and the Pooling and
Servicing Agreement constitutes the legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as enforceability thereof may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or reorganization or
similar occurrence affecting the Trustee, and (B) general principles of
equity regardless of whether such enforcement is sought in a proceeding
at law or in equity;
3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Trustee in connection with its execution and delivery of the
Pooling and Servicing Agreement or the performance of its obligations
thereunder;
4. the Class A-2 Certificates have been duly executed,
authenticated and delivered by the Trustee; and
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing Agreement
do not conflict with or result in a violation of any statute or
regulation applicable to the Trustee, or the charter or bylaws of the
Trustee, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the Trustee is a
party or by which it is bound.
In rendering such opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Trustee and
public officials. Such opinion may also assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto other than the Trustee.
I. The Underwriter shall have received from the Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Trustee, dated the Closing Date, to the effect that
each person who, as an officer or representative of the Trustee, signed
or signs the Class A-2 Certificates, the Pooling and Servicing
Agreement or any other document delivered pursuant hereto, on the date
hereof or on the Closing Date, in connection with the transactions
described in 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, and
the signatures of such persons appearing on such documents are their
genuine signatures.
J. The Policy relating to the Class A-2 Certificates shall
have been duly executed and issued at or prior to the Closing Date and
shall
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conform in all material respects to the description thereof in the
Prospectus.
K. The Underwriter shall have received a favorable opinion of
in-house counsel to the Insurer, dated the Closing Date and in form and
substance satisfactory to counsel for the Underwriter, to the effect
that:
1. The Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of New
York. The Insurer is validly licensed to do business in New York and is
authorized to issue the Policy and perform its obligations under the
Policy in accordance with the terms thereof.
2. The execution and delivery by the Insurer of the Policy,
the Insurance Agreement and the Indemnification Agreement are within
the corporate power of the Insurer and have been authorized by all
necessary corporate action on the part of the Insurer; the Policy has
been duly executed and is the valid and binding obligation of the
Insurer enforceable in accordance with its terms except that the
enforcement of the Policy 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.
3. The Insurer is authorized to deliver the Insurance
Agreement, the Indemnification Agreement, and such agreement has been
duly executed and delivered and constitute the legal, valid and binding
obligations of the Insurer enforceable in accordance with its terms
except that the enforcement of the Insurance Agreement, 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.
4. No consent, approval, authorization or order of any state
or federal court or governmental agency or body is required on the part
of the Insurer, the lack of which would adversely affect the validity
or enforceability of the Policy; to the extent required by applicable
legal requirements that would adversely affect validity or
enforceability of the Policy, the form of the Policy has been filed
with, and approved by, all governmental authorities having jurisdiction
over the Insurer in connection with the Policy.
5. The Policy is not required to be registered under the
Securities Act.
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6. The information set forth under the caption "THE
CERTIFICATE INSURANCE POLICY" and "THE CERTIFICATE INSURER" in the
Prospectus forming a part of the Registration Statement, insofar as
such statements constitute a description of the Policy, accurately
summarizes the Policy.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Trustee, the
Insurer 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 Insurer.
L. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the 1933 Act.
M. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act.
N. There has not occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, since December
31, 1997, of (A) the Company and its subsidiaries or (B) the Insurer,
that is in the Underwriter's judgment material and adverse and that
makes it in the Underwriter's judgment impracticable to market the
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
O. The Underwriter shall have received from the Insurer a
certificate, signed by the president, a senior vice president or a vice
president of the Insurer, dated the Closing Date, to the effect that
the signer of such certificate has carefully examined the Policy, the
Insurance Agreement, the Indemnification Agreement and the related
documents and that, to the best of his or her knowledge based on
reasonable investigation:
1. There are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policy, the Insurance Agreement, or
the Indemnification Agreement;
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2. Each person who as an officer or representative of the
Insurer, signed or signs the Policy, the Insurance Agreement, the
Indemnification Agreement or any other document delivered pursuant
hereto, on the date thereof, or on the Closing Date, in connection with
the transactions described in this 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, and
the signatures of such persons appearing on such documents are their
genuine signatures;
3. The information contained in the Prospectus under the
captions "THE CERTIFICATE INSURANCE POLICY" and "THE CERTIFICATE
INSURER" is true and correct in all material respects and does not omit
to state a material fact with respect to the description of the Policy
or the ability of the Insurer to meet its payment obligations under the
Policy;
4. The tables regarding the Insurer's capitalization set forth
under the heading "THE CERTIFICATE INSURER" present fairly the
capitalization of the Insurer as of June 30, 1998;
5. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of the Insurer by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the 1933 Act;
6. The audited balance sheet of the Insurer as of December 31,
1997 and the related statement of income and retained earnings for the
fiscal year then ended, and the accompanying footnotes, together with
the related opinion of an independent certificated public accountant,
copies of which are incorporated by reference in the Prospectus
Supplement, fairly present in all material respects the financial
condition of the Insurer as of such date and for the period covered by
such statements in accordance with generally accepted accounting
principles consistently applied; the unaudited balance sheet of the
Insurer as of June 30, 1998 and the related statement of income and
retained earnings for the three-month period then ended, copies of
which are included in the Prospectus Supplement, fairly present in all
material respects the financial condition of the Insurer as of such
date and for the period covered by such statements in accordance with
generally accepted accounting principles applied consistently with
those principles applied in preparing the December 31, 1997 audited
statements.
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7. to the best knowledge of such officer, since June 30, 1998,
no material adverse change has occurred in the financial position of
the Insurer other than as set forth in the Prospectus Supplement.
The officer of the Insurer certifying to items 5-7 shall be an officer
in charge of a principal financial function.
The Insurer shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and its bylaws,
all of which are in full force and effect on the date of such certificate.
P. The Underwriter shall have received from Xxxxx Xxxxxxxxxx
LLP, special counsel to the Company, a survey in form and substance
satisfactory to the Underwriter, indicating the requirements of
applicable local law which must be complied with in order to transfer
and service the Mortgage Loans pursuant to the Pooling and Servicing
Agreement and the Company shall have complied with all such
requirements.
Q. The Underwriter shall have received from Xxxxx Xxxxxxxxxx
LLP, special counsel to the Underwriter, such opinion or opinions,
dated the Closing Date, with respect to the issuance and sale of the
Certificates, the Prospectus and such other related matters as the
Underwriter shall reasonably require.
R. The Underwriter and counsel for the Underwriter shall have
received copies of any opinions of counsel to the Company supplied to
the Trustee relating to matters with respect to the Certificates. Any
such opinions shall be dated the Closing Date and addressed to the
Underwriter or accompanied by reliance letters to the Underwriter or
shall state the Underwriter may rely thereon.
S. The Underwriter shall have received such further
information, certificates and documents as the Underwriter may
reasonably have requested not fewer than three (3) full business days
prior to the Closing Date.
T. There shall have been executed and delivered by Advanta
Mortgage Holding Company, the corporate parent of the Company ("AMHC"),
a letter agreement with the Trustee and the Insurer, pursuant to which
AMHC agrees to become jointly and severally liable with the Company and
Advanta Mortgage Corp. USA for the payment of the Joint and Several
Obligations (as defined in such letter agreement).
U. There shall have been executed and delivered by AMHC, the
corporate parent of the Company, a letter agreement with the
Underwriter substantially in the form of Exhibit A hereto.
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V. Prior to the Closing Date, 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 sale of the Offered Certificates as herein contemplated
and related proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained, and all
proceedings taken by the Company in connection with the issuance and
sale of the Class A-2 Certificates as herein contemplated shall be
satisfactory in form and substance to the Underwriter and counsel for
the Underwriter.
W. Subsequent to the execution and delivery of this Agreement
none of the following shall have occurred: (i) trading in securities
generally on the New York Stock Exchange, the American Stock Exchange
or the over-the-counter market shall have been suspended or minimum
prices shall have been established on either of such exchanges or such
market by the Commission, by such exchange or by any other regulatory
body or governmental authority having jurisdiction; (ii) a banking
moratorium shall have been declared by Federal or state authorities;
(iii) the United States shall have become engaged in hostilities, there
shall have been an escalation of hostilities involving the United
States or there shall have been a declaration of a national emergency
or war by the United States; or (iv) there shall have occurred such a
material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets of the United States shall be such) as to make it, in the
judgment of the Underwriter, impractical or inadvisable to proceed with
the public offering or delivery of the Class A-2 Certificates on the
terms and in the manner contemplated in the Prospectus.
X. The Class A-2 Certificates shall have received the ratings
set forth on Schedule A hereto.
If any condition specified in this Section VI shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter 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 VII.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
Section VII. Payment of Expenses. The Company agrees to pay: (a) the
costs incident to the authorization, issuance, sale and delivery of the Class
A-2 Certificates and any taxes payable in connection therewith; (b) the costs
incident to the
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preparation, printing and filing under the Securities Act of the Registration
Statement and any amendments and exhibits thereto; (c) the costs of distributing
the Registration Statement as originally filed and each amendment thereto and
any post-effective amendments thereof (including, in each case, exhibits), the
Preliminary Prospectus, the Prospectus and any amendment or supplement to the
Prospectus or any document incorporated by reference therein, all as provided in
this Agreement; (d) the costs of reproducing and distributing this Agreement;
(e) the fees and expenses of qualifying the Class A-2 Certificates under the
securities laws of the several jurisdictions as provided in Section V(G) hereof
and of preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Underwriter); (f) any fees charged by securities rating services for rating the
Class A-2 Certificates; and (g) all other costs and expenses incident to the
performance of the obligations of the Company; provided that, except as provided
in this Section VII, the Underwriter shall pay its own costs and expenses,
including the costs and expenses of Xxxxx Xxxxxxxxxx LLP, any transfer taxes on
the Class A-2 Certificates which it may sell and the expenses of advertising any
offering of the Class A-2 Certificates made by the Underwriter.
If this Agreement is terminated by the Underwriter, in accordance with
the provisions of Section VI or Section X, the Company shall reimburse the
Underwriter for its reasonable out-of-pocket expenses, including fees and
disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriter.
Section VIII. Indemnification and Contribution.
A. The Company agrees to indemnify and hold harmless the
Underwriter and each person, if any, who controls the Underwriter
within the meaning of Section 15 of the Securities Act from and against
any and all loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of
the Class A-2 Certificates), to which the Underwriter or any such
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
or (iv) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading and shall reimburse the Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by the Underwriter or such controlling person in
connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that
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the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any Preliminary Prospectus, the
Prospectus or the Registration Statement in reliance upon and in
conformity with written information (including any Derived Information)
furnished to the Company through the Underwriter specifically for
inclusion therein; and provided, further, that as to any Preliminary
Prospectus this indemnity shall not inure to the benefit of the
Underwriter or any controlling person on account of any loss, claim,
damage, liability or action arising from the sale of the Class A-2
Certificates to any person by the Underwriter if the Underwriter failed
to send or give a copy of the Prospectus, as amended or supplemented,
to that person within the time required by the Securities Act, and the
untrue statement or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact in the
Preliminary Prospectus was corrected in the Prospectus, unless such
failure resulted from non-compliance by the Company with Section V(C).
For purposes of the last proviso to the immediately preceding sentence,
the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and the Underwriter shall not be
obligated to send or give any supplement or amendment to any document
incorporated therein by reference to any person other than a person to
whom the Underwriter had delivered such incorporated document or
documents in response to a written request therefor. The foregoing
indemnity agreement is in addition to any liability which the Company
may otherwise have to the Underwriter or any controlling person of the
Underwriter.
B. The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act against
any and all loss, claim, damage or liability, or any action in respect
thereof, to which the Company or any such director, officer or
controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus
or (iv) the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information
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furnished to the Company by or on behalf of the Underwriter
specifically for inclusion therein, and shall reimburse the Company and
any such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company or any director, officer or
controlling person in connection with investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred. The foregoing indemnity agreement
is in addition to any liability which the Underwriter may otherwise
have to the Company or any such director, officer or controlling
person.
C. Promptly after receipt by any indemnified party under this
Section VIII of notice of any claim or the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be
made against any indemnifying party under this Section VIII, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify an indemnifying
party shall not relieve it from any liability which it may have under
this Section VIII except to the extent it has been materially
prejudiced by such failure; and provided, further, that the failure to
notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this
Section VIII.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section VIII for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same
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general allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) at any time for all such indemnified parties, which firm shall be
designated in writing by the Underwriter, if the indemnified parties under this
Section VIII consist of the Underwriter or any of its controlling persons, or by
the Company, if the indemnified parties under this Section VIII consist of the
Company or any of the Company's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII(A) and (B), shall use its best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
D. The Underwriter agrees to deliver to the Company no later
than the date on which the Prospectus Supplement is required to be
filed pursuant to Rule 424 with a copy of its Derived Information
(defined below) for filing with the Commission on Form 8-K.
E. The Underwriter agrees, assuming all Company-Provided
Information (defined below) is accurate and complete in all material
respects, to indemnify and hold harmless the Company, each of the
Company's officers and directors and each person who controls the
Company within the meaning of Section 15 of the Securities Act against
any and all losses, claims, damages or liabilities, joint or several,
to which they may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement of
a material fact contained in the Derived Information provided by the
Underwriter, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating
or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses
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are incurred. The obligations of the Underwriter under this Section
VIII(E) shall be in addition to any liability which the Underwriter may
otherwise have.
The procedures set forth in Section VIII(C) shall be equally applicable
to this Section VIII(E).
F. For purposes of this Section VIII, the term "Derived
Information" means such portion, if any, of the information delivered
to the Company pursuant to Section VIII(D) for filing with the
Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral term
sheets, Structural term sheets or Computational Materials (as
such terms are interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to the
Underwriter by the Company concerning the Mortgage Loans comprising the Trust.
The terms "Collateral term sheet" and "Structural term sheet" shall
have the respective meanings assigned to them in the February 13, 1995 letter
(the "PSA Letter") of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral term sheet" as used
herein includes any subsequent Collateral term sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Xxxxxx letter" and
together with the PSA Letter, the "No-Action Letters") of Xxxxx & Xxxx on behalf
of Xxxxxx, Peabody & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994).
G. If the indemnification provided for in this Section VIII
shall for any reason be unavailable to or insufficient to hold harmless
an indemnified party under Section VIII(A) or (B) in respect of any
loss, claim, damage or liability, or any action in respect thereof,
referred to therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, (i) in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company on the one hand and the Underwriter on the
other from the offering of the Class A-2 Certificates or (ii) if the
allocation provided by clause (i) above is not permitted by applicable
law or if the indemnified party failed to give the notice required
under Section VIII(C), in such proportion as is appropriate
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to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Company on the one hand and
the Underwriter on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of the Underwriter and the Company shall be
deemed to be in such proportion so that the Underwriter is responsible for that
portion represented by the percentage that the underwriting discount appearing
on the cover page of the Prospectus bears to the public offering price appearing
on the cover page of the Prospectus.
The relative fault of the Underwriter and the Company shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by the Underwriter, the intent of the
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission and other equitable
considerations.
The Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section VIII(G) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII(G) shall be deemed to include, for purposes of this Section
VIII(G), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
In no case shall the Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Class A-2 Certificates
purchased by the Underwriter hereunder. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
H. The Underwriter confirms that the information set forth (i)
in the Prospectus Supplement relating to market making and (ii) in the
fourth paragraph under the caption "Underwriting" in the Prospectus
Supplement, together with the Derived Information, is correct and
constitutes the only information furnished in writing to the Company by
or on behalf of the Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
Section IX. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or
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on behalf of the Underwriter or controlling persons thereof, or by or on behalf
of the Company and shall survive delivery of any Class A-2 Certificates to the
Underwriter.
Section X. Termination of Agreement. The Underwriter may terminate this
Agreement immediately upon notice to the Company, at any time at or prior to the
Closing Date if any of the events or conditions described in Section VI(W) of
this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section V(G), the provisions of Section
VII, the indemnity agreement set forth in Section VIII, and the provisions of
Sections IX and XIII shall remain in effect.
Section XI. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriter, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxxx Xxxxx Xxxxxx Inc., 0 Xxxxx
Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General Counsel
(fax: (000) 000-0000);
B. if to the Company, shall be delivered or sent by mail,
telex or facsimile transmission to Advanta Mortgage Conduit Services,
Inc. 00000 Xxxx Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 Attention:
General Counsel (Fax: 000-000-0000).
Section XII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriter and
the Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriter within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section XII, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision contained
herein.
Section XIII. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
Section XIV. Definition of the Term "Business Day". For purposes of
this Agreement, "Business Day" means any day on which the New York Stock
Exchange, Inc. is open for trading.
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Section XV. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section XVI. Counterparts. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.
Section XVII. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriter, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
ADVANTA MORTGAGE CONDUIT
SERVICES INC.
By:
--------------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXXX XXXXX XXXXXX INC.
By:
---------------------------------
Name:
Title:
[Underwriting Agreement]
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SCHEDULE A
CLASS REQUIRED RATINGS INITIAL PRINCIPAL COUPON PURCHASE PRICE TO
S&P/XXXXX'X AMOUNT OF OFFERED UNDERWRITER
CERTIFICATES PURCHASED DISREGARDING
BY UNDERWRITER ACCRUED INTEREST
Class A-2 AAA /Aaa $500,000,000 Floating 99.80%
