USAA AUTO LOAN GRANTOR TRUST 1999-1
--% AUTOMOBILE LOAN PASS-THROUGH
CERTIFICATES, CLASS A
USAA FEDERAL SAVINGS BANK
(Bank)
USAA FEDERAL SAVINGS BANK
(Seller and Servicer)
UNDERWRITING AGREEMENT
_______, 1999
X.X. Xxxxxx Securities Inc.
As Representative of the
Several Underwriters named
in Schedule I (the "Representative")
c/o X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
USAA Federal Savings Bank, a federally chartered savings
association (the "Bank"), proposes to sell to the several Underwriters named in
Schedule I hereto (the "Underwriters") $673,149,000 principal amount of ____%
Automobile Loan Pass-Through Certificates, Class A (the "Class A Certificates")
to be issued by the USAA Auto Loan Grantor Trust 1999-1 (the "Trust"). Each
Class A Certificate will represent a specified percentage undivided interest in
the Trust. The assets of the Trust include, among other things, a pool of fixed
rate simple interest motor vehicle installment loans secured by new and used
automobiles and light-duty trucks (the "Receivables") and certain monies due
thereunder on or after July 1, 1999 (the "Cutoff Date"), such Receivables to be
sold to the Trust by the Bank (in such capacity, the "Seller") and to be
serviced for the Trust by the Bank (in such capacity, the "Servicer"). The Class
A Certificates will be issued in an aggregate principal amount of $673,149,000,
which is equal to approximately [96.25]% of the aggregate principal balance of
the Receivables as of the Cutoff Date. Simultaneously with the issuance and sale
of the Class A Certificates as contemplated herein, the Trust will also issue
the ____% Automobile Loan Pass-Through Certificates, Class B (the "Class B
Certificates" and, together with the Class A Certificate, the "Certificates")
evidencing an undivided ownership interest of approximately [3.75]% in the
Trust, payments in respect of which are, to the extent specified in the Pooling
and Servicing Agreement, subordinated to the rights of the holders of the Class
A Certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement dated as of July __, 1999 (the "Pooling and Servicing
Agreement"), among the Bank, as Seller and Servicer, and The Bank of New York,
as trustee (the "Trustee").
The Bank has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended (the "Act"), and the
rules and regulations of the Commission thereunder (the "Rules and
Regulations"), a registration statement, including a prospectus, relating to the
Certificates. Any preliminary prospectus included in such registration statement
or filed with the Commission pursuant to Rule 424(a) of the Rules and
Regulations is referred to in this Agreement as the "Preliminary Prospectus."
The registration statement as amended at the time when it shall become
effective, or, if a post-effective amendment is filed with respect thereto, as
amended by such post-effective amendment at the time of its effectiveness,
including in each case information (if any) deemed to be part of the
registration statement at the time of effectiveness pursuant to Rule 430A under
the Act, is referred to in this Agreement as the "Registration Statement," and
the prospectus in the form used to confirm sales of the Class A Certificates is
referred to in this Agreement as the "Prospectus."
The terms which follow, when used in this Agreement, shall
have the meanings indicated. "Effective Date" shall mean each date that the
Registration Statement and any post-effective amendment or amendments thereto
became or become effective. "Execution Time" shall mean the date and time that
this Agreement is executed and delivered by the parties hereto. "Rule 424" and
"Rule 430A" refer to such rules under the Act. To the extent not defined herein,
capitalized terms used herein shall have the meanings assigned to such terms in
the Pooling and Servicing Agreement.
The Bank agrees with the Underwriters as follows:
1. The Bank agrees to sell and deliver the Class A
Certificates to the several Underwriters as hereinafter provided, and each
Underwriter, upon the basis of the representations and warranties herein
contained, but subject to the conditions hereinafter stated, agrees to purchase,
severally and not jointly, from the Bank the respective principal amount of
Class A Certificates set forth opposite such Underwriter's name in Schedule I
hereto. The Class A Certificates are to be purchased by the Underwriters at a
purchase price equal to ___________% of the aggregate principal amount thereof
plus accrued interest on the principal amount thereof at the Class A
Pass-Through Rate (as defined in the Prospectus) calculated from (and
including)______, 1999, to (but excluding) the Closing Date.
2. The Bank understands that the Underwriters intend (i) to
make a public offering of their respective portions of the Class A Certificates
as soon after the Registration Statement and this Agreement have become
effective as in the judgment of the Representative is advisable and (ii)
initially to offer the Class A Certificates upon the terms set forth in the
Prospectus.
3. Payment for the Class A Certificates shall be made to the
Bank or to its order by wire transfer of same day funds at the office of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 at 9:00 A.M., New York City time, on July 28, 1999 (the "Closing Date"),
or at such other time on the same or such other date, not later than the fifth
Business Day thereafter, as the Representative and the Bank may agree upon in
writing. As used herein, the term "Business
2
Day" means any day other than a day on which banks are permitted or required to
be closed in New York City.
Payment for the Class A Certificates shall be made against
delivery to the Representative (for the respective accounts of the several
Underwriters) of the Class A Certificates registered in the name of Cede & Co.
as nominee of The Depository Trust Company and in such denominations, as
permitted by the Pooling and Servicing Agreement, as the Representative shall
request in writing not later than two full Business Days prior to the Closing
Date, with any transfer taxes payable in connection with the transfer to the
Underwriters of the Certificates duly paid by the Bank. The physical
certificates representing interests in the Class A Certificates will be made
available for inspection and packaging by the Representative at the office of
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000 not later than 1:00 P.M., New York City time, on the Business Day prior to
the Closing Date.
4. The Bank represents and warrants to and agrees with each
Underwriter that:
(1) The Registration Statement on Form S-3 (No.
333-81385), including the Prospectus and such amendments thereto as may have
been required on or prior to the date hereof, relating to the Certificates, has
been filed with the Commission and such Registration Statement as amended has
become effective. With respect to the Registration Statement, the conditions to
the use of a registration statement on Form S-3 under the Act, as set forth in
the General Instructions to Form S-3, have been satisfied by the Bank;
(2) No stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that purpose has
been instituted or, to the knowledge of the Bank, threatened by the Commission,
and on the Effective Date of the Registration Statement, the Registration
Statement and the Prospectus conformed in all respects to the requirements of
the Act and the Rules and Regulations, and did not include any untrue statement
of a material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading, and, on the
Closing Date, the Registration Statement and the Prospectus will conform in all
respects to the requirements of the Act and the Rules and Regulations, and
neither of such documents will include any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that this
representation and warranty shall not apply to any statements or omissions made
in reliance upon and in conformity with information furnished to the Bank in
writing by any Underwriter through the Representative expressly for use
therein;
3
(3) As of the Closing Date, the representations and
warranties of the Bank, in its capacity as Seller and Servicer under the Pooling
and Servicing Agreement, will be true and correct, and each Receivable will
satisfy the conditions set forth in Section 12.1(b) thereof;
(4) 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 power and authority (corporate and other) to own,
lease and operate its properties and conduct its business as described in the
Prospectus, and to enter into and perform its obligations under this Agreement;
(5) The Class A Certificates have been duly
authorized, and, when issued and delivered pursuant to the Pooling and Servicing
Agreement, duly authenticated by the Trustee and paid for by the Underwriters in
accordance with the terms of this Agreement, will be duly and validly issued,
authenticated and delivered and entitled to the benefits provided by the Pooling
and Servicing Agreement; each of the Pooling and Servicing Agreement, and this
Agreement have been duly authorized by the Bank and, when executed and
delivered by the Bank and the other party thereto (in the case of the Pooling
and Servicing Agreement), each of the Pooling and Servicing Agreement and this
Agreement will constitute a valid and binding agreement of the Bank; the Class A
Certificates and the Pooling and Servicing Agreement will conform to the
descriptions thereof in the Prospectus in all material respects;
(6) 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 or the Pooling and Servicing 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;
(7) The Bank is not in violation of its By-laws or
Charter 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 is 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 Class A Certificates and compliance with the terms and provisions hereof and
thereof will not result in a breach or violation of any of the terms and
provisions of,
4
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 the By-laws or Charter of the Bank; and the Bank has full
power and authority to authorize and sell, and establish, the Trust that will
issue the Class A Certificates as contemplated by this Agreement and to enter
into this Agreement and the Pooling and Servicing Agreement and consummate the
transactions contemplated hereby and thereby;
(8) Since the respective dates as of which
information is given in the Registration Statement and the Prospectus, except
as otherwise stated therein, (A) there has been no material adverse change in
the condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Bank and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business (a
"Material Adverse Effect"), and (B) there have been no transactions entered into
by the Bank or any of its subsidiaries, other than those in the ordinary course
of business, which are material with respect to the Bank and its subsidiaries
considered as one enterprise;
(9) Other than as set forth or contemplated in the
Prospectus, there are no legal or governmental proceedings pending or, to the
knowledge of the Bank, threatened to which the Bank is or may be a party or to
which any property of the Bank is or may be the subject which, if determined
adversely to the Bank, could individually or in the aggregate reasonably be
expected to have a Material Adverse Effect or that would reasonably be expected
to materially adversely affect the interests of the holders of the Class A
Certificates; and there are no contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or required to
be described in the Registration Statement or the Prospectus which are not filed
or described as required; and
(10) By assignment and delivery of each of the
Receivables to the Trust as of the Closing Date, the Bank will transfer all of
its right, title and interest in, to and under the Receivables to the Trust,
subject to no prior lien, mortgage, security interest, pledge, adverse claim,
charge or other encumbrance.
5. The Bank covenants and agrees with the several Underwriters
that:
(1) Prior to the termination of the offering of the
Class A Certificates, the Bank will not file or cause to be filed any amendment
of the Registration Statement or supplement
5
to the Prospectus which shall be reasonably disapproved of promptly by the
Representative after reasonable notice thereof. Subject to the foregoing
sentence, 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 cause the Prospectus, properly completed, and any
supplement thereto, to be filed with the Commission pursuant to the applicable
paragraph of Rule 424(b) within the time period prescribed and will provide
evidence satisfactory to the Underwriters of such timely filing. The Bank will
promptly advise the Underwriters (i) when the Prospectus, and any supplement
thereto, shall have been filed (if required) with the Commission pursuant to
Rule 424(b), (ii) when, prior to termination of the offering of the Class A
Certificates, any amendment to the Registration Statement shall have become
effective, (iii) of any request by the Commission for any amendment of the
Registration Statement or supplement to the Prospectus or for any additional
information, (iv) of the receipt by the Bank of notification with respect to the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the institution or threatening of any proceeding for
that purpose and (v) of the receipt by the Bank of notification with respect to
the suspension of the qualification of the Class A Certificates for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose. The Bank will use its reasonable best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof;
(2) The Bank will deliver, at its expense, to the
Representative, two signed copies of the Registration Statement (as originally
filed) and each amendment thereto, in each case including exhibits, and to each
other Underwriter a conformed copy of the Registration Statement and each
amendment thereto, in each case without exhibits, and, during the period
mentioned in paragraph (e) below, to each of the Underwriters as many copies of
the Prospectus (including all amendments and supplements thereto) as the
Representative may reasonably request. The Bank will furnish or cause to be
furnished to the Representative copies of all reports on Form SR required by
Rule 463 under the Act;
(3) The Bank will if (i) during such period of time
after the first date of the public offering of the Class A Certificates as in
the opinion of counsel for the Underwriters a Prospectus relating to the Class A
Certificates is required by law to be delivered in connection with sales by an
Underwriter or dealer, (ii) any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein, in the light of the circumstances when the Prospectus is delivered to
a purchaser, not misleading, or (iii) it is necessary to amend or supplement the
Prospectus to comply with the applicable law, forthwith prepare and furnish, at
6
the expense of the Bank, to the Underwriters and to the dealers (whose names and
addresses the Representative will furnish to the Bank) to which Class A
Certificates may have been sold by the Representative on behalf of the
Underwriters and upon request by the Representative to any other dealers
identified by the Representative, such amendments or supplements to the
Prospectus as may be necessary so 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 so that the Prospectus
will comply with the law;
(4) The Bank will endeavor to qualify the Class A
Certificates for offer and sale under the securities or "Blue Sky" laws of such
jurisdictions as the Representative shall reasonably request and will continue
such qualification in effect so long as reasonably required for distribution of
the Class A Certificates and will pay all fees and expenses (including fees and
disbursements of counsel to the Underwriters) reasonably incurred in connection
with such qualification and in connection with the determination of the
eligibility of the Class A Certificates for investment under the laws of such
jurisdictions as the Representative may designate; 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; and provided further that the Bank shall
not be required to file a general consent to service of process in any
jurisdiction;
(5) On or before January 31, 2001, the Bank will
cause the Trust to make generally available to the holders of the Certificates
and to the Representative 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;
(6) For the period from the date of this Agreement
until the retirement of the Class A Certificates, the Servicer will furnish to
the Representative (x) 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 certified public accountant's
servicing reports furnished to the Trustee pursuant to Article XIII of the
Pooling and Servicing Agreement, by first-class mail as soon as practicable
after such statements and reports are furnished to the Trustee and (y) copies of
each amendment to the Pooling and Servicing Agreement, and on each Determination
Date or as soon thereafter as practicable, the Servicer shall give notice
substantially in the form of Schedule II hereto by telex or telecopy to the
Representative of the Class A Pool Factor as of the related Record Date;
7
(7) During the period beginning on the date hereof
and continuing to and including the Business Day following the Closing Date, the
Bank will not offer, sell, contract to sell or otherwise dispose of any
securities of or guaranteed by the Bank which are substantially similar to the
Class A Certificates without the prior written consent of the Representative;
(8) 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;
(9) 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. ("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 action by the Bank agreed
upon on or prior to the Closing Date, the Bank shall furnish such documents and
take any such action;
(10) So long as any of the Class A Certificates are
outstanding, the Bank will furnish to the Representative by first class mail (i)
as soon as practical after the end of the Bank's fiscal year, copies of all
documents, records and financial statements required to be distributed to
Certificateholders (including Certificate Owners) or filed with the Commission
pursuant to the Exchange Act, or any order of the Commission thereunder and (ii)
from time to time, any other information concerning the Bank filed with any
government or regulatory authority or national securities exchange which is
otherwise publicly available, as the Representative may reasonably request; and
(11) The Bank is not, and upon the issuance and sale
of the Class A Certificates as herein contemplated and the application of the
net proceeds therefrom as described in the Prospectus will not be, an
"investment company" or an entity "controlled" by an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (the
"1940 Act").
6. 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
8
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. The obligations of the several Underwriters to purchase and
pay for the Class A 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:
(1) At the time this Agreement is executed and
delivered by the Bank KPMG Xxxx Xxxxxxx shall have furnished to the
Representative a letter dated as of the date of this Agreement substantially in
the form of the draft to which the Representative previously agreed.
(2) The Prospectus shall have been filed with the
Commission pursuant to Rule 424(b) within the applicable time period prescribed
for such filing by the Rules and Regulations and in accordance with Section 5(a)
of this Agreement; no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or, to the knowledge of the Bank, threatened by the
Commission; and all requests for additional information from the Commission with
respect to the Registration Statement shall have been complied with to the
satisfaction of the Representative.
(3) Subsequent to the execution and delivery of this
Agreement, there shall have not occurred (i) 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 Representative materially impairs the investment quality of the
Class A Certificates that makes it impracticable or inadvisable to proceed with
completion of the sale of, and any payment for, the Class A Certificates, or
(ii) any downgrading in the rating of any debt securities of the Bank or any of
its direct or indirect subsidiaries by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the Act), or
any public announcement that any such organization has under surveillance or
review its rating of any such debt securities (other than an announcement with
positive implications of a possible upgrading, and no implication of a possible
downgrading, of such rating).
(4) Xxxxxxx X. Xxxxxx, Vice President and Banking
Counsel of the Bank, shall have furnished to the Representative his written
opinion dated the Closing Date, in
9
form and substance satisfactory to the Representative, to the effect that:
(1) 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;
(2) 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;
(3) 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;
(4) None of the execution, delivery and
performance by the Bank of this Agreement or the Pooling and Servicing
Agreement, 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 Class A 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 ByLaws 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;
(5) 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
10
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 or 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";
(6) The Pooling and Servicing Agreement has
been duly authorized, executed and delivered by the Bank;
(7) This Agreement has been duly authorized,
executed and delivered by the Bank; and
(8) 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 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.
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 (d) include any
supplements thereto.
(5) Jones, Day, Xxxxxx & Xxxxx, special counsel to
the Bank, shall have furnished to the Representative their written opinion dated
the Closing Date, in form and substance satisfactory to the Representative, to
the effect that:
(1) 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, in the
case of the Class A Certificates, and when delivered to and paid for by
the purchaser thereof, in the case of the Class B Certificates, will be
duly and validly issued and outstanding and will be entitled to the
benefits of the Pooling and Servicing Agreement;
11
(2) 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 (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
(3) the unenforceability under certain circumstances of provisions
indemnifying a party against liability where such indemnification is
contrary to public policy;
(3) 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 and as of the Closing
Date 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, and as of
the Closing Date contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary to make the statements therein, 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;
(4) The Class A 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;
(5) The Pooling and Servicing Agreement is not
required to be qualified under the Trust Indenture Act of 1939, as
amended; and
(6) The Trust is not now, and immediately
following the sale of the Certificates pursuant to this
12
Agreement will not be, required to be registered under the Investment
Company Act of 1940, as amended.
In addition, such counsel shall opine, based upon certain
representations made by the Bank, 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, New York 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 (e) include
any supplements thereto.
(6) Jones, Day, Xxxxxx & Xxxxx, special counsel to
the Bank, shall have furnished to the Representative a written opinion or
opinions dated the Closing Date, in form and substance satisfactory to the
Representative, 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.
(7) Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP,
counsel to the Underwriters, shall have furnished to the Representative a
written opinion or opinions dated the Closing Date, in form and substance
satisfactory to the Representative, with respect to the validity of the Class A
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.
(8) Jones, Day, Xxxxxx & Xxxxx, special tax counsel
to the Bank, shall have furnished to the Representative a written opinion dated
as of the Closing Date, in form and substance satisfactory to the
Representative, to the effect that:
(1) the Trust will be treated as a grantor
trust, under subpart E, part I of subchapter J of the Internal Revenue
Code of 1986, as amended, and not as a partnership or an association
taxable as a corporation for federal income tax purposes and the
holders of the Class A Certificates will each be treated as owning
their respective shares of the Trust's assets and income for federal
income tax purposes; and
13
(2) The statements in the Registration
Statement and Prospectus under the headings "Prospectus Summary -- Tax
Status" and "Certain Federal Income Tax Consequences" to the extent
that they address matters of law or legal conclusions with respect
thereto, are correct in all material respects.
(9) Counsel to the Trustee shall have furnished to
the Representative a written opinion dated as of the Closing Date, in form and
substance satisfactory to the Representative, to the effect that:
(1) the Trustee has been duly incorporated and
is validly existing as a banking organization organized under the laws
of the state of New York;
(2) The Trustee has full corporate trust power
and authority to enter into and perform its obligations under the
Pooling and Servicing Agreement;
(3) 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);
(4) The Trustee has duly executed and
authenticated the Certificates issued on the date hereof on behalf of
the Trust;
(5) 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 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
(6) 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,
14
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.
(10) The Underwriters shall have received a letter,
dated the Closing Date, of KPMG Peat Marwick which meets the requirements of the
subsection (a) of this Section 7, except that the specified date referred to in
such subsection will be a date not more than three days prior to the Closing
Date for the purposes of this subsection.
(11) The Underwriters shall have received evidence
satisfactory to them that the Class A Certificates have been rated in the
highest rating category by each of Xxxxx'x and by S&P and that the Class B
Certificates have been rated at least "BBB" or its equivalent by each of the
foregoing Rating Agencies.
(l2) The Bank shall have furnished to the
Representative a certificate, in form and substance satisfactory to the
Representative, signed by a Vice President or more senior officer of the Bank
and dated the Closing Date, 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 Agreement are true and correct 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.
(13) The Class B Certificates shall have been issued
by the Trust and an affiliate of the Seller shall have
15
entered into a valid and binding agreement to purchase the full aggregate
principal amount of such Class B Certificates.
(14) The Representative shall have received a letter
or letters from each counsel delivering any written opinion to any Rating Agency
in connection with the transaction described herein which is not otherwise
described in this Agreement allowing the Underwriters to rely on such opinion as
if it were addressed to the Underwriters.
(15) On the Closing Date, the representations and
warranties of the Bank in the Pooling and Servicing Agreement will be true and
correct.
(16) Any taxes, fees and other governmental charges
which are due and payable in connection with the execution, delivery and
performance of this Agreement, the Pooling and Servicing Agreement, and the
Certificates shall have been paid by the Bank at or prior to the Closing Date.
8. The Bank agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of either Section 15 of the Act or Section 20 of the Exchange Act, from
and against any and all losses, claims, damages and liabilities (including,
without limitation, the legal fees and other expenses reasonably incurred in
connection with investigating, preparing or defending any suit, action or
proceeding or any claim asserted, except as otherwise provided below regarding
the limitation on use of counsel) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Bank shall have furnished such
amendments or supplements thereto) or any preliminary prospectus, or caused by
any omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
untrue statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished to the Bank in
writing by any Underwriter through the Representative expressly for use therein;
provided that the foregoing indemnity with respect to any preliminary prospectus
shall not inure to the benefit of any Underwriter (or to the benefit of any
person controlling such Underwriter) from whom the person asserting any losses,
claims or damages purchased Certificates if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary prospectus is
eliminated or remedied in the Prospectus (as amended or supplemented if the Bank
shall have furnished any amendments or supplements thereto) and, if the
furnishing of a copy of the Prospectus (as so amended or supplemented) to such
person was required by law or was requested in writing by the
16
Bank, a copy of the Prospectus (as so amended or supplemented) shall not have
been furnished to such person at or prior to the written confirmation of the
sale of such Certificates to such person.
Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Bank, each director and officer of the Bank who
signed the Registration Statement, and each person who controls the Bank within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act to the
same extent as the foregoing indemnity from the Bank to each Underwriter, but
only with reference to information furnished to the Bank in writing by such
Underwriter through the Representa tive expressly for use in the Registration
Statement, the Prospectus, any amendment or supplement thereto, or any
preliminary prospectus.
If any suit, action, proceeding (including any
governmental or regulatory investigation), claim or demand shall be brought or
asserted against any person in respect of which indemnity may be sought pursuant
to either of the two preceding paragraphs, such person (the "Indemnified
Person") shall promptly notify the person against whom such indemnity may be
sought (the "Indemnifying Person") in writing, and the Indemnifying Person,
upon request of the Indemnified Person, shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may designate in such proceeding and shall
pay the fees and expenses of such counsel related to such proceeding. In any
such proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless (i) the Indemnifying Person and the Indemnified
Person shall have mutually agreed to the contrary, (ii) the Indemnifying Person
has failed within a reasonable time to retain counsel reasonably satisfactory to
the Indemnified Person or (iii) the named parties in any such proceeding
(including any impleaded parties) include both the Indemnifying Person and the
Indemnified Person and representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them, in
which case such counsel for the Indemnified Person shall be reasonably
satisfactory to the Indemnifying Person. It is understood that the Indemnifying
Person shall not, in connection with any proceeding or related proceeding in the
same jurisdiction, be liable for the fees and expenses of more than one separate
firm (in addition to one local counsel in each applicable jurisdiction) for all
Indemnified Persons, and that all such fees and expenses shall be reimbursed as
they are incurred. Any such separate firm for the Underwriters and such control
persons of Underwriters shall be designated in writing by the Representative and
any such separate firm for the Bank or of its directors and officers who sign
the Registration Statement or control persons shall be designated in writing by
the Bank. The Indemnifying
17
Person shall not be liable for any settlement of any claim or proceeding
effected without its written consent. Notwithstanding the foregoing sentence, if
at any time an Indemnified Person shall have requested an Indemnifying Person to
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by the third sentence of this paragraph, the Indemnifying Person
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such Indemnifying Person of the aforesaid request and (ii)
such Indemnifying Person shall not have reimbursed the Indemnified Person in
accordance with such request prior to the date of such settlement. No
Indemnifying Person shall, without the prior written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in respect
of which any Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person, unless such
settlement includes an unconditional release of such Indemnified Person from all
liability on claims that are the subject matter of such proceeding.
If the indemnification provided for in the first and second
paragraphs of this Section 8 is unavailable other than in accordance with its
terms to an Indemnified Person in respect of any losses, claims, damages or
liabilities referred to therein, then each Indemnifying Person under such
paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or pay able by such Indemnified Person as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the Bank on the one
hand and the Underwriters on the other hand from the offering of the Class A
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 the Underwriters on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable consider
ations. The relative benefits received by the Bank on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Bank and the total underwriting discounts and the commissions
received by the Underwriters, in each case as set forth in the table on the
cover of the Prospectus, bear to the aggregate public offering price of the
Class A Certificates. The relative fault of the Bank on the one hand and the
Underwriters on the other 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 Bank or by any of the Underwriters and the parties' rela-
18
tive intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.
The Bank and the Underwriters agree that it would not be just
and equitable if contri bution pursuant to this Section 8 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 that does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Person as a result of the losses,
claims, damages and liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified
Person in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 8, in no event shall an
Underwriter be required to contribute any amount in excess of the amount by
which the total price at which the Class A Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages that such Underwriter has otherwise been required to pay by reason of
such 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective principal amount of Class A Certificates set forth opposite their
names in Schedule I hereto, and not joint.
The indemnity and contribution agreements contained in this
Section 8 are in addition to any liability which the Indemnifying Persons may
otherwise have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this
Section 8 and the representations and warranties of the Bank set forth in this
Agreement shall remain operative and in full force and effect regardless of (i)
any termination of this Agreement, (ii) any investigation made by or on behalf
of any Underwriter or any person controlling any Underwriter or by or on behalf
of the Bank, or any of their officers or directors or any other person
controlling the Bank and (iii) acceptance of and payment for any of the
Certificates.
9. Notwithstanding anything herein contained, this Agreement
may be terminated in the absolute discretion of the Representative, by notice
given to the Bank, if after the execution and delivery of this Agreement and
prior to the Closing Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, the New York Stock Exchange or
the American Stock Exchange; (ii) trading of any securities
19
issued or guaranteed by the Bank or USAA Capital Corporation shall have been
suspended on any exchange or in any over-the-counter market; (iii) a general
moratorium on commercial banking activities shall have been declared by Federal,
Texas or New York State authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representative is material and
adverse and which, in the judgment of the Representative, makes it impracticable
to market the Class A Certificates on the terms and in the manner contemplated
in the Prospectus.
10. This Agreement shall become effective upon the later of
(x) execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
If on the Closing Date any one or more of the Underwriters
shall fail or refuse to purchase Class A Certificates which it or they have
agreed to purchase hereunder on such date, and the aggregate principal
amount of Class A Certificates which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate principal amount of the Class A Certificates to be purchased on such
date, the other Underwriters shall be obligated severally in the proportions
that the principal amount of Class A Certificates set forth opposite their
respective names in Schedule I bears to the aggregate principal amount of Class
A Certificates set forth opposite the names of all such non-defaulting
Underwriters, or in such other proportions as the Representative may specify,
to purchase the Class A Certificates which such defaulting Underwriter or
Underwriters agreed but failed or refused to purchase on such date; provided
that in no event shall the principal amount of Class A Certificates that any
Underwriter has agreed to purchase pursuant to Section 1 be increased pursuant
to this Section 10 by an amount in excess of one-ninth of such principal amount
of Class A Certificates without the written consent of such Underwriter. If on
the Closing Date any Underwriter or Underwriters shall fail or refuse to
purchase Class A Certificates which it or they have agreed to purchase hereunder
on such date, and the aggregate principal amount of Class A Certificates with
respect to which such default occurs is more than one-tenth of the aggregate
principal amount of Class A Certificates to be purchased on such date, and
arrangements satisfactory to the Representative and the Bank for the purchase of
such Class A Certificates are not made within 36 hours after such default, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter or the Bank. In any such case either the Representative or the Bank
shall have the right to postpone the Closing Date, but in no event for longer
than seven days, in order that the required changes, if any, in the Registration
Statement and in the Prospectus or in any other documents
20
or arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
11. X.X. Xxxxxx Securities Inc. ("JPMSI") and the Bank agree
that JPMSI shall act as the agent of the Bank in connection with the sale of the
Class B Certificates by the Seller to one of its affiliates. The indemnification
and contribution provisions set forth in Section 8 hereof shall apply to JPMSI
in its capacity as such agent in respect of the Class B Certificates to the
extent such provisions apply to each Underwriter in respect of the Class A
Certificates. No compensation shall be payable by the Bank to JPMSI in
connection with acting as such agent.
12. If this Agreement shall be terminated by the Underwriters,
or any of them, because of any failure or refusal on the part of the Bank to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Bank shall be unable to perform its obligations under this
Agreement or any condition of the Underwriters' obligations cannot be fulfilled,
the Bank agrees to reimburse the Underwriters or such Underwriters as have so
terminated this Agreement with respect to themselves, severally, for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by such Underwriters in connection with this Agreement or
the offering contemplated hereunder.
13. Any action by the Underwriters hereunder may be taken by
the Representative alone on behalf of the Underwriters, and any such action
taken by the Representative alone shall be binding upon the Underwriters. All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if mailed, delivered by hand or transmitted by
any standard form of telecommunication. Notices to the Underwriters shall be
given to the Representative, c/o X.X. Xxxxxx Securities Inc., 00 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Facsimile No.: 212-648-5909), Attention: Syndicate
Desk. Notices to the Bank shall be given to it at USAA Federal
Savings Bank, 00000 XxXxxxxxx Xxxxxxx, Xxx Xxxxxxx, Xxxxx 00000 (Facsimile No.:
210-498-3207), Attention: Xxxxxxx X. Xxxxxx.
14. This Agreement shall inure to the benefit of and be
binding upon the Bank, the Underwriters, any controlling persons referred to
herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Class A Certificates from any Under-
21
writer shall be deemed to be a successor by reason merely of such purchase.
15. This Agreement may be signed in counterparts, each of
which shall be an original and all of which together shall constitute one and
the same instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
22
If the foregoing is in accordance with your understanding of
our agreement, kindly sign and return to us the enclosed duplicate hereof,
whereupon it will become a binding agreement among the Bank and the Underwriters
in accordance with its terms.
Very truly yours,
USAA FEDERAL SAVINGS BANK
By:_____________________________________
Name: Xxxxx X. XxXxxxxxx
Title: Vice President
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
X.X. XXXXXX SECURITIES INC.
As Representative of the
Underwriters
By:___________________________________
Name: Xxxxxx X. Xxxxxxxx
Title Vice President
23
SCHEDULE I
UNDERWRITERS
Principal Amount of Class A Certificates
X.X. Xxxxxx Securities Inc....................................... $__________
____________________............................................. $__________
____________________............................................. $__________
____________________............................................. $__________
------------
Total.................................................... $__________
===========
A-1
SCHEDULE II
FORM OF SERVICER'S CERTIFICATE
X.X. Xxxxxx Securities Inc.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Re: Pooling and Servicing Agreement dated as of ______, 1999 (the
"Pooling and Servicing Agreement") between USAA Federal Savings
Bank, as Seller and Servicer, and The Bank of New York, as
Trustee
Determination Date to which this Certificate relates:
___________, 19__
For Monthly Period ending on _________, 19__
1. The undersigned Servicing Officer does hereby
certify that the Class A Pool Factor is __________.
2. Capitalized terms used in this Certificate shall
have the same meanings as in the Pooling and Servicing Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand as of
the above-referenced Determination Date.
USAA FEDERAL SAVINGS BANK,
as Servicer
By:
Servicing Officer
BY: ___________________________________________________________________________
B-1
