Exhibit 1.1
EXECUTION COPY
USAA AUTO OWNER TRUST 2006-2
Asset Backed Notes
USAA FEDERAL SAVINGS BANK
(SELLER AND SERVICER)
USAA ACCEPTANCE, LLC
(DEPOSITOR)
UNDERWRITING AGREEMENT
----------------------
May 15, 2006
Deutsche Bank Securities Inc.,
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Wachovia Capital Markets, LLC
Xxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 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 2006-2 (the "Issuer"), pursuant to an amended and restated trust
agreement to be dated as of May 24, 2006 (the "Trust Agreement"), between the
Depositor and Xxxxx Fargo Delaware Trust Company, as owner trustee (the "Owner
Trustee"), which will issue (i) $237,000,000 principal amount of its Class A-1
5.15898% Asset Backed Notes (the "Class A-1 Notes"), (ii) $283,000,000
principal amount of its Class A-2 5.31000% Asset Backed Notes (the "Class A-2
Notes"), (iii) $338,000,000 principal amount of its Class A-3 5.32000% Asset
Backed Notes (the "Class A-3 Notes"), (iv) $233,076,000 principal amount of
its Class A-4 5.37000% 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) $36,651,706 principal amount of its Class B 5.62000%
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 May 24, 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 May 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 May 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 May 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 May 15, 2006 (the
"Time of Sale"), the Depositor had prepared the following information
(collectively, the "Time of Sale Information"): the Preliminary Prospectus
Supplement dated May 15, 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 representation or warranty specifically relates to the Bank, the
representation or warranty solely with respect to the Bank is only made by the
Bank.
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(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 May 15, 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 May
15, 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 conformity with the Underwriters' Information
(as defined herein). The Indenture has been qualified under the
Trust Indenture Act.
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(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.
(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.
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(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 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
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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, 99.880000%
of the principal amount thereof, (ii) with respect to the Class A-2 Notes,
99.826492% of the principal amount thereof, (iii) with respect to the Class
A-3 Notes, 99.788935% of the principal amount thereof, (iv) with respect to
the Class A-4 Notes, 99.738325% of the principal amount thereof and (v) with
respect to the Class B Notes, 99.694612% of the principal amount thereof.
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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 Deutsche Bank Securities Inc. and Wachovia Capital Markets,
LLC, as Representatives of the Several Underwriters named herein (the
"Representatives"), and the Depositor, at 9:00 A.M., New York time, on May 24,
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 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
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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 4, 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 4, 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 national securities exchange which is
otherwise publicly available as the
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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 Preliminary Prospectus and the
Prospectus, 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 Underwriter Free Writing Prospectus
shall be conveyed if, as a result of such conveyance, the
11
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 effect from and including the date on
which the Prospectus Directive is implemented
12
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 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) it 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) 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
13
(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.
(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
14
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 concerning the Prospectus and the Time of Sale
Information, in each case in form and substance reasonably
satisfactory to the Representatives and their counsel.
15
(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.
(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
16
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
Moody's 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
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
17
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 6(v) shall have occurred or any of the other conditions described in
Section 6 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 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 9
18
and 13 and except that the provisions of Sections 10 and 11 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 8, 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 7 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
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 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
19
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
"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
20
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 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
21
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 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
22
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.
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,
23
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 Deutsche Bank
Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxxxx x'Xxxxxx, Managing Director; and Wachovia Capital
Markets, LLC, Xxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000,
Attention: Xxxx Xxxxxx, 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 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
24
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:
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxxxxx X. Xxxxxxxx
-------------------------
Authorized Signatory
Accepted:
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxxx Xxxxxxxxxxx
-------------------------
Authorized Signatory
Accepted:
WACHOVIA CAPITAL MARKETS, LLC
By: /s/ Xxxxxx X. Xxxxx
-------------------------
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
----------- --------- --------- --------- --------- -------------
Deutsche Bank Securities Inc.................... $71,100,000 $84,900,000 $101,400,000 $69,922,800 $36,651,706
Wachovia Capital Markets, LLC................... $71,100,000 $84,900,000 $101,400,000 $69,922,800 N/A
Banc of America Securities LLC.................. $23,700,000 $28,300,000 $33,800,000 $23,307,600 N/A
Barclays Capital Inc............................ $23,700,000 $28,300,000 $33,800,000 $23,307,600 N/A
BNP Paribas Securities Corp..................... $23,700,000 $28,300,000 $33,800,000 $23,307,600 N/A
X.X. Xxxxxx Securities Inc...................... $23,700,000 $28,300,000 $33,800,000 $23,307,600 N/A
---------------------------------------------------------------------------------
Total.......................................... $237,000,000 $283,000,000 $338,000,000 $233,076,000 $36,651,706
---------------------------------------------------------------------------------
EXHIBIT A
Filed pursuant to Rule 433(d)
Registration Statement No. 333- 131356
FINAL TERM SHEET, dated May 15, 2006
$1,127,727,706
USAA AUTO OWNER TRUST 2006-2
Issuing Entity
USAA Acceptance, LLC
Depositor
[GRAPHIC OMITTED] USAA
FEDERAL
SAVINGS
[GRAPHIC OMITTED](R) BANK
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
2006-2 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......... $237,000,000 $283,000,000 $338,000,000 $233,076,000 $36,651,706
Per Annum
Interest
Rate........... 5.15898% 5.310% 5.320% 5.370% 5.620%
Final
Scheduled
Payment
Date........... June 15, 2007 Mar. 16, 2009 Sept. 15, 2010 Feb. 15, 2012 Jan. 15, 2013
Initial Public
Offering
Price (1)...... 100.000000% 99.996492% 99.998935% 99.978325% 99.994612%
Ratings
(Xxxxx'x/S&P).. Prime-1/A-1+ Aaa/AAA Aaa/AAA Aaa/AAA BBB
Payment Date...... Monthly, Monthly, Monthly, Monthly, Monthly,
beginning beginning beginning beginning beginning
June 15, 2006 June 15, 2006 June 15, 2006 June 15, 2006 June 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) day convention) convention) convention) convention)
Weighted Average
Life(2) 0.31 1.00 2.00 3.23 3.56
CUSIP.............
(1) Plus accrued interest from May 24, 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. Trade Date: May 15,
2006 Settlement Date: May 24, 2006
Joint Global Coordinators of the Class A Notes
Deutsche Bank Securities Wachovia Securities
Co-Managers of the Class A Notes
Banc of America Securities LLC
Barclays Capital
BNP Paribas
JPMorgan
Global Coordinator of the Class B Notes
Deutsche Bank Securities
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 1-800-503-4611.
This free writing prospectus does not contain all information that is
required to be included in the base prospectus and the prospectus supplement.
