EXECUTION COPY
ADVANTA AUTO FINANCE CORPORATION
Automobile Receivables Asset Backed Notes
Series 1997-2
5.85625% Class A-1 Asset Backed Notes
6.19% Class A-2 Asset Backed Notes
6.22% Class A-3 Asset Backed Notes
6.26% Class A-4 Asset Backed Notes
UNDERWRITING AGREEMENT
Prudential Securities Incorporated
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 10292
Ladies and Gentlemen:
Advanta Auto Finance Corporation, a Nevada corporation (the "Company"),
proposes to sell to you (the "Underwriter") the principal amount of certain
securities (the "Securities"), to be issued pursuant to an indenture (the
"Indenture") dated as of December 1, 1997, between Advanta Automobile
Receivables Trust 1997-2 (the "Trust") and Norwest Bank Minnesota, National
Association, as indenture trustee (the "Indenture Trustee"). The Trust will be
formed pursuant to a Trust Agreement to be dated as of December 17, 1997, as
amended, and entered into by and among Advanta Auto Receivables Corp. I
("Receivables I") and Wilmington Trust Company as Owner Trustee. The Securities
will be secured by certain auto loan receivables to be transferred by
Receivables I to the Trust pursuant to a sale and servicing agreement (the "Sale
and Servicing Agreement") dated December 1, 1997 among Receivables I, the
Company, the Trust and Norwest Bank Minnesota, National Association as
collateral agent and back-up servicer.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, the Underwriter, as set forth below in this Section 1. Certain
terms used in this Section are defined in paragraph (c) hereof.
(a) The Company meets the requirements for the use of Form S-3 under
the Securities Act of 1933 (the "Act") and has filed with the Securities
and Exchange Commission (the "Commission") a registration statement (file
number 333-19733) on such Form, including a basic prospectus, for
registration under the Act of the offering and sale of the Securities. The
Company may have filed one or more amendments thereto, and may have used a
Preliminary Final Prospectus,
each of which has previously been furnished to you. Such registration
statement, as so amended, has become effective. The offering of the
Securities is a Delayed Offering and, although the Basic Prospectus may not
include all the information with respect to the Securities and the offering
thereof required by the Act and the rules thereunder to be included in the
Final Prospectus, the Basic Prospectus includes all such information
required by the Act and the rules thereunder to be included therein as of
the Effective Date. The Company will next file with the Commission pursuant
to Rules 415 and 424(b)(2) or (5) a final supplement to the form of the
prospectus included in such registration statement relating to the
Securities and the offering thereof. As filed, such final prospectus
supplement shall include all required information with respect to the
Securities and the offering thereof and, except to the extent the
Underwriter shall agree in writing to a modification, shall be in all
substantive respects in the form furnished to you prior to the Execution
Time or, to the extent not completed at the Execution Time, shall contain
only such specific additional information and other changes (beyond that
contained in the Basic Prospectus and any Preliminary Final Prospectus) as
the Company has advised you, prior to the Execution Time, will be included
or made therein.
To the extent that the Underwriter (i) has provided to the Company
Collateral term sheets (as hereinafter defined) that the 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 the
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 sheets 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 Final Prospectus is filed with the
Commission pursuant to Rule 424 of the Rules and Regulations.
(b) On the Effective Date, the Registration Statement did or will, and
when the Final Prospectus is first filed (if required) in accordance with
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Securities Exchange Act of 1934
(the "Exchange Act") and the Trust Indenture Act of 1939, to the extent
applicable (the "Trust Indenture Act") and the respective rules thereunder;
on the Effective Date, the Registration Statement did not or will not
contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein not misleading; on the Effective Date and on the
Closing Date the Indenture did or will comply in all material respects with
the requirements of the Trust Indenture Act and the rules thereunder; and,
on the Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), did not or will not, and on the date of any filing pursuant to Rule
424(b) and on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to
2
make the statements therein, in the light of the circumstance under which
they were made, not misleading; provided, however, that the Company makes
no representations or warranties as to (i) that part of the Registration
statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished in writing to the Company
by or on behalf of the Underwriter specifically for inclusion in the
Registration Statement or the Final Prospectus (or any supplement thereto).
(c) The terms which follow, when used in this Agreement, shall have
the meanings indicated. The term "the Effective Date" shall mean each date
that the Registration Statement and any post-effective amendment or
amendments thereto became or become effective and each date after the date
hereof on which a document incorporated by reference in the Registration
Statement is filed. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Basic
Prospectus" shall mean the prospectus referred to in paragraph (a) above
contained in the Registration Statement at the Effective Date. "Preliminary
Final Prospectus" shall mean any preliminary prospectus supplement to the
Basic Prospectus which describes the Securities and the offering thereof
and is used prior to filing of the Final Prospectus. "Final Prospectus"
shall mean the prospectus supplement relating to the Securities that is
first filed pursuant to Rule 424(b) after the Execution Time, together with
the Basic Prospectus. "Registration Statement" shall mean the registration
statement referred to in paragraph (a) above, including incorporated
documents, exhibits and financial statements, as amended at the Execution
Time (or, if not effective at the Execution Time, in the form in which it
shall become effective) and, in the event any post-effective amendment
thereto becomes effective prior to the Closing Date (as hereinafter
defined), shall also mean such registration statement as so amended. "Rule
415", "Rule 424" and "Regulation S-K" refer to such rules or regulation
under the Act. Any reference herein to the Registration Statement, the
Basic Prospectus, any Preliminary Final Prospectus or the Final Prospectus
shall be deemed to refer to and include the documents incorporated by
reference therein pursuant to item 12 of Form S-3 which were filed under
the Exchange Act on or before the Effective Date of the Registration
Statement or the issue date of the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus, as the case may be; and any reference
herein to the terms "amend", "amendment" or "supplement" with respect to
the Registration Statement, the Basic Prospectus, any Preliminary Final
Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date
of the Registration Statement or the issue date of the Basic Prospectus,
any Preliminary Final Prospectus or the Final Prospectus, as the case may
be, deemed to be incorporated therein by reference. A "Delayed Offering"
shall mean an offering of securities pursuant to Rule 415 which does not
commence promptly after the effective date of a registration statement,
with the result that only information required pursuant to Rule 415 need be
included in
3
such registration statement at the effective date thereof with respect to
the securities so offered.
2. Purchase and Sale. Subject to the terms and conditions and in reliance
upon the representations and warranties set forth herein, the Company agrees to
sell to the Underwriter, and the Underwriter agrees to purchase from the Company
the Securities, at the purchase price and in the principal amount set forth in
Schedule I attached hereto.
3. Delivery and Payment. Delivery of and payment for the Securities to be
purchased by the Underwriter 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 Underwriter and the Company at 10:00 A.M. New York
City time on December [23], 1997 or at such other time or date as shall be
agreed upon in writing by the Underwriter and the Company (such date being
referred to as the "Closing Date"). Payment shall be made to the Company by wire
transfer of same day funds payable to the account of the Company. Delivery of
the Securities shall be made to the Underwriter against payment of the purchase
price thereof. The Securities shall be in such denominations and registered in
such names as the Underwriter may request in writing at least two business days
prior to the Closing Date. The Securities will be made available for examination
by the Underwriter no later than 2:00 p.m. New York City time on the first
business day prior to the Closing Date.
4. Agreements. The Company agrees with the Underwriter that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereto, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the Registration
Statement or supplement (including the Final Prospectus or any Preliminary
Final Prospectus) to the Basic Prospectus unless the Company has furnished
you a copy for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject to
the foregoing sentence, the Company will cause the Final Prospectus,
properly completed, and any supplement thereto to be filed with the
commission pursuant to the applicable paragraph of Rule 424(b) within the
time period prescribed and will provide evidence satisfactory to the
Underwriter of such timely filing. The Company will promptly advise the
Underwriter (i) when the Registration Statement, if not effective at the
Execution Time, and any amendment thereto, shall have become effective,
(ii) when the Final Prospectus, and any supplement thereto, shall have been
filed with the Commission pursuant to Rule 424(b), (iii) when, prior to
termination of the offering of the Securities, any amendment to the
Registration Statement shall have been filed or become effective, (iv) of
any request by the Commission for any amendment of the Registration
Statement or supplement to the Final Prospectus or for any additional
information, (v) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and
4
(vi) of the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company will (i) prepare and file with the Commission, subject to the
second sentence of paragraph (a) of this Section 4, an amendment or
supplement which will correct such statement or omission or effect such
compliance and (ii) supply any supplemented Prospectus to the Underwriter
in such quantities as the Underwriter may reasonably request.
(c) As soon as practicable but in any event not later than 90 days
after the close of the period covered thereby, the Company will make
generally available to its security holders and to the Underwriter an
earnings statement or statements of the Trust which will satisfy the
provisions of Section 11(a) of the Act and, including, at the option of the
Company, Rule 158 under the Act.
(d) The Company will furnish to the Underwriter and counsel for the
Underwriter, without charge, copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by
the Underwriter or dealer may be required by the Act, as many copies of any
Preliminary Final Prospectus and the Final Prospectus and any supplement
thereto as the Underwriter may reasonably request.
(e) The Company will use its best efforts to arrange for the
qualification of the Securities for sale under the laws of such
jurisdictions as the Underwriter may designate, will use its best efforts
to maintain such qualifications in effect so long as required for the
distribution of the Securities.
(f) Not, without the Underwriter's prior written consent, to publicly
offer or sell or contract to sell debt securities issued or guaranteed by
the Company (other than the Securities) representing interests in or
secured by other auto loan-related assets originated or owned by the
Company for a period of 5 business days following the commencement of the
offering of the Securities to the public.
5. Conditions to the Obligations of the Underwriter. The obligations of the
Underwriter to purchase the Securities shall be subject to the accuracy of the
representations and warranties on the part of the Company contained herein as of
the
5
Execution Time and the Closing Date, to the accuracy of the statements of
the Company made in any certificates pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Underwriter agrees in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 12:00 Noon on the business day
following the day on which the public offering price was determined, if
such determination occurred after 3:00 PM New York City time on such date;
if filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
shall have been filed in the manner and within the time period required by
Rule 424(b); and no stop order suspending the effectiveness of the
Registration Statement shall have been issued and no proceedings for that
purpose shall have been instituted or threatened.
(b) The Company shall have furnished to the Underwriter the opinion of
Xxxxx Xxxxxxxxxx LLP, special counsel for the Company, dated the Closing
Date, to the effect that:
(i) each of the Company and Receivables I (the "Subsidiary") has
been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
chartered or organized, with full corporate power and authority to own
its properties and conduct its business as described in the Final
Prospectus, and is duly qualified to do business as a foreign
corporation in each state necessary to enable it to perform its
obligations under the sale and servicing agreement;
(ii) all the outstanding shares of capital stock of the
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiary are owned by the Company either directly or through wholly
owned subsidiaries free and clear of any perfected security interest
and, to the knowledge of such counsel, after due inquiry, any other
security interests, claims, liens or encumbrances;
(iii) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act, and
constitutes a legal, valid and binding instrument enforceable against
the Company in accordance with its terms (subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other law affecting creditors' rights generally from
time to time in effect); and the Securities have been duly authorized
and, when executed and authenticated in accordance with the provisions
of the
6
Indenture and delivered to and paid for by the Underwriter pursuant to
this Agreement will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture;
(iv) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority or body or any arbitrator involving the
Company or the Subsidiary, of character required to be disclosed in
the Registration Statement which is not adequately disclosed in the
Final Prospectus, and there is no franchise, contract or other
document of character required to be described in the Registration
Statement or Final Prospectus, or to be filed as an exhibit, which is
not described or filed as required; and the statements included or
incorporated in the Final Prospectus describing any legal proceedings
or material contracts or agreements relating to the Company fairly
summarize such matters;
(v) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best knowledge
of such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial and statistical information contained
therein as to which such counsel need express no opinion) comply as to
form in all material respects with the applicable requirements of the
Act, the Exchange Act and the Trust Indenture Act and the respective
rules thereunder; and such counsel has no reason to believe that at
the Effective Date the Registration Statement contained any untrue
statement of a material fact or omitted to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading or that the Final Prospectus includes any
untrue statement of a material fact or omits to state a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company;
(vii) no consent, approval, authorization or order of any court
or governmental agency or body is required for the consummation of the
transactions contemplated herein except such as have been obtained
under the Act and such as may be required under the blue sky law of
any jurisdiction in connection with the purchase and distribution of
the Securities by the Underwriter and such other approvals (specified
in such opinion) as have been obtained;
7
(viii) neither the execution and delivery of the Indenture, the
issue and sale of the Securities, nor the consummation of any other of
the transactions herein contemplated nor the fulfillment of the terms
hereof will conflict with, result in a breach or violation of, or
constitute a default under any law or the charter or by-laws of the
Company or the terms of any indenture or other agreement or instrument
known to such counsel and to which the Company or any of its
subsidiaries of a party or bound or any judgment, order or decree
known to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its subsidiaries; and
(ix) no holders of securities of the Company have rights to the
registration of such securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York or the
United States, to the extent deemed proper and specified in such opinion, upon
the opinion of other counsel of good standing believed to be reliable and who
are satisfactory to counsel for the Underwriter and (B) as to matters of fact,
to the extent deemed proper, on certificates of responsible officers of the
Company and public officials. References to the Final Prospectus in this
paragraph (b) include any supplements thereto at the Closing Date.
(c) The Underwriter shall have received from Xxxxx Xxxxxxxxxx LLP,
special counsel for the Underwriter, such opinion or opinions, dated the
Closing Date, with respect to the issuance and sale of the Securities, the
Indenture, the Registration Statement, the Final Prospectus (together with
any supplement thereto) and other related matters as the Underwriter may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(d) The Company shall have furnished to the Underwriter a certificate
of the Company, signed by the president, a senior vice president, vice
president or principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signer of such certificate
has carefully examined the Registration Statement, the Final Prospectus,
any supplement to the Final Prospectus and this Agreement and that, to the
best of his or her knowledge and based upon reasonable investigation:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
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;
8
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included in the Final Prospectus (exclusive of any supplement
thereto), there has been no material adverse change in the condition
(financial or other), earnings, business or properties of the company
and its subsidiaries, whether or not arising from transactions in the
ordinary course of business, except as set forth in or contemplated in
the Final Prospectus (exclusive of any supplement thereto).
(e) At the Closing Date, Xxxxxx Xxxxxxxx LLP shall have furnished to
the Underwriter a letter or letters (which may refer to letters previously
delivered to the Underwriter), dated as of the Closing Date, in form and
substance satisfactory to the Underwriter, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act
and the respective applicable published rules and regulations thereunder
and stating in effect that they have performed certain specified procedures
requested by the Underwriter with respect to the information set forth in
the Prospectus and certain matters relating to the Company.
(f) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its subsidiaries the effect of which is, in the judgment
of the Underwriter, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(g) Subsequent to the Execution Time, there shall not have been any
decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purpose of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(h) Prior to the Closing Date, the Company shall have furnished to the
Underwriter such further information, certificates and documents as the
Underwriter may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the
9
opinions and certificates mentioned above or elsewhere in this Agreement shall
not be in all material respects reasonably satisfactory in form and substance to
the Underwriter and counsel for the Underwriter, this Agreement and all
obligations of the Underwriter hereunder may be canceled at, or at any time
prior to, the Closing Date by the Underwriter. Notice of such cancellation shall
be given to the Company in writing or by telephone or telegraph confirmed in
writing.
The documents required to be delivered by this Section 5 shall be delivered
at the office of Xxxxx Xxxxxxxxxx LLP, special counsel for the Underwriter, at
0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx, on the Closing Date.
6. Payment of Expenses. The Company agrees to pay: the costs incident to
the authorization, issuance, sale and delivery of the Securities and any taxes
payable in connection therewith; the costs incident to the preparation, printing
and filing under the Securities Act of the Registration Statement and any
amendments and exhibits thereto; the costs of distributing the Registration
Statement as originally filed and each amendment thereto and any post-effective
amendments thereof (including, in each case, exhibits), the Preliminary Final
Prospectus, the Prospectus and any amendment or supplement to the Prospectus or
any document incorporated by reference therein, all as provided in this
Agreement; the costs of reproducing and distributing this Agreement; the fees
and expenses of qualifying the Securities under the securities laws of the
several jurisdictions 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); any fees charged by securities rating services for
rating the Securities; and all other costs and expenses incident to the
performance of the obligations of the Company; provided that, except as provided
in this Section 6, the Underwriter shall pay its own costs and expenses,
including any transfer taxes on the Securities which they may sell, the expenses
of advertising any offering of the Securities made by the Underwriter and
one-half the costs and expenses of Xxxxx Xxxxxxxxxx LLP.
7. Indemnification and Contribution. (a) The Company agrees to indemnify
and hold harmless the Underwriter, the directors, officers, employees and agents
of the Underwriter and each person who controls the Underwriter within the
meaning of either the Act or the Exchange Act against any and all losses,
claims, damages or liabilities to which such indemnified parties may become
subject under the Act, the Exchange Act or other Federal or state statutory law
or regulation, at common law 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 or alleged untrue statement of a material fact
contained in the registration statement for the registration of the Securities
as originally filed or in any amendment thereof, or in the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, or in any amendment
thereof or supplement thereto, 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 not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any
10
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information (including
any Derived Information (as defined in Section 7(e) herein)) furnished to the
Company by or on behalf of any Underwriter through the Underwriter specifically
for inclusion therein; and provided, further, that as to any Preliminary Final
Prospectus this indemnity shall not inure to the benefit of the Underwriter or
any controlling person on account of any loss, claim, damage, liability or
action arising from the sale of the Securities to any person by the Underwriter
if the 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 Final
Prospectus was corrected in the Prospectus, unless such failure resulted from
non-compliance by the Company with Section 4(d). 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 the
Underwriters shall not 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 the Underwriter had delivered such incorporated document or
documents in response to a written request therefor. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
(b) The Underwriter agrees to indemnify and hold harmless the Company,
each of its directors, each of its officers who signs the Registration
Statement, and each person who controls the Company within the meaning of
either the Act or the Exchange Act, to the same extent as the foregoing
indemnity from the Company to the Underwriter, but only with reference to
losses, claims, damages or liability arising out of or based upon any
untrue statement of a material fact contained in any written information
(including any Derived Information (as defined in Section 7(e) herein))
provided by the Underwriter, or arising out of or based upon the omission
or alleged omission to state therein a material fact required to be stated
therein, in the light of the circumstances under which they were made, not
misleading. This indemnity agreement will be in addition to any liability
which the Underwriter may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of the commencement of any action, such indemnified party will,
if a claim in respect thereof is to be made against the indemnifying party
under this Section 7, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party
(i) will not relieve it from liability under paragraph (a) or (b) above
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) will not, in any event, relieve the
indemnifying party from any obligations to any indemnified
11
party other than the indemnification obligation provided in paragraph (a)
or (b) above. The indemnifying party shall be entitled to appoint counsel
of the indemnifying party's choice at the indemnifying party's expense to
represent the indemnified party in any action for which indemnification is
sought (in which case the indemnifying party shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by
the indemnified party or parties except as set forth below); provided,
however, that such counsel shall be satisfactory to the indemnified party.
Notwithstanding the indemnifying party's election to appoint counsel to
represent the indemnified party in an action, the indemnified party shall
have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses
of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such
counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the indemnified
party and the indemnifying party and the indemnified party shall have
reasonably concluded that there may be legal defenses available to it
and/or other indemnified parties which are different from or additional to
those available to the indemnifying party, (iii) the indemnifying party
shall not have employed counsel satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
the institution of such action or (iv) the indemnifying party shall
authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party.
(d) The Underwriter agrees to deliver to the Company no later than the
date on which the Final Prospectus 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) For purposes of this Section 7, the term "Derived Information"
means such portion, if any, of the information delivered to the Company
pursuant to Section 4(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 (as
defined below)).
"Company-Provided Information" means any computer tape furnished to the
Underwriter by the Company concerning the Mortgage Loans which comprise part of
the assets of the Trust.
12
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 Xxxxxx, Xxxxxxxx, 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 Brown & Xxxx on behalf
of Xxxxxx, Xxxxxxx & Co., Inc. (which letter, and the SEC staff's response
thereto, were publicly available May 20, 1994).
(f) The Underwriter confirms that the information set forth in the
Final Prospectus relating to market making and under the caption
"Underwriting", together with the Derived Information, is correct and
constitutes the only information furnished in writing to the Company by or
on behalf of the Underwriter specifically for inclusion in the Registration
Statement and the Final Prospectus.
(g) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 7 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriter shall, in
lieu of indemnifying the indemnified party, contribute to the amount paid
or payable by such indemnified party in such proportion as is appropriate
to reflect not only the relative benefits but also the relative fault of
the Company and of the Underwriter in connection with the statements or
omissions which resulted in such loss, claim, damage, liability or action
in respect thereof, as well as any other relevant equitable considerations;
provided, however, that in no case shall the Underwriter be responsible for
any amount in excess of the underwriting discount or commission applicable
to the Securities purchased by the Underwriter hereunder. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from
the offering, and benefits received by the Underwriter shall be deemed to
be equal to the underwriting discount or commission set forth on the cover
page of the Final Prospectus. Relative fault shall be determined by
reference to whether any alleged untrue statement or omission relates to
information provided by the Company or the Underwriter, 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 Underwriter agree that it would not be just and
equitable if contribution were determined by pro rata allocation or any other
method of allocation which does not take account of the equitable considerations
referred to above. Notwithstanding the provisions of this paragraph (d), no
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 7,
each person who controls the Underwriter within the meaning of either the Act or
the Exchange Act and each director, officer, employee and agent of the
Underwriter shall have the same rights to contribution as the Underwriter,
13
and each person who controls the Company within the meaning of either the Act or
the Exchange Act, each officer of the Company who shall have signed the
Registration Statement and each director of the company shall have the came
rights to contribution as the Company, subject in each case to the applicable
terms and condition of this paragraph (d).
8. Termination. This Agreement shall be subject to termination in the
discretion of the Underwriter, by notice given to the Company prior to delivery
of and payment for the Securities, if prior to such time (i) trading in
securities generally on the New York Stock Exchange, the American Stock
Exchange, or the National Association of Securities Dealers Automated Quotation
National Market System shall have been suspended or limited or minimum prices
shall have been established on either of such Exchanges or Market System, (ii) a
banking moratorium shall have been declared either by Federal or New York State
authorities or (iii) there shall have occurred any outbreak or escalation of
hostilities, declaration by the United States of a national emergency or war or
other calamity or crisis the effect of which on financial markets is such as to
make it, in the reasonable judgment of the Underwriter, impracticable or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Final Prospectus (exclusive of any supplement thereto).
9. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Underwriter set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of any Underwriter or the Company or any of the officers,
directors or controlling persons referred to in Section 7 hereof, and will
survive delivery of and payment for the Securities. The provision 5 of Sections
6 and 7 hereof shall survive the termination or cancellation of this Agreement.
10. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Underwriter, will be mailed, delivered or
telegraphed and confirmed to the Underwriter, at Xxx Xxx Xxxx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000; or, if sent to the Company, will be mailed, delivered or
telegraphed and confirmed to it at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxx 000, Xxxx
Xxxxxxxxxx, Xxxxxxxxxxxx 00000, xxxxxxxxx of the legal department.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 7 hereof, and no other
person will have any right or obligation hereunder.
12. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
14
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement between the
Company and the Underwriter.
Very truly yours,
ADVANTA AUTO FINANCE CORPORATION
By: /s/ Xxxxx Xxxxxx
-----------------------------
Name: Xxxxx Xxxxxx
Title: President
The foregoing Agreement
is hereby confirmed and
accepted as of December 1, 1997.
Prudential Securities Incorporated
By: Prudential Securities Incorporated
By:/s/ Xxxxx Xxxxxx
---------------------------------
Name: Xxxxx Xxxxxx
Title: Vice-President
[Signature Page for the Underwriting Agreement]
15
SCHEDULE I
--------------------------------------------------------------------------------------------------------
Class Initial Principal Amount of Securities Purchase Price to Underwriter
Purchased by Underwriter disregarding accrued interest
--------------------------------------------------------------------------------------------------------
Class A-1 $20,000,000 99.75000%
--------------------------------------------------------------------------------------------------------
Class A-2 $31,000,000 99.75000%
--------------------------------------------------------------------------------------------------------
Class A-3 $29,000,000 99.75000%
--------------------------------------------------------------------------------------------------------
Class A-4 $16,192,000 99.75000%
--------------------------------------------------------------------------------------------------------
