USAA Auto Loan Grantor Trust 1997-1
__% Automobile Loan Pass-Through Certificates, Class A
__% Automobile Loan Pass-Through Certificates, Class B
USAA FEDERAL SAVINGS BANK
Seller and Servicer
UNDERWRITING AGREEMENT
_______ __, 1997
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx
Incorporated as Representative of the
Underwriters set forth herein
World Financial Center
North Tower, 15th Floor
New York, New York l0281-1315
Ladies and Gentlemen:
1. Introductory. USAA Federal Savings Bank (the "Bank") proposes
to cause USAA Auto Loan Grantor Trust 1997-1 (the "Trust") to sell to Xxxxxxx
Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated, [ ] and [ ] (individually, an
"Underwriter" and collectively, the "Underwriters") __% Automobile Loan
Pass-Through Certificates, Class A (the "Class A Certificates") and the __%
Automobile Loan Pass-Through Certificates, Class B (the "Class B Certificates"
and, together with the Class A Certificates, the "Certificates"). The
Certificates will be issued pursuant to a Pooling and Servicing Agreement
between the Bank, as Seller and Servicer, and The Chase Manhattan Bank, as
Trustee (the "Trustee"), dated as of _______ __, 1997 (the "Pooling and
Servicing Agreement"). Each Certificate will represent a fractional undivided
interest in the Trust. The assets of the Trust will include, among other things,
a pool of simple interest motor vehicle installment loans (the "Receivables")
secured by new and used automobiles and light-duty trucks (the "Financed
Vehicles") and certain monies due or to become due thereunder on or after the
Cutoff Date (as hereinafter defined), such Receivables to be sold to the Trust
and serviced
by the Bank. The Class A Certificates will be issued in an aggregate principal
amount of $[ ] and the Class B Certificates will be issued in an aggregate
principal amount of $[ ], which, together with the aggregate principal amount of
the Class A Certificates issued, is equal to the Original Pool Balance of the
Receivables as of the opening of business on _______ __, 1997 (the "Cutoff
Date"). Capitalized terms used herein and not otherwise herein defined shall
have the meanings ascribed to such terms in the Pooling and Servicing Agreement.
The Bank hereby agrees with the Underwriters, as follows:
2. Representations and Warranties of the Bank. The
Bank represents and warrants to, and agrees with the Underwriters that:
(i) A registration statement on Form S-3
(No. 333- ), including a prospectus and such amendments thereto
as may have been required on the date hereof, relating to the
Certificates, has been filed with the Securities and Exchange Commission
(the "Commission"). The conditions to the use of a registration
statement on Form S-3 under the Securities Act of 1933, as amended
(the "Act"), as set forth in the General Instructions to Form S-3, have
been, or will prior to the effective date of the Registration Statement
be, satisfied in all material respects with respect to the Bank and the
Registration Statement.
(ii) The Bank will next file with the Commission
either, (A) prior to the effectiveness of such registration statement, a
further amendment thereto (including the form of final prospectus) or
(B) after effectiveness of such registration statement, a final
prospectus in accordance with Rules 430A and 424(b) (each, as
hereinafter defined). In the case of clause (B), the Bank has included
in such registration statement, as amended at the Effective Date (as
hereinafter defined), all information (other than Rule 430A Information
(as hereinafter defined)) required by the Act and the rules and
regulations thereunder (the "Rules and Regulations") to be included in
the prospectus with respect to the Certificates and the offering there-
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of. As filed, such amendment and form of final prospectus, or such final
prospectus, shall include all Rule 430A Information and, except to the
extent Underwriter shall agree in writing to a modification, shall be in
all substantive respects in the form furnished to the Underwriters prior
to the Execution Time (as hereinafter defined) or, to the extent not
completed at the Execution Time, shall contain only such specific
additional information and other changes (beyond that contained in the
latest Preliminary Prospectus (as hereinafter defined) which has
previously been furnished to the Underwriters) as the Bank has advised
the Underwriters, prior to the Execution Time, will be included or made
therein.
The terms which follow, when used in this Agreement, shall have the
meanings indicated. The term "Effective Date" shall mean each date that
the Registration Statement and any post-effective amendment or
amendments thereto became or become effective under the Act. "Execution
Time" shall mean the date and time that this Agreement is executed and
delivered by the parties hereto. "Preliminary Prospectus" shall mean any
preliminary prospectus referred to in the preceding paragraph and any
preliminary prospectus included in the Registration Statement which, as
of the Effective Date, omits Rule 430A Information. "Prospectus" shall
mean the prospectus relating to the Certificates that is first filed
with the Commission pursuant to Rule 424(b) and any prospectus
subsequently filed pursuant to Rule 424 or, if no filing pursuant to
Rule 424(b) is required, shall mean the form of final prospectus
included in the Registration Statement at the Effective Date.
"Registration Statement" shall mean the registration statement referred
to in the preceding paragraph and any registration statement required to
be filed under the Act or the Rules and Regulations, including
incorporated documents, exhibits and financial statements, in the form
in which it has, or shall, become effective and, in the event that any
post effective amendment thereto becomes effective prior to the Closing
Date (as hereinafter defined), shall also mean such registration
statement as so amended. Such term shall include Rule 430A Information
deemed to be included therein at the Effective Date as
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provided by Rule 430A. "Rule 424" and "Rule 430A" refer to such rules
and regulations under the Act. "Rule 430A Information" means information
with respect to the Certificates and the offering thereof permitted to
be omitted from the Registration Statement when it becomes effective
pursuant to Rule 430A.
(iii) On the Effective Date, the Registration
Statement did, or will, comply in all material respects with the
applicable requirements of the Act and the Rules and Regulations; on the
Effective Date and when the Prospectus is first filed (if required) in
accordance with Rule 424(b) and on the Closing Date, the Prospectus (and
any supplements thereto) will comply in all material respects with the
applicable requirements of the Act and the Rules and Regulations; on the
Effective Date, the Registration Statement did not, or will not, contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; and, on the Effective Date, the
Prospectus, if not filed pursuant to Rule 424(b), did not, or will not,
and on the date of any filing pursuant to Rule 424(b) and on the Closing
Date, the Prospectus (together with any supplement thereto) will not,
include any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Bank makes no representations or warranties
as to the information contained in, or omitted from, the Registration
Statement or the Prospectus (or any supplements thereto) in reliance
upon, and in conformity with, information furnished in writing to the
Bank on the Underwriters' behalf specifically for use in connection with
the preparation of the Registration Statement or the Prospectus (or any
supplements thereto).
(iv) As of the Closing Date, the representations
and warranties of the Bank, as Seller and Servicer, in the Pooling and
Servicing Agreement will be true and correct, and each Receivable
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will satisfy the conditions set forth in Section 12.1(b) thereof.
(v) No consent, approval, authorization or order
of, or filing with, any court or governmental agency or body is required
to be obtained or made by the Bank for the consummation of the
transactions contemplated by this Agreement, except such as have been
obtained and made under the Act, such as may be required under state
securities laws and the filing of any financing statements required to
perfect the Trust's interest in the Receivables.
(vi) The Bank is not in violation of its By-Laws or
in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any agreement or
instrument to which it is a party or by which it or its properties are
bound which would have a material adverse effect on the transactions
contemplated herein or in the Pooling and Servicing Agreement. The
execution, delivery and performance of this Agreement and the Pooling
and Servicing Agreement, and the issuance and sale of the Certificates
and compliance with the terms and provisions thereof will not result in
a breach or violation of any of the terms and provisions of, or
constitute a default under, any statute, rule, regulation or order of
any governmental agency or body or any court having jurisdiction over
the Bank or any of its properties or any agreement or instrument to
which the Bank is a party or by which the Bank is bound or to which any
of the properties of the Bank is subject, or By-Laws of the Bank and the
Bank has full power and authority to authorize, cause the Trust to
issue, and sell the Certificates as contemplated by this Agreement, to
enter into this Agreement and the Pooling and Servicing Agreement and to
consummate the transactions contemplated herein and therein.
(vii) This Agreement has been duly authorized,
executed and delivered by the Bank.
3. Purchase, Sale, Payment and Delivery of Certifi- xxxxx. On the
basis of the representations, warranties and agreements herein contained, but
subject to the terms and conditions herein set forth, the Bank agrees to sell to
the
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Underwriters, and the Underwriters agree severally, and not jointly, to purchase
from the Bank the number and type of Class A Certificates and Class B
Certificates set forth in Schedule A opposite the name of each such Underwriter.
The Class A Certificates are to be purchased at a purchase price of ______% of
the aggregate principal amount thereof plus accrued interest, if any, from
_______ __, 1997 and the Class B Certificates ar to be purchased at a purchase
price of ___% of the aggregate principal amount thereof plus accrued interest,
if any, from _______ __, 1997.
The Bank will deliver the Certificates to the Underwriters
against payment of the purchase price in immediately available funds drawn to
the order of the Bank at the offices of Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
in New York, New York 10022 at 10:00 a.m., New York City time on _______ __,
1997 or at such other time not later than seven full business days thereafter as
the Underwriters and the Bank determine, such time being herein referred to as
the "Closing Date". The Certificates so to be delivered shall be represented by
definitive certificates registered in the name of Cede & Co., as nominee for The
Depository Trust Company and definitive certificate(s) registered in the name(s)
provided by the Underwriters, each in such numbers as the Underwriters shall
request. The Bank shall make such definitive certificates representing the
Certificates available for inspection by the Underwriters at the office at which
the Certificates are to be delivered no later than _______ __, New York City
time, on the business day prior to the Closing Date.
4. Offering by the Underwriters. It is understood that, after the
Registration Statement becomes effective, the Underwriters propose to offer the
Certificates for sale to the public (which may include selected brokers and
dealers) as set forth in the Prospectus.
5. Certain Agreements of the Bank. The Bank agrees with the
Underwriters that:
(i) The Bank will use its best efforts to cause
the Registration Statement, and any amendment thereto, if not effective
at the Execution Time, to become effective. If the Registration
Statement has become or becomes effective pursuant to Rule 430A, or
filing of the Prospectus is otherwise required under Rule 424(b), the
Bank will file the prospectus, properly completed, pursuant to Rule
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424(b) within the time period prescribed and will provide evidence
satisfactory to the Underwriters of such timely filing. The Bank will
advise the Underwriters promptly of any proposal to amend or supplement
the Registration Statement or the Prospectus, and will not effect any
such amendment or supplementation to which the Underwriters shall
reasonably object. The Bank will also advise you promptly of the
effectiveness of any amendment or supplementation of the Registration
Statement or Prospectus, of any request by the Commission for any
amendment or supplementation of the Registration Statement or the
Prospectus or for any additional information, of the receipt by the Bank
of any notification with respect to the suspension of qualification of
the Certificates for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose and of the institution by
the Commission of any stop order proceeding in respect of the
Registration Statement, and will use its best efforts to prevent the
issuance of any such stop order and to obtain as soon as possible its
lifting, if issued.
(ii) If, at any time when a prospectus relating to
the Certificates is required to be delivered under the Act, any event
occurs 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 to make the statements
therein, in the light of the circumstances under which they were made,
not misleading, or if it is necessary at any time to amend the
Prospectus to comply with the Act, the Bank promptly will prepare and
file with the Commission (subject to the Underwriters' prior review
pursuant to paragraph (i) of this Section 5) an amendment or supplement
which will correct such statement or omission or an amendment or
supplement which will effect such compliance.
(iii) As soon as practicable, the Bank will cause
the Trust to make generally available to the Certificateholders of the
Trust an earning statement or statements of the Trust covering a period
of at least 12 months beginning after the Effective Date of the
Registration Statement which will satisfy the provisions of Section
11(a) of the
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Act and Rule 158 of the Commission promulgated thereunder.
(iv) The Bank will furnish to the Underwriters
copies of the Registration Statement, each related preliminary
prospectus, the Prospectus and all amendments and supplements to such
documents, in each case as soon as available and in such quantities as
the Underwriters may reasonably request.
(v) The Bank will cooperate with any Underwriter in
arranging for the qualification of the Certificates for sale and the
determination of their eligibility for investment under the laws of such
jurisdictions as such Underwriter designates and will continue such
qualifications in effect so long as required for the distribution of the
Certificates; provided, however, that the Bank shall not be obligated to
qualify to do business in any jurisdiction in which it is not currently
so qualified or to take any action which would subject it to general or
unlimited service of process in any jurisdiction where it is not now so
subject.
(vi) For a period from the date of this Agreement
until the retirement of the Certificates, the Bank, as Servicer, will
furnish to you copies of each certificate and the annual statements of
compliance delivered to the Trustee pursuant to Article XIII of the
Pooling and Servicing Agreement and the annual independent public
accountant's reports furnished to the Trustee pursuant to Article XIII
of the Pooling and Servicing Agreement, as soon as practicable after
such statements and reports are furnished to the Trustee.
(vii) So long as any of the Certificates are
outstanding, the Bank will furnish to you as soon as practicable, (A)
all documents distributed, or caused to be distributed, by the Bank to
the Certificateholders, (B) all documents filed, or caused to be filed,
by the Bank with the Commission pursuant to the Securities Act of 1933,
as amended, any order of the Commission thereunder or pursuant to a
"no-action" letter from the staff of the Commission and (C) from time to
time, such other infor-
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xxxxxx in the possession of the Bank concerning the Trust and any other
information concerning the Bank filed with any governmental or
regulatory authority which is otherwise publicly available as you may
reasonably request.
(viii) On or before the Closing Date, the Bank
shall cause its computer records relating to the Receivables to be
marked to show the Trust's absolute ownership of the Receivables, and
from and after the Closing Date the Bank shall not, as Seller or
Servicer, take any action inconsistent with the Trust's ownership of
such Receivables, other than as permitted by the Pooling and Servicing
Agreement.
(ix) To the extent, if any, that the
ratings provided with respect to the Class A Certificates and the Class
B Certificates by Xxxxx'x Investors Service, Inc. and Standard & Poor's
Corporation are conditional upon the furnishing of documents or the
taking of any other action by the Bank agreed upon on or prior to the
Closing Date, the Bank shall furnish such documents and take any such
action.
6. Payment of Expenses. The Bank will pay all expenses incident
to the performance of its obligations under this Agreement, including (i) the
printing and filing of the Registration Statement as originally filed and of
each amendment thereto, (ii) the Trustee's acceptance fee and the fees and
disbursements of the counsel to the Trustee, (iii) the fees and disbursements of
the accountants, (iv) the fees of the rating agencies and (v) blue sky expenses;
provided, however, that the Underwriters may reimburse the Bank for certain
expenses incurred by the Bank as agreed to by the Underwriters and the Bank.
7. Conditions to the Obligations of the Underwriters. The
obligation of the Underwriters to purchase and pay for the Certificates will be
subject to the accuracy of the representations and warranties on the part of the
Bank herein, to the accuracy of the statements of officers of the Bank made
pursuant to the provisions hereof, to the performance by the Bank of its
obligations hereunder and to the following additional conditions precedent:
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(i) On or prior to the date of this Agreement, the
Underwriters shall have received a letter, dated the date of this
Agreement, of KPMG Peat Marwick and substantially in the form heretofore
agreed and otherwise in form and substance agreed to by the
Underwriters.
(ii) If the Registration Statement has not become
effective prior to the date of this Agreement, unless the Underwriters
agree in writing to a later time, the Registration Statement shall have
become effective not later than (A) 6:00 p.m., New York City time, on
the date of determination of the public offering price, if such
determination occurred at or prior to 12:00 noon, New York City time, on
such date or (B) 3:00 p.m. on the business day following the day on
which the public offering price was determined, if such determination
occurred after 12:00 noon, New York City time, on such date; if filing
of the Prospectus, or any supplement thereto, is required pursuant to
Rule 424(b), the Prospectus shall be filed in the manner and within the
time period required by Rule 424(b); and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(iii) Subsequent to the execution and delivery of
this Agreement, there shall have not occurred (a) any change, or any
development involving a prospective change, in or affecting particularly
the business or properties of the Bank [or USAA Capital Corporation]
which, in the reasonable judgment of the Underwriters materially impairs
the investment quality of either Class of Certificates; (b) any
suspension or material limitation of trading in securities generally on
the New York Stock Exchange, or any setting of minimum prices for
trading on such exchange, or any suspension of trading of any securities
of the Bank or of [USAA Capital Corporation] on any exchange or in the
over-the-counter market by such exchange or over-the-counter market or
by the Commission; (c) any banking moratorium declared by Federal, New
York or Texas authorities; or (d) any outbreak or material escalation of
major hostilities or any other substantial national or
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international calamity or emergency if, in the reasonable judgment of
the Underwriters, the effect of any such outbreak, escalation, calamity
or emergency on the United States financial markets makes it
impracticable or inadvisable to proceed with completion of the sale of,
and any payment for, the Certificates.
(iv) You shall have received an opinion, dated the Closing
Date, of Xxxxxxx X. Xxxxxx, Vice President and Banking Counsel of the
Bank, substantially to the effect that:
(a) The Bank (1) has been duly chartered and is
validly existing as a federal savings association under the laws of the
United States, (2) has the power and authority to own its properties and
conduct its business as described in the Prospectus and (3) had at all
relevant times, and now has, the power, authority and legal right to
acquire, own, sell and service the Receivables;
(b) The Bank has the power and authority to execute
and deliver this Agreement and the Pooling and Servicing Agreement and
to consummate the transactions contemplated herein and therein;
(c) No consent, approval, authorization or order
of, or filing with, any Texas or federal governmental agency or body or
any court is required by the Bank to perform the transactions
contemplated by this Agreement or the Pooling and Servicing Agreement
except for (1) filing of a Uniform Commercial Code financing statement
in the State of Texas with respect to the transfer of the Receivables to
the Trust pursuant to the Pooling and Servicing Agreement and (2) such
consents, approvals, authorizations, orders or filings as may be
required under the federal and state securities laws;
(d) None of the execution, delivery and
performance by the Bank of this Agreement or the Pooling and Servicing
Agree-
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ment, the transfer of the Receivables to the Trust, the assignment of
the security interests of the Bank in the Financed Vehicles, the
issuance and sale of the Certificates or the consummation of any other
of the transactions contemplated herein or in the Pooling and Servicing
Agreement, will conflict with, result in a breach, violation or
acceleration of any of the terms of, or constitute a default under, the
By-Laws or the Charter of the Bank, as amended, or, to the best of such
counsel's knowledge, any rule, order, statute or regulation known to
such counsel to be currently applicable to the Bank of any court,
regulatory body, administrative agency or governmental body having
jurisdiction over the Bank or the terms of any material indenture or
other material agreement or instrument known to such counsel to which
the Bank is a party or by which it or its properties are bound;
(e) To the best knowledge of such counsel, after
due inquiry, there are no actions, proceedings or investigations pending
or threatened before any court, administrative agency or other tribunal
(1) asserting the invalidity of this Agreement, or the Pooling and
Servicing Agreement, or either Class of the Certificates, (2) seeking to
prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by this Agreement, the Pooling and
Servicing Agreement, or (3) seeking adversely to affect the federal
income tax attributes of either Class of Certificates as described in
the Prospectus under the headings "Prospectus Summary -- Tax Status" and
"Certain Federal Income Tax Consequences";
(f) The Pooling and Servicing Agreement, has been
duly authorized, executed and delivered by the Bank;
(g) This Agreement has been duly authorized,
executed and delivered by the Bank; and
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(h) The statements in the Prospectus under the
caption "Certain Legal Aspects of the Receivables," to the extent they
constitute matters of law or legal conclusions, are correct in all
material respects.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of Texas and the United States, to the extent deemed proper
and stated in such opinion, upon the opinion of other qualified counsel
of good standing, and (B) as to matters of fact, to the extent deemed
proper and as stated therein, on certificates of responsible officers of
the Trust, the Bank and public officials. References to the Prospectus
in this paragraph (iv) include any supplements thereto.
(v) You shall have received an opinion, dated the
Closing Date of Xxxxx, Day, Xxxxxx & Xxxxx, special counsel to the Bank,
substantially to the effect that:
(a) The Certificates have been duly and
validly authorized and, when executed, authenticated and issued
in accordance with the terms of the Pooling and Servicing
Agreement, and delivered to and paid for by the Underwriters
pursuant to this Agreement, will be duly and validly issued and
outstanding and will be entitled to the benefits of the Pooling
and Servicing Agreement;
(b) Assuming the authorization,
execution and delivery thereof by the Trustee with respect to
the Pooling and Servicing Agreement, such agreement constitutes
the legal, valid and binding agreement of the Bank, enforceable
against the Bank in accordance with its terms, subject, as to
enforcement, to (1) the effect of bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or
other similar laws of general application relating to or
affecting creditors' rights generally or the rights of creditors
of federal savings associations; (2) the application of general
principles of equity (regard-
13
less of whether such enforceability is considered in a
proceeding in equity or at law); (3) the unenforceability under
certain circumstances of provisions indemnifying a party against
liability where such indemnification is contrary to public
policy; (4) the effect of judicial decisions which have held
that certain covenants and provisions of agreements are
unenforceable where (A) the breach of such covenants or
provisions imposes restrictions or burdens where it cannot be
demonstrated that such breach is a material breach of a material
covenant or provision or (B) the creditor's enforcement of such
covenants or provisions under the circumstances would violate
the creditor's implied covenant of good faith and fair dealing;
and (5) the unenforceability of provisions in the Pooling and
Servicing Agreement to the effect that failure to exercise or
delay in exercising rights or remedies will not operate as a
waiver of any such rights or remedies, or to the effect that
provisions therein may only be waived in writing to the extent
that an oral agreement modifying such provisions has been
entered into;
(c) The Registration Statement became
effective under the Act as of the date and time specified in
such opinion; after due inquiry, to the best of such counsel's
knowledge, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or contemplated
under the Act; the Registration Statement, and each amendment
thereof or supplement thereto as of its Effective Date and the
Prospectus as of its date of issuance complied as to form in all
material respects with the requirements of the Act and the Rules
and Regulations; and such counsel has no reason to believe that
either the Registration Statement or the Prospectus or any such
amendment thereof or supplement thereto as of its Effective Date
or date of issuance, as the case may be, contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated
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therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; it
being understood that such counsel need express no opinion as to
the financial statements or other financial data contained in
the Registration Statement or the Prospectus;
(d) The Class A Certificates, Class B
Certificates, the Pooling and Servicing Agreement and this
Agreement, conform in all material respects to the descriptions
thereof set forth in the Registration Statement and the
Prospectus;
(e) The Pooling and Servicing Agreement
is not required to be qualified under the Trust Indenture Act of
1939, as amended; and
(f) The Trust is not now, and
immediately following the sale of the Certificates pursuant to
this Agreement will not be, required to be registered under the
Investment Company Act of 1940, as amended.
In addition, such counsel shall opine as to certain
matters relating to the acquisition by the Bank of a perfected first
priority security interest in the vehicles financed by motor vehicle
installment loans made by the Bank and that the Receivables constitute
"chattel paper" (as defined in Section 9.105(a)(2) of the Uniform
Commercial Code of the State of Texas).
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other than
the State of Texas and the United States, to the extent deemed proper
and stated in such opinion, upon the opinion of other qualified counsel
of good standing, and (B) as to matters of fact, to the extent deemed
proper and as stated therein, on certificates of responsible officers of
the Trust, the Bank and public officials. References to the Prospectus
in this paragraph (v) include any supplements thereto.
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(vi) You shall have received an opinion or opinions
of Xxxxx, Day, Xxxxxx & Xxxxx, special counsel to the Bank, dated the
Closing Date and satisfactory in form and substance to you, with respect
to certain matters relating to the transfer of the Receivables to the
Trust, with respect to the perfection of the Trust's interests in the
Receivables and with respect to certain other matters.
(vii) You shall have received from Skadden, Arps,
Slate, Xxxxxxx & Xxxx LLP, counsel to the Underwriters, such opinion or
opinions, dated the Closing Date and satisfactory in form and substance
to you, with respect to the validity of the Certificates, the
Registration Statement, the Prospectus and other related matters as the
Underwriters may require, and the Bank shall have furnished to such
counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(viii) You shall have received an opinion of Xxxxx,
Day, Xxxxxx & Xxxxx, special tax counsel to the Bank, dated the Closing
Date and satisfactory in form and substance to you substantially to the
effect that:
(a) the Trust created by the Pooling and
Servicing Agreement will not be classified as an association
taxable as a corporation for federal income tax purposes and,
instead, under subpart E, part I of subchapter J of the Internal
Revenue Code of 1986, as amended, the Trust will be treated as a
grantor trust, and subject to possible recharacterization of
certain amounts paid by the Trust to the Seller or the Servicer,
the holders of the Class A Certificates or the Class B
Certificates will be treated as owning an undivided pro-rata
interest in the income and corpus attributable to the Trust;
(b) The statements in the Reg- istration
Statement and Prospectus under the headings "Prospectus Summary
-- Tax Status" and "Certain Federal Income Tax Consequences" to
the extent that they constitute matters of law
16
or legal conclusions with respect thereto, have been prepared or
reviewed by such counsel and are correct in all material
respects; and
(c) For Texas franchise tax purposes,
the Trust created by the Pooling and Servicing Agreement will
not be subject to Texas franchise taxes.
(ix) You shall have received an opinion of counsel
to the Trustee, dated the Closing Date and satisfactory in form and
substance to you, substantially to the effect that:
(a) the Trustee has been duly
incorporated and is validly existing as a banking organization
organized under the laws of the state of New York;
(b) The Trustee has full corporate
trust power and authority to enter into and perform its
obligations under the Pooling and Servicing Agreement;
(c) The Pooling and Servicing Agreement
has been duly authorized, executed and delivered by the Trustee
and constitutes a valid and legally binding agreement of the
Trustee, enforceable against the Trustee in accordance with its
terms, subject, as to enforcement of remedies, (a) to applicable
bankruptcy, insolvency, reorganization, and other similar laws
affecting the rights of creditors generally, and (b) to general
principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(d) The Trustee has duly exe- cuted and
authenticated the Certificates issued on the date hereof on
behalf of the Trust;
(e) No consent, approval or
authorization of, or registration, declaration or filing with,
or giving of notice to or the taking of any other act with
respect to any court or governmental authority, agency or body
17
of the United States of America or of any state governing the
trust powers of the Trustee is required under any existing laws
or regulation for the consummation on the part of the Trustee of
any of the transactions contemplated in the Pooling and
Servicing Agreement, except such as have been obtained; and
(f) The execution and delivery of the
Pooling and Servicing Agreement and the performance by the
Trustee of the terms thereof do not conflict with or result in a
violation of (1) any laws or regulations of the United States of
America or of any state governing the trust powers of the
Trustee, (2) the Articles of Incorporation or By-Laws of the
Trustee or (3) any material agreement, instrument, order, writ,
judgment or decree known to such counsel to which the Trustee is
a party or is subject.
In rendering such opinions, counsel to the Trustee may rely on
the opinion of the office of the general counsel to the Trustee.
(x) The Underwriters shall have received a letter,
dated the Closing Date, of KPMG Peat Marwick which meets the
requirements of the subsection (i) of this Section 7, except that the
specified date referred to in such subsection will be a date not more
than five days prior to the Closing Date for the purposes of this
subsection.
(xi) The Underwriters shall have re- ceived
evidence satisfactory to them that the Class A Certificates have been
rated in the highest rating category by each of Xxxxx'x Investors
Service, Inc. and by Standard & Poor's Corporation and that the Class B
Certificates have been rated in one of the four highest rating
categories by each of the foregoing rating agencies.
(xii) You shall have received a cer- tificate,
dated the Closing Date, of a Vice President or more senior officer of
the Bank in which such officer shall state that, to the best of his or
her knowledge after reasonable investigation, the representations and
warranties of the Bank in this
18
Agreement are true and correct in all material respects on and as of the
Closing Date, that the Bank has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Closing Date, that the representations and
warranties of the Bank, as Seller and as Servicer, in the Pooling and
Servicing Agreement and the conditions set forth in Section 12.1(b) of
the Pooling and Servicing Agreement, are true and correct as of the
dates specified in the Pooling and Servicing Agreement, that no stop
order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted or
are threatened by the Commission and that, subsequent to the date of the
Prospectus, there has been no material adverse change in the financial
position or results of operation of the Bank's motor vehicle installment
loan business except as set forth in or contemplated by the Prospectus
or as described in such certificate.
The Bank will furnish or cause to be furnished to the Underwriters such
number of conformed copies of such opinions, certificates, letters and documents
as the Underwriters reasonably request.
8. Indemnification.
(i) The Bank will indemnify and hold harmless each
Underwriter and each person, if any, who controls such Underwriter with
the meaning of Section 15 of the Act against any losses, claims, damages
or liabilities to which the Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of, or are based upon, any
untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, the preliminary prospectus, the
Prospectus, or any amendment or supplement thereto, or arise out of, or
are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse the Underwriter
for any legal or other expenses reasonably incurred by the
19
Underwriter in connection with investigating or defending any such
action or claim; provided, however, that the Bank shall not be liable in
any such case to the extent that any such loss, claim, damage or
liability arises out of, or is based upon, an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the preliminary prospectus or the Prospectus or
any such amendment or supplement in reliance upon and in conformity with
written information furnished to the Bank by the Underwriter expressly
for use therein.
(ii) Each Underwriter agrees severally to indemnify
and hold harmless the Bank, its directors, each of its officers or
agents who signed the Registration Statement, and each person, if any,
who controls the Bank within the meaning of Section 15 of the Act
against any and all loss, liability, claim, damage and expense described
in the indemnity contained in subsection (i) of this Section 8, as
incurred, but only with respect to untrue statements or omissions, or
alleged untrue statements or omissions, made in the Registration
Statement (or any amendment thereto) or any preliminary prospectus or
the Prospectus (or any amendment or supplement thereto) in reliance upon
and in conformity with written information furnished to the Bank by each
Underwriter expressly for use in the Registration Statement (or any
amendment thereto) or such preliminary prospectus or the Prospectus (or
any amendment or supplement thereto).
(iii) Each indemnified party shall give prompt
notice to the indemnifying party of any action commenced against the
indemnified party in respect of which indemnity may be sought hereunder,
but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability which it may have hereunder or
otherwise than on account of this indemnity agreement. In case any such
action shall be brought against an indemnified party and it shall have
notified the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it shall wish, to assume the defense thereof, with counsel,
satisfactory to such
20
indemnified party (who shall not, except with the consent of the
indemnified party, be counsel to the indemnifying party with respect to
such action), and it being understood that the indemnifying party shall
not, in connection with any one such action or separate but
substantially similar or related actions in the same jurisdiction
arising out of the same general allegations or circumstances, be liable
for the reasonable fees and expenses of more than one separate firm of
attorneys, and, after notice from the indemnifying party to the
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to the indemnified party under
subsections (i) or (ii) of this Section 8 for any legal expenses of
other counsel or any other expenses, in each case subsequently incurred
by the indemnified party, in connection with the defense thereof other
than reasonable costs of investigation.
9. Contribution. In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement provided for in
Section 8 is for any reason held to be unavailable other than in accordance with
its terms, then each indemnifying party shall contribute to the amount paid or
payable by such indemnifying party as a result of the losses, claims, damages or
liabilities referred to in 8(i) and 8(ii) above (i) in such proportion as is
appropriate to reflect the relative benefits received by the Bank on the one
hand and the respective Underwriter on the other from the offering of the
Certificates 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 Bank on the one hand and of the respective Underwriter on the other
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Bank on the one hand and
the respective Underwriter on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Bank bear to the total underwriting discounts and
commissions received by such Underwriter. 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 informa-
21
tion supplied by the Bank or by any Underwriter and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this Section 9 shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
Section 9. Notwithstanding the provisions of this Section 9, each Underwriter
shall not be required to contribute any amount in excess of the underwriting
discount or commission applicable to the Certificates purchased by it hereunder.
The Bank and the Underwriters agree that it would not be just and equitable if
contribution pursuant to this Section 9 were 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 account of the equitable
considerations referred to above in this Section 9. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
10. Termination. The Underwriters may terminate this Agreement
immediately upon notice to the Bank, if at any time, prior to the Closing Date
relating thereto, there has occurred: (a) any change, or any development
involving a prospective change, in or affecting particularly the business or
properties of the Bank or [USAA Capital Corporation] which, in the reasonable
judgment of the Underwriters, materially impairs the investment quality of the
Class A Certificates or the Class B Certificates; (b) any suspension or material
limitation of trading in securities generally on the New York Stock Exchange, or
any setting of minimum prices for trading on such exchange, or any suspension of
trading of any securities of the Bank or of [USAA Capital Corporation] on any
exchange or in the over-the-counter market by such exchange or over-the-counter
market or by the Commission; (c) any banking moratorium declared by Federal, New
York or Texas authorities; or (d) any outbreak or material escalation of major
hostilities or any other substantial national or international calamity or
emergency if, in the reasonable judgment of the Underwriters, the effect of any
such outbreak, escalation, calamity or emergency on the United States financial
markets makes it impracticable or inadvisable to proceed with completion of the
sale of and any payment for the Certificates.
22
11. Survival of Certain Representations and Obligations. The
respective indemnities, agreements, representations, warranties and other
statements of the Bank or its officers and of the Underwriters set forth in or
made pursuant to this Agreement will remain in full force and effect, regardless
of any investigation, or statement as to the results thereof, made by or on
behalf of the Underwriters, the Bank or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Certificates. If for any reason the purchase of the
Certificates by the Underwriters is not consummated, the Bank shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
6 and the respective obligations of the Bank and the Underwriters pursuant to
Sections 6, 8 and 9 shall remain in effect. If the purchase of the Certificates
by the Underwriters is not consummated for any reason other than solely because
of the occurrence of any event specified in clauses (b), (c) or (d) of Section
7(iii), the Bank will reimburse the Underwriters for all out-of-pocket expenses
(including fees and disbursements of counsel) reasonably incurred by it in
connection with the offering of the Certificates.
12. Notices. All communications hereunder will be in writing and,
if sent to the Underwriters, will be mailed, delivered or telegraphed and
confirmed to the Underwriters at Xxxxxxx Xxxxx & Co., World Financial Center,
Attention: Managing Director, Asset-Backed Securities Department, or to such
other address as the Underwriters may designate in writing to the Bank, or if
sent to the Bank, will be mailed, delivered or telegraphed and confirmed to the
Bank at USAA Federal Savings Bank, 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx
00000, Attention: Xxxxxxx X. Xxxxxx.
13. Successors. This Agreement will inure to the benefit of, and
be binding upon, the parties hereto 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 parties hereto and their
respective successors and the controlling persons and officers and directors
referred to in Sections 8 and 9 and their heirs and legal representatives, any
legal or equitable right, remedy or claim under or in respect of this Agreement
or any provision herein contained. This Agreement and all conditions and
provisions hereof are intended to be for the sole and exclusive benefit of the
parties hereto and their respective successors, and said controlling persons and
offi-
23
xxxx and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Certificates
from the Underwriters shall be deemed to be a successor by reason merely of such
purchase.
14. 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 Agreement.
15. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
24
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate thereof,
whereupon it will become a binding agreement among the undersigned in accordance
with its terms.
Very truly yours,
USAA FEDERAL SAVINGS BANK
By: _____________________________
Name:
Title:
The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
For itself and as Representative
of the Underwriters named
in Schedule A hereto.
By: __________________________________
Name:
Title:
SCHEDULE A
Aggregate Principal
Amount of the
Class A Certificates
--------------------
Underwriters
------------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $
Incorporated
[ ] $
[ ] $
Aggregate Principal
Amount of the
Class B Certificates
--------------------
Underwriter
-----------
Xxxxxxx Xxxxx, Xxxxxx, Xxxxxx & Xxxxx $
Incorporated
