Exhibit 1.1
EXECUTION COPY
USAA AUTO OWNER TRUST 2006-3
Asset Backed Notes
USAA FEDERAL SAVINGS BANK
(SELLER AND SERVICER)
USAA ACCEPTANCE, LLC
(DEPOSITOR)
UNDERWRITING AGREEMENT
----------------------
August 14, 0000
Xxxx xx Xxxxxxx Securities LLC
Hearst Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
X.X. Xxxxxx Securities Inc.
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
As Joint Global Coordinators
and Representatives of the
Several Underwriters named
on Schedule I hereto
Dear Sirs:
USAA Acceptance, LLC, a Delaware limited liability company (the
"Depositor"), proposes to form a Delaware statutory trust, USAA Auto Owner Trust
2006-3 (the "Issuer"), pursuant to an amended and restated trust agreement to be
dated as of August 22, 2006 (the "Trust Agreement"), between the Depositor and
Xxxxx Fargo Delaware Trust Company, as owner trustee (the "Owner Trustee"),
which will issue (i) $257,000,000 principal amount of its Class A-1 5.40470%
Asset Backed Notes (the "Class A-1 Notes"), (ii) $270,000,000 principal amount
of its Class A-2 5.470% Asset Backed Notes (the "Class A-2 Notes"), (iii)
$442,000,000 principal amount of its Class A-3 5.360% Asset Backed Notes (the
"Class A-3 Notes"), (iv) $221,653,000 principal amount of its Class A-4 5.360%
Asset Backed Notes (the "Class A-4 Notes" and, together with the Class A-1
Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class A Notes") and (v)
$36,824,513 principal amount of its Class B 5.660% Asset Backed Notes (the
"Class B Notes" and, together with the Class A Notes, the "Notes") pursuant to
an
indenture to be dated as of August 22, 2006 (the "Indenture"), between the
Issuer and JPMorgan Chase Bank, National Association, as indenture trustee (the
"Indenture Trustee"). The Issuer will also issue a certificate (the
"Certificate" and, together with the Notes, the "Securities"). The assets of the
Issuer will include, among other things, a pool of motor vehicle installment
loans made by USAA Federal Savings Bank, a federally chartered savings
association (the "Bank"), and secured by new and used cars and light duty trucks
(the "Receivables"), certain monies due or received thereunder on or after
August 1, 2006, security interests in the vehicles financed thereby, certain
accounts, and the proceeds thereof, and the proceeds from claims on certain
insurance policies. The Receivables will be transferred to the Depositor by the
Bank, as seller (in such capacity, the "Seller"), pursuant to a receivables
purchase agreement to be dated as of August 1, 2006 (the "Receivables Purchase
Agreement"), between the Seller and the Depositor, as purchaser (the
"Purchaser"), and the Depositor will transfer the Receivables to the Issuer in
exchange for the Securities, pursuant to a sale and servicing agreement to be
dated as of August 1, 2006 (the "Sale and Servicing Agreement"), among the
Depositor, the Bank, as Seller and servicer (in such capacity, the "Servicer"),
and the Issuer. The Servicer will service the Receivables pursuant to the Sale
and Servicing Agreement. Capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Sale and Servicing Agreement.
At or prior to the time when sales to purchasers of the Notes were first
made to investors by the several Underwriters named in Schedule I hereto (the
"Underwriters"), which was approximately 2:45 p.m. on August 14, 2006 (the "Time
of Sale"), the Depositor had prepared the following information (collectively,
the "Time of Sale Information"): the Preliminary Prospectus Supplement dated
August 14, 2006 to the Prospectus (as defined below) (together, along with
information referred to under the caption "Static Pool Data" therein regardless
of whether it is deemed a part of the Registration Statement or Prospectus, the
"Preliminary Prospectus"). If, subsequent to the Time of Sale and prior to the
Closing Date (as defined below), such information included an untrue statement
of material fact or omitted 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, and as a result investors in the Notes may terminate their
old "Contracts of Sale" (within the meaning of Rule 159 under the Securities Act
of 1933, as amended (the "Securities Act")) for any Notes and the Underwriters
enter into new Contracts of Sale with investors in the Notes, then "Time of Sale
Information" will refer to the information conveyed to investors at the time of
entry into the first such new Contract of Sale, in an amended Preliminary
Prospectus approved by the Depositor and the Representatives that corrects such
material misstatements or omissions (a "Corrected Prospectus") and "Time of
Sale" will refer to the time and date on which such new Contracts of Sale were
entered into.
This is to confirm the agreement concerning the purchase of the Notes from
the Depositor by the Underwriters.
1. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE DEPOSITOR AND THE
BANK. Each of the Depositor and the Bank (each, a "Representing Party" and,
collectively, the "Representing Parties") makes the representations and
warranties set forth below. To the extent that a representation or warranty
specifically relates to the Depositor, the representation or warranty solely
with respect to the Depositor is only made by the Depositor and to the extent a
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representation or warranty specifically relates to the Bank, the representation
or warranty solely with respect to the Bank is only made by the Bank.
(a) A registration statement on Form S-3 (No. 333-131356) relating
to the Notes has been filed by Depositor with the Securities and Exchange
Commission (the "Commission") and has become effective and is still
effective as of the date hereof under the Securities Act. The Depositor
proposes to file with the Commission pursuant to Rule 424(b) of the rules
and regulations of the Commission under the Securities Act (the "Rules and
Regulations") a prospectus supplement dated August 14, 2006 (together with
information referred to under the caption "Static Pool Data" therein
regardless of whether it is deemed a part of the Registration Statement or
Prospectus, the "Prospectus Supplement") to the prospectus dated August
14, 2006, relating to the Notes and the method of distribution thereof.
Copies of such registration statement, any amendment or supplement
thereto, such prospectus, the Preliminary Prospectus and the Prospectus
Supplement have been delivered to you. Such registration statement,
including exhibits thereto, and such prospectus, as amended or
supplemented to the date hereof, and as further supplemented by the
Prospectus Supplement, are hereinafter referred to as the "Registration
Statement" and the "Prospectus," respectively. The conditions to the use
of a registration statement on Form S-3 under the Securities Act have been
satisfied. The Depositor has filed the Preliminary Prospectus and it has
done so within the applicable period of time required under the Securities
Act and the Rules and Regulations.
(b) The Registration Statement, at the time it became effective, any
post-effective amendment thereto, at the time it became effective, and the
Prospectus, as of the date of the Prospectus Supplement, complied and on
the Closing Date will comply in all material respects with the applicable
requirements of the Securities Act and the Rules and Regulations and the
Trust Indenture Act of 1939, as amended (the "Trust Indenture Act"), and
the rules and regulations of the Commission thereunder. The Registration
Statement, as of the applicable effective date as to each part of the
Registration Statement pursuant to Rule 430B(f)(2) and any amendment
thereto, did not include any untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading. The Preliminary
Prospectus, as of its date and as of the Time of Sale, did not contain an
untrue statement of a material fact and did not 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. The
Prospectus, as of the date of the Prospectus Supplement and as of the
Closing Date, does not and will not contain any untrue statement of a
material fact and did not and will not 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, not misleading. The
representations and warranties in the three preceding sentences do not
apply to (i) that part of the Registration Statement which shall
constitute the Statement of Eligibility and Qualification (Form T-1) of
the Indenture Trustee under the Trust Indenture Act or (ii) that
information contained in or omitted from the Registration Statement or the
Prospectus (or any amendment or supplement thereto) in reliance upon and
in
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conformity with the Underwriters' Information (as defined herein). The
Indenture has been qualified under the Trust Indenture Act.
(c) The Time of Sale Information, at the Time of Sale, did not, and
at the Closing Date 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 the Depositor makes no
representation and warranty with respect to any statements or omissions
made in reliance upon and in conformity with the Underwriters'
Information.
(d) The documents incorporated by reference in the Prospectus, when
they were filed with the Commission, conformed in all material respects to
the requirements of the Securities Act or the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable, and the rules and
regulations thereunder; and any further documents so filed and
incorporated by reference in the Prospectus, when such documents are filed
with the Commission, will conform in all material respects to the
requirements of the Securities Act or the Exchange Act, as applicable, and
the Rules and Regulations.
(e) The Bank has been duly organized and is validly existing as a
federally chartered savings association and is a member of the Federal
Home Loan Bank System. The Bank is in good standing with the Office of
Thrift Supervision and has the power and authority (corporate and other)
to own, lease and operate its properties and to conduct its business as
such properties are presently owned, leased and operated and as such
business is presently conducted, and had at all relevant times, and now
has, the power, authority and legal right to own and sell the Receivables.
(f) The Depositor has been duly organized and is validly existing as
a limited liability company under the laws of the State of Delaware, and
all filings required at the date hereof under the Delaware Limited
Liability Company Act (6 Del. C. ss.18-101, et seq.) (the "LLC Act") with
respect to the due formation and valid existence of the Depositor as a
limited liability company have been made; and the Depositor is duly
qualified or registered as a foreign limited liability company to transact
business and is in good standing in each jurisdiction in which such
qualification or registration is required, whether by reason of ownership
of property or the conduct of business, and the failure to so qualify or
register would have a materially adverse effect on the Depositor and now
has the power, authority and legal right to acquire, own and sell the
Receivables.
(g) The representations and warranties of the Bank in Section 3.02
of the Receivables Purchase Agreement will be true and correct as of the
Closing Date.
(h) The representations and warranties of the Depositor in Section
5.1 of the Sale and Servicing Agreement will be true and correct as of the
Closing Date.
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(i) The representations and warranties of the Bank in Section 6.1 of
the Sale and Servicing Agreement will be true and correct as of the
Closing Date.
(j) Each Representing Party has the power and authority to execute
and deliver this Agreement and to carry out the terms of this Agreement
and the execution, delivery and performance by each Representing Party of
this Agreement has been duly authorized by such Representing Party.
(k) This Agreement has been duly executed and delivered by the
Representing Parties.
(l) When authenticated by the Owner Trustee in accordance with the
Trust Agreement, the Certificate will be duly issued and entitled to the
benefits and security afforded by the Trust Agreement and the Sale and
Servicing Agreement.
(m) When authenticated by the Indenture Trustee in accordance with
the Indenture and delivered and paid for pursuant to this Agreement, the
Notes will be duly issued and constitute legal, valid and binding
obligations of the Issuer enforceable against the Issuer in accordance
with their terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, or other similar laws affecting
the enforcement of creditors' rights in general or the rights of creditors
of federal savings associations and by general principles of equity,
regardless of whether such enforcement is considered in a proceeding in
equity or at law.
(n) The execution, delivery and performance of this Agreement and
the consummation by each of the Representing Parties of the transactions
contemplated hereby shall not conflict with, result in any breach of any
of the terms and provisions of or constitute (with or without notice or
lapse of time) a default under, the organizational documents of such
Representing Party, or any indenture, agreement or other instrument to
which such Representing Party is a party or by which such Representing
Party is bound, or violate any law or any order, rule or regulation
applicable to such Representing Party of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over such Representing Party or any of
its properties; and, except for the registration of the Notes under the
Securities Act, the qualification of the Indenture under the Trust
Indenture Act and such consents, approvals, authorizations, registrations
or qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution of
the Notes by the Underwriters, no permit, consent, approval of, or
declaration to or filing with, any governmental authority is required in
connection with the execution, delivery and performance of this Agreement
or the consummation of the transactions contemplated hereby.
(o) There are no proceedings or investigations pending or, to the
knowledge of each Representing Party, threatened before any court,
regulatory body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over such Representing Party or its
properties (i) asserting the invalidity of this Agreement or
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any of the Securities, (ii) seeking to prevent the issuance of any of the
Securities or the consummation of any of the transactions contemplated by
this Agreement, (iii) seeking any determination or ruling that, if
determined adversely to such Representing Party, is reasonably likely to
materially and adversely affect the performance by such Representing
Party, as applicable, of its obligations under, or the validity or
enforceability of, the Securities or this Agreement, or (iv) that may
adversely affect the federal or state income, excise, franchise or similar
tax attributes of the Securities.
(p) Each Representing Party (i) is not in violation of its
organizational documents, (ii) is not in default and no event has occurred
which, with notice or lapse of time or both, would constitute such a
default, in the due performance or observance of any term, covenant or
condition contained in any indenture, agreement, mortgage, deed of trust
or other instrument to which such Representing Party is a party or by
which such Representing Party is bound or to which any of such
Representing Party's property or assets is subject and (iii) is not in
violation in any respect of any law, order, rule or regulation applicable
to such Representing Party or any of such Representing Party's property of
any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over it
or any of its property, except, in the case of clauses (ii) and (iii), for
any defaults or violations that would not, individually or in the
aggregate, have a material adverse effect on (A) the performance by such
Representing Party's of its obligations under, or the validity or
enforceability of, the Securities, the Basic Documents or this Agreement
or (B) the condition (financial or otherwise), results of operations,
business or prospects of such Representing Party.
(q) None of the Issuer, the Depositor or the Bank is or upon
issuance of the Notes and the application of the proceeds therefrom will
be an "investment company" or under the "control" of an "investment
company" within the meaning thereof as defined in the Investment Company
Act of 1940, as amended.
(r) None of the Depositor, the Bank or anyone acting on its behalf
has taken any action that would require qualification of the Trust
Agreement under the Trust Indenture Act.
(s) As of the Time of Sale, the Depositor was not and as of the
Closing Date is not, an "ineligible issuer," as defined in Rule 405 under
the Securities Act.
2. PURCHASE BY THE UNDERWRITERS. On the basis of the representations,
warranties and agreements contained herein, and subject to the terms and
conditions set forth herein, the Depositor agrees to cause to be issued by the
Issuer and the Depositor agrees to sell to each of the Underwriters, severally
and not jointly, and each of the Underwriters, severally and not jointly, agrees
to purchase from the Depositor, the respective principal amount of Notes set
forth opposite the name of such Underwriter in Schedule 1 hereto at a purchase
price equal to (i) with respect to the Class A-1 Notes, 100.000000% of the
principal amount thereof, (ii) with respect to the Class A-2 Notes, 99.995412%
of the principal amount thereof, (iii) with respect to the Class A-3 Notes,
99.987639% of the principal amount thereof, (iv) with respect to the Class A-4
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Notes, 99.988961% of the principal amount thereof and (v) with respect to the
Class B Notes, 99.978691% of the principal amount thereof.
The Depositor shall not be obligated to deliver any of the Notes except
upon payment in full for all the Notes to be purchased as provided herein.
Delivery of and payment for the Notes shall be made at the office of
Sidley Austin LLP, New York, New York, or at such other place as shall be agreed
upon by Banc of America Securities LLC and X.X. Xxxxxx Securities Inc., as
Representatives of the Several Underwriters named herein (the
"Representatives"), and the Depositor, at 9:00 A.M., New York time, on August
22, 2006, or at such other date or time, not later than five full business days
thereafter, as shall be agreed upon by the Representatives and the Depositor
(such date and time being referred to herein as the "Closing Date"). On the
Closing Date, the Depositor shall deliver or cause to be delivered to the
Representatives for the account of each Underwriter the Notes against payment to
or upon the order of the Depositor of the purchase price in immediately
available funds. Time shall be of the essence, and delivery at the time and
place specified pursuant to this Agreement is a further condition of the
obligation of each Underwriter hereunder. Upon delivery, each class of Notes
shall be represented by one or more global certificates registered in the name
of Cede & Co., as nominee of The Depository Trust Company ("DTC"). The interest
of the beneficial owners of the Notes will be represented by book-entries on the
records of DTC and participating members thereof. Definitive certificates
representing the Notes will be available only under limited circumstances.
3. FURTHER AGREEMENTS OF THE DEPOSITOR AND THE BANK. (a) The Depositor
agrees with each of the several Underwriters:
(i) To file the Prospectus Supplement with the Commission pursuant
to and in accordance with Rule 424(b) of the Rules and Regulations within
the time period prescribed by such rule and provide evidence satisfactory
to the Representatives of such timely filing.
(ii) During any period in which a prospectus relating to the Notes
is required to be delivered under the Securities Act: to advise the
Representatives promptly of any proposal to amend the Registration
Statement or amend or supplement the Prospectus and not to effect any such
amendment or supplementation without the consent of the Representatives;
to advise the Representatives promptly of (A) the effectiveness of any
post-effective amendment to the Registration Statement, (B) any request by
the Commission for any amendment of the Registration Statement or the
Prospectus or for any additional information, (C) the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation or threatening of any proceedings
for that purpose, (D) the issuance by the Commission of any order
preventing or suspending the use of any prospectus relating to the Notes
or the initiation or threatening of any proceedings for that purpose and
(E) the receipt by the Depositor of any notification with respect to the
suspension of the qualification of the Notes for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose; and
to use its
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reasonable best efforts to prevent the issuance of any such stop order or
of any order preventing or suspending the use of any prospectus relating
to the Notes or suspending any such qualification and, if any such stop
order or order of suspension is issued, to obtain the lifting thereof at
the earliest possible time.
(iii) If, during any period in which a prospectus relating to the
Notes is required to be delivered under the Securities Act, any event
shall have occurred as a result of which the Prospectus, as then amended
or supplemented, would include an 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, when such Prospectus is
delivered to a purchaser, not misleading, or if for any other reason it
shall be necessary at such time to amend or supplement the Prospectus in
order to comply with the Securities Act, to notify the Representatives
immediately thereof, and to promptly prepare and file with the Commission,
subject to paragraph (b) of this Section 3, an amendment or a supplement
to the Prospectus such that the statements in the Prospectus, as so
amended or supplemented will not, in the light of the circumstances, when
the Prospectus is delivered to a purchaser, be misleading, or such that
the Prospectus will comply with the Securities Act.
(iv) To furnish promptly to each of the Representatives and counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed
with the Commission, including all consents and exhibits filed therewith;
and during the period described in paragraph (a)(iii) of this Section 3,
to deliver promptly without charge to the Representatives such number of
the following documents as the Representatives may from time to time
reasonably request: (A) conformed copies of the Registration Statement as
originally filed with the Commission and each amendment thereto (in each
case excluding exhibits other than this Agreement and each of the Basic
Documents) and (B) any preliminary prospectus supplement, including the
Preliminary Prospectus, the Prospectus and any amendment or supplement
thereto.
(v) During any period in which a prospectus relating to the Notes is
required to be delivered under the Securities Act, 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 Depositor or the Representatives, be required by the Securities Act
or requested by the Commission.
(vi) For so long as any of the Notes are outstanding or until such
time as the Underwriters shall cease to maintain a secondary market in the
Notes, to furnish to the Underwriters (A) copies of all materials
furnished by the Issuer to the holders of the Notes and all reports and
financial statements furnished by the Issuer to the Commission pursuant to
the Exchange Act or any rule or regulation of the Commission thereunder
and (B) from time to time, such other information concerning the Depositor
filed with any government or regulatory authority or
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national securities exchange which is otherwise publicly available
as the Representatives may reasonably request and such other
information concerning the Issuer as the Representatives may
reasonably request.
(vii) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Notes for
offering and sale under the securities laws of such jurisdictions as
the Representatives may request and to comply with such laws so as
to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the
distribution of the Notes; provided, that in connection therewith
the Depositor shall not be required to qualify to do business or to
file a general consent to service of process in any jurisdiction.
(viii) During the period from the date of the Prospectus to
and including the business day after the Closing Date, to not offer
for sale, sell, contract to sell or otherwise dispose of, directly
or indirectly, or file a registration statement for, or announce any
offering of, any securities collateralized by, or evidencing an
ownership interest in, a pool of installment loans for new and used
cars and light duty trucks without the prior written consent of the
Representatives.
(ix) For a period from the date of this Agreement until the
retirement of the Notes, to deliver to you the annual statement of
compliance and the annual independent certified public accountants'
report furnished to the Owner Trustee and the Indenture Trustee,
pursuant to the Sale and Servicing Agreement, as soon as such
statements and reports are furnished to the Owner Trustee and the
Indenture Trustee, respectively.
(x) To cause the Trust to make generally available to
Noteholders and to the Underwriters as soon as practicable an
earnings statement covering a period of at least twelve months
beginning with the first fiscal quarter of the Trust occurring after
the effective date of the Registration Statement, which shall
satisfy the provisions of Section 11(a) of the Act and Rule 158 of
the Commission promulgated thereunder.
(xi) To file with the Commission the final terms of the Notes
pursuant to Rule 433(d)(5) of the Securities Act in the form
attached hereto as Exhibit A (the "Final Term Sheet").
(b) The Depositor and the Bank agree with each of the several
Underwriters that to the extent, if any, that the ratings provided with
respect to the Notes by Xxxxx'x Investors Service, Inc. ("Moody's") and
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. ("S&P") are conditional upon the furnishing of documents
or the taking of any other actions by the Bank or the Depositor, to
furnish such documents and take any such other actions.
4. WRITTEN COMMUNICATIONS.
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(a) It is understood that, subject to the terms and conditions
hereof, the Underwriters propose to offer the Notes for sale to the public
as set forth in the Prospectus.
(b) The following terms have the specified meanings for purposes of
this Agreement:
(i) "Free Writing Prospectus" means and includes any
information relating to the Notes disseminated by the Depositor or
any Underwriter that constitutes a "free writing prospectus" within
the meaning of Rule 405 under the Securities Act.
(ii) "Issuer Information" means (1) the information contained
in any Underwriter Free Writing Prospectus which information is also
included in the Preliminary Prospectus (other than Underwriter
Information), (2) information in the Preliminary Prospectus that is
used to calculate or create any Derived Information other than any
Pre-pricing Information, (3) any computer tape in respect of the
Notes or the related receivables furnished by the Depositor to any
Underwriter and (4) information contained in the Final Term Sheet.
(iii) "Derived Information" means such written information
regarding the Notes as is disseminated by any Underwriter to a
potential investor, which information is not any of (A) Issuer
Information, (B) Pre-pricing Information, or (C) contained in the
Registration Statement, the Preliminary Prospectus, the Prospectus
Supplement, the Prospectus or any amendment or supplement to any of
them, taking into account information incorporated therein by
reference (other than information incorporated by reference from any
information regarding the Notes that is disseminated by any
Underwriter to a potential investor).
(iv) "Pre-pricing Information" means the information in a
Underwriter Free Writing Prospectus consisting of (A) the status of
the subscriptions for each class of Notes (both for the issuance as
a whole and for each Underwriter's specific retention) and (B)
expected pricing parameters of the Notes.
(c) The Depositor will not disseminate to any potential investor any
information relating to the Notes that constitutes a "written
communication" within the meaning of Rule 405 under the Securities Act,
other than the Time of Sale Information, the Prospectus and the Final Term
Sheet, unless the Depositor has obtained the prior consent of the
Representatives (which consent will not be unreasonably withheld).
(d) Neither the Depositor nor any Underwriter shall disseminate or
file with the Commission any information relating to the Notes in reliance
on Rule 167 or 426 under the Securities Act, nor shall the Depositor or
any Underwriter disseminate any Underwriter Free Writing Prospectus (as
defined below) "in a manner reasonably designed to lead to its broad
unrestricted dissemination" within the meaning of Rule 433(d) under the
Securities Act.
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(e) Each Free Writing Prospectus shall bear the following legend, or
a substantially similar legend that complies with Rule 433 under the
Securities Act:
The Depositor has filed a registration statement (including a
prospectus) with the SEC for the offering to which this
communication relates. Before you invest, you should read the
prospectus in that registration statement and other documents the
depositor has filed with the SEC for more complete information about
the depositor, the issuing trust, and this offering. You may get
these documents for free by visiting XXXXX on the SEC Web site at
xxx.xxx.xxx. Alternatively, the depositor, any underwriter or any
dealer participating in the offering will arrange to send you the
prospectus if you request it by calling toll-free 1-[_________].
(f) In the event any Representing Party becomes aware that, as of
the Time of Sale, any Time of Sale Information contains or contained any
untrue statement of material fact or omits or omitted to state a material
fact necessary in order to make the statements contained therein (when
read in conjunction with all Time of Sale Information) in light of the
circumstances under which they were made, not misleading (a "Defective
Prospectus"), such Representing Party shall promptly notify the
Representatives of such untrue statement or omission no later than one
business day after discovery and the Depositor shall, if requested by the
Representatives, prepare and deliver to the Underwriters a Corrected
Prospectus.
(g) Each Underwriter represents, warrants, covenants and agrees with
the Depositor that:
(i) Other than the Time of Sale Information and the Prospectus
(and, to the extent referenced in each of the Time of Sale
Information and the Prospectus, the Registration Statement), it has
not made, used, prepared, authorized, approved or referred to and
will not prepare, make, use, authorize, approve or refer to any
"written communication" (as defined in Rule 405 under the Securities
Act) that constitutes an offer to sell or solicitation of an offer
to buy the Notes, including but not limited to any "ABS
informational and computational materials" as defined in Item
1101(a) of Regulation AB under the Securities Act; provided,
however, that (i) each Underwriter may prepare and convey one or
more "written communications" (as defined in Rule 405 under the
Securities Act) containing no more than the following: (1)
information included in the Preliminary Prospectus with the consent
of the Depositor (except as provided in clauses (2) through (4)
below), (2) information relating to the class, size, rating, price,
CUSIPS, coupon, yield, spread, benchmark, status and/or legal
maturity date of the Notes, the weighted average life, expected
final payment date, the trade date and payment window of one or more
classes of Notes, (3) the eligibility of the Notes to be purchased
by ERISA plans and (4) a column or other entry showing the status of
the subscriptions for the Notes (both for the issuance as a whole
and for each Underwriter's retention) and/or expected pricing
parameters of the Notes (each such written communication, an
"Underwriter Free Writing Prospectus"); (ii) unless otherwise
consented to by the Depositor, no such
11
Underwriter Free Writing Prospectus shall be conveyed if, as a
result of such conveyance, the Depositor or the Issuer shall be
required to make any registration or other filing solely as a result
of such Underwriter Free Writing Prospectus pursuant to Rule 433(d)
under the Securities Act other than the filing of the final terms of
the Notes pursuant to Rule 433(d)(5) of the Securities Act in the
form of the Final Term Sheet; and (iii) each Underwriter will be
permitted to provide confirmations of sale.
(ii) In disseminating information to prospective investors, it
has complied and will continue to comply fully with the Rules and
Regulations, including but not limited to Rules 164 and 433 under
the Securities Act and the requirements thereunder for filing and
retention of Free Writing Prospectuses, including retaining any
Underwriter Free Writing Prospectuses they have used but which are
not required to be filed for the required period.
(iii) Prior to entering into any Contract of Sale, it shall
convey the Time of Sale Information to the prospective investor. The
Underwriter shall maintain sufficient records to document its
conveyance of the Time of Sale Information to the potential investor
prior to the formation of the related Contract of Sale and shall
maintain such records as required by the Rules and Regulations.
(iv) If a Defective Prospectus has been corrected with a
Corrected Prospectus, it shall (A) deliver the Corrected Prospectus
to each investor with whom it entered into a Contract of Sale and
that received the Defective Prospectus from it prior to entering
into a new Contract of Sale with such investor and (B) provide to
such investor (w) adequate disclosure of the contractual
arrangement, (x) adequate disclosure of such investor's rights under
its existing Contract of Sale, (y) adequate disclosure of the new
information in the Corrected Prospectus and (z) a meaningful ability
to elect to terminate or not terminate the existing Contract of Sale
and to elect to enter into or not enter into a new agreement to
purchase the Notes.
(v) Immediately following the use of any Underwriter Free
Writing Prospectus containing any "issuer information" as defined in
Rule 433(h)(1) and footnote 271 of the Commission's Securities
Offering Reform Release No. 83-8591 of the Securities Act it has
provided the Depositor a copy of such Underwriter Free Writing
Prospectus, unless such "issuer information" consists of the terms
of the Notes, and such information is not the final information to
be included in the Prospectus Supplement.
(h) In the event that any Underwriter shall incur any costs to any
investor in connection with the reformation of the Contract of Sale with
such investor that received a Defective Prospectus, the Representing
Parties jointly and severally agree to reimburse such Underwriter for such
costs.
(i) In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a "Relevant Member
State"), with
12
effect from and including the date on which the Prospectus Directive is
implemented in that Relevant Member State (the "Relevant Implementation
Date"), each Underwriter has not made and will not make an offer of Notes
to the public in that Relevant Member State prior to the publication of a
prospectus in relation to Notes which has been approved by the competent
authority in that Relevant Member State or, where appropriate, approved in
another Relevant Member State and notified to the competent authority in
that Relevant Member State, all in accordance with the Prospectus
Directive, except that it may, with effect from and including the Relevant
Implementation Date, make an offer of Class A Notes to the public in that
Relevant Member State at any time:
(i) to legal entities which are authorized or regulated to
operate in financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
(ii) to any legal entity which has two or more of (1) an
average of at least 250 employees during the last financial year;
(2) a total balance sheet of more than (euro)43,000,000 and (3) an
annual net turnover of more than (euro)50,000,000, as shown in its
last annual or consolidated accounts; or
(iii) in any other circumstances which do not require the
publication by the Issuer of a prospectus pursuant to Article 3 of
the Prospectus Directive.
For purposes of this Section 4(i), the expression an "offer of Class A
Notes to the public" in relation to any notes in any Relevant Member State
means the communication in any form and by any means of sufficient
information on the terms of the offer and the Class A Notes to be offered
so as to enable an investor to decide to purchase or subscribe the Class A
Notes, as the same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State, and the
expression "Prospectus Directive" means Directive 2003/71/EC and includes
any relevant implementing measure in each Relevant Member State.
(j) Each Underwriter (i) is a person whose ordinary activities
involve it in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of its business and (ii) has not
offered or sold and will not offer or sell the Class A Notes other than to
persons whose ordinary activities involve them in acquiring, holding,
managing or disposing of investments (as principal or as agent) for the
purposes of their businesses or who it is reasonable to expect will
acquire, hold, manage or dispose of investments (as principal or agent)
for the purposes of their businesses where the issue of the Class A Notes
would otherwise constitute a contravention of Section 19 of the Financial
Services and Markets Act (the "FSMA") by the issuing entity;
(k) Each Underwriter has only communicated or caused to be
communicated and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity (within the
meaning of Section 21 of the FSMA)
13
received by it in connection with the issue or sale of the Class A Notes
in circumstances in which Section 21(1) of the FSMA does not apply to the
Issuer; and
(l) Each Underwriter has complied and will comply with all
applicable provisions of the FSMA with respect to anything done by it in
relation to the Class A Notes in, from or otherwise involving the United
Kingdom.
5. CONDITIONS OF UNDERWRITERS' OBLIGATIONS. The respective obligations of
the several Underwriters hereunder are subject to the accuracy, when made and on
the Closing Date, of the representations and warranties of the Representing
Parties contained herein, to the accuracy of the statements of the Representing
Parties made in any certificates pursuant to the provisions hereof, to the
performance by the Representing Parties of their respective obligations
hereunder, and to each of the following additional terms and conditions:
(a) Prior to the Closing Date, 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; and any request of the Commission for
inclusion of additional information in the Registration Statement or the
Prospectus or otherwise shall have been complied with to the reasonable
satisfaction of the Representatives; and the Depositor shall have filed
the Prospectus Supplement and the Preliminary Prospectus and the final
terms of the Notes with the Commission pursuant to Rule 424(b) and Rule
433 of the Securities Act, as applicable, within the time period
prescribed by such rules.
(b) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Securities,
each of the Basic Documents, the Registration Statement and the
Prospectus, and all other legal matters relating to such agreements and
the transactions contemplated hereby and thereby shall be satisfactory in
all material respects to counsel for the Underwriters, and the
Representing Parties shall have furnished to such counsel all documents
and information that they may reasonably request to enable them to pass
upon such matters.
(c) The Trust Agreement shall have been duly executed and delivered
by the Depositor and the Owner Trustee and the Certificates shall have
been duly executed and delivered by the Owner Trustee on behalf of the
Issuer and duly authenticated by the Owner Trustee.
(d) The Sale and Servicing Agreement shall have been duly executed
and delivered by the Depositor, the Bank, as Seller and Servicer and the
Issuer and agreed and accepted by the Indenture Trustee and the Owner
Trustee.
(e) The Indenture shall have been duly executed and delivered by the
Issuer and the Indenture Trustee and the Notes shall have been duly
executed and delivered by the Issuer and duly authenticated by the
Indenture Trustee.
(f) The Receivables Purchase Agreement shall have been duly executed
and delivered by the Seller and the Depositor.
14
(g) The Representatives shall have received evidence satisfactory to
them and their counsel that within ten days of the Closing Date, UCC-1
financing statements required to be filed on or prior to the Closing Date
pursuant to the Basic Documents have been filed.
(h) Xxxxxxx X. Broker, Esq., Vice President and Banking Counsel of
the Bank, shall have furnished to the Representatives his written opinion,
addressed to the Underwriters and dated the Closing Date, regarding the
due organization and power and authority of the Bank, the due
authorization, execution and delivery by the Bank of the Basic Documents
to which it is a party, no conflicts or violations of its charter or
by-laws, contracts or law and other related matters, in form and substance
reasonably satisfactory to the Representatives and their counsel.
(i) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel to the
Depositor, shall have furnished to the Representatives their written
opinion, as counsel to the Depositor, addressed to the Underwriters and
dated the Closing Date, regarding (i) the due organization of the
Depositor and (ii) other general Delaware law matters with respect to the
Depositor, including, without limitation, the due authorization, execution
and delivery of the Basic Documents by the Depositor, in each case, in
form and substance reasonably satisfactory to the Representatives and
their counsel.
(j) Xxxxxxxx, Xxxxxx & Finger, P.A., special Delaware counsel to the
Issuer, shall have furnished to the Representatives their written opinion,
as counsel to the Issuer, addressed to the Underwriters and dated the
Closing Date, regarding (i) the due organization of the Issuer, (ii) the
enforceability of the Trust Agreement, (iii) other general Delaware law
matters with respect to the Issuer, including, without limitation, the due
authorization, execution and delivery of the Basic Documents by the Issuer
and the due authorization and issuance of the Certificates, (iv) the
perfection and priority of the security interest created by the Sale and
Servicing Agreement and (v) the perfection and priority of the security
interest created by the Indenture, in each case, in form and substance
reasonably satisfactory to the Representatives and their counsel.
(k) Sidley Austin LLP shall have furnished to the Representatives
their written opinion, addressed to the Underwriters and dated the Closing
Date, regarding (i) the enforceability of the Basic Documents (other than
the Trust Agreement and the Note Depository Agreement), (ii) the validity
of the security interests created thereby, (iii) the due issuance and
enforceability of the Notes, (iv) the qualification of the Indenture under
the Trust Indenture Act, (v) no violations of law, (vi) compliance with
applicable federal securities laws, (vii) exemption of the Bank, the
Depositor and the Issuer from registration as an investment company under
the Investment Company Act of 1940, as amended, (viii) the conformity in
all material respects of each of the Basic Documents to the description
thereof contained in the Registration Statement, the Prospectus and the
Time of Sale Information, (ix) the Registration Statement, the Preliminary
Prospectus and the Prospectus appear on their face to be responsive in all
material respects to the applicable Rules and Regulations and (x) negative
assurances
15
concerning the Prospectus and the Time of Sale Information, in each case
in form and substance reasonably satisfactory to the Representatives and
their counsel.
(l) Gardere Xxxxx Xxxxxx LLP, special Texas counsel to the
Depositor, shall have furnished to the Representatives their written
opinion, addressed to the Underwriters and dated the Closing Date,
regarding the perfection and priority of the security interest created by
the Receivables Purchase Agreement, in form and substance reasonably
satisfactory to the Representatives and their counsel.
(m) Sidley Austin llp shall have furnished to the Representatives
their written opinion, addressed to the Underwriters and dated the Closing
Date, with respect to certain matters relating to the transfer of the
Receivables by the Seller to the Depositor, in form and substance
reasonably satisfactory to the Representatives and their counsel.
(n) Sidley Austin llp shall have furnished to the Representatives
their written opinion, addressed to the Underwriters and dated the Closing
Date, to the effect that (i) the Issuer will not be an association (or a
publicly traded partnership) taxable as a corporation for federal income
tax purposes, (ii) the Class A Notes will be characterized as indebtedness
for federal income tax purposes and (iii) the statements set forth in the
Preliminary Prospectus and in the Prospectus under the heading "Certain
Federal Income Tax Consequences", to the extent that they are statements
of law are true and correct in all material respects, in form and
substance reasonably satisfactory to the Representatives and their
counsel.
(o) The Representatives shall have received from XxXxx Xxxxxx LLP,
counsel for the Underwriters, such opinion or opinions, dated the Closing
Date, with respect to such matters as the Representatives may require, and
the Bank and the Depositor shall have furnished to such counsel such
documents as they reasonably request for enabling them to pass upon such
matters.
(p) Xxxxxxxx, Xxxxxx & Finger, P.A., counsel to the Owner Trustee,
shall have furnished to the Representatives their written opinion, as
counsel to the Owner Trustee, addressed to the Underwriters and dated the
Closing Date, regarding the due organization of the Owner Trustee, the due
authorization, execution and delivery by the Owner Trustee of the Trust
Agreement, no conflicts or violations of organizational documents,
contracts or law and other related matters, in form and substance
reasonably satisfactory to the Representatives and their counsel.
(q) Xxxxxxx Xxxxxxxx & Xxxx LLP, counsel to the Indenture Trustee,
shall have furnished to the Representatives their written opinion, as
counsel to the Indenture Trustee, addressed to the Underwriters and dated
the Closing Date, regarding the due organization of the Indenture Trustee,
the due authorization, execution and delivery by the Indenture Trustee of
the Basic Documents to which it is a party, no conflicts or violations of
organizational documents, contracts or law and other related matters, in
form and substance reasonably satisfactory to the Representatives and
their counsel.
16
(r) The Representatives shall have received a letter dated the date
hereof (the "Procedures Letter") from a firm of independent nationally
recognized certified public accountants acceptable to the Representatives
verifying the accuracy of such financial and statistical data contained in
the Prospectus (including any static pool data included therein pursuant
to Item 1105 of Regulation AB under the Securities Act) as the
Representatives shall deem advisable. In addition, if any amendment or
supplement to the Prospectus made after the date hereof contains financial
or statistical data, the Representatives shall have received a letter
dated the Closing Date confirming the Procedures Letter and providing
additional comfort on such new data.
(s) The Representatives shall have received a certificate, dated the
Closing Date, of any of the Chairman of the Board, the President, any
Senior Vice President, any Vice President or the chief financial officer
of each of the Bank and the Depositor stating that (i) the representations
and warranties of the Bank or the Depositor, as applicable, contained in
this Agreement and the Basic Documents to which it is a party are true and
correct on and as of the Closing Date, (ii) the Bank or the Depositor, as
applicable, has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied hereunder and under such
agreements at or prior to the Closing Date, (iii) 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 best of his
or her knowledge, are contemplated by the Commission, and (iv) since
December 31, 2005, there has been no material adverse change in the
financial position or results of operations of the Bank or the Depositor,
as applicable, or the Issuer or any change, or any development including a
prospective change, in or affecting the condition (financial or
otherwise), results of operations, business or prospects of the Bank or
the Depositor, as applicable, or the Issuer except as set forth in or
contemplated by the Registration Statement and the Prospectus.
(t) The Representatives shall have received a letter from Xxxxx'x
stating that (i) the Class A-1 Notes have received a rating of "Prime-1"
and (ii) the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes
have received a rating of "Aaa".
(u) The Representatives shall have received a letter from S&P
stating that (i) the Class A-1 Notes have received a rating of "A-1+" and
(ii) the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes have
received a rating of "AAA".
(v) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (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 limited, 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 or (ii) a general
moratorium on commercial banking activities shall have been declared by
Federal or New York State authorities or (iii) there shall have been any
material disruption in commercial banking securities settlement or
clearance services in the United States or (iv) an outbreak or escalation
of hostilities or a declaration by the United States of a national
emergency or war or any other substantial national or
17
international calamity or emergency as to make it, in the reasonable
judgment of a majority in interest of the several Underwriters,
impracticable or inadvisable to proceed with the public offering or the
delivery of the Notes on the terms and in the manner contemplated in the
Prospectus.
(w) The Representatives shall have received from the Indenture
Trustee, a certificate stating that any information contained in the
Statement of Eligibility and Qualification (Form T-1) filed with the
Registration Statement, is true, accurate and complete.
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.
6. TERMINATION. The obligations of the Underwriters hereunder may be
terminated by the Representatives, in their absolute discretion, by notice given
to and received by the Depositor or the Bank prior to delivery of and payment
for the Notes if, prior to that time, any of the events described in Section
5(v) shall have occurred or any of the other conditions described in Section 5
shall not be satisfied.
7. DEFAULTING UNDERWRITERS.
(a) If any one or more of the Underwriters shall fail to purchase
and pay for any of the Notes agreed to be purchased by such Underwriter
hereunder on the Closing Date, and such failure constitutes a default in
the performance of its or their obligations under this Agreement, the
Representatives may make arrangements for the purchase of such Notes by
other persons satisfactory to the Bank, the Depositor and the
Representatives, including any of the Underwriters, but if no such
arrangements are made by the Closing Date, then each remaining
non-defaulting Underwriter shall be severally obligated to purchase the
Notes which the defaulting Underwriter or Underwriters agreed but failed
to purchase on the Closing Date in the respective proportions which the
principal amount of Notes set forth opposite the name of each remaining
non-defaulting Underwriter in Schedule 1 hereto bears to the aggregate
principal amount of Notes set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided,
however, that the remaining non-defaulting Underwriters shall not be
obligated to purchase any of the Notes on the Closing Date if the
aggregate principal amount of Notes which the defaulting Underwriter or
Underwriters agreed but failed to purchase on such date exceeds
one-eleventh of the aggregate principal amount of the Notes to be
purchased on the Closing Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase in total more than 110% of
the principal amount of the Notes which it agreed to purchase on the
Closing Date pursuant to Section 2. If the foregoing maximums are exceeded
and the remaining Underwriters or other underwriters satisfactory to the
Representatives, the Bank and the Depositor do not elect to purchase the
Notes which the defaulting Underwriter or Underwriters agreed but failed
to purchase, this Agreement shall terminate without liability on the part
of any non-defaulting
18
Underwriter, the Bank or the Depositor, except that the Bank and the
Depositor will continue to be liable for the payment of expenses to the
extent set forth in Sections 8 and 12 and except that the provisions of
Sections 9 and 10 shall not terminate and shall remain in effect. As used
in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context otherwise requires, any party not listed
in Schedule 1 hereto who, pursuant to this Section 7, purchases Notes
which a defaulting Underwriter agreed but failed to purchase.
(b) Nothing contained herein shall relieve a defaulting Underwriter
of any liability it may have for damages caused by its default. If other
Underwriters are obligated or agree to purchase the Notes of a defaulting
Underwriter, any of the Representatives, the Bank or the Depositor may
postpone the Closing Date for up to seven full business days in order to
effect any changes that in the opinion of counsel for the Bank and the
Depositor or counsel for the Underwriters may be necessary in the
Registration Statement, the Prospectus or in any other document or
arrangement, and the Depositor agrees to file promptly any amendment or
supplement to the Registration Statement or the Prospectus that effects
any such changes.
8. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If (a) notice shall have been
given pursuant to Section 6 terminating the obligations of the Underwriters
hereunder, (b) the Depositor shall fail to tender the Notes for delivery to the
Underwriters for any reason permitted under this Agreement or (c) the
Underwriters shall decline to purchase the Notes for any reason permitted under
this Agreement, the Bank shall reimburse the Underwriters for the fees and
expenses of their counsel and for such other out-of-pocket expenses as shall
have been reasonably incurred by them in connection with this Agreement and the
proposed purchase of the Notes, and upon demand the Bank shall pay the full
amount thereof to the Representatives. If this Agreement is terminated pursuant
to Section 7 by reason of the default of one or more Underwriters, the Bank
shall not be obligated to reimburse any defaulting Underwriter on account of
those expenses.
9. INDEMNIFICATION.
(a) The Representing Parties, jointly and severally, agree to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of Section 15 of the
Securities Act (collectively referred to for the purposes of this Section
9 and Section 10 as the Underwriter) against any loss, claim, damage or
liability, joint or several, to which that Underwriter may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage
or liability (or any action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Preliminary Prospectus
(including any Corrected Prospectus) or in any amendment or supplement
thereto or the Prospectus or in any amendment or supplement thereto or in
the Issuer Information or (ii) 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 case of Issuer Information, when considered
together with the Preliminary Prospectus), in light of the circumstances
under which they are made, not misleading, and shall reimburse each
Underwriter for
19
any legal or other expenses reasonably incurred by that Underwriter
directly in connection with investigating or preparing to defend or
defending against or appearing as a third party witness in connection with
any such loss, claim, damage or liability (or any action in respect
thereof) as such expenses are incurred; provided, however, that the
Representing Parties shall not be liable in any such case to the extent
that any such loss, claim, damage or liability (or any action in respect
thereof) arises out of or is based upon an untrue statement or alleged
untrue statement in or omission or alleged omission from (x) the
Registration Statement, the Preliminary Prospectus or in any amendment or
supplement thereto or the Prospectus or any such amendment or supplement
in reliance upon and in conformity with the Underwriters' Information or
(y) any Statement of Eligibility and Qualification (Form T-1) filed with
the Registration Statement.
(b) Each Underwriter, severally and not jointly, shall indemnify and
hold harmless each Representing Party, each of its directors, each officer
of the Depositor who signed the Registration Statement and each person, if
any, who controls a Representing Party within the meaning of Section 15 of
the Securities Act (collectively referred to solely for the purposes of
this Section 9 and Section 10 as the "Representing Party Indemnified
Parties"), against any loss, claim, damage or liability, joint or several,
to which the Representing Party Indemnified Parties may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage
or liability (or any action in respect thereof) arises out of or is based
upon (i) any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement, the Preliminary Prospectus
or in any amendment or supplement thereto or the Prospectus or in any
amendment or supplement thereto or in any Derived Information or (ii) the
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of
the circumstances under which they are made, not misleading, but in each
case only to the extent that the untrue statement or alleged untrue
statement or omission or alleged omission (A) in the Registration
Statement, the Preliminary Prospectus or in any amendment or supplement
thereto or the Prospectus or in any amendment or supplement thereto was
made in reliance upon and in conformity with the written information
furnished to the Bank and the Representing Parties by or on behalf of such
Underwriter specifically for use therein or (B) in the Derived Information
that does not arise out of or is not based upon an error or material
omission in the information contained in the Preliminary Prospectus or in
any computer tape in respect of the Notes or the related receivables
furnished by the Depositor to any Underwriter, and shall reimburse
Representing Party Indemnified Parties for any legal or other expenses
reasonably incurred by the Representing Party Indemnified Parties in
connection with investigating or preparing to defend or defending against
or appearing as third party witness in connection with any such loss,
claim, damage or liability (or any action in respect thereof) as such
expenses are incurred. The parties acknowledge and agree that the written
information furnished to the Representing Parties through the
Representatives by or on behalf of the Underwriters (the "Underwriters'
Information") consists (x) with respect to the Preliminary Prospectus,
solely of the first paragraph of text exclusive of the following table and
the third paragraph of text exclusive of the following table under the
caption
20
"Underwriting" in the Preliminary Prospectus and the second, third and
fourth paragraphs of text and the second sentence in the sixth paragraph
of text under the caption "Underwriting-General" in the Preliminary
Prospectus and (y) with respect to the Prospectus Supplement, solely of
the first paragraph of text including the following table and the third
paragraph of text including the following table under the caption
"Underwriting" in the Prospectus Supplement and the second, third and
fourth paragraphs of text and the second sentence in the sixth paragraph
of text under the caption "Underwriting-General" in the Prospectus
Supplement.
(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 9, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under this
Section 9 except to the extent it has been materially prejudiced (through
the forfeiture of substantive rights or defenses) by such failure; and,
provided, further, that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified
party otherwise than under this Section 9. 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 9
for any legal or other expenses subsequently incurred by the indemnified
party in connection with the defense thereof other than reasonable costs
of investigation; provided, however, an indemnified party shall have the
right to employ its own counsel in any such action, but the fees, expenses
and other charges of such counsel for the indemnified party will be at the
expense of such indemnified party unless (i) the employment of counsel by
the indemnified party has been authorized in writing by the indemnifying
party, (ii) the indemnified party has reasonably concluded (based upon
advice of counsel to the indemnified party) that there may be legal
defenses available to it or other indemnified parties that are different
from or in addition to those available to the indemnifying party, (iii) a
conflict or potential conflict exists (based upon advice of counsel to the
indemnified party) between the indemnified party and the indemnifying
party (in which case the indemnifying party will not have the right to
direct the defense of such action on behalf of the indemnified party) or
(iv) the indemnifying party has not in fact employed counsel reasonably
satisfactory to the indemnified party to assume the defense of such action
within a reasonable time after receiving notice of the commencement of the
action, in each of which cases the reasonable fees, disbursements and
other charges of counsel will be at the expense of the indemnifying party
or parties. It is understood that the indemnifying party or parties shall
not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees, disbursements and other
charges of more than one separate firm of attorneys (in addition to any
local counsel) at any one time for all
21
such indemnified party or parties. Each indemnified party, as a condition
of the indemnity agreements contained in Sections 9(a) and 9(b), shall use
all reasonable 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 shall not be unreasonably withheld, but if settled with its
written consent or if there be a final judgment of 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. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of
any pending or threatened proceeding in respect of which any indemnified
party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party unless such settlement (i) includes an
unconditional release of such indemnified party from all liability on
claims that are the subject matter of such proceedings and (ii) does not
include a statement as to or an admission of fault, culpability or a
failure to act by or on behalf of any indemnified party.
The obligations of the Representing Parties and the Underwriters in this
Section 9 and in Section 10 are in addition to any other liability which the
Representing Parties or the Underwriters, as the case may be, may otherwise
have.
10. CONTRIBUTION. If the indemnification provided for in Section 9 is
unavailable or insufficient to hold harmless an indemnified party under Section
9(a) or (b), 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 (i) in such
proportion as shall be appropriate to reflect the relative benefits received by
the Representing Parties on the one hand and the Underwriters on the other from
the offering of the Notes or (ii) if the allocation provided by clause (i) above
is not permitted by applicable law, 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 Representing Parties 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, as well as any other relevant
equitable considerations. The relative benefits received by the Representing
Parties on the one hand and the Underwriters on the other with respect to such
offering shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Notes purchased under this Agreement (before deducting
expenses) received by the Representing Parties bear to the total underwriting
discounts and commissions received by the Underwriters with respect to the Notes
purchased under this Agreement, in each case as set forth in the table on the
cover page of the Prospectus Supplement. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Representing Parties on the
one hand or the Underwriters on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission.
The Representing Parties and the Underwriters agree that it would not be
just and equitable if contributions pursuant to this Section 10 were to be
determined by pro rata allocation (even if the Underwriters were treated as one
entity for such purpose) or by any other method of
22
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 referred to above in this Section
10 shall be deemed to include, subject to the limitations on the fees and
expenses of separate counsel set forth in Section 9, for purposes of this
Section 10, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such claim or any action
in respect thereof. Notwithstanding the provisions of this Section 10, no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Notes underwritten by it and distributed
to the public were offered to the public less the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to indemnify as provided in Section 9 and contribute as provided in this Section
10 are several in proportion to their respective underwriting obligations and
not joint.
11. PERSONS ENTITLED TO BENEFIT OF AGREEMENT. This Agreement shall inure
to the benefit of and be binding upon the Underwriters, the Representing Parties
and their respective successors. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any person, firm or
corporation, other than the Underwriters, the Representing Parties and their
respective successors and the controlling persons and officers and directors
referred to in Sections 9 and 10 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision contained herein.
12. EXPENSES. The Representing Parties agree with the Underwriters to pay
(a) the costs incident to the authorization, issuance, sale, preparation and
delivery of the Notes and any taxes payable in connection therewith; (b) the
costs incident to the preparation, printing and filing under the Securities Act
of the Registration Statement and any amendments and exhibits thereto; (c) the
costs of distributing the Registration Statement as originally filed and each
amendment thereto and any post-effective amendments thereof (including, in each
case, exhibits), any preliminary prospectus supplement (including the
Preliminary Prospectus), the Prospectus and any amendment or supplement to the
Prospectus, including, without limitation, the Prospectus Supplement, all as
provided in this Agreement; (d) the costs of printing, reproducing and
distributing this Agreement and any other underwriting and selling group
documents and the Term Sheet by mail, telex or other means of communications;
(e) the fees and expenses of qualifying the Notes under the securities laws of
the several jurisdictions as provided in Section 3(a)(vii) and of preparing,
printing and distributing Blue Sky Memoranda (including related fees and
expenses of counsel to the Underwriters); (f) any fees charged by Xxxxx'x and
S&P for rating the Notes; (g) all fees and expenses of the Owner Trustee and the
Indenture Trustee and their respective counsel; (h) the amounts set forth in
Section 4(h); and (i) all other costs and expenses incident to the performance
of the obligations of the Representing Parties under this Agreement; provided,
that except as otherwise provided in this Section 12 and in Section 8, the
Underwriters shall pay their own costs and expenses, including the costs and
expenses of their counsel, any transfer taxes on the Notes which they may sell
and the expenses of advertising any offering of the Notes made by the
Underwriters.
23
13. SURVIVAL. The respective indemnities, rights of contribution,
representations, warranties and agreements of the Representing Parties and the
Underwriters contained in this Agreement or made by or on behalf on them,
respectively, pursuant to this Agreement, shall survive the delivery of and
payment for the Notes and shall remain in full force and effect, regardless of
any (i) termination or cancellation of this Agreement, (ii) any investigation
made by or on behalf of any of them or any person controlling any of them or
(iii) acceptance of and payment for the Notes.
14. NOTICES, ETC. All statements, requests, notices and agreements
hereunder shall be in writing, and:
(a) if to the Underwriters, shall be delivered or sent by mail or
facsimile transmission and confirmed to c/o Banc of America Securities
LLC, Hearst Tower, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx,
Attention: Xxxx Xxxxx, Managing Director; and X.X. Xxxxxx Securities Inc.,
000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxx
Xxx, Managing Director;
(b) if to the Depositor, shall be delivered or sent by mail or
facsimile transmission and confirmed to the address of the Depositor set
forth in the Registration Statement, Attention: General Counsel; and
(c) if to the Bank, shall be delivered or sent by mail or facsimile
transmission and confirmed to the address of the Bank set forth in the
Registration Statement, Attention: General Counsel.
Any such statements, requests, notices or agreements shall take effect at the
time of receipt thereof. The Bank and the Depositor shall be entitled to act and
rely upon any request, consent, notice or agreement given or made on behalf of
the Underwriters by the Representatives.
15. DEFINITIONS OF CERTAIN TERMS. For purposes of this Agreement,
"business day" means any day on which the New York Stock Exchange, Inc. is open
for trading.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PROVISIONS (OTHER THAN SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW), AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
17. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
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.
19. No Fiduciary Duty. Each of the Depositor and the Bank acknowledges and
agrees that each of the Underwriters is acting solely in the capacity of an
arm's length contractual
24
counterparty to the Depositor and the Bank with respect to the offering of Notes
contemplated hereby (including in connection with determining the terms of the
offering) and not as a financial advisor or a fiduciary to, or an agent of, the
Depositor, the Bank or any other person. In addition, neither the
Representatives nor any other Underwriter is advising the Depositor, the Bank or
any other person as to any legal, tax, investment, accounting or regulatory
matters in any jurisdiction. Each of the Depositor and the Bank shall consult
with its own advisors concerning such matters, and the Underwriters shall have
no responsibility or liability to either the Depositor or the Bank with respect
thereto. Any review by the Underwriters of the Depositor, the Bank, the
transactions contemplated hereby or other matters relating to such transactions
will be performed solely for the benefit of the Underwriters and shall not be on
behalf of either the Depositor or the Bank.
25
If the foregoing is in accordance with your understanding of the agreement
between the Bank, the Depositor and the several Underwriters, kindly indicate
your acceptance in the space provided for that purpose below.
Very truly yours,
USAA ACCEPTANCE, LLC
By: /s/ Xxxxx X. XxXxxxxxx
------------------------
Name: Xxxxx X. XxXxxxxxx
Title: Vice President
USAA FEDERAL SAVINGS BANK
By: /s/ Xxxxxxx X. Broker
-------------------------
Name: Xxxxxxx X. Broker
Title: Vice President
Accepted:
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Authorized Signatory
Accepted:
X.X. XXXXXX SECURITIES INC.
By: /s/ Xxxx Xxx
-----------------------
Authorized Signatory
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
SCHEDULE 1
PRINCIPAL PRINCIPAL Principal Principal
AMOUNT OF AMOUNT OF Amount of Amount of Principal
CLASS A-1 CLASS A-2 Class A-3 Class A-4 Amount of
Underwriter NOTES NOTES Notes Notes Class B Notes
----------- ---------------- ------------ ------------ ------------ --------------
Banc of America Securities LLC.................. $77,100,000 $81,000,000 $132,600,000 $66,495,900 $18,412,513
X.X. Xxxxxx Securities Inc...................... $77,100,000 $81,000,000 $132,600,000 $66,495,900 $18,412,000
Barclays Capital Inc............................ $25,700,000 $27,000,000 $44,200,000 $22,165,300 $0
Deutsche Bank Securities Inc.................... $25,700,000 $27,000,000 $44,200,000 $22,165,300 $0
Xxxxxx Brothers Inc............................. $25,700,000 $27,000,000 $44,200,000 $22,165,300 $0
Wachovia Capital Markets, LLC................... $25,700,000 $27,000,000 $44,200,000 $22,165,300 $0
---------------------------------------------------------------------------------
Total.......................................... $257,000,000 $270,000,000 $442,000,000 $221,653,000 $36,824,513
---------------------------------------------------------------------------------
EXHIBIT A
Filed pursuant to Rule 433(d)
Registration Statement No. 333- 131356-02
FINAL TERM SHEET, dated August 14, 2006
$1,227,477,513
USAA AUTO OWNER TRUST 2006-3
Issuing Entity
USAA Acceptance, LLC
Depositor
[GRAPHIC OMITTED]
USAA FEDERAL SAVINGS BANK
Sponsor, Seller and Servicer
The issuing entity will own motor vehicle loans originated by USAA Federal
Savings Bank and will issue the following classes of USAA Auto Owner Trust
2006-3 Asset Backed Notes:
Class A-1 Class A-2 Class A-3 Class A-4 Class B
Notes(3) Notes(3) Notes(3) Notes(3) Notes(4)
------------------ ------------------- ------------------ ------------------ -------------------
Principal
Amount......... $257,000,000 $270,000,000 $442,000,000 $221,653,000 $36,824,513
Per Annum
Interest
Rate........... 5.4047% 5.47% 5.36% 5.36% 5.66%
Final
Scheduled
Payment
Date........... Aug. 15, 2007 Apr. 15, 2009 Feb. 15, 2011 Jun. 15, 2012 Mar. 15, 2013
Initial Public
Offering
Price (1)...... 100.000000% 99.995412% 99.987639% 99.988961% 99.978691%
Ratings
(Xxxxx'x/S&P) . Prime-1/A-1+ Aaa/AAA Aaa/AAA Aaa/AAA BBB
Payment Date...... Monthly, beginning Monthly, beginning Monthly, beginning Monthly, beginning Monthly, beginning
September 15, 2006 September 15, 2006 September 15, 2006 September 15, 2006 September 15, 2006
(subject to the (subject to the (subject to the (subject to the (subject to the
business day business day business day business day business day
convention) convention) convention) convention) convention)
Weighted Average
Life(2) 0.31 0.95 2.00 3.31 3.56
CUSIP............. 903279 AA 5 903279 AB 3 903279 AC 1 903279 AD 9 903279 AE 7
(1) Plus accrued interest from August 22, 2006.
(2) Pricing speed: 1.6% ABS (with a 10% clean-up call)
(3) The Class A Notes are generally eligible for purchase by or on behalf of
employee benefit plans and other similar retirement plans and arrangements
that are subject to ERISA or to Section 4975 of the Code.
(4) The Class B Notes may not be acquired by, on behalf of or with assets of
an employee benefit plan or individual retirement account.
retirement account.
Trade Date: August 14, 2006
Settlement Date: August 22, 2006
Joint Global Coordinators of the Class A Notes
Banc of America Securities LLC JPMorgan
Co-Managers of the Class A Notes
Barclays Capital
Deutsche Bank Securities
Xxxxxx Brothers
Wachovia
Securities
Joint Global Coordinators of the Class B Notes
Banc of America Securities LLC JPMorgan
The Depositor has filed a registration statement (including a prospectus)
with the SEC for the offering to which this communication relates. Before you
invest, you should read the prospectus in that registration statement and other
documents the Depositor has filed with the SEC for more complete information
about the Depositor, the issuing entity, and this offering. You may get these
documents for free by visiting XXXXX on the SEC Web site at xxx.xxx.xxx.
Alternatively, the Depositor, any underwriter or any dealer participating in the
offering will arrange to send you the prospectus if you request it by calling
toll-free 1-800-294-1322.
This free writing prospectus does not contain all information that is
required to be included in the base prospectus and the prospectus supplement.
