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EXHIBIT 1.1
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EXHIBIT 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
ADVANTA NATIONAL BANK
ADVANTA FINANCE CORP.
ADVANTA REVOLVING HOME EQUITY LOAN ASSET-BACKED NOTES,
SERIES 1997-A, CLASS A NOTES
UNDERWRITING AGREEMENT
November 14, 1997
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. as Sponsor (the "Sponsor") has
authorized the issuance and sale of Revolving Home Equity Loan Asset-Backed
Notes, Series 1997-A consisting of variable rate pass-through Class A Notes
(the "Notes"). The Notes will be issued pursuant to an indenture (the
"Indenture"), dated as of November __, 1997, between the Advanta Revolving Home
Equity Loan Trust 1997-A (the "Trust") and Bankers Trust Company of California,
N.A., as Indenture Trustee (the "Indenture Trustee"). The Trust will be formed
pursuant to a Trust Agreement to be dated as of November 1, 1997 and entered
into by and between the Sponsor and Wilmington Trust Company, as Owner Trustee.
The Notes will be secured by certain adjustable rate home equity revolving
credit line loans, made or to be made in the future (the "Mortgage Loans")
under certain home equity revolving credit line loan agreements (the "Credit
Line Agreements") to be transferred by the Sponsor to the Trust pursuant to a
sale and servicing agreement (the "Sale and Servicing Agreement"), dated as of
November 1, 1997, among the Sponsor, the Trust, Advanta Mortgage Corp. USA, as
Master Servicer (the "Master Servicer"), and the Indenture Trustee. Advanta
National Bank and Advanta Finance Corp. (each an "Originator", and together the
"Originators") will retain, initially, the remaining undivided interest in the
trust assets (the "Originators' Interest") which may be sold or pledged at
anytime, subject to certain conditions specified in the Trust
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Agreement. The Class A Principal Balance of the Notes as of the opening of
business on November 20, 1997 (the "Closing Date"), shall be $100,000,000.
On or prior to the date of issuance of the Notes, the Sponsor will
obtain a guaranty insurance policy (the "Policy") issued by AMBAC Indemnity
Corporation (the "Insurer") which will unconditionally and irrevocably
guarantee to the Indenture Trustee for the benefit of the Noteholders on any
Payment Date, the amount by which the (i) Class A Principal Balance exceeds the
(ii) Trust Collateral Value minus the Non-Subordinated Originators' Interest,
and (iii) any accrued and unpaid interest due on the Notes.
The Notes and the Originators' Interest are more fully described in a
registration statement which the Sponsor has furnished to X.X. Xxxxxx
Securities Inc. (the "Underwriter"). Capitalized terms used but not defined
herein shall have the meanings given to them in the Sale and Servicing
Agreement.
The Sponsor will also enter into an Insurance Agreement, dated as of
November 20, 1997 (the "Insurance Agreement"), with the Indenture Trustee 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. The Sponsor will also enter into an Indemnification
Agreement, dated as of November 14, 1997 (the "Indemnification Agreement"),
with the Underwriter 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. "Documents" shall mean the
Indenture, the Trust Agreement, the Sale and Servicing Agreement, the
Underwriting Agreement, the Insurance Agreement and the Indemnification
Agreement.
SECTION 1. Representations and Warranties of the Sponsor
and the Originators. The Sponsor and each Originator each represent and
warrant to, and agree with the Underwriter that:
A. Registration Statements on Form S-3, as amended by
Post-Effective Amendments thereto, have (i) been prepared by the
Sponsor and the Originators 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 Sponsor 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 Notes and any
prospectus filed with the Commission by the
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Sponsor with the consent of the Underwriter 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 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 Sponsor 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 Sponsor 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
Sponsor Collateral term sheets (as hereinafter defined) that the
Underwriter has provided to a prospective investor, the Sponsor 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 Sponsor Structural term sheets or Computational
Materials (each as defined below) that the Underwriter has provided to
a prospective investor, the Sponsor 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
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of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not
misleading. The Prospectus as of its date, and as amended or
supplemented as of the Closing Date (as hereinafter defined) does not
and will not contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided that no representation or warranty is made as
to information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Sponsor 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 Sponsor or any Originator, otherwise than
as set forth or contemplated in the Prospectus as supplemented or
amended as of the Closing Date.
E. Each of the Sponsor and each Originator has been duly
incorporated and is validly existing as a corporation or national
banking association, as the case may be, 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 or national
banking association 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 the Documents to
which it is a party, and to cause the Notes 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 Sponsor or any Originator is a party or of
which any of its properties is the subject (a) which if determined
adversely to the Sponsor or
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any Originator would have a material adverse effect on the business or
financial condition of the Sponsor or any Originator, (b) which
asserts the invalidity of the Documents or the Notes, (c) which seeks
to prevent the issuance of the Notes or the consummation by the
Sponsor or any Originator of any of the transactions contemplated by
the Documents to which they are a party or (d) which might materially
and adversely affect the performance by the Sponsor or any Originator
of its obligations under, or the validity or enforceability of, the
Documents to which they are a party or the Notes.
G. The Documents, when executed and delivered as contemplated
hereby and thereby, will have been duly authorized, executed and
delivered by the Sponsor or any Originator, as the case may be, and
will constitute, legal, valid and binding instruments enforceable
against the Sponsor or any Originator in accordance with their
respective terms, subject as to enforceability to (x) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law) and (z) with respect to rights of indemnity under
this Agreement, the Indemnification Agreement and the Insurance
Agreement, limitations of public policy under applicable securities
laws.
H. The execution, delivery and performance of the Documents
by the Sponsor and each Originator, as the case may be, and the
consummation of the transactions contemplated hereby and thereby, and
the issuance and delivery of the 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 Sponsor or any Originator is a party, by which the Sponsor
or any Originator is bound or to which any of the property or assets
of the Sponsor, the Originators or any of their subsidiaries are
subject, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the Sponsor
or of the Originators or any statute or any order, rule or regulation
of any court or governmental agency or body having jurisdiction over
the Sponsor or the Originators or any of their properties or assets.
I. Arthur Xxxxxxxx LLP are independent public accountants
with respect to the Sponsor and the Originators as required by the
Securities Act and the Rules and Regulations.
J. The direction by the Sponsor to the Indenture Trustee to
execute, authenticate, issue and deliver the Notes has been duly
authorized by the Sponsor, 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 Indenture,
the Notes will be validly issued and outstanding and will be entitled
to the benefits provided by the Indenture.
K. No consent, approval, authorization, order, registration
or qualification of or with any court or governmental agency or body
of the United States is
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required for the issuance of the Notes and the sale of the Notes to
the Underwriter, or the consummation by the Sponsor or each Originator
of the other transactions contemplated by the Documents, 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 Notes by the
Underwriter or as have been obtained.
L. Each Originator possesses all material licenses, Notes,
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
neither Originator has received notice of any proceedings relating to
the revocation or modification of any such license, certificate,
authority or permit which if decided adversely to such Originator
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 Sale and
Servicing Agreement, the Sponsor will: (i) have good title to the
interest in the Mortgage Loans conveyed by the Sponsor, 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 Sale and Servicing Agreement or in the Notes
being issued pursuant thereto; and (iii) have the power and authority
to sell its interest in the Mortgage Loans to the Indenture Trustee
and to sell the Notes to the Underwriter. Upon execution and delivery
of the Sale and Servicing Agreement by the Indenture Trustee, the
Indenture Trustee will have acquired all of the Sponsor's right, title
and interest in and to the Mortgage Loans. Upon delivery to the
Underwriter of the Notes, the Underwriter will have good title to the
Notes, free of any Liens.
N. As of opening of business on November 1, 1997 (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. None of the Sponsor, any Originator or the Trust created
by the Trust 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 Notes and the Indenture will
conform in all material respects to the descriptions thereof contained
in the Prospectus.
Q. At the Closing Date, the Notes shall have been rated in
the highest rating category by at least two nationally recognized
rating agencies.
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R. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of the Documents
and the 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 Sponsor set forth in the Sale and Servicing
Agreement, the Insurance Agreement and the Indemnification Agreement
will be true and correct in all material respects.
Any certificate signed by an officer of the Sponsor or any Originator
and delivered to the Underwriter or counsel for the Underwriter in connection
with an offering of the 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 1 are made.
SECTION 2. Purchase and Sale. The commitment of the
Underwriter to purchase the 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 Sponsor agrees to instruct the Indenture Trustee to issue and agrees to
sell to the Underwriter, and the Underwriter agrees (except as provided in
Sections 6 and 10 hereof) to purchase from the Sponsor the aggregate initial
principal amount of the Notes set forth on Schedule A, at the purchase price or
prices set forth in Schedule A.
SECTION 3. Delivery and Payment. Delivery of and
payment for the Notes to be purchased by the Underwriter shall be made at the
offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, at 10:00 A.M. New York City time on the Closing Date or at such
other time or date as shall be agreed upon in writing by the Underwriter, the
Sponsor and the Originators. Payment shall be made to the Originators by wire
transfer of same day funds payable to the account of the Originators. Delivery
of the Notes shall be made to the Underwriter against payment of the purchase
price thereof. The 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 Notes will be made available for examination by
the Underwriter no later than 4:00 P.M. New York City time on the first
business day prior to the Closing Date.
SECTION 4. Offering by the Underwriter. It is
understood that, subject to the terms and conditions hereof, the Underwriter
proposes to offer the Notes for sale to the public as set forth in the
Prospectus.
SECTION 5. Covenants of the Sponsor. The Sponsor and
each Originator agree 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
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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 Sponsor 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 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 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
qualification, the Sponsor 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 signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
C. To deliver promptly to the Underwriter such number of the
following documents as the Underwriter shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case including
exhibits); (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and (iii) any document
incorporated by reference in the Prospectus (including exhibits
thereto). If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the Effective Time in
connection with the offering or sale of the 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 Sponsor 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
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Underwriter may from time to time reasonably request of an amended
Prospectus or a supplement to the Prospectus which corrects such
statement or omission or effects such compliance, and in case the
Underwriter is required to deliver a Prospectus in connection with
sales of any of the 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 Sponsor 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 Sponsor or the
Underwriter, be required by the Securities Act or requested by the
Commission.
E. Prior to filing with the Commission any (i) Preliminary
Prospectus, (ii) amendment to the Registration Statement or supplement
to the Prospectus, or document incorporated by reference in the
Prospectus or (iii) Prospectus pursuant to Rule 424 of the Rules and
Regulations, to 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 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 Sponsor, 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 their best efforts, in cooperation with the
Underwriter, to qualify the 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 Notes. The Sponsor will
file or cause the filing of such statements and reports as may be
required by the laws of each jurisdiction in which the 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 Sponsor for a
period of 5 business days following the commencement of the offering
of the Notes to the public.
I. So long as the Notes shall be outstanding, to deliver to
the Underwriter as soon as such statements are furnished to the
Indenture Trustee the annual
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statement as to compliance delivered to the Indenture Trustee pursuant
to Section 3.9 of the Indenture.
J. To apply the net proceeds from the sale of the Notes in
the manner set forth in the Prospectus.
SECTION 6. Conditions to the Underwriter's Obligation.
The obligation of the Underwriter to purchase the 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 Sponsor and each
Originator herein contained; (ii) the performance by the Sponsor and each
Originator of all of their respective obligations hereunder; and (iii) the
following conditions as of the Closing Date:
A. The Underwriter shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus shall have been complied with.
B. The Underwriter shall not have discovered and disclosed to
the Sponsor 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 the Documents, the 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 Sponsor 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 Sponsor and each
Originator with respect to the following items, dated the Closing
Date, to the effect that:
1. Each of the Sponsor and each Originator has been duly
organized and is validly existing as a corporation or national banking
association, as the case may be, in good standing under the laws of
its jurisdiction of incorporation, and is qualified to do business in
each state necessary to enable it to perform its obligations as
Sponsor or Originator, as the case may be, under the Documents to
which they are a party. Each of the Sponsor and each Originator has
the requisite power and authority to execute and deliver, engage in
the transactions
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contemplated by, and perform and observe the conditions of the
Documents to which they are a party.
2. The Documents to which they are a party to have been
duly and validly authorized, executed and delivered by the Sponsor
and each Originator, as the case may be, and all requisite corporate
action having been taken with respect
thereto, and the Notes constitute the valid, legal and binding
agreement of the Sponsor or an Originator, as the case may be.
3. Neither the transfer of the Mortgage Loans to the
Trust, the issuance or sale of the Notes nor the execution, delivery
or performance by the Sponsor or any Originator of the Documents to
which they are a party to, (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 by-laws of the Sponsor or any
Originator; (ii) any term or provision of any material agreement,
contract, instrument or indenture, to which the Sponsor or any
Originator 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 Sponsor or any Originator and known to such counsel; or (B)
results in, or will result in the creation or imposition of any lien,
charge or encumbrance upon any of the Trust's assets or upon the
Notes, except as otherwise contemplated by the Sale and Servicing
Agreement.
4. The endorsement and delivery of each Credit Line
Agreement, 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 Noteholders
all right, title and interest of the Sponsor in the Credit Line
Agreement 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 Sponsor and to prevent any other
sale, transfer, assignment, pledge or other encumbrance of the
Mortgage Loans by the Sponsor 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 Documents
or the offer, issuance, sale or delivery of the Notes or the
consummation of any other transaction contemplated thereby by the
Sponsor and the Originators, except such which have been obtained.
6. There are no actions, proceedings or investigations,
to such counsel's knowledge, pending or threatened against the Sponsor
or any Originator before any court, governmental agency or body or
other tribunal (i) asserting the invalidity of the Documents to which
they are a party to or the Notes, (ii) seeking to prevent the issuance
of the Notes or the consummation of any of the
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transactions contemplated by the Documents or (iii) which would
materially and adversely affect the performance by the Sponsor or the
Originators of obligations under, or the validity or enforceability
of, the Notes or Documents to which they are a party.
7. To the best 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 Indenture, when executed and delivered, will have been
duly qualified under the Trust Indenture Act.
10. 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.
11. No information has come to such counsel's attention
which causes them to believe that the Prospectus (other than the
financial statement and other financial and statistical data contained
therein, as to which such counsel need express no opinion), as of the
date thereof, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
12. 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 Sponsor and the
Originators, the Indenture Trustee and public officials. Such opinions may
also assume the due
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authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Sponsor and the Originators.
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 Originators.
F. The Notes shall have been rated in the highest rating
category by Standard & Poor's Ratings Group and by Xxxxx'x Investors
Service, Inc., 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 Sponsor a
certificate, signed by the president, a senior vice president or a
vice president of the Sponsor, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined the
Registration Statement, the Sale and Servicing Agreement, and this
Agreement and that, to the best of his or her knowledge based upon
reasonable investigation:
1. the representations and warranties of the Sponsor in
this Agreement, as of the Closing Date, and in the Sale and Servicing
Agreement, the Insurance Agreement, and in all related agreements, as
of the date specified in such agreements, are true and correct, and
the Sponsor, 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 Sponsor which if adversely determined, individually or
in the aggregate, would be reasonably likely to adversely affect the
Sponsor's obligations under the Documents to which it is a party in
any material way; and no merger, liquidation, dissolution or
bankruptcy of the Sponsor is pending or contemplated;
3. the information contained in the Registration
Statement and the Prospectus relating to the Sponsor, 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;
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4. the information set forth in the Schedule of Mortgage
Loans required to be furnished pursuant to the Sale 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 by-laws of the Sponsor
since September 30, 1997, and no such amendment has been authorized.
No event has occurred since September 30, 1997, which has affected
the good standing of the Sponsor 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 Sponsor and its subsidiaries, taken as a whole, from
September 30, 1997;
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 Sponsor or in any rating accorded any securities of the
Sponsor, 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 Sponsor, signed or signs the Registration Statement, the Documents
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 Documents 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 Sponsor shall attach to such certificate a true and correct copy
of its certificate or articles of incorporation, as appropriate, and by-laws
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 Documents
to which it is a party to;
2. the Documents to which the Indenture Trustee is a
party have been duly authorized, executed and delivered by the
Indenture Trustee and such Documents constitute the legal, valid and
binding obligation of the Indenture Trustee, enforceable against the
Indenture
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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 Documents to which it is a party 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 Documents to which it
is a party do not conflict with or result in a violation of any
statute or regulation applicable to the Indenture Trustee, or the
charter or by-laws 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 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 Sponsor, 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 Sale and Servicing Agreement, the Indenture or any other document
delivered pursuant hereto, on the date hereof or on the Closing Date,
in connection with the transactions described in the Sale and
Servicing Agreement and the Indenture 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 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.
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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 Wisconsin-domiciled 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, the Insurance Agreement and the Indemnification Agreement are
within the corporate power of the Insurer and have been authorized by
all necessary corporate action on the part of the Insurer; the Policy
has been duly executed and is the valid and binding obligation of the
Insurer enforceable in accordance with its terms except that the
enforcement of the Policy may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by
general principles of equity.
3. The Insurer is authorized to deliver the Insurance
Agreement and the Indemnification Agreement, and such agreements have
been duly executed and delivered and constitute the legal, valid and
binding obligations of the Insurer enforceable in accordance with its
terms except that the enforcement of the Insurance Agreement and the
Indemnification 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
POLICY" and "THE 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 Sponsor, the Originators,
the Indenture Trustee, the Insurer and public officials. Such opinion may
assume the due authorization,
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execution and delivery of the instruments and documents referred to therein by
the parties thereto other than the Insurer.
L. Except for the downgrading of Advanta National Bank on
_____, 1997, 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 Sponsor or the Originators or in any rating accorded any
securities of the Sponsor, if any, by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the 1933 Act.
M. On or prior to the Closing Date, there shall not have
occurred any downgrading, nor shall any notice have been given of (A)
any intended or potential downgrading or (B) any review or possible
change in rating the direction of which has not been indicated, in the
rating accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the 1933 Act.
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 September
30, 1997, of (A) the Sponsor, the Originators and any 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 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 Policy,
the Insurance Agreement, the Indemnification Agreement and the related
documents and that, to the best of his or her knowledge based on
reasonable investigation:
1. There are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policy, the Indemnification
Agreement or the Insurance Agreement;
2. Each person who as an officer or representative of
the Insurer, signed or signs the Policy, the Insurance Agreement, the
Indemnification Agreement or any other document delivered pursuant
hereto, on the date thereof, or on the Closing Date, in connection
with the transactions described in this Agreement was, at the
respective times of such signing and delivery, and is now, duly
elected or appointed, qualified and acting as such officer or
representative, and the signatures of such persons appearing on such
documents are their genuine signatures;
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3. The information contained in the Prospectus under the
captions "THE 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 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 POLICY" and "THE INSURER" presents
accurately and fairly the capitalization of the Insurer as of
September 30, 1997;
5. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating accorded
the claims paying ability of the Insurer by any "nationally recognized
statistical rating organization," as such term is defined for purposes
of the 1933 Act;
6. The audited balance sheet of the Insurer as of
December 31, 1996 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, 1997 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, 1996 audited statements;
7. To the best knowledge of such officer, since
September 30, 1997, 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
by-laws, 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 Sponsor and the Originators, a survey in
form and substance satisfactory to the Underwriter, indicating the
requirements of applicable local
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law which must be complied with in order to transfer and service the
Mortgage Loans pursuant to the Sale and Servicing Agreement and each
Originator shall have complied with all such requirements.
Q. The Underwriter 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
Notes, the Prospectus and such other related matters as the
Underwriter shall reasonably require.
R. The Underwriter and counsel for the Underwriter shall have
received copies of any opinions of counsel to the Sponsor, the
Originators or the Insurer supplied to the Indenture Trustee relating
to matters with respect to the Notes or the Policy. 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, Notes and documents as the Underwriter may reasonably
have requested not fewer than three (3) full business days prior to
the Closing Date.
T. There shall have been executed and delivered by Advanta
Mortgage Holding Company, the corporate parent of the Sponsor
("AMHC"), a letter agreement with the Indenture Trustee and the
Insurer, pursuant to which AMHC agrees to become jointly and severally
liable with the Sponsor, the Originators and the Master Servicer 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 Sponsor, a letter agreement with the
Underwriter and the Insurer substantially in the form of Exhibit A
hereto.
V. Prior to the Closing Date, counsel for the Underwriter
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the 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 any
Originator 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.
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;
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(i) 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 (iii) 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.
If any condition specified in this Section 6 shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be
terminated by the Underwriter by notice to the Sponsor and the Originators 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 7.
All opinions, letters, evidence and Notes 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 7. Payment of Expenses. The Sponsor and the
Originators agree to pay: (a) the costs incident to the authorization,
issuance, sale and delivery of the 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 Notes under the securities laws of the several jurisdictions
as provided in Section 5(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 Notes; (g) half of the costs and expenses of
Xxxxx Xxxxxxxxxx LLP; and (h) all other costs and expenses incident to the
performance of the obligations of the Sponsor and the Originators; provided
that, except as provided in this Section 7, the Underwriter shall pay its own
costs and expenses, including half of the costs and expenses of Xxxxx
Xxxxxxxxxx LLP, any transfer taxes on the Notes which they may sell and the
expenses of advertising any offering of the Notes made by the Underwriter.
If this Agreement is terminated by the Underwriter, in accordance with
the provisions of Section 6 or Section 10, the Sponsor and the Originators
shall reimburse the Underwriter for its respective reasonable out-of-pocket
expenses, including fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for
the Underwriters.
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SECTION 8. Indemnification and Contribution.
A. The Sponsor and the Originators agree 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 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 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 neither the
Sponsor nor the Originator shall be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Preliminary
Prospectus, the Prospectus or the Registration Statement in reliance
upon and in conformity with written information (including any Derived
Information) furnished to the Sponsor by 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 Notes
to any person by the Underwriter if the Underwriter failed to send or
give a copy of the Prospectus, as amended or supplemented, to that
person within the time required by the Securities Act, and the untrue
statement or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact in the
Preliminary Prospectus was corrected in the Prospectus, unless such
failure resulted from non-compliance by the Sponsor or any Originator
with Section 5(C). For purposes of the last proviso to the
immediately preceding sentence, the term "Prospectus" shall not be
deemed to include the documents incorporated therein by reference, and
the Underwriter shall not be obligated to send or give any supplement
or amendment to any document incorporated therein by reference to any
person other than a person to whom the Underwriter had delivered such
incorporated document or documents in response to a written request
therefor. The foregoing indemnity agreement is in addition to any
liability which the Sponsor or any Originator may otherwise have to
the Underwriter or any controlling person of the Underwriter.
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B. The Underwriter agrees to indemnify and hold harmless the
Sponsor, the Originators, each of their respective directors, each of
their respective officers who signed the Registration Statement, and
each person, if any, who controls the Sponsor or the Originators
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 Sponsor or the Originators 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 (excluding any Derived Information which is
covered in paragraph (E) below) furnished to the Sponsor by or on
behalf of the Underwriter specifically for inclusion therein, and
shall reimburse the Sponsor, the Originators and any such director,
officer or controlling person for any legal or other expenses
reasonably incurred by the Sponsor or the Originators 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 Sponsor, the Originators or any
such director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this
Section 8 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 8, 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 8 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 8.
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 8 for
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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 Underwriter, if the indemnified
parties under this Section 8 consist of the Underwriter or any of its
controlling persons, or by the Sponsor or the Originator, as the case may be,
if the indemnified parties under this Section 8 consist of the Sponsor or the
Originator, as the case may be, or any of the Sponsor's directors, officers or
controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section 8(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 Sponsor a copy of
its Derived Information no later than one (1) business day prior to
the date such information is required to be filed, pursuant to the
No-Action Letters (as defined herein), with the Commission on Form
8-K.
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E. The Underwriter agrees, assuming all Sponsor-Provided
Information (defined below) is accurate and complete in all material
respects, to indemnify and hold harmless the Sponsor, the Originators,
each of the Sponsor's and the Originators' respective officers and
directors and each person who controls the Sponsor or the Originators
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 the Underwriter under this Section 8(E) shall be in
addition to any liability which the Underwriter may otherwise have.
The procedures set forth in Section 8(C) shall be equally
applicable to this Section 8(E).
F. For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information delivered
to the Sponsor pursuant to Section 8(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 Sponsor-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).
"Sponsor-Provided Information" means any computer tape furnished to
the Underwriter by the Sponsor and the Originators 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
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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 8
shall for any reason be unavailable to or insufficient to hold
harmless an indemnified party under Section 8(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, in such
proportion as shall be appropriate to reflect the relative benefits
received by the Sponsor and the Originators on the one hand and the
Underwriter on the other from the offering of the Notes or 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 8(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 Sponsor and the Originators 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 Sponsor and any
Originator shall be deemed to be in such proportion so that the Underwriter is
responsible for that portion represented by the percentage that the
underwriting discount appearing on the cover page of the Prospectus bears to
the public offering price appearing on the cover page of the Prospectus.
The relative fault of the Underwriter and the Sponsor and any
Originator 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 Sponsor and any Originator
or by the Underwriter, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such statement or
omission and other equitable considerations.
The Sponsor, the Originators and the Underwriter agree that it would
not be just and equitable if contributions pursuant to this Section 8(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 8(G) shall be deemed to include, for purposes of this
Section 8(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 Notes purchased by the
Underwriter hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of
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the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
H. The Underwriter confirms that the information set forth
(i) in the Prospectus Supplement relating to market making and (ii) in
the third 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 Sponsor
and the Originators by or on behalf of the Underwriter specifically
for inclusion in the Registration Statement and the Prospectus.
SECTION 9. Representations, Warranties and Agreements to
Survive Delivery. All representations, warranties and agreements contained in
this Agreement or contained in Notes of officers of the Sponsor or each
Originator 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 Sponsor
or any Originator and shall survive delivery of any Notes to the Underwriter.
SECTION 10. Termination of Agreement . The Underwriter
may terminate this Agreement immediately upon notice to the Sponsor and each
Originator, at any time at or prior to the Closing Date if any of the events or
conditions described in Section 6(W) of this Agreement shall occur and be
continuing. In the event of any such termination, the covenant set forth in
Section 5(G), the provisions of Section 7, the indemnity agreement set forth in
Section 8, and the provisions of Sections 9 and 13 shall remain in effect.
SECTION 11. 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 X.X. Xxxxxx Securities Inc., 00
Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate Desk
(Fax: 000-000-0000);
B. if to the Sponsor, shall be delivered or sent by mail, telex
or facsimile transmission to Advanta Mortgage Conduit Services, Inc.
00000 Xxxx Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 Attention:
General Counsel (Fax: 000-000-0000);
C. if to Advanta National Bank, shall be delivered or sent by
mail to Advanta National Bank, Brandywine Corporate Center, 000
Xxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000 (Telephone: 000-000-0000);
D. if to Advanta Finance Corp., 00000 Xxxx Xxxxxxxx Xxxxx, Xxx
Xxxxx, XX 00000.
SECTION 12. Persons Entitled to the Benefit of this
Agreement. This Agreement shall inure to the benefit of and be binding upon
the Underwriter, the
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Sponsor, each Originator 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
Sponsor or of the Originators, officers of the Sponsor who have signed the
Registration Statement and any person controlling the Sponsor or the
Originators 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 13. Survival. The respective indemnities,
representations, warranties and agreements of the Sponsor, the Originators 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 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 14. 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 15. 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 16. 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 17. 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
Sponsor and the Underwriter, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ADVANTA MORTGAGE CONDUIT
SERVICES INC.
By:
---------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED, as of
the date first above written:
X.X. XXXXXX SECURITIES INC.
By:
-------------------------------
Name:
Title:
[Underwriting Agreement]
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CONFIRMED AND ACCEPTED, as of
the date first above written:
ADVANTA NATIONAL BANK
By:
-----------------------------
Name:
Title:
ADVANTA FINANCE CORP.
By:
-----------------------------
Name:
Title:
[Underwriting Agreement]
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SCHEDULE A
Purchase Price
to Underwriter
Initial Principal Amount of Notes disregarding
Class Purchased by the Underwriter accrued interest
----- ---------------------------- ----------------
Class A $100,000,000 99.75%
32
EXHIBIT A
As of November 20, 1997
X.X. Xxxxxx & Co.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
AMBAC Indemnity Corporation
Xxx Xxxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Underwriting Agreement dated November 14, 1997 (the
"Underwriting Agreement") among Advanta Mortgage Conduit
Services, Inc. (the "Sponsor"), Advanta National Bank and
Advanta Finance Corp. (the "Originators") and X.X. Xxxxxx
& Co. (the "Underwriter"); Indemnification Agreement dated
November 14, 1997 (the "Indemnification Agreement")
among the Sponsor, the Underwriter and AMBAC Indemnity
Corporation (the "Insurer"); the Insurance Agreement dated as
of November 1, 1997 (the "Insurance Agreement") among the
Insurer, the Sponsor, and the Indenture Trustee
Ladies and Gentlemen:
Pursuant to the Underwriting Agreement, the Indemnification Agreement
and the Insurance Agreement (together, the "Designated Agreements"), the
Sponsor and the Originators have undertaken certain financial obligations with
respect to the indemnification of the Underwriter and of the Insurer with
respect to the Registration Statement, the Prospectus and the Prospectus
Supplement described in the Designated Agreements. Any financial obligations
of the Sponsor and the Originators under the Designated Agreements, whether or
not specifically enumerated in this paragraph, are hereinafter referred to as
the "Joint and Several Obligations"; provided, however, that "Joint and Several
Obligations" shall mean only the financial obligations of the Sponsor and the
Originators under the Designated Agreements (including the payment of money
damages for a breach of any of the Sponsor's and the Originators' obligations
under the Designated Agreements, whether financial or otherwise) but shall not
include any obligations not relating to the payment of money.
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As a condition of their respective executions of the Designated
Agreements, the Underwriter and the Insurer have required the undersigned,
Advanta Mortgage Holding Company ("AMHC"), the parent corporation of the
Sponsor and the Originators, to acknowledge its joint-and-several liability
with the Sponsor and the Originators for the payment of the Joint and Several
Obligations under the Designated Agreements.
Now, therefore, the Underwriter, the Insurer and AMHC do hereby agree
that:
(i) AMHC hereby agrees to be absolutely and
unconditionally jointly and severally liable with the Sponsor
and the Originators to the Underwriter for the payment of the
Joint and Several Obligations under the Underwriting
Agreement.
(ii) AMHC may honor its obligations hereunder
either by direct payment of any Joint and Several Obligations
or by causing any Joint and Several Obligations to be paid to
the Underwriter or to the Insurer, as applicable, by the
Sponsor or another affiliate of AMHC.
A-2
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Capitalized terms used herein and not defined herein shall have their
respective meanings as set forth in the Agreement.
Very truly yours,
ADVANTA MORTGAGE HOLDING
COMPANY
By:
-------------------------
Authorized Signatory
CONFIRMED AND ACCEPTED,
as of the date first above written:
AMBAC ASSURANCE CORPORATION
By:
----------------------------------
Authorized Signatory
X.X. XXXXXX SECURITIES INC.
By:
----------------------------------
Authorized Signatory
A-3
