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[CAPTION]
ADVANTA CONDUIT RECEIVABLES, INC.
Mortgage Loan Asset-Backed Notes, Series 1999-4
UNDERWRITING AGREEMENT
November 5, 1999
BEAR, XXXXXXX & CO. INC.
As Representative of the Underwriters (the "Representative")
named in Schedule I
000 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Advanta Conduit Receivables, Inc. (the "Company") has
authorized the issuance and sale by Advanta Mortgage Loan Trust
1999-4, a Delaware business trust (the "Trust"), of Mortgage Loan
Asset-Backed Notes, Series 1999-4 (the "Notes") and Trust
Certificates (the "Trust Certificates", and together with the
Notes, the "Securities"). Only the Notes are offered by the
Underwriters.
The Notes will be issued by the Trust, and will be
secured by the trust estate (the "Trust Estate") which will
consist primarily of a pool of closed-end adjustable-rate, first
lien sub-prime residential mortgage loans (the "Mortgage Loans"),
amounts on deposit with Bankers Trust Company of California,
N.A., as Indenture Trustee of the Trust (the "Indenture Trustee")
in an account to be used to acquire additional mortgage loans
following the Closing Date (as hereinafter defined) for the Trust
(the "Pre-Funding Account") and certain related property. The
Mortgage Loans shall have, on or about November 17, 1999 (the
"Closing Date"), an aggregate principal balance of approximately
$133,943,952 and the Pre-Funding Account shall have approximately
$71,100,000, which amount may be applied to the purchase of
additional loans during the period from the Closing Date to on or
before February 29, 1999.
The Notes are to be issued pursuant to an Indenture, to
be dated as of November 1, 1999 (the "Indenture"), between the
Trust and the Indenture Trustee. The Trust, the Indenture
Trustee, Advanta Holding Trust 1999-4 (the "Holding Trust"), the
Company and Advanta Mortgage Corp. USA, as Master Servicer will
also enter into a Sale and Servicing Agreement, dated as of
November 1, 1999 (the "Sale and Servicing Agreement").
On or prior to the date of issuance of the Notes, the
Company will obtain a financial guaranty insurance policy (the
"Policy") issued by Ambac Assurance Corporation (the "Insurer")
which will unconditionally and irrevocably guarantee to the
Indenture Trustee for the benefit of the holders of the Notes an
amount equal to the Insured Amount (as defined in the Annex A to
the Sale and Servicing Agreement).
The Notes 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 Annex A to the Sale and Servicing
Agreement.
Simultaneously with the execution of the Indenture and
the Sale and Servicing Agreement, the Company will enter into a
conveyance agreement pursuant to the Mortgage Loan Transfer
Agreement dated on or about November 1, 1999 among the Company
and the Originators named therein (together, the "Purchase
Agreement"), pursuant to which the Originators will transfer to
the Company all of their right, title and interest in and to the
Mortgage Loans as of the Closing Date.
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The Company will also enter into a Trust Agreement (the
"Trust Agreement"), dated as of November 1, 1999, among the
Wilmington Trust Company, as Owner Trustee (the "Owner Trustee"),
the Holding Trust and the Company, pursuant to which the Trust
will be formed.
The Company will also enter into an Indemnification
Agreement (the "Indemnification Agreement") dated as of November
5, 1999 among the Underwriters and the Insurer.
Section 1. Representations and Warranties of the
Company
. The Company represents and warrants to, and agrees
with the Underwriters that:
a. A Registration Statement on Form S-3
(registration statement number 333-75295), as amended by
Post-Effective Amendments thereto, has (i) been prepared by
the Company in conformity with the requirements of the
Securities Act of 1933 (the "Securities Act") and the Trust
Indenture Act of 1939, as amended (the "Trust Indenture
Act"), and the respective 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 Statement has 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; "Registration Statement" means such registration
statement, as amended by all Post-Effective Amendments
thereto heretofore filed with the Commission, at the
Effective Time, including any documents incorporated by
reference therein at such time; and "Prospectus" means each
Prospectus included in such Registration Statement or
amendments thereof 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 and as supplemented by a final prospectus
supplement (the "Prospectus Supplement") relating to the
Notes, as first filed with the Commission pursuant to
paragraph (1) or (4) of Rule 424(b) of the Rules and
Regulations. Reference made herein to 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 Prospectus, as
the case may be, and any reference to any amendment or
supplement to the Prospectus shall be deemed to refer to and
include any document filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act") after the date of
such Prospectus, as the case may be, and incorporated by
reference in such 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.
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 Statement. The conditions for use of Form S-3,
as set forth in the General Instructions thereto, have been
satisfied.
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To the extent that any Underwriter (i) has
provided to the Company Collateral Term Sheets (as
hereinafter defined) that such Underwriter has provided to a
prospective investor, the Company has filed such Collateral
Term Sheets as an exhibit to a report on Form 8-K within two
business days of its receipt thereof, or (ii) has provided
to the Company Structural Term Sheets or Computational
Materials (each as defined below) that such Underwriter has
provided to a prospective investor, the Company will file or
cause to be filed with the Commission a report on Form 8-K
containing such Structural Term Sheet and Computational
Materials, as soon as reasonably practicable after the date
of this Agreement, but in any event, not later than the date
on which the Prospectus is filed with the Commission
pursuant to Rule 424 of the Rules and Regulations.
b. The Registration Statement conforms, and the
Prospectus and any further amendments or supplements to the
Registration Statement or the Prospectus will, when they
become effective or are filed with the Commission, as the
case may be, conform in all respects to the requirements of
the Securities Act, the Trust Indenture Act and the Rules
and Regulations. The Registration Statement, as of the
Effective Date thereof and of any amendment thereto, did not
contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
The Prospectus as of its date, and as amended or
supplemented as of the Closing Date does not and will not
contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading; provided that no
representation or warranty is made as to information
contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with
written information furnished to the Company in writing by
the Underwriters expressly for use therein.
c. The documents incorporated by reference in
the Prospectus, when they became effective or were filed
with the Commission, as the case may be, conformed in all
material respects to the requirements of the Securities Act
or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such
documents contained an untrue statement of a material fact
or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading; and any further documents so filed and
incorporated by reference in the Prospectus, when such
documents become effective or are filed with the Commission,
as the case may be, will conform in all material respects to
the requirements of the Securities Act or the Exchange Act,
as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue
statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading.
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.
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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 Sale and
Servicing Agreement, an Insurance and Indemnity Agreement,
dated as of November 17, 1999, between the Insurer, Advanta
Mortgage Corp. USA, as Master Servicer , the Company, the
Trust, the Holding Trust and the Indenture Trustee (the
"Insurance Agreement"), the Trust Agreement, and the
Purchase Agreement, and to cause the Notes to be issued.
f. There are no actions, proceedings or
investigations pending before or threatened by any court,
administrative agency or other tribunal to which the 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 Sale and Servicing Agreement, the
Insurance Agreement, the Purchase Agreement, the Trust
Agreement or the Notes, (c) which seeks to prevent the
issuance of the Notes or the consummation by the Company of
any of the transactions contemplated by the Indenture, the
Sale and Servicing Agreement, the Insurance Agreement, the
Purchase Agreement, the Trust 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
Sale and Servicing Agreement, the Insurance Agreement, the
Purchase Agreement, the Trust Agreement, this Agreement or
the Notes.
g. This Agreement has been, and the Sale and
Servicing Agreement, the Insurance Agreement, the Trust
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, the Sale and Servicing
Agreement, the Insurance Agreement, the Trust 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 and limitations of
public policy under applicable securities laws.
h. The execution, delivery and performance of
this Agreement, the Sale and Servicing Agreement, the
Insurance Agreement, the Trust Agreement and the Purchase
Agreement by the Company and the consummation of the
transactions contemplated hereby, thereby and in the
Indenture, and the issuance and delivery of the Notes do not
and will not conflict with or result in a breach or
violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of
trust, loan agreement or other agreement or instrument to
which the Company is a party, by which the Company is bound
or to which any of the property or assets of the Company or
any of its subsidiaries is subject, nor will such actions
result in any violation of the provisions of the articles of
incorporation or by-laws of the Company or any statute or
any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Company or any
of its properties or assets.
i. Arthur Xxxxxxxx LLP are independent public
accountants with respect to the Company as required by the
Securities Act and the Rules and Regulations.
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j. The direction by the Company to the Indenture
Trustee to execute, authenticate, issue and deliver the
Notes has been duly authorized by the Company, and assuming
the Indenture Trustee has been duly authorized to do so,
when executed, authenticated, issued and delivered by the
Indenture Trustee in accordance with the Indenture, the
Notes will be validly issued and outstanding and will be
entitled to the benefits provided by the Indenture.
k. No consent, approval, authorization, order,
registration or qualification of or with any court or
governmental agency or body of the United States is required
for the issuance of the Notes and the sale of the Notes to
the Underwriters, or the consummation by the Company of the
other transactions contemplated by this Agreement, the
Indenture, the Sale and Servicing Agreement, the Insurance
Agreement, the Trust 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 Notes 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
Indenture and the Sale and Servicing Agreement, the Company
will or will cause the Trust to: (i) have good title to the
interest in the Mortgage Loans, 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 Indenture, in the Sale and Servicing Agreement, in
the Trust Agreement or in the Notes being issued pursuant
thereto; and (iii) have the power and authority to sell its
interest in or cause the sale of the Mortgage Loans to the
Indenture Trustee, on behalf of the Trust, and to sell the
Notes to the Underwriters. Upon execution and delivery of
the Sale and Servicing Agreement by the Trust, the Trust
will have acquired beneficial ownership of all of the
Company's right, title and interest in and to the Mortgage
Loans. Upon delivery to the Underwriters of the Notes, the
Underwriters will have good title to the Notes, free of any
Liens.
n. The Trust's pledge of the Mortgage Loans to
the Indenture Trustee pursuant to the Indenture will vest in
the Indenture Trustee, for the benefit of the Noteholders, a
first priority perfected security interest therein, subject
to no prior lien, mortgage, security interest, pledge,
adverse claim, charge or other encumbrance.
o. As of the opening of business on November 1,
1999 (the "Cut-Off Date"), and on each Subsequent Cut-Off
Date (as defined in the Annex A to the Sale and Servicing
Agreement) 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.
p. None of the Company, the Holding Trust or the
Trust is an "investment company" within the meaning of such
term under the Investment Company Act of 1940, as amended
(the "1940 Act") and the rules and regulations of the
Commission thereunder.
q. At the Closing Date, the Notes, the Indenture
and the Sale and Servicing Agreement will conform in all
material respects to the descriptions thereof contained in
the Prospectus.
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r. At the Closing Date, the Notes shall have
been rated in the highest rating category by at least two
nationally recognized rating agencies.
s. Any taxes, fees and other governmental
charges in connection with the execution, delivery and
issuance of this Agreement, the Indenture, the Sale and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement, the Trust
Agreement and the Securities have been paid or will be paid
at or prior to the Closing Date.
t. At the Closing Date, each of the
representations and warranties of the Company set forth in
the Sale 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 Notes shall be deemed, and
shall state that it is, a representation and warranty as to the
matters covered thereby to each person to whom the
representations and warranties in this Section 1 are made.
Section 2. Purchase and Sale
. The commitment of the Underwriters to purchase the
Notes pursuant to this Agreement shall be deemed to have been
made on the basis of the representations and warranties herein
contained and shall be subject to the terms and conditions herein
set forth. The Company agrees to instruct the Indenture Trustee
to issue and agrees to sell to the Underwriters, and the
Underwriters agree (except as provided in Sections 10 and 11
hereof) to purchase from the Company the aggregate initial
principal amounts of Notes 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 Notes shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate
principal amount of Notes as is indicated with respect to each
Underwriter under the caption "Underwriting" in the Prospectus.
The rights of the Company and a non-defaulting Underwriter shall
be as set forth in Section 13 hereof.
Section 3. Delivery and Payment
. Delivery of and payment for the Notes 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 November 17, 1999 or at such other time or date as shall be
agreed upon by the Representative and the Company. Payment shall
be made to the Company by wire transfer of same day funds payable
to the account of the Company. Delivery of the Notes shall be
made to the Representative for the accounts of the Underwriters
against payment of the purchase price thereof. The Notes shall
be in such denominations and registered in such names as the
Company and the Representative have agreed upon at least two
business days prior to the Closing Date. The Notes 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 4. Offering by the Underwriters
. It is understood that, subject to the terms and
conditions hereof, the Underwriters propose to offer the Notes
for sale to the public as set forth in the Prospectus.
Section 5. Covenants of the Company
. The Company agrees as follows:
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a. (i) To prepare the Prospectus Supplement in a
form approved by the Representative and to file such
Prospectus Supplement 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; (ii) 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; (iii) 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; (iv) 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 Notes; and
(v) to promptly advise the Representative of its receipt of
notice of the issuance by the Commission of any stop order
or of: (w) any order preventing or suspending the use of
the Prospectus; (x) the suspension of the qualification of
the Notes for offering or sale in any jurisdiction; (y) the
initiation of or threat of any proceeding for any such
purpose; (z) 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 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) the Prospectus and any amended or
supplemented Prospectus; and (iii) any document incorporated
by reference in the Prospectus (including exhibits thereto).
If the delivery of a prospectus is required at any time
prior to the expiration of nine months after the Effective
Time in connection with the offering or sale of the Notes,
and if at such time any events shall have occurred as a
result of which the Prospectus as then amended or
supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary
in order to make the statements therein, in the light of the
circumstances under which they were made when such
Prospectus is delivered, not misleading, or, if for any
other reason it shall be necessary during such same period
to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Securities Act or the
Exchange Act, the 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 Notes 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.
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d. To file promptly with the Commission any
amendment to the Registration Statement or the Prospectus or
any supplement to the Prospectus that may, in the judgment
of the Company or the Representative, be required by the
Securities Act or requested by the Commission.
e. Prior to filing with the Commission any (i)
amendment to the Registration Statement or supplement to the
Prospectus, or document incorporated by reference in the
Prospectus, or (ii) Prospectus pursuant to Rule 424 of the
Rules and Regulations, to give at least three business days
prior notification to the Representative and to furnish a
copy thereof to the Representative and counsel for the
Underwriters, provided, however, that if any of the
foregoing filings referred to in (i) or (ii), relate to the
Notes, the Company shall obtain the consent of the
Representative to such filing, which consent shall not be
unreasonably withheld.
f. [Reserved].
g. To use its best efforts, in cooperation with
the Representative, to qualify the Notes for offering and
sale under the applicable securities laws of such states and
other jurisdictions of the United States as the
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 Notes. The Company
will file or cause the filing of such statements and reports
as may be required by the laws of each jurisdiction in which
the Notes have been so qualified.
h. The Company shall not, without the
Representative's prior written consent, which consent shall
not be unreasonably withheld, 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 Notes to the public.
i. So long as the Notes shall be outstanding, to
deliver to the Representative as soon as such statements are
furnished to the Indenture Trustee: (i) the annual statement
as to compliance delivered to the Indenture Trustee pursuant
to Article IV of the Sale and Servicing Agreement ; (ii) the
annual statement of a firm of independent public accountants
furnished to the Indenture Trustee pursuant to Article IV of
the Sale and Servicing Agreement; and (iii) the Monthly
Statement furnished to the Noteholders pursuant to Article
VIII of the Indenture.
j. To apply the net proceeds from the sale of
the Notes in the manner set forth in the Prospectus.
Section 6. Conditions to the Underwriters'
Obligations
. The obligations of the Underwriters to purchase the
Notes pursuant to this Agreement are subject to: (i) the accuracy
on and as of the Closing Date of the representations and
warranties on the part of the Company herein contained; (ii) the
performance in all material respects by the Company of all of
their respective obligations hereunder; and (iii) the following
conditions as of the Closing Date:
a. The Representative shall have received
confirmation of the effectiveness of the Registration
Statement. No stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have
been issued and no proceeding for that purpose shall have
been initiated or threatened by the Commission. Any request
of the Commission for inclusion of additional information in
the Registration Statement or the Prospectus shall have been
complied with.
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b. None of the Underwriters shall have
discovered and disclosed to the Company on or prior to the
Closing Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains
an untrue statement of a fact or omits to state a fact
which, in the opinion of Fried, Frank, Harris, Xxxxxxx &
Xxxxxxxx, 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 Indenture, the Sale and Servicing
Agreement, the Purchase Agreement, the Insurance Agreement,
the Indemnification Agreement, the Trust Agreement, the
Notes, the Registration Statement and the Prospectus, and
all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in
all respects to counsel for the 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 Nevada, and is qualified
to do business in each state necessary to enable it to
perform its obligations as Sponsor under the Sale 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 Sale and
Servicing Agreement, the Insurance Agreement, the Trust
Agreement and the Purchase Agreement.
2. This Agreement, the Notes, the Sale and
Servicing Agreement, the Insurance Agreement, the Trust
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
Securities) constitutes the valid, legal and binding
agreement of the Company.
3. Neither the transfer of the Mortgage
Loans to the Trust Estate, the issuance or sale of the
Notes nor the execution, delivery or performance by the
Company of the Sale and Servicing Agreement, this
Agreement, the Insurance Agreement, the Trust 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 Notes,
except as otherwise contemplated by the Indenture or
the Sale and Servicing Agreement.
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4. With respect to the Mortgage Loans, the
endorsement and delivery of each Mortgage Note, and the
preparation, delivery and recording of an Assignment in
each case with respect to each Mortgage is sufficient
to fully transfer to the Trust for the benefit of the
owners of the Notes all right, title and interest of
the Company in the Mortgage 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 Trust to avail itself of
all protection available under applicable law against
the claims of any present or future creditors of the
Company and to prevent any other sale, transfer,
assignment, pledge or other encumbrance of the Mortgage
Loans by the Company from being enforceable.
5. No consent, approval, authorization or
order of, registration or filing with, or notice to,
courts, governmental agency or body or other tribunal
is required under the laws of the State of New York,
for the execution, delivery and performance of the Sale
and Servicing Agreement, this Agreement, the Insurance
Agreement, the Purchase Agreement, the Trust Agreement
or the offer, issuance, sale or delivery of the Notes
or the consummation of any other transaction
contemplated thereby by the Company, except such which
have been obtained.
6. There are no actions, proceedings or
investigations, to such counsel's knowledge, pending or
threatened against the Company before any court,
governmental agency or body or other tribunal (i)
asserting the invalidity of the Sale and Servicing
Agreement, the Insurance Agreement, this Agreement, the
Purchase Agreement, the Trust Agreement or the Notes,
(ii) seeking to prevent the issuance of the Notes or
the consummation of any of the transactions
contemplated by the Indenture, the Sale and Servicing
Agreement, the Indemnification Agreement, the Insurance
Agreement, the Trust Agreement or this Agreement, or
(iii) which would materially and adversely affect the
performance by the Company of obligations under, or the
validity or enforceability of, the Sale and Servicing
Agreement, the Insurance Agreement, the Notes, the
Purchase Agreement, the Trust Agreement or this
Agreement.
7. To the best of the knowledge of such
counsel, the Commission has not issued any stop order
suspending the effectiveness of the Registration
Statement or any order directed to any prospectus
relating to the Notes (including the Prospectus), and
has not initiated or threatened any proceeding for that
purpose.
8. The Registration Statement and the
Prospectus (other than the financial and statistical
data included therein, as to which such counsel need
express no opinion), including the Incorporated
Documents, as of the date on which the Registration
Statement was declared effective and as of the date
hereof, comply as to form in all material respects with
the requirements of the Securities Act and the rules
and regulations thereunder and the Exchange Act and the
rules and regulations thereunder, and such counsel does
not know of any amendment to the Registration Statement
required to be filed, or of any contracts, indentures
or other documents of a character required to be filed
as an exhibit to the Registration Statement or required
to be described in the Registration Statement which has
not been filed or described as required.
9. The Indenture, when executed and
delivered, will have been duly qualified under the
Trust Indenture Act. The registration of the Trust
under the Investment Company Act of 1940, as amended is
not presently required.
11
10. The Indenture, upon execution and
delivery, is effective to create a valid and
enforceable security interest in favor of the Indenture
Trustee, for the benefit of the Noteholders and the
Insurer, in all of the Trust's right, title and
interest in the Mortgage Loans. The security interest
in favor of the Indenture Trustee, for the benefit of
the Noteholders and the Insurer, will constitute a
first priority perfected security interest upon the
delivery of the Mortgage Files to the Indenture
Trustee, on behalf of the Noteholders, and the
recording of instruments in accordance with the
provisions of the Sale and Servicing Agreement.
11. The statements in the Prospectus set
forth under the captions "DESCRIPTION OF THE
SECURITIES," "THE AGREEMENTS" and the statements in the
Prospectus Supplement set forth under the caption
"DESCRIPTION OF THE NOTES," to the extent such
statements purport to summarize certain provisions of
the Notes or of the Indenture or the Sale and Servicing
Agreement, are fair and accurate in all material
respects.
12. The statements in the Prospectus and
Prospectus Supplement set forth under the captions
"ERISA CONSIDERATIONS," "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES," and the statements in the Prospectus set
forth under the caption "LEGAL ASPECTS OF MORTGAGE
LOANS," to the extent that they constitute matters of
federal, New York, California or Nevada law, or
federal, New York, California or Nevada legal
conclusions provide a fair and accurate summary of such
law or conclusions.
13. The opinions of Xxxxx Xxxxxxxxxx LLP,
special counsel to the Company, expressed or referred
to under the captions "MATERIAL FEDERAL INCOME TAX
CONSEQUENCES" of the Prospectus and Prospectus
Supplement are hereby confirmed.
14. Such opinion shall also relate to
comparable matters with respect to the Originators and
Advanta Mortgage Holding Company.
15. 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.
16. 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 Indenture Trustee and public
officials. Such opinions may also assume the due authorization,
execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
e. The Representative shall have received
letters, including bring-down letters, from Xxxxxx Xxxxxxxx
LLP, dated on or before the Closing Date, in form and
substance satisfactory to the Representative and counsel for
the Underwriters, to the effect that they have performed
certain specified procedures requested by the Representative
with respect to the information set forth in the Prospectus
and certain matters relating to the Company.
12
f. The Notes shall have received the ratings
listed on Schedule A hereto, and such ratings shall not have
been rescinded or downgraded as of the Closing Date. 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 Notes. 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 Indenture, the Sale and Servicing Agreement
and this Agreement and that, to the best of his or her
knowledge based upon reasonable investigation:
1. the representations and warranties of
the Company in this Agreement, as of the Closing Date,
and in the Sale and Servicing Agreement, the Insurance
Agreement, the Purchase Agreement, the Trust 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. except as set forth in the Prospectus,
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 Sale and Servicing Agreement, the
Insurance Agreement, this Agreement, the Trust
Agreement or the Purchase Agreement in any material
way; and no merger, liquidation, dissolution or
bankruptcy of the Company is pending or contemplated;
3. the information contained in the
Registration Statement and the Prospectus relating to
the Company, the Mortgage Loans or the servicing
procedures of it or its affiliates or subservicer is
true and accurate in all material respects and nothing
has come to his or her attention that would lead such
officer to believe that the Registration Statement or
Prospectus includes any untrue statement of a material
fact or omits to state a material fact necessary to
make the statements therein not misleading;
4. the information set forth in the
Schedule of Mortgage Loans required to be furnished
pursuant to the Sale and Servicing Agreement is true
and correct in all material respects;
5. there has been no amendment or other
document filed affecting the articles of incorporation
or bylaws of the Company since December 31, 1998, and
no such amendment has been authorized. No event has
occurred since September 30, 1999, which has affected
the good standing of the Company under the laws of the
State of Nevada;
6. there has not occurred any material
adverse change or, except as set forth in the
Prospectus, any development involving a prospective
material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations
of the Company and its subsidiaries, taken as a whole,
from September 30, 1999;
13
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, if any, accorded the
Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized
statistical rating organization," as such term is
defined for purposes of the Securities Act; and
8. each person who, as an officer or
representative of the Company, signed or signs the
Registration Statement, the Sale and Servicing
Agreement, the Insurance Agreement, the Trust
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
Indenture, the Sale and Servicing Agreement, the
Insurance Agreement, the Purchase Agreement, the Trust
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 Indenture Trustee, dated
the Closing Date and in form and substance satisfactory to
the Representative, to the effect that:
1. the Indenture Trustee is a national
banking association duly organized, validly existing
and in good standing under the laws of the United
States and has the power and authority to enter into
and to take all actions required of it under the
Indenture and the Sale and Servicing Agreement;
2. the Indenture and the Sale and Servicing
Agreement have been duly authorized, executed and
delivered by the Indenture Trustee and the Indenture
and the Sale and Servicing Agreement constitute the
legal, valid and binding obligation of the Indenture
Trustee, enforceable against the Indenture Trustee in
accordance with its terms, except as enforceability
thereof may be limited by (A) bankruptcy, insolvency,
reorganization or other similar laws affecting the
enforcement of creditors' rights generally, as such
laws would apply in the event of a bankruptcy,
insolvency or reorganization or similar occurrence
affecting the Indenture Trustee, and (B) general
principles of equity regardless of whether such
enforcement is sought in a proceeding at law or in
equity;
3. no consent, approval, authorization or
other action by any governmental agency or body or
other tribunal is required on the part of the Indenture
Trustee in connection with its execution and delivery
of the Indenture and the Sale and Servicing Agreement
or the performance of its obligations thereunder;
4. the Notes have been duly executed,
authenticated and delivered by the Indenture Trustee;
and
14
5. the execution and delivery of, and
performance by the Indenture Trustee of its obligations
under, the Indenture and the Sale and Servicing
Agreement do not conflict with or result in a violation
of any statute or regulation applicable to the
Indenture Trustee, or the charter or bylaws of the
Indenture Trustee, or to the best knowledge of such
counsel, any governmental authority having jurisdiction
over the Indenture Trustee or the terms of any
indenture or other agreement or instrument to which the
Indenture Trustee is a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the
Company, the Indenture Trustee and public officials. Such
opinion may also assume the due authorization, execution and
delivery of the instruments and documents referred to therein by
the parties thereto other than the Indenture Trustee.
i. The Representative shall have received from
the Indenture Trustee a certificate, signed by the
President, a senior vice president or a vice president of
the Indenture Trustee, dated the Closing Date, to the effect
that each person who, as an officer or representative of the
Indenture Trustee, signed or signs the Notes, the Indenture,
the Sale 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 Indenture and the Sale and Servicing Agreement was,
at the respective times of such signing and delivery, and is
now, duly elected or appointed, qualified and acting as such
officer or representative, and the signatures of such
persons appearing on such documents are their genuine
signatures.
j. The Representative shall have received a
favorable opinion of Xxxxxxxx, Xxxxxx & Finger, counsel to
the Trust, dated the Closing Date and in form and substance
satisfactory to the Representative, to the effect that:
1. The Trust has been duly formed and is
validly existing as a business trust
under the laws of the State of Delaware,
12 Del. C. Section 3801, et seq., and
has the power and authority to own its
properties, to conduct its business as
described in the Trust Agreement, to
execute, deliver and perform the
Indenture, the Insurance Agreement and
the Sale and Servicing Agreement and to
issue, execute and deliver the Notes and
the Certificate (as defined in the Trust
Agreement).
2. The Indenture, the Insurance Agreement
and the Sale and Servicing Agreement
have been duly authorized, executed and
delivered by the Trust.
3. The Trust Agreement constitutes a legal,
valid and binding obligation of the
Depositor (as defined in the Trust
Agreement), enforceable against the
Depositor, in accordance with its terms.
4. The Trust has the power and authority to
pledge the Mortgage Loans as security
for the Notes and has duly authorized
such pledge by all necessary trust
action. The Notes have been duly
authorized, executed and delivered by
the Trust.
15
5. No consent, approval or other
authorization of, or registration,
declaration or filing with, any court or
governmental agency or commission of the
State of Delaware is required by or with
respect to the Trust for the issuance
and sale of the Notes or the valid
execution and delivery of the Indenture,
the Insurance Agreement and the Sale and
Servicing Agreement, or for the validity
or enforceability thereof, or for the
payment of any amounts by the Trust
thereunder.
6. Neither the execution and delivery by
the Trust of the Indenture, the
Insurance Agreement and the Sale and
Servicing Agreement, nor the issuance,
execution and delivery by the Trust of
the Notes, nor the consummation of the
transactions contemplated thereby, nor
compliance with the terms thereof, will
(i) conflict with or result in a breach
of, or constitute a default under the
provisions of any law, rule or
regulation of the State of Delaware
applicable to the Trust or, to our
knowledge, without independent
investigation, any judgment or order
applicable to the Trust or its
properties or, to our knowledge, without
independent investigation, any
indenture, mortgage, contract or other
agreement or instrument to which the
Trust is a party or by which it is bound
or (ii) to our knowledge, result in the
creation or imposition of any lien,
charge or encumbrance upon the Trusts
properties (other than the lien of the
Indenture).
7. To our knowledge, without independent
investigation, there are no pending or
threatened actions, suits or proceedings
affecting the Trust before any court or
other government authority which, if
adversely decided, would materially and
adversely affect the ability of the
Trust to carry out the transactions
contemplated by the Indenture, the
Insurance Agreement and the Sale and
Servicing Agreement.
8. To our knowledge, the Trust is not
required to obtain any material permits,
licenses, authorizations and approvals
necessary under the laws of the State of
Delaware to conduct its activities as
now conducted and as described in the
Trust Agreement and the Indenture.
k. The Representative shall have received a
favorable opinion of Xxxxxxxx, Xxxxxx & Finger, counsel to
the Owner Trustee, dated the Closing Date and in form and
substance satisfactory to the Representative, to the effect
that:
1. Owner Trustee is duly incorporated and
validly existing as a banking
corporation under the laws of the State
of Delaware and has the power and
authority to execute and deliver the
Trust Agreement.
2. The Trust Agreement has been duly
authorized, executed and delivered by
the Owner Trustee, and the Trust
Agreement constitutes a legal, valid and
binding agreement of the Owner Trustee,
enforceable against the Owner Trustee,
in accordance with its terms.
16
3. No consent, approval or other
authorization of, or registration,
declaration or filing with, any court or
governmental agency or commission of the
State of Delaware or the United States
or America, involving the banking and
trust powers of the Owner Trustee is
required by or with respect to the Owner
Trustee for the valid execution and
delivery of the Trust Agreement or for
the validity or enforceability thereof.
4. Neither the execution and delivery by
the Owner Trustee of the Trust
Agreement, nor the consummation of the
transactions contemplated thereby, nor
compliance with the terms thereof, will
(i) conflict with or result in a breach
of, or constitute a default under the
provisions of the Trust Agreement or the
certificate of incorporation of the
Owner Trustee or, any law, rule or
regulation of the State of Delaware
applicable to the Owner Trustee or, to
our knowledge, without independent
investigation, any judgment or order
applicable to the Owner Trustee or its
properties or any indenture, mortgage,
contract or other agreement or
instrument to which the Owner Trustee is
a party or by which it is bound or (ii)
to our knowledge, without independent
investigation, result in the creation or
imposition of any lien, charge or
encumbrance upon the Owner Trustee's
properties.
5. To our knowledge, without independent
investigation, there are no pending or
threatened actions, suits or proceedings
affecting the Owner Trustee before any
court or other government authority
which, if adversely decided, would
materially and adversely affect the
ability of the Owner Trustee to carry
out the transactions contemplated by the
Trust Agreement.
l. The Policy relating to the Notes shall have
been duly executed and issued at or prior to the Closing
Date and shall conform in all material respects to the
description thereof in the Prospectus.
m. 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 company
duly organized and validly existing under the laws of
the State of Wisconsin and duly qualified to conduct an
insurance business in the State of California and the
State of New York. The Insurer is validly licensed and
authorized to issue the Policy and perform its
obligations under the Policy in accordance with the
terms thereof under the laws of the State of
California, State of New York and the State of
Wisconsin.
2. The Insurer has full corporate power and
authority to execute and deliver the Policy and the
Policy has been duly authorized, executed and delivered
by the Insurer and constitutes a legal, valid and
binding obligation of the Insurer enforceable in
accordance with its terms except to the extent that the
enforceability (but not the validity) of such
obligation may be limited by any applicable bankruptcy,
insolvency, liquidation, rehabilitation or other
similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights and by
general principles of equity.
17
3. The execution and delivery by the
Insurer of the Policy, the Insurance Agreement and the
Indemnification Agreement will not, and the
consummation of the transactions contemplated thereby
and the satisfaction of the terms thereof will not,
conflict with or result in a breach of any of the
terms, conditions or provisions of the Certificate of
Incorporation or By-Laws of the Insurer, or any
restriction contained in any contract, agreement or
instrument to which the Insurer is a party or by which
it is bound or constitute a default under any of the
foregoing.
4. Proceedings legally required for the
issuance of the Policy, and the execution, delivery and
performance of the Insurance Agreement and the
Indemnification Agreement have been taken by the
Insurer and licenses, orders, consents or other
authorizations or approvals of any governmental boards
or bodies legally required for the enforceability of
the Policy have been obtained; any proceedings not
taken and any licenses, authorizations or approvals not
obtained are not material to the enforceability of the
Policy, the Insurance Agreement and the Indemnification
Agreement.
5. The Policy is exempt from registration
under the Securities Act.
6. There is no action, suit or proceeding
pending against or affecting the Insurer in any court,
or before or by any governmental body, which is likely
to affect or impair the validity or enforceability of
the Policy, the Insurance Agreement or the
Indemnification Agreement.
7. The statements contained in the
Prospectus Supplement under the heading "THE NOTE
INSURER" and "THE POLICY", insofar as such statements
constitute summaries of the matters referred to
therein, accurately reflect and fairly present the
information purported to be shown and, insofar as such
statements describe the Insurer, fairly and accurately
describe the Insurer, other than any financial or
statistical information contained or incorporated by
reference therein, as to which no opinion is expressed.
8. The Insurer is authorized to deliver the
Insurance Agreement and the Indemnification Agreement,
and each of the Insurance Agreement and the
Indemnification Agreement has been duly executed and is
the valid and binding obligation of the Insurer
enforceable in accordance with its terms except to the
extent that the enforceability (but not the validity)
of such obligation may be limited by any applicable
bankruptcy, insolvency, liquidation, rehabilitation or
other similar law or enactment now or hereafter enacted
affecting the enforcement of creditors' rights and by
general principles of equity and subject to principles
of public policy limiting the right to enforce the
indemnification provisions contained therein insofar as
such provisions relate to indemnification for
liabilities arising under the securities laws.
In rendering this opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the
Company, the Indenture Trustee, the Insurer and public officials.
Such opinion may assume the due authorization, execution and
delivery of the instruments and documents referred to therein by
the parties thereto other than the Insurer.
The Insurer shall attach to such opinion 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.
18
n. On or prior to the Closing Date, there has
been no downgrading, nor has any notice been given of (A)
any intended or potential downgrading or (B) any review or
possible changes in rating the direction of which has not
been indicated, in the rating, if any, accorded the
Insurer's claims paying ability by any "nationally
recognized statistical rating organization," as such term is
defined for purposes of the Securities Act.
o. On or prior to the Closing Date, there has
been no downgrading, nor has any notice been given of (A)
any intended or potential downgrading or (B) any review or
possible changes in rating the direction of which has not
been indicated, in the rating, if any, accorded the Company
or in any rating accorded any securities of the Company, if
any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the
Securities Act.
p. There has not occurred any change, or any
development involving a prospective change, in the
condition, financial or otherwise, or in the earnings,
business or operations, since September 30, 1999, 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 Notes on the terms and in the manner
contemplated in the Prospectus.
r. 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 Sale and
Servicing Agreement and the Indenture and the Company shall
have complied with all such requirements.
s. The Representative shall have received from
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, special counsel to
the Underwriters, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the
Notes, the Prospectus and such other related matters as the
Representative shall reasonably require.
t. The Representative and counsel for the
Underwriters shall have received copies of any opinions of
counsel to the Company supplied to the Indenture Trustee
relating to matters with respect to the Notes. Any such
opinions shall be dated the Closing Date and addressed to
the Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely
thereon.
u. 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.
v. There shall have been executed and delivered
by Advanta Mortgage Holding Company, the indirect corporate
parent of the Company ("AMHC"), a letter agreement with the
Indenture 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).
w. There shall have been executed and delivered
by AMHC, the indirect corporate parent of the Company, a
letter agreement with the Underwriters 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).
19
x. 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
Notes as herein contemplated and related proceedings or in
order to evidence the accuracy and completeness of any of
the representations and warranties, or the fulfillment of
any of the conditions, herein contained, and all proceedings
taken by the Company in connection with the issuance and
sale of the Notes as herein contemplated shall be
satisfactory in form and substance to the Representative and
counsel for the Underwriters.
y. 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 Notes on the
terms and in the manner contemplated in the Prospectus.
z. The Notes shall have received the ratings set
forth on Schedule A hereto.
If any condition specified in this Section 6 shall not
have been fulfilled when and as required to be fulfilled, this
Agreement may be terminated by the 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 7.
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 7. Payment of Expenses
. The Company agrees to pay: (a) the costs incident
to the authorization, issuance, sale and delivery of the Notes
and any taxes payable in connection therewith; (b) the costs
incident to the preparation, printing and filing under the
Securities Act of the Registration Statement and any amendments
and exhibits thereto; (c) the costs of distributing the
Registration Statement as originally filed and each amendment
thereto and any post-effective amendments thereof (including, in
each case, exhibits), the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by
reference therein, all as provided in this Agreement; (d) the
fees and expenses of qualifying the Notes under the securities
laws of the several jurisdictions as provided in Section 5(g)
hereof and of preparing, printing and distributing a Blue Sky
Memorandum and a Legal Investment Survey (including related fees
and expenses of counsel to the Underwriters); (e) any fees
charged by securities rating services for rating the Notes; (f)
the costs and expenses of Xxxxx Xxxxxxxxxx LLP, counsel to the
Company; 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 7, the Underwriters shall pay
their own costs and expenses, including the costs and expenses of
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx, any transfer taxes on
the Notes which they may sell and the expenses of advertising any
offering of the Notes made by the Underwriters.
20
If this Agreement is terminated by the Representative,
in accordance with the provisions of Section 6 or Section 10, the
Company shall reimburse the Underwriters for their respective
reasonable out-of-pocket expenses, including fees and
disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
counsel for the Underwriters.
Section 8. 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
Notes), 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 , the
Prospectus or the Registration Statement in reliance upon and in
conformity with written information (including any Derived
Information) furnished to the Company through the Representative
specifically for inclusion therein; and provided, further, that
as to any Collateral Term Sheets or Computational Materials 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 Notes 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 Collateral Term Sheets, Structural Term Sheets or
Computational Materials was corrected in the Prospectus, unless
such failure resulted from non-compliance by the Company with
Section 5(c). 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
21
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
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 8 of notice of any claim or the commencement
of any action, such indemnified party shall, if a claim in
respect thereof is to be made against any indemnifying party
under this Section 8, notify the indemnifying party in writing of
the claim or the commencement of that action; provided, however,
that the failure to notify an indemnifying party shall not
relieve it from any liability which it may have under this
Section 8 except to the extent it has been materially prejudiced
by such failure, and provided, further, that the failure to
notify any indemnifying party shall not relieve it from any
liability which it may have to any indemnified party otherwise
than under this Section 8.
If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall be entitled to participate
therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense
thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such
claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 8 for 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 8 consist of the Underwriters or any of their
controlling persons, or by the Company, if the indemnified
parties under this Section 8 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 8(a) and (b), shall use its best
efforts to cooperate with the indemnifying party in the defense
of any such action or claim. No indemnifying party shall be
liable for any settlement of any such action effected without its
written consent (which consent shall not be unreasonably
withheld), but if settled with its written consent or if there be
a final judgment for the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by
reason of such settlement or judgment.
22
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 (as 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
8(e) shall be in addition to any liability which such Underwriter
may otherwise have.
The procedures set forth in Section 8(c) shall be
equally applicable to this Section 8(e).
f. For purposes of this Section 8, the term "Derived
Information" means such portion, if any, of the information
delivered to the Company pursuant to Section 8(d) for filing with
the Commission on Form 8-K as:
(i) is not contained in the Prospectus
without taking into account information
incorporated therein by reference;
(ii) does not constitute 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 all or a portion of the Trust Estate.
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).
23
g. If the indemnification provided for in this
Section 8 shall for any reason be unavailable to or insufficient
to hold harmless an indemnified party under Section 8(a) or (b)
in respect of any loss, claim, damage or liability, or any action
in respect thereof, referred to therein, then each indemnifying
party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or
action in respect thereof, (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 Notes or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the
indemnified party failed to give the notice required under
Section 8(c), in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the
Underwriters on the other with respect to the statements or
omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other
relevant equitable considerations.
The relative benefits of the Underwriters and the
Company shall be deemed to be in such proportion as the total net
proceeds from the offering (before deducting expenses) received
by the Company bear to the total underwriting discounts and
commissions.
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 8(g) were to be determined by pro rata allocation or by
any other method of allocation which does not take into account
the equitable considerations referred to herein. The amount paid
or payable by an indemnified party as a result of the loss,
claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(g) shall be deemed to
include, for purposes of this Section 8(g), any legal or other
expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or
claim.
h. For purposes of this Section 8, in no case shall
any Underwriter be responsible for any amount in excess of (x)
the amount received by such Underwriter in connection with its
resale of the Notes over (y) the amount paid by such Underwriter
to the Company for the Notes 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.
g. The Underwriters severally confirm that the
information set forth (i) in the Prospectus Supplement relating
to market making and (ii) in the third paragraph under the
caption "Underwriting" in the Prospectus Supplement, together
with the Derived Information, is correct and constitutes the only
information furnished in writing to the Company by or on behalf
of the Underwriters specifically for inclusion in the
Registration Statement and the Prospectus.
Section 9. Representations, Warranties and
Agreements to Survive Delivery
. All representations, warranties and agreements
contained in this Agreement or contained in 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 Notes to the Underwriters.
24
Section 10. 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 6(y) of this Agreement shall occur and be continuing.
In the event of any such termination, the covenant set forth in
Section 5(g), the provisions of Section 7, the indemnity
agreement set forth in Section 8, and the provisions of Sections
8 and 9 shall remain in effect.
Section 11. 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 Bear,
Xxxxxxx & Co., Inc., as Representative of the Underwriters,
Asset-Backed Securities Group, 000 Xxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxx, XX, 00000, Attention: General Counsel (fax: (212)
000-0000);
b. if to the Company, shall be delivered or sent
by mail, telex or facsimile transmission to Advanta Conduit
Receivables, Inc., 00000 Xxxxxx Xxxxxxxx Xxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Attention: General Counsel (Fax: (858)
000-0000).
Section 12. 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 12, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any
provision contained herein.
Section 13. Default by One of the Underwriters
. If one of the Underwriters shall fail on the Closing
Date to purchase the Notes which it is obligated to purchase
hereunder (the "Defaulted Securities"), the remaining
Underwriter(s) (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 Securities 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 13 shall
relieve the defaulting Underwriter from liability in respect of
its default.
In the event of any such default which does not result
in a termination of this Agreement, either the Non-Defaulting
Underwriter or the Company shall have the right to postpone the
Closing Date for a period not exceeding seven days in order to
effect any required changes in the Registration Statement or
Prospectus or in any other documents or arrangements.
25
Section 14. 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 Notes and shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any of them or any person controlling any of them.
Section 15. Definition of the Term "Business Day"
. For purposes of this Agreement, "Business Day" means
any day that is not a Saturday or Sunday or other day on which
any of the Insurer, Advanta Mortgage Corp. USA or the Company is
closed or commercial banking institutions in the States of New
York, California or Delaware or in the city in which the
principal corporate trust office of the Indenture Trustee is
located, are authorized or obligated by law or executive order to
be closed.
Section 16. 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 17. 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 18. 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 19. 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.
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 CONDUIT RECEIVABLES, INC.
By:
Name: Xxxxx X. XxXxxxx
Title: Vice-President
CONFIRMED AND ACCEPTED, as of
the date first above written:
BEAR, XXXXXXX & CO., INC.
as Representative of the Underwriters
By:
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
315962
26
SCHEDULE A
Initial
Principal Purchase Price
Amount of Notes to Underwriters
Required Purchased by disregarding
Notes Ratings Underwriters Coupon accrued interest
S&P/Xxxxx'x
Notes AAA /Aaa $200,000,000 LIBOR $199,500,000
+.375% 1,2
SCHEDULE I
Underwriter Principal Amount of Notes:
Bear, Xxxxxxx & Co. Inc. $120,000,000
XX Xxxxx Securities Corporation $ 80,000,000
Total for Notes $200,000,000
_______________________________
1 Notes are subject to the Available Funds Cap Rate as
defined in the Prospectus Supplement.
2 Notes are subject to an increase in the note interest
rate on the payment date immediately following the
month in which the clean-up call may first be
exercised, as defined in the Prospectus Supplement.
