Exhibit 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1997-1, Class A Certificates
UNDERWRITING AGREEMENT
March 26, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
As Representative of the Underwriters
named in Schedule I
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1997-1, (the "Certificates") consisting of (i) the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class
A-4 Certificates, the Class A-5 Certificates and the Class A-6 Adjustable Rate
Certificates (collectively, the "Class A Certificates"), (ii) the Class M-1F
Certificates and the Class M-1A Adjustable Rate Certificates (collectively, the
"Class M-1 Certificates"), (iii) the Class M-2F Certificates and the Class M-2A
Adjustable Rate Certificates (collectively, the "M-2 Certificates", and
collectively with the Class M-1 Certificates, the "Mezzanine Certificates"),
(iv) the Class B-1F Certificates and the Class B-1A Adjustable Rate Certificates
(collectively, the "Class B Certificates" and collectively with the Mezzanine
Certificates, the "Subordinate Certificates"), (v) the Class C Certificates and
(vi) the residual class with respect to each REMIC held by the Trust (the "Class
R Certificates"). Only the Class A Certificates and the Subordinate Certificates
(collectively, the "Offered Certificates") are being offered. The Certificates
will be issued by the Advanta Mortgage Loan Trust 1997-1 (the "Trust"), and will
evidence in the aggregate the entire beneficial interest in a trust estate (the
"Trust Estate") consisting primarily of two segregated pools (the "Mortgage
Pools") of closed-end mortgage loans (the "Mortgage Loans"), and certain related
property. The Mortgage Loans shall have, as of the opening of business on March
1, 1997 (the "Cut-Off Date"), an aggregate principal balance of approximately
$550,000,000. The certificates are to be issued under a pooling and servicing
agreement, to be dated as of
March 1, 1997 (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").
Only the Offered Certificates are being purchased by the
Underwriters.
The 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 February 15, 1995 among the Trustee,
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.
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
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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 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
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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 make the statements therein not
misleading. The Prospectus as of its date, and as amended or
supplemented as of the Closing Date (as hereinafter defined)
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
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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 and
the Purchase Agreement, and to cause the 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 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 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 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 Purchase Agreement, this
Agreement or the Certificates.
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G. This Agreement has been, and the Pooling and
Servicing 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 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 and limitations of public
policy under applicable securities laws.
H. The execution, delivery and performance of this
Agreement, the Pooling and Servicing 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.
I. Arthur ▇▇▇▇▇▇▇▇ 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 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
Certificates will be validly issued and outstanding
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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 Certificates and the sale of the
Offered Certificates to the Underwriters, or the consummation
by the Company of the other transactions contemplated by this
Agreement, the Pooling and Servicing 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 Offered 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 Offered 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 Offered 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 delivery
to the Underwriters of the Offered
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Certificates, the Underwriters will have good title to the
Offered Certificates, free of any Liens.
N. As of 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 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 Offered 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 Purchase Agreement and the
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 Offered 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 Offered 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
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purchase from the Company the aggregate initial principal amounts of Offered
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
Offered Certificates of each Class shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate principal amount of
Offered Certificates of the related Class as is indicated with respect to each
Underwriter under the caption "Underwriting" in the Prospectus. The right 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 Offered
Certificates to be purchased by the Underwriters shall be made at the offices of
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 March 31, 1997 or at such other time or date as shall
be agreed upon in writing by the Representative and the Company (such date being
referred to as the "Closing Date"). 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 Representative for the accounts of
the Underwriters against payment of the purchase price thereof. The Offered
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 Offered 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 proposes to offer the Offered 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
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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 connection with
the offering or sale of the Offered 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 Offered 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 Offered
Certificates, and if at such time any events shall
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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 Offered Certificates at
any time nine months or more after the Effective Time, upon
the request of the Representative but at the expense of such
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 Offered 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
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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 Offered 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 Offered 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 Offered 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 Offered Certificates
to the public.
I. So long as the Offered Certificates shall be
outstanding, to deliver to the Representative 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 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 Offered Certificates pursuant to this Agreement are
subject to: (i) the accuracy on and as of the Closing Date of
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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 ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, 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 Indemnification Agreement, the Offered
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.
D. The Representative shall have received the
favorable opinion of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 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
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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
Pooling and Servicing Agreement and the Purchase Agreement.
2. This Agreement, the Certificates, the Pooling and
Servicing 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 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 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,
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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 Purchase Agreement or the
offer, issuance, sale or delivery of the 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, this Agreement, the
Purchase Agreement or the 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 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 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 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
15
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 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 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 Offered 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
16
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 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 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 Offered Certificates shall have been rated in
the highest rating category by Standard & Poor's Ratings Group
and by ▇▇▇▇▇'▇ Investors Service, Inc., 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 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.
17
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 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, 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 September 30, 1996, and no such amendment has
been authorized. No event has occurred since September
18
30, 1996, 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 September 30, 1996;
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, 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 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 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:
19
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 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.
20
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
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 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. 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 ▇▇▇▇ ▇▇▇.
L. 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 September 30, 1996, of the Company and its
subsidiaries, 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.
M. The Representative shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, 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
21
Servicing Agreement and the Company shall have complied with
all such requirements.
N. The Representative shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, 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.
O. 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
Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely thereon.
P. 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.
Q. 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,
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).
R. 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.
S. 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 Certificates as herein
contemplated shall be satisfactory in form and
22
substance to the Representative and counsel for the
Underwriters.
T. 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 of the Certificates on the terms and in the manner
contemplated in the Prospectus.
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
Offered 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
23
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 Offered 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 Offered 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, any transfer taxes on the
Offered Certificates which they may sell and the expenses of advertising any
offering of the Offered 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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, 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 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 Offered 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,
24
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 Offered 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 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,
25
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 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
26
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.
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
27
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
28
(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 Letter") of
Cleary, Gottlieb, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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 "▇▇▇▇▇▇ letter" and together with the PSA Letter,
the "No-Action Letters") of ▇▇▇▇▇ & ▇▇▇▇ on behalf of ▇▇▇▇▇▇,
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 Underwriters on the other from the offering
of the Offered 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
29
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 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
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
30
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 Offered 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(Y) 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
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, as
Representative of the Underwriters, ▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General
Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇);
B. if to the Company, shall be delivered or
sent by mail, telex or facsimile transmission to
Advanta Mortgage Conduit Services, Inc. ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
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 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
31
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
32
WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW, SPECIFIED TIMES
OF DAY REFER TO NEW YORK CITY TIME.
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.
33
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: Vice President
CONFIRMED AND ACCEPTED, as of the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
as Representative of the Underwriters
By:______________________
Name:
Title:
[Underwriting Agreement]
================================================================================
SCHEDULE A
--------------------------------------------------------------------------------
Purchase Price
Initial Principal Amount to Underwriters
of Offered Certificates disregarding
Class Purchased by Underwriters accrued interest
-----------------------------------------------------------------------------------------------
Class A-1 $141,000,000 99.9219%
-----------------------------------------------------------------------------------------------
Class A-2 $82,000,000 99.8906%
-----------------------------------------------------------------------------------------------
Class A-3 $11,500,000 99.9219%
-----------------------------------------------------------------------------------------------
Class A-4 $34,015,000 99.8438%
-----------------------------------------------------------------------------------------------
Class A-5 $29,835,000 99.9063%
-----------------------------------------------------------------------------------------------
Class A-6 $168,000,000 100.0000%
-----------------------------------------------------------------------------------------------
Class M-1F $10,200,000 99.8125%
-----------------------------------------------------------------------------------------------
Class M-1A $22,100,000 100.0000%
-----------------------------------------------------------------------------------------------
Class M-2F $9,350,000 99.8281%
-----------------------------------------------------------------------------------------------
Class M-2A $12,600,000 100.0000%
-----------------------------------------------------------------------------------------------
Class B-1F $10,500,000 99.9688%
-----------------------------------------------------------------------------------------------
Class B-1A $18,900,000 100.000%
===============================================================================================
35
EXHIBIT A
As of March 26, 1997
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
As Representative of the Underwriters
named in Schedule I
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Underwriting Agreement dated March 26, 1997 (the
"Underwriting Agreement") between Advanta
Mortgage Conduit Services, Inc. ("Advanta") and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated (the
"Representative")
Ladies and Gentlemen:
Pursuant to the Underwriting Agreement and the Indemnification
Agreement (together, the "Designated Agreements"), Advanta has undertaken
certain financial obligations with respect to the indemnification of the
Underwriters with respect to the Registration Statement, the Prospectus and the
Prospectus Supplement described in the Designated Agreements. Any financial
obligations of Advanta under the Designated Agreements, whether or not
specifically enumerated in this paragraph, are hereinafter referred to as the
"Joint and Several Obligations"; provided, however, that "Joint and Several
Obligations" shall mean only the financial obligations of Advanta under the
Designated Agreements (including the payment of money damages for a breach of
any of Advanta's obligations under the Designated Agreements, whether financial
or otherwise) but shall not include any obligations not relating to the payment
of money.
As a condition of their respective executions of the
Underwriting Agreement and of the Indemnification Agreement, the Underwriters
have required the undersigned, Advanta Mortgage Holding Company ("AMHC"), the
parent corporation of Advanta, to acknowledge its joint-and-several liability
with Advanta for the payment of the Joint and Several Obligations under the
Designated Agreements.
Now, therefore, the Underwriters and AMHC do hereby agree
that:
(i) AMHC hereby agrees to be absolutely and
unconditionally jointly and severally liable with
Advanta to the Underwriters for the payment of the
Joint and Several Obligations under the Underwriting
Agreement.
(ii) AMHC may honor its obligations hereunder either by
direct payment of any Joint and Several Obligations
or by causing any Joint and Several Obligations to be
paid to the Underwriters by Advanta or another
affiliate of AMHC.
2
Capitalized terms used herein and not defined herein shall
have their respective meanings as set forth in the Agreement.
Very truly yours,
ADVANTA MORTGAGE HOLDING COMPANY
By:_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
as Representative of the Underwriters
By:__________________________________
Name:
Title:
[AMHC Guarantee]
SCHEDULE I
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
▇▇▇▇▇▇ Brothers
Prudential Securities Incorporated
Salomon Brothers Inc.
