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Exhibit 1.1
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ADVANTA MORTGAGE CONDUIT SERVICES, INC.
Mortgage Loan Asset-Backed Certificates,
Series 1999-2
UNDERWRITING AGREEMENT
May 26, 1999
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
As Representative of the Underwriters (the "Representative")
named in Schedule I
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Advanta Mortgage Conduit Services, Inc. (the "Company") has
authorized the issuance and sale of Mortgage Loan Asset-Backed Certificates,
Series 1999-2, consisting of (i) the Class A-1 Certificates (the "Class A-1
Certificates") , (ii) the Class A-2 Certificates (the "Class A-2 Certificates"
), (iii) the Class A-3 Certificates (the "Class A-3 Certificates"), (iv) the
Class A-4 Certificates (the "Class A-4 Certificates"), (v) the Class A-5
Certificates (the "Class A-5 Certificates"), (vi) the Class A-6 Certificates
(the "Class A-6 Certificates" and together with the Class A-1 Certificates,
Class A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates
and the Class A-5 Certificates, the "Fixed Rate Group Certificates"), (vii) the
Class A-7 Certificates (the "Class A-7 Certificates" or the "Adjustable Rate
Group Certificates", and together with the Fixed Rate Group Certificates, the
"Offered Certificates"), (viii) the Class B Certificates, (ix) the residual
class with respect to the Upper-Tier REMIC held by the Trust (the "Class R
Certificates") and (x) the residual class with respect to the Lower-Tier REMIC
held by the Trust (the "Class RL Certificates", together with the Offered
Certificates, the Class B Certificates and the Class R Certificates, the
"Certificates"). Only the Offered Certificates are offered by the Underwriters.
The Offered Certificates will be issued by the Advanta
Mortgage Loan Trust 1999-2 (the "Trust"), and will evidence in the aggregate the
beneficial interest in a trust estate (the "Trust Estate") consisting primarily
of a pool of closed-end mortgage loans having fixed rates of interest (the
"Fixed Rate Group"), a pool of closed-end mortgage loans having adjustable rates
of interest (the "ARM Group", and together with the Fixed Rate Group, the
"Mortgage Loans"), amounts on deposit with Bankers Trust Company of California,
N.A., as trustee of the Trust (the "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 June 3, 1999 (the "Closing Date"), an
aggregate principal balance of approximately $478,400,000 and the Pre-Funding
Account shall have approximately $39,100,000, which amount may be applied to the
purchase of additional
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loans for the Fixed Rate Group during the period from the Closing Date to on or
before July 16, 1999. The Offered Certificates are to be issued under a pooling
and servicing agreement, to be dated as of May 1, 1999 (the "Pooling and
Servicing Agreement"), among the Company, as Sponsor, Advanta Mortgage Corp.
USA, as Master Servicer, and the Trustee.
On or prior to the date of issuance of the Certificates, the
Company will obtain a certificate guaranty insurance policy (the "Policy")
issued by Ambac Assurance Corporation (the "Insurer") which will unconditionally
and irrevocably guarantee to the Trustee for the benefit of the holders of the
Offered Certificates the amount by which (i) the Group I Insured Distribution
Amount (as defined in the Pooling and Servicing Agreement), as applicable, for
the Fixed Rate Group Certificates exceeds Group I Total Available Funds (as
defined in the Pooling and Servicing Agreement) and (ii) the Group II Insured
Distribution Amount (as defined in the Pooling and Servicing Agreement), as
applicable, for the Adjustable Rate Group Certificates exceeds the Group II
Total Available Funds (as defined in the Pooling and Servicing Agreement).
The Offered Certificates are more fully described in a
Registration Statement which the Company has furnished to the Underwriters.
Capitalized terms used but not defined herein shall have the meanings given to
them in the Pooling and Servicing Agreement.
Simultaneously with the execution of the Pooling and Servicing
Agreement, the Company will enter into a conveyance agreement pursuant to the
Master Loan Transfer Agreement dated on or about May 1, 1999 among the Trustee,
Advanta Mortgage Conduit Services, Inc. and the Affiliated Originators or the
Unaffiliated Originators named therein (together, the "Purchase Agreement"),
pursuant to which the Affiliated Originators and the Unaffiliated Originators
will transfer to the Company all of their right, title and interest in and to
the Mortgage Loans as of the Closing Date.
The Company will also enter into an Indemnification Agreement
(the "Indemnification Agreement") dated as of May 26, 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. Registration Statements on Form S-3 (registration
statement number 333-777927), as amended by Post-Effective Amendments
thereto, have (i) been prepared by the Company in conformity with the
requirements of the Securities Act of 1933 (the "Securities Act") and
the rules and regulations (the "Rules and Regulations") of the United
States Securities and Exchange Commission (the "Commission")
thereunder, (ii) been filed with the Commission under the Securities
Act and (iii) become effective under the Securities Act. Copies of such
Registration Statements have been delivered by the Company to the
Underwriters. As used in this Agreement, "Effective Time" means the
date and the time as of which such Registration Statements, or the most
recent post-effective amendment thereto, if any, was declared effective
by the Commission; "Effective Date" means the date of the Effective
Time; "Preliminary Prospectus" means each prospectus included in such
Registration Statements, or amendments thereof, including a preliminary
prospectus supplement which, as completed, is proposed to be
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used in connection with the sale of the Offered Certificates and any
prospectus filed with the Commission by the Company with the consent of
the Underwriters pursuant to Rule 424(a) of the Rules and Regulations;
"Registration Statement" means such registration statements, as amended
by all Post-Effective Amendments thereto heretofore filed with the
Commission, at the Effective Time, including any documents incorporated
by reference therein at such time; and "Prospectus" means such final
prospectus, as supplemented by a final prospectus supplement (the
"Prospectus Supplement") relating to the Offered Certificates, as first
filed with the Commission pursuant to paragraph (1) or (4) of Rule
424(b) of the Rules and Regulations. Reference made herein to any
Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-3 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be, and any
reference to any amendment or supplement to any Preliminary Prospectus
or the Prospectus shall be deemed to refer to and include any document
filed under the Securities Exchange Act of 1934 (the "Exchange Act")
after the date of such Preliminary Prospectus or the Prospectus, as the
case may be, and incorporated by reference in such Preliminary
Prospectus or the Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to include
any report of the Company filed with the Commission pursuant to Section
13(a) or 15(d) of the Exchange Act after the Effective Time that is
incorporated by reference in the Registration Statement. The Commission
has not issued any order preventing or suspending the use of any
Preliminary Prospectus. There are no contracts or documents of the
Company which are required to be filed as exhibits to the Registration
Statement pursuant to the Securities Act or the Rules and Regulations
which have not been so filed or incorporated by reference therein on or
prior to the Effective Date of the Registration Statements. The
conditions for use of Form S-3, as set forth in the General
Instructions thereto, have been satisfied.
To the extent that any Underwriter (i) has provided
to the Company Collateral term sheets (as hereinafter defined) that
such Underwriter has provided to a prospective investor, the Company
has filed such Collateral term sheets as an exhibit to a report on Form
8-K within two business days of its receipt thereof, or (ii) has
provided to the Company Structural term sheets or Computational
Materials (each as defined below) that such Underwriter has provided to
a prospective investor, the Company will file or cause to be filed with
the Commission a report on Form 8-K containing such Structural term
sheet and Computational Materials, as soon as reasonably practicable
after the date of this Agreement, but in any event, not later than the
date on which the Prospectus is filed with the Commission pursuant to
Rule 424 of the Rules and Regulations.
b. The Registration Statement conforms, and the
Preliminary Prospectus and the Prospectus and any further amendments or
supplements to the Registration Statement or the Preliminary Prospectus
and the Prospectus will, when they become effective or are filed with
the Commission, as the case may be, conform in all respects to the
requirements of the Securities Act and the Rules and Regulations. The
Registration Statement, as of the Effective Date thereof and of any
amendment thereto, did not contain an untrue statement of a material
fact or omit to state a material fact
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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.
e. The Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws of
its jurisdiction of incorporation, is duly qualified to do business and
is in good standing as a foreign corporation in each jurisdiction in
which its ownership or lease of property or the conduct of its business
requires such qualification, and has all power and authority necessary
to own or hold its properties, to conduct the business in which it is
engaged and to enter into and perform its obligations under this
Agreement, the Pooling and Servicing Agreement, the Indemnification
Agreement, the Insurance and Indemnity Agreement, dated as of June 3,
1999, between the Insurer, Master Servicer, Sponsor, the Trust and the
Trustee (the "Insurance Agreement"), and the Purchase Agreement, and to
cause the Certificates to be issued.
f. There are no actions, proceedings or
investigations pending before or threatened by any court,
administrative agency or other tribunal to which the Company is a party
or of which any of its properties is the subject (a) which if
determined adversely to the Company would have a material adverse
effect on the business or financial
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condition of the Company, (b) which asserts the invalidity of this
Agreement, the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, the Purchase Agreement, or
the Certificates, (c) which seeks to prevent the issuance of the
Certificates or the consummation by the Company of any of the
transactions contemplated by the Pooling and Servicing Agreement, the
Insurance Agreement, the Indemnification Agreement, the Purchase
Agreement or this Agreement, as the case may be, or (d) which might
materially and adversely affect the performance by the Company of its
obligations under, or the validity or enforceability of, the Pooling
and Servicing Agreement, the Insurance Agreement, the Indemnification
Agreement, the Purchase Agreement, this Agreement or the Certificates.
g. This Agreement has been, and the Pooling and
Servicing Agreement, the Insurance Agreement, the Indemnification
Agreement and the Purchase Agreement when executed and delivered as
contemplated hereby and thereby will have been, duly authorized,
executed and delivered by the Company, and this Agreement constitutes,
and the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement when executed and
delivered as contemplated herein, will constitute, legal, valid and
binding instruments enforceable against the Company in accordance with
their respective terms, subject as to enforceability to (x) applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally, (y) general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law), and (z) with respect to rights of indemnity under
this Agreement, the Indemnification Agreement and limitations of public
policy under applicable securities laws.
h. The execution, delivery and performance of this
Agreement, the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement and the Purchase Agreement by
the Company and the consummation of the transactions contemplated
hereby and thereby, and the issuance and delivery of the Certificates
do not and will not conflict with or result in a breach or violation of
any of the terms or provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, loan agreement or other agreement
or instrument to which the Company is a party, by which the Company is
bound or to which any of the property or assets of the Company or any
of its subsidiaries is subject, nor will such actions result in any
violation of the provisions of the articles of incorporation or by-laws
of the Company or any statute or any order, rule or regulation of any
court or governmental agency or body having jurisdiction over the
Company or any of its properties or assets.
i. Arthur ▇▇▇▇▇▇▇▇ LLP are independent public
accountants with respect to the Company as required by the Securities
Act and the Rules and Regulations.
j. The direction by the Company to the Trustee to
execute, authenticate, issue and deliver the Certificates has been duly
authorized by the Company, and assuming the Trustee has been duly
authorized to do so, when executed, authenticated, issued and delivered
by the Trustee in accordance with the Pooling and
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Servicing Agreement, the Certificates will be validly issued and
outstanding and will be entitled to the benefits provided by the
Pooling and Servicing Agreement.
k. No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body of the United States is required for the issuance of the
Certificates and the sale of the Offered Certificates to the
Underwriters, or the consummation by the Company of the other
transactions contemplated by this Agreement, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification Agreement and
the Purchase Agreement, except such consents, approvals,
authorizations, registrations or qualifications as may be required
under State securities or Blue Sky laws in connection with the purchase
and distribution of the Offered Certificates by the Underwriters or as
have been obtained.
l. The Company possesses all material licenses,
certificates, authorities or permits issued by the appropriate State,
Federal or foreign regulatory agencies or bodies necessary to conduct
the business now conducted by it and as described in the Prospectus,
and the Company has not received notice of any proceedings relating to
the revocation or modification of any such license, certificate,
authority or permit which if decided adversely to the Company would,
singly or in the aggregate, materially and adversely affect the conduct
of its business, operations or financial condition.
m. At the time of execution and delivery of the
Pooling and Servicing Agreement, the Company will 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 Pooling and
Servicing Agreement or in the Certificates 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 Trustee, on behalf of
the Trust, and to sell the Offered Certificates to the Underwriters.
Upon execution and delivery of the Pooling and Servicing Agreement by
the Trustee, the Trustee will have acquired beneficial ownership of all
of the Company's right, title and interest in and to the Mortgage
Loans. Upon delivery to the Underwriters of the Offered Certificates,
the Underwriters will have good title to the Offered Certificates, free
of any Liens.
n. As of the opening of business on May 1, 1999 ( the
"Cut-Off Date"), and on each Subsequent Cut-Off Date (as defined in the
Pooling 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.
o. Neither the Company nor the Trust created by the
Pooling and Servicing Agreement is an "investment company" within the
meaning of such term under the Investment Company Act of 1940 (the
"1940 Act") and the rules and regulations of the Commission thereunder.
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p. At the Closing Date, the Offered Certificates and
the Pooling and Servicing Agreement will conform in all material
respects to the descriptions thereof contained in the Prospectus.
q. At the Closing Date, the Offered Certificates
shall have been rated in the highest rating category by at least two
nationally recognized rating agencies.
r. Any taxes, fees and other governmental charges in
connection with the execution, delivery and issuance of this Agreement,
the Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and the Certificates
have been paid or will be paid at or prior to the Closing Date.
s. At the Closing Date, each of the representations
and warranties of the Company set forth in the Pooling and Servicing
Agreement will be true and correct in all material respects.
Any certificate signed by an officer of the Company and
delivered to the Representative or counsel for the Underwriters in connection
with an offering of the Offered Certificates shall be deemed, and shall state
that it is, a representation and warranty as to the matters covered thereby to
each person to whom the representations and warranties in this Section 1 are
made.
Section 2. Purchase and Sale. The commitment of the
Underwriters to purchase the Offered Certificates pursuant to this Agreement
shall be deemed to have been made on the basis of the representations and
warranties herein contained and shall be subject to the terms and conditions
herein set forth. The Company agrees to instruct the Trustee to issue and agrees
to sell to the Underwriters, and the Underwriters agree (except as provided in
Sections 10 and 11 hereof) to purchase from the Company the aggregate initial
principal amounts of Offered Certificates set forth on Schedule A, at the
purchase price or prices set forth in Schedule A.
The obligations of the Underwriters hereunder to purchase the
Offered Certificates of each Class shall be several and not joint. Each
Underwriter's obligation shall be to purchase the aggregate principal amount of
Offered Certificates 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 Offered Certificates to be purchased by the Underwriters shall be made at
the offices of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, or at such other place as shall be agreed upon by the Representative and
the Company at 10:00 A.M. New York City time on June 3, 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 Offered Certificates shall be
made to the Representative for the accounts of the Underwriters against payment
of the purchase price thereof. The Offered Certificates shall be in such
denominations and registered in such names as the Company and the
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Representative have agreed upon at least two business days prior to the Closing
Date. The Offered Certificates will be made available for examination by the
Representative no later than 2:00 p.m. New York City time on the first business
day prior to the Closing Date.
Section 4. Offering by the Underwriters. It is understood
that, subject to the terms and conditions hereof, the Underwriters propose to
offer the Offered Certificates for sale to the public as set forth in the
Prospectus.
Section 5. Covenants of the Company. The Company agrees as
follows:
a. (i) To prepare the Preliminary Prospectus
Supplement and the Prospectus Supplement in a form approved by the
Representative and to file such Preliminary Prospectus Supplement and
the 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 Preliminary Prospectus and 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 Preliminary Prospectus and
the Prospectus or any amended Preliminary Prospectus or the 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 Preliminary Prospectus and
the Prospectus and, for so long as the delivery of a prospectus is
required in connection with the offering or sale of the Offered
Certificates; 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 any
Preliminary Prospectus or the Prospectus; (x) the suspension of the
qualification of the Offered Certificates 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 any Preliminary
Prospectus or the Prospectus or suspending any such qualification, the
Company promptly shall use its best efforts to obtain the withdrawal of
such order or suspension.
b. To furnish promptly to the Representative and to
counsel for the Underwriters a signed copy of the Registration
Statement as originally filed with the Commission, and of each
amendment thereto filed with the Commission, including all consents and
exhibits filed therewith.
c. To deliver promptly to the Representative such
number of the following documents as the Representative shall
reasonably request: (i) conformed copies of the Registration Statement
as originally filed with the Commission and each amendment thereto (in
each case including exhibits); (ii) each Preliminary Prospectus, the
Prospectus
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and any amended or supplemented Prospectus; and (iii) any document
incorporated by reference in the Prospectus (including exhibits
thereto). If the delivery of a prospectus is required at any time prior
to the expiration of nine months after the Effective Time in connection
with the offering or sale of the Offered Certificates, and if at such
time any events shall have occurred as a result of which the Prospectus
as then amended or supplemented would include any untrue statement of a
material fact or omit to state any material fact necessary in order to
make the statements therein, in the light of the circumstances under
which they were made when such Prospectus is delivered, not misleading,
or, if for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the Prospectus
in order to comply with the Securities Act or the Exchange Act, the
Company shall notify the Representative and, upon the Representative's
request, shall file such document and prepare and furnish without
charge to the Underwriters and to any dealer in securities as many
copies as the Representative may from time to time reasonably request
of an amended Prospectus or a supplement to the Prospectus which
corrects such statement or omission or effects such compliance, and in
case any of the Underwriters are required to deliver a Prospectus in
connection with sales of any of the Offered Certificates at any time
nine months or more after the Effective Time, upon the request of the
Representative but at the expense of such Underwriter, the Company
shall prepare and deliver to such Underwriter as many copies as such
Underwriter may reasonably request of an amended or supplemented
Prospectus complying with Section 10(a)(3) of the Securities Act.
d. To file promptly with the Commission any amendment
to the Registration Statement or the Prospectus or any supplement to
the Prospectus that may, in the judgment of the Company or the
Representative, be required by the Securities Act or requested by the
Commission.
e. Prior to filing with the Commission any (i)
Preliminary Prospectus, (ii) amendment to the Registration Statement or
supplement to the Prospectus, or document incorporated by reference in
the Prospectus, or (iii) Prospectus pursuant to Rule 424 of the Rules
and Regulations, to 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), (ii), or (iii)
relate to the Offered Certificates, 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 Offered Certificates for offering and
sale under the applicable securities laws of such states and other
jurisdictions of the United States as the Representative may designate,
and maintain or cause to be maintained such qualifications in effect
for as long as may be required for the distribution of the Offered
Certificates. The Company will file or cause the filing of such
statements and reports as may be required by the laws of each
jurisdiction in which the Offered Certificates have been so qualified.
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h. Except with respect to the Sponsor's Advanta
Revolving Home Loan Equity Trust 1999-A, 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 Offered Certificates to the public.
i. So long as the Offered Certificates shall be
outstanding, to deliver to the Representative as soon as such
statements are furnished to the Trustee: (i) the annual statement as to
compliance delivered to the Trustee pursuant to Article VII of the
Pooling and Servicing Agreement; (ii) the annual statement of a firm of
independent public accountants furnished to the Trustee pursuant to
Article VIII of the Pooling and Servicing Agreement; and (iii) the
Monthly Statement furnished to the Certificateholders pursuant to
Article VII of the Pooling and Servicing Agreement.
j. To apply the net proceeds from the sale of the
Offered Certificates in the manner set forth in the Prospectus.
Section 6. Conditions to the Underwriters' Obligations. The
obligations of the Underwriters to purchase the Offered Certificates pursuant to
this Agreement are subject to: (i) the accuracy on and as of the Closing Date of
the representations and warranties on the part of the Company herein contained;
(ii) the performance 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, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇,
counsel for the Underwriters, is material and is required to be stated
therein or is necessary to make the statements therein not misleading.
c. All corporate proceedings and other legal matters
relating to the authorization, form and validity of this Agreement, the
Pooling and Servicing Agreement, the Purchase Agreement, the Insurance
Agreement, the Indemnification Agreement, the Certificates, the
Registration Statement and the Prospectus, and all other legal matters
relating to this Agreement and the transactions contemplated hereby
shall be satisfactory in all respects to counsel for the Underwriters,
and the Company shall have furnished to
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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 ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ LLP, special counsel to the
Company with respect to the following items, dated the Closing Date, to
the effect that:
1. The Company has been duly organized and
is validly existing as a corporation in good standing under
the laws of the State of Delaware, and is qualified to do
business in each state necessary to enable it to perform its
obligations as Sponsor under the Pooling and Servicing
Agreement. The Company has the requisite power and authority
to execute and deliver, engage in the transactions
contemplated by, and perform and observe the conditions of,
this Agreement, the Insurance Agreement, the Pooling and
Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement.
2. This Agreement, the Certificates, the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement and the Purchase Agreement have been
duly and validly authorized, executed and delivered by the
Company, all requisite corporate action having been taken with
respect thereto, and each (other than the Certificates)
constitutes the valid, legal and binding agreement of the
Company.
3. Neither the transfer of the Mortgage
Loans to the Trust Estate, the issuance or sale of the
Certificates nor the execution, delivery or performance by the
Company of the Pooling and Servicing Agreement, this
Agreement, the Insurance Agreement, the Indemnification
Agreement or the Purchase Agreement (A) conflicts or will
conflict with or results or will result in a breach of, or
constitutes or will constitute a default under, (i) any term
or provision of the certificate of incorporation or bylaws of
the Company; (ii) any term or provision of any material
agreement, contract, instrument or indenture, to which the
Company is a party or is bound and known to such counsel; or
(iii) any order, judgment, writ, injunction or decree of any
court or governmental agency or body or other tribunal having
jurisdiction over the Company and known to such counsel; or
(B) results in, or will result in the creation or imposition
of any lien, charge or encumbrance upon the Trust Estate or
upon the Certificates, except as otherwise contemplated by the
Pooling and Servicing Agreement.
4. With respect to the Mortgage Loans, the
endorsement and delivery of each 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 Trustee for the benefit of the Owners of the Certificates
all right, title and interest of the Company in the Note and
Mortgage, as noteholder and mortgagee or assignee thereof,
subject to any exceptions set forth in such opinion, and will
be sufficient to permit the Trustee to avail itself of all
protection available
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13
under applicable law against the claims of any present or
future creditors of the Company and to prevent any other sale,
transfer, assignment, pledge or other encumbrance of the
Mortgage Loans by the Company from being enforceable.
5. No consent, approval, authorization or
order of, registration or filing with, or notice to, courts,
governmental agency or body or other tribunal is required
under the laws of the State of New York, for the execution,
delivery and performance of the Pooling and Servicing
Agreement, this Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement or the
offer, issuance, sale or delivery of the Offered Certificates
or the consummation of any other transaction contemplated
thereby by the Company, except such which have been obtained.
6. There are no actions, proceedings or
investigations, to such counsel's knowledge, pending or
threatened against the Company before any court, governmental
agency or body or other tribunal (i) asserting the invalidity
of the Pooling and Servicing Agreement, the Insurance
Agreement, the Indemnification Agreement, this Agreement, the
Purchase Agreement or the Certificates, (ii) seeking to
prevent the issuance of the Certificates or the consummation
of any of the transactions contemplated by the Pooling and
Servicing Agreement, the Indemnification Agreement, or this
Agreement, (iii) which would materially and adversely affect
the performance by the Company of obligations under, or the
validity or enforceability of, the Pooling and Servicing
Agreement, the Insurance Agreement, the Indemnification
Agreement, the Certificates, the Purchase Agreement or this
Agreement or (iv) that would adversely affect the status of
the Trust Estate as a "real estate mortgage investment
conduit" ("REMIC") as such term is defined in the Internal
Revenue Code of 1986, as amended.
7. To the best of the knowledge of such
counsel, the Commission has not issued any stop order
suspending the effectiveness of the Registration Statement or
any order directed to any prospectus relating to the Offered
Certificates (including the Prospectus), and has not initiated
or threatened any proceeding for that purpose.
8. The Registration Statement and the
Prospectus (other than the financial and statistical data
included therein, as to which such counsel need express no
opinion), including the Incorporated Documents, as of the date
on which the Registration Statement was declared effective and
as of the date hereof, comply as to form in all material
respects with the requirements of the 1933 Act and the rules
and regulations thereunder and the Exchange Act and the rules
and regulations thereunder, and such counsel does not know of
any amendment to the Registration Statement required to be
filed, or of any contracts, indentures or other documents of a
character required to be filed as an exhibit to the
Registration Statement or required to be described in the
Registration Statement which has not been filed or described
as required.
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14
9. Neither the qualification of the Pooling
and Servicing Agreement under the Trust Indenture Act of 1939
nor the registration of the Trust created by such Pooling and
Servicing Agreement under the Investment Company Act of 1940
is presently required.
10. The statements in the Prospectus set
forth under the captions "DESCRIPTION OF THE SECURITIES," "THE
POOLING AND SERVICING AGREEMENT" and the statements in the
Prospectus Supplement set forth under the caption "DESCRIPTION
OF THE CERTIFICATES," to the extent such statements purport to
summarize certain provisions of the Offered Certificates or of
the Pooling and Servicing Agreement, are fair and accurate in
all material respects.
11. The statements in the Prospectus and
Prospectus Supplement set forth under the captions "ERISA
CONSIDERATIONS," "CERTAIN FEDERAL INCOME TAX CONSEQUENCES,"
and the statements in the Prospectus set forth under the
caption "CERTAIN LEGAL ASPECTS OF MORTGAGE LOANS AND RELATED
MATTERS," to the extent that they constitute matters of
federal, New York or California law, or federal, New York or
California legal conclusions provide a fair and accurate
summary of such law or conclusions.
12. Assuming that (a) the Trustee causes the
Trust created under the Pooling and Servicing Agreement to
elect, as the Trustee has covenanted to do in the Pooling and
Servicing Agreement, to be treated as a REMIC and (b) the
parties to the Pooling and Servicing Agreement comply with the
terms thereof, the Trust will be treated as a REMIC, the
Offered Certificates and the Class B Certificates issued
pursuant to the Pooling and Servicing Agreement will be
treated as the "regular interests" in a REMIC and the Class R
Certificates and the Class RL Certificates issued pursuant to
the Pooling and Servicing Agreement will be treated as
"residual interests" in a REMIC. The Trust will not be subject
to tax upon its income or assets by any taxing authority of
the State of New York or New York City or of the State of
California (except that no opinion need be expressed with
respect to any minimum tax).
13. Such opinion shall also relate to
comparable matters with respect to the Affiliated Originators
and Advanta Mortgage Holding Company.
14. No information has come to such
counsel's attention which causes them to believe that the
Prospectus (other than the financial statement and other
financial and statistical data contained therein, as to which
such counsel need express no opinion), as of the date thereof,
contained any untrue statement of a material fact or omitted
to state a material fact necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading.
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15
15. Such other matters as the Representative
may reasonably request.
In rendering its opinions, the counsel described above may
rely, as to matters of fact, on certificates of responsible officers of the
Company, the Trustee and public officials. Such opinions may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Company.
e. The Representative shall have received letters,
including bring-down letters, from ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ LLP, dated on or
before the Closing Date, in form and substance satisfactory to the
Representative and counsel for the Underwriters, to the effect that
they have performed certain specified procedures requested by the
Representative with respect to the information set forth in the
Prospectus and certain matters relating to the Company.
f. The Offered Certificates shall have received the
ratings listed on Schedule A hereto, and such ratings shall not have
been rescinded or downgraded 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 Offered Certificates. Any such opinions
shall be dated the Closing Date and addressed to the Underwriters or
accompanied by reliance letters to the Underwriters or shall state that
the Underwriters may rely upon them.
g. The Representative shall have received from the
Company a certificate, signed by the president, a senior vice president
or a vice president of the Company, dated the Closing Date, to the
effect that the signer of such certificate has carefully examined the
Registration Statement, the Pooling and Servicing Agreement and this
Agreement and that, to the best of his or her knowledge based upon
reasonable investigation:
1. the representations and warranties of the
Company in this Agreement, as of the Closing Date, and in the
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, the Purchase Agreement and in all
related agreements, as of the date specified in such
agreements, are true and correct, and the Company has complied
with all the agreements and satisfied all the conditions on
its part to be performed or satisfied at or prior to the
Closing Date;
2. 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
Pooling and Servicing Agreement, the Insurance Agreement, the
Indemnification Agreement, this Agreement or the Purchase
Agreement in any material way; and no merger, liquidation,
dissolution or bankruptcy of the Company is pending or
contemplated;
- 14 -
16
3. the information contained in the
Registration Statement and the Prospectus relating to the
Company, the Mortgage Loans or the servicing procedures of it
or its affiliates or subservicer is true and accurate in all
material respects and nothing has come to his or her attention
that would lead such officer to believe that the Registration
Statement or Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to
make the statements therein not misleading;
4. the information set forth in the Schedule
of Mortgage Loans required to be furnished pursuant to the
Pooling and Servicing Agreement is true and correct in all
material respects;
5. there has been no amendment or other
document filed affecting the articles of incorporation or
bylaws of the Company since December 31, 1998, and no such
amendment has been authorized. No event has occurred since
March 31, 1999, which has affected the good standing of the
Company under the laws of the State of Delaware;
6. there has not occurred any material
adverse change or, 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 March 31, 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 1933 Act; and
8. each person who, as an officer or
representative of the Company, signed or signs the
Registration Statement, the Pooling and Servicing Agreement,
the Insurance Agreement, the Indemnification Agreement, this
Agreement, or any other document delivered pursuant hereto, on
the date of such execution, or on the Closing Date, as the
case may be, in connection with the transactions described in
the Pooling and Servicing Agreement, the Insurance Agreement,
the Indemnification Agreement, the Purchase Agreement and this
Agreement was, at the respective times of such signing and
delivery, and is now, duly elected or appointed, qualified and
acting as such officer or representative, and the signatures
of such persons appearing on such documents are their genuine
signatures.
The Company shall attach to such certificate a true and
correct copy of its certificate or articles of incorporation, as appropriate,
and bylaws which are in full force and effect
- 15 -
17
on the date of such certificate and a certified true copy of the resolutions of
its Board of Directors with respect to the transactions contemplated herein.
h. The Representative shall have received a favorable
opinion of counsel to the Trustee, dated the Closing Date and in form
and substance satisfactory to the Representative, to the effect that:
1. the Trustee is a national banking
association duly organized, validly existing and in good
standing under the laws of the United States and has the power
and authority to enter into and to take all actions required
of it under the Pooling and Servicing Agreement;
2. the Pooling and Servicing Agreement has
been duly authorized, executed and delivered by the Trustee
and the Pooling and Servicing Agreement constitutes the legal,
valid and binding obligation of the Trustee, enforceable
against the Trustee in accordance with its terms, except as
enforceability thereof may be limited by (A) bankruptcy,
insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, as such laws would
apply in the event of a bankruptcy, insolvency or
reorganization or similar occurrence affecting the Trustee,
and (B) general principles of equity regardless of whether
such enforcement is sought in a proceeding at law or in
equity;
3. no consent, approval, authorization or
other action by any governmental agency or body or other
tribunal is required on the part of the Trustee in connection
with its execution and delivery of the Pooling and Servicing
Agreement or the performance of its obligations thereunder;
4. the Offered Certificates have been duly
executed, authenticated and delivered by the Trustee; and
5. the execution and delivery of, and
performance by the Trustee of its obligations under, the
Pooling and Servicing Agreement do not conflict with or result
in a violation of any statute or regulation applicable to the
Trustee, or the charter or bylaws of the Trustee, or to the
best knowledge of such counsel, any governmental authority
having jurisdiction over the Trustee or the terms of any
indenture or other agreement or instrument to which the
Trustee is a party or by which it is bound.
In rendering such opinion, such counsel may rely, as to
matters of fact, on certificates of responsible officers of the Company, the
Trustee and public officials. Such opinion may also assume the due
authorization, execution and delivery of the instruments and documents referred
to therein by the parties thereto other than the Trustee.
i. The Representative shall have received from the
Trustee a certificate, signed by the President, a senior vice president
or a vice president of the
- 16 -
18
Trustee, dated the Closing Date, to the effect that each person who, as
an officer or representative of the Trustee, signed or signs the
Offered Certificates, the Pooling and Servicing Agreement or any other
document delivered pursuant hereto, on the date hereof or on the
Closing Date, in connection with the transactions described in the
Pooling and Servicing Agreement was, at the respective times of such
signing and delivery, and is now, duly elected or appointed, qualified
and acting as such officer or representative, and the signatures of
such persons appearing on such documents are their genuine signatures.
j. The Policy relating to the Offered Certificates
shall have been duly executed and issued at or prior to the Closing
Date and shall conform in all material respects to the description
thereof in the Prospectus.
k. The Representative shall have received a favorable
opinion of in-house counsel to the Insurer, dated the Closing Date and
in form and substance satisfactory to counsel for the Underwriters, to
the effect that:
1. The Insurer is a stock insurance 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.
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
- 17 -
19
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 of 1933, as amended.
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 under the heading "THE CERTIFICATE INSURER" and
"THE CERTIFICATE INSURANCE 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
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.
l. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the
- 18 -
20
rating, if any, accorded the Insurer's claims paying ability by any
"nationally recognized statistical rating organization," as such term
is defined for purposes of the 1933 Act.
m. On or prior to the Closing Date, there has been no
downgrading, nor has any notice been given of (A) any intended or
potential downgrading or (B) any review or possible changes in rating
the direction of which has not been indicated, in the rating, if any,
accorded the Company or in any rating accorded any securities of the
Company, if any, by any "nationally recognized statistical rating
organization," as such term is defined for purposes of the 1933 Act.
n. There has not occurred any change, or any
development involving a prospective change, in the condition, financial
or otherwise, or in the earnings, business or operations, since March
31, 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
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
o. [Reserved].
p. The Representative shall have received from ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ LLP, special counsel to the Company, a survey in form and
substance satisfactory to the Representative, indicating the
requirements of applicable local law which must be complied with in
order to transfer and service the Mortgage Loans pursuant to the
Pooling and Servicing Agreement and the Company shall have complied
with all such requirements.
q. The Representative shall have received from Fried,
Frank, Harris, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, special counsel to the Underwriters,
such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Offered Certificates, the Prospectus and such
other related matters as the Representative shall reasonably require.
r. The Representative and counsel for the
Underwriters shall have received copies of any opinions of counsel to
the Company supplied to the Trustee relating to matters with respect to
the Certificates. Any such opinions shall be dated the Closing Date and
addressed to the Underwriters or accompanied by reliance letters to the
Underwriters or shall state the Underwriters may rely thereon.
s. The Representative shall have received such
further information, certificates and documents as the Representative
may reasonably have requested not fewer than three (3) full business
days prior to the Closing Date.
t. There shall have been executed and delivered by
Advanta Mortgage Holding Company, the corporate parent of the Company
("AMHC"), a letter agreement with the Trustee and the Insurer, pursuant
to which AMHC agrees to become jointly and severally liable with the
Company and Advanta Mortgage Corp. USA for the payment of the Joint and
Several Obligations (as defined in such letter agreement).
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21
u. There shall have been executed and delivered by
AMHC, the 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).
v. Prior to the Closing Date, counsel for the
Underwriters shall have been furnished with such documents and opinions
as they may reasonably require for the purpose of enabling them to pass
upon the issuance and sale of the Offered Certificates as herein
contemplated and related proceedings or in order to evidence the
accuracy and completeness of any of the representations and warranties,
or the fulfillment of any of the conditions, herein contained, and all
proceedings taken by the Company in connection with the issuance and
sale of the Offered Certificates as herein contemplated shall be
satisfactory in form and substance to the Representative and counsel
for the Underwriters.
w. Subsequent to the execution and delivery of this
Agreement none of the following shall have occurred: (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange or the over-the-counter market shall have been suspended or
minimum prices shall have been established on either of such exchanges
or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction; (ii) a
banking moratorium shall have been declared by Federal or state
authorities; (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation of hostilities
involving the United States or there shall have been a declaration of a
national emergency or war by the United States; or (iv) there shall
have occurred such a material adverse change in general economic,
political or financial conditions (or the effect of international
conditions on the financial markets of the United States shall be such)
as to make it, in the judgment of the Representative, impractical or
inadvisable to proceed with the public offering or delivery of the
Offered Certificates on the terms and in the manner contemplated in the
Prospectus.
x. The Offered Certificates 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
Offered Certificates and any taxes payable in connection therewith; (b) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (c) the
- 20 -
22
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), the Preliminary Prospectus, the Prospectus and any amendment or
supplement to the Prospectus or any document incorporated by reference therein,
all as provided in this Agreement; (d) the fees and expenses of qualifying the
Offered Certificates 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 Offered Certificates; (f) the costs and expenses
of ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 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,
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, any transfer taxes on the Offered Certificates which they
may sell and the expenses of advertising any offering of the Offered
Certificates made by the Underwriters.
If this Agreement is terminated by the Representative, in
accordance with the provisions of Section 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, ▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇, 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 Offered Certificates), to which such
Underwriter or any such controlling person may become subject, under the
Securities Act or otherwise, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement,
(ii) the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
(iii) any untrue statement or alleged untrue statement of a material fact
contained in the Prospectus or (iv) the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and shall reimburse such Underwriter and each such
controlling person promptly upon demand for any legal or other expenses
reasonably incurred by such Underwriter or such controlling person in connection
with investigating or defending or preparing to defend against any such loss,
claim, damage, liability or action as such expenses are incurred; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of, or is
based upon, any untrue statement or alleged untrue statement or omission or
alleged omission made in any Preliminary Prospectus, the Prospectus or the
Registration Statement in reliance upon and in conformity with written
information (including any Derived Information) furnished to the Company through
the Representative specifically for inclusion therein; and provided, further,
that as to any Preliminary Prospectus this indemnity shall not inure to the
benefit of any Underwriter or any controlling person on account of any loss,
- 21 -
23
claim, damage, liability or action arising from the sale of the Offered
Certificates to any person by such Underwriter if such Underwriter failed to
send or give a copy of the Prospectus, as amended or supplemented, to that
person within the time required by the Securities Act, and the untrue statement
or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact in the Preliminary Prospectus was corrected in
the Prospectus, unless such failure resulted from non-compliance by the Company
with Section 5(c). For purposes of the last proviso to the immediately preceding
sentence, the term "Prospectus" shall not be deemed to include the documents
incorporated therein by reference, and none of the Underwriters shall be
obligated to send or give any supplement or amendment to any document
incorporated therein by reference to any person other than a person to whom such
Underwriter had delivered such incorporated document or documents in response to
a written request therefor. The foregoing indemnity agreement is in addition to
any liability which the Company may otherwise have to any Underwriters or any
controlling person of such Underwriter.
b. Each Underwriter agrees severally, and not jointly to
indemnify and hold harmless the Company, each of its directors, each of its
officers who signed the Registration Statement, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act
against any and all loss, claim, damage or liability, or any action in respect
thereof, to which the Company or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise, insofar as
such loss, claim, damage, liability or action arises out of, or is based upon,
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, (ii) the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, (iii) any untrue statement or
alleged untrue statement of a material fact contained in the Prospectus or (iv)
the omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, but in each case only
to the extent that the untrue statement or alleged untrue statement or omission
or alleged omission was made in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Underwriter
specifically for inclusion therein, and shall reimburse the Company and any such
director, officer or controlling person for any legal or other expenses
reasonably incurred by the Company or any director, officer or controlling
person in connection with investigating or defending or preparing to defend
against any such loss, claim, damage, liability or 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.
- 22 -
24
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.
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.
- 23 -
25
d. Each Underwriter agrees to deliver to the Company no later
than the date on which the Preliminary Prospectus Supplement and the Prospectus
Supplement is required to be filed pursuant to Rule 424 with a copy of its
Derived Information (defined below) for filing with the Commission on Form 8-K.
e. Each Underwriter agrees, assuming all Company-Provided
Information (defined below) is accurate and complete in all material respects,
to severally and not jointly indemnify and hold harmless the Company, each of
the Company's officers and directors and each person who controls the Company
within the meaning of Section 15 of the Securities Act against any and all
losses, claims, damages or liabilities, joint or several, to which they may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement of a material fact contained in the Derived
Information provided by such Underwriter, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party for any legal or other expenses reasonably
incurred by him, her or it in connection with investigating or defending or
preparing to defend any such loss, claim, damage, liability or action as such
expenses are incurred. The obligations of each of the Underwriters under this
Section 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, ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ 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
- 24 -
26
substantive change in the information presented. The term "Computational
Materials" has the meaning assigned to it in the May 17, 1994 letter (the
"▇▇▇▇▇▇ letter" and together with the PSA Letter, the "No-Action Letters") of
▇▇▇▇▇ & ▇▇▇▇ on behalf of ▇▇▇▇▇▇, 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 Offered Certificates or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law or if the indemnified party
failed to give the notice required under Section 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 Offered Certificates
over (y) the amount paid by such Underwriter to the Company for the Offered
Certificates purchased by such Underwriter hereunder. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
- 25 -
27
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 Offered Certificates 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(w) of this Agreement shall occur and be continuing. In the event of
any such termination, the covenant set forth in Section 5(g), the provisions of
Section 7, the indemnity agreement set forth in Section 8, and the provisions of
Sections 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 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co.
Incorporated, as Representative of the Underwriters, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, Attention: General Counsel (fax: ( 212 )
761-0465);
b. if to the Company, shall be delivered or sent by
mail, telex or facsimile transmission to Advanta Mortgage Conduit
Services, Inc. ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel (Fax: ▇▇▇-▇▇▇-▇▇▇▇).
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
- 26 -
28
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 Offered Certificates
which it is obligated to purchase hereunder (the "Defaulted Certificates"), the
remaining Underwriters (the "Non-Defaulting Underwriter"), shall have the right,
but not the obligation within one (1) Business Day thereafter, to make
arrangements to purchase all, but not less than all, of the Defaulted
Certificates upon the terms herein set forth; if, however, the Non-Defaulting
Underwriter shall not have completed such arrangements within such one (1)
Business Day period, then this Agreement shall terminate without liability on
the part of the Non-Defaulting Underwriter.
No action taken pursuant to this Section 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
Certificates and shall remain in full force and effect, regardless of any
investigation made by or on behalf of any of them or any person controlling any
of them.
Section 15. Definition of the Term "Business Day". For
purposes of this Agreement, "Business Day" means any day on which the New York
Stock Exchange, Inc. is open for trading.
Section 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
- 27 -
29
any action under this Agreement taken by the Representative will be binding upon
all of the Underwriters.
- 28 -
30
If the foregoing correctly sets forth the agreement between
the Company and the Underwriters, please indicate your acceptance in the space
provided for that purpose below.
Very truly yours,
ADVANTA MORTGAGE CONDUIT
SERVICES INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice-President
CONFIRMED AND ACCEPTED, as of
the date first above written:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & CO. INCORPORATED
as Representative of the Underwriters
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇
----------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Vice President
- 29 -
31
--------------------------------------------------------------------------------------------------------------------
SCHEDULE A
--------------------------------------------------------------------------------------------------------------------
INITIAL PRINCIPAL
AMOUNT OF OFFERED
CERTIFICATES PURCHASE PRICE TO
REQUIRED RATINGS PURCHASED BY UNDERWRITERS DISREGARDING
CLASS S&P/▇▇▇▇▇'▇ UNDERWRITERS COUPON ACCRUED INTEREST
--------------------------------------------------------------------------------------------------------------------
Class A-1 AAA /Aaa $114,000,000 Floating(2) $113,829,000.00
--------------------------------------------------------------------------------------------------------------------
Class A-2 AAA /Aaa $90,000,000 Fixed $89,815,140.00
--------------------------------------------------------------------------------------------------------------------
Class A-3 AAA /Aaa $40,000,000 Fixed $39,895,960.00
--------------------------------------------------------------------------------------------------------------------
Class A-4 AAA /Aaa $95,000,000 Fixed $94,704,740.00
--------------------------------------------------------------------------------------------------------------------
Class A-5 AAA /Aaa $31,700,000 Fixed(1) $31,572,217.30
--------------------------------------------------------------------------------------------------------------------
Class A-6 AAA /Aaa $41,000,000 Fixed(2) $40,896,465.00
--------------------------------------------------------------------------------------------------------------------
Class A-7 AAA /Aaa $105,800,000 Floating(2) $105,561,950.00
--------------------------------------------------------------------------------------------------------------------
----------
1 Class A-1, Class A-5 and Class A-6 are subject to the Fixed Rate Group
Available Funds Cap Rate as defined in the Prospectus Supplement.
2 Class A-7 is subject to the ARM Group Available Funds Cap Rate as defined
in the Prospectus Supplement.
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32
SCHEDULE I
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
Prudential Securities Incorporated
▇▇▇▇▇▇▇ ▇▇▇▇▇ Barney Inc.
- 2 -