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EXHIBIT 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1998-2
UNDERWRITING AGREEMENT
June 12, 1998
XXXXXX XXXXXXX & CO. INCORPORATED
As Representative of the Underwriters
named in Schedule I
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1998-2, (the "Certificates") consisting of (i) the Class A-1 Group IA
Fixed Rate Certificates, the Class A-2 Group IA Fixed Rate Certificates, the
Class A-3 Group IA Fixed Rate Certificates, the Class A-4 Group IA Fixed Rate
Certificates, the Class A-5 Group IA Fixed Rate Certificates, the Class A-6
Group IA Fixed Rate Certificates, the Class A-7 Group IA Fixed Rate Certificates
and the Class A-8 Group IA Fixed Rate Certificates (collectively, the "Group IA
Certificates"), (ii) the Class A-9 Group IB Fixed Rate Certificates, the Class
A-10 Group IB Fixed Rate Certificates, the Class A-11 Group IB Fixed Rate
Certificates, the Class A-12 Group IB Fixed Rate Certificates, the Class A-13
Group IB Fixed Rate Certificates, the Class A-14 Group IB Fixed Rate
Certificates and the Class A-15 Group IB Fixed Rate Certificates (collectively,
the "Group IB Certificates"), (iii) the Class A-16 Group IIA Floating Rate
Certificates and the Class A-17 Group IIA Fixed Rate Certificates (collectively,
the "Group IIA Certificates"), (iv) the Class A-18 Group IIB Floating Rate
Certificates and the Class A-19 Group IIB Fixed Rate Certificates (collectively
the "Group IIB Certificates"), (iv) the Class F-IO Certificates (the "Class F-IO
Certificates"), (v) the Class A-IO Certificates (the "Class A-IO Certificates")
and (vi) the residual class with respect to each REMIC held by the Trust (the
"Class R Certificates"). Only the Group IA Certificates, the Group IIA
Certificates, the Class F-IO Certificates and the Class A-IO Certificates
(collectively, the "Offered Certificates") are offered. The Offered
Certificates, the Group IB Certificates, the Group IIB Certificates and the
Class R Certificates are referred to herein collectively as the "Certificates".
The Certificates will be issued by the Advanta Mortgage Loan
Trust 1998-2 (the "Trust"), and will evidence in the aggregate the entire
beneficial interest in a trust estate (the "Trust Estate") consisting primarily
of four segregated pools (the "Mortgage Pools") of closed-end mortgage loans
(the "Mortgage Loans"), and certain
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related property. The Mortgage Loans shall have, as of June 22, 1998 (the
"Closing Date"), an aggregate principal balance of approximately 925,000,000.
The certificates are to be issued under a pooling and servicing agreement, to be
dated as of June 1, 1998 (the "Pooling and Servicing Agreement"), among the
Company, as sponsor, Advanta Mortgage Corp. USA, as master servicer, and Bankers
Trust Company of California, N.A., as trustee (the "Trustee").
On or prior to the date of issuance of the Certificates, the
Company will obtain a guaranty insurance policy (the "Policy") issued by AMBAC
Indemnity Corporation (the "Insurer") which will unconditionally and irrevocably
guarantee to the Trustee for the benefit of the holders of Offered Certificates
the amount by which the Insured Distribution Amount (as defined in the Pooling
and Servicing Agreement) for each of the Group IA Certificates, Group IB
Certificates, Group IIA Certificates and Group IIB Certificates, the Class F-IO
Certificates and the Class A-IO Certificates exceeds the Available Funds (as
defined in the Pooling and Servicing Agreement) amount for each such group.
Only the Offered Certificates are being purchased by the
Underwriters. The Trust will deliver the Group IB Certificates and the Group IIB
Certificates to Advanta National Bank in consideration for the sale of its
Mortgage Loans to the Trust.
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 June 27, 1997 among the Trustee, the
Affiliate and the Affiliated Originators (as defined therein) 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 June 12, 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
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(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 the resale from time to time of the Class IB
and Class IIB Certificates by Advanta National Bank and any
prospectus filed with the Commission by the Company with the
consent of the Underwriters pursuant to Rule 424(a) of the
Rules and Regulations; "Registration Statement" means such
registration statements, as amended by all Post-Effective
Amendments thereto heretofore filed with the Commission, at
the Effective Time, including any documents incorporated by
reference therein at such time; and "Prospectus" means such
final prospectus, as first supplemented by a prospectus
supplement (the "Prospectus Supplement") relating to the
Offered Certificates and the resale from time to time of the
Class IB and Class IIB Certificates by Advanta National Bank,
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.
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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 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.
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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 and the Purchase Agreement, and to
cause the Offered 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
Indemnification Agreement, the Purchase Agreement, or the
Offered Certificates, (c) which seeks to prevent the issuance
of the Offered Certificates or the consummation by the Company
of any of the transactions contemplated by the Pooling and
Servicing 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 Indemnification Agreement, the Purchase
Agreement, this Agreement or the Offered Certificates.
G. This Agreement has been, and the Pooling and
Servicing 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 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,
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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
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
Offered 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 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 Offered
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
Offered 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 Offered 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, 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 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
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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 Certificates, the
Underwriters will have good title to the Offered Certificates,
free of any Liens.
N. As of the opening of business on June 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 Offered 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
Indemnification Agreement, the Purchase Agreement and the
Offered Certificates have been paid or will be paid at or
prior to the Closing Date.
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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 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 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 June 22, 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 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 propose to
offer the Offered Certificates for sale to the public as set forth in the
Prospectus.
Section V. Fees. The fees to be charged by the Underwriters to
the Company (i) in connection with the underwriting of the Underwritten
Certificates by the
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Underwriters and (ii) for pricing, structuring and all other services performed
by the Underwriters with respect to both the Underwritten Certificates and the
Group IB Certificates and the Group IIB Certificates shall be as set forth on
Schedule II hereto.
Section VI. 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
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
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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 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 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.
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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 VII. 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
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.
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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 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 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 Pooling and
Servicing Agreement, the Indemnification Agreement and the
Purchase Agreement.
2. This Agreement, the Certificates, the Pooling and
Servicing 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
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
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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, 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 Indemnification 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, the Indemnification
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, 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
Indemnification 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
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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 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 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
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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 statements 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 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 Offered 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 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
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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 Indemnification Agreement, the
Purchase Agreement and in all related agreements, as of the
date specified in such agreements, are true and correct, and
the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at
or prior to the Closing Date;
2. there are no actions, suits or proceedings
pending, or to the best of such officer's knowledge,
threatened against or affecting the Company which if adversely
determined, individually or in the aggregate, would be
reasonably likely to adversely affect the Company's
obligations under the Pooling and Servicing Agreement, the
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 March 31, 1998, and no such amendment has been
authorized. No event has occurred since March 31, 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 March 31, 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
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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 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 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:
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;
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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.
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. 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 Wisconsin. 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, 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
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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, and such agreement has been duly
executed and delivered and constitutes the legal, valid and
binding obligations of the Insurer enforceable in accordance
with its terms except that the enforcement of the
Indemnification Agreement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors'
rights generally and by general principles of equity and by
public policy considerations relating to indemnification for
securities law violations.
4. No consent, approval, authorization or order of
any state or federal court or governmental agency or body is
required on the part of the Insurer, the lack of which would
adversely affect the validity or enforceability of the Policy;
to the extent required by applicable legal requirements that
would adversely affect validity or enforceability of the
Policy, the form of the Policy has been filed with, and
approved by, all governmental authorities having jurisdiction
over the Insurer in connection with the Policy.
5. The Policy is not required to be registered under
the Securities Act.
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
Securities Act.
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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 Securities Act.
N. There has not occurred any change, or any
development involving a prospective change, in the condition,
financial or otherwise, or in the earnings, business or
operations, since December 31, 1997, of (A) the Company and
its subsidiaries or (B) the Insurer, that is in the
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
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 or
the Indemnification Agreement;
2. Each person who as an officer or representative of
the Insurer, signed or signs the Policy, 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 INSURANCE POLICY"
and "THE
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CERTIFICATE INSURER" presents fairly the capitalization of the
Insurer as of March 31, 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
Securities Act;
6. The audited balance sheet of the Insurer as of
December 31, 1997 and the related statement of income and
retained earnings for the fiscal year then ended, and the
accompanying footnotes, together with the related opinion of
an independent certificated public accountant, copies of which
are incorporated by reference in the Prospectus Supplement,
fairly present in all material respects the financial
condition of the Insurer as of such date and for the period
covered by such statements in accordance with generally
accepted accounting principles consistently applied; the
unaudited balance sheet of the Insurer as of March 31, 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 March
31, 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.
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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
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 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
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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.
X. The 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 VIII. 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 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 Xxxxx Xxxxxxxxxx LLP, 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.
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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 IX. 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,
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 (as
defined herein)) 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
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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, 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 (including any Derived Information (as defined
herein)) 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
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VIII except to the extent it has been materially prejudiced by
such failure, and provided, further, that the failure to
notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise
than under this Section VIII.
If any such claim or action shall be brought against
an indemnified party, and it shall notify the indemnifying
party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to
assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this
Section VIII for any legal or other expenses subsequently
incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
Any indemnified party shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and expenses of such counsel shall be at the expense of such indemnified
party unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ separate counsel; or (iii) the
indemnifying party has failed to assume the defense of such action and employ
counsel reasonably satisfactory to the indemnified party, in which case, if such
indemnified party notifies the indemnifying party in writing that it elects to
employ separate counsel at the expense of the indemnifying party, the
indemnifying party shall not have the right to assume the defense of such action
on behalf of such indemnified party, it being understood, however, the
indemnifying party shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same 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.
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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, 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
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(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, Xxxxx & Xxxxxxxx on behalf of the
Public Securities Association (which letter, and the SEC staff's response
thereto, were publicly available February 17, 1995). The term "Collateral term
sheet" as used herein includes any subsequent Collateral term sheet that
reflects a substantive change in the information presented. The term
"Computational Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Xxxxxx letter" and together with the PSA Letter, the "No-Action
Letters") of Xxxxx & Xxxx on behalf of Xxxxxx, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
G. If the indemnification provided for in this
Section VIII shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section VIII(A) or (B) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the
one hand and the 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 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
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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 Offered 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 X. 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 XI. 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 XII. 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 Xxxxxx Xxxxxxx &
Co. Incorporated, as
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Representative of the Underwriters, 0000 Xxxxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: General Counsel (Fax:
212-761-0782);
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:
619-674-3592).
Section XIII. 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
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 XIV. 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 XV. 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
Offered 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.
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Section XVI. 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 XVII. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL
BE CONSTRUED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF
CONFLICTS OF LAW, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section XVIII. 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 XIX. 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 XX. 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: /s/ Xxxx Xxxxxxxxx
-----------------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
as Representative of the Underwriters
By: /s/ Xxx Xxx
---------------------------------
Name: Xxx Xxx
Title: Vice President
[Underwriting Agreement]
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SCHEDULE I
Xxxxxx Xxxxxxx & Co. Incorporated
Xxxxxx Brothers Inc.
Prudential Securities Incorporated
