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EXHIBIT 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1998-3
UNDERWRITING AGREEMENT
September 10, 1998
XXXXXXX XXXXX XXXXXX INC.
As Representative of the Underwriters
named in Schedule I
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
Floating Rate Certificates (the "Class A-1 Certificates"), (ii) the Class A-2
Group II Floating Rate 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-1 Certificates are offered by the Underwriters.
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 I Mortgage Pool") of closed-end
mortgage loans having variable rates of interest (the "Group I Mortgage Loans"),
amounts on deposit with Bankers Trust Company of California, N.A., as trustee of
the Trust (the "Trustee") in an account to be used to acquire additional
mortgage loans following the Closing Date (as hereinafter defined) for the Trust
(the "Pre-Funding Account") and certain related property. The Mortgage Loans
shall have, as of September 23, 1998 (the "Closing Date"), an aggregate
principal balance of approximately $400,000,000 and the Pre-Funding Account
shall have approximately $108,562,000. 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 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-1
Certificates the amount by which the Group I
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Insured Distribution Amount (as defined in the Pooling and Servicing Agreement)
for the Class A-1 Certificates exceeds the Group I 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 Underwriters.
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,
Advanta Mortgage Conduit Services, Inc. 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
Underwriters, 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 Underwriters 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 Underwriters. 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,
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including any documents incorporated by reference therein at
such time; and "Prospectus" means such final prospectus, as
first supplemented by a 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 any Underwriter (i) has provided
to the Company Collateral term sheets (as hereinafter defined)
that such 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 such 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
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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 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
Underwriters 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-1 Certificates to
be issued.
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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 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 Pooling and Servicing Agreement, the Insurance 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 Insurance Agreement, the Indemnification
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,
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rule or regulation of any court or governmental agency or body
having jurisdiction over the Company or any of its properties
or assets.
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-1
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-1 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-1 Certificates and the sale of
the Class A-1 Certificates to the Underwriters, 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-1
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-1 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-1 Certificates to the Underwriters. Upon
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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 delivery to the Underwriters
of the Class A-1 Certificates, the Underwriters will have good
title to the Class A-1 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-1 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-1 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-1 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 Representative or counsel for the Underwriters in connection
with an offering of the Class A-1 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
Underwriters to purchase the Class A-1 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 Underwriters, and the Underwriters agree (except as provided in
Sections X and XI hereof) to purchase from the Company the
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aggregate initial principal amounts of Class A-1 Certificates set forth on
Schedule A, at the purchase price or prices set forth in Schedule A.
The obligations of the Underwriters hereunder to purchase the Class A-1
Certificates of each Class shall be several and not joint. Each Underwriter's
obligation shall be to purchase the aggregate principal amount of Class A-1
Certificates as is indicated with respect to each Underwriter under the caption
"Underwriting" in the Prospectus. The rights of the Company and a non-defaulting
Underwriter shall be as set forth in Section XIII hereof.
Section III. Delivery and Payment. Delivery of and payment for the
Class A-1 Certificates to be purchased by the Underwriters shall be made at the
offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at such other place as shall be agreed upon by the Representative 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 Representative 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 Class A-1 Certificates
shall be made to the Representative for the accounts of the Underwriters against
payment of the purchase price thereof. The Class A-1 Certificates shall be in
such denominations and registered in such names as the Representative may
request in writing at least two business days prior to the Closing Date. The
Class A-1 Certificates will be made available for examination by the
Representative no later than 2:00 p.m. New York City time on the first business
day prior to the Closing Date.
Section IV. Offering by the Underwriters. It is understood that,
subject to the terms and conditions hereof, the Underwriters propose to offer
the Class A-1 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
Representative 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
Representative, 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 Representative 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
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connection with the offering or sale of the Class A-1
Certificates, to promptly advise the Representative 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-1 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.
B. To furnish promptly to the Representative and to
counsel for the Underwriters 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 Representative such number
of the following documents as the Representative 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-1
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 Representative and, upon the
Representative'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 Representative 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
any of the Underwriters are required to deliver a Prospectus
in connection with sales of any of the Class A-1 Certificates
at any time nine months or more after the Effective Time, upon
the request of the Representative but at the expense of such
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Underwriter, the Company shall prepare and deliver to such
Underwriter as many copies as such 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 Representative, 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 furnish a copy thereof to the Representative and counsel
for the Underwriters and obtain the consent of the
Representative to the filing.
F. To make generally available to holders of the Class
A-1 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
Representative, to qualify the Class A-1 Certificates for
offering and sale under the applicable securities laws of such
states and other jurisdictions of the United States as the
Representative 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-1 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-1 Certificates have been so
qualified.
H. Not, without the Representative'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-1 Certificates
to the public.
I. So long as the Class A-1 Certificates shall be
outstanding, to deliver to the Representative as soon as such
statements are furnished to
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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 Offered
Certificates in the manner set forth in the Prospectus.
Section VI. Conditions to the Underwriters' Obligations.
The obligations of the Underwriters to purchase the Class A-1
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 performance by the Company of all of their
respective obligations hereunder; and (iii) the following conditions as of the
Closing Date:
A. The Representative 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. None of the Underwriters shall 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 Underwriters, 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-1 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 Underwriters, 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.
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D. The Representative 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 Insurance
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 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-1
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
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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-1
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
Agreement or the Class A-1 Certificates, (ii) seeking to
prevent the issuance of the Class A-1 Certificates or the
consummation of any of the transactions contemplated by the
Pooling and Servicing 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-1 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-1
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
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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-1 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 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-1
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,
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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 Representative 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 Representative 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 Representative and counsel for the
Underwriters, to the effect that they have performed certain
specified procedures requested by the Representative with
respect to the information set forth in the Prospectus and
certain matters relating to the Company.
F. The Class A-1 Certificates shall have received the
ratings listed on Schedule A hereto, and such ratings shall
not have been rescinded or downgraded. The Representative and
counsel for the Underwriters shall have received copies of any
opinions of counsel supplied to the rating organizations
relating to any matters with respect to the Class A-1
Certificates. Any such opinions shall be dated the Closing
Date and addressed to the Underwriters or accompanied by
reliance letters to the Underwriters or shall state that the
Underwriters may rely upon them.
G. The Representative 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;
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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;
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
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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 Representative shall have received a favorable
opinion of counsel to the Trustee, dated the Closing Date and
in form and substance satisfactory to the Representative, 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;
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-1 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.
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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 Representative 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-1 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-1 Certificates
shall have been duly executed and issued at or prior to the
Closing Date and shall conform in all material respects to the
description thereof in the Prospectus.
K. The Representative 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
Underwriters, 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
Indemnification Agreement, the Insurance 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 and the Indemnification
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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.
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
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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 Representative's judgment material and
adverse and that makes it in the Representative's judgment
impracticable to market the Offered Certificates on the terms
and in the manner contemplated in the Prospectus.
O. The Representative 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;
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;
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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.
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 Representative shall have received from Xxxxx
Xxxxxxxxxx LLP, special counsel to the Company, a survey in
form and substance satisfactory to the Representative,
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 Representative shall have received from Xxxxx
Xxxxxxxxxx LLP, special counsel to the Underwriters, 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 Representative shall
reasonably require.
R. The Representative and counsel for the Underwriters
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
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Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely thereon.
S. The Representative shall have received such further
information, certificates and documents as the Representative
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 Underwriters substantially in the form of Exhibit A
hereto.
V. Prior to 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 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-1 Certificates as herein
contemplated shall be satisfactory in form and substance to
the Representative and counsel for the Underwriters.
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 Representative,
impractical or inadvisable to proceed with the public offering
or delivery
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of the Class A-1 Certificates on the terms and in the manner
contemplated in the Prospectus.
X. The Class A-1 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 Representative 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 Underwriters.
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-1 Certificates and any taxes payable in connection therewith; (b) the costs
incident to the 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-1
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 Underwriters); (f) any fees charged by securities rating services
for rating the Class A-1 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 Underwriters shall pay their own
costs and expenses, including the costs and expenses of Xxxxx Xxxxxxxxxx LLP,
any transfer taxes on the Class A-1 Certificates which they may sell and the
expenses of advertising any offering of the Class A-1 Certificates made by the
Underwriters.
If this Agreement is terminated by the Representative, in accordance
with the provisions of Section VI or Section X, the Company shall reimburse the
Underwriters for their respective reasonable out-of-pocket expenses, including
fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters.
Section VIII. Indemnification and Contribution.
A. The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter
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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-1 Certificates), to which such 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 such Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by such 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 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 Representative specifically for inclusion therein; and provided,
further, that as to any Preliminary Prospectus this indemnity shall not
inure to the benefit of any Underwriter or any controlling person on
account of any loss, claim, damage, liability or action arising from
the sale of the Class A-1 Certificates to any person by such
Underwriter if such 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
none of the Underwriters shall 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 such Underwriter
had delivered such incorporated document or documents in response to a
written request therefor. The foregoing indemnity agreement is in
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addition to any liability which the Company may otherwise have to any
Underwriters or any controlling person of such Underwriter.
B. Each Underwriter agrees severally, and not jointly 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 furnished to the Company by or
on behalf of such 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 any 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
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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 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 Underwriters, if the indemnified
parties under this Section VIII consist of the Underwriters or any of their
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.
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D. Each 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. Each Underwriter agrees, assuming all Company-Provided
Information (defined below) is accurate and complete in all material
respects, to severally and not jointly 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 such 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 are incurred. The obligations of each of the
Underwriters under this Section VIII(E) shall be in addition to any
liability which such 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
Underwriters 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
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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 & Wood on behalf
of Xxxxxx, Xxxxxxx & 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 Underwriters on the
other from the offering of the Class A-1 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 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 Underwriters
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 Underwriters and the Company shall be
deemed to be in such proportion so that the Underwriters are 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 Underwriters 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 one of the Underwriters, 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 Underwriters 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
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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 any Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Class A-1 Certificates
purchased by such 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 Underwriters severally confirm 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 Underwriters 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 on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Company and shall survive delivery of
any Class A-1 Certificates to the Underwriters.
Section X. Termination of Agreement. The Representative 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 Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxxx Xxxxx Barney Inc., as
Representative of the Underwriters, 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 Underwriters and
the Company, and their respective successors. This Agreement and the terms and
provisions
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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 Underwriters 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. Default by One of the Underwriters. If one of the
Underwriters shall fail on the Closing Date to purchase the Offered Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), the
remaining Underwriters (the "Non-Defaulting Underwriter"), shall have the right,
but not the obligation within one (1) Business Day thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted
Certificates upon the terms herein set forth; if, however, the Non-Defaulting
Underwriter shall not have completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section XIII shall relieve the
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 Underwriter 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 XIV. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters 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 XV. 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.
Section XVI. 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.
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Section XVII. 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 XVIII. 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.
Section XIX. Representations of Underwriters. The Representative will
act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all of the Underwriters.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, 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 BARNEY INC.
as Representative of the Underwriters
By: ________________________________
Name:
Title:
[Underwriting Agreement]
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SCHEDULE A
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INITIAL PRINCIPAL PURCHASE PRICE TO
AMOUNT OF OFFERED UNDERWRITERS
REQUIRED RATINGS CERTIFICATES PURCHASED DISREGARDING
CLASS S&P/XXXXX'X BY UNDERWRITERS COUPON ACCRUED INTEREST
----------------------------------------------------------------------------------
Class A-1 AAA /Aaa $500,000,000 Floating 99.8%
----------------------------------------------------------------------------------
