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EXHIBIT 1.1
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).
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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.
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
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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.
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
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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 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
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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.
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
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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.
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
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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.
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Section 5. Covenants of the Company. The Company agrees as follows:
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
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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.
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
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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.
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
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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.
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.
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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 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.
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
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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.
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
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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;
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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;
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
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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
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
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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.
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
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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.
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,
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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
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or enactment now or hereafter enacted affecting the enforcement of
creditors' rights and by general principles of equity.
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
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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.
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
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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).
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.
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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.
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
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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 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
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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
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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 (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
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(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).
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.
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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.
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:(000) 000-0000);
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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: (000) 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.
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.
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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.
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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 CONDUIT RECEIVABLES, INC.
By: /s/ Xxxxx X. XxXxxxx
------------------------------
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: /s/ Xxxxxx X. Xxxxxxx
-----------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Managing Director
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SCHEDULE A
--------------------------------------------------------------------------------
INITIAL PURCHASE PRICE
PRINCIPAL TO UNDERWRITERS
REQUIRED AMOUNT OF NOTES DISREGARDING
NOTES RATINGS PURCHASED BY COUPON ACCRUED INTEREST
S&P/XXXXX'X UNDERWRITERS
--------------------------------------------------------------------------------
Notes AAA /Aaa $200,000,000 LIBOR $199,500,000
+.375%
(1),(2)
(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.
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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
