EXECUTION COPY
ADVANTA AUTO FINANCE CORPORATION
Automobile Receivables Asset Backed Notes
Series 1998-1
41,000,000 5.90% Class A-1 Asset Backed Notes
16,602,000 6.09% Class A-2 Asset Backed Notes
UNDERWRITING AGREEMENT
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Advanta Auto Receivables Corp. I, 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 June 1, 1998, between Advanta Automobile
Receivables Trust 1998-1 (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 June 1, 1998, by and
among the Company 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 June 1, 1998 among Receivables I, Advanta Auto
Finance corportation ("Advanta Auto"), 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
make the statements therein, in the light of the circumstance under
which they
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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 dated March 24, 1997 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
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to Rule 415 need be included in 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 June 29, 1998 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
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(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
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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 Advanta Auto 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
Company 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 Company are owned by Advanta Auto
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 Trust 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
Indenture and
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delivered to and paid for by the Underwriter pursuant to
this Agreement will constitute legal, valid and binding
obligations of the Trust 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 Advanta Auto, 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 or Advanta
Auto 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 or will be 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;
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(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 is a party or is
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;
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(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.
(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 Final 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 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.
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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, 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 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 or the Insurer through
the Underwriter specifically for inclusion therein; and provided,
further, that as toany Preliminary Final Prospectus this
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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
Final 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 Final 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 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
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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 Final 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 Automobile
Receivables which comprise part of the assets of the Trust.
The terms "Collateral term sheet" and "Structural term sheet"
shall have the respective meanings assigned to them in the February 13, 1995
letter (the "PSA Letter") of 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
12
Letters") of Xxxxx & 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 (f), 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, 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
13
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 provisions 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 Seven World Trade
Center, New York, New York 10048; 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.
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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 RECEIVABLES CORP. I
By: /s/ Xxxx Xxxxxxxxx
------------------------------
Name: Xxxx Xxxxxxxxx
Title: Vice President
The foregoing Agreement
is hereby confirmed and
accepted as of June 25, 1998:
SALOMON BROTHERS INC
By: /s/ Xxxx X. XxXxxxxxxx, XX
---------------------------
Name: Xxxx X. XxXxxxxxxx, XX
Title: Associate
[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 $41,000,000 99.5568973%
-------------------------------------------------------------------------------
Class A-2 $16,602,000 99.5560173%
-------------------------------------------------------------------------------
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