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Exhibit 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Notes,
Series 1998-4
UNDERWRITING AGREEMENT
November 2, 1998
XXXXXX XXXXXXX & CO. INCORPORATED
As Underwriter
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 Notes, Series 1998-4, consisting
of (i) the Advanta Mortgage Loan Trust 1998-4 A Class A Mortgage Backed Notes
(the "Class A Notes"), (ii) the Advanta Mortgage Loan Trust 1998-4 B Class B
Mortgage Backed Notes (the "Class B Notes"), (iii) the Advanta Mortgage Loan
Trust 1998-4 C Class C Mortgage Backed Notes (the "Class C Notes," and together
with the Class A Notes and the Class B Notes, the "Notes") and (iv) the equity
class with respect to each Trust (the "Residual Certificates"). Only the Class A
Notes, the Class B Notes and the Class C Notes (collectively, the "Underwritten
Notes") are being offered hereby.
The Class A Notes will be issued by Advanta Mortgage Loan Trust 1998-4 A
("Trust A"). The Class B Notes will be issued by Advanta Mortgage Loan Trust
1998-4 B ("Trust B"). The Class C Notes will be issued by Advanta Mortgage Loan
Trust 1998-4 C ("Trust C"). Each of Trust A, Trust B and Trust C is referred to
herein as a "Trust or "Trusts". The Trusts are each separate business trusts
established under Delaware law pursuant to separate Trust Agreement, each dated
as of November 2, 1998 (the "Trust Agreements"), between the Company and
Wilmington Trust Company, a Delaware banking corporation, as owner Trustee.
Each class of Notes will evidence in the aggregate the obligations of the
respective Trust issuing such class of Notes. The trust estate (the "Trust
Estate") of each Trust will consist primarily of a pool (the "Mortgage Pools")
of closed-end mortgage loans (the "Mortgage Loans"), and certain related
property. The Mortgage Loans owned by Trust A shall have, as of November 24,
1998 (the "Closing Date"), an aggregate principal balances of approximately
$461,929,124. The Mortgage Loans owned by Trust B shall have, as of November 24,
1998 (the "Closing Date"), an aggregate principal balances of approximately
$213,198,103. The Mortgage Loans owned by Trust C shall have, as of November 24,
1998 (the "Closing Date"), an aggregate principal balances of approximately
$102,472,109. In addition, following the Closing Date, the Trust Estates of
Trust A and Trust B will each contain certain monies on deposit which may be
used to acquire from the Sponsor after the Closing Date additional Mortgage Loan
meeting certain qualifications.
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Each class of Notes is to be issued under a separate Indenture with
respect to each Trust, to be dated as of November 1, 1998 (an "Indenture"),
between such Trust and Bankers Trust Company of California, N.A., as indenture
trustee (the "Indenture Trustee"). Each Trust, the Indenture Trustee, the
Company and Advanta Mortgage Corp. USA will also enter into a separate Sale and
Servicing Agreement, each to be dated as of November 1, 1998 (the "Sale and
Servicing Agreements").
On or prior to the date of issuance of Notes, the Trusts will obtain a
guaranty insurance policy (the "Policies") issued by AMBAC Assurance Corporation
(the "Insurer") which will unconditionally and irrevocably guarantee to the
Trustee for such Trust, for the benefit of the holders of the Notes issued by
such Trust, the amount by which the Insured Distribution Amount (as defined in
such Trust's respective Indenture) for each of the Notes exceeds the Available
Funds Amount (as defined in such Trust's respective Indenture) for each such
group.
The Notes are more fully described in a Registration Statement (as defined
hereinafter) which the Company has furnished to the Underwriter. Capitalized
terms used but not defined herein shall have the meanings given to them in the
Indentures.
Simultaneously with the execution of the Indentures, the Company will
enter into a conveyance agreement pursuant to the Master Loan Transfer Agreement
dated as of June 27, 1997 among the Indenture 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.
Section I. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with the Underwriter that:
A. Registration Statements on Form S-3, as amended by Post-Effective
Amendments thereto, have (i) been prepared by the Company in conformity
with the requirements of the Securities Act of 1933 (the "Securities Act")
and the rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission") thereunder,
(ii) been filed with the Commission under the Securities Act and (iii)
become effective under the Securities Act. Copies of such Registration
Statements have been delivered by the Company to the Underwriter. As used
in this Agreement, "Effective Time" means the date and the time as of
which such Registration Statements, or the most recent post-effective
amendment thereto, if any, was declared effective by the Commission;
"Effective Date" means the date of the Effective Time; "Preliminary
Prospectus" means each prospectus included in such Registration
Statements, or amendments thereof, including a preliminary prospectus
supplement which, as completed, is proposed to be used in connection with
the sale of the Underwritten Notes and any prospectus filed with the
Commission by the Company with the consent of the Underwriter pursuant to
Rule 424(a) of
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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
Underwritten Notes, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and Regulations.
Reference made herein to any Preliminary Prospectus or to the Prospectus
shall be deemed to refer to and include any documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the Securities
Act, as of the date of such Preliminary Prospectus or the Prospectus, as
the case may be, and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act of 1934 (the
"Exchange Act") after the date of such Preliminary Prospectus or the
Prospectus, as the case may be, and incorporated by reference in such
Preliminary Prospectus or the Prospectus, as the case may be; and any
reference to any amendment to the Registration Statement shall be deemed
to include any report of the Company filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act after the Effective Time that
is incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus. There are no contracts or documents of the Company
which are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations which have not
been so filed or incorporated by reference therein on or prior to the
Effective Date of the Registration Statements. The conditions for use of
Form S-3, as set forth in the General Instructions thereto, have been
satisfied.
To the extent that the Underwriter (i) has provided to the Company
Collateral term sheets (as hereinafter defined) that the Underwriter has
provided to a prospective investor, the Company has filed such Collateral
term sheets as an exhibit to a report on Form 8-K within two business days
of its receipt thereof, or (ii) has provided to the Company Structural
term sheets or Computational Materials (each as defined below) that the
Underwriter has provided to a prospective investor, the Company will file
or cause to be filed with the Commission a report on Form 8-K containing
such structural term sheet and Computational Materials, as soon as
reasonably practicable after the date of this Agreement, but in any event,
not later than the date on which the Prospectus is filed with the
Commission pursuant to Rule 424 of the Rules and Regulations.
B. The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
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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 Underwriter expressly for use
therein.
C. The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading.
D. Since the respective dates as of which information is given in
the Prospectus, there has not been any material adverse change in the
general affairs, management, financial condition, or results of operations
of the Company, otherwise than as set forth or contemplated in the
Prospectus as supplemented or amended as of the Closing Date.
E. The Company has been duly incorporated and is validly existing as
a corporation in good standing under the laws of its jurisdiction of
incorporation, is duly qualified to do business and is in good standing as
a foreign corporation in each jurisdiction in which its ownership or lease
of property or the conduct of its business requires such qualification,
and has all power and authority necessary to own or hold its properties,
to conduct the business in which it is engaged and to enter into and
perform its obligations under this Agreement, the Indentures, the Sale and
Servicing Agreements and the Purchase Agreement, and to cause the
Underwritten Notes to be issued.
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F. There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other tribunal
to which the Company is a party or of which any of its properties is the
subject (a) which if determined adversely to the Company would have a
material adverse effect on the business or financial condition of the
Company, (b) which asserts the invalidity of this Agreement, the
Indentures, the Sale and Servicing Agreements, the Purchase Agreement, or
the Underwritten Notes, (c) which seeks to prevent the issuance of the
Underwritten Notes or the consummation by the Company of any of the
transactions contemplated by the Indentures, the Purchase Agreement, the
Trust Agreements 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 Indentures,
the Sale and Servicing Agreements, the Purchase Agreement, this Agreement
or the Underwritten Notes.
G. This Agreement has been, and the Indentures, the Sale and
Servicing Agreements 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 Indentures, the Sale and Servicing Agreements 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
Indentures, the Sale and Servicing Agreements and the Purchase Agreement
by the Company and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of the Underwritten
Notes do not and will not conflict with or result in a breach or violation
of any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company is a party, by which the Company is bound
or to which any of the property or assets of the Company or any of its
subsidiaries is subject, nor will such actions result in any violation of
the provisions of the articles of incorporation or by-laws of the Company
or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties or assets.
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I. Arthur Xxxxxxxx LLP are independent public accountants with
respect to the Company as required by the Securities Act and the Rules and
Regulations.
J. The direction by the Company to the Indenture Trustee to execute,
authenticate, issue and deliver the Underwritten Notes has been duly
authorized by the Company, and assuming the Indenture Trustee has been
duly authorized to do so, when executed, authenticated, issued and
delivered by the Indenture Trustee in accordance with the Indentures, the
Underwritten Notes will be validly issued and outstanding and will be
entitled to the benefits provided by the Indentures.
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 Underwritten Notes and
the sale of the Underwritten Notes to the Underwriter, or the consummation
by the Company of the other transactions contemplated by this Agreement,
the Indentures, the Sale and Servicing Agreements 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 Underwritten
Notes by the Underwriter 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 Indentures and the
Sale and Servicing Agreements, 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 Indentures, the Sale and
Servicing Agreements or in the Underwritten Notes being issued pursuant
thereto; (iii) have the power and authority to sell its interest in the
Mortgage Loans to the Trusts; and (iv) the Trusts have the power to assign
or pledge the Mortgage Loans to the Indenture Trustee and to sell the
Underwritten Notes to the Underwriter. Upon execution and delivery of the
Indentures and the Sale and Servicing Agreements by the Indenture Trustee,
the Indenture Trustee will have acquired beneficial ownership of
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all of the Company's right, title and interest in and to the Mortgage
Loans. Upon delivery to the Underwriter of the Underwritten Notes, the
Underwriter will have good title to the Underwritten Notes, free of any
Liens.
N. As of the opening of business on November 1, 1998 (the "Statistic
Calculation 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 Trusts are "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 Underwritten Notes, the Sale and
Servicing Agreements and the Indentures will conform in all material
respects to the descriptions thereof contained in the Prospectus.
Q. At the Closing Date, the Underwritten Notes 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 Indentures,
the Sale and Servicing Agreements, the Purchase Agreement and the
Underwritten Notes 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 Sale and Servicing Agreements and the
Indentures will be true and correct in all material respects.
Any certificate signed by an officer of the Company and delivered to the
Underwriter or counsel for the Underwriter in connection with an offering of the
Underwritten Notes shall be deemed, and shall state that it is, a representation
and warranty as to the matters covered thereby to each person to whom the
representations and warranties in this Section I are made.
Section II. Purchase and Sale. The commitment of the Underwriter to
purchase the Underwritten Notes 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 Indenture Trustee to issue and agrees to sell to
the Underwriter, and the Underwriter agrees (except as provided in Sections X
and XI hereof) to purchase from the Company the aggregate initial principal
amounts of Underwritten Notes set forth on Schedule A, at the purchase price or
prices set forth in Schedule A.
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Section III. Delivery and Payment. Delivery of and payment for the
Underwritten Notes to be purchased by the Underwriter 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 Underwriter and the Company
at 10:00 A.M. New York City time on November 24, 1998 or at such other time or
date as shall be agreed upon in writing by the Underwriter and the Company.
Payment shall be made to the Company by wire transfer of same day funds payable
to the account of the Company. Delivery of the Underwritten Notes shall be made
to the Underwriter against payment of the purchase price thereof. The
Underwritten Notes shall be in such denominations and registered in such names
as the Underwriter may request in writing at least two business days prior to
the Closing Date. The Underwritten Notes will be made available for examination
by the Underwriter 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 Underwriter. It is understood that, subject to
the terms and conditions hereof, the Underwriter proposes to offer the
Underwritten Notes for sale to the public as set forth in the Prospectus.
Section V. Covenants of the Company. The Company agrees as follows:
A. To prepare the Prospectus in a form approved by the Underwriter
and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission's close of business on the second
business day following the execution and delivery of this Agreement; to
make no further amendment or any supplement to the Registration Statement
or to the Prospectus prior to the Closing Date except as permitted herein;
to advise the Underwriter, promptly after it receives notice thereof, of
the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Underwriter with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange
Act subsequent to the date of the Prospectus and, for so long as the
delivery of a prospectus is required in connection with the offering or
sale of the Underwritten Notes, to promptly advise the Underwriter of its
receipt of notice of the issuance by the Commission of any stop order or
of: (i) any order preventing or suspending the use of any Preliminary
Prospectus or the Prospectus; (ii) the suspension of the qualification of
the Underwritten Notes 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
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qualification, the Company promptly shall use its best efforts to obtain
the withdrawal of such order or suspension.
B. To furnish promptly to the Underwriter and to counsel for the
Underwriter a true and correct copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith.
C. To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i) true
and correct 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 Underwritten Notes, and if at such time any events shall have occurred
as a result of which the Prospectus as then amended or supplemented would
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made when such Prospectus
is delivered, not misleading, or, if for any other reason it shall be
necessary during such same period to amend or supplement the Prospectus or
to file under the Exchange Act any document incorporated by reference in
the Prospectus in order to comply with the Securities Act or the Exchange
Act, the Company shall notify the Underwriter and, upon the Underwriter's
request, shall file such document and prepare and furnish without charge
to the Underwriter and to any dealer in securities as many copies as the
Underwriter may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which corrects such statement
or omission or effects such compliance, and in case any of the Underwriter
are required to deliver a Prospectus in connection with sales of any of
the Underwritten Notes at any time nine months or more after the Effective
Time, upon the request of the Underwriter but at the expense of the
Underwriter, the Company shall prepare and deliver to the Underwriter as
many copies as the Underwriter may reasonably request of an amended or
supplemented Prospectus complying with Section 10(a)(3) of the Securities
Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Underwriter, be
required by the Securities Act or requested by the Commission.
E. Prior to filing with the Commission any (i) Preliminary
Prospectus, (ii) amendment to the Registration Statement or supplement to
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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 Underwriter and counsel for the Underwriter
and obtain the consent of the Underwriter to the filing.
F. To make generally available to holders of the Underwritten Notes
as soon as practicable, but in any event not later than 90 days after the
close of the period covered thereby, a statement of earnings of the Trust
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations (including, at the option of the
Company, Rule 158) and covering a period of at least twelve consecutive
months beginning not later than the first day of the first fiscal quarter
following the Closing Date.
G. To use its best efforts, in cooperation with the Underwriter, to
qualify the Underwritten Notes for offering and sale under the applicable
securities laws of such states and other jurisdictions of the United
States as the Underwriter may designate, and maintain or cause to be
maintained such qualifications in effect for as long as may be required
for the distribution of the Underwritten Notes. 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 Underwritten Notes have been so
qualified.
H. Not, without the Underwriter's prior written consent, to publicly
offer or sell or contract to sell any mortgage pass-through securities,
collateralized mortgage obligations or other similar securities
representing interests in or secured by other mortgage-related assets
originated or owned by the Company for a period of 5 business days
following the commencement of the offering of the Underwritten Notes to
the public.
I. So long as the Underwritten Notes shall be outstanding, to
deliver to the Underwriter as soon as such statements are furnished to the
Indenture Trustee: (i) the annual statement as to compliance delivered to
the Indenture Trustee pursuant to Section 3.9 of the Indentures; (ii) the
annual statement of a firm of independent public accountants furnished to
the Indenture Trustee pursuant to the Indentures; and (iii) the Monthly
Statement furnished to the Noteholders pursuant to the Indentures.
J. To apply the net proceeds from the sale of the Underwritten Notes
in the manner set forth in the Prospectus.
Section VI. Conditions to the Underwriter' Obligations. The obligations of
the Underwriter to purchase the Underwritten Notes pursuant to this Agreement
are subject to: (i) the accuracy on and as of the Closing Date of the
representations and warranties on the part of the Company herein contained; (ii)
the
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performance by the Company of all of their respective obligations hereunder;
and (iii) the following conditions as of the Closing Date:
A. The Underwriter shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending the
effectiveness of the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have been initiated
or threatened by the Commission. Any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus shall have been complied with.
B. None of the Underwriter 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 Underwriter, is
material and is required to be stated therein or is necessary to make the
statements therein not misleading.
C. All corporate proceedings and other legal matters relating to the
authorization, form and validity of this Agreement, the Indentures, the
Purchase Agreement, the Sale and Servicing Agreements, the Underwritten
Notes, the Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to counsel for the
Underwriter, and the Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable them
to pass upon such matters.
D. The Underwriter shall have received the favorable opinion of
Xxxxx Xxxxxxxxxx LLP, special counsel to the Company with respect to the
following items, dated the Closing Date, to the effect that:
1. The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, and
is qualified to do business in each state necessary to enable it to
perform its obligations as Sponsor under the Sale and Servicing
Agreements. 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 Sale and Servicing
Agreements, the Indentures and the Purchase Agreement.
2. This Agreement, the Notes, the Sale and Servicing Agreements, the
Indentures 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
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(other than the Notes) constitutes the valid, legal and binding agreement
of the Company.
3. Neither the transfer of the Mortgage Loans to each Trust, the
issuance or sale of the Notes nor the execution, delivery or performance
by the Company of the Sale and Servicing Agreements, the Indentures, 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 a Trust Estate or
upon the Notes, except as otherwise contemplated by the Indentures.
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 Indenture 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
Indenture 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 Sale and Servicing Agreements,
the Indentures, this Agreement, the Purchase Agreement or the offer,
issuance, sale or delivery of the Notes 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 Sale and Servicing Agreements, the Indentures, this
Agreement, the Purchase Agreement or the Notes, (ii) seeking to prevent
the issuance of the Notes or the consummation of any of the transactions
contemplated by the Sale and Servicing Agreements, the Indentures or this
Agreement or (iii) which would materially and adversely affect the
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performance by the Company of obligations under, or the validity or
enforceability of, the Indentures, the Sale and Servicing Agreements, the
Notes, the Purchase Agreement or this Agreement.
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 Notes
(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. The Indentures are required to be qualified under the Trust
Indenture Act of 1939. The registration of the Trusts under the Investment
Company Act of 1940 is not presently required.
10. The statements in the Prospectus and the Prospectus Supplement
set forth under the captions "DESCRIPTION OF THE NOTES," "THE SALE AND
SERVICING AGREEMENTS" and the statements in the Prospectus Supplement set
forth under the caption "DESCRIPTION OF THE NOTES," to the extent such
statements purport to summarize certain provisions of the Notes or of the
Indentures, 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 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. Such opinion shall also relate to comparable matters with
respect to the Affiliated Originators and Advanta Mortgage Holding
Company.
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13. 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.
14. Such other matters as the Underwriter may reasonably request.
In rendering its opinions, the counsel described above may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Indenture Trustee and public officials. Such opinions may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
E. The Underwriter shall have received letters, including bring-down
letters, from Xxxxxx Xxxxxxxx LLP, dated on or before the Closing Date, in
form and substance satisfactory to the Underwriter and counsel for the
Underwriter, to the effect that they have performed certain specified
procedures requested by the Underwriter with respect to the information
set forth in the Prospectus and certain matters relating to the Company.
F. The Underwritten Notes shall have received the ratings listed on
Schedule A hereto, and such ratings shall not have been rescinded or
downgraded. The Underwriter and counsel for the Underwriter shall have
received copies of any opinions of counsel supplied to the rating
organizations relating to any matters with respect to the Notes. Any such
opinions shall be dated the Closing Date and addressed to the Underwriter
or accompanied by reliance letters to the Underwriter or shall state that
the Underwriter may rely upon them.
G. The Underwriter shall have received from the Company a
certificate, signed by the president, a senior vice president or a vice
president of the Company, dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Registration
Statement, the Sale and Servicing Agreements, the Indentures 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 Sale and Servicing
Agreements, the Indentures, 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
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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 Indentures, the Sale and Servicing Agreements, 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 Indentures 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,
1998, and no such amendment has been authorized. No event has occurred
since September 30, 1998, which has affected the good standing of the
Company under the laws of the State of Delaware;
6. there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
September 30, 1998;
7. on or prior to the Closing Date, there has been no downgrading,
nor has any notice been given of (A) any intended or potential downgrading
or (B) any review or possible changes in rating the direction of which has
not been indicated, in the rating, if any, accorded the Company or in any
rating accorded any securities of the Company, if any, by any "nationally
recognized statistical rating organization," as such term is defined for
purposes of the 1933 Act; and
8. each person who, as an officer or representative of the Company,
signed or signs the Registration Statement, the Indentures, the Sale and
Servicing Agreements, this Agreement, or any other document delivered
pursuant hereto, on the date of such execution, or on the Closing
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Date, as the case may be, in connection with the transactions described in
the Indentures, the Purchase Agreement and this Agreement was, at the
respective times of such signing and delivery, and is now, duly elected or
appointed, qualified and acting as such officer or representative, and the
signatures of such persons appearing on such documents are their genuine
signatures.
The Company shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and bylaws which
are in full force and effect on the date of such certificate and a certified
true copy of the resolutions of its Board of Directors with respect to the
transactions contemplated herein.
H. The Underwriter shall have received a favorable opinion of
counsel to the Indenture Trustee, dated the Closing Date and in form and
substance satisfactory to the Underwriter, to the effect that:
1. the Indenture 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 Indentures;
2. the Indentures have been duly authorized, executed and delivered
by the Indenture Trustee and the Indentures constitute the legal, valid
and binding obligation of the Indenture Trustee, enforceable against the
Indenture 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 Indenture
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 Indenture Trustee in connection with its execution and delivery of the
Indentures or the performance of its obligations thereunder;
4. the Notes have been duly executed, authenticated and delivered by
the Indenture Trustee; and
5. the execution and delivery of, and performance by the Indenture
Trustee of its obligations under, the Indentures do not conflict with or
result in a violation of any statute or regulation applicable to the
Indenture Trustee, or the charter or bylaws of the Indenture Trustee, or
to the best knowledge of such counsel, any governmental authority having
jurisdiction over the Indenture Trustee or the terms of any indenture or
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other agreement or instrument to which the Indenture 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 Indenture 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 Indenture Trustee.
I. The Underwriter shall have received from the Indenture Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Indenture Trustee, dated the Closing Date, to the effect
that each person who, as an officer or representative of the Indenture
Trustee, signed or signs the Notes, the Indentures or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date, in
connection with the transactions described in each of the Indentures 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 Policies relating to the Underwritten Notes 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 Underwriter shall have received a favorable opinion of
in-house counsel to the Insurer, dated the Closing Date and in form and
substance satisfactory to counsel for the Underwriter, to the effect that:
1. The Insurer is a stock insurance corporation, duly incorporated
and validly existing under the laws of the State of Wisconsin. The Insurer
is validly licensed to do business in New York and is authorized to issue
the Policies and perform its obligations under the Policies in accordance
with the terms thereof.
2. The execution and delivery by the Insurer of the Policies, and of
that certain Indemnification Agreement, dated November 2, 1998 (the
"Indemnification Agreement"), between the Insurer and the Underwriter, and
that certain Insurance and Indemnification Agreement (the "Insurance
Agreement"), dated as of November 1, 1998, by and among the Insurer, the
Company, the Indenture Trustee and the Trusts, are within the corporate
power of the Insurer and have been authorized by all necessary corporate
action on the part of the Insurer; the Policies have been duly executed
and are valid and binding obligation of the Insurer enforceable in
accordance with their terms except that the enforcement of the Policies
may be limited by laws relating to bankruptcy, insolvency, reorganization,
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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 Policies; to the extent required by applicable legal
requirements that would adversely affect validity or enforceability of the
Policies, the form of the Policies have been filed with, and approved by,
all governmental authorities having jurisdiction over the Insurer in
connection with the Policies.
5. The Policies are not required to be registered under the
Securities Act.
6. The information set forth under the caption "THE INSURANCE
POLICIES" and "THE INSURER" in the Prospectus and the Prospectus
Supplement forming a part of the Registration Statement, insofar as such
statements constitute a description of the Policies, accurately summarizes
the Policies.
In rendering this opinion, such counsel may rely, as to matters of fact,
on certificates of responsible officers of the Company, the Indenture Trustee,
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.
M. On or prior to the Closing Date, there has been no downgrading,
nor has any notice been given of (A) any intended or
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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
Underwriter's judgment material and adverse and that makes it in the
Underwriter's judgment impracticable to market the Underwritten Notes on
the terms and in the manner contemplated in the Prospectus.
O. The Underwriter shall have received from the Insurer a
certificate, signed by the president, a senior vice president or a vice
president of the Insurer, dated the Closing Date, to the effect that the
signer of such certificate has carefully examined the Policies, the
Indemnification Agreement, the Insurance 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 Policies, the Insurance Agreement or the
Indemnification Agreement;
2. Each person who as an officer or representative of the Insurer,
signed or signs the Policies, 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 Supplement under the
captions "THE INSURANCE POLICY" and "THE 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 Policies or the ability of the Insurer
to meet its payment obligations under the Policies;
4. The tables regarding the Insurer's capitalization set forth in
the Prospectus Supplement under the heading "THE INSURANCE POLICY" and
"THE INSURER" presents fairly the capitalization of the Insurer as of
September 30, 1998;
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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 September 30, 1998 and the
related statement of income and retained earnings for the three-month
period then ended, copies of which are included in the Prospectus
Supplement, fairly present in all material respects the financial
condition of the Insurer as of such date and for the period covered by
such statements in accordance with generally accepted accounting
principles applied consistently with those principles applied in preparing
the December 31, 1997 audited statements.
7. To the best knowledge of such officer, since September 30, 1998,
no material adverse change has occurred in the financial position of the
Insurer other than as set forth in the Prospectus Supplement.
The officer of the Insurer certifying to items 5-7 shall be an officer in
charge of a principal financial function.
The Insurer shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and its bylaws,
all of which are in full force and effect on the date of such certificate.
P. The Underwriter shall have received from Xxxxx Xxxxxxxxxx LLP,
special counsel to the Company, a survey in form and substance
satisfactory to the Underwriter, indicating the requirements of applicable
local law which must be complied with in order to transfer and service the
Mortgage Loans pursuant to the Sale and Servicing Agreements and the
Indentures and the Company shall have complied with all such requirements.
Q. The Underwriter shall have received from Xxxxx Xxxxxxxxxx LLP,
special counsel to the Underwriter, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Notes, the
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Prospectus and such other related matters as the Underwriter shall
reasonably require.
R. The Underwriter and counsel for the Underwriter shall have
received copies of any opinions of counsel to the Company supplied to the
Indenture Trustee relating to matters with respect to the Notes. Any such
opinions shall be dated the Closing Date and addressed to the Underwriter
or accompanied by reliance letters to the Underwriter or shall state the
Underwriter may rely thereon.
S. The Underwriter shall have received such further information,
certificates and documents as the Underwriter may reasonably have
requested not fewer than three (3) full business days prior to the Closing
Date.
T. Prior to the Closing Date, counsel for the Underwriter shall have
been furnished with such documents and opinions as they may reasonably
require for the purpose of enabling them to pass upon the issuance and
sale of the Underwritten Notes 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 Notes as herein contemplated
shall be satisfactory in form and substance to the Underwriter and counsel
for the Underwriter.
U. Subsequent to the execution and delivery of this Agreement none
of the following shall have occurred: (i) trading in securities generally
on the New York Stock Exchange, the American Stock Exchange or the
over-the-counter market shall have been suspended or minimum prices shall
have been established on either of such exchanges or such market by the
Commission, by such exchange or by any other regulatory body or
governmental authority having jurisdiction; (ii) a banking moratorium
shall have been declared by Federal or state authorities; (iii) the United
States shall have become engaged in hostilities, there shall have been an
escalation of hostilities involving the United States or there shall have
been a declaration of a national emergency or war by the United States; or
(iv) there shall have occurred such a material adverse change in general
economic, political or financial conditions (or the effect of
international conditions on the financial markets of the United States
shall be such) as to make it, in the judgment of the Underwriter,
impractical or inadvisable to proceed with the public offering or delivery
of the Notes on the terms and in the manner contemplated in the
Prospectus.
V. The Notes shall have received the ratings set forth on Schedule A
hereto.
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If any condition specified in this Section VI shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Underwriter by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section VII.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriter.
Section VII. Payment of Expenses. The Company agrees to pay: (a) the costs
incident to the authorization, issuance, sale and delivery of the Underwritten
Notes 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 Underwritten Notes
under the securities laws of the several jurisdictions as provided in Section
V(G) hereof and of preparing, printing and distributing a Blue Sky Memorandum
and a Legal Investment Survey (including related fees and expenses of counsel to
the Underwriter); (f) any fees charged by securities rating services for rating
the Underwritten Notes; and (g) all other costs and expenses incident to the
performance of the obligations of the Company; provided that, except as provided
in this Section VII, the Underwriter shall pay their own costs and expenses,
including the costs and expenses of Xxxxx Xxxxxxxxxx LLP, any transfer taxes on
the Underwritten Notes which they may sell and the expenses of advertising any
offering of the Underwritten Notes made by the Underwriter.
If this Agreement is terminated by the Underwriter, in accordance with the
provisions of Section VI or Section X, the Company shall reimburse the
Underwriter for their respective reasonable out-of-pocket expenses, including
fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriter.
Section VIII. Indemnification and Contribution.
A. The Company agrees to indemnify and hold harmless the Underwriter
and each person, if any, who controls the Underwriter within the meaning
of Section 15 of the Securities Act from and against any and all loss,
claim, damage or liability, joint or several, or any action in respect
thereof (including, but not limited to, any loss, claim, damage, liability
or action relating to purchases and sales of the Underwritten Notes), to
which the Underwriter or any such controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any
untrue statement
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or alleged untrue statement of a material fact contained in the
Registration Statement, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus or
(iv) the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading and shall reimburse the Underwriter and each such controlling
person promptly upon demand for any legal or other expenses reasonably
incurred by the Underwriter or such controlling person in connection with
investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred;
provided, however, that 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 by or on behalf
of the Underwriter specifically for inclusion therein; and provided,
further, that as to any Preliminary Prospectus this indemnity shall not
inure to the benefit of the Underwriter or any controlling person on
account of any loss, claim, damage, liability or action arising from the
sale of the Underwritten Notes to any person by or on behalf of the
Underwriter if the Underwriter failed to send or give a copy of the
Prospectus, as amended or supplemented, to that person within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state
a material fact in the Preliminary Prospectus was corrected in the
Prospectus, unless such failure resulted from non-compliance by the
Company with Section V(C). For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be deemed
to include the documents incorporated therein by reference, and none of
the Underwriter 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 the Underwriter had delivered such
incorporated document or documents in response to a written request
therefor. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to the Underwriter or any
controlling person of the Underwriter.
B. The Underwriter agrees to indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act against any and all
loss, claim, damage or liability, or any action in respect thereof, to
which the Company or any such director, officer or controlling
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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 the Underwriter specifically
for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any director, officer or controlling
person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which the Underwriter may otherwise have to the Company or
any such director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section VIII of notice of any claim or the commencement of any action,
such indemnified party shall, if a claim in respect thereof is to be made
against any indemnifying party under this Section VIII, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify an indemnifying
party shall not relieve it from any liability which it may have under this
Section VIII except to the extent it has been materially prejudiced by
such failure, and provided, further, that the failure to notify any
indemnifying party shall not relieve it from any liability which it may
have to any indemnified party otherwise than under this Section VIII.
If any such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying party shall
be entitled to participate therein and, to the extent that it wishes, jointly
with any other similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified party. After
notice from the indemnifying party to the indemnified party of its election to
assume the defense of such claim or action, the indemnifying party shall not be
liable to the indemnified party under this Section VIII for any legal or other
expenses subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation.
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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 Underwriter, if the indemnified
parties under this Section VIII consist of the Underwriter 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. The Underwriter agrees to deliver to the Company, no later than
the date on which the Prospectus Supplement is required to be filed
pursuant to Rule 424, a copy of its Derived Information (defined below)
for filing with the Commission on Form 8-K.
E. The Underwriter agrees, assuming all Company-Provided Information
(defined below) is accurate and complete in all material
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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 the Underwriter, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating or
defending or preparing to defend any such loss, claim, damage, liability
or action as such expenses are incurred. The obligations of each of the
Underwriter under this Section VIII(E) shall be in addition to any
liability which the Underwriter may otherwise have.
The procedures set forth in Section VIII(C) shall be equally applicable to
this Section VIII(E).
F. For purposes of this Section VIII, the term "Derived Information"
means such portion, if any, of the information delivered to the Company
pursuant to Section VIII(D) for filing with the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral term sheets,
Structural term sheets or Computational Materials (as such terms are
interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to the
Underwriter by the Company concerning the Mortgage Loans comprising the Trust.
The terms "Collateral term sheet" and "Structural term sheet" shall have
the respective meanings assigned to them in the February 13, 1995 letter (the
"PSA Letter") of Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's response thereto, were
publicly available February 17, 1995). The term "Collateral term sheet" as used
herein includes any subsequent Collateral term sheet that reflects a substantive
change in the information presented. The term "Computational Materials" has the
meaning assigned to it in the May 17, 1994 letter (the "Xxxxxx letter" and
together with the PSA Letter, the "No-Action
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Letters") of Xxxxx & Xxxx on behalf of Xxxxxx, Peabody & Co., Inc. (which
letter, and the SEC staff's response thereto, were publicly available May 20,
1994).
G. If the indemnification provided for in this Section VIII shall
for any reason be unavailable to or insufficient to hold harmless an
indemnified party under Section VIII(A) or (B) in respect of any loss,
claim, damage or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability, or
action in respect thereof, (i) in such proportion as shall be appropriate
to reflect the relative benefits received by the Company on the one hand
and the Underwriter on the other from the offering of the Underwritten
Notes 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 Underwriter on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or liability, or
action in respect thereof, as well as any other relevant equitable
considerations.
The relative benefits of the Underwriter and the Company shall be deemed
to be in such proportion so that the Underwriter 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 Underwriter and the Company shall be determined
by reference to whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact relates to
information supplied by the Company or by one of the Underwriter, the intent of
the parties and their relative knowledge, access to information and opportunity
to correct or prevent such statement or omission and other equitable
considerations.
The Company and the Underwriter agree that it would not be just and
equitable if contributions pursuant to this Section VIII(G) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII(G) shall be deemed to include, for purposes of this Section
VIII(G), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
In no case shall the Underwriter be responsible for any amount in excess
of the underwriting discount applicable to the Underwritten Notes purchased by
the Underwriter hereunder. No person guilty of fraudulent misrepresentation
(within the
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meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
H. The Underwriter 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 Underwriter specifically for inclusion in the
Registration Statement and the Prospectus.
Section IX. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriter or controlling
persons thereof, or by or on behalf of the Company and shall survive delivery of
any Underwritten Notes to the Underwriter.
Section X. Termination of Agreement. The Underwriter may terminate this
Agreement immediately upon notice to the Company, at any time at or prior to the
Closing Date if any of the events or conditions described in Section VI(W) of
this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section V(G), the provisions of Section
VII, the indemnity agreement set forth in Section VIII, and the provisions of
Sections IX and XIII shall remain in effect.
Section XI. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriter, shall be delivered or sent by mail, telex
or facsimile transmission to Xxxxxx Xxxxxxx & Co. Incorporated, as
Underwriter, 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, 00000, Attention: General
Counsel (Fax: 000-000-0000);
B. if to the Company, shall be delivered or sent by mail, telex or
facsimile transmission to Advanta Mortgage Conduit Services, Inc., Welsh
and XxXxxx Xxxxx, Xxxxxx Xxxxx, XX 00000 Attention: General Counsel (Fax:
000-000-0000).
Section XII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriter and
the Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriter within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any
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person controlling the Company within the meaning of Section 15 of the
Securities Act. Nothing in this Agreement is intended or shall be construed to
give any person, other than the persons referred to in this Section XII, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
Section XIII. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriter contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Underwritten Notes
and shall remain in full force and effect, regardless of any investigation made
by or on behalf of any of them or any person controlling any of them.
Section XIV. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
Section XV. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
Section XVI. Counterparts. This Agreement may be executed in counterparts
and, if executed in more than one counterpart, the executed counterparts shall
each be deemed to be an original but all such counterparts shall together
constitute one and the same instrument.
Section XVII. Headings. The headings herein are inserted for convenience
of reference only and are not intended to be part of, or to affect the meaning
or interpretation of, this Agreement.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriter, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
ADVANTA MORTGAGE CONDUIT
SERVICES INC.
By: /s/ Xxxx Xxxxxxxxx
-----------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
as Underwriter
By: /s/ Xxx Xxx
-----------------------------
Name: Xxx Xxx
Title: Vice President
[Underwriting Agreement]
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SCHEDULE A
INITIAL PRINCIPAL
AMOUNT OF PURCHASE PRICE TO
UNDERWRITTEN NOTES UNDERWRITER
REQUIRED RATINGS PURCHASED BY DISREGARDING
CLASS S&P/XXXXX'X UNDERWRITER COUPON ACCRUED INTEREST
------- ---------------- ------------------ -------- -----------------
Class A AAA /Aaa $ 650,000,000 Floating 99.80%
Class B AAA /Aaa 350,000,000 Floating 100.00%
Class C AAA /Aaa 100,000,000 Floating 99.85%
Total........... $ 1,100,000,000
Floating
