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EXHIBIT 1.1
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ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1997-2
UNDERWRITING AGREEMENT
May 22, 1997
XXXXXX XXXXXXX & CO. INCORPORATED
As Representative of the Underwriters
named in Schedule I
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has authorized
the issuance and sale of Mortgage Loan Asset-Backed Certificates, Series 1997-2,
(the "Certificates") consisting of (i) the Class A-1 Certificates, the Class A-2
Certificates, the Class A-3 Certificates, the Class A-4 Certificates, the Class
A-5 Certificates, the Class A-6 Adjustable Rate Certificates and the Class A-7
IO Certificates (collectively, the "Class A Certificates"), (ii) the Class M-1F
Certificates (the "Class M-1 Certificates"), (iii) the Class M-2F Certificates
(the "Class M-2 Certificates", and collectively with the Class M-1 Certificates,
the "Mezzanine Certificates"), (iv) the Class B-1F Certificates (the "Class B
Certificates" and collectively with the Mezzanine Certificates, the "Subordinate
Certificates") and (v) the residual class with respect to each REMIC held by the
Trust (the "Class R Certificates"). Only the Class A Certificates and the
Subordinate Certificates (collectively, the "Offered Certificates") are being
offered. The Certificates will be issued by the Advanta Mortgage Loan Trust
1997-2 (the "Trust"), and will evidence in the aggregate the entire beneficial
interest in a trust estate (the "Trust Estate") consisting primarily of two
segregated pools (the "Mortgage Pools") of closed-end mortgage loans (the
"Mortgage Loans"), and certain related property. The Mortgage Loans shall have,
as of the opening of business on June 1, 1997 (the "Cut-Off Date"), an aggregate
principal balance of approximately $700,000,000. The certificates are to be
issued under a pooling and servicing agreement, to be dated as of June 1, 1997
(the "Pooling and Servicing Agreement"), among the Company, as sponsor, Advanta
Mortgage Corp. USA, as master
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servicer, and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").
On or prior to the date of issuance of the Certificates, the Company
will obtain a guaranty insurance policy (the "Policy") issued by AMBAC Indemnity
Corporation (the "Insurer") which will unconditionally and irrevocably guarantee
to the Trustee for the benefit of the holders of the Class A-6 Adjustable Rate
Certificates the amount by which the sum of the Adjustable Rate Group Interest
Distribution Amount and the related Subordination Deficit, if any, exceeds the
Group II Total Available Funds.
Only the Offered Certificates are being purchased by the Underwriters.
The Certificates are more fully described in a Registration Statement
which the Company has furnished to the Underwriters. Capitalized terms used but
not defined herein shall have the meanings given to them in the Pooling and
Servicing Agreement.
Simultaneously with the execution of the Pooling and Servicing
Agreement, the Company will enter into a conveyance agreement pursuant to the
Master Loan Transfer Agreement dated as of February 15, 1995 among the Trustee,
and the Affiliated Originators named thereon (together, the "Purchase
Agreement"), pursuant to which the Affiliated Originators will transfer to the
Company all of their right, title and interest in and to the Mortgage Loans as
of the Closing Date.
The Company will also enter into an Indemnification Agreement (the
"Indemnification Agreement") dated as of June 1, 1997 among the Underwriters,
the Company and the Insurer, governing the liability of the several parties with
respect to the losses resulting from material misstatements or omissions
contained in the Prospectus Supplement.
SECTION I. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with the Underwriters that:
A. Registration Statements on Form S-3, as amended by
Post-Effective Amendments thereto, have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933 (the "Securities Act") and the rules and regulations (the "Rules
and Regulations") of the United States Securities and Exchange
Commission (the "Commission") thereunder, (ii) been filed with the
Commission under the Securities Act and
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(iii) become effective under the Securities Act. Copies of
such Registration Statements have been delivered by the Company to the
Underwriters. As used in this Agreement, "Effective Time" means the
date and the time as of which such Registration Statements, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
Registration Statements, or amendments thereof, including a preliminary
prospectus supplement which, as completed, is proposed to be used in
connection with the sale of the Offered Certificates and any prospectus
filed with the Commission by the Company with the consent of the
Underwriters pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statements, as amended
by all Post-Effective Amendments thereto heretofore filed with the
Commission, at the Effective Time, including any documents incorporated
by reference therein at such time; and "Prospectus" means such final
prospectus, as first supplemented by a prospectus supplement (the
"Prospectus Supplement") relating to the Offered Certificates, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934 (the "Exchange Act")
after the date of such Preliminary Prospectus or the Prospectus, as the
case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to include
any report of the Company filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus. There are no contracts or documents of the
Company which are required to be filed as exhibits to the Registration
Statement pursuant to
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the Securities Act or the Rules and Regulations which have not been so
filed or incorporated by reference therein on or prior to the Effective
Date of the Registration Statements. The conditions for use of Form
S-3, as set forth in the General Instructions thereto, have been
satisfied.
To the extent that any Underwriter (i) has provided to the
Company Collateral term sheets (as hereinafter defined) that such
Underwriter has provided to a prospective investor, the Company has
filed such Collateral term sheets as an exhibit to a report on Form 8-K
within two business days of its receipt thereof, or (ii) has provided
to the Company Structural term sheets or Computational Materials (each
as defined below) that such Underwriter has provided to a prospective
investor, the Company will file or cause to be filed with the
Commission a report on Form 8-K containing such Structural term sheet
and Computational Materials, as soon as reasonably practicable after
the date of this Agreement, but in any event, not later than the date
on which the Prospectus is filed with the Commission pursuant to Rule
424 of the Rules and Regulations.
B. The Registration Statement conforms, and the Prospectus and
any further amendments or supplements to the Registration Statement or
the Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading. The Prospectus
as of its date, and as amended or supplemented as of the Closing Date
(as hereinafter defined) does not and will not contain any untrue
statement of a material fact or omit to state a material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that
no representation or warranty is made as to information contained in or
omitted from the Registration Statement or the Prospectus in reliance
upon and in conformity with written information furnished to the
Company in writing by the Underwriters expressly for use therein.
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C. The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements of
the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading; and any further documents
so filed and incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the rules
and regulations of the Commission thereunder and will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading.
D. Since the respective dates as of which information is given
in the Prospectus, there has not been any material adverse change in
the general affairs, management, financial condition, or results of
operations of the Company, otherwise than as set forth or contemplated
in the Prospectus as supplemented or amended as of the Closing Date.
E. The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of its
jurisdiction of incorporation, is duly qualified to do business and is
in good standing as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority necessary
to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the Indemnification
Agreement and the Purchase Agreement, and to cause the Certificates to
be issued.
F. There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other
tribunal to which the Company is a party or of which any of its
properties is the subject (a) which if determined adversely to the
Company would have a material
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adverse effect on the business or financial condition of the Company,
(b) which asserts the invalidity of this Agreement, the Pooling and
Servicing Agreement, the Indemnification Agreement, the Purchase
Agreement, or the Certificates, (c) which seeks to prevent the issuance
of the Certificates or the consummation by the Company of any of the
transactions contemplated by the Pooling and Servicing Agreement, the
Indemnification Agreement, the Purchase Agreement or this Agreement, as
the case may be, or (d) which might materially and adversely affect the
performance by the Company of its obligations under, or the validity or
enforceability of, the Pooling and Servicing Agreement, the
Indemnification Agreement, the Purchase Agreement, this Agreement or
the Certificates.
G. This Agreement has been, and the Pooling and Servicing
Agreement, the Indemnification Agreement and the Purchase Agreement
when executed and delivered as contemplated hereby and thereby will
have been, duly authorized, executed and delivered by the Company, and
this Agreement constitutes, and the Pooling and Servicing Agreement,
the Indemnification Agreement and the Purchase Agreement when executed
and delivered as contemplated herein, will constitute, legal, valid and
binding instruments enforceable against the Company in accordance with
their respective terms, subject as to enforceability to (x) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (z) with respect to rights of indemnity under
this Agreement, the Indemnification Agreement and limitations of public
policy under applicable securities laws.
H. The execution, delivery and performance of this Agreement,
the Pooling and Servicing Agreement, the Indemnification Agreement and
the Purchase Agreement by the Company and the consummation of the
transactions contemplated hereby and thereby, and the issuance and
delivery of the Certificates do not and will not conflict with or
result in a breach or violation of any of the terms or provisions of,
or constitute a default under, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument to which the Company is
a party, by which the Company is
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bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation or by-laws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets.
I. Arthur Xxxxxxxx LLP are independent public accountants with
respect to the Company as required by the Securities Act and the Rules
and Regulations.
J. The direction by the Company to the Trustee to execute,
authenticate, issue and deliver the Certificates has been duly
authorized by the Company, and assuming the Trustee has been duly
authorized to do so, when executed, authenticated, issued and delivered
by the Trustee in accordance with the Pooling and Servicing Agreement,
the Certificates will be validly issued and outstanding and will be
entitled to the benefits provided by the Pooling and Servicing
Agreement.
K. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body of
the United States is required for the issuance of the Certificates and
the sale of the Offered Certificates to the Underwriters, or the
consummation by the Company of the other transactions contemplated by
this Agreement, the Pooling and Servicing Agreement, the
Indemnification Agreement and the Purchase Agreement, except such
consents, approvals, authorizations, registrations or qualifications as
may be required under State securities or Blue Sky laws in connection
with the purchase and distribution of the Offered Certificates by the
Underwriters or as have been obtained.
L. The Company possesses all material licenses, certificates,
authorities or permits issued by the appropriate State, Federal or
foreign regulatory agencies or bodies necessary to conduct the business
now conducted by it and as described in the Prospectus, and the Company
has not received notice of any proceedings relating to the revocation
or 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
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conduct of its business, operations or financial condition.
M. At the time of execution and delivery of the Pooling and
Servicing Agreement, the Company will: (i) have good title to the
interest in the Mortgage Loans conveyed by the Affiliated Originators,
free and clear of any lien, mortgage, pledge, charge, encumbrance,
adverse claim or other security interest (collectively, "Liens"); (ii)
not have assigned to any person any of its right, title or interest in
the Mortgage Loans, in the Purchase Agreement, in the Pooling and
Servicing Agreement or in the Offered Certificates being issued
pursuant thereto; and (iii) have the power and authority to sell its
interest in the Mortgage Loans to the Trustee and to sell the Offered
Certificates to the Underwriters. Upon execution and delivery of the
Pooling and Servicing Agreement by the Trustee, the Trustee will have
acquired beneficial ownership of all of the Company's right, title and
interest in and to the Mortgage Loans. Upon delivery to the
Underwriters of the Offered Certificates, the Underwriters will have
good title to the Offered Certificates, free of any Liens.
N. As of the Cut-Off Date, each of the Mortgage Loans will
meet the eligibility criteria described in the Prospectus and will
conform to the descriptions thereof contained in the Prospectus.
O. Neither the Company nor the Trust created by the Pooling
and Servicing Agreement is an "investment company" within the meaning
of such term under the Investment Company Act of 1940 (the "1940 Act")
and the rules and regulations of the Commission thereunder.
P. At the Closing Date, the Certificates and the Pooling and
Servicing Agreement will conform in all material respects to the
descriptions thereof contained in the Prospectus.
Q. At the Closing Date, the Offered Certificates shall have
been rated in the highest rating category by at least two nationally
recognized rating agencies.
R. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement,
the Pooling and Servicing Agreement, the Indemnification Agreement, the
Purchase Agreement and the Certificates have
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been paid or will be paid at or prior to the Closing Date.
S. At the Closing Date, each of the representations and
warranties of the Company set forth in the Pooling and Servicing
Agreement will be true and correct in all material respects.
Any certificate signed by an officer of the Company and delivered to
the Representative or counsel for the Underwriters in connection with an
offering of the Offered Certificates shall be deemed, and shall state that it
is, a representation and warranty as to the matters covered thereby to each
person to whom the representations and warranties in this Section I are made.
SECTION II. Purchase and Sale. The commitment of the Underwriters to
purchase the Offered Certificates pursuant to this Agreement shall be deemed to
have been made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein set forth. The
Company agrees to instruct the Trustee to issue and agrees to sell to the
Underwriters, and the Underwriters agree (except as provided in Sections X and
XI hereof) to purchase from the Company the aggregate initial principal amounts
of Offered Certificates set forth on Schedule A, at the purchase price or prices
set forth in Schedule A.
The obligations of the Underwriters hereunder to purchase the Offered
Certificates of each Class shall be several and not joint. Each Underwriter's
obligation shall be to purchase the aggregate principal amount of Offered
Certificates of the related Class as is indicated with respect to each
Underwriter under the caption "Underwriting" in the Prospectus. The right of the
Company and a non-defaulting Underwriter shall be as set forth in Section XIII
hereof.
SECTION III. Delivery and Payment. Delivery of and payment for the
Offered Certificates to be purchased by the Underwriters shall be made at the
offices of Xxxxx Xxxxxxxxxx, 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at
such other place as shall be agreed upon by the Representative and the Company
at 10:00 A.M. New York City time on June 17, 1997 or at such other time or date
as shall be agreed upon in writing by the Representative and the Company (such
date being referred to as the "Closing Date"). Payment shall be made to the
Company by wire transfer of same day funds payable to the account of the
Company. Delivery of the Offered Certificates shall be made to the
Representative for the accounts of the Underwriters against payment of the
purchase price thereof. The Offered Certificates shall be in such denominations
and registered in such names as the Representative may request in writing at
least two business days prior to the Closing Date.
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The Offered Certificates will be made available for examination by the
Representative no later than 2:00 p.m. New York City time on the first business
day prior to the Closing Date.
SECTION IV. Offering by the Underwriters. It is understood that,
subject to the terms and conditions hereof, the Underwriters proposes to offer
the Offered Certificates for sale to the public as set forth in the Prospectus.
SECTION V. Covenants of the Company. The Company agrees as follows:
A. To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus prior to
the Closing Date except as permitted herein; to advise the
Representative, promptly after it receives notice thereof, of the time
when any amendment to the Registration Statement has been filed or
becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representative with copies
thereof; to file promptly all reports and any definitive proxy or
information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of the Prospectus and, for so long
as the delivery of a prospectus is required in connection with the
offering or sale of the Offered Certificates, to promptly advise the
Representative of its receipt of notice of the issuance by the
Commission of any stop order or of: (i) any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus;
(ii) the suspension of the qualification of the Offered Certificates
for offering or sale in any jurisdiction; (iii) the initiation of or
threat of any proceeding for any such purpose; (iv) any request by the
Commission for the amending or supplementing of the Registration
Statement or the Prospectus or for additional information. In the event
of the issuance of any stop order or of any order preventing or
suspending the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, the Company
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promptly shall use its best efforts to obtain the withdrawal of such
order or suspension.
B. To furnish promptly to the Representative and to counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
C. To deliver promptly to the Representative such number of
the following documents as the Representative shall reasonably request:
(i) conformed copies of the Registration Statement as originally filed
with the Commission and each amendment thereto (in each case including
exhibits); (ii) each Preliminary Prospectus, the Prospectus and any
amended or supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto). If the
delivery of a prospectus is required at any time prior to the
expiration of nine months after the Effective Time in connection with
the offering or sale of the Offered Certificates, and if at such time
any events shall have occurred as a result of which the Prospectus as
then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, the
Company shall notify the Representative and, upon the Representative's
request, shall file such document and prepare and furnish without
charge to the Underwriters and to any dealer in securities as many
copies as the Representative may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which
corrects such statement or omission or effects such compliance, and in
case any of the Underwriters are required to deliver a Prospectus in
connection with sales of any of the Offered Certificates at any time
nine months or more after the Effective Time, upon the request of the
Representative but at the expense of such Underwriter, the Company
shall prepare and deliver to such Underwriter as many copies as such
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Underwriter may reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission.
E. Prior to filing with the Commission any (i) Preliminary
Prospectus, (ii) amendment to the Registration Statement or supplement
to the Prospectus, or document incorporated by reference in the
Prospectus, or (iii) Prospectus pursuant to Rule 424 of the Rules and
Regulations, to furnish a copy thereof to the Representative and
counsel for the Underwriters and obtain the consent of the
Representative to the filing.
F. To make generally available to holders of the Offered
Certificates as soon as practicable, but in any event not later than 90
days after the close of the period covered thereby, a statement of
earnings of the Trust (which need not be audited) complying with
Section 11(a) of the Securities Act and the Rules and Regulations
(including, at the option of the Company, Rule 158) and covering a
period of at least twelve consecutive months beginning not later than
the first day of the first fiscal quarter following the Closing Date.
G. To use its best efforts, in cooperation with the
Representative, to qualify the Offered Certificates for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate,
and maintain or cause to be maintained such qualifications in effect
for as long as may be required for the distribution of the Offered
Certificates. The Company will file or cause the filing of such
statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
H. Not, without the Representative's prior written consent, to
publicly offer or sell or contract to sell any mortgage pass-through
securities, collateralized mortgage obligations or other similar
securities representing interests in or secured by other
mortgage-related assets
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originated or owned by the Company for a period of 5 business days
following the commencement of the offering of the Offered Certificates
to the public.
I. So long as the Offered Certificates shall be outstanding,
to deliver to the Representative as soon as such statements are
furnished to the Trustee: (i) the annual statement as to compliance
delivered to the Trustee pursuant to Section 8.16 of the Pooling and
Servicing Agreement; (ii) the annual statement of a firm of independent
public accountants furnished to the Trustee pursuant to Section 8.17 of
the Pooling and Servicing Agreement; and (iii) the Monthly Statement
furnished to the Certificateholders pursuant to Section 7.8 of the
Pooling and Servicing Agreement.
J. To apply the net proceeds from the sale of the Offered
Certificates in the manner set forth in the Prospectus.
SECTION VI. Conditions to the Underwriters' Obligations. The
obligations of the Underwriters to purchase the Offered Certificates pursuant to
this Agreement are subject to: (i) the accuracy on and as of the Closing Date of
the representations and warranties on the part of the Company herein contained;
(ii) the performance by the Company of all of their respective obligations
hereunder; and (iii) the following conditions as of the Closing Date:
A. The Representative shall have received confirmation of the
effectiveness of the Registration Statement. No stop order suspending
the effectiveness of the Registration Statement or any part thereof
shall have been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request of the
Commission for inclusion of additional information in the Registration
Statement or the Prospectus shall have been complied with.
B. None of the Underwriters shall have discovered and
disclosed to the Company on or prior to the Closing Date that the
Registration Statement or the Prospectus or any amendment or supplement
thereto contains an untrue statement of a fact or omits to state a fact
which, in the opinion of Xxxxx Xxxxxxxxxx, counsel for the
Underwriters, is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
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C. All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the Pooling
and Servicing Agreement, the Purchase Agreement, the Indemnification
Agreement, the Offered Certificates, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and
the transactions contemplated hereby shall be satisfactory in all
respects to counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that they may
reasonably request to enable them to pass upon such matters.
D. The Representative shall have received the favorable
opinion of Xxxxx Xxxxxxxxxx, special counsel to the Company with
respect to the following items, dated the Closing Date, to the effect
that:
1. The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, and is qualified to do business in each state necessary to
enable it to perform its obligations as Sponsor under the Pooling and
Servicing Agreement. The Company has the requisite power and authority
to execute and deliver, engage in the transactions contemplated by, and
perform and observe the conditions of, this Agreement, the Pooling and
Servicing Agreement, the Indemnification Agreement and the Purchase
Agreement.
2. This Agreement, the Certificates, the Pooling and Servicing
Agreement, the Indemnification Agreement and the Purchase Agreement
have been duly and validly authorized, executed and delivered by the
Company, all requisite corporate action having been taken with respect
thereto, and each (other than the Certificates) constitutes the valid,
legal and binding agreement of the Company.
3. Neither the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates nor the execution, delivery or
performance by the Company of the Pooling and Servicing Agreement, this
Agreement, the Indemnification Agreement or the Purchase Agreement (A)
conflicts or will conflict with or results or will result in a breach
of, or constitutes or will constitute a default under, (i) any term or
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provision of the certificate of incorporation or bylaws of the Company;
(ii) any term or provision of any material agreement, contract,
instrument or indenture, to which the Company is a party or is bound
and known to such counsel; or (iii) any order, judgment, writ,
injunction or decree of any court or governmental agency or body or
other tribunal having jurisdiction over the Company and known to such
counsel; or (B) results in, or will result in the creation or
imposition of any lien, charge or encumbrance upon the Trust Estate or
upon the Certificates, except as otherwise contemplated by the Pooling
and Servicing Agreement.
4. The endorsement and delivery of each Note, and the
preparation, delivery and recording of an Assignment with respect to
each Mortgage is sufficient to fully transfer to the Trustee for the
benefit of the Owners all right, title and interest of the Company in
the Note and Mortgage, as noteholder and mortgagee or assignee thereof,
subject to any exceptions set forth in such opinion, and will be
sufficient to permit the Trustee to avail itself of all protection
available under applicable law against the claims of any present or
future creditors of the Company and to prevent any other sale,
transfer, assignment, pledge or other encumbrance of the Mortgage Loans
by the Company from being enforceable.
5. No consent, approval, authorization or order of,
registration or filing with, or notice to, courts, governmental agency
or body or other tribunal is required under the laws of the State of
New York, for the execution, delivery and performance of the Pooling
and Servicing Agreement, this Agreement, the Indemnification Agreement,
the Purchase Agreement or the offer, issuance, sale or delivery of the
Certificates or the consummation of any other transaction contemplated
thereby by the Company, except such which have been obtained.
6. There are no actions, proceedings or investigations, to
such counsel's knowledge, pending or threatened against the Company
before any court, governmental agency or body or other tribunal (i)
asserting the invalidity of the Pooling and Servicing Agreement, the
Indemnification Agreement, this Agreement, the Purchase Agreement or
the Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Pooling and
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Servicing Agreement, the Indemnification Agreement, or this Agreement,
(iii) which would materially and adversely affect the performance by
the Company of obligations under, or the validity or enforceability of,
the Pooling and Servicing Agreement, the Indemnification Agreement, the
Certificates, the Purchase Agreement or this Agreement or (iv) that
would adversely affect the status of the Trust Estate as a "real estate
mortgage investment conduit" ("REMIC") as such term is defined in the
Internal Revenue Code of 1986, as amended.
7. To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the effectiveness
of the Registration Statement or any order directed to any prospectus
relating to the Certificates (including the Prospectus), and has not
initiated or threatened any proceeding for that purpose.
8. The Registration Statement and the Prospectus (other than
the financial and statistical data included therein, as to which such
counsel need express no opinion), including the Incorporated Documents,
as of the date on which the Registration Statement was declared
effective and as of the date hereof, comply as to form in all material
respects with the requirements of the 1933 Act and the rules and
regulations thereunder and the Exchange Act and the rules and
regulations thereunder, and such counsel does not know of any amendment
to the Registration Statement required to be filed, or of any
contracts, indentures or other documents of a character required to be
filed as an exhibit to the Registration Statement or required to be
described in the Registration Statement which has not been filed or
described as required.
9. Neither the qualification of the Pooling and Servicing
Agreement under the Trust Indenture Act of 1939 nor the registration of
the Trust created by such Agreement under the Investment Company Act of
1940 is presently required.
10. The statements in the Prospectus set forth under the
captions "DESCRIPTION OF THE SECURITIES," "THE POOLING AND SERVICING
AGREEMENT" and the statements in the Prospectus Supplement set forth
under the caption "DESCRIPTION OF THE CERTIFICATES," to the extent such
statements purport to summarize certain provisions of the Certificates
or of the Pooling and Servicing
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Agreement, are fair and accurate in all material respects.
11. The statements in the Prospectus and Prospectus Supplement
set forth under the captions "ERISA CONSIDERATIONS," "CERTAIN FEDERAL
INCOME TAX CONSEQUENCES," and the statements in the Prospectus set
forth under the caption "CERTAIN LEGAL ASPECTS OF THE MORTGAGE LOANS
AND RELATED MATTERS," to the extent that they constitute matters of
federal, New York or California law, or federal, New York or California
legal conclusions provide a fair and accurate summary of such law or
conclusions.
12. Assuming that (a) the Trustee causes the Trust created
under the Pooling and Servicing Agreement to elect, as the Trustee has
covenanted to do in the Pooling and Servicing Agreement, to be treated
as a REMIC and (b) the parties to the Pooling and Servicing Agreement
comply with the terms thereof, the Trust will be treated as a REMIC,
the Offered Certificates issued pursuant to the Pooling and Servicing
Agreement will be treated as the "regular interests" in the REMIC and
the Class R Certificates issued pursuant to the Pooling and Servicing
Agreement will be treated as the sole "residual interest" in the REMIC.
The Trust will not be subject to tax upon its income or assets by any
taxing authority of the State of New York or New York City or of the
State of California (except that no opinion need be expressed with
respect to any minimum tax).
13. Such opinion shall also relate to comparable matters with
respect to the Affiliated Originators and Advanta Mortgage Holding
Company.
14. No information has come to such counsel's attention which
causes them to believe that the Prospectus (other than the financial
statement and other financial and statistical data contained therein,
as to which such counsel need express no opinion), as of the date
thereof, contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
15. Such other matters as the Representative may reasonably
request.
In rendering its opinions, the counsel described above may rely, as to
matters of fact, on certificates of
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responsible officers of the Company, the Trustee and public officials. Such
opinions may also assume the due authorization, execution and delivery of the
instruments and documents referred to therein by the parties thereto other than
the Company.
E. The Representative shall have received letters, including
bring-down letters, from Xxxxxx Xxxxxxxx LLP, dated on or before the
Closing Date, in form and substance satisfactory to the Representative
and counsel for the Underwriters, to the effect that they have
performed certain specified procedures requested by the Representative
with respect to the information set forth in the Prospectus and certain
matters relating to the Company.
F. The Offered Certificates shall have received the ratings
listed on Schedule A hereto, and such ratings shall not have been
rescinded or downgraded. The Representative and counsel for the
Underwriters shall have received copies of any opinions of counsel
supplied to the rating organizations relating to any matters with
respect to the Certificates. Any such opinions shall be dated the
Closing Date and addressed to the Underwriters or accompanied by
reliance letters to the Underwriters or shall state that the
Underwriters may rely upon them.
G. The Representative shall have received from the Company a
certificate, signed by the president, a senior vice president or a vice
president of the Company, dated the Closing Date, to the effect that
the signer of such certificate has carefully examined the Registration
Statement, the Pooling and Servicing Agreement and this Agreement and
that, to the best of his or her knowledge based upon reasonable
investigation:
1. the representations and warranties of the Company in this
Agreement, as of the Closing Date, and in the Pooling and Servicing
Agreement, the Indemnification Agreement, the Purchase Agreement and in
all related agreements, as of the date specified in such agreements,
are true and correct, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed
or satisfied at or prior to the Closing Date;
2. there are no actions, suits or proceedings pending, or to
the best of such officer's
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knowledge, threatened against or affecting the Company which if
adversely determined, individually or in the aggregate, would be
reasonably likely to adversely affect the Company's obligations under
the Pooling and Servicing Agreement, the Indemnification Agreement,
this Agreement or the Purchase Agreement in any material way; and no
merger, liquidation, dissolution or bankruptcy of the Company is
pending or contemplated;
3. the information contained in the Registration Statement and
the Prospectus relating to the Company, the Mortgage Loans or the
servicing procedures of it or its affiliates or subservicer is true and
accurate in all material respects and nothing has come to his or her
attention that would lead such officer to believe that the Registration
Statement or Prospectus includes any untrue statement of a material
fact or omits to state a material fact necessary to make the statements
therein not misleading;
4. the information set forth in the Schedule of Mortgage Loans
required to be furnished pursuant to the Pooling and Servicing
Agreement is true and correct in all material respects;
5. there has been no amendment or other document filed
affecting the articles of incorporation or bylaws of the Company since
March 31, 1997, and no such amendment has been authorized. No event has
occurred since March 31, 1997, which has affected the good standing of
the Company under the laws of the State of Delaware;
6. there has not occurred any material adverse change, or any
development involving a prospective material adverse change, in the
condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries, taken as a whole, from
March 31, 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 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
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8. each person who, as an officer or representative of the
Company, signed or signs the Registration Statement, the Pooling and
Servicing Agreement, the Indemnification Agreement, this Agreement, or
any other document delivered pursuant hereto, on the date of such
execution, or on the Closing Date, as the case may be, in connection
with the transactions described in the Pooling and Servicing Agreement,
the Indemnification Agreement, the Purchase Agreement and this
Agreement was, at the respective times of such signing and delivery,
and is now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such persons appearing
on such documents are their genuine signatures.
The Company shall attach to such certificate a true and correct copy of
its certificate or articles of incorporation, as appropriate, and bylaws which
are in full force and effect on the date of such certificate and a certified
true copy of the resolutions of its Board of Directors with respect to the
transactions contemplated herein.
H. The Representative shall have received a favorable opinion
of counsel to the Trustee, dated the Closing Date and in form and
substance satisfactory to the Representative, to the effect that:
1. the Trustee is a national banking association duly
organized, validly existing and in good standing under the laws of the
United States and has the power and authority to enter into and to take
all actions required of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and the Pooling and
Servicing Agreement constitutes the legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except as enforceability thereof may be limited by (A)
bankruptcy, insolvency, reorganization or other similar laws affecting
the enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or reorganization or
similar occurrence affecting the Trustee, and (B) general principles of
equity regardless of whether such enforcement is sought in a proceeding
at law or in equity;
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3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the part
of the Trustee in connection with its execution and delivery of the
Pooling and Servicing Agreement or the performance of its obligations
thereunder;
4. the Certificates have been duly executed, authenticated and
delivered by the Trustee; and
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing Agreement
do not conflict with or result in a violation of any statute or
regulation applicable to the Trustee, or the charter or bylaws of the
Trustee, or to the best knowledge of such counsel, any governmental
authority having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the Trustee is a
party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Trustee.
I. The Representative shall have received from the Trustee a
certificate, signed by the President, a senior vice president or a vice
president of the Trustee, dated the Closing Date, to the effect that
each person who, as an officer or representative of the Trustee, signed
or signs the Certificates, the Pooling and Servicing Agreement or any
other document delivered pursuant hereto, on the date hereof or on the
Closing Date, in connection with the transactions described in the
Pooling and Servicing Agreement was, at the respective times of such
signing and delivery, and is now, duly elected or appointed, qualified
and acting as such officer or representative, and the signatures of
such persons appearing on such documents are their genuine signatures.
J. The Policy relating to the Certificates shall have been
duly executed and issued at or prior to the Closing Date and shall
conform in all material respects to the description thereof in the
Prospectus.
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K. The Representative shall have received a favorable opinion
of in-house counsel to the Insurer, dated the Closing Date and in form
and substance satisfactory to counsel for the Underwriters, to the
effect that:
1. The Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of
Wisconsin. The Insurer is validly licensed to do business in New York
and is authorized to issue the Policy and perform its obligations under
the Policy in accordance with the terms thereof.
2. The execution and delivery by the Insurer of the Policy,
and the Indemnification Agreement are within the corporate power of the
Insurer and have been authorized by all necessary corporate action on
the part of the Insurer; the Policy has been duly executed and is the
valid and binding obligation of the Insurer enforceable in accordance
with its terms except that the enforcement of the Policy may be limited
by laws relating to bankruptcy, insolvency, reorganization, moratorium,
receivership and other similar laws affecting creditors' rights
generally and by general principles of equity.
3. The Insurer is authorized to deliver the Indemnification
Agreement, and such agreement has been duly executed and delivered and
constitute the legal, valid and binding obligations of the Insurer
enforceable in accordance with its terms except that the enforcement of
the Indemnification Agreement may be limited by laws relating to
bankruptcy, insolvency, reorganization, moratorium, receivership and
other similar laws affecting creditors' rights generally and by general
principles of equity and by public policy considerations relating to
indemnification for securities law violations.
4. No consent, approval, authorization or order of any state
or federal court or governmental agency or body is required on the part
of the Insurer, the lack of which would adversely affect the validity
or enforceability of the Policy; to the extent required by applicable
legal requirements that would adversely affect validity or
enforceability of the Policy, the form of the Policy has been filed
with, and approved by, all governmental authorities having jurisdiction
over the Insurer in connection with the Policy.
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5. The Policy is not required to be registered under the
Securities Act.
6. The information set forth under the caption "THE
CERTIFICATE INSURANCE POLICY" and "THE CERTIFICATE INSURER" in the
Prospectus forming a part of the Registration Statement, insofar as
such statements constitute a description of the Policy, accurately
summarizes the Policy.
In rendering this opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Trustee, the
Insurer and public officials. Such opinion may assume the due authorization,
execution and delivery of the instruments and documents referred to therein by
the parties thereto other than the Insurer.
L. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is defined
for purposes of the 1933 Act.
M. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act.
N. There has not occurred any change, or any development
involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or operations, since December
31, 1996, of (A) the Company and its subsidiaries or (B) the Insurer,
that is in the Representative's judgment material and adverse and that
makes it in the Representative's judgment impracticable to market the
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
O. The Representative shall have received from the Insurer a
certificate, signed by the president, a senior vice president or a vice
president of the Insurer, dated the Closing Date,
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to the effect that the signer of such certificate has carefully
examined the Policy, the Indemnification Agreement and the related
documents and that, to the best of his or her knowledge based on
reasonable investigation:
1. There are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policy or the Indemnification
Agreement;
2. Each person who as an officer or representative of the
Insurer, signed or signs the Policy, the Indemnification Agreement or
any other document delivered pursuant hereto, on the date thereof, or
on the Closing Date, in connection with the transactions described in
this Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and acting
as such officer or representative, and the signatures of such persons
appearing on such documents are their genuine signatures;
3. The information contained in the Prospectus under the
captions "THE CERTIFICATE INSURANCE POLICY" and "THE CERTIFICATE
INSURER" is true and correct in all material respects and does not omit
to state a material fact with respect to the description of the Policy
or the ability of the Insurer to meet its payment obligations under the
Policy;
4. The tables regarding the Insurer's capitalization set forth
under the heading "THE CERTIFICATE INSURANCE POLICY" and "THE
CERTIFICATE INSURER" presents fairly the capitalization of the Insurer
as of March 31, 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
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of income and retained earnings for the fiscal year then ended, and the
accompanying footnotes, together with opinion dated of
, an independent certificated public accountant, 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 consistently applied; the unaudited
balance sheet of the Insurer as of March 31, 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 March 31,
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 bylaws,
all of which are in full force and effect on the date of such certificate.
P. The Representative shall have received from Xxxxx
Xxxxxxxxxx, special counsel to the Company, a survey in form and
substance satisfactory to the Representative, indicating the
requirements of applicable local law which must be complied with in
order to transfer and service the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and the Company shall have complied
with all such requirements.
Q. The Representative shall have received from Xxxxx
Xxxxxxxxxx, special counsel to the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and sale
of the Certificates, the Prospectus and such other
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related matters as the Representative shall reasonably require.
R. The Representative and counsel for the Underwriters shall
have received copies of any opinions of counsel to the Company supplied
to the Trustee relating to matters with respect to the Certificates.
Any such opinions shall be dated the Closing Date and addressed to the
Underwriters or accompanied by reliance letters to the Underwriters or
shall state the Underwriters may rely thereon.
S. The Representative shall have received such further
information, certificates and documents as the Representative may
reasonably have requested not fewer than three (3) full business days
prior to the Closing Date.
T. There shall have been executed and delivered by Advanta
Mortgage Holding Company, the corporate parent of the Company ("AMHC"),
a letter agreement with the Trustee and the Insurer, pursuant to which
AMHC agrees to become jointly and severally liable with the Company and
Advanta Mortgage Corp. USA for the payment of the Joint and Several
Obligations (as defined in such letter agreement).
U. There shall have been executed and delivered by AMHC, the
corporate parent of the Company, a letter agreement with the
Underwriters substantially in the form of Exhibit A hereto.
V. Prior to the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they may
reasonably require for the purpose of enabling them to pass upon the
issuance and sale of the Offered Certificates as herein contemplated
and related proceedings or in order to evidence the accuracy and
completeness of any of the representations and warranties, or the
fulfillment of any of the conditions, herein contained, and all
proceedings taken by the Company in connection with the issuance and
sale of the Certificates as herein contemplated shall be satisfactory
in form and substance to the Representative and counsel for the
Underwriters.
W. Subsequent to the execution and delivery of this Agreement
none of the following shall have occurred: (i) trading in securities
generally on the New York Stock Exchange, the American Stock
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Exchange or the over-the-counter market shall have been suspended or
minimum prices shall have been established on either of such exchanges
or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; (ii) a
banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation of hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States; or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets of the United States shall be such)
as to make it, in the judgment of the Representative, impractical or
inadvisable to proceed with the public offering or delivery of the
Certificates on the terms and in the manner contemplated in the
Prospectus.
X. The Certificates shall have received the ratings set forth
on Schedule A hereto.
If any condition specified in this Section VI shall not have been
fulfilled when and as required to be fulfilled, this Agreement may be terminated
by the Representative by notice to the Company at any time at or prior to the
Closing Date, and such termination shall be without liability of any party to
any other party except as provided in Section VII.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.
SECTION VII. Payment of Expenses. The Company agrees to pay: (a) the
costs incident to the authorization, issuance, sale and delivery of the Offered
Certificates and any taxes payable in connection therewith; (b) the costs
incident to the preparation, printing and filing under the Securities Act of the
Registration Statement and any amendments and exhibits thereto; (c) the costs of
distributing the Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in each case,
exhibits), the Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
all as provided in this Agreement; (d) the costs of reproducing and distributing
this Agreement; (e) the fees and expenses of qualifying the Offered Certificates
under the
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securities laws of the several jurisdictions as provided in Section V(G) hereof
and of preparing, printing and distributing a Blue Sky Memorandum and a Legal
Investment Survey (including related fees and expenses of counsel to the
Underwriters); (f) any fees charged by securities rating services for rating the
Offered Certificates; and (g) all other costs and expenses incident to the
performance of the obligations of the Company; provided that, except as provided
in this Section VII, the Underwriters shall pay their own costs and expenses,
including the costs and expenses of Xxxxx Xxxxxxxxxx, any transfer taxes on the
Offered Certificates which they may sell and the expenses of advertising any
offering of the Offered Certificates made by the Underwriters.
If this Agreement is terminated by the Representative, in accordance
with the provisions of Section VI or Section X, the Company shall reimburse the
Underwriters for their respective reasonable out-of-pocket expenses, including
fees and disbursements of Xxxxx Xxxxxxxxxx, counsel for the Underwriters.
SECTION VIII. Indemnification and Contribution. A. The Company agrees
to indemnify and hold harmless each Underwriter and each person, if any, who
controls such Underwriter within the meaning of Section 15 of the Securities Act
from and against any and all loss, claim, damage or liability, joint or several,
or any action in respect thereof (including, but not limited to, any loss,
claim, damage, liability or action relating to purchases and sales of the
Offered Certificates), to which such Underwriter or any such controlling person
may become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in the
Registration Statement, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus or (iv) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading and shall reimburse such Underwriter
and each such controlling person promptly upon demand for any legal or other
expenses reasonably incurred by such Underwriter or such controlling person in
connection with investigating or defending or preparing to defend against any
such loss, claim, damage, liability or action as such expenses are incurred;
provided, 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
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made in any Preliminary Prospectus, the Prospectus or the Registration Statement
in reliance upon and in conformity with written information (including any
Derived Information) furnished to the Company through the Representative
specifically for inclusion therein; and provided, further, that as to any
Preliminary Prospectus this indemnity shall not inure to the benefit of any
Underwriter or any controlling person on account of any loss, claim, damage,
liability or action arising from the sale of the Offered Certificates to any
person by such Underwriter if such Underwriter failed to send or give a copy of
the Prospectus, as amended or supplemented, to that person within the time
required by the Securities Act, and the untrue statement or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact in the Preliminary Prospectus was corrected in the Prospectus,
unless such failure resulted from non-compliance by the Company with Section
V(C). For purposes of the last proviso to the immediately preceding sentence,
the term "Prospectus" shall not be deemed to include the documents incorporated
therein by reference, and none of the Underwriters shall be obligated to send or
give any supplement or amendment to any document incorporated therein by
reference to any person other than a person to whom such Underwriter had
delivered such incorporated document or documents in response to a written
request therefor. The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Underwriters or any
controlling person of such Underwriter.
B. Each Underwriter agrees severally, and not jointly to indemnify and
hold harmless the Company, each of its directors, each of its officers who
signed the Registration Statement, and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act against any and
all loss, claim, damage or liability, or any action in respect thereof, to which
the Company or any such director, officer or controlling person may become
subject, under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, (i) any untrue
statement or alleged untrue statement of a material fact contained in the
Registration Statement, (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (iii) any untrue statement or alleged untrue statement
of a material fact contained in the Prospectus or (iv) the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, 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
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with written information furnished to the Company by or on behalf of such
Underwriter specifically for inclusion therein, and shall reimburse the Company
and any such director, officer or controlling person for any legal or other
expenses reasonably incurred by the Company or any director, officer or
controlling person in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to any
liability which any Underwriter may otherwise have to the Company or any such
director, officer or controlling person.
C. Promptly after receipt by any indemnified party under this Section
VIII of notice of any claim or the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against any
indemnifying party under this Section VIII, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify an indemnifying party shall not relieve it from any
liability which it may have under this Section VIII except to the extent it has
been materially prejudiced by such failure, and provided, further, that the
failure to notify any indemnifying party shall not relieve it from any liability
which it may have to any indemnified party otherwise than under this Section
VIII.
If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying party
shall not be liable to the indemnified party under this Section VIII for any
legal or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation.
Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different 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
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the defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by the
Underwriters, if the indemnified parties under this Section VIII consist of the
Underwriters or any of their controlling persons, or by the Company, if the
indemnified parties under this Section VIII consist of the Company or any of the
Company's directors, officers or controlling persons.
Each indemnified party, as a condition of the indemnity agreements
contained in Section VIII(A) and (B), shall use its best efforts to cooperate
with the indemnifying party in the defense of any such action or claim. No
indemnifying party shall be liable for any settlement of any such action
effected without its written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be a final
judgment for the plaintiff in any such action, the indemnifying party agrees to
indemnify and hold harmless any indemnified party from and against any loss or
liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for fees and expenses of counsel, the indemnifying party agrees that it
shall be liable for any settlement of any proceeding effected without its
written consent if (i) such settlement is entered into more than 30 days after
receipt by such indemnifying party of the aforesaid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in accordance
with such request prior to the date of such settlement.
D. Each Underwriter agrees to deliver to the Company no later
than the date on which the Prospectus Supplement is required to be
filed pursuant to Rule 424 with a copy of its Derived Information
(defined below) for filing with the Commission on Form 8-K.
E. Each Underwriter agrees, assuming all Company-Provided
Information (defined below) is
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accurate and complete in all material respects, to severally and not
jointly indemnify and hold harmless the Company, each of the Company's
officers and directors and each person who controls the Company within
the meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to which they
may become subject under the Securities Act or otherwise, insofar as
such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement of a
material fact contained in the Derived Information provided by such
Underwriter, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses
reasonably incurred by him, her or it in connection with investigating
or defending or preparing to defend any such loss, claim, damage,
liability or action as such expenses are incurred. The obligations of
each of the Underwriters under this Section VIII(E) shall be in
addition to any liability which such Underwriter may otherwise have.
The procedures set forth in Section VIII(C) shall be equally
applicable to this Section VIII(E).
F. For purposes of this Section VIII, the term "Derived
Information" means such portion, if any, of the information delivered
to the Company pursuant to Section VIII(D) for filing with the
Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into
account information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral term
sheets, Structural term sheets or Computational
Materials (as such terms are interpreted in the
No-Action Letters).
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"Company-Provided Information" means any computer tape
furnished to the Underwriters by the Company concerning the
Mortgage Loans comprising the Trust.
The terms "Collateral term sheet" and "Structural
term sheet" shall have the respective meanings assigned to
them in the February 13, 1995 letter (the "PSA Letter") of
Cleary, Gottlieb, Xxxxx & Xxxxxxxx on behalf of the Public
Securities Association (which letter, and the SEC staff's
response thereto, were publicly available February 17, 1995).
The term "Collateral term sheet" as used herein includes any
subsequent Collateral term sheet that reflects a substantive
change in the information presented. The term "Computational
Materials" has the meaning assigned to it in the May 17, 1994
letter (the "Xxxxxx letter" and together with the PSA Letter,
the "No-Action Letters") of Xxxxx & Xxxx on behalf of Xxxxxx,
Peabody & Co., Inc. (which letter, and the SEC staff's
response thereto, were publicly available May 20, 1994).
G. If the indemnification provided for in this
Section VIII shall for any reason be unavailable to or
insufficient to hold harmless an indemnified party under
Section VIII(A) or (B) in respect of any loss, claim, damage
or liability, or any action in respect thereof, referred to
therein, then each indemnifying party shall, in lieu of
indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect
thereof, (i) in such proportion as shall be appropriate to
reflect the relative benefits received by the Company on the
one hand and the Underwriters on the other from the offering
of the Offered Certificates or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law or if
the indemnified party failed to give the notice required under
Section VIII(C), in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the
one hand and the Underwriters on the other with respect to the
statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as
any other relevant equitable considerations.
The relative benefits of the Underwriters and the
Company shall be deemed to be in such proportion so
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that the Underwriters are responsible for that portion
represented by the percentage that the underwriting discount
appearing on the cover page of the Prospectus bears to the
public offering price appearing on the cover page of the
Prospectus.
The relative fault of the Underwriters and the Company shall
be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information
supplied by the Company or by one of the Underwriters, the
intent of the parties and their relative knowledge, access to
information and opportunity to correct or prevent such
statement or omission and other equitable considerations.
The Company and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section
VIII(G) were to be determined by pro rata allocation or by any
other method of allocation which does not take into account
the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section VIII(G) shall be
deemed to include, for purposes of this Section VIII(G), any
legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or
defending any such action or claim.
In no case shall any Underwriter be responsible for any amount
in excess of the underwriting discount applicable to the
Certificates purchased by such Underwriter hereunder. No
person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be
entitled to contribution from any person who was not guilty of
such fraudulent misrepresentation.
H. The Underwriters severally confirm that the
information set forth (i) in the Prospectus Supplement
relating to market making and (ii) in the fourth paragraph
under the caption "Underwriting" in the Prospectus Supplement,
together with the Derived Information, is correct and
constitutes the only information furnished in writing to the
Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
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SECTION IX. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Company and shall survive delivery of
any Offered Certificates to the Underwriters.
SECTION X. Termination of Agreement. The Representative may terminate
this Agreement immediately upon notice to the Company, at any time at or prior
to the Closing Date if any of the events or conditions described in Section
VI(W) of this Agreement shall occur and be continuing. In the event of any such
termination, the covenant set forth in Section V(G), the provisions of Section
VII, the indemnity agreement set forth in Section VIII, and the provisions of
Sections IX and XIII shall remain in effect.
SECTION XI. Notices. All statements, requests, notices and agreements
hereunder shall be in writing, and:
A. if to the Underwriters, shall be delivered or sent by mail,
telex or facsimile transmission to Xxxxxx Xxxxxxx & Co. Incorporated,
as Representative of the Underwriters, 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. 00000 Xxxx Xxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000 Attention:
General Counsel (Fax: 000-000-0000).
SECTION XII. Persons Entitled to the Benefit of this Agreement. This
Agreement shall inure to the benefit of and be binding upon the Underwriters and
the Company, and their respective successors. This Agreement and the terms and
provisions hereof are for the sole benefit of only those persons, except that
the representations, warranties, indemnities and agreements contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control the Underwriters within the meaning of Section 15 of the
Securities Act, and for the benefit of directors of the Company, officers of the
Company who have signed the Registration Statement and any person controlling
the Company within the meaning of Section 15 of the Securities Act. Nothing in
this Agreement is intended or shall be construed to give any person, other than
the persons referred to in this Section XII, any legal or equitable right,
remedy
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or claim under or in respect of this Agreement or any provision contained
herein.
SECTION XIII. Default by One of the Underwriters. If one of the
Underwriters shall fail on the Closing Date to purchase the Offered Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), the
remaining Underwriters (the "Non-Defaulting Underwriter"), shall have the right,
but not the obligation within one (1) Business Day thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted
Certificates upon the terms herein set forth; if, however, the Non-Defaulting
Underwriter shall not have completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section XIII shall relieve the
defaulting Underwriter from liability in respect of its default.
In the event of any such default which does not result in a termination
of this Agreement, either the Non-Defaulting Underwriter or the Company shall
have the right to postpone the Closing Date for a period not exceeding seven
days in order to effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
SECTION XIV. Survival. The respective indemnities, representations,
warranties and agreements of the Company and the Underwriters contained in this
Agreement, or made by or on behalf of them, respectively, pursuant to this
Agreement, shall survive the delivery of and payment for the Certificates and
shall remain in full force and effect, regardless of any investigation made by
or on behalf of any of them or any person controlling any of them.
SECTION XV. Definition of the Term "Business Day". For purposes of this
Agreement, "Business Day" means any day on which the New York Stock Exchange,
Inc. is open for trading.
SECTION XVI. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE
CONSTRUED IN ACCORDANCE WITH SUCH LAWS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS
OF LAW, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION XVII. Counterparts. This Agreement may be executed in
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to
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be an original but all such counterparts shall together constitute one and the
same instrument.
SECTION XVIII. Headings. The headings herein are inserted for
convenience of reference only and are not intended to be part of, or to affect
the meaning or interpretation of, this Agreement.
SECTION XIX. Representations of Underwriters. The Representative will
act for the several Underwriters in connection with the transactions
contemplated by this Agreement, and any action under this Agreement taken by the
Representative will be binding upon all of the Underwriters.
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If the foregoing correctly sets forth the agreement between the Company
and the Underwriters, please indicate your acceptance in the space provided for
that purpose below.
Very truly yours,
ADVANTA MORTGAGE CONDUIT
SERVICES INC.
By: /s/ Xxxx X. Xxxxxxxxx
-------------------------
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
CONFIRMED AND ACCEPTED, as of
the date first above written:
XXXXXX XXXXXXX & CO. INCORPORATED
as Representative of the Underwriters
By: /s/ Xxxxxxx Xxx
---------------------
Name: Xxxxxxx Xxx
Title: Vice President
[Underwriting Agreement]
