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Exhibit 1.1
ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1998-1
UNDERWRITING AGREEMENT
March 12, 1998
XXXXXX XXXXXXX & CO. INCORPORATED
As Representative of the Underwriters
named in Schedule I
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1998-1, (the "Certificates") consisting of (i) the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class
A-4 Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the
Class A-IO Certificates, the Class A-7 Certificates and the Class A-8
Certificates (collectively, the "Class A Certificates"), (ii) the Class M-1
Certificates (the "Class M-1 Certificates"), (iii) the Class M-2 Certificates
(the "Class M-2 Certificates", and collectively with the Class M-1 Certificates,
the "Mezzanine Certificates"), (iv) the Class B-1 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
1998-1 (the "Trust"), and will evidence in the aggregate the entire beneficial
interest in a trust estate (the "Trust Estate") consisting primarily of two
segregated pools (the "Mortgage Pools") of closed-end mortgage loans (the
"Mortgage Loans"), and certain related property. The Mortgage Loans shall have
on March 19, 1998 (the "Closing Date"), an aggregate principal balance of
approximately $900,000,000. The certificates are to be issued under a pooling
and servicing agreement, to be dated as of March 1, 1998 (the "Pooling and
Servicing Agreement"), among the Company, as sponsor, Advanta Mortgage Corp.
USA, as master servicer, and Bankers Trust Company of California, N.A., as
trustee (the "Trustee").
On or prior to the date of issuance of the Certificates, the Company
will obtain a guaranty insurance policy (the "Policy") issued by MBIA Insurance
Corporation (the "Insurer") which will unconditionally and irrevocably guarantee
to the Trustee for the benefit of the holders of the Group I Certificates
(including Component I of the Class A-7 Certificates) the amount by which the
sum of the Group I Interest Distribution
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Amount and the related Subordination Deficit, if any, exceeds the Group I 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 June 15, 1997 among the Trustee, the
Affiliate 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 March __, 1998 among the Underwriters,
the Company and the Insurer, governing the liability of the several parties with
respect to the losses resulting from material misstatements or omissions
contained in the Prospectus Supplement.
Section I. Representations and Warranties of the Company. The
Company represents and warrants to, and agrees with the Underwriters that:
A. Registration Statements on Form S-3, as amended by
Post-Effective Amendments thereto, have (i) been prepared by the
Company in conformity with the requirements of the Securities Act of
1933 (the "Securities Act") and the rules and regulations (the
"Rules and Regulations") of the United States Securities and
Exchange Commission (the "Commission") thereunder, (ii) been filed
with the Commission under the Securities Act and (iii) become
effective under the Securities Act. Copies of such Registration
Statements have been delivered by the Company to the Underwriters.
As used in this Agreement, "Effective Time" means the date and the
time as of which such Registration Statements, or the most recent
post-effective amendment thereto, if any, was declared effective by
the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in
such Registration Statements, or amendments thereof, including a
preliminary prospectus supplement which, as completed, is proposed
to be used in connection with the sale of the Offered Certificates
and any prospectus filed with the Commission by the Company with the
consent of the Underwriters pursuant to 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,
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including any documents incorporated by reference therein at such
time; and "Prospectus" means such final prospectus, as first
supplemented by a prospectus supplement (the "Prospectus
Supplement") relating to the Offered Certificates, as first filed
with the Commission pursuant to paragraph (1) or (4) of Rule 424(b)
of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer
to and include any documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the Securities Act, as of the
date of such Preliminary Prospectus or the Prospectus, as the case
may be, and any reference to any amendment or supplement to any
Preliminary Prospectus or the Prospectus shall be deemed to refer to
and include any document filed under the Securities Exchange Act of
1934 (the "Exchange Act") after the date of such Preliminary
Prospectus or the Prospectus, as the case may be, and incorporated
by reference in such Preliminary Prospectus or the Prospectus, as
the case may be; and any reference to any amendment to the
Registration Statement shall be deemed to include any report of the
Company filed with the Commission pursuant to Section 13(a) or 15(d)
of the Exchange Act after the Effective Time that is incorporated by
reference in the Registration Statement. The Commission has not
issued any order preventing or suspending the use of any Preliminary
Prospectus. There are no contracts or documents of the Company which
are required to be filed as exhibits to the Registration Statement
pursuant to the Securities Act or the Rules and Regulations which
have not been so filed or incorporated by reference therein on or
prior to the Effective Date of the Registration Statements. The
conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
To the extent that any Underwriter (i) has provided to the
Company Collateral term sheets (as hereinafter defined) that such
Underwriter has provided to a prospective investor, the Company has
filed such Collateral term sheets as an exhibit to a report on Form
8-K within two business days of its receipt thereof, or (ii) has
provided to the Company Structural term sheets or Computational
Materials (each as defined below) that such 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
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Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material
fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein not misleading. The
Prospectus as of its date, and as amended or supplemented as of the
Closing Date (as hereinafter defined) does not and will not contain
any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement
or the Prospectus in reliance upon and in conformity with written
information furnished to the Company in writing by the Underwriters
expressly for use therein.
C. The documents incorporated by reference in the Prospectus,
when they became effective or were filed with the Commission, as the
case may be, conformed in all material respects to the requirements
of the Securities Act or the Exchange Act, as applicable, and the
rules and regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; and any
further documents so filed and incorporated by reference in the
Prospectus, when such documents become effective or are filed with
the Commission, as the case may be, will conform in all material
respects to the requirements of the Securities Act 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.
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F. There are no actions, proceedings or investigations pending
before or threatened by any court, administrative agency or other
tribunal to which the Company is a party or of which any of its
properties is the subject (a) which if determined adversely to the
Company would have a material adverse effect on the business or
financial condition of the Company, (b) which asserts the invalidity
of this Agreement, the 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 bound or to which any of
the property or assets of the Company or any of its subsidiaries is
subject, nor will such actions result in any violation of the
provisions of the articles of incorporation or by-laws of the
Company or any statute or any order, rule or regulation of any court
or governmental agency or body having jurisdiction over the Company
or any of its properties or assets.
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I. Arthur Xxxxxxxx LLP are independent public accountants with
respect to the Company as required by the Securities Act and the
Rules and Regulations.
J. The direction by the Company to the 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
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
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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 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
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Class as is indicated with respect to each Underwriter under the caption
"Underwriting" in the Prospectus. The right of the Company and a non-defaulting
Underwriter shall be as set forth in Section XIII hereof.
Section III. Delivery and Payment. Delivery of and payment for the
Offered Certificates to be purchased by the Underwriters shall be made at the
offices of Xxxxx Xxxxxxxxxx LLP, 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or
at such other place as shall be agreed upon by the Representative and the
Company at 10:00 A.M. New York City time on March 19, 1998 or at such other time
or date as shall be agreed upon in writing by the Representative and the Company
(such date being referred to as the "Closing Date"). Payment shall be made to
the Company by wire transfer of same day funds payable to the account of the
Company. Delivery of the Offered Certificates shall be made to the
Representative for the accounts of the Underwriters against payment of the
purchase price thereof. The Offered Certificates shall be in such denominations
and registered in such names as the Representative may request in writing at
least two business days prior to the Closing Date. The Offered Certificates will
be made available for examination by the Representative no later than 2:00 p.m.
New York City time on the first business day prior to the Closing Date.
Section IV. Offering by the Underwriters. It is understood that,
subject to the terms and conditions hereof, the Underwriters proposes to offer
the Offered Certificates for sale to the public as set forth in the Prospectus.
Section V. Covenants of the Company. The Company agrees as follows:
A. To prepare the Prospectus in a form approved by the
Representative and to file such Prospectus pursuant to Rule 424(b)
under the Securities Act not later than the Commission's close of
business on the second business day following the execution and
delivery of this Agreement; to make no further amendment or any
supplement to the Registration Statement or to the Prospectus prior
to the Closing Date except as permitted herein; to advise the
Representative, promptly after it receives notice thereof, of the
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
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for any such purpose; (iv) any request by the Commission for the
amending or supplementing of the Registration Statement or the
Prospectus or for additional information. In the event of the
issuance of any stop order or of any order preventing or suspending
the use of any Preliminary Prospectus or the Prospectus or
suspending any such qualification, the Company promptly shall use
its best efforts to obtain the withdrawal of such order or
suspension.
B. To furnish promptly to the Representative and to counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and of each amendment thereto
filed with the Commission, including all consents and exhibits filed
therewith.
C. To deliver promptly to the Representative such number of
the following documents as the Representative shall reasonably
request: (i) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in
each case including exhibits); (ii) each Preliminary Prospectus, the
Prospectus and any amended or supplemented Prospectus; and (iii) any
document incorporated by reference in the Prospectus (including
exhibits thereto). If the delivery of a prospectus is required at
any time prior to the expiration of nine months after the Effective
Time in connection with the offering or sale of the Offered
Certificates, and if at such time any events shall have occurred as
a result of which the Prospectus as then amended or supplemented
would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if for
any other reason it shall be necessary during such same period to
amend or supplement the Prospectus or to file under the Exchange Act
any document incorporated by reference in the Prospectus in order to
comply with the Securities Act or the Exchange Act, the Company
shall notify the Representative and, upon the Representative's
request, shall file such document and prepare and furnish without
charge to the Underwriters and to any dealer in securities as many
copies as the Representative may from time to time reasonably
request of an amended Prospectus or a supplement to the Prospectus
which corrects such statement or omission or effects such
compliance, and in case any of the Underwriters are required to
deliver a Prospectus in connection with sales of any of the Offered
Certificates at any time nine months or more after the Effective
Time, upon the request of the Representative but at the expense of
such Underwriter, the Company shall prepare and deliver to such
Underwriter as many copies as such Underwriter may reasonably
request of an amended or supplemented Prospectus complying with
Section 10(a)(3) of the Securities Act.
D. To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
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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 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.
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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 LLP,
counsel for the Underwriters, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
C. All corporate proceedings and other legal matters relating
to the authorization, form and validity of this Agreement, the
Pooling and Servicing Agreement, the Purchase Agreement, the
Indemnification Agreement, the Offered Certificates, the
Registration Statement and the Prospectus, and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to counsel for the
Underwriters, and the Company shall have furnished to such counsel
all documents and information that they may reasonably request to
enable them to pass upon such matters.
D. The Representative shall have received the favorable
opinion of Xxxxx Xxxxxxxxxx LLP, special counsel to the Company with
respect to the following items, dated the Closing Date, to the
effect that:
1. The Company has been duly organized and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, and is qualified to do business in each state necessary to
enable it to perform its obligations as Sponsor under the Pooling
and Servicing Agreement. The Company has the requisite power and
authority to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of, this
Agreement, the Pooling and
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Servicing Agreement, the Indemnification Agreement and the Purchase
Agreement.
2. This Agreement, the Certificates, the Pooling and Servicing
Agreement, the Indemnification Agreement and the Purchase Agreement
have been duly and validly authorized, executed and delivered by the
Company, all requisite corporate action having been taken with
respect thereto, and each (other than the Certificates) constitutes
the valid, legal and binding agreement of the Company.
3. Neither the transfer of the Mortgage Loans to the Trust,
the issuance or sale of the Certificates nor the execution, delivery
or performance by the Company of the Pooling and Servicing
Agreement, this Agreement, the Indemnification Agreement or the
Purchase Agreement (A) conflicts or will conflict with or results or
will result in a breach of, or constitutes or will constitute a
default under, (i) any term or provision of the certificate of
incorporation or bylaws of the Company; (ii) any term or provision
of any material agreement, contract, instrument or 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.
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6. There are no actions, proceedings or investigations, to
such counsel's knowledge, pending or threatened against the Company
before any court, governmental agency or body or other tribunal (i)
asserting the invalidity of the Pooling and Servicing Agreement, the
Indemnification Agreement, this Agreement, the Purchase Agreement or
the Certificates, (ii) seeking to prevent the issuance of the
Certificates or the consummation of any of the transactions
contemplated by the Pooling and Servicing Agreement, the
Indemnification Agreement, or this Agreement, (iii) which would
materially and adversely affect the performance by the Company of
obligations under, or the validity or enforceability of, the Pooling
and Servicing Agreement, the Indemnification Agreement, the
Certificates, the Purchase Agreement or this Agreement or (iv) that
would adversely affect the status of the Trust Estate as a "real
estate mortgage investment conduit" ("REMIC") as such term is
defined in the Internal Revenue Code of 1986, as amended.
7. To the best of the knowledge of such counsel, the
Commission has not issued any stop order suspending the
effectiveness of the Registration Statement or any order directed to
any prospectus relating to the Certificates (including the
Prospectus), and has not initiated or threatened any proceeding for
that purpose.
8. The Registration Statement and the Prospectus (other than
the financial and statistical data included therein, as to which
such counsel need express no opinion), including the Incorporated
Documents, as of the date on which the Registration Statement was
declared effective and as of the date hereof, comply as to form in
all material respects with the requirements of the 1933 Act and the
rules and regulations thereunder and the Exchange Act and the rules
and regulations thereunder, and such counsel does not know of any
amendment to the Registration Statement required to be filed, or of
any contracts, indentures or other documents of a character required
to be filed as an exhibit to the Registration Statement or required
to be described in the Registration Statement which has not been
filed or described as required.
9. Neither the qualification of the Pooling and Servicing
Agreement under the Trust Indenture Act of 1939 nor the registration
of the Trust created by such Agreement under the Investment Company
Act of 1940 is presently required.
10. The statements in the Prospectus set forth under the
captions "DESCRIPTION OF THE SECURITIES," "THE POOLING AND SERVICING
AGREEMENT" and the statements in the Prospectus Supplement set forth
under the caption "DESCRIPTION OF THE CERTIFICATES," to the extent
such statements purport to summarize certain provisions of the
Certificates or of the Pooling and Servicing Agreement, are fair and
accurate in all material respects.
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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 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
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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 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;
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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 December 31, 1997, and no such amendment has been authorized.
No event has occurred since December 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 December 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
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
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and has the power and authority to enter into and to take all
actions required of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has been duly
authorized, executed and delivered by the Trustee and the Pooling
and Servicing Agreement constitutes the legal, valid and binding
obligation of the Trustee, enforceable against the Trustee in
accordance with its terms, except as enforceability thereof may be
limited by (A) bankruptcy, insolvency, reorganization or other
similar laws affecting the enforcement of creditors' rights
generally, as such laws would apply in the event of a bankruptcy,
insolvency or reorganization or similar occurrence affecting the
Trustee, and (B) general principles of equity regardless of whether
such enforcement is sought in a proceeding at law or in equity;
3. no consent, approval, authorization or other action by any
governmental agency or body or other tribunal is required on the
part of the Trustee in connection with its execution and delivery of
the Pooling and Servicing Agreement or the performance of its
obligations thereunder;
4. the Certificates have been duly executed, authenticated and
delivered by the Trustee; and
5. the execution and delivery of, and performance by the
Trustee of its obligations under, the Pooling and Servicing
Agreement do not conflict with or result in a violation of any
statute or regulation applicable to the Trustee, or the charter or
bylaws of the Trustee, or to the best knowledge of such counsel, any
governmental authority having jurisdiction over the Trustee or the
terms of any indenture or other agreement or instrument to which the
Trustee is a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to matters of
fact, on certificates of responsible officers of the Company, the Trustee and
public officials. Such opinion may also assume the due authorization, execution
and delivery of the instruments and documents referred to therein by the parties
thereto other than the Trustee.
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.
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J. The Policy relating to the Certificates shall have been
duly executed and issued at or prior to the Closing Date and shall
conform in all material respects to the description thereof in the
Prospectus.
K. The Representative shall have received a favorable opinion
of in-house counsel to the Insurer, dated the Closing Date and in
form and substance satisfactory to counsel for the Underwriters, to
the effect that:
1. The Insurer is a stock insurance corporation, duly
incorporated and validly existing under the laws of the State of
Wisconsin. The Insurer is validly licensed to do business in New
York and is authorized to issue the Policy and perform its
obligations under the Policy in accordance with the terms thereof.
2. The execution and delivery by the Insurer of the Policy,
and the Indemnification Agreement are within the corporate power of
the Insurer and have been authorized by all necessary corporate
action on the part of the Insurer; the Policy has been duly executed
and is the valid and binding 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.
5. The Policy is not required to be registered under the
Securities Act.
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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, 1997, of (A) the Company and its subsidiaries or (B)
the Insurer, that is in the Representative's judgment material and
adverse and that makes it in the Representative's judgment
impracticable to market the Offered Certificates on the terms and in
the manner contemplated in the Prospectus.
O. The Representative shall have received from the Insurer a
certificate, signed by the president, a senior vice president or a
vice president of the Insurer, dated the Closing Date, to the effect
that the signer of such certificate has carefully examined the
Policy, the Indemnification Agreement and the related documents and
that, to the best of his or her knowledge based on reasonable
investigation:
1. There are no actions, suits or proceedings pending or
threatened against or affecting the Insurer which, if adversely
determined, individually or in the aggregate, would adversely affect
the Insurer's performance under the Policy or the Indemnification
Agreement;
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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 December 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,
1997 and the related statement of income and retained earnings for
the fiscal year then ended, and the accompanying footnotes, together
with the related opinion of an independent certificated public
accountant, copies of which are incorporated by reference in the
Prospectus Supplement, fairly present in all material respects the
financial condition of the Insurer as of such date and for the
period covered by such statements in accordance with generally
accepted accounting principles consistently applied.
7. to the best knowledge of such officer, since December 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.
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The Insurer shall attach to such certificate a true and correct copy
of its certificate or articles of incorporation, as appropriate, and its bylaws,
all of which are in full force and effect on the date of such certificate.
P. The Representative shall have received from Xxxxx
Xxxxxxxxxx LLP, special counsel to the Company, a survey in form and
substance satisfactory to the Representative, indicating the
requirements of applicable local law which must be complied with in
order to transfer and service the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and the Company shall have complied
with all such requirements.
Q. The Representative shall have received from Xxxxx
Xxxxxxxxxx LLP, special counsel to the Underwriters, such opinion or
opinions, dated the Closing Date, with respect to the issuance and
sale of the Certificates, the Prospectus and such other related
matters as the Representative shall reasonably require.
R. The Representative and counsel for the Underwriters shall
have received copies of any opinions of counsel to the Company
supplied to the Trustee relating to matters with respect to the
Certificates. Any such opinions shall be dated the Closing Date and
addressed to the Underwriters or accompanied by reliance letters to
the Underwriters or shall state the Underwriters may rely thereon.
S. The Representative shall have received such further
information, certificates and documents as the Representative may
reasonably have requested not fewer than three (3) full business
days prior to the Closing Date.
T. There shall have been executed and delivered by Advanta
Mortgage Holding Company, the corporate parent of the Company
("AMHC"), a letter agreement with the Trustee and the Insurer,
pursuant to which AMHC agrees to become jointly and severally liable
with the Company and Advanta Mortgage Corp. USA for the payment of
the Joint and Several Obligations (as defined in such letter
agreement).
U. There shall have been executed and delivered by AMHC, the
corporate parent of the Company, a letter agreement with the
Underwriters substantially in the form of Exhibit A hereto.
V. Prior to the Closing Date, counsel for the Underwriters
shall have been furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon
the issuance and sale of the Offered Certificates as herein
contemplated and related proceedings or in order to evidence the
accuracy and completeness of any of the representations and
warranties, or the fulfillment of any of
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the conditions, herein contained, and all proceedings taken by the
Company in connection with the issuance and sale of the Certificates
as herein contemplated shall be satisfactory in form and substance
to the Representative and counsel for the Underwriters.
W. Subsequent to the execution and delivery of this Agreement
none of the following shall have occurred: (i) trading in securities
generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
minimum prices shall have been established on either of such
exchanges or such market by the Commission, by such exchange or by
any other regulatory body or governmental authority having
jurisdiction; (ii) a 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
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distributing this Agreement; (e) the fees and expenses of qualifying the Offered
Certificates under the securities laws of the several jurisdictions as provided
in Section V(G) hereof and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related fees and expenses of
counsel to the Underwriters); (f) any fees charged by securities rating services
for rating the Offered Certificates; and (g) all other costs and expenses
incident to the performance of the obligations of the Company; provided that,
except as provided in this Section VII, the Underwriters shall pay their own
costs and expenses, including the costs and expenses of Xxxxx Xxxxxxxxxx LLP,
any transfer taxes on the Offered Certificates which they may sell and the
expenses of advertising any offering of the Offered Certificates made by the
Underwriters.
If this Agreement is terminated by the Representative, in accordance
with the provisions of Section VI or Section X, the Company shall reimburse the
Underwriters for their respective reasonable out-of-pocket expenses, including
fees and disbursements of Xxxxx Xxxxxxxxxx LLP, counsel for the Underwriters.
Section 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 made in any Preliminary Prospectus, the
Prospectus or the Registration Statement in reliance upon and in
conformity with written information (including any Derived
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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 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
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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 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
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26
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 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.
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The procedures set forth in Section VIII(C) shall be equally
applicable to this Section VIII(E).
F. For purposes of this Section VIII, the term "Derived
Information" means such portion, if any, of the information
delivered to the Company pursuant to Section VIII(D) for filing with
the Commission on Form 8-K as:
(i) is not contained in the Prospectus without taking into account
information incorporated therein by reference;
(ii) does not constitute Company-Provided Information; and
(iii) is of the type of information defined as Collateral term
sheets, Structural term sheets or Computational Materials (as
such terms are interpreted in the No-Action Letters).
"Company-Provided Information" means any computer tape furnished to
the 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
27
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loss, claim, damage or liability, or action in respect thereof, as
well as any other relevant equitable considerations.
The relative benefits of the Underwriters and the Company shall be
deemed to be in such proportion so that the Underwriters are responsible for
that portion represented by the percentage that the underwriting discount
appearing on the cover page of the Prospectus bears to the public offering price
appearing on the cover page of the Prospectus.
The relative fault of the Underwriters and the Company shall be
determined by reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact relates
to information supplied by the Company or by one of the Underwriters, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission and other equitable
considerations.
The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section VIII(G) were to be
determined by pro rata allocation or by any other method of allocation which
does not take into account the equitable considerations referred to herein. The
amount paid or payable by an indemnified party as a result of the loss, claim,
damage or liability, or action in respect thereof, referred to above in this
Section VIII(G) shall be deemed to include, for purposes of this Section
VIII(G), any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or claim.
In no case shall any Underwriter be responsible for any amount in
excess of the underwriting discount applicable to the Certificates purchased by
such Underwriter hereunder. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
H. The Underwriters severally confirm that the information set
forth (i) in the Prospectus Supplement relating to market making and
(ii) in the fourth paragraph under the caption "Underwriting" in the
Prospectus Supplement, together with the Derived Information, is
correct and constitutes the only information furnished in writing to
the Company by or on behalf of the Underwriters specifically for
inclusion in the Registration Statement and the Prospectus.
Section IX. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties and agreements contained in this
Agreement or contained in certificates of officers of the Company submitted
pursuant hereto shall remain operative and in full force and effect, regardless
of any investigation made by or on behalf of the Underwriters or controlling
persons thereof, or by or on behalf of the Company and shall survive delivery of
any Offered Certificates to the Underwriters.
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29
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 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.
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30
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 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:___________________________________
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:__________________________________
Name:
Title:
[Underwriting Agreement]
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SCHEDULE A
-------------------------------------------------------------------------------------------------------------------------------
INITIAL PRINCIPAL PURCHASE PRICE TO
AMOUNT OF OFFERED UNDERWRITERS
REQUIRED RATINGS CERTIFICATES PURCHASED DISREGARDING
CLASS S&P/XXXXX'X/FITCH BY UNDERWRITERS COUPON ACCRUED INTEREST
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $143,000,000 * 99.7500%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $89,000,000 6.25% 99.7449%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $64,000,000 6.27% 99.7325%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $42,000,000 6.42% 99.7431%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $68,000,000 6.60% 99.7128%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $50,000,000 6.43% 99.7055%
-------------------------------------------------------------------------------------------------------------------------------
Class A-IO AAA/Aaa/AAA ($50,000,000)** 5.00% 11.2604%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $330,000,000 * 99.7500%
-------------------------------------------------------------------------------------------------------------------------------
Class X-0 XXX/Xxx/XXX $44,000,000 6.24% 99.7495%
-------------------------------------------------------------------------------------------------------------------------------
Class M-1 AA/Aa2/AA $26,000,000 * 99.7500%
-------------------------------------------------------------------------------------------------------------------------------
Class M-2 A/A2/A $23,000,000 * 99.7500%
-------------------------------------------------------------------------------------------------------------------------------
Class B-1 BBB/Baa2/BBB $21,000,000 * 99.7500%
-------------------------------------------------------------------------------------------------------------------------------
*Floating
**Notional Balance
33
EXHIBIT A
As of March __, 1998
Xxxxxx Xxxxxxx & Co. Incorporated
As Representative of the Underwriters
named in Schedule I
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Re: Underwriting Agreement dated March __, 1998 (the
"Underwriting Agreement") between Advanta Mortgage
Conduit Services, Inc. ("Advanta") and Xxxxxx Xxxxxxx
& Co. Incorporated (the "Representative") and
Indemnification Agreement dated as of March ___, 1998
(the "Indemnification Agreement") among MBIA
Insurance Corporation (the "Insurer"), Advanta and
the Representative
-------------------------------------------------------
Ladies and Gentlemen:
Pursuant to the Underwriting Agreement and the Indemnification
Agreement (together, the "Designated Agreements"), Advanta has undertaken
certain financial obligations with respect to the indemnification of the
Underwriters and the Insurer with respect to the Registration Statement, the
Prospectus and the Prospectus Supplement described in the Designated Agreements.
Any financial obligations of Advanta under the Designated Agreements, whether or
not specifically enumerated in this paragraph, are hereinafter referred to as
the "Joint and Several Obligations"; provided, however, the "Joint and Several
Obligations" shall mean only the financial obligations of Advanta under the
Designated Agreements (including the payment of money damages for a breach of
any of Advanta's obligations under the Designated Agreement, whether financial
or otherwise) but shall not include any obligations not relating to the payment
of money.
As a condition of their respective executions of the Underwriting
Agreement and of the Indemnification Agreement, the Underwriters and the Insurer
have required the undersigned, Advanta Mortgage Holding Company ("AMHC"), the
parent corporation of Advanta, to acknowledge its joint-and-several liability
with Advanta for the payment of the Joint and Several Obligations under the
Designated Agreements.
Now, therefore, the Underwriters, the Insurer and AMHC do hereby
agree that:
34
(i) AMHC hereby agrees to be absolutely and unconditionally
jointly and severally liable with Advanta to the Underwriters
for the payment of the Joint and Several Obligations under the
Underwriting
Agreement.
(ii) AMHC hereby agrees to be absolutely and unconditionally
jointly and severally liable with Advanta to the Insurer for
the payment of the Joint and Several Obligations under the
Indemnification
Agreement.
(iii) AMHC may honor its obligations hereunder either by direct
payment of any Joint and Several Obligations or by causing any
Joint and Several Obligations to be paid to the Underwriters
by Advanta or another affiliate of AMHC.
Capitalized terms used herein and not defined herein shall have
their respective meanings set forth in the Agreement.
Very truly yours,
ADVANTA MORTGAGE HOLDING COMPANY
By:___________________________________
Name: Xxxx X. Xxxxxxxxx
Title: Vice President
XXXXXX XXXXXXX & CO. INCORPORATED
as Representative of the Underwriters
By:_______________________________
Name:
Title:
MBIA INSURANCE CORPORATION
By:________________________________
Name:
Title:
[AMHC Guarantee]
2
35
SCHEDULE I
Xxxxxx Xxxxxxx & Co. Incorporated
X.X. Xxxxxx Securities, Inc.
Salomon Brothers Inc
Greenwich Capital Markets, Inc.
