Exhibit 1.1
-----------
EXECUTION COPY
USAA AUTO OWNER TRUST 2006-4
Asset Backed Notes
USAA FEDERAL SAVINGS BANK
(SELLER AND SERVICER)
USAA ACCEPTANCE, LLC
(DEPOSITOR)
UNDERWRITING AGREEMENT
November 14, 2006
Barclays Capital Inc.
000 Xxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Deutsche Bank Securities Inc.
00 Xxxx Xxxxxx
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 2006-4 (the "Issuer"), pursuant to an amended and restated trust
agreement to be dated as of November 21, 2006 (the "Trust Agreement"), between
the Depositor and Xxxxx Fargo Delaware Trust Company, as owner trustee (the
"Owner Trustee"), which will issue (i) $433,000,000 principal amount of its
Class A-1 5.34% Asset Backed Notes (the "Class A-1 Notes"), (ii) $474,000,000
principal amount of its Class A-2 5.16% Asset Backed Notes (the "Class A-2
Notes"), (iii) $452,000,000 principal amount of its Class A-3 5.01% Asset
Backed Notes (the "Class A-3 Notes"), (iv) $262,486,000 principal amount of
its Class A-4 4.98% 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) $45,852,019 principal amount of its Class B 5.26%
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 November 21, 2006 (the
"Indenture"), between the Issuer and The
Bank of New York, 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 November 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
November 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 November 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 3:10 p.m. on November 14, 2006 (the
"Time of Sale"), the Depositor had prepared the following information
(collectively, the "Time of Sale Information"): the Preliminary Prospectus
Supplement dated November 13, 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.
2
(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 November 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 November 13, 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.
3
(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.
4
(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
5
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, 99.900000%
of the principal amount thereof, (ii) with respect to the Class A-2 Notes,
99.851590% of the principal amount thereof, (iii) with respect to the Class
A-3 Notes, 99.801008% of the principal amount thereof, (iv) with respect to
the Class A-4 Notes, 99.729691% of the principal amount thereof and (v) with
respect to the Class B Notes, 99.693735% of the principal amount thereof.
6
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 Barclays Capital Inc. and Deutsche Bank Securities Inc., as
Representatives of the Several Underwriters named herein (the
"Representatives"), and the Depositor, at 9:00 A.M., New York time, on
November 21, 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 suspending any such
qualification and, if any such stop order or order of
7
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 national securities
exchange which is otherwise publicly available as the
8
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.
9
(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, other than any Pre-pricing Information, that is used
to calculate or create any Derived 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.
10
(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 2000 (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+",
(ii) the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes
have received a rating of "AAA" and (iii) the Class B Notes have
received a rating of "BBB".
(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
00
Xxxxxx Xxxxxx 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 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
18
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 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
19
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 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 the Prospectus Supplement, solely of
the first paragraph of text including the following
20
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
21
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 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
22
(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 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 Barclays Capital Inc., 000
Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Syndicate
Desk; and Deutsche Bank Securities Inc., 00 Xxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000, Attention: Xxxxx Xxxxxxx;
(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:
BARCLAYS CAPITAL INC.
By: /s/ Xxx Xxx
--------------------
Authorized Signatory
Accepted:
DEUTSCHE BANK SECURITIES INC.
By:/s/ Xxxx Xxxxxxxxxxx
----------------------
Authorized Signatory
DEUTSCHE BANK SECURITIES INC.
By: /s/ Xxx X. Xxxxxxx
------------------------
Authorized Signatory
Acting on behalf of themselves and as
the Representatives of the several
Underwriters
SCHEDULE 1
Principal Principal Principal Principal Principal
Amount of Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4 Class B
Underwriter Notes Notes Notes Notes Notes
----------- ------------ ------------ ------------ ----------- ------------
Barclays Capital Inc............. $129,900,000 $142,200,000 $158,200,000 $78,745,800 $22,926,010
Deutsche Bank Securities Inc..... 129,900,000 142,200,000 158,200,000 78,745,800 22,926,009
BNP Paribas Securities Corp...... 43,300,000 47,400,000 45,200,000 26,248,600 0
Citigroup Global Markets Inc..... 43,300,000 47,400,000 45,200,000 26,248,600 0
Xxxxxxx Lynch, Pierce, Xxxxxx & 43,300,000
Xxxxx Incorporated............... 43,300,000 47,400,000 0 26,248,600 0
Wachovia Capital Markets, LLC.... 43,300,000 47,400,000 45,200,000 26,248,600 0
--------------------------------------------------------------------
Total........................... $433,000,000 $474,000,000 $452,000,000 $262,486,000 $45,852,019
--------------------------------------------------------------------
EXHIBIT A
Filed pursuant to Rule 433(d)
Registration Statement No. 333- 131356-03
FINAL TERM SHEET, dated November 14, 2006
$1,667,338,019
USAA AUTO OWNER TRUST 2006-4
Issuing Entity
USAA Acceptance, LLC
Depositor
[GRAPHIC OMITTED][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
2006-4 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......... $433,000,000 $474,000,000 $452,000,000 $262,486,000 $45,852,019
Per Annum
Interest
Rate........... 5.34% 5.16% 5.01% 4.98% 5.26%
Final
Scheduled
Payment
Date........... Dec. 13, 2007 Nov. 16, 2009 Jun. 15, 2011 Oct. 15, 2012 Jun. 17, 2013
Initial
Public
Offering
Price (1)...... 100.000000% 99.991590% 99.981008% 99.969691% 99.993735%
Ratings
(Xxxxx'x/S&P).. Prime-1/A-1+ Aaa/AAA Aaa/AAA Aaa/AAA NA/BBB
Payment Date..... Monthly, Monthly, Monthly, Monthly, Monthly,
beginning beginning beginning beginning beginning
December December 15, December December December
15, 2006 2006 15, 2006 15, 2006 15, 2006
(subject to (subject to (subject to (subject to (subject to
the the business the the the
business day business business business
day convention) day day day
convention) convention) convention) convention)
Weighted
Average
Life(2) 0.33 1.10 2.20 3.37 3.57
CUSIP....... 90327L AA 8 90327L AB 6 90327L AC 4 90327L AD 2 90327L AE 0
(1) Plus accrued interest from November 21, 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.
November 14, 2006
Trade Date:
Settlement Date: November 21, 2006
Joint Global Coordinators of the Class A Notes
Barclays Capital Deutsche Bank Securities
Co-Managers of the Class A Notes
BNP Paribas
Citigroup
Xxxxxxx Xxxxx & Co.
Wachovia
Securities
Joint Global Coordinators of the Class B Notes
Barclays Capital 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 0-000-000-0000.
This free writing prospectus does not contain all information that is
required to be included in the base prospectus and the prospectus supplement.
