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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported) February 11, 1997
Key Consumer Acceptance Corporation
(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
333-12431 52-1995940
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(Commission File Number) (I.R.S. Employer Identification No.)
Key Tower, 127 Public Square, Cleveland, Ohio 44114-1306
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(Address of Principal Executive Offices) (Zip Code)
(216) 689-6300
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(Registrant's Telephone Number, Including Area Code)
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
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ITEM 5. OTHER EVENTS.
The Registrant is filing final forms of the exhibits listed in Item 7(c)
below.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
<TABLE>
<CAPTION>
EXHIBIT
NO. DOCUMENT DESCRIPTION
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<S> <C>
1.1 Underwriting Agreement among Key Consumer Acceptance Corporation, Key
Bank USA, National Association, AutoFinance Group, Inc., and Credit
Suisse First Boston Corporation, as underwriter, dated as of February
14, 1997.
3.1 Amended and Restated Certificate of Incorporation of Key Consumer
Acceptance Corporation, dated as of February 19, 1997.
4.1 Indenture between Key Auto Finance Trust 1997-1, and Bankers Trust
Company, as indenture trustee, dated as of February 21, 1997.
4.2 Trust Agreement between Key Consumer Acceptance Corporation, as
depositor, and Chase Manhattan Bank Delaware, as owner trustee, dated
as of February 21, 1997.
99.1 Sale and Servicing Agreement among Key Auto Finance Trust 1997-1, Key
Consumer Acceptance Corporation, as seller, Key Bank, USA, National
Association, as servicer, and Bankers Trust Company, as indenture
trustee, dated as of February 21, 1997.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KEY CONSUMER ACCEPTANCE CORPORATION
(Registrant)
Dated: March 28, 1997 By: /s/ Craig T. Platt
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Name: Craig T. Platt
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Title: President and Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT
No. Document Description
1.1 Underwriting Agreement among Key Consumer Acceptance Corporation,
Key Bank USA, National Association, AutoFinance Group, Inc., and
Credit Suisse First Boston Corporation, as underwriter, dated as of
February 14, 1997.
3.1 Amended and Restated Certificate of Incorporation of Key Consumer
Acceptance Corporation, dated as of February 19, 1997.
4.1 Indenture between Key Auto Finance Trust 1997-1, and Bankers Trust
Company, as indenture trustee, dated as of February 21, 1997.
4.2 Trust Agreement between Key Consumer Acceptance Corporation, as
depositor, and Chase Manhattan Bank Delaware, as owner trustee,
dated as of February 21, 1997.
99.1 Sale and Servicing Agreement among Key Auto Finance Trust 1997-1,
Key Consumer Acceptance Corporation, as seller, Key Bank, USA,
National Association, as servicer, and Bankers Trust Company, as
indenture trustee, dated as of February 21, 1997.
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EXHIBIT 1.1
KEY AUTO FINANCE TRUST 1997-1
$300,000,000 CLASS A-1 5.85% ASSET BACKED NOTES
$66,000,000 CLASS A-2 6.05% ASSET BACKED NOTES
$46,141,000 CLASS A-3 6.15% ASSET BACKED NOTES
$26,307,000 CLASS B 6.40% ASSET BACKED NOTES
KEY CONSUMER ACCEPTANCE CORPORATION
(Seller)
KEY BANK USA, NATIONAL ASSOCIATION
(Servicer)
UNDERWRITING AGREEMENT
February 14, 1997
CREDIT SUISSE FIRST
BOSTON CORPORATION
Eleven Madison Avenue
New York, NY 10010-3629
Ladies and Gentlemen:
Key Consumer Acceptance Corporation, a Delaware corporation (the "Seller")
and a wholly owned limited-purpose subsidiary of KeyCorp, an Ohio corporation
("KeyCorp"), proposes to sell to Credit Suisse First Boston Corporation (the
"Underwriter") $300,000,000 aggregate principal amount of Class A-1 5.85% Asset
Backed Notes (the "Class A-1 Notes"), $66,000,000 aggregate principal amount of
Class A-2 6.05% Asset Backed Notes (the "Class A-2 Notes"), $46,141,000
aggregate principal amount of Class A-3 6.15% Asset Backed Notes (the "Class A-3
Notes") and $26,307,000 aggregate principal amount of Class B 6.40% Asset Backed
Notes (the "Class B Notes," and, together with the Class A-1 Notes, the Class
A-2 Notes and the Class A-3 Notes, the "Notes"). The Notes are issued by the Key
Auto Finance Trust 1997-1 (the "Trust"). The Trust also will issue $17,538,000
aggregate principal amount of certificates (the "Certificates" and, together
with the Notes, the "Securities"). Each Certificate will represent a fractional
undivided interest in the Trust. Each Note will be secured by the assets of the
Trust pursuant to the Indenture (as hereinafter defined).
The assets of the Trust include, among other things, a pool of retail
motor vehicle loans and retail installment sale contracts secured by new and
used automobiles and light trucks
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(the "Receivables") and certain monies received under the Receivables after
January 31, 1997 (the "Cutoff Date"), such Receivables to be serviced for the
Trust by Key Bank USA, National Association (the "Bank") in its capacity as
servicer (in such capacity, the "Servicer").
The Receivables will be sold to the Seller by each of the Bank and
AutoFinance Group, Inc., an Ohio corporation ("AFG," and together with the Bank,
the "Originators") pursuant to a Purchase Agreement, dated as of the Closing
Date (each such agreement, a "Purchase Agreement") between the Seller and each
of the Bank and AFG. The Receivables will be conveyed by the Seller to the Trust
pursuant to a Sale and Servicing Agreement dated as of the Closing Date among
the Seller, the Servicer, Bankers Trust Company, as indenture trustee (the
"Indenture Trustee") and Chase Manhattan Bank Delaware, as owner trustee (the
"Trustee") (the "Sale and Servicing Agreement"). The Bank will grant the Trust a
security interest in the Receivables and related assets under and subject to the
terms of an Affiliate Security Agreement dated as of the Closing Date (the
"Affiliate Security Agreement") between the Bank and the Trust.
The Notes will be issued pursuant to an Indenture to be dated as of the
Closing Date (the "Indenture"), between the Trust and the Indenture Trustee. The
Servicer will agree to perform certain administrative tasks pursuant to an
Administration Agreement to be dated as of the Closing Date (the "Administration
Agreement"). The Certificates will be issued pursuant to a Trust Agreement to be
dated as of the Closing Date (the "Trust Agreement") between Seller and the
Trustee.
The Seller has prepared in conformity in all material respects 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"), and
filed with the Securities and Exchange Commission (the "Commission") a
registration statement (Reg. No. 333-12431), including a prospectus, relating to
the Securities. The registration statement as amended at the time it became
effective, or, if any post-effective amendment has been filed with respect
thereto, as amended by the most recent post-effective amendment at the time of
its effectiveness, is referred to as the "Registration Statement," the form of
base prospectus included in the Registration Statement as most recently filed
with the Commission is referred to as the "Base Prospectus" and the form of the
prospectus which includes the Base Prospectus and a prospectus supplement
describing the Notes and the offering thereof (the "Prospectus Supplement")
which prospectus is first filed on or after the date of this Agreement in
accordance with Rule 424(b) is referred to in this Agreement as the
"Prospectus".
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The terms which follow, when used in this Agreement, shall have the
meanings indicated. "Effective Date" shall mean the latest of the dates that the
Registration Statement or the most recent post-effective amendment thereto
became effective. "Execution Time" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "Rule 424" refers to
such rule under the Act. "Basic Documents" shall mean each Purchase Agreement,
the Affiliate Security Agreement, the Sale and Servicing Agreement, the
Indenture, the Trust Agreement, the Administration Agreement, the Certificate
Purchase Agreement with respect to the Certificates (the "Certificate Purchase
Agreement"), this Agreement, the Securities and each Depository Agreement.
"Participating Entity" means each of AFG, the Bank and the Seller.
"Securityholder" means any Noteholder and any Certificateholder and "Security
Owner" means the beneficial owner of any Note or Certificate. To the extent not
defined herein, capitalized terms used herein have the meanings assigned to such
terms in Appendix X to the Sale and Servicing Agreement.
The Participating Entities agree (severally and not jointly, except as
otherwise expressly provided herein) with the Underwriter as follows:
1. The Seller agrees to sell and deliver to the Underwriter as hereinafter
provided, and the Underwriter, upon the basis of the representations and
warranties herein contained, but subject to the conditions hereinafter stated,
agrees to purchase from the Seller, the Notes. The purchase price for Notes of
any class will be the applicable percentage set forth on Schedule I hereto of
the aggregate principal amount of such class purchased.
2. The Seller understands that the Underwriter intends (i) to make a
public offering of the Notes purchased by the Underwriter hereunder as soon
after the Registration Statement and this Agreement have become effective as in
the judgment of the Seller and the Underwriter is advisable and (ii) initially
to offer the Notes purchased by the Underwriter hereunder upon the terms set
forth in the Prospectus.
3. Payment for the Notes purchased by the Underwriter hereunder shall be
made to the Seller or to its order by wire transfer of same day funds at the
office of Mayer Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603
at 10:00 A.M., Chicago, Illinois time on February 21, 1997, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Underwriter and the Seller may agree upon in writing (the
"Closing Date"). As used herein, the term "Business Day" means any day other
than a day on which banks generally are permitted or required to be closed in
New York, New York or Cleveland, Ohio.
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Payment for the Notes purchased by the Underwriter hereunder shall be made
against delivery to the Underwriter for the account of the Underwriter on the
Closing Date of such Notes in definitive form registered in the name of Cede &
Co. as nominee of The Depository Trust Company and in such denominations, as
permitted by the Basic Documents, as the Underwriter shall request in writing
not later than a reasonable time prior to the Closing Date, with any transfer
taxes payable in connection with the transfer to the Underwriter of the Notes
duly paid by the Seller. The Seller shall make such definitive certificates
representing the Notes available for inspection by the Underwriter at the office
of Mayer, Brown & Platt, 190 South LaSalle Street, Chicago, Illinois 60603 not
later than 1:00 P.M., Chicago, Illinois time, on the Business Day prior to the
Closing Date.
4. Each Participating Entity represents and warrants
(severally and not jointly) to and agrees with the Underwriter
that:
(a) The Registration Statement, including amendments thereto as may
have been required on or prior to the date hereof, relating to the Notes,
has been filed with the Commission and such Registration Statement as
amended has become effective. The conditions to the use by the Seller 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 with respect to the
Registration Statement and the Prospectus.
(b) 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 such Participating Entity, threatened
by the Commission, and (i) on the Effective Date of the Registration
Statement, the Registration Statement conformed in all material 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, in light of the circumstances under which they were
made, not misleading, (ii) on the date of this Agreement, the Prospectus
conforms in all material respects to the requirements of the Act and the
Rules and Regulations, and does 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, in light of the
circumstances under which they were made, not misleading, and (iii) at the
time of filing of the Prospectus pursuant to Rule 424(b) and on the
Closing Date the Registration Statement and the Prospectus will conform
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in all material 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, in light
of the circumstances under which they were made, 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 Participating Entities in writing by the
Underwriter expressly for use in the Registration Statement or the
Prospectus (collectively, "Underwriter Information"). Each Participating
Entity hereby agrees with the Underwriter that, for all purposes of this
Agreement, the only Underwriter Information furnished consists of (1) the
statements in the first sentence of the paragraph immediately below the
pricing table with respect to the terms of the offering on the cover page
of the Prospectus Supplement, (2) the capitalized paragraph with respect
to stabilizing transactions in secondary markets in the Notes on page S-2
of the Prospectus Supplement, and (3) the statements in the second
paragraph under the caption "Underwriting" in the Prospectus Supplement.
(c) The computer tapes with respect to the Receivables to be sold to
the Trust created as of the Cutoff Date (the "Computer Tapes"), and made
available to the Underwriter by each of the Bank and AFG, respectively,
were complete and accurate in all material respects as of the date
thereof.
(d) Such Participating Entity is either a corporation or national
bank that is duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, with power and authority to
own its properties and conduct its business as now conducted by it and had
at all relevant times, and has, full power, authority and legal right to
acquire, own and sell the Receivables and the other Trust Property. Such
Participating Entity has the power, authority and legal right to execute,
deliver and perform this Agreement and each of the other Basic Documents
to which it is a party and to carry out their respective terms and to sell
and assign the respective property to be sold and assigned to and
deposited with the Trustee as Trust Property.
(e) The Securities have been duly authorized, and, when issued and
delivered pursuant to the Basic Documents and duly executed and
authenticated by the Trustee and the Indenture Trustee, as applicable,
will be duly and validly issued, authenticated and delivered and entitled
to the benefits provided by the Basic Documents. The execution,
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delivery and performance by such Participating Entity of each of the Basic
Documents to which it is a party and the consummation of the transactions
contemplated hereby and thereby have been duly authorized by such
Participating Entity by all necessary corporate action. The Basic
Documents to which such Participating Entity is a Party have been duly
executed and delivered by such Participating Entity and, when executed and
delivered by such Participating Entity and the other parties thereto, each
of such Basic Documents will constitute a legal, valid and binding
obligation of such Participating Entity, enforceable against such
Participating Entity in accordance with its respective terms, subject, as
to enforceability, to applicable bankruptcy, insolvency, reorganization,
moratorium, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors generally and to
equitable limitations on the availability of specific remedies. The
Securities and the Basic Documents conform to the descriptions thereof in
the Prospectus in all material respects. The Notes and the Indenture have
been duly executed and delivered by the Trust and, when the Indenture is
executed and the Notes are authenticated by the Indenture Trustee, the
Indenture and the Notes will constitute legal, valid and binding
obligations of the Trust, enforceable in accordance with their respective
terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, moratorium, conservatorship, receivership,
liquidation and other similar laws affecting enforcement of the rights of
creditors generally and to equitable limitations on the availability of
specific remedies.
(f) No consent, approval, authorization, license or other order or
action of, or filing or registration with, any court or governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance by such Participating Entity of any of the Basic
Documents to which it is a party or the consummation of the transactions
contemplated hereby or thereby except such as have been obtained and made
under the Act and the Rules and Regulations or state securities laws and
any filings of UCC financing statements.
(g) Such Participating Entity is not in violation of its articles or
certificate of incorporation, articles of association, code of regulations
or bylaws or in default in the performance or observance of any material
obligation, agreement, covenant or condition contained in any agreement or
instrument to which it is a party or by which it is bound which violation
or default would have a material adverse effect on the transactions
contemplated herein or in the
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Basic Documents. The execution, delivery and performance by such
Participating Entity of the Basic Documents to which it is a party, the
consummation of the transactions contemplated hereby and thereby and the
compliance with the terms and provisions hereof and thereof will not
materially conflict with or result in a material breach or violation of
any of the terms and provisions of, constitute (with or without notice or
lapse of time or both) a material default under or result in the creation
or imposition of any Lien (other than as contemplated by the Basic
Documents) upon any of its properties pursuant to the terms of, (A) the
articles or certificate of incorporation, articles of association, code of
regulations or bylaws of such Participating Entity, (B) any material
indenture, contract, lease, mortgage, deed of trust or other instrument or
agreement to which such Participating Entity is a party or by which such
Participating Entity is bound, which violation or default would have a
material adverse effect on the transactions contemplated herein or in the
Basic Documents or (C) any law, order, rule or regulation applicable to
such Participating Entity of any regulatory body, any court,
administrative agency or other governmental instrumentality having
jurisdiction over such Participating Entity.
(h) There are no proceedings or investigations pending, or, to the
knowledge of such Participating Entity threatened, to which such
Participating Entity is a party before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
(i) that are required to be disclosed in the Registration Statement or the
Prospectus and are not so disclosed, (ii) asserting the invalidity of this
Agreement or any of the Basic Documents, (iii) seeking to prevent the
issuance of the Securities or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (iv) seeking
any determination or ruling that might materially and adversely affect the
performance by such Participating Entity of its obligations under, or the
validity or enforceability of, this Agreement or any of the Basic
Documents, (v) that may materially and adversely affect the federal or
state income, excise, franchise or similar tax attributes of any of the
Securities, or (vi) which, if determined adversely, could individually or
in the aggregate reasonably be expected to materially adversely affect the
interests of the holders of any of the Securities or the marketability of
any of the Securities.
(i) 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
pursuant to the Act
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and the Rules and Regulations which are not filed or
described as required.
(j) The representations and warranties of such Participating Entity
contained in the Basic Documents to which it is a party are true and
correct as of the dates of the respective Basic Documents in all material
respects.
(k) By assignment and delivery of each of the Receivables of each
Originator to the Seller as of the Closing Date, such Originator will
transfer title in such Receivables to the Seller, subject to no Lien prior
or equal to the ownership interest granted to the Seller. By assignment
and delivery of each of the Receivables to the Trust as of the Closing
Date, the Seller will transfer title in the Receivables to the Trust,
subject to no Lien prior or equal to the ownership or security interest
granted to the Trust.
(l) Ernst & Young are independent public accountants with respect to
the Participating Entities within the meaning of the Act and the Rules and
Regulations.
5. Each Participating Entity covenants and agrees (severally and not
jointly) with the Underwriter that:
(a) Prior to the termination of the offering of the Notes, the
Seller will not file or cause to be filed any amendment of the
Registration Statement or supplement to the Prospectus without first
furnishing to the Underwriter a copy of the proposed amendment or
supplement and giving the Underwriter a reasonable opportunity to review
the same. Subject to the foregoing sentence, the Seller 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 Underwriter of such timely filing. The Seller will promptly advise
the Underwriter (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b), (ii) when 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 Seller of notification with
respect to the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the initiation or
threatening of any proceeding for that purpose and (v) of the receipt by
the Seller of notification with respect to the suspension of the
qualification of the
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Securities for sale in any jurisdiction or the initiation or threatening
of any proceeding for such purpose. Such Participating Entity will use its
reasonable efforts to prevent the issuance of any such stop order and, if
issued, to obtain as soon as possible the withdrawal thereof. The receipt
by the Underwriter of any amendment or supplement to the Registration
Statement or Prospectus, as applicable, shall not be deemed a waiver of
any condition set forth in Section 7 hereof.
(b) The Seller will deliver, at its expense, to the Underwriter, two
signed copies of the Registration Statement (as originally filed) and each
amendment thereto, in each case including exhibits, and, during the period
mentioned in paragraph (e) below, to the Underwriter as many copies of the
Prospectus (including all amendments and supplements thereto) as the
Underwriter may reasonably request. The Seller will furnish or cause to be
furnished to the Underwriter copies of all reports on Form SR required by
Rule 463 under the Act.
(c) If during such period of time after the first date of the public
offering of the Notes as in the opinion of counsel for the Underwriter a
prospectus relating to the Notes is required by law to be delivered in
connection with sales by the Underwriter or a dealer, 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
materially misleading, or it is necessary to amend or supplement the
Prospectus to comply with applicable law, the Seller will forthwith
prepare and furnish, at the expense of the Seller, to the Underwriter and
to the dealers (whose names and addresses the Underwriter will furnish to
the Seller) to which Notes may have been sold by the Underwriter and upon
request by the Underwriter to any other dealers identified by the
Underwriter, 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 materially misleading or so
that the Prospectus will comply with applicable law. Neither your consent
to, nor the Underwriter's delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section 7.
(d) The Seller will endeavor to qualify the Notes for offer and sale
under the securities or Blue Sky laws of such jurisdictions as the
Underwriter shall reasonably request and will continue such qualification
in effect so long as
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reasonably required for distribution of the Notes and will pay all
reasonable fees and expenses (including fees and disbursements of counsel
to the Underwriter to the extent provided in Section 6(iii) hereof)
incurred in connection with such qualification and in connection with the
determination of the eligibility of the Notes for investment under the
laws of such jurisdictions as the Underwriter may designate; provided,
however, that the Seller 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 Seller shall not be required to file a general
consent to service of process in any jurisdiction.
(e) The Seller will cause the Trust to make generally available to
Securityholders and to the Underwriter all financial information required
to be sent to Securityholders pursuant to the Basic Documents.
(f) For the period from the date of this Agreement until the
retirement of all of the Securities the Servicer will furnish to the
Underwriter (i) copies of each Servicer's Certificate and the annual
statements of compliance delivered to the Trustee or Indenture Trustee
pursuant to the Basic Documents and the annual independent certified
public accountant's servicing reports furnished to the Trustee or
Indenture Trustee pursuant to the Basic Documents, by first-class mail at
the same time such statements and reports are furnished to the Trustee or
Indenture Trustee, (ii) copies of each amendment to any of the Basic
Documents, (iii) copies of all other reports and communications to any
Securityholders or Security Owners, or to or from the Trustee, Indenture
Trustee, the Clearing Agency, any Rating Agency or the Commission relating
to the Trust or the Securities, (iv) copies of each Opinion of Counsel and
Officer's Certificate delivered pursuant to the Basic Documents, as soon
as available, and (v) from time to time, such other information concerning
the Trust or the Participating Entities as the Underwriter may reasonably
request.
(g) If required, the Seller will register the Notes pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), prior to
April 30, 1998.
(h) To the extent, if any, that the ratings provided with respect to
the Notes by the Rating Agencies are conditional upon the furnishing of
documents or the taking of any other action by any Participating Entity,
such Participating Entity shall furnish or cause to be furnished such
documents and use reasonable efforts to take any such other action.
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6. The Participating Entities will pay all costs and expenses incident to
the performance of their respective obligations under this Agreement, including,
without limiting the generality of the foregoing, all costs and expenses (i)
incident to the preparation, issuance, execution, authentication and delivery of
the Notes, (ii) incident to the preparation, printing (or otherwise
reproducing), filing and delivery under the Act of the Registration Statement,
the Prospectus and any preliminary prospectus (including in each case all
exhibits, amendments and supplements thereto), (iii) incurred in connection with
the registration or qualification and determination of eligibility for
investment of the Notes under the laws of such jurisdictions as the Underwriter
may designate (including fees and disbursements of counsel for the Underwriter
with respect thereto), (iv) related to any filing with the National Association
of Securities Dealers, Inc., (v) in connection with the printing (including word
processing and duplication costs) and delivery of this Agreement, the Basic
Documents and any Blue Sky Memorandum and the furnishing to the Underwriter and
dealers of copies of the Registration Statement, any preliminary prospectus and
the Prospectus (including exhibits, amendments and supplements thereto) as
herein provided, (vi) the fees and disbursements of the counsel of the
Participating Entities and accountants and all fees and disbursements of
Underwriter's counsel other than a portion of such fees and disbursements to be
agreed between Seller and the Underwriter, (vii) any fees and expenses payable
to the Clearing Agency, (viii) any fees and expenses payable to the Rating
Agencies in connection with the rating of the Notes and (ix) any fees and
expenses of the Trustee and the Indenture Trustee.
7. The obligations of the Underwriter to purchase and pay for the Notes
will be subject to the accuracy in all material respects, as of the date hereof
and the Closing Date, of the representations and warranties on the part of the
Participating Entities herein, to the accuracy of the statements of officers of
the Participating Entities made in any writing delivered at the Closing pursuant
to the provisions hereof, to the performance by each of the Participating
Entities of its obligations hereunder and to the following additional conditions
precedent:
(a) At each of the time this Agreement is executed and delivered by
the Participating Entities and at the Closing Date, Ernst & Young shall
have furnished to the Underwriter letters dated, respectively, as of the
date of this Agreement and as of the Closing Date, substantially in the
forms of the drafts to which the Underwriter previously agreed and
otherwise in form and substance satisfactory to the Underwriter and Ernst
& Young.
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(b) The form of prospectus used to confirm sales of Notes 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 Participating Entities, contemplated 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 reasonable satisfaction of the Underwriter.
(c) The Underwriter shall have received officer's certificates,
dated the Closing Date, signed by any Vice President or more senior
officer of each Participating Entity, representing and warranting that, as
of the Closing Date, the representations and warranties of such
Participating Entity in this Agreement and the Basic Documents are true
and correct, that such Participating Entity has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder or under the Basic Documents at or prior to the
Closing Date, that no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that purpose
have been instituted or, to the best of such officer's knowledge,
contemplated by the Commission, and that since December 31, 1995, there
has been no material adverse change, or any development involving a
material adverse change, in or affecting particularly any Originator's
portfolio of Motor Vehicle Loans or the business or properties of the
Trust, any Participating Entity or KeyCorp which materially impairs the
investment quality of the Notes.(1)
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) any material adverse change, or any
development involving a material adverse change, in or affecting the
business, operations, financial condition or properties of the Trust, any
Participating Entity or KeyCorp which, in the reasonable judgment of the
Underwriter, materially impairs the investment quality of the Notes or
makes it impractical or inadvisable to proceed with completion of the sale
of and payment for the Notes, (ii) any downgrading in the rating of
- --------
(1) NOTE: The statements relating to KeyCorp may, in the
discretion of the Seller, be contained in a separate
officer's certificate from an officer of KeyCorp.
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<PAGE> 13
any debt securities of KeyCorp or any Participating Entity 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 no implication of a
possible downgrading, of such rating).
(e) Forrest F. Stanley, Esq., General Counsel of the Bank, shall
have furnished to the Underwriter his written opinion, dated the Closing
Date, in form and substance satisfactory to the Underwriter, to the effect
that:
(i) Each Participating Entity has been duly organized and is
validly existing and in good standing under the laws of its
jurisdiction of organization. Each Participating Entity has
corporate power and authority (a) to own its properties and conduct
its business as now conducted by it; (b) to own, sell, assign and,
in the case of the Servicer and AFG, service the Receivables and the
other Trust Property; (c) in the case of the Seller, to establish
the Trust and sell the Securities as contemplated by this Agreement
and the Basic Documents; and (d) to execute and deliver this
Agreement and the Basic Documents to which it is a party and to
carry out their respective terms.
(ii) The execution, delivery, and performance of each of this
Agreement and the Basic Documents and the consummation of the
transactions contemplated hereby and thereby have been duly
authorized by each Participating Entity that is a party thereto by
all necessary corporate action. This Agreement and the Basic
Documents have been duly executed and delivered by, and each
constitutes a legal, valid and binding obligation of each
Participating Entity that is a party thereto enforceable against
such Participating Entity in accordance with its respective terms,
subject to the General Qualifications (as defined in Schedule II).
(iii) The execution, delivery and performance by each
Participating Entity of this Agreement and the Basic Documents to
which it is a party, the consummation of the transactions
contemplated hereby and thereby and the compliance with the terms
and provisions hereof and thereof will not materially conflict with
or result in a material breach of any of the terms or provisions of,
or constitute (with or without notice or lapse of time or both) a
material default under or result in the creation or imposition
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<PAGE> 14
of any Lien (other than as contemplated by the Basic Documents) upon
any of its properties pursuant to the terms of, (A) the certificate
of incorporation, articles of association or bylaws of such
Participating Entity, (B) to the actual knowledge of such counsel,
any material indenture, contract, lease, mortgage, deed of trust or
other instrument or agreement to which such Participating Entity is
a party or by which such Participating Entity is bound, which breach
or default would reasonably be expected to have a material adverse
impact on such Participating Entity or the transactions contemplated
by the Basic Documents, (C) any Court Order (as defined in Schedule
II) actually known to me, or (D) applicable provisions of statutory
law or regulations.
(iv) No consent, approval, authorization, license or other order
or action of, or filing or registration with, any court or
governmental authority, bureau or agency is required in connection
with the execution, delivery or performance by any Participating
Entity of this Agreement and the Basic Documents to which it is a
party, or the consummation of the transactions contemplated hereby
or thereby, except as may be required under the Act and the Rules
and Regulations and state securities laws and any filings of UCC
financing statements.
(v) The Seller has duly authorized, executed and delivered the
written order to each of the Trustee and Indenture Trustee to
execute and authenticate the applicable Securities. When the
Receivables have been transferred to the Trust, the Basic Documents
have been executed, the Securities have been authenticated by the
Trustee and Indenture Trustee, as applicable in accordance with the
Basic Documents, and the Notes and Certificates have been delivered
and paid for pursuant to this Agreement and the Certificate Purchase
Agreement, the Securities will be validly issued and outstanding and
entitled to the benefits provided by the Basic Documents, subject to
the General Qualifications, and the Indenture and the Notes will
constitute legal, valid and binding obligations of the Trust,
enforceable in accordance with their respective terms, subject, as
to enforceability, to the General Qualifications.
(vi) There are no proceedings or investigations pending or, to
my actual knowledge, threatened to which any Participating Entity is
a party before any court, regulatory body, administrative agency or
other
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<PAGE> 15
tribunal or governmental instrumentality having jurisdiction over
any Participating Entity, (A) that are required to be disclosed in
the Registration Statement or the Prospectus, other than those
disclosed therein, (B) asserting the invalidity of this Agreement or
any of the Basic Documents, (C) seeking to prevent the issuance of
the Securities or the consummation of any of the transactions
contemplated by this Agreement or any of the Basic Documents, (D)
seeking any determination or ruling that could materially and
adversely affect the performance of any Participating Entity's
obligations under, or the validity or enforceability of, this
Agreement or any of the Basic Documents to which it is a party, (E)
that may affect materially and adversely the federal or state
income, excise, franchise or similar tax attributes of any of the
Securities, or (F) that would reasonably be expected to materially
adversely affect the interests of the holders of any of the
Securities.
(vii) Such counsel is generally familiar with the standard
operating procedures relating to each Originator's acquisition of a
perfected security interest in the vehicles financed by such
Originator pursuant to retail motor vehicle loans and retail
installment sale contracts in the ordinary course of such
Originator's business. Assuming that each Originator's standard
procedures are followed with respect to the perfection of security
interests in the Financed Vehicles, such Originator has acquired or
will acquire a perfected security interest in the Financed Vehicles.
(viii) To such counsel's actual knowledge, there are no
contracts or other documents to which a Participating Entity is a
party 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.
Such opinion may be made subject to (i) the qualifications that the
enforceability of the terms of the Basic Documents may be subject to the
General Qualifications and (ii) the assumptions and limitations set forth
in Schedule III.
(f) Thompson Hine & Flory LLP, special counsel to the Participating
Entities, shall have furnished to the Underwriter its written opinion,
dated the Closing Date, in
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<PAGE> 16
form and substance satisfactory to the Underwriter, to the
effect that:
(i) The Receivables are "chattel paper" as defined
in the UCC.
(ii) All filings necessary under applicable law to perfect (A)
the transfer of the Receivables by each Originator to the Seller,
(B) the transfer of the Receivables by the Seller to the Trust, (C)
the security interest granted by the Bank to the Trust pursuant to
the Affiliate Security Agreement and (D) the security interest
granted by the Trust in the Receivables to the Indenture Trustee,
have been made and, provided that the Participating Entities and the
Trust do not relocate their respective principal places of business
and that the Trustee maintains the list of Receivables for
inspection by interested parties, no other filings (other than the
filing of continuation statements) need be made to maintain such
perfection, and the interest of the Seller, the Trust and the
Indenture Trustee, respectively, will constitute a perfected
security or ownership interest prior to any other security or
ownership interest that may be perfected by the filing of a
financing statement under the UCC. No consent, approval,
authorization, license or other order or action of, or filing or
registration with, any court or governmental authority, bureau or
agency is required (including filings of UCC financing statements)
under the Act, the Rules and Regulations or the UCC in connection
with the execution, delivery or performance by any Participating
Entity of this Agreement and the Basic Documents to which it is a
party, or the consummation of the transactions contemplated hereby
or thereby, except such as have been obtained or made.
(iii) The statements in the Registration Statement and the
Prospectus under the headings "Description of the Notes,"
"Description of the Certificates," "Certain Information Regarding
the Securities" and "Description of the Transfer and Servicing
Agreements," to the extent they purport to summarize the provisions
of the Basic Documents, constitute a fair summary of such documents.
The statements in the Registration Statement and the Prospectus
under the headings "Summary of Terms - Tax Status," "Summary of
Terms - ERISA Considerations," "Federal Income Tax Consequences,"
"State Tax Consequences" and "ERISA Considerations" accurately
describe the material Federal income tax, Ohio corporation franchise
tax and
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<PAGE> 17
ERISA consequences to Noteholders and Note Owners and, to the extent
they constitute descriptions of matters of law or legal conclusions
with respect thereto, have been prepared or reviewed by such counsel
and are correct in all material respects.
(iv) Except as described in the Prospectus, the Trust will not
be subject to income or franchise taxation in Ohio and the Trust
will not be subject to the Ohio dealer intangibles tax.
(v) Noteholders who are not residents of, or domiciled in, or
otherwise subject to taxation in Ohio will not be subject to Ohio
income or Ohio franchise taxation in such state solely by reason of
being Noteholders.
(vi) The Trust will be classified for federal income tax
purposes as a partnership and not as an association taxable as a
corporation, and the Notes will be characterized as debt for federal
and Ohio income and franchise tax purposes.
(vii) The Trust Agreement is not required to be qualified and
the Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended, and the Trust is not required to be registered
as an "investment company" under the Investment Company Act of 1940,
as amended.
(viii) The Registration Statement has become effective under the
Act and no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been initiated or, to the best of such counsel's
knowledge, threatened by the Commission. The Registration Statement
and the Prospectus (other than the accounting, financial and
statistical data contained in the Registration Statement or the
Prospectus, or omitted therefrom, as to which such counsel need
express no opinion) comply as to form in all material respects with
the requirements of the Act and the Rules and Regulations.
(ix) The Securities and the Basic Documents each conforms in all
material respects with the descriptions thereof contained in the
Registration Statement and the Prospectus.
(x) To the extent, if any, that the Purchase
Agreement between the Bank and the Seller does not
-17-
<PAGE> 18
constitute a valid sale, transfer and assignment of the Receivables
from the Bank to the Seller, the Affiliate Security Agreement
constitutes the creation of a valid perfected first priority
security interest in the Receivables in favor of the Trust.
(xi) In the event that the Federal Deposit Insurance
Corporation were to be appointed as conservator or receiver for the
Bank pursuant to the Federal Deposit Insurance Act, as amended, the
interests in the Receivables granted to the Trust would be
enforceable against the Bank notwithstanding the appointment of the
Federal Deposit Insurance Corporation as receiver or conservator for
the Bank.
(xii) Nothing has come to such counsel's attention that would
cause it to believe that as of the date of the Prospectus and at the
Closing Date (x) the Registration Statement, the Prospectus and any
amendments and supplements thereto (other than the financial
statements and other accounting, statistical and financial
information contained therein or omitted therefrom, as to which such
counsel need express no belief) contained or contain any untrue
statement of a material fact or omitted or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading and (y) the descriptions therein of
laws, rules, regulations, governmental proceedings, legal matters,
contracts and documents are not accurate in all material respects or
do not fairly present the information required to be shown therein.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Basic Documents may be subject to
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
(g) Thompson Hine & Flory LLP, special counsel to the Participating
Entities, shall have furnished its written opinion, dated the Closing
Date, with respect to (i) nonconsolidation under the Bankruptcy Code of
the assets and liabilities of the Seller on the one hand, and those of
either KeyCorp, AFG or any other Affiliate subject to the Bankruptcy Code
on the other, in the event KeyCorp, AFG or any such Affiliate were to
become subject of a case under the Bankruptcy Code, (ii) the
characterization of the
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<PAGE> 19
transfer of the Receivables from each Originator to the Seller and from
the Seller to the Trust and perfection of the Trust's and the Indenture
Trustee's interest in the Receivables, and (iii) that the Trust and the
Indenture Trustee will have a first priority perfected security interest
in the Financed Vehicles located in the State of Washington, and such
opinions shall be in substantially the forms previously agreed with the
Underwriter and its counsel and in any event satisfactory in form and in
substance to the Underwriter and its counsel.
(h) The Underwriter shall have received an opinion of Mayer, Brown &
Platt, counsel to the Underwriter dated the Closing Date, with respect to
the validity of the Securities and such other related matters as the
Underwriter shall require and the Participating Entities shall have
furnished or caused to be furnished to such counsel such documents as they
may reasonably request for the purpose of enabling them to pass upon such
matters.
(i) The Underwriter shall have received an opinion addressed to the
Underwriter of counsel to the Trustee, dated the Closing Date and
satisfactory in form and substance to the Underwriter and its counsel, to
the effect that:
(i) The Trustee has been duly organized and is validly
existing and in good standing under the laws of its jurisdiction of
organization. The Trustee has full power, authority and legal right
to execute, deliver and perform the Basic Documents to which it is a
party and to carry out their respective terms.
(ii) The execution, delivery and performance by the Trustee of
each of the Basic Documents to which the Trustee or the Trust is a
party and the consummation of the transactions contemplated thereby,
have been duly authorized by the Trustee by all necessary action.
The Basic Documents to which the Trustee is a party have been duly
executed and delivered by the Trustee, and, when executed and
delivered by the other parties thereto, such Basic Documents will
constitute legal, valid and binding obligations of the Trustee
enforceable against the Trustee in accordance with their respective
terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the
availability of specific remedies. The Basic Documents to which the
Trust is a party have been duly executed
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<PAGE> 20
and delivered by the Trust, and when executed and delivered by the
other parties thereto, such Basic Documents will constitute legal,
valid and binding obligations of the Trust enforceable against the
Trust in accordance with their respective terms, subject, as to
enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other
similar laws affecting enforcement of the rights of creditors
generally and to equitable limitations on the availability of
specific remedies.
(iii) No consent, approval, authorization, license or other
order or action of, or filing or registration with, any court or
governmental authority, bureau or agency is required in connection
with the execution, delivery or performance by the Trustee or the
Trust of the Basic Documents to which it is a party or the
consummation of the transactions contemplated thereby except such as
have been obtained and made under the Act and the Rules and
Regulations or state securities laws and the filing of any UCC
financing statements required to perfect the Trust's interest in the
Receivables.
(iv) The execution, delivery and performance by the Trustee of
the Basic Documents to which it is a party, the consummation of the
transactions contemplated thereby and the compliance with the terms
and provisions thereof will not conflict with or result in a breach
or violation of any of the terms and provisions of, constitute (with
or without notice or lapse of time or both) a default under or
result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of, (A) the articles of association
or bylaws of the Trustee, (B) any indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which
the Trustee is a party or by which the Trustee is bound or any of
its properties are subject, or (C) any law, order, rule or
regulation applicable to the Trustee or its properties, of any
regulatory body, any court, administrative agency or other
governmental instrumentality having jurisdiction over the Trustee or
any of its properties.
(v) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(vi) There are no actions, suits or proceedings pending or, to
the best of such counsel's knowledge, threatened against the Trustee
before any court, or by
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<PAGE> 21
or before any federal, state, municipal or other governmental
department, commission, board, bureau or governmental agency or
instrumentality, or arbitrator which would, if adversely determined,
affect in any material respect the consummation, validity or
enforceability against the Trustee of any of the Basic Documents.
(vii) The Trust has been duly formed and is validly existing
as a statutory business trust under the laws of the State of
Delaware, with full power and authority to execute, deliver and
perform its obligations under the Basic Documents to which it is a
party.
(j) The Underwriter shall have received from counsel for the Indenture
Trustee a favorable opinion, dated the Closing Date and satisfactory in
form and substance to the Underwriter and its counsel to the effect that:
(i) The Indenture Trustee is duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization. The Indenture Trustee has full power, authority and
legal right to execute, deliver and perform the Basic Documents to
which it is a party and carry out their respective terms.
(ii) The execution, delivery and performance by the Indenture
Trustee of the Basic Documents to which it is a party and the
consummation of the transactions contemplated thereby have been duly
authorized by the Indenture Trustee by all necessary action. The
Basic Documents to which it is a party have been duly executed and
delivered by the Indenture Trustee, and when executed and delivered
by the other parties thereto, will constitute legal, valid and
binding obligations of the Indenture Trustee, enforceable against
the Indenture Trustee in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation or other
similar laws affecting the enforcement of rights of creditors
generally and to equitable limitations on the availability of
specific remedies.
(iii) The Notes have been duly authenticated and delivered by
the Indenture Trustee.
(iv) No consent, approval, authorization, license
or other order or action of, or filing or registration
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<PAGE> 22
with, any court or governmental authority, bureau or agency is
required in connection with the execution, delivery or performance
of the Basic Documents to which it is a party by the Indenture
Trustee or the consummation of the transactions contemplated
thereby.
(v) The execution, delivery and performance of the Basic
Documents to which it is a party by the Indenture Trustee, the
consummation of the transactions contemplated thereby and compliance
with the terms and provisions thereof will not conflict with or
result in a breach or violation of any of the terms and provisions
of, constitute (with or without notice or lapse of time or both) a
default under or result in the creation or imposition of any Lien
upon any of its properties pursuant to the terms of, (A) the
charter, articles of association or bylaws of the Indenture Trustee,
(B) any indenture, contract, lease, mortgage, deed of trust or other
instrument or agreement to which the Indenture Trustee is a party or
by which the Indenture Trustee is bound or any of its properties are
subject, or (C) any law, order, rule or regulation applicable to the
Indenture Trustee or its properties, of any regulatory body, any
court, administrative agency or other governmental instrumentality
having jurisdiction over the Indenture Trustee or any of its
properties.
(vi) There are no actions, suits or proceedings pending or, to
the best of such counsel's knowledge, threatened against the
Indenture Trustee before any court, or by or before any federal,
state, municipal or other governmental department, commission,
board, bureau or governmental agency or instrumentality, or
arbitrator which would, if adversely determined, affect in any
material respect the consummation, validity or enforceability
against the Indenture Trustee of the Indenture.
(vii) If the Indenture Trustee were acting as Servicer under
the Basic Documents as of the date of this Agreement, the Indenture
Trustee would have the corporate power and authority to perform the
obligations of the Servicer as provided in the Basic Documents.
(k) If any Rating Agency shall have requested any legal opinion,
officer's certificate or other document not required by this Agreement,
the Underwriter also shall have received such legal opinion, officer's
certificate or other document together with a letter from the party
delivering
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<PAGE> 23
such opinion, certificate or document allowing the Underwriter to rely on
such opinion, certificate or document as if it were addressed to the
Underwriter.
(l) The Class A-1 Notes, Class A-2 Notes and Class A-3 Notes shall
have been rated the highest possible long-term rating category by each of
the Rating Agencies and the Class B Notes shall have been rated at least
in the "A" category or its equivalent by each of the Rating Agencies.
(m) On the Closing Date, the representations and warranties of the
Participating Entities in the Basic Documents will be true and correct in
all material respects.
(n) Any taxes, fees and other governmental charges which are due and
payable in connection with the execution, delivery and performance of this
Agreement and the Basic Documents shall have been paid by the Seller at or
prior to the Closing Date.
(o) The Seller shall have made or caused to be made a deposit in the
Reserve Account in the amount of the Reserve Account Initial Deposit.
(p) The Underwriter shall have received evidence satisfactory to it
that, on or before the Closing Date, UCC- 1 financing statements have been
filed in the offices of the Secretaries of State of Ohio, Illinois and
Delaware and Cuyahoga County, Ohio reflecting the interest of each of the
Seller, the Trust and the Indenture Trustee in the Receivables, the other
Trust property and the proceeds thereof.
(q) The closing shall have occurred under the Certificate Purchase
Agreement.
8. Each Participating Entity jointly and severally (except as otherwise
set forth at the conclusion of this paragraph) agrees to indemnify and hold
harmless the Underwriter and each person, if any, who controls the 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), incurred by the Underwriter or such
controlling person and 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 Seller shall have furnished such
amendments or supplements thereto) or any preliminary prospectus, or caused
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<PAGE> 24
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, 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 the Underwriter Information; provided that the foregoing
indemnity with respect to any untrue statement or omission in any preliminary
prospectus shall not inure to the benefit of the Underwriter (or to the benefit
of any person controlling the Underwriter) if the person asserting any losses,
claims or damages purchased Securities from the Underwriter and 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 Seller shall have furnished any amendments or supplements
thereto) and 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 Securities to such person to the extent required by law, and,
provided further, that to the extent that any such losses, claims, damages or
liabilities incurred by the Underwriter or such controlling person shall have
been caused by such an untrue statement or alleged untrue statement (i) relating
to Receivables originated by AFG in its capacity as an Originator or as to any
such Receivables assigned and sold by AFG to the Seller, (ii) with respect to
AFG as the subservicer of such Receivables or relating to any such Receivables
subserviced by AFG, or (iii) with respect to AFG as the purchaser of any such
Receivables from the Seller or the Trust upon a breach of a representation,
warranty or covenant or as to any Receivables so purchased, in each case as
provided by the applicable Basic Documents, then and in each such event AFG and
the Seller shall be solely and severally liable to the Underwriter and such
controlling persons for all such losses, claims, damages and liabilities
incurred by each of them in accordance with the terms and provisions of this
Section 8, and the Bank shall not have any liability whatsoever to the
Underwriter or such controlling person for or to the extent of any such losses,
claims, damages or liabilities.
The Underwriter agrees to indemnify and hold harmless the Participating
Entities, each director and officer of the Participating Entities and each
person who controls any Participating Entity 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 Participating Entities to the Underwriter, but only with
reference to Underwriter Information delivered by the Underwriter.
If any suit, action, proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or
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<PAGE> 25
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 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 reasonable fees and expenses of such counsel
related to such proceeding; provided that the failure of the Indemnified Person
to give notice shall not relieve the Indemnifying Person of its obligations
under this Section 8 except to the extent (if any) that the Indemnifying Person
shall have been prejudiced thereby. 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. 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 any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred promptly following submission of a documented request for such
reimbursement. Any such separate firm for the Underwriter and such control
persons of the Underwriter shall be designated in writing by the Underwriter and
any such separate firm for the Participating Entities, their directors, officers
and control persons shall be designated in writing by the Bank. The Indemnifying
Person shall not be liable for any settlement of any claim or proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the Indemnifying Person agrees to
indemnify any Indemnified Person from and against any loss or liability by
reason of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an Indemnified Person shall have made two requests of 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
second aforesaid request and (ii) such Indemnifying Person shall not have
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<PAGE> 26
reimbursed the Indemnified Person in accordance with such requests 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 determined by a court to be unavailable 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 payable 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 Participating Entities on the one hand and the
Underwriter on the other hand from the offering of the Securities 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 Participating
Entities on the one hand and the Underwriter 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 considerations. The
relative benefits received by the Participating Entities on the one hand and the
Underwriter 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 Participating Entities and the total underwriting discounts and
the commissions received by the Underwriter, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault of the Participating Entities on the
one hand and the Underwriter 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 Participating Entities or by the Underwriter and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Participating Entities and the Underwriter agree that it would not be
just and equitable if contribution pursuant to this Section 8 were determined by
pro rata allocation or by any other method of allocation that does not take
account of the equitable
-26-
<PAGE> 27
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 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 the Underwriter be required to
contribute any amount in excess of the amount by which the total price at which
the Securities underwritten by it and distributed to the public were offered to
the public exceeds the amount of any damages that the 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 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 Participating Entities 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 the Underwriter or any person controlling the Underwriter or by or on
behalf of any Participating Entity or any of their officers or directors or any
other person controlling any Participating Entity and (iii) acceptance of and
payment for any of the Securities.
9. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Underwriter, by notice given to the
Seller, 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, or there shall have been any setting of minimum prices
for trading on either such exchange; (ii) trading of any securities of or
guaranteed by KeyCorp or any Participating Entity shall have been suspended on
any exchange or in any over-the-counter market; (iii) a moratorium on commercial
banking activities in New York or Ohio shall have been declared by either
federal, New York or Ohio 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 Underwriter
-27-
<PAGE> 28
is material and adverse and which, in the judgment of the Underwriter, makes it
impracticable to market the Notes 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.
11. If this Agreement shall be terminated by the Underwriter because of
any failure or refusal on the part of any Participating Entity to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Participating Entity shall be unable to perform its obligations under
this Agreement or any condition of the Underwriter's obligations cannot be
fulfilled, the Participating Entities agree to reimburse the Underwriter for all
out-of-pocket expenses (including the fees and expenses of their counsel)
reasonably incurred by the Underwriter in connection with this Agreement or the
offering contemplated thereunder.
12. 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
Underwriter shall be given to Credit Suisse First Boston Corporation, Eleven
Madison Avenue, New York, New York 10010-3629 (Facsimile No: (212) 325-8278),
Attention: Investment Banking--Transactions Advisory Group. Notices to the
Participating Entities shall be given to them at Key Tower, 127 Public Square,
Cleveland, Ohio 44114 (Facsimile No.: (216) 689-5708), Attention: Craig T.
Platt.
13. This Agreement shall inure to the benefit of and be binding upon the
Participating Entities, the Underwriter, 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 Notes from the Underwriter shall be deemed to be a successor by reason merely
of such purchase.
14. 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.
-28-
<PAGE> 29
[SIGNATURE PAGES FOLLOW]
-29-
<PAGE> 30
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 Participating Entities and the
Underwriter in accordance with its terms.
Very truly yours,
KEY CONSUMER ACCEPTANCE CORPORATION
By: /s/ Joseph A. Pampush
-----------------------------------
Name: Joseph A. Pampush
Title: Assistant Secretary
S-1
<PAGE> 31
KEY BANK USA, NATIONAL ASSOCIATION
By: /s/ Joseph A. Pampush
-----------------------------------
Name: Joseph A. Pampush
Title: Vice President-Controller
S-2
<PAGE> 32
AUTOFINANCE GROUP, INC.
By: /s/ Blair T. Nance
-----------------------------------
Name: Blair T. Nance
Title: Chief Financial Officer
S-3
<PAGE> 33
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON
CORPORATION, As Underwriter
By: /s/ W. Williams
--------------------------------
Name: W. Williams
Title: Associate
S-4
<PAGE> 34
SCHEDULE I
<TABLE>
<CAPTION>
Initial Initial Initial Initial
Principal Amount Principal Amount Principal Amount Principal Amount
of Class A-1 of Class A-2 of Class A-3 of Class B
Asset-Backed Asset-Backed Asset-Backed Asset-Backed
Notes Notes Notes Notes Total
---------------- ---------------- ---------------- ---------------- ------------
<S> <C> <C> <C> <C> <C>
Total: $300,000,000 $66,000,000 $46,141,000 $26,307,000 $438,448,000
============ =========== =========== =========== ============
Purchase Price: 99.750000% 99.656250% 99.656250% 99.521875% $437,186,735
============ =========== =========== =========== ============
</TABLE>
I-1
<PAGE> 35
SCHEDULE II
CERTAIN DEFINED TERMS
A. General Qualifications. As used in the Opinion Letter, the
term "General Qualifications" shall mean and include,
without limitation:
(1) the effect of bankruptcy, insolvency, reorganization, receivership,
moratorium, and similar laws affecting the rights and remedies of
creditors generally, including, without limitation, (a) the Federal
Bankruptcy Code; (b) all other Federal and state bankruptcy,
insolvency, reorganization, receivership, moratorium, arrangement,
and assignment for the benefit of creditors laws that affect the
rights and remedies of creditors generally or that have reference to
or affect generally only creditors of specific types of debtors, and
state laws of like character affecting generally only creditors of
financial institutions; (c) state fraudulent transfer and conveyance
laws; (d) judicially developed doctrines relevant to any of the
foregoing laws, such as substantive consolidation of entities;
(2) the effect of general principles of equity, whether applied by a
court of law or equity, including, without limitation, principles:
(a) governing the availability of specific performance, injunctive
relief, or other equitable remedies, including those principles
which may place the award of such remedies, subject to certain
guidelines, in the discretion of the court to which application for
such relief is made; (b) affording equitable defenses against a
party seeking enforcement; (c) requiring good faith and fair dealing
in the performance and enforcement of a contract by the party
seeking its enforcement; (d) requiring reasonableness in the
performance and enforcement of an agreement by the party seeking
enforcement of the contract; (e) requiring consideration of the
materiality of a breach and the consequences of the breach to the
party seeking enforcement; (f) requiring consideration of the
impracticability or impossibility of performance at the time of
attempted enforcement; (g) affording defenses based upon the
unconscionability of the enforcing party's conduct after the parties
have entered into the contract; and
(3) the effect of other generally applicable rules of law that: (a)
limit or affect the enforcement of provisions of a contract that
purport to require waiver
II-1
<PAGE> 36
of the obligations of good faith, fair dealing, diligence and
reasonableness; (b) provide that forum selection clauses in
contracts are not necessarily binding on the court(s) in the forum
selected; (c) limit the availability of a remedy under certain
circumstances where another remedy has been elected; (d) limit the
right of a creditor to use force or cause a breach of the peace in
enforcing rights; (e) relate to the sale or disposition of
collateral or the requirements of a commercially reasonable sale;
(f) limit the enforceability of provisions releasing, exculpating or
exempting a party from, or requiring indemnification of a party for,
liability for its own action or inaction, to the extent the action
or inaction involves gross negligence, recklessness, willful
misconduct or unlawful conduct; (g) may, where less than all of a
contract may be unenforceable, limit the enforceability of the
balance of the contract to circumstances in which the unenforceable
portion is not an essential part of the agreed exchange; (h) govern
and afford judicial discretion regarding the determination of
damages and entitlement to attorneys' fees and other costs; (i) may,
in the absence of a waiver or consent, discharge a guarantor to the
extent that (1) action by a creditor impairs the value of collateral
securing guaranteed debt to the detriment of the guarantor, or (2)
guaranteed debt is materially modified; (j) may permit a party who
has materially failed to render or offer performance required by the
contract to cure that failure unless (1) permitting a cure would
unreasonably hinder the aggrieved party from making substitute
arrangements for performance, or (2) it was important in the
circumstances to the aggrieved party that performance occur by the
date stated in the contract.
B. Actual Knowledge. The phrases "actually known to me," "my actual
knowledge" or similar phrases shall mean the conscious awareness of facts
or other information by me or by any lawyer in the KeyCorp Law Group in
Cleveland, Ohio.
C. Court Orders. The term "Court Orders" shall mean judicial administrative
orders, writs, judgments, and decrees that name the any Participating
Entity, are specifically directed to a Participating Entity or its
respective property, and are issued by a court of competent jurisdiction.
II-2
<PAGE> 37
SCHEDULE III
ASSUMPTIONS AND QUALIFICATIONS
For purposes of this opinion, I have assumed that (i) with respect to the
opinions expressed in paragraphs (ii) and (iii), each of the Bank and AFG holds
the requisite title and rights to the Receivables, (ii) the Underwriting
Agreements and the Basic Documents have been duly executed and delivered by all
parties thereto (other than the Participating Entities) and are valid and
binding upon and enforceable against such parties, subject to the General
Qualifications, (iii) there has been no mutual mistake of fact or
misunderstanding, fraud, duress, or undue influence, (iv) all statutes, judicial
and administrative decisions, and rules and regulations constituting Federal law
and the laws of the State of Ohio are generally available to lawyers practicing
in the State of Ohio and are in a format that make legal research reasonably
feasible, and (v) Court Orders and agreements to which any Participating is a
party or by which it or its properties are bound would be enforced as written.
The opinions expressed herein are limited to matters of Federal law and
the laws of the State of Ohio, without giving effect to principles of conflicts
of laws. This Opinion Letter addresses only the specific legal issues addressed
herein and does not, by implication or otherwise, address any other legal
issues, including without limitation: federal securities (except as to paragraph
(viii) of this Opinion Letter) and tax laws; state securities, "blue-sky", or
tax laws; the characterization of the transfer of the Receivables by the Bank or
AFG to Seller or by Seller to the Trust as a sale of such Receivables or a
transfer of a security interest therein, or the form, sufficiency or other legal
requirements for such sale or transfer of a security interest (including the
attachment and perfection thereof); laws, rules, and regulations of
municipalities or other political subdivisions of the State of Ohio; and federal
and state laws (such as ERISA and RICO) that in my reasonable judgment do not
relate to the opinions expressed herein.
III-1
<PAGE> 1
EXHIBIT 3.1
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
KEY CONSUMER ACCEPTANCE CORPORATION
This Amended and Restated Certificate of Incorporation was duly adopted in
accordance with Title 8, Section 245 of the Delaware General Corporation law.
The original Certificate of Incorporation was filed with the Delaware Secretary
of State's office on September 12, 1996.
1) The name of the corporation is Key Consumer Acceptance Corporation.
2) The address of its registered office in the State of Delaware is:
Corporation Trust Center, 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent at such address is The
Corporation Trust Company.
3) The nature of the business or purposes to be conducted or promoted
by the Corporation is to engage exclusively in the following business and
financial activities:
a) to purchase or otherwise acquire from certain direct and indirect
subsidiaries of KeyCorp (collectively, the "AFFILIATE SELLERS") or trusts
formed by one or more Affiliate Seller (the "AFFILIATE TRUSTS"), and to
hold, sell, transfer or pledge or otherwise exercise ownership rights
with respect to (i) motor vehicle retail installment sale contracts and
motor vehicle loans and leases, whether such contracts, and loans or
leases constitute accounts, chattel paper, instruments or general
intangibles, and including rights to payment of any interest, finance
charges or fees and any other rights with respect thereto (the
"RECEIVABLES"), (ii) security interests in the vehicles financed by the
Receivables (the "FINANCED VEHICLES") and any accessions thereto; (iii)
the rights to proceeds with respect to the Receivables from claims on
certain insurance policies covering the Financed Vehicles and any rights
of an Affiliate Seller or Affiliate Trust in any rebates of premiums and
other amounts relating to certain insurance policies and other items
financed under the Receivables; (iv) any property that shall have secured
a Receivable; (v) any rights of an Affiliate Seller with respect to any
agreement under which such Affiliate Seller has acquired Receivables
originated by or through a motor vehicle dealer; (vi) any rights of an
Affiliate Seller or Affiliate Trust in any documents or instruments
relating to the Receivables; and (vii) any and all proceeds of the
foregoing (the property described in clauses (ii) through (vii) above
being called "RELATED ASSETS");
b) to enter into any agreement providing for the sale, transfer or
pledge of the Receivables and Related Assets and to issue and sell one or
more
<PAGE> 2
series of bonds, notes, certificates or other securities secured
primarily by or evidencing beneficial ownership interests in the
Receivables and Related Assets;
(c) to use the proceeds of the sale of bonds, notes,
certificates or other securities or the proceeds of the sale of the
Receivables and Related Assets to acquire Receivables and Related
Assets;
(d) to act as settlor or depositor of trusts or other entities (a
"TRUST") formed to issue bonds, notes, certificates or other securities
secured by or evidencing beneficial ownership interests in the
Receivables and Related Assets;
(e) to acquire, own, hold, transfer, assign, pledge and otherwise deal
with books, notes, certificates and other securities issued by a Trust or
pursuant to an indenture or similar agreement to which such a Trust is a
party;
(f) for federal, state or local tax purposes, to serve as general
partner of any Trust;
(g) to enter into any agreement relating to any Receivables or Related
Assets that provides for the administration, service and collection of
amounts due on such Receivables and Related Assets;
(h) to establish any reserve account, spread account or other credit
enhancement for the benefit of any bond, note, certificate or other
security issued by any Trust or under any related indenture and to
otherwise invest any proceeds from Receivables and Related Assets and any
other income as determined by the Company's board of directors;
(i) to issue capital stock as provided for herein; and
(j) to engage in any lawful act or activity and to exercise any powers
permitting to corporations organized under the General Corporation Law
of the State of Delaware that are incidental to and necessary, suitable
or convenient for the accomplishment of the purposes specified in
CLAUSES (a) through (i) above.
4) The total number of shares of stock which the Corporation shall have
authority to issue is One Thousand Five Hundred (1500) common shares ("Common
Stock"); all of such shares shall be without par value.
5) The Board of Directors shall consist of such number of members (not less,
however, than three or, when all of the shares of the Corporation are owned
of record by one or two shareholders, not less than the number of
shareholders) as the Board of Directors may determine. Unless so
determined by the Board of Directors, the number shall be three. Whichever
the Board of Directors shall
<PAGE> 3
have so determined the number, that number shall be deemed the
authorized number of members of the Board of Directors until the number
shall again be changed by the Board of Directors. However many members
are authorized, at least one (1) member shall be an "Independent
Director". An "Independent Director" is an individual who is not, and
shall not have been at any time during the preceding five years, a
director, officer, employee or affiliate of KeyCorp or any of its
subsidiaries or affiliates.
6) The Corporation shall not, without the affirmative vote of 100% of
the members of the Board of Directors (including all Independent
Directors), which vote of each such director shall be in writing and
given prior to such action: (a) make an assignment for the benefit of
creditors, file a petition in bankruptcy, petition or apply to any
tribunal for the appointment of a custodian, receiver of any trustee for
it or for a substantial part of its property, commence any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether
now or hereinafter in effect, consent or acquiesce in the filing of any
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Corporation or any substantial part of its property, or
admit its inability to pay its debts generally as they become due or
authorize any of the foregoing to be done or taken on behalf of the
Corporation; or (b) be a party to any merger or consolidation or sell,
transfer, assign, convey, or lease any substantial part of the assets of
the Corporation, or directly or indirectly purchase or otherwise acquire
all or substantially all of the assets or any stock of any class of any
corporation, partnership, joint venture or any other entity; or (c)
dissolve or liquidate, in whole or part. The Corporation shall not: (i)
engage in any other business or activities other than as permitted
herein; or (ii) incur any indebtedness or assume or guaranty any
indebtedness of any other entity other than in connection with the
acquisition or transfer of Receivables and Related Assets or the issuance
and sale of securities secured by or evidencing beneficial ownership
interests in Receivables and Related Assets, or other activity set forth
in Paragraph 3 hereof or incidental to and necessary, suitable or
convenient for the accomplishment of the foregoing.
7) The Corporation shall conduct its affairs in the following manner:
(i) the Corporation's funds and other assets will be identifiable and
will not be commingled with those of any direct or ultimate parent of the
Corporation or any subsidiary or affiliate of any such parent (except for
incidental commingling in the case of any misdirected payment of a
Receivable, in which case such commingled funds shall be identified and
separated as soon as practicable after the receipt of such payment);
(ii) the Corporation will maintain separate bank
<PAGE> 4
accounts, corporate records, books of accounts and business functions
(including separate stationery and separate principal office) from those of
any direct or ultimate parent of the Corporation or any subsidiary or
affiliate of any such parent; and (iii) the Corporation will pay from its
funds and assets all obligations and indebtedness incurred by it.
8) Without: (a) the affirmative vote of 100% of the members of the Board of
Directors, including, without limitation, the affirmative vote of each
Independent Director, as defined herein, and (b) the affirmative vote of
the holders of 100% of the number of shares of the Common Stock outstanding,
the Corporation shall not amend either this Paragraph 8, Paragraph 5,
Paragraph 6 or Paragraph 7 of this Certificate of Incorporation.
Dated this 19th day of February, 1997.
(CORPORATE SEAL) /s/ Richard Hawrylak
-------------------------
Richard Hawrylak
Assistant Secretary
Key Consumer Acceptance Corporation
<PAGE> 1
EXHIBIT 4.1
KEY AUTO FINANCE TRUST 1997-1
Class A-1 5.85% Asset Backed Notes
Class A-2 6.05% Asset Backed Notes
Class A-3 6.15% Asset Backed Notes
Class B 6.40% Asset Backed Notes
INDENTURE
Dated as of February 21, 1997
BANKERS TRUST COMPANY
as Indenture Trustee
<PAGE> 2
CROSS REFERENCE TABLE (1)
<TABLE>
<CAPTION>
TIA Indenture
Section Section
<S> <C>
310 (a) (1)........................................... 6.11
(a) (2)........................................... 6.11
(a) (3)........................................... 6.10
(a) (4)........................................... N.A(2)
(a) (5)........................................... 6.11
(b) .............................................. 6.8; 6.11
(c) .............................................. N.A.
311 (a) .............................................. 6.12
(b) .............................................. 6.12
(c) .............................................. N.A.
312 (a) .............................................. 7.1
(b) .............................................. 7.2
(c) .............................................. 7.2
(d) .............................................. 7.4
313 (a) .............................................. 7.4
(b) (1)........................................... 7.4
(b) (2)........................................... 11.5
(c) .............................................. 7.4
(d) .............................................. 7.3
314 (a) .............................................. 11.15
(b) .............................................. 11.1
(c) (1)........................................... 11.1
(c) (2)........................................... 11.1
(c) (3)........................................... 11.1
(d) .............................................. 11.1
(e) .............................................. 11.1
(f) .............................................. 11.1
315 (a) .............................................. 6.1
(b) .............................................. 6.5; 11.5
(c) .............................................. 6.1
(d) .............................................. 6.1
(e) .............................................. 5.13
316 (a) (last sentence)............................... 2.7
(a) (1) (A)....................................... 5.11
(a) (1) (B)....................................... 5.12
</TABLE>
- --------
(1) Note: This Cross Reference Table shall not, for any purpose, be deemed to
be part of this Indenture.
(2) N.A. means Not Applicable.
<PAGE> 3
<TABLE>
<S> <C>
(a) (2)........................................... N.A.
(b) .............................................. 5.7
(c) .............................................. N.A.
317 (a) (1)........................................... 5.3
(a) (2)........................................... 5.3
(b) .............................................. 3.3
318 (a) .............................................. 11.7
</TABLE>
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE................ 2
SECTION 1.1 Definitions....................................... 2
SECTION 1.2 Incorporation by Reference of Trust Indenture
Act............................................... 2
SECTION 1.3 Other Interpretive Provisions..................... 3
ARTICLE II THE NOTES................................................ 3
SECTION 2.1 Form.............................................. 3
SECTION 2.2 Execution, Authentication and Delivery............ 4
SECTION 2.3 Temporary Notes................................... 4
SECTION 2.4 Registration of Transfer and Exchange............. 5
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes........ 6
SECTION 2.6 Persons Deemed Owner.............................. 7
SECTION 2.7 Payment of Principal and Interest................. 7
SECTION 2.8 Cancellation...................................... 8
SECTION 2.9 Release of Collateral............................. 9
SECTION 2.10 Book-Entry Notes................................. 9
SECTION 2.11 Notices to Clearing Agency....................... 10
SECTION 2.12 Definitive Notes................................. 10
SECTION 2.13 Authenticating Agents............................ 11
SECTION 2.14 Tax Treatment.................................... 11
ARTICLE III COVENANTS............................................... 12
SECTION 3.1 Payment of Principal and Interest................. 12
SECTION 3.2 Maintenance of Office or Agency................... 12
SECTION 3.3 Money for Payments To Be Held in Trust............ 12
SECTION 3.4 Existence......................................... 14
SECTION 3.5 Protection of Trust Estate........................ 14
SECTION 3.6 Opinions as to Trust Estate....................... 15
SECTION 3.7 Performance of Obligations; Servicing of
Receivables....................................... 15
SECTION 3.8 Negative Covenants................................ 18
SECTION 3.9 Annual Statement as to Compliance................. 18
SECTION 3.10 Issuer May Consolidate, Etc...................... 19
SECTION 3.11 Successor or Transferee.......................... 21
SECTION 3.12 No Other Business................................ 21
SECTION 3.13 No Borrowing..................................... 21
SECTION 3.14 Servicer's Obligations........................... 21
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities 21
SECTION 3.16 Capital Expenditures............................. 22
</TABLE>
(i)
<PAGE> 5
<TABLE>
<CAPTION>
Page
<S> <C>
SECTION 3.17 Restricted Payments.............................. 22
SECTION 3.18 Notice of Events of Default...................... 22
SECTION 3.19 Further Instruments and Acts..................... 22
SECTION 3.20 Removal of Administrator......................... 22
ARTICLE IV SATISFACTION AND DISCHARGE............................... 22
SECTION 4.1 Satisfaction and Discharge of Indenture........... 22
SECTION 4.2 Application of Trust Money........................ 24
SECTION 4.3 Repayment of Moneys Held by Paying Agent.......... 24
ARTICLE V REMEDIES.................................................. 24
SECTION 5.1 Events of Default................................. 24
SECTION 5.2 Acceleration of Maturity; Rescission and
Annulment ........................................... 26
SECTION 5.3 Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee..................... 26
SECTION 5.4 Remedies; Priorities.............................. 29
SECTION 5.5 Optional Preservation of the Receivables.......... 31
SECTION 5.6 Limitation of Suits............................... 31
SECTION 5.7 Unconditional Rights of Noteholders To Receive
Principal and Interest.............................. 32
SECTION 5.8 Restoration of Rights and Remedies................ 32
SECTION 5.9 Rights and Remedies Cumulative.................... 32
SECTION 5.10 Delay or Omission Not a Waiver................... 33
SECTION 5.11 Control by Noteholders........................... 33
SECTION 5.12 Waiver of Past Defaults.......................... 33
SECTION 5.13 Undertaking for Costs............................ 34
SECTION 5.14 Waiver of Stay or Extension Laws................. 34
SECTION 5.15 Action on Notes.................................. 34
SECTION 5.16 Performance and Enforcement of Certain
Obligations ........................................ 35
ARTICLE VI INDENTURE TRUSTEE........................................ 35
SECTION 6.1 Duties of Indenture Trustee....................... 35
SECTION 6.2 Rights of Indenture Trustee....................... 37
SECTION 6.3 Individual Rights of Indenture Trustee............ 37
SECTION 6.4 Indenture Trustee's Disclaimer.................... 38
SECTION 6.5 Notice of Defaults................................ 38
SECTION 6.6 Reports by Indenture Trustee to Holders........... 38
SECTION 6.7 Compensation and Indemnity........................ 38
SECTION 6.8 Replacement of Indenture Trustee.................. 39
SECTION 6.9 Successor Indenture Trustee by Merger............. 40
</TABLE>
(ii)
<PAGE> 6
<TABLE>
<CAPTION>
Page
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SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee................................... 40
SECTION 6.11 Eligibility; Disqualification.................... 42
SECTION 6.12 Preferential Collection of Claims Against Issuer. 42
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.......................... 42
SECTION 7.1 Issuer to Furnish Indenture Trustee Names and
Addresses of Noteholders............................ 42
SECTION 7.2 Preservation of Information; Communications to
Noteholders......................................... 42
SECTION 7.3 Reports by Issuer................................. 43
SECTION 7.4 Reports by Indenture Trustee...................... 43
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES................... 44
SECTION 8.1 Collection of Money............................... 44
SECTION 8.2 Trust Accounts.................................... 44
SECTION 8.3 General Provisions Regarding Accounts............. 45
SECTION 8.4 Release of Trust Estate........................... 46
SECTION 8.5 Opinion of Counsel................................ 47
ARTICLE IX SUPPLEMENTAL INDENTURES.................................. 47
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders......................................... 47
SECTION 9.2 Supplemental Indentures with Consent of
Noteholders ........................................ 49
SECTION 9.3 Execution of Supplemental Indentures.............. 51
SECTION 9.4 Effect of Supplemental Indenture.................. 51
SECTION 9.5 Conformity With Trust Indenture Act............... 52
SECTION 9.6 Reference in Notes to Supplemental Indentures..... 52
ARTICLE X REDEMPTION OF NOTES....................................... 52
SECTION 10.1 Redemption....................................... 52
SECTION 10.2 Form of Redemption Notice........................ 53
SECTION 10.3 Notes Payable on Redemption Date................. 53
ARTICLE XI MISCELLANEOUS............................................ 53
SECTION 11.1 Compliance Certificates and Opinions, etc........ 53
SECTION 11.2 Form of Documents Delivered to Indenture Trustee. 56
SECTION 11.3 Acts of Noteholders.............................. 56
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer
and Rating Agencies................................. 57
SECTION 11.5 Notices to Noteholders; Waiver................... 58
</TABLE>
(iii)
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<TABLE>
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SECTION 11.6 Alternate Payment and Notice Provisions.......... 59
SECTION 11.7 Conflict with Trust Indenture Act................ 59
SECTION 11.8 Effect of Headings and Table of Contents......... 59
SECTION 11.9 Successors and Assigns........................... 59
SECTION 11.10 Separability.................................... 59
SECTION 11.11 Benefits of Indenture........................... 59
SECTION 11.12 Legal Holidays.................................. 60
SECTION 11.13 GOVERNING LAW................................... 60
SECTION 11.14 Counterparts.................................... 60
SECTION 11.15 Recording of Indenture.......................... 60
SECTION 11.16 Trust Obligation................................ 60
SECTION 11.17 No Petition..................................... 61
SECTION 11.18 Inspection...................................... 61
</TABLE>
Exhibit A Schedule of Receivables
Exhibit B Form of Sale and Servicing Agreement
Exhibit C Form of Note Depository Agreement
Exhibit D Form of Class A-1 Note
Exhibit E Form of Class A-2 Note
Exhibit F Form of Class A-3 Note
Exhibit G Form of Class B Note
(iv)
<PAGE> 8
INDENTURE dated as of February 21, 1997, between KEY AUTO FINANCE TRUST
1997-1, a Delaware business trust ("Issuer"), and Bankers Trust Company, a New
York banking corporation, solely as trustee and not in its individual capacity
("Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of Issuer's Class A-1 5.85% Asset
Backed Notes (the "Class A-1 Notes"), Class A-2 6.05% Asset Backed Notes (the
"Class A-2 Notes") and Class A-3 6.15% Asset Backed Notes (the "Class A-3
Notes") and then for the equal and ratable benefit of the Holders of the
Issuer's Class B 6.40% Asset Backed Notes (the "Class B Notes" and, together
with the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes, the "Notes"):
GRANTING CLAUSE
Issuer hereby Grants to Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Holders of the Notes, all of Issuer's
right, title and interest in and to (a) the Receivables, and all moneys received
thereon after the Cutoff Date; (b) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other interest
of Issuer in the Financed Vehicles and any other property that shall secure the
Receivables; (c) any proceeds with respect to (i) any Receivable repurchased by
a Dealer, pursuant to a Dealer Agreement, as a result of a breach of a
representation or warranty in the related Dealer Agreement, (ii) a default by an
Obligor resulting in the repossession of the Financed Vehicle, or (iii) any
Dealer Recourse and other rights of Affiliates under Dealer Agreements; (d) any
proceeds with respect to the Receivables from claims on any Insurance Policies
covering Financed Vehicles or Obligors or from claims under any lender's single
interest insurance policy naming any Seller Affiliate as an insured; (e) rebates
of premiums and other amounts relating to any Insurance Policies and rebates of
other items, such as extended warranties financed under the Receivables, in each
case, to the extent Servicer would, in accordance with its customary practices,
apply such amounts to the Principal Balance of the related Receivable; (f) any
instrument or document relating to the Receivables; (g) all the Seller's rights
under the Purchase Agreements, including the right of the Seller to cause an
Affiliate to repurchase Receivables from the Seller; (h) the security interests
in the Receivables and other assets granted by each Seller Affiliate to the
Issuer under the Affiliate Security Agreement and all rights of the Issuer
thereunder; (i) all funds on deposit from time to time in the Trust Accounts and
in all investments and proceeds thereof (including the Reserve Account Property
but excluding all investment income thereon); (j) the Issuer's rights under the
Sale and Servicing Agreement; and (k) all present and future claims, demands,
causes and choses in action in respect of any or all of the foregoing and all
payments on or under and all proceeds of every
<PAGE> 9
kind and nature whatsoever in respect of any or all of the foregoing, including
all proceeds of the conversion, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal
of and interest on, and any other amounts owing in respect of, the Notes,
equally and ratably without prejudice, priority or distinction except as set
forth herein, and to secure compliance with the provisions of this Indenture,
all as provided in this Indenture.
Indenture Trustee, as Indenture Trustee on behalf of the Holders of the
Notes, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture.
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE.
SECTION 1.1 Definitions. Capitalized terms are used in this Indenture
as defined in Appendix X to the Sale and Servicing Agreement dated as of
February 21, 1997, among Key Consumer Acceptance Corporation, as Seller, the
Issuer and Key Bank USA, National Association, as Servicer.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act. Whenever
this Indenture refers to a provision of the TIA, the provision is incorporated
by reference in and made a part of this Indenture. The following TIA terms used
in this Indenture have the following meanings:
"Commission" means the Securities and Exchange Commission.
"indenture securities" means the Notes.
"indenture security holder" means a Noteholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means Indenture Trustee.
"obligor" on the indenture securities means Issuer and any other
obligor on the indenture securities.
2
<PAGE> 10
All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
SECTION 1.3 Other Interpretive Provisions. All terms defined in this
Indenture shall have the defined meanings when used in any certificate or other
document delivered pursuant hereto unless otherwise defined therein. For
purposes of this Indenture and all such certificates and other documents, unless
the context otherwise requires: (a) accounting terms not otherwise defined in
this Indenture, and accounting terms partly defined in this Indenture to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles; (b) the words "hereof," "herein" and
"hereunder" and words of similar import refer to this Indenture as a whole and
not to any particular provision of this Indenture; (c) references to any
Article, Section , Schedule or Exhibit are references to Articles, Sections ,
Schedules and Exhibits in or to this Indenture and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (d) the term "including" means "including without limitation"; (e)
except as otherwise expressly provided herein, references to any law or
regulation refer to that law or regulation as amended from time to time and
include any successor law or regulation; (f) references to any Person include
that Person's successors and assigns; and (g) headings are for purposes of
reference only and shall not otherwise affect the meaning or interpretation of
any provision hereof.
ARTICLE II THE NOTES.
SECTION 2.1 Form. The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes
and Class B Notes, in each case together with Indenture Trustee's certificate of
authentication, shall be in substantially the forms set forth in Exhibits D, E,
F, and G respectively, with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may, consistently herewith,
be determined by the officers executing such Notes, as evidenced by their
execution of the Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
3
<PAGE> 11
Each Note shall be dated the date of its authentication. The terms of
the Notes set forth in Exhibits D, E, F and G are part of the terms of this
Indenture.
SECTION 2.2 Execution, Authentication and Delivery. The Notes shall be
executed on behalf of Issuer by any of its Authorized Officers. The signature of
any such Authorized Officer on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signature of individuals who were
at any time Authorized Officers of Issuer shall bind Issuer, notwithstanding
that such individuals or any of them have ceased to hold such offices prior to
the authentication and delivery of such Notes or did not hold such offices at
the date of such Notes.
Indenture Trustee shall upon Issuer Order authenticate and deliver
Class A-1 Notes for original issue in an aggregate principal amount of
$300,000,000, Class A-2 Notes for original issue in the aggregate principal
amount of $66,000,000, Class A-3 Notes for original issue in an aggregate
principal amount of $46,141,000 and Class B Notes for original issue in the
aggregate principal amount of $26,307,000. The aggregate principal amount of
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class B Notes outstanding
at any time may not exceed such amounts except as provided in Section 2.5.
Each Note shall be dated the date of its authentication. The Notes
shall be issuable as registered Notes in the minimum denomination of $1,000 and
in integral multiples thereof (except for one Note of each class which may be
issued in a denomination other than an integral multiple of $1,000).
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by Indenture Trustee by the manual signature of one of its authorized
signatories, and such certificate upon any Note shall be conclusive evidence,
and the only evidence, that such Note has been duly authenticated and delivered
hereunder.
SECTION 2.3 Temporary Notes. Pending the preparation of Definitive
Notes, Issuer may execute, and upon receipt of an Issuer Order, Indenture
Trustee shall authenticate and deliver, temporary Notes which are printed,
lithographed, typewritten, mimeographed or otherwise produced, of the tenor of
the Definitive Notes in lieu of which they are issued and with such variations
not inconsistent with the terms of this Indenture as the officers executing such
Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, Issuer will cause Definitive Notes to be
prepared without unreasonable delay. After the preparation of Definitive Notes,
4
<PAGE> 12
the temporary Notes shall be exchangeable for Definitive Notes upon surrender of
the temporary Notes at the office or agency of Issuer to be maintained as
provided in Section 3.2, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Notes, Issuer shall execute and
Indenture Trustee upon Issuer Order shall authenticate and deliver in exchange
therefor a like principal amount of Definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits under this Indenture as Definitive Notes.
SECTION 2.4 Registration of Transfer and Exchange. Issuer shall cause
to be kept a register (the "Note Register") in which, subject to such reasonable
regulations as it may prescribe, Issuer shall provide for the registration of
Notes and the registration of transfers of Notes. Indenture Trustee shall
initially be "Note Registrar" for the purpose of registering Notes and transfers
of Notes as herein provided. Upon any resignation of any Note Registrar, Issuer
shall promptly appoint a successor or, if it elects not to make such an
appointment, assume the duties of Note Registrar.
If a Person other than Indenture Trustee is appointed by Issuer as Note
Registrar, Issuer will give Indenture Trustee prompt written notice of the
appointment of such Note Registrar and of the location, and any change in the
location, of the Note Register, and Indenture Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies thereof,
and Indenture Trustee shall have the right to conclusively rely upon a
certificate executed on behalf of Note Registrar by an Executive Officer thereof
as to the names and addresses of the Holders of the Notes and the principal
amounts and number of such Notes.
Upon surrender for registration of transfer of any Note at the office
or agency of Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401(1) of the UCC are met Issuer shall execute and
upon its written request Indenture Trustee shall authenticate and the Noteholder
shall obtain from Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes, in any authorized denominations, of the same
class and a like aggregate principal amount.
At the option of the Holder, Notes may be exchanged for other Notes in
any authorized denominations, of the same class and a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, if the requirements of
Section 8-401(1) of the UCC are met Issuer shall execute and upon Issuer
Request, Indenture Trustee shall authenticate and the Noteholder shall obtain
from Indenture Trustee, the Notes which the Noteholder making the exchange is
entitled to receive.
5
<PAGE> 13
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of Issuer, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in substantially the form attached to the form of each
class of Note set forth as an exhibit hereto duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing, with such
signature guaranteed by an "eligible guarantor institution" meeting the
requirements of Note Registrar which requirements include membership or
participation in a Securities Transfer Agents Medallion Program ("Stamp") or
such other "signature guarantee program" as may be determined by Note Registrar
in addition to, or in substitution for, Stamp, all in accordance with the
Exchange Act, and (ii) accompanied by such other documents as Indenture Trustee
may require.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
The preceding provisions of this section notwithstanding, Issuer shall
not be required to make and Note Registrar need not register transfers or
exchanges of Notes selected for redemption or of any Note for a period of 15
days preceding the due date for any payment with respect to the Note.
SECTION 2.5 Mutilated, Destroyed, Lost or Stolen Notes. If (i) any
mutilated Note is surrendered to Indenture Trustee, or Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to Indenture Trustee such security or
indemnity as may be required by it to hold Issuer and Indenture Trustee
harmless, then, in the absence of notice to Issuer, Note Registrar or Indenture
Trustee that such Note has been acquired by a bona fide purchaser, and provided
that the requirements of Section 8-405 of the UCC are met, Issuer shall execute
and upon its written request Indenture Trustee shall authenticate and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Note, a replacement Note; provided that if any such destroyed, lost or stolen
Note, but not a mutilated Note, shall have become or within seven days shall be
due and payable, or shall have been called for redemption, instead of issuing a
replacement Note. Issuer may upon delivery of the security or indemnity herein
required pay such destroyed, lost or stolen Note when so due or payable or upon
the Redemption Date without surrender thereof. If, after the delivery of such
replacement Note or payment of a
6
<PAGE> 14
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a bona fide purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, Issuer and
Indenture Trustee shall be entitled to recover such replacement Note (or such
payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a bona fide purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by Issuer or Indenture Trustee in
connection therewith.
Upon the issuance of any replacement Note under this Section, Issuer
may require the payment by the Holder of such Note of a sum sufficient to cover
any tax or other governmental charge that may be imposed in relation thereto and
any other reasonable expenses (including the fees and expenses of Indenture
Trustee) connected therewith.
Every replacement Note issued pursuant to this Section in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Notes.
SECTION 2.6 Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, Issuer, Indenture Trustee and any agent of
Issuer or Indenture Trustee may treat the Person in whose name any Note is
registered (as of the day of determination) as the owner of such Note for the
purpose of receiving payments of principal of and interest, if any, on such Note
and for all other purposes whatsoever, whether or not such Note be overdue, and
neither Issuer, Indenture Trustee nor any agent of Issuer or Indenture Trustee
shall be affected by notice to the contrary.
SECTION 2.7 Payment of Principal and Interest. (a) The Notes shall
accrue interest as provided in the forms of the Class A-1 Note, Class A-2 Note,
Class A-3 Note and Class B Note set forth in Exhibits D, E, F, and G
respectively, and such interest shall be payable on each Distribution Date as
specified therein. Any installment of interest or principal, if any, payable on
any Note which is punctually paid or duly provided for by Issuer on the
applicable Distribution Date shall be paid to the Person in whose name such Note
(or one
7
<PAGE> 15
or more Predecessor Notes) is registered on the Record Date, by check mailed
first-class, postage prepaid, to such Person's address as it appears on the Note
Register on such Record Date, except that, unless Definitive Notes have been
issued pursuant to Section 2.12, with respect to Notes registered on the Record
Date in the name of the nominee of the Clearing Agency (initially, such nominee
to be Cede & Co.), payment will be made by wire transfer in immediately
available funds to the account designated by such nominee and except for the
final installment of principal payable with respect to such Note on a
Distribution Date or on the Final Scheduled Distribution Date (and except for
the Redemption Price for any Note called for redemption pursuant to Section
10.1(a)) which shall be payable as provided below. The funds represented by any
such checks returned undelivered shall be held in accordance with Section 3.3.
(b) The principal of each Note shall be payable on each Distribution
Date as provided in the forms of the Class A-1 Note, Class A-2 Note, Class A-3
Note and Class B Note set forth in Exhibits D, E, F, and G respectively.
Notwithstanding the foregoing, the entire unpaid principal amount of the Notes
shall be due and payable, if not previously paid, on the date on which an Event
of Default shall have occurred and be continuing, if Indenture Trustee or the
Holders of the Notes representing not less than a majority of the Outstanding
Amount of the Notes have declared the Notes to be immediately due and payable in
the manner provided in Section 5.2 and, in such event, all principal payments on
each class of Notes shall be made pro rata to the Noteholders of such class
entitled thereto. Indenture Trustee shall notify the Person in whose name a Note
is registered at the close of business on the Record Date preceding the
Distribution Date on which Issuer expects that the final installment of
principal of and interest on such Note will be paid. Such notice shall be mailed
or transmitted by facsimile prior to such final Distribution Date and shall
specify that such final installment will be payable only upon presentation and
surrender of such Note and shall specify the place where such Note may be
presented and surrendered for payment of such installment. Notices in connection
with redemptions of Notes shall be mailed to Noteholders as provided in Section
10.2.
SECTION 2.8 Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than Indenture Trustee, be delivered to Indenture Trustee and shall
be promptly cancelled by Indenture Trustee. Issuer may at any time deliver to
Indenture Trustee for cancellation any Notes previously authenticated and
delivered hereunder which Issuer may have acquired in any manner whatsoever, and
all Notes so delivered shall be promptly cancelled by Indenture Trustee. No
Notes shall be authenticated in lieu of or in exchange for any Notes cancelled
as provided in this Section, except as expressly permitted by this Indenture.
All cancelled Notes may be held or disposed of by Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless Issuer
8
<PAGE> 16
shall direct by an Issuer Order that they be destroyed or returned to it;
provided that such Issuer Order is timely and the Notes have not been previously
disposed of by Indenture Trustee.
SECTION 2.9 Release of Collateral. Subject to Section 11.1, Indenture
Trustee shall release property from the lien of this Indenture only upon receipt
of an Issuer Request accompanied by an Officer's Certificate, an Opinion of
Counsel and Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent
Certificates to the effect that the TIA does not require any such Independent
Certificates. If the Commission shall issue an exemptive order under TIA Section
304(d) modifying Owner Trustee's obligations under TIA Sections 314(c) and
314(d)(1), subject to Section 11.1 and the terms of the Basic Documents,
Indenture Trustee shall release property from the lien of this Indenture in
accordance with the conditions and procedures set forth in such exemptive order.
SECTION 2.10 Book-Entry Notes. The Notes, upon original issuance, will
be issued in the form of typewritten Notes representing the Book-Entry Notes, to
be delivered to Bankers Trust Company, as agent for The Depository Trust
Company, the initial Clearing Agency, by, or on behalf of, Issuer. Such Notes
shall initially be registered on the Note Register in the name of Cede & Co.,
the nominee of the initial Clearing Agency, and no Note Owner will receive a
Definitive Note representing such Note Owner's interest in such Note, except as
provided in Section 2.12. Unless and until definitive, fully registered Notes
(the "Definitive Notes") have been issued to Note Owners pursuant to Section
2.12:
(a) the provisions of this Section shall be in full force and
effect;
(b) Note Registrar and Indenture Trustee shall be entitled to
deal with the Clearing Agency for all purposes of this Indenture
(including the payment of principal of and interest on the Notes and
the giving of instructions or directions hereunder) as the sole Holder
of the Notes, and shall have no obligation to the Note Owners;
(c) to the extent that the provisions of this Section conflict
with any other provisions of this Indenture, the provisions of this
Section shall control;
(d) the rights of Note Owners shall be exercised only through
the Clearing Agency and shall be limited to those established by law
and agreements between such Note Owners and the Clearing Agency and/or
the Clearing Agency Participants or Persons acting through Clearing
Agency Participants. Pursuant to the Note Depository Agreement, unless
9
<PAGE> 17
and until Definitive Notes are issued pursuant to Section 2.12, the
initial Clearing Agency will make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Notes to such Clearing Agency
Participants; and
(e) whenever this Indenture requires or permits actions to be
taken based upon instructions or directions of Holders of Notes
evidencing a specified percentage of the Outstanding Amount of the
Notes, the Clearing Agency shall be deemed to represent such percentage
only to the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants or Persons acting
through Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in
the Notes and has delivered such instructions to Indenture Trustee.
SECTION 2.11 Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders is required under this Indenture, unless and
until Definitive Notes shall have been issued to Note Owners pursuant to Section
2.12, Indenture Trustee shall give all such notices and communications specified
herein to be given to Holders of the Notes to the Clearing Agency, and shall
have no obligation to the Note Owners.
SECTION 2.12 Definitive Notes. If (a) Seller advises Indenture Trustee
in writing that the Clearing Agency is no longer willing or able to properly
discharge its responsibilities with respect to the Notes, and Seller is unable
to locate a qualified successor, (b) Seller at its option advises Indenture
Trustee in writing that it elects to terminate the book-entry system through the
Clearing Agency or (c) after the occurrence of an Event of Default, Note Owners
representing beneficial interests aggregating at least a majority of the
Outstanding Amount of the Notes advise Indenture Trustee through the Clearing
Agency in writing that the continuation of a book entry system through the
Clearing Agency is no longer in the best interests of the Note Owners, then the
Clearing Agency shall notify all Note Owners and Indenture Trustee of the
occurrence of any such event and of the availability of Definitive Notes to Note
Owners requesting the same. Upon surrender to Indenture Trustee of the
typewritten Note or Notes representing the Book-Entry Notes by the Clearing
Agency, accompanied by registration instructions, Issuer shall execute and
Indenture Trustee shall authenticate the Definitive Notes in accordance with the
instructions of the Clearing Agency. None of Issuer, Note Registrar or Indenture
Trustee shall be liable for any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Notes, Indenture Trustee shall recognize the
Holders of the Definitive Notes as Noteholders.
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SECTION 2.13 Authenticating Agents. (a) The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with power to act
on its behalf and subject to its direction in the authentication of Notes in
connection with issuance, transfers and exchanges under Sections 2.2, 2.3, 2.4
and 2.5, as fully to all intents and purposes as though each such Authenticating
Agent had been expressly authorized by those Sections to authenticate such
Notes. For all purposes of this Indenture, the authentication of Notes by an
Authenticating Agent pursuant to this Section shall be deemed to be the
authentication of Notes "by the Indenture Trustee."
(b) Any corporation into which any Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticating Agent hereunder, without the execution or filing of any
further act on the part of the parties hereto or such Authenticating Agent or
such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to Indenture Trustee and Owner Trustee. Indenture Trustee
may at any time terminate the agency of any Authenticating Agent by giving
written notice of termination to such Authenticating Agent and Owner Trustee.
Upon receiving such notice of resignation or upon such a termination, Indenture
Trustee may appoint a successor Authenticating Agent and shall give written
notice of any such appointment to Owner Trustee.
(d) The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.8 and 6.4 shall be applicable to any Authenticating Agent.
SECTION 2.14 Tax Treatment. Issuer has entered into this Indenture, and
the Notes shall be issued, with the intention that, for federal, state and local
income and franchise tax purposes, the Notes shall qualify as indebtedness of
Issuer secured by the Trust Estate. Issuer, by entering into this Indenture, and
each Noteholder, by its acceptance of a Note (and each Note Owner by its
acceptance of an interest in the applicable Book-Entry Note), agree to treat the
Notes for federal, state and local income and franchise tax purposes as
indebtedness of Issuer.
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ARTICLE III COVENANTS.
SECTION 3.1 Payment of Principal and Interest. Issuer will duly and
punctually pay the principal of and interest on the Notes in accordance with the
terms of the Notes and this Indenture. Without limiting the foregoing, subject
to Section 8.2(c), Issuer will cause to be distributed all amounts on deposit in
the Note Distribution Account on a Distribution Date deposited therein pursuant
to the Sale and Servicing Agreement (i) in the Class A-1 Noteholders' Interest
Distributable Amount, to Class A-1 Noteholders, (ii) in the Class A-2
Noteholders' Interest Distributable Amount, to Class A-2 Noteholders, (iii) in
the Class A-3 Noteholders' Interest Distributable Amount, to Class A-3
Noteholders, and (iv) in the Class B Noteholders' Interest Distributable Amount,
to Class B Noteholders. Amounts properly withheld under the Code by any Person
from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by Issuer to such Noteholder for all purposes of
this Indenture.
SECTION 3.2 Maintenance of Office or Agency. Issuer will maintain in
the Borough of Manhattan, The City of New York, an office or agency where Notes
may be surrendered for registration of transfer or exchange, and where notices
and demands to or upon Issuer in respect of the Notes and this Indenture may be
served. Issuer hereby initially appoints Indenture Trustee to serve as its agent
for the foregoing purposes. Issuer will give prompt written notice to Indenture
Trustee of the location, and of any change in the location, of any such office
or agency. If at any time Issuer shall fail to maintain any such office or
agency or shall fail to furnish Indenture Trustee with the address thereof, such
surrenders, notices and demands may be made or served at the Corporate Trust
Office, and Issuer hereby appoints Indenture Trustee as its agent to receive all
such surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. As provided in
Section 8.2, all payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Collection Account and the
Note Distribution Account pursuant to Section 8.2(c) shall be made on behalf of
Issuer by Indenture Trustee or by another Paying Agent, and no amounts so
withdrawn from the Collection Account and the Note Distribution Account for
payments of Notes shall be paid over to Issuer except as provided in this
Section.
On or before each Distribution Date and Redemption Date, Issuer shall
deposit or cause to be deposited in the Note Distribution Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum to
be held in trust for the benefit of the Persons entitled thereto and (unless the
Paying Agent is Indenture Trustee) shall promptly notify Indenture Trustee in
writing of its action or failure so to act.
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Issuer will cause each Paying Agent other than Indenture Trustee to
execute and deliver to Indenture Trustee an instrument in which such Paying
Agent shall agree with Indenture Trustee (and if Indenture Trustee acts as
Paying Agent, it hereby so agrees), subject to the provisions of this Section,
that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to such
Persons as herein provided;
(ii) give Indenture Trustee written notice of any default by
Issuer (or any other obligor upon the Notes) of which it has actual
knowledge in the making of any payment required to be made with respect
to the Notes;
(iii) at any time during the continuance of any such default,
upon the written request of Indenture Trustee, forthwith pay to
Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to
Indenture Trustee all sums held by it in trust for the payment of Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(v) comply with all requirements of the Code with respect to
the withholding from any payments made by it on any Notes of any
applicable withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to Indenture Trustee all sums held in trust by such
Paying Agent, such sums to be held by Indenture Trustee upon the same trusts as
those upon which the sums were held by such Paying Agent; and upon such a
payment by any Paying Agent to Indenture Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Subject to applicable laws with respect to the escheat of funds, any
money held by Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such trust
and be paid to Issuer on Issuer Request; and the Holder of such Note shall
thereafter, as an unsecured general creditor, look only to Issuer for payment
thereof (but only to the extent of the amounts so paid to Issuer), and all
liability of Indenture
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Trustee or such Paying Agent with respect to such trust money shall thereupon
cease; provided that Indenture Trustee or such Paying Agent, before being
required to make any such repayment, shall at the expense of Issuer cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will be repaid to Issuer.
Indenture Trustee may also adopt and employ, at the written direction of and at
the expense of Issuer, any other reasonable means of notification of such
repayment (including, but not limited to, mailing notice of such repayment to
Holders whose Notes have been called but have not been surrendered for
redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of Indenture Trustee or of any Paying
Agent, at the last address of record for each such Holder).
SECTION 3.4 Existence. Except as otherwise permitted by the provisions
of Section 3.10, Issuer will keep in full effect its existence, rights and
franchises as a business trust under the laws of the State of Delaware (unless
it becomes, or any successor Issuer hereunder is or becomes, organized under the
laws of any other state or of the United States of America, in which case Issuer
will keep in full effect its existence, rights and franchises under the laws of
such other jurisdiction) and will obtain and preserve its qualification to do
business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Notes, the Collateral and each other instrument or agreement included in the
Trust Estate.
SECTION 3.5 Protection of Trust Estate. Issuer will from time to time
prepare (or shall cause to be prepared), execute and deliver all such
supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and will take such other action necessary or advisable to:
(a) maintain or preserve the lien and security interest (and
the priority thereof) of this Indenture or carry out more effectively
the purposes hereof;
(b) perfect, publish notice of or protect the validity of any
Grant made or to be made by this Indenture;
(c) enforce any of the Collateral; or
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(d) preserve and defend title to the Trust Estate and the
rights of Indenture Trustee and the Noteholders in such Trust Estate
against the claims of all persons and parties.
Issuer hereby designates Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument designated in writing by Issuer pursuant to this Section.
SECTION 3.6 Opinions as to Trust Estate. (a) On the Closing Date,
Issuer shall furnish to Indenture Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the recording and filing of this Indenture, any indentures supplemental hereto,
and any other requisite documents, and with respect to the execution and filing
of any financing statements and continuation statements, as are necessary to
perfect and make effective the first priority lien and security interest of this
Indenture and reciting the details of such action, or stating that, in the
opinion of such counsel, no such action is necessary to make such lien and
security interest effective.
(b) Within 120 days after the beginning of each calendar year,
beginning with the first calendar year beginning more than three months after
the Cutoff Date, Issuer shall furnish to Indenture Trustee an Opinion of Counsel
either stating that, in the opinion of such counsel, such action has been taken
with respect to the recording, filing, re-recording and refiling of this
Indenture, any indentures supplemental hereto and any other requisite documents
and with respect to the execution and filing of any financing statements and
continuation statements as are necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or
stating that in the opinion of such counsel no such action is necessary to
maintain such lien and security interest. Such Opinion of Counsel shall also
describe the recording, filing, rerecording and refiling of this Indenture, any
indentures supplemental hereto and any other requisite documents and the
execution and filing of any financing statements and continuation statements
that will, in the opinion of such counsel, be required to maintain the lien and
security interest of this Indenture until January 30 in the following calendar
year.
SECTION 3.7 Performance of Obligations; Servicing of Receivables. (a)
Issuer will not take any action and will use its best efforts not to permit any
action to be taken by others that would release any Person from any of such
Person's material covenants or obligations under any instrument or agreement
included in the Trust Estate or that would result in the amendment,
hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any such instrument or agreement, except as
ordered by any bankruptcy or other court or as expressly provided in this
Indenture, the Basic Documents or such other instrument or agreement.
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(b) Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to Indenture Trustee in an Officer's Certificate of Issuer shall be
deemed to be action taken by Issuer. Initially, Issuer has contracted with
Servicer and the Administrator to assist Issuer in performing its duties under
this Indenture.
(c) Issuer will punctually perform and observe all of its obligations
and agreements contained in this Indenture, the Basic Documents and in the
instruments and agreements included in the Trust Estate, including but not
limited to preparing (or causing to prepared) and filing (or causing to be
filed) all UCC financing statements and continuation statements required to be
filed by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, Issuer shall not waive, amend,
modify, supplement or terminate any Basic Document or any provision thereof
without the consent of Indenture Trustee or the Holders of at least a majority
of the Outstanding Amount of the Notes.
(d) If Issuer shall have knowledge of the occurrence of a Servicer
Termination Event under the Sale and Servicing Agreement, Issuer shall promptly
notify Indenture Trustee and the Rating Agencies thereof in accordance with
Section 11.4, and shall specify in such notice the action, if any, Issuer is
taking in respect of such default. If a Servicer Termination Event shall arise
from the failure of Servicer to perform any of its duties or obligations under
the Sale and Servicing Agreement with respect to the Receivables, Issuer shall
take all reasonable steps available to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination
to Servicer of Servicer's rights and powers pursuant to Section 8.1 of the Sale
and Servicing Agreement, Issuer shall appoint a successor servicer (the
"Successor Servicer"), and such Successor Servicer shall accept its appointment
by a written assumption in a form acceptable to Indenture Trustee. In the event
that a Successor Servicer has not been appointed and accepted its appointment at
the time when Servicer ceases to act as Servicer, Indenture Trustee without
further action shall automatically be appointed the Successor Servicer.
Indenture Trustee may resign as Servicer by giving written notice of such
resignation to Issuer and in such event will be released from such duties and
obligations, such release not to be effective until the date a new servicer
enters into a servicing agreement with Issuer as provided below. Upon delivery
of any such notice to Issuer, Issuer shall obtain a new servicer as the
Successor Servicer under the Sale and Servicing Agreement. Any Successor
Servicer other than Indenture Trustee shall (i) be an established financial
institution having a net worth of not less than $50,000,000 and whose regular
business includes the servicing of motor vehicle loans and (ii)
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enter into a servicing agreement with Issuer having substantially the same
provisions as the provisions of the Sale and Servicing Agreement applicable to
Servicer. If within 30 days after the delivery of the notice referred to above,
Issuer shall not have obtained such a new servicer, Indenture Trustee may
appoint, or may petition a court of competent jurisdiction to appoint, a
Successor Servicer. In connection with any such appointment, Indenture Trustee
may make such arrangements for the compensation of such successor as it and such
successor shall agree, subject to the limitations set forth below and in the
Sale and Servicing Agreement, and in accordance with Section 8.2 of the Sale and
Servicing Agreement, Issuer shall enter into an agreement with such successor
for the servicing of the Receivables (such agreement to be in form and substance
satisfactory to Indenture Trustee). If Indenture Trustee shall succeed to
Servicer's duties as servicer of the Receivables as provided herein, it shall do
so in its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, the provisions of Article VI shall be inapplicable to Indenture
Trustee in its duties as the successor to Servicer and the servicing of the
Receivables. In case Indenture Trustee shall become successor to Servicer under
the Sale and Servicing Agreement, Indenture Trustee shall be entitled to appoint
as Servicer any one of its Affiliates, or delegate any of its responsibilities
as Servicer to agents, subject to the terms of the Sale and Servicing Agreement,
provided that such appointment or delegation shall not affect or alter in any
way the liability of Indenture Trustee as a successor for the performance of the
duties and obligations of Servicer in accordance with the terms hereof.
(f) Upon any termination of Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, Issuer shall promptly notify Indenture
Trustee. As soon as a Successor Servicer (other than Indenture Trustee) is
appointed, Issuer shall notify Indenture Trustee of such appointment, specifying
in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment
granted to Indenture Trustee under this Indenture or the rights of Indenture
Trustee hereunder, Issuer agrees that, unless such action is specifically
permitted hereunder or under the Basic Documents, it will not, without the prior
written consent of Indenture Trustee or the Holders of at least a majority in
Outstanding Amount of the Notes, amend, modify, waive, supplement, terminate or
surrender, or agree to any amendment, modification, supplement, termination,
waiver or surrender of, the terms of any Collateral or the Basic Documents, or
waive timely performance or observance by Servicer or Seller under the Sale and
Servicing Agreement; provided that no such amendment shall (i) except for
amendments and modifications of the Receivables permitted under the Sale and
Servicing Agreement, increase or reduce in any manner the amount of, or
accelerate or delay the timing of, distributions that are required to be made
for the benefit of the Noteholders, or (ii) reduce the aforesaid percentage of
the Notes which are
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required to consent to any such amendment, without the consent of the Holders of
all the Outstanding Notes. If any such amendment, modification, supplement or
waiver shall be so consented to by Indenture Trustee or such Holders, Issuer
agrees, promptly following a request by Indenture Trustee to do so, to execute
and deliver, in its own name and at its own expense, such agreements,
instruments, consents and other documents as Indenture Trustee may deem
necessary or appropriate in the circumstances.
SECTION 3.8 Negative Covenants. So long as any Notes are Outstanding,
Issuer shall not:
(a) except as expressly permitted by this Indenture or the
Basic Documents, sell, transfer, exchange or otherwise dispose of any
of the properties or assets of Issuer, including those included in the
Trust Estate, unless directed to do so by Indenture Trustee;
(b) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other than
amounts properly withheld from such payments under the Code) or assert
any claim against any present or former Noteholder by reason of the
payment of the taxes levied or assessed upon any part of the Trust
Estate;
(c) dissolve or liquidate in whole or in part; or
(d) (i) permit the validity or effectiveness of this Indenture
to be impaired, or permit the lien of this Indenture to be amended,
hypothecated, subordinated, terminated or discharged, or permit any
Person to be released from any covenants or obligations with respect to
the Notes under this Indenture except as may be expressly permitted
hereby, (ii) permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this Indenture)
to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and other
liens that arise by operation of law, in each case on a Financed
Vehicle and arising solely as a result of an action or omission of the
related Obligor) or (iii) permit the lien of this Indenture not to
constitute a valid first priority (other than with respect to any such
tax, mechanics' or other lien) security interest in the Trust Estate.
SECTION 3.9 Annual Statement as to Compliance. Issuer will deliver to
Indenture Trustee, on or before April 30 after the end of each fiscal year ended
December 31, beginning on April 30, 1998, and otherwise in compliance with the
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requirements of TIA Section 314(a)(4) an Officer's Certificate stating, as to
the Authorized Officer signing such Officer's Certificate, that:
(a) a review of the activities of Issuer during such fiscal
year and of performance under this Indenture has been made under such
Authorized Officer's supervision; and
(b) to the best of such Authorized Officer's knowledge, based
on such review, Issuer has complied with all conditions and covenants
under this Indenture throughout such year, or, if there has been a
default in the compliance of any such condition or covenant, specifying
each such default known to such Authorized Officer and the nature and
status thereof.
SECTION 3.10 Issuer May Consolidate, Etc. Only on Certain Terms. (a)
Issuer shall not consolidate or merge with or into any other Person, unless
(i) the Person (if other than Issuer) formed by or surviving
such consolidation or merger shall be a Person organized and existing
under the laws of the United States of America or any state and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to Indenture Trustee, in form satisfactory to Indenture
Trustee, the due and punctual payment of the principal of and interest
on all Notes and the performance or observance of every agreement and
covenant of this Indenture on the part of Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to Indenture Trustee) to the effect
that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
(vi) Issuer shall have delivered to Indenture Trustee an
Officer's Certificate and an Opinion of Counsel each stating that such
consolidation or merger and such supplemental indenture comply with
this Article III
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and that all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing required by
the Exchange Act).
(b) Except as expressly contemplated by the Basic Documents, Issuer
shall not convey or transfer all or substantially all of its properties or
assets, including those included in the Trust Estate, to any Person, unless
(i) the Person that acquires by conveyance or transfer the
properties and assets of Issuer the conveyance or transfer of which is
hereby restricted shall (A) be a United States citizen or a Person
organized and existing under the laws of the United States of America
or any state, (B) expressly assume, by an indenture supplemental
hereto, executed and delivered to Indenture Trustee, in form
satisfactory to Indenture Trustee, the due and punctual payment of the
principal of and interest on all Notes and the performance or
observance of every agreement and covenant of this Indenture on the
part of Issuer to be performed or observed, all as provided herein, (C)
expressly agree by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject and
subordinate to the rights of Holders of the Notes, (D) unless otherwise
provided in such supplemental indenture, expressly agree to indemnify,
defend and hold harmless Issuer against and from any loss, liability or
expense arising under or related to this Indenture and the Notes and
(E) expressly agree by means of such supplemental indenture that such
Person (or if a group of persons, then one specified Person) shall
prepare (or cause to be prepared) and make all filings with the
Commission (and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no
Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to Indenture Trustee) to the effect
that such transaction will not have any material adverse tax
consequence to the Trust, any Noteholder or any Certificateholder;
(v) any action as is necessary to maintain the lien and
security interest created by this Indenture shall have been taken; and
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(vi) Issuer shall have delivered to Indenture Trustee an
Officers' Certificate and an Opinion of Counsel each stating that such
conveyance or transfer and such supplemental indenture comply with this
Article III and that all conditions precedent herein provided for
relating to such transaction have been complied with (including any
filing required by the Exchange Act).
SECTION 3.11 Successor or Transferee. (a) Upon any consolidation or
merger of Issuer in accordance with Section 3.10(a), the Person formed by or
surviving such consolidation or merger (if other than Issuer) shall succeed to,
and be substituted for, and may exercise every right and power of, Issuer under
this Indenture with the same effect as if such Person had been named as Issuer
herein.
(b) Upon a conveyance or transfer of all the assets and properties of
Issuer pursuant to Section 3.10(b), Key Auto Finance Trust 1997-1 will be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of Issuer with respect to the Notes immediately upon the
delivery of written notice to Indenture Trustee stating that Key Auto Finance
Trust 1997-1 is to be so released.
SECTION 3.12 No Other Business. Issuer shall not engage in any business
other than financing, purchasing, owning, selling and managing the Receivables
in the manner contemplated by this Indenture and the Basic Documents and
activities incidental thereto.
SECTION 3.13 No Borrowing. Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes.
SECTION 3.14 Servicer's Obligations. Issuer shall cause Servicer to
comply with the Sale and Servicing Agreement, including Sections 4.9, 4.10 and
4.11 thereof.
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities. Except
as contemplated by the Sale and Servicing Agreement or this Indenture, Issuer
shall not make any loan or advance or credit to, or guarantee (directly or
indirectly or by an instrument having the effect of assuring another's payment
or performance on any obligation or capability of so doing or otherwise),
endorse or otherwise become contingently liable, directly or indirectly, in
connection with the obligations, stocks or dividends of, or own, purchase,
repurchase or acquire (or agree contingently to do so) any stock, obligations,
assets or securities of, or any other interest in, or make any capital
contribution to, any other Person.
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SECTION 3.16 Capital Expenditures. Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17 Restricted Payments. Issuer shall not, directly or
indirectly, (a) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to Owner Trustee or any owner of a beneficial interest in Issuer or
otherwise with respect to any ownership or equity interest or security in or of
Issuer or to Servicer or Administrator, (b) redeem, purchase, retire or
otherwise acquire for value any such ownership or equity interest or security or
(c) set aside or otherwise segregate any amounts for any such purpose; provided
that Issuer may make, or cause to be made, (i) distributions to Servicer,
Administrator, Owner Trustee, Indenture Trustee and the Certificateholders as
permitted by, and to the extent funds are available for such purpose under, the
Sale and Servicing Agreement or Trust Agreement and (ii) distributions to the
Indenture Trustee pursuant to Section 2(a)(ii) of the Administration Agreement.
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.
SECTION 3.18 Notice of Events of Default. Issuer agrees to give
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and each Event of Servicing Termination or default on the part
of Seller of its obligations under the Sale and Servicing Agreement.
SECTION 3.19 Further Instruments and Acts. Upon request of Indenture
Trustee, Issuer will execute and deliver such further instruments and do such
further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.20 Removal of Administrator. For so long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection therewith.
ARTICLE IV SATISFACTION AND DISCHARGE.
SECTION 4.1 Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as to (a)
rights of registration of transfer and exchange, (b) substitution of mutilated,
destroyed, lost or stolen Notes, (c) rights of Noteholders to receive payments
of principal thereof and interest thereon, (d) Sections 3.3, 3.4, 3.5, 3.8,
3.10, 3.12, 3.13 and 3.18, (e) the rights, obligations and immunities of
Indenture Trustee hereunder (including the rights of Indenture Trustee under
Section 6.7 and the obligations of Indenture Trustee under Section 4.2) and (f)
the rights of Noteholders as
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beneficiaries hereof with respect to the property so deposited with Indenture
Trustee payable to all or any of them, and Indenture Trustee, on demand of and
at the expense of Issuer, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to the Notes, when
(i) either
(A) all Notes theretofore authenticated and delivered
(other than (1) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 2.5
and (2) Notes for which payment money has theretofore been
deposited in trust or segregated and held in trust by Issuer
and thereafter repaid to Issuer or discharged from such trust,
as provided in Section 3.3) have been delivered to Indenture
Trustee for cancellation; or
(B) all Notes not theretofore delivered to Indenture
Trustee for cancellation
(1) have become due and payable,
(2) will become due and payable at the Final
Scheduled Distribution Date within one year, or
(3) are to be called for redemption within
one year under arrangements satisfactory to Indenture
Trustee for the giving of notice of redemption by
Trustee in the name, and at the expense, of Issuer,
and Issuer, in the case of clauses (1), (2) or (3), has
irrevocably deposited or caused to be irrevocably deposited
with Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in
trust for such purpose, in an amount sufficient to pay and
discharge the entire indebtedness on such Notes not
theretofore delivered to Indenture Trustee for cancellation
when due to the Final Scheduled Distribution Date or
Redemption Date (if Notes shall have been called for
redemption pursuant to Section 10.1(a)), as the case may be;
(ii) Issuer has paid or caused to be paid all other sums
payable hereunder by Issuer;
(iii) Issuer has delivered to Indenture Trustee an Officer's
Certificate, an Opinion of Counsel and (if required by the TIA or
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Indenture Trustee) an Independent Certificate from a firm of certified
public accountants, each meeting the applicable requirements of Section
11.1(a) and each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have
been complied with; and
(iv) Issuer has delivered to the Indenture Trustee an Opinion
of Counsel to the effect that the satisfaction and discharge of the
Notes pursuant to this Section will not cause any Noteholder to be
treated as having sold or exchanged any of its Notes for purposes of
Section 1001 of the Code.
SECTION 4.2 Application of Trust Money. All moneys deposited with
Indenture Trustee pursuant to Section 4.1 shall be held in trust and applied by
it, in accordance with the provisions of the Notes and this Indenture, to the
payment, either directly or through any Paying Agent, as Indenture Trustee may
determine, to the Holders of the particular Notes for the payment or redemption
of which such moneys have been deposited with Indenture Trustee, of all sums due
and to become due thereon for principal and interest; but such moneys need not
be segregated from other funds except to the extent required herein or in the
Sale and Servicing Agreement or required by law.
SECTION 4.3 Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all moneys then held by any Paying Agent other than Indenture Trustee under the
provisions of this Indenture with respect to such Notes shall, upon demand of
Issuer, be paid to Indenture Trustee to be held and applied according to Section
3.3 and thereupon such Paying Agent shall be released from all further liability
with respect to such moneys.
ARTICLE V REMEDIES.
SECTION 5.1 Events of Default. "Event of Default", wherever used
herein, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) default in the payment of any interest on any Note when
the same becomes due and payable, and such default shall continue for a
period of five days;
(b) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes due and
payable;
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(c) default in the observance or performance of any material
covenant or agreement of Issuer made in this Indenture (other than a
covenant or agreement, a default in the observance or performance of
which is elsewhere in this Section specifically dealt with), or any
representation or warranty of Issuer made in this Indenture or in any
certificate or other writing delivered pursuant hereto or in connection
herewith proving to have been incorrect in any material respect as of
the time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in respect
of which such misrepresentation or warranty was incorrect shall not
have been eliminated or otherwise cured, for a period of 30 days (or
for such longer period, not in excess of 90 days, as may be reasonably
necessary to remedy such default; provided that such default is capable
of remedy within 90 days or less and Servicer on behalf of Owner
Trustee delivers an Officer's Certificate to Indenture Trustee to the
effect that Issuer has commenced, or will promptly commence and
diligently pursue, all reasonable efforts to remedy such default) after
there shall have been given, by registered or certified mail, to Issuer
by Indenture Trustee or to Issuer and Indenture Trustee by the Holders
of at least 25% of the Outstanding Amount of the Notes, a written
notice specifying such default or incorrect representation or warranty
and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(d) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of Issuer or any
substantial part of the Trust Estate in an involuntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
Issuer or for any substantial part of the Trust Estate, or ordering the
winding-up or liquidation of Issuer's affairs, and such decree or order
shall remain unstayed and in effect for a period of 60 consecutive
days; or
(e) the commencement by Issuer of a voluntary case under any
applicable Federal or state bankruptcy, insolvency or other similar law
now or hereafter in effect, or the consent by Issuer to the entry of an
order for relief in an involuntary case under any such law, or the
consent by Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of Issuer or for any substantial part of the Trust
Estate, or the making by Issuer of any general assignment for the
benefit of creditors, or the failure by Issuer generally to pay its
debts as such debts become due, or the taking of action by Issuer in
furtherance of any of the foregoing.
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Issuer shall deliver to Indenture Trustee, within five days after the
occurrence thereof, written notice in the form of an Officer's Certificate of
any event which with the giving of notice and the lapse of time would become an
Event of Default under clause (c), its status and what action Issuer is taking
or proposes to take with respect thereto.
SECTION 5.2 Acceleration of Maturity; Rescission and Annulment. If an
Event of Default should occur and be continuing, then and in every such case
Indenture Trustee or the Holders of Notes representing not less than a majority
of the Outstanding Amount of the Notes may declare all the Notes to be
immediately due and payable, by a notice in writing to Issuer (and to Indenture
Trustee if given by Noteholders), and upon any such declaration the unpaid
principal amount of such Notes, together with accrued and unpaid interest
thereon through the date of acceleration, shall become immediately due and
payable.
At any time after such declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the money due has been
obtained by Indenture Trustee as hereinafter in this Article V provided, the
Holders of Notes representing a majority of the Outstanding Amount of the Notes,
by written notice to Issuer and Indenture Trustee, may rescind and annul such
declaration and its consequences if:
(a) Issuer has paid or deposited with Indenture Trustee a sum
sufficient to pay
(i) all payments of principal of and interest on all
Notes and all other amounts that would then be due hereunder
or upon such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(ii) all sums paid or advanced by Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of Indenture Trustee and its agents
and counsel; and
(b) all Events of Default, other than the nonpayment of the
principal of the Notes that has become due solely by such acceleration,
have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any
right consequent thereto.
SECTION 5.3 Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) Issuer covenants that if (i) default is made in the
payment
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of any interest on any Note when the same becomes due and payable, and such
default continues for a period of five days, or (ii) default is made in the
payment of the principal of or any installment of the principal of any Note when
the same becomes due and payable, Issuer will, upon demand of Indenture Trustee,
pay to it, for the benefit of the Holders of the Notes, the whole amount then
due and payable on such Notes for principal and interest, with interest upon the
overdue principal, and, to the extent payment at such rate of interest shall be
legally enforceable, upon overdue installments of interest, at the rate
specified in Section 2.7 and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of Indenture
Trustee and its agents and counsel.
(b) In case Issuer shall fail forthwith to pay such amounts upon such
demand, Indenture Trustee, in its own name and as trustee of an express trust,
may institute a proceeding for the collection of the sums so due and unpaid, and
may prosecute such proceeding to judgment or final decree, and may enforce the
same against Issuer or other obligor upon such Notes and collect in the manner
provided by law out of the property of Issuer or other obligor upon such Notes,
wherever situated, the moneys adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, Indenture Trustee
may, as more particularly provided in Section 5.4, in its discretion, proceed to
protect and enforce its rights and the rights of the Noteholders, by such
appropriate proceedings as Indenture Trustee shall deem most effective to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest in
the Trust Estate, proceedings under Title 11 of the United States Code or any
other applicable Federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of Issuer or its property or such other obligor or Person, or
in case of any other comparable judicial proceedings relative to Issuer or other
obligor upon the Notes, or to the creditors or property of Issuer or such other
obligor, Indenture Trustee, irrespective of whether the principal of any Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether Indenture Trustee shall have made any
demand pursuant to the provisions of this Section , shall be entitled and
empowered, by intervention in such proceedings or otherwise:
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(i) to file and prove a claim or claims for the whole amount
of principal and interest owing and unpaid in respect of the Notes and
to file such other papers or documents as may be necessary or advisable
in order to have the claims of Indenture Trustee (including any claim
for reasonable compensation to Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and counsel,
and for reimbursement of all expenses and liabilities incurred, and all
advances made, by Indenture Trustee and each predecessor Indenture
Trustee, except as a result of negligence, bad faith or willful
misconduct) and of the Noteholders allowed in such proceedings;
(ii) unless prohibited by applicable law and regulations, to
vote on behalf of the Holders of Notes in any election of a trustee, a
standby trustee or person performing similar functions in any such
proceedings;
(iii) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute all amounts
received with respect to the claims of the Noteholders and of Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims
of Indenture Trustee or the Holders of Notes allowed in any judicial
proceedings relative to Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such proceeding is hereby authorized by each of such Noteholders to make
payments to Indenture Trustee, and, in the event that Indenture Trustee shall
consent to the making of payments directly to such Noteholders, to pay to
Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to Indenture Trustee, each predecessor Indenture Trustee and their
respective agents, attorneys and counsel, and all other expenses and liabilities
incurred, and all advances made, by Indenture Trustee and each predecessor
Indenture Trustee except as a result of negligence or bad faith.
(e) Nothing herein contained shall be deemed to authorize Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize Indenture Trustee to vote in respect of the claim of any Noteholder in
any such proceeding except, as aforesaid, to vote for the election of a trustee
in bankruptcy or similar person.
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(f) All rights of action and of asserting claims under this Indenture,
or under any of the Notes, may be enforced by Indenture Trustee without the
possession of any of the Notes or the production thereof in any trial or other
proceedings relative thereto, and any such action or proceedings instituted by
Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of Indenture Trustee, each predecessor Indenture
Trustee and their respective agents and attorneys, shall be for the ratable
benefit of the Holders of the Class A Notes and then for the ratable benefit of
the Class B Notes, as provided by Section 5.4(b).
(g) In any proceedings brought by Indenture Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which Indenture Trustee shall be a party), Indenture Trustee shall be held to
represent all the Holders of the Notes, and it shall not be necessary to make
any Noteholder a party to any such proceedings.
SECTION 5.4 Remedies; Priorities. (a) If an Event of Default shall have
occurred and be continuing, Indenture Trustee may do one or more of the
following (subject to Section 5.5):
(i) institute proceedings in its own name and as trustee of an
express trust for the collection of all amounts then payable on the
Notes or under this Indenture with respect thereto, whether by
declaration or otherwise, enforce any judgment obtained, and collect
from Issuer and any other obligor upon such Notes moneys adjudged due;
(ii) institute proceedings from time to time for the complete
or partial foreclosure of this Indenture with respect to the Trust
Estate;
(iii) exercise any remedies of a secured party under the UCC
and take any other appropriate action to protect and enforce the rights
and remedies of Indenture Trustee and the Holders of the Notes; and
(iv) sell the Trust Estate or any portion thereof or rights or
interest therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided that Indenture Trustee may not sell or otherwise liquidate the Trust
Estate following an Event of Default, other than an Event of Default described
in Section 5.1(a) or (b), unless (A) (i) the Holders of 100% of the Outstanding
Amount of the Notes consent thereto, (ii) the proceeds of such sale or
liquidation distributable to the Noteholders are sufficient to discharge in full
all amounts then due and unpaid upon such Notes for principal and interest or
(iii) Indenture
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Trustee determines that the Trust Estate will not continue to provide sufficient
funds for the payment of principal of and interest on the Notes as they would
have become due if the Notes had not been declared due and payable, and
Indenture Trustee obtains the consent of Holders of 66-2/3% of the Outstanding
Amount of the Notes and (B) (i) the Holders of all outstanding Certificates
consent thereto or (ii) the proceeds of such sale or liquidation are sufficient
to pay in full the principal of and accrued interest on all of the outstanding
Notes and Certificates on the date of such sale or liquidation. In determining
such sufficiency or insufficiency with respect to clause (A)(ii) and (iii) or
clause (B)(ii), Indenture Trustee may, but need not, obtain and rely upon an
opinion of an Independent investment banking or accounting firm of national
reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose. In the event of a sale of the
Receivables by the Indenture Trustee following an Event of Default, the
Noteholders and Certificateholders will receive notice and an opportunity to
submit a bid in respect of such sale.
(b) If Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out such money or property (and other amounts
including amounts held on deposit in the Reserve Account) held as Collateral for
the benefit of the Noteholders in the following order:
FIRST: to Indenture Trustee for amounts due under Section 6.7;
SECOND: to Servicer for due and unpaid Servicing Fees;
THIRD: to the Holders of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes for amounts due and unpaid on the Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes for
interest;
FOURTH: to the Holders of the Class B Notes for amounts due
and unpaid on the Class B Notes for interest, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class B Notes for interest;
FIFTH: to the Holders of the Class A-1 Notes, Class A-2 Notes
and Class A-3 Notes for amounts due and unpaid on the Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes for
principal;
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SIXTH: to the Holders of the Class B Notes for amounts due and
unpaid on the Class B Notes for principal, ratably, without preference
or priority of any kind, according to the amounts due and payable on
the Class B Notes for principal; and
SEVENTH: to Issuer for distribution to the Certificateholders.
Indenture Trustee may fix a record date and payment date for any
payment to Noteholders pursuant to this Section . At least 15 days before such
record date, Issuer shall mail to each Noteholder and Indenture Trustee a notice
that states the record date, the payment date and the amount to be paid.
SECTION 5.5 Optional Preservation of the Receivables. If the Notes have
been declared to be due and payable under Section 5.2 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, Indenture Trustee may, but need not, elect to maintain possession of
the Trust Estate. It is the desire of the parties hereto and the Noteholders
that there be at all times sufficient funds for the payment of principal of and
interest on the Notes, and Indenture Trustee shall take such desire into account
when determining whether or not to maintain possession of the Trust Estate. In
determining whether to maintain possession of the Trust Estate, Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the Trust
Estate for such purpose.
SECTION 5.6 Limitation of Suits. No Holder of any Note shall have any
right to institute any proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Holder has previously given written notice to
Indenture Trustee of a continuing Event of Default;
(b) the Holders of not less than 25% of the Outstanding Amount
of the Notes have made written request to Indenture Trustee to
institute such proceeding in respect of such Event of Default in its
own name as Indenture Trustee hereunder;
(c) such Holder or Holders have offered to Indenture Trustee
indemnity reasonably satisfactory to it against the costs, expenses and
liabilities to be incurred in complying with such request;
(d) Indenture Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute such
proceedings; and
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(e) no direction inconsistent with such written request has
been given to Indenture Trustee during such 60-day period by the
Holders of a majority of the Outstanding Amount of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except, in each
case, to the extent and in the manner herein provided.
In the event Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes,
each representing less than a majority of the Outstanding Amount of the Notes,
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7 Unconditional Rights of Noteholders To Receive Principal
and Interest. Notwithstanding any other provisions in this Indenture, the Holder
of any Note shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on such Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder.
SECTION 5.8 Restoration of Rights and Remedies. If Indenture Trustee or
any Noteholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to Indenture Trustee or to such
Noteholder, then and in every such case Issuer, Indenture Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of Indenture Trustee and the Noteholders shall continue
as though no such Proceeding had been instituted.
SECTION 5.9 Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to Indenture Trustee or to the Noteholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
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SECTION 5.10 Delay or Omission Not a Waiver. No delay or omission of
Indenture Trustee or any Holder of any Note to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such right or
remedy or constitute a waiver of any such Default or Event of Default or an
acquiescence therein. Every right and remedy given by this Article V or by law
to Indenture Trustee or to the Noteholders may be exercised from time to time,
and as often as may be deemed expedient, by Indenture Trustee or by the
Noteholders, as the case may be.
SECTION 5.11 Control by Noteholders. The Holders of a majority of the
Outstanding Amount of the Notes shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to Indenture
Trustee with respect to the Notes or exercising any trust or power conferred on
Indenture Trustee; provided that
(a) such direction shall not be in conflict with any rule of
law or with this Indenture;
(b) subject to the express terms of Section 5.4, any direction
to Indenture Trustee to sell or liquidate the Trust Estate shall be by
the Holders of Notes representing not less than 100% of the Outstanding
Amount of the Notes;
(c) if the conditions set forth in Section 5.5 have been
satisfied and Indenture Trustee elects to retain the Trust Estate
pursuant to such Section , then any direction to Indenture Trustee by
Holders of Notes representing less than 100% of the Outstanding Amount
of the Notes to sell or liquidate the Trust Estate shall be of no force
and effect;
(d) Indenture Trustee may take any other action deemed proper
by Indenture Trustee that is not inconsistent with such direction; and
(e) such direction shall be in writing;
provided, further, that, subject to Section 6.1, Indenture Trustee need not take
any action that it determines might involve it in liability or might materially
adversely affect the rights of any Noteholders not consenting to such action.
SECTION 5.12 Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2, the
Holders of Notes of not less than a majority of the Outstanding Amount of the
Notes may waive any past Default or Event of Default and its consequences except
a Default (a) in payment of principal of or interest on any of the Notes or (b)
in respect of a covenant or provision hereof which cannot be modified or amended
without the
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consent of the Holder of each Note. In the case of any such waiver, Issuer,
Indenture Trustee and the Holders of the Notes shall be restored to their former
positions and rights hereunder, respectively; but no such waiver shall extend to
any subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other Default or Event of Default or impair any right consequent thereto.
SECTION 5.13 Undertaking for Costs. All parties to this Indenture
agree, and each Holder of any Note by such Holder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit
for the enforcement of any right or remedy under this Indenture, or in any suit
against Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to (a) any suit instituted by
Indenture Trustee, (b) any suit instituted by any Noteholder, or group of
Noteholders, in each case holding in the aggregate more than 10% of the
Outstanding Amount of the Notes or (c) any suit instituted by any Noteholder for
the enforcement of the payment of principal of or interest on any Note on or
after the respective due dates expressed in such Note and in this Indenture (or,
in the case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to Indenture Trustee,
but will suffer and permit the execution of every such power as though no such
law had been enacted.
SECTION 5.15 Action on Notes. Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of Indenture Trustee or the Noteholders shall be impaired by the recovery of any
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judgment by Indenture Trustee against Issuer or by the levy of any execution
under such judgment upon any portion of the Trust Estate or upon any of the
assets of Issuer.
SECTION 5.16 Performance and Enforcement of Certain Obligations. (a)
Promptly following a request from Indenture Trustee to do so and at
Administrator's expense, Issuer agrees to take all such lawful action as
Indenture Trustee may request to compel or secure the performance and observance
by Seller and Servicer, as applicable, of each of their obligations to Issuer
under or in connection with the Sale and Servicing Agreement or by the Seller or
any Seller Affiliate, as applicable, of each of their obligations under or in
connection with each Purchase Agreement, in each case, in accordance with the
terms thereof, and to exercise any and all rights, remedies, powers and
privileges lawfully available to Issuer under or in connection with the Sale and
Servicing Agreement and each Purchase Agreement, as the case may be, to the
extent and in the manner directed by Indenture Trustee, including the
transmission of notices of default on the part of Seller, Servicer or applicable
Seller Affiliate thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by Seller or Servicer of
each of their obligations under the Sale and Servicing Agreement or by the
Seller or any Seller Affiliate, as applicable, of each of their obligations
under or in connection with each Purchase Agreement.
(b) If an Event of Default has occurred and is continuing, Indenture
Trustee may, and, at the direction (which direction shall be in writing or by
telephone (confirmed in writing promptly thereafter)) of the Holders of 66-2/3%
of the Outstanding Amount of the Notes shall, exercise all rights, remedies,
powers, privileges and claims of Issuer against Seller or Servicer under or in
connection with the Sale and Servicing Agreement, or against the Seller or
Seller Affiliate under the applicable Purchase Agreement, including the right or
power to take any action to compel or secure performance or observance by
Seller, Servicer or applicable Seller Affiliate of each of their obligations to
Issuer thereunder and to give any consent, request, notice, direction, approval,
extension or waiver under the Sale and Servicing Agreement or any Purchase
Agreement, as applicable, and any right of Issuer to take such action shall be
suspended.
ARTICLE VI INDENTURE TRUSTEE.
SECTION 6.1 Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, of which a Responsible Officer of Indenture Trustee
has actual knowledge, Indenture Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent person would exercise or use under the circumstances
in the conduct of such person's own affairs.
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(b) Except during the continuance of an Event of Default:
(i) Indenture Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture and no
implied covenants or obligations shall be read into this Indenture
against Indenture Trustee; and
(ii) in the absence of bad faith on its part, Indenture
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon certificates or
opinions furnished to Indenture Trustee and conforming to the
requirements of this Indenture; however, Indenture Trustee shall
examine the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:
(i) this paragraph does not limit the effect of paragraph (b)
of this Section;
(ii) Indenture Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer unless it is
proved that Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) Indenture Trustee shall not be liable with respect to
any action it takes or omits to take in good faith in accordance with a
direction received by it pursuant to Section 5.11.
(d) Indenture Trustee shall not be liable for interest on any money
received by it except as Indenture Trustee may agree in writing with Issuer.
(e) Money held in trust by Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or indemnity satisfactory to it against such risk or liability is
not assured to it.
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(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.
(h) Indenture Trustee shall take all actions required to be taken by
the Indenture Trustee under the Sale and Servicing Agreement.
SECTION 6.2 Rights of Indenture Trustee. (a) Indenture Trustee may
conclusively rely on any document believed by it to be genuine and to have been
signed or presented by the proper person. Indenture Trustee need not investigate
any fact or matter stated in the document.
(b) Before Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. Indenture Trustee
shall not be liable for any action it takes, suffers or omits to take in good
faith in reliance on the Officer's Certificate or Opinion of Counsel.
(c) Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee, and Indenture Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, Key Consumer Acceptance Corporation, Key Bank USA, or any other
such agent, attorney, custodian or nominee appointed with due care by it
hereunder. Indenture Trustee shall have no duty to monitor the performance of
Issuer.
(d) Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, that Indenture Trustee's conduct does not constitute
wilful misconduct, negligence or bad faith.
(e) Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.
SECTION 6.3 Individual Rights of Indenture Trustee. Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Notes
and may otherwise deal with Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee. Any Paying Agent, Note Registrar,
co-registrar or co-paying agent may do the same with like rights. However,
Indenture Trustee must comply with Sections 6.11 and 6.12.
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SECTION 6.4 Indenture Trustee's Disclaimer. Indenture Trustee shall not
be responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes, shall not be accountable for Issuer's use of the
proceeds from the Notes, and shall not be responsible for any statement of
Issuer in the Indenture or in any document issued in connection with the sale of
the Notes or in the Notes other than Indenture Trustee's certificate of
authentication.
SECTION 6.5 Notice of Defaults. If a Default occurs and is continuing
and if it is either actually known or written notice of the existence thereof
has been delivered to a Responsible Officer of Indenture Trustee, Indenture
Trustee shall mail to each Noteholder notice of the Default within 90 days after
such knowledge or notice occurs. Except in the case of a Default in payment of
principal of or interest on any Note (including payments pursuant to the
mandatory redemption provisions of such Note), Indenture Trustee may withhold
the notice if and so long as a committee of its Responsible Officers in good
faith determines that withholding the notice is in the interests of Noteholders.
SECTION 6.6 Reports by Indenture Trustee to Holders. Paying Agent shall
deliver to each Noteholder such information as it may be required by law to
enable such Holder to prepare its Federal and state income tax returns.
SECTION 6.7 Compensation and Indemnity. The compensation and
reimbursement of expenses of Indenture Trustee shall be governed by the
Administration Agreement. In addition, Issuer shall reimburse any expenses
incurred by the Indenture Trustee in pursuing remedies pursuant to Section 5.4.
Issuer has caused Administrator to agree to indemnify Indenture Trustee and its
officers, directors, employees and agents against any and all loss, liability or
expense (including attorneys' fees and expenses) incurred by it in connection
with the acceptance or the administration of this trust and the performance of
its duties hereunder. Neither Issuer nor Administrator need reimburse any
expense or indemnify against any loss, liability or expense incurred by
Indenture Trustee through Indenture Trustee's own wilful misconduct, negligence
or bad faith or to the extent arising from the breach by the Indenture Trustee
of any of its representations and warranties and covenants set forth herein.
Issuer's payment obligations to Indenture Trustee pursuant to this
Section and the Administration Agreement referenced in the preceding paragraph
shall survive the discharge of this Indenture and the Administration Agreement
subject to a satisfaction of the Rating Agency Condition or the Indenture
Trustee's earlier resignation or removal. When Indenture Trustee incurs expenses
after the occurrence of a Default specified in Section 5.1(d) or (e) with
respect to Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
Federal or state bankruptcy, insolvency or similar law.
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SECTION 6.8 Replacement of Indenture Trustee. Indenture Trustee may
resign at any time by so notifying Issuer. The Holders of a majority in
Outstanding Amount of the Notes may remove Indenture Trustee by so notifying
Indenture Trustee and may appoint a successor Indenture Trustee. Issuer shall
remove Indenture Trustee if:
(a) Indenture Trustee fails to comply with Section 6.11;
(b) Indenture Trustee is adjudged a bankrupt or insolvent;
(c) a receiver or other public officer takes charge of
Indenture Trustee or its property; or
(d) Indenture Trustee otherwise becomes incapable of acting.
If Indenture Trustee resigns or is removed or if a vacancy exists in
the office of Indenture Trustee for any reason (Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), Issuer shall
promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to Issuer. Thereupon the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of Indenture Trustee under this Indenture subject to satisfaction of the Rating
Agency Condition. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. The retiring Indenture Trustee shall promptly
transfer all property held by it as Indenture Trustee to the successor Indenture
Trustee.
If a successor Indenture Trustee does not take office within 60 days
after the retiring Indenture Trustee resigns or is removed, the retiring
Indenture Trustee, Issuer or the Holders of a majority in Outstanding Amount of
the Notes may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.
If Indenture Trustee fails to comply with Section 6.11, any Noteholder
may petition any court of competent jurisdiction for the removal of Indenture
Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of Indenture Trustee and appointment of a
Successor Indenture Trustee pursuant to any of the provisions of this Section
shall not become effective until acceptance of appointment by the successor
Indenture Trustee pursuant to this Section 6.8 and payment of all fees and
expenses owed to the outgoing Indenture Trustee.
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Notwithstanding the resignation or removal of Indenture Trustee
pursuant to this Section, Issuer's and Administrator's obligations under Section
6.7 shall continue for the benefit of the retiring Indenture Trustee.
Indenture Trustee shall not be liable for the acts or omissions of any
successor Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. If Indenture Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Indenture Trustee. Indenture Trustee shall
provide the Rating Agencies and the Administrator prior written notice of any
such transaction.
In case at the time such successor or successors by merger, conversion
or consolidation to Indenture Trustee shall succeed to the trusts created by
this Indenture any of the Notes shall have been authenticated but not delivered,
any such successor to Indenture Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Notes so
authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to Indenture Trustee may authenticate such Notes
either in the name of any predecessor hereunder or in the name of the successor
to Indenture Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Notes or in this Indenture provided that
the certificate of Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, after delivering written notice to the Administrator, for the purpose of
meeting any legal requirement of any jurisdiction in which any part of Issuer
may at the time be located, Indenture Trustee shall have the power and may
execute and deliver all instruments to appoint one or more Persons to act as a
co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person or Persons, in such capacity
and for the benefit of the Noteholders, such title to the Trust, or any part
hereof, and, subject to the other provisions of this Section , such powers,
duties, obligations, rights and trusts as Indenture Trustee may consider
necessary or desirable. No co-trustee or separate trustee hereunder shall be
required to meet the terms of eligibility as a successor trustee under Section
6.11 and no notice to Noteholders of the appointment of any co-trustee or
separate trustee shall be required under Section 6.8.
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(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon Indenture Trustee shall be conferred or imposed upon and
exercised or performed by Indenture Trustee and such separate trustee
or co-trustee jointly (it being understood that such separate trustee
or co-trustee is not authorized to act separately without Indenture
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed Indenture Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations (including the holding of title to Issuer or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason
of any act or omission of any other trustee hereunder, including acts
or omissions of predecessor or successor trustees; and
(iii) Indenture Trustee may at any time accept the resignation
of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, Indenture Trustee. Every such instrument shall be filed with
Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall invest in and be
exercised by Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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SECTION 6.11 Eligibility; Disqualification. Indenture Trustee shall at
all times satisfy the requirements of TIA Section 310(a). Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and shall have a long
term debt rating of investment grade or better by the Rating Agencies or shall
otherwise be acceptable to the Rating Agencies. Indenture Trustee shall comply
with TIA Section 310(b), including the optional provision permitted by the
second sentence of TIA Section 310(b)(9); provided that there shall be excluded
from the operation of TIA Section 310(b)(1) any indenture or indentures under
which other securities of Issuer are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
relationship listed in TIA Section 311(b). An Indenture Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS.
SECTION 7.1 Issuer to Furnish Indenture Trustee Names and Addresses of
Noteholders. Issuer will furnish or cause to be furnished to Indenture Trustee
(a) not more than five days after the earlier of (i) each Record Date and (ii)
three months after the last Record Date, a list, in such form as Indenture
Trustee may reasonably require, of the names and addresses of the Holders as of
such Record Date, (b) at such other times as Indenture Trustee may request in
writing, within 30 days after receipt by Issuer of any such request, a list of
similar form and content as of a date not more than 10 days prior to the time
such list is furnished; provided that so long as (i) Indenture Trustee is Note
Registrar, or (ii) the Notes are Book-Entry Notes, no such list shall be
required to be furnished.
SECTION 7.2 Preservation of Information; Communications to Noteholders.
(a) Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders contained in the most recent
list furnished to Indenture Trustee as provided in Section 7.1 and the names and
addresses of Holders received by Indenture Trustee in its capacity as Note
Registrar. Indenture Trustee may destroy any list furnished to it as provided in
such Section 7.1 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with
other Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more Noteholders of Notes evidencing not less than 25%
of the Outstanding Amount of Notes to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA Section 312(b)), the Indenture
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Trustee shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
(c) Issuer, Indenture Trustee and Note Registrar shall have the
protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer. (a) Issuer shall:
(i) file with Indenture Trustee, within 15 days after Issuer
is required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) which Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of
the Exchange Act;
(ii) file with Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by
the Commission such additional information, documents and reports with
respect to compliance by Issuer with the conditions and covenants of
this Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to Indenture Trustee (and Indenture Trustee shall
transmit by mail to all Noteholders described in TIA Section 313(c))
such summaries of any information, documents and reports required to be
filed by Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a)
as may be required by rules and regulations prescribed from time to
time by the Commission.
(b) Unless Issuer otherwise determines, the fiscal year of Issuer shall
end on December 31 of each year.
SECTION 7.4 Reports by Indenture Trustee. If required by TIA Section
313(a), within 60 days after each March 31, beginning with March 31, 1998,
Indenture Trustee shall mail to each Noteholder as required by TIA Section
313(c) a brief report dated as of such date that complies with TIA Section
313(a). Indenture Trustee also shall comply with TIA Section 313(b)(1). A copy
of each report at the time of its mailing to Noteholders shall be filed by
Indenture Trustee with the Commission and each stock exchange, if any, on which
the Notes are listed. Issuer shall notify Indenture Trustee if and when the
Notes are listed on any stock exchange.
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ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES.
SECTION 8.1 Collection of Money. Except as otherwise expressly provided
herein, Indenture Trustee may demand payment or delivery of, and shall receive
and collect, directly and without intervention or assistance of any fiscal agent
or other intermediary, all money and other property payable to or receivable by
Indenture Trustee pursuant to this Indenture. Indenture Trustee shall apply all
such money received by it as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
Trust Estate, Indenture Trustee may take such action as may be appropriate to
enforce such payment or performance, including the institution and prosecution
of appropriate proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.
SECTION 8.2 Trust Accounts. (a) On or prior to the Closing Date, Issuer
shall cause Servicer to establish, in the name of Indenture Trustee, for the
benefit of the Noteholders and the Certificateholders, the Trust Accounts as
provided in Section 5.1 of the Sale and Servicing Agreement.
(b) On or before each Distribution Date, the Total Distribution Amount
with respect to the preceding Collection Period will be deposited in the
Collection Account as provided in Section 5.2 of the Sale and Servicing
Agreement. On or before each Distribution Date, the Noteholders' Distributable
Amount with respect to the preceding Collection Period will be transferred from
the Collection Account and/or the Reserve Account to the Note Distribution
Account as provided in Sections 5.1 and 5.5 of the Sale and Servicing Agreement.
(c) On each Distribution Date and Redemption Date, Indenture Trustee
shall distribute all amounts on deposit in the Note Distribution Account to
Noteholders in respect of the Notes to the extent of amounts due and unpaid on
the Notes for principal and interest in the following amounts and in the
following order of priority (except as otherwise provided in Section 5.4(b)):
(i) accrued and unpaid interest on the Class A Notes (A) in
the Class A-1 Noteholders' Interest Distributable Amount, to the Class
A-1 Noteholders, (B) in the Class A-2 Noteholders' Interest
Distributable Amount, to the Class A-2 Noteholders, and (C) in the
Class A-3 Noteholders' Interest Distributable Amount, to the Class A-3
Noteholders; provided that if there are not sufficient funds in the
Note Distribution Account to pay the entire amount of accrued and
unpaid interest then due on the Class A Notes for the related
Distribution Date, the amount in the Note Distribution Account shall be
applied to the payment of such interest
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on each class of the Class A Notes pro rata on the basis of the total
amount of such interest due on such class of Notes for such
Distribution Date;
(ii) accrued and unpaid interest on the Class B Notes to the
Class B Noteholders, provided that if there are not sufficient funds in
the Note Distribution Account to pay the entire amount of accrued and
unpaid interest then due on the Class B Notes for the related
Distribution Date, the amount in the Note Distribution Account shall be
applied to payment of such interest on the Class B Notes on a pro rata
basis;
(iii) payment of principal to the Holders of the Class A-1
Notes until the Outstanding Amount of the Class A-1 Notes is reduced to
zero provided that if there are not sufficient funds in the Note
Distribution Account to pay in full the principal amount of the
outstanding Class A-1 Notes, the amounts in the Note Distribution
Account shall be applied to the payment of principal on the Class A-1
Notes on a pro rata basis;
(iv) payment of principal to the Holders of the Class A-2
Notes until the Outstanding Amount of the Class A-2 Notes is reduced to
zero provided that if there are not sufficient funds in the Note
Distribution Account to pay in full the principal amount of the
outstanding Class A-2 Notes, the amounts in the Note Distribution
Account shall be applied to the payment of principal on the Class A-2
Notes on a pro rata basis.
(v) payment of principal to the Holders of the Class A-3 Notes
until the Outstanding Amount of the Class A-3 Notes is reduced to zero
provided that if there are not sufficient funds in the Note
Distribution Account to pay in full the principal amount of the
outstanding Class A-3 Notes, the amounts in the Note Distribution
Account shall be applied to the payment of principal on the Class A-3
Notes on a pro rata basis; and
(vi) payment of principal to the Holders of the Class B Notes
until the Outstanding Amount of the Class B Notes is reduced to zero
provided that if there are not sufficient funds in the Note
Distribution Account to pay in full the principal amount of the
outstanding Class B Notes, the amounts in the Note Distribution Account
shall be applied to the payment of principal on the Class B Notes on a
pro rata basis.
SECTION 8.3 General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion of the funds in the Trust Accounts shall be invested in Eligible
Investments and reinvested by Indenture Trustee upon Issuer Order, subject to
the provisions of Section 5.1(b) of the Sale and Servicing Agreement. In
accordance
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with Section 5.1(b) of the Sale and Servicing Agreement, on each Distribution
Date, all interest and other investment income (net of losses and investment
expenses) on funds on deposit in the Trust Accounts shall be distributed to the
Seller by the Indenture Trustee. Issuer will not direct Indenture Trustee to
make any investment of any funds or to sell any investment held in any of the
Trust Accounts unless the security interest Granted and perfected in such
account will continue to be perfected in such investment or the proceeds of such
sale, in either case without any further action by any Person, and, in
connection with any direction to Indenture Trustee to make any such investment
or sale, if requested by Indenture Trustee, Issuer shall deliver to Indenture
Trustee an Opinion of Counsel, acceptable to Indenture Trustee, to such effect.
(b) Subject to Section 6.1(c), Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Trust Accounts
resulting from any loss on any Eligible Investment included therein except for
losses attributable to Indenture Trustee's failure to make payments on such
Eligible Investments issued by Indenture Trustee, in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
(c) If (i) Issuer shall have failed to give investment directions for
any funds on deposit in the Trust Accounts to Indenture Trustee by 11:00 a.m.
Eastern Time (or such other time as may be agreed by Issuer and Indenture
Trustee) on any Business Day; (ii) a Default or Event of Default shall have
occurred and be continuing with respect to the Notes but the Notes shall not
have been declared due and payable pursuant to Section 5.2, or (iii) if such
Notes shall have been declared due and payable following an Event of Default,
amounts collected or receivable from the Trust Estate are being applied in
accordance with Section 5.5 as if there had not been such a declaration; then
Indenture Trustee shall, to the fullest extent practicable, invest and reinvest
funds in the Trust Accounts in the Victory U.S. Government Obligations Fund or
such other Eligible Investment designated in advance in writing by the Servicer.
Indenture Trustee shall not be liable for losses in respect of such investments
in Eligible Investments that comply with the requirements of the Basic
Documents.
SECTION 8.4 Release of Trust Estate. (a) Subject to the payment of its
fees and expenses pursuant to Section 6.7, Indenture Trustee may, and when
required by the provisions of this Indenture shall, execute instruments to
release property from the lien of this Indenture, or convey Indenture Trustee's
interest in the same, in a manner and under circumstances that are not
inconsistent with the provisions of this Indenture. No party relying upon an
instrument executed by Indenture Trustee as provided in this Article VIII shall
be bound to ascertain Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
moneys.
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(b) Indenture Trustee shall, at such time as there are no Notes
outstanding and all sums due Indenture Trustee pursuant to Section 6.7 have been
paid, release any remaining portion of the Trust Estate that secured the Notes
from the lien of this Indenture and release to Issuer or any other Person
entitled thereto any funds then on deposit in the Trust Accounts. Indenture
Trustee shall release property from the lien of this Indenture pursuant to this
Section 8.4(b) only upon receipt of an Issuer Request accompanied by an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA)
Independent Certificates in accordance with TIA Sections 314(c) and
314(d)(1) meeting the applicable requirements of Section 11.1.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, acknowledges that from
time to time the Indenture Trustee shall release the lien of this Indenture on
any Receivable to be sold to (i) Seller in accordance with Section 3.3 of the
Sale and Servicing Agreement and (ii) to Servicer in accordance with Section 4.7
of the Sale and Servicing Agreement.
SECTION 8.5 Opinion of Counsel. Indenture Trustee shall receive at
least seven days' notice when requested by Issuer to take any action pursuant to
Section 8.4(a), accompanied by copies of any instruments involved, and Indenture
Trustee may also require as a condition to such action, an Opinion of Counsel,
in form and substance satisfactory to Indenture Trustee, stating the legal
effect of any such action, outlining the steps required to complete the same,
and concluding that all conditions precedent to the taking of such action have
been complied with and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; provided that such Opinion of Counsel shall not be
required to express an opinion as to the fair value of the Trust Estate. Counsel
rendering any such opinion may rely, without independent investigation, on the
accuracy and validity of any certificate or other instrument delivered to
Indenture Trustee in connection with any such action.
ARTICLE IX SUPPLEMENTAL INDENTURES.
SECTION 9.1 Supplemental Indentures Without Consent of Noteholders. (a)
Without the consent of the Holders of any Notes but with prior notice to the
Rating Agencies by Issuer, as evidenced to Indenture Trustee, Issuer and
Indenture Trustee, when authorized by an Issuer Order, at any time and from time
to time, may enter into one or more indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act as in force at the date of
the execution thereof), in form satisfactory to Indenture Trustee, for any of
the following purposes:
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(i) to correct or amplify the description of any property at
any time subject to the lien of this Indenture, or better to assure,
convey and confirm unto Indenture Trustee any property subject or
required to be subjected to the lien of this Indenture, or to subject
to the lien of this Indenture additional property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another person to Issuer, and the
assumption by any such successor of the covenants of Issuer herein and
in the Notes contained;
(iii) to add to the covenants of Issuer, for the benefit of
the Holders of the Notes, or to surrender any right or power herein
conferred upon Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any
provision herein or in any supplemental indenture which may be
inconsistent with any other provision herein or in any supplemental
indenture or to make any other provisions with respect to matters or
questions arising under this Indenture or in any supplemental
indenture; provided that such action shall not materially and adversely
affect the interests of the Holders of the Notes;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the Notes
and to add to or change any of the provisions of this Indenture as
shall be necessary to facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of
Article VI;
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar
federal statute hereafter enacted and to add to this Indenture such
other provisions as may be expressly required by the TIA; or
(viii) (A) to add, modify or eliminate such provisions of the
Indenture as may be necessary or advisable in order to enable all or a
portion of Issuer to qualify as, and to permit an election to be made
to cause all or a portion of Issuer to be treated as, a "financial
asset securitization investment trust" as described in the provisions
of the "Small Business Job Protection Act of 1996," or to enable all or
a portion
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of the Issuer to qualify and an election to be made for similar
treatment under such comparable subsequent federal income tax
provisions as may ultimately be enacted into law, and (B) in connection
with any such election, to modify or eliminate existing provisions set
forth in this Indenture relating to the intended federal income tax
treatment of the Notes or Certificates and Issuer in the absence of the
election; it being a condition to any such amendment that each Rating
Agency will have notified the Indenture Trustee in writing that the
amendment will not result in a reduction or withdrawal of the rating of
any outstanding Notes or Certificates with respect to which it is a
Rating Agency; and
(ix) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer of
all or any portion of the Receivables to be derecognized under GAAP by
Seller to Issuer, (b) Issuer to avoid becoming a member of Seller's
consolidated group under GAAP or (c) the Seller, any Seller Affiliate
or any of other Affiliates to otherwise comply with or obtain more
favorable treatment under any law or regulation or any accounting rule
or principle; it being a condition to any such amendment that each
Rating Agency will have notified the Indenture Trustee in writing that
the amendment will not result in a reduction or withdrawal of the
rating of any outstanding Notes or Certificates with respect to which
it is a Rating Agency.
Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) Issuer and Indenture Trustee, when authorized by an Issuer Order,
may, also without the consent of any of the Holders of the Notes but with prior
notice to the Rating Agencies by Issuer, as evidenced to Indenture Trustee,
enter into an indenture or indentures supplemental hereto for the purpose of
adding any provisions to, or changing in any manner or eliminating any of the
provisions of, this Indenture or of modifying in any manner the rights of the
Holders of the Notes under this Indenture; provided that such action shall not,
as evidenced by an Opinion of Counsel, adversely affect in any material respect
the interests of any Noteholder.
SECTION 9.2 Supplemental Indentures with Consent of Noteholders. Issuer
and Indenture Trustee, when authorized by an Issuer Order, also may, with prior
notice to the Rating Agencies and with the consent of the Holders of not less
than a majority of the Outstanding Amount of the Notes, by Act of such Holders
delivered to Issuer and Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or
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of modifying in any manner the rights of the Holders of the Notes under this
Indenture; provided that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal
of or interest on any Note, or reduce the principal amount thereof, the
interest rate thereon or the Redemption Price with respect thereto,
change the provision of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Trust Estate to
payment of principal of or interest on the Notes, or change any place
of payment where, or the coin or currency in which, any Note or the
interest thereon is payable, or impair the right to institute suit for
the enforcement of the provisions of this Indenture requiring the
application of funds available therefor, as provided in Article V, to
the payment of any such amount due on the Notes on or after the
respective due dates thereof (or, in the case of redemption, on or
after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount of the
Notes, the consent of the Holders of which is required for any such
supplemental indenture, or the consent of the Holders of which is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture;
(iii) modify or alter the provisions of the proviso as to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the
Notes required to direct Indenture Trustee to direct Issuer to sell or
liquidate the Trust Estate pursuant to Section 5.4;
(v) modify any provision of this Section except to increase
any percentage specified herein or to provide that certain additional
provisions of this Indenture or the Basic Documents cannot be modified
or waived without the consent of the Holder of each Outstanding Note
affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment of
interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of such
calculation) or to affect the rights of the Holders of Notes to the
benefit of any provisions for the mandatory redemption of the Notes
contained herein; or
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(vii) permit the creation of any lien ranking prior to or on a
parity with the lien of this Indenture with respect to any part of the
Trust Estate or, except as otherwise permitted or contemplated herein
or in the Basic Documents, terminate the lien of this Indenture on any
property at any time subject hereto or deprive the Holder of any Note
of the security provided by the lien of this Indenture.
Indenture Trustee may determine whether or not any Notes would be
affected by any supplemental indenture and any such determination shall be
conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. Indenture Trustee shall not be liable for
any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by Issuer and Indenture Trustee of any
supplemental indenture pursuant to this Section , Issuer shall mail to the
Holders of the Notes to which such amendment or supplemental indenture relates a
notice setting forth in general terms the substance of such supplemental
indenture. Any failure of Issuer to mail such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 9.3 Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created
by this Indenture, Indenture Trustee shall be entitled to receive, and subject
to Sections 6.1 and 6.2, shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture. Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects Indenture
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise.
SECTION 9.4 Effect of Supplemental Indenture. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and be deemed to be modified and amended in accordance therewith with respect
to the Notes affected thereby, and the respective rights, limitations of rights,
obligations, duties, liabilities and immunities under this Indenture of
Indenture Trustee, Issuer and the Holders of the Notes shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
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SECTION 9.5 Conformity With Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6 Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by Indenture Trustee shall,
bear a notation in form approved by Indenture Trustee as to any matter provided
for in such supplemental indenture. If Issuer or Indenture Trustee shall so
determine, new Notes so modified as to conform, in the opinion of Indenture
Trustee and Issuer, to any such supplemental indenture may be prepared and
executed by Issuer and authenticated and delivered by Indenture Trustee in
exchange for Outstanding Notes.
ARTICLE X REDEMPTION OF NOTES.
SECTION 10.1 Redemption. (a) The Class B Notes are subject to
redemption in whole, but not in part, at the direction of Seller or Servicer
pursuant to Section 9.1(a) of the Sale and Servicing Agreement, on any
Distribution Date on which Seller or Servicer exercises its option to purchase
the Trust Estate pursuant to said Section 9.1(a), for a purchase price equal to
the Redemption Price; provided that Issuer has available funds sufficient to pay
the Redemption Price. Servicer or Issuer shall furnish the Rating Agencies
notice of such redemption. If the Class B Notes are to be redeemed pursuant to
this Section 10.1(a), Servicer or Issuer shall furnish notice of such election
to Indenture Trustee not later than 25 days prior to the Redemption Date and
Issuer shall deposit with Indenture Trustee in the Note Distribution Account the
Redemption Price of the Class B Notes to be redeemed whereupon all such Class B
Notes shall be due and payable on the Redemption Date upon the furnishing of a
notice complying with Section 10.2 to each Holder of the Class B Notes.
(b) If the assets of Issuer are sold pursuant to Section 9.2
of the Trust Agreement, all amounts on deposit in the Note Distribution
Account shall be paid to the Noteholders up to the Outstanding Amount
of the Notes and all accrued and unpaid interest thereon. If amounts
are to be paid to Noteholders pursuant to this Section 10.1(b),
Servicer or Issuer shall, to the extent practicable, furnish notice of
such event to Indenture Trustee not later than 25 days prior to the
Redemption Date whereupon all such amounts shall be payable on the
Redemption Date.
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SECTION 10.2 Form of Redemption Notice. (a) Notice of redemption under
Section 10.1(a) shall be given by Indenture Trustee by facsimile or by
first-class mail, postage prepaid, transmitted or mailed prior to the applicable
Redemption Date to each Holder of Class B Notes, as of the close of business on
the Record Date preceding the applicable Redemption Date, at such Holder's
address appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) that the Record Date otherwise applicable to
such Redemption Date is not applicable and that payments shall
be made only upon presentation and surrender of such Class B
Notes and the place where such Class B Notes are to be
surrendered for payment of the Redemption Price (which shall
be the office or agency of Issuer to be maintained as provided
in Section 3.2); and
(iv) that interest on the Class B Notes shall cease
to accrue on the Redemption Date.
Notice of redemption of the Class B Notes shall be given by Indenture
Trustee in the name and at the expense of Issuer. Failure to give notice of
redemption, or any defect therein, to any Holder of any Class B Note shall not
impair or affect the validity of the redemption of any other Class B Note.
(b) Prior notice of redemption under Section 10.1(b) is not
required to be given to Noteholders.
SECTION 10.3 Notes Payable on Redemption Date. The Class B Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), on the Redemption Date
become due and payable at the Redemption Price and (unless Issuer shall default
in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
ARTICLE XI MISCELLANEOUS.
SECTION 11.1 Compliance Certificates and Opinions, etc. (a) Upon any
application or request by Issuer to Indenture Trustee to take any action under
any provision of this Indenture, Issuer shall furnish to Indenture Trustee (i)
an
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Officer's Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with,
(ii) an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with and (iii) (if required by
the TIA) an Independent Certificate from a firm of certified public accountants
meeting the applicable requirements of this Section, except that, in the case of
any such application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such
certificate or opinion has read or has caused to be read such
covenant or condition and the definitions herein relating
thereto;
(ii) a brief statement as to the nature and scope of
the examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such
signatory, such signatory has made such examination or
investigation as is necessary to enable such signatory to
express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(iv) a statement as to whether, in the opinion of
each such signatory such condition or covenant has been
complied with.
(b) (i) Prior to the deposit of any Collateral or
other property or securities with Indenture Trustee that is to
be made the basis for the release of any property or
securities subject to the lien of this Indenture, Issuer
shall, in addition to any obligation imposed in Section
11.1(a) or elsewhere in this Indenture, furnish to Indenture
Trustee an Officer's Certificate certifying or stating the
opinion of each person signing such certificate as to the fair
value (within 90 days of such deposit) to Issuer of the
Collateral or other property or securities to be so deposited.
(ii) Whenever Issuer is required to furnish to
Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in
clause (i), Issuer shall also deliver to Trustee an
Independent Certificate
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as to the same matters, if the fair value to Issuer of the
securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of Issuer, as set
forth in the certificates delivered pursuant to clause (i) and
this clause (ii), is 10% or more of the Outstanding Amount of
the Notes, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value
thereof to Issuer as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent of
the Outstanding Amount of the Notes.
(iii) Other than with respect to the release of any
Purchased Receivables or Defaulted Receivables, whenever any
property or securities are to be released from the lien of
this Indenture, Issuer shall also furnish to Indenture Trustee
an Officer's Certificate certifying or stating the opinion of
each person signing such certificate as to the fair value
(within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of
such person the proposed release will not impair the security
under this Indenture in contravention of the provisions
hereof.
(iv) Whenever Issuer is required to furnish to
Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in
clause (iii), Issuer shall also furnish to Trustee an
Independent Certificate as to the same matters if the fair
value of the property or securities and of all other property
other than Purchased Receivables and Defaulted Receivables, or
securities released from the lien of this Indenture since the
commencement of the then current calendar year, as set forth
in the certificates required by clause (iii) and this clause
(iv), equals 10% or more of the Outstanding Amount of the
Notes, but such certificate need not be furnished in the case
of any release of property or securities if the fair value
thereof as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent of the then
Outstanding Amount of the Notes.
(v) Notwithstanding Section 2.9 or any other
provision of this Section, Issuer may (A) collect, liquidate,
sell or otherwise dispose of Receivables as and to the extent
permitted or required by the Basic Documents and (B) make cash
payments out of the Trust Accounts as and to the extent
permitted or required by the Basic Documents.
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SECTION 11.2 Form of Documents Delivered to Indenture Trustee. In any
case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his or her certificate or opinion is
based are erroneous. Any such certificate of an Authorized Officer or Opinion of
Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of
Servicer, Seller, Administrator or Issuer, stating that the information with
respect to such factual matters is in the possession of Servicer, Seller,
Administrator or Issuer, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Whenever in this Indenture, in connection with any application or
certificate or report to Indenture Trustee, it is provided that Issuer shall
deliver any document as a condition of the granting of such application, or as
evidence of Issuer's compliance with any term hereof, it is intended that the
truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts
and opinions stated in such document shall in such case be conditions precedent
to the right of Issuer to have such application granted or to the sufficiency of
such certificate or report. The foregoing shall not, however, be construed to
affect Indenture Trustee's right to rely upon the truth and accuracy of any
statement or opinion contained in any such document as provided in Article VI.
SECTION 11.3 Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such
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Noteholders in person or by agents duly appointed in writing; and except as
herein otherwise expressly provided such action shall become effective when such
instrument or instruments are delivered to Indenture Trustee, and, where it is
hereby expressly required, to Issuer. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Noteholders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Indenture and (subject to Section 6.1)
conclusive in favor of Indenture Trustee and Issuer, if made in the manner
provided in this Section.
(b) The fact and date of the execution by any person of any
such instrument or writing may be proved in any customary manner of
Indenture Trustee.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind
the Holder of every Note issued upon the registration thereof or in
exchange therefor or in lieu thereof, in respect of anything done,
omitted or suffered to be done by Indenture Trustee or Issuer in
reliance thereon, whether or not notation of such action is made upon
such Note.
SECTION 11.4 Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Noteholders or other documents provided or permitted by this Indenture
to be made upon, given or furnished to or filed with:
(a) Indenture Trustee by any Noteholder, Administrator or
Issuer shall be sufficient for every purpose hereunder if personally
delivered, delivered by overnight courier or mailed certified mail,
return receipt requested and shall be deemed to have been duly given
upon receipt to Indenture Trustee at its Corporate Trust Office, or
(b) Issuer by Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if personally delivered,
delivered by overnight courier or mailed certified mail, return receipt
requested and shall be deemed to have been duly given upon receipt to
Issuer addressed to: Key Auto Finance Trust 1997-1, in care of Chase
Manhattan Bank Delaware, 1201 Market Street, Wilmington, Delaware,
19801, Attention: John Cashin, with a copy to Administrator at Key
Tower, 127 Public Square, Cleveland, Ohio 44114-1306, Attention: Craig
T. Platt, or at any
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other address previously furnished in writing to Indenture Trustee by
Issuer or Administrator. Issuer shall promptly transmit any notice
received by it from the Noteholders to Indenture Trustee.
Notices required to be given to the Rating Agencies by Issuer,
Indenture Trustee or Owner Trustee shall be in writing, personally delivered,
delivered by overnight courier or mailed certified mail, return receipt
requested to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., 99 Church Street, New York, New York 10007, (ii) in the
case of S&P, at the following address: Standard & Poor's Ratings Services, 26
Broadway (15th Floor), New York, New York 10004, Attention of Asset Backed
Surveillance Department; and (iii) in the case of Fitch, at the following
address: Fitch Investors Service, L.P., One State Street Plaza, New York, New
York 10004 or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.
SECTION 11.5 Notices to Noteholders; Waiver. Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may
be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with Indenture Trustee
but such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to Indenture Trustee shall be deemed to be
a sufficient giving of such notice.
Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created
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hereunder, and shall not under any circumstance constitute a Default or Event of
Default.
SECTION 11.6 Alternate Payment and Notice Provisions. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, Issuer may
enter into any agreement with any Holder of a Note providing for a method of
payment, or notice by Indenture Trustee or any Paying Agent to such Holder, that
is different from the methods provided for in this Indenture for such payments
or notices, provided that such methods are reasonable and consented to by
Indenture Trustee (which consent shall not be unreasonably withheld). Issuer
will furnish to the trustee a copy of each such agreement and Indenture Trustee
will cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7 Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties
on any person (including the provisions automatically deemed included herein
unless expressly excluded by this Indenture) are a part of and govern this
Indenture, whether or not physically contained herein.
SECTION 11.8 Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9 Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of Indenture Trustee in this
Indenture shall bind its successors.
SECTION 11.10 Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11 Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other person with an ownership interest in any part
of the Trust Estate, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
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SECTION 11.12 Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.14 Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15 Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to Indenture Trustee or any other counsel reasonably
acceptable to Indenture Trustee) to the effect that such recording is necessary
either for the protection of the Noteholders or any other person secured
hereunder or for the enforcement of any right or remedy granted to Indenture
Trustee under this Indenture.
SECTION 11.16 Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of Issuer, Seller, Servicer, Owner
Trustee or Indenture Trustee on the Notes or under this Indenture or any
certificate or other writing delivered in connection herewith or therewith,
against (i) Seller, Servicer, Indenture Trustee or Owner Trustee in its
individual capacity, (ii) any owner of a beneficial interest in Issuer or (iii)
any partner, owner, beneficiary, agent, officer, director, employee or agent of
Seller, Servicer, Indenture Trustee or Owner Trustee in its individual capacity,
any holder of a beneficial interest in Issuer, Seller, Servicer, Owner Trustee
or Indenture Trustee or of any successor or assign of Seller, Servicer,
Indenture Trustee or Owner Trustee in its individual capacity, except as any
such Person may have expressly agreed (it being understood that Indenture
Trustee and Owner Trustee have no such obligations in their individual capacity)
and except that any such partner, owner or beneficiary shall be fully liable, to
the extent provided by applicable law, for any unpaid consideration for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity. For all purposes of this
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Indenture, in the performance of any duties or obligations of Issuer hereunder,
Owner Trustee shall be subject to, and entitled to the benefits of, the terms
and provisions of Article VI, VII and VIII of the Trust Agreement.
SECTION 11.17 No Petition. Indenture Trustee, by entering into this
Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree
that they will not at any time institute against Seller or Issuer, or join in
any institution against Seller or Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
SECTION 11.18 Inspection. Issuer agrees that, on reasonable prior
notice, it will permit any representative of Indenture Trustee, during Issuer's
normal business hours, to examine all the books of account, records, reports,
and other papers of Issuer, to make copies and extracts therefrom, to cause such
books to be audited by Independent certified public accountants, and to discuss
Issuer's affairs, finances and accounts with Issuer's officers, employees, and
independent certified public accountants, all at such reasonable times and as
often as may be reasonably requested. Indenture Trustee shall and shall cause
its representatives to hold in confidence all such information except that the
foregoing shall not be construed to prohibit (i) disclosure of any and all
information that is publicly known, or information obtained by the Indenture
Trustee from sources other than the Issuer, (ii) disclosure of any and all
information (A) if required to do so by any applicable statute, law, rule or
regulation, (B) to any government agency or regulatory body having or claiming
authority to regulate or oversee any aspects of the Indenture Trustee's business
or that of its affiliates, (C) pursuant to any subpoena, civil investigative
demand or similar demand or request of any court, regulatory authority,
arbitrator or arbitration to which the Indenture Trustee or an affiliate or an
officer, director, employer or shareholder thereof is a party, or (D) to any
affiliate, independent or internal auditor, agent, employee or attorney of the
Indenture Trustee having a need to know the same, provided that the Indenture
Trustee advises such recipient of the confidential nature of the information
being disclosed, or (iii) any other disclosure authorized by the Issuer.
61
<PAGE> 69
IN WITNESS WHEREOF, Issuer and Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized, all as of the day and year first above written.
KEY AUTO FINANCE TRUST 1997-1,
By: CHASE MANHATTAN BANK DELAWARE, a Delaware
banking corporation, not in its individual
capacity but solely as Owner Trustee,
By: /s/ John J. Cashin
--------------------------------------
Name: John J. Cashin
Title: Senior Trust Officer
BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity
but solely as Indenture Trustee,
By: /s/ Melissa Kaye Adelson
--------------------------------------
Name: Melissa Kaye Adelson
Title: Vice President
62
<PAGE> 70
EXHIBIT A
SCHEDULE OF RECEIVABLES
Delivered on Disk to Indenture Trustee
63
<PAGE> 71
EXHIBIT B
FORM OF SALE AND SERVICING AGREEMENT
64
<PAGE> 72
EXHIBIT C
FORM OF NOTE DEPOSITORY AGREEMENT
65
<PAGE> 73
EXHIBIT D
FORM OF A-1 NOTES
REGISTERED $____________(3)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-1
5.85% CLASS A-1 ASSET BACKED NOTES
Key Auto Finance Trust 1997-1, a trust organized and existing under the
laws of the State of Delaware (including any successor, the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of __________________ DOLLARS ($___________), partially payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is the initial principal amount of this
Note and the denominator of which is the aggregate initial principal amount of
the Class A-1 Notes (the "Fraction") by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the A-1
Notes pursuant to Section 3.1 of the Indenture; provided that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of the
Final Scheduled Distribution Date for the Class A-1 Notes and the
- --------
(3)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
66
<PAGE> 74
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. The Issuer
will pay interest on this Note on each Distribution Date until the principal of
this Note is paid or made available for payment, in an amount equal to the
product of the Class A-1 Noteholders' Interest Distributable Amount for the
related Distribution Date multiplied by the Fraction subject to certain
limitations contained in Section 3.1 and Section 8.2 of the Indenture. Such
principal of and interest on this Note shall be paid in the manner specified in
the Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Dated: February 21, 1997
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By:
-------------------------------------------
Name:
-------------------------------------------
Title:
-------------------------------------------
67
<PAGE> 75
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: February 21, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its individual capacity,
but solely as Indenture Trustee
By:
-------------------------------------------
Authorized Signatory
68
<PAGE> 76
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 5.85% Class A-1 Asset Backed Notes (herein called the "A-1
Notes" or the "Notes"), all issued under an Indenture dated as of February 21,
1997 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Indenture Trustee"), which term includes any successor Indenture Trustee under
the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are not otherwise defined herein and that are defined in the
Indenture shall have the meanings assigned to them in or pursuant to the
Indenture.
The Notes, the Class A-2 Notes and the Class A-3 Notes are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A-1 Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of Issuer, Seller, Servicer, Owner Trustee or Indenture Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) Seller, Servicer, Indenture Trustee or Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of Seller, Servicer, Indenture Trustee or Owner Trustee in its
individual capacity, any holder of a beneficial interest in Issuer, Seller,
Servicer, Owner Trustee or Indenture Trustee or of any successor or assign of
Seller, Servicer, Indenture Trustee or Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
Indenture Trustee and Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
<PAGE> 77
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, agree to treat, and to
take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that they
will not at any time institute against Seller or Issuer, or join in any
institution against Seller or Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware, a
Delaware banking corporation, in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
2
<PAGE> 78
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee_______
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto_____________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ _______________________________ (*)
Signature Guaranteed:
___________________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- -------------------------
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
<PAGE> 79
EXHIBIT E
FORM OF A-2 NOTES
REGISTERED $____________(4)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-1
6.05% CLASS A-2 ASSET BACKED NOTES
Key Auto Finance Trust 1997-1, a trust organized and existing under the
laws of the State of Delaware (including any successor, the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of __________________ DOLLARS ($___________), partially payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is the initial principal amount of this
Note and the denominator of which is the aggregate initial principal amount of
the Class A-2 Notes ("the Fraction") by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the A-2
Notes pursuant to Section 3.1 of the Indenture; provided that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of the
Final Scheduled Distribution Date for the Class A-2 Notes and the
- --------
(4)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 80
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the A-2 Notes will be made until the principal of the A-1 Notes
has been paid in full. The Issuer will pay interest on this Note on each
Distribution Date until the principal of this Note is paid or made available for
payment in an amount equal to the product of the Class A-2 Noteholders' Interest
distributable Amount for the related Transfer Date multiplied by the Fraction,
subject to certain limitations contained in Section 3.1 and Section 8.2 of the
Indenture. Such principal of and interest on this Note shall be paid in the
manner specified in the Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Dated: February 21, 1997
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware Banking
corporation, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
2
<PAGE> 81
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: February 21, 1997
BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity,
but solely as Indenture Trustee
By:
-------------------------------------
Authorized Signatory
3
<PAGE> 82
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.05% Class A-2 Asset Backed Notes (herein called the "A-2
Notes" or the "Notes"), all issued under an Indenture dated as of February 21,
1997 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Indenture Trustee"), which term includes any successor Indenture Trustee under
the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are not otherwise defined herein and that are defined in the
Indenture shall have the meanings assigned to them in or pursuant to the
Indenture.
The Notes, the Class A-1 Notes and the Class A-3 Notes are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A-2 Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of Issuer, Seller, Servicer, Owner Trustee or Indenture Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) Seller, Servicer, Indenture Trustee or Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of Seller, Servicer, Indenture Trustee or Owner Trustee in its
individual capacity, any holder of a beneficial interest in Issuer, Seller,
Servicer, Owner Trustee or Indenture Trustee or of any successor or assign of
Seller, Servicer, Indenture Trustee or Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
Indenture Trustee and Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
<PAGE> 83
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, agree to treat, and to
take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that they
will not at any time institute against Seller or Issuer, or join in any
institution against Seller or Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware, a
Delaware banking corporation, in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
2
<PAGE> 84
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee_______
_______________________________________________________________________________
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto_____________________________________________________
_______________________________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ _______________________________ (*)
Signature Guaranteed:
____________________________________________
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- -------------------------
(*) NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
<PAGE> 85
EXHIBIT F
FORM OF A-3 NOTES
REGISTERED $____________(5)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-1
6.15% CLASS A-3 ASSET BACKED NOTES
Key Auto Finance Trust 1997-1, a trust organized and existing under the
laws of the State of Delaware (including any successor, the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of __________________ DOLLARS ($___________), partially payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is the initial principal amount of this
Note and the denominator of which is the aggregate initial principal amount of
the Class A-3 Notes ("the Fraction") by (ii) the aggregate amount, if any,
payable from the Note Distribution Account in respect of principal on the A-3
Notes pursuant to Section 3.1 of the Indenture; provided that the entire unpaid
principal amount of this Note shall be due and payable on the earlier of the
Final Scheduled Distribution Date for the Class A-3 Notes and the
- --------
(5)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 86
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the A-3 Notes will be made until the principal of the A-2 Notes
has been paid in full. The Issuer will pay interest on this Note on each
Distribution Date until the principal of this Note is paid or made available for
payment in an amount equal to the product of the Class A-3 Noteholders' Interest
distributable Amount for the related Transfer Date multiplied by the Fraction,
subject to certain limitations contained in Section 3.1 and Section 8.2 of the
Indenture. Such principal of and interest on this Note shall be paid in the
manner specified in the Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Dated: February 21, 1997
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
2
<PAGE> 87
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: February 21, 1997
BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity,
but solely as Indenture Trustee
By:
---------------------------------------
Authorized Signatory
3
<PAGE> 88
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.15% Class A-3 Asset Backed Notes (herein called the "A-3
Notes" or the "Notes"), all issued under an Indenture dated as of February 21,
1997 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Indenture Trustee"), which term includes any successor Indenture Trustee under
the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are not otherwise defined herein and that are defined in the
Indenture shall have the meanings assigned to them in or pursuant to the
Indenture.
The Notes, the Class A-1 Notes and the Class A-2 Notes are and will be
equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class A-3 Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of Issuer, Seller, Servicer, Owner Trustee or Indenture Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) Seller, Servicer, Indenture Trustee or Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of Seller, Servicer, Indenture Trustee or Owner Trustee in its
individual capacity, any holder of a beneficial interest in Issuer, Seller,
Servicer, Owner Trustee or Indenture Trustee or of any successor or assign of
Seller, Servicer, Indenture Trustee or Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
Indenture Trustee and Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
<PAGE> 89
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, agree to treat, and to
take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that they
will not at any time institute against Seller or Issuer, or join in any
institution against Seller or Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware, a
Delaware banking corporation, in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
2
<PAGE> 90
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
- ------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ _______________________________ *
Signature Guaranteed:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- -------------------------
* NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
<PAGE> 91
EXHIBIT G
FORM OF CLASS B NOTES
REGISTERED $____________(6)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH
HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME
MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS SUBORDINATED
TO THE CLASS A-1 NOTES, CLASS A-2 NOTES AND CLASS A-3 NOTES ON THE TERMS AND
CONDITIONS PROVIDED IN THE INDENTURE.
KEY AUTO FINANCE TRUST 1997-1
6.40% CLASS B ASSET BACKED NOTES
Key Auto Finance Trust 1997-1, a trust organized and existing under the
laws of the State of Delaware (including any successor, the "Issuer"), for value
received, hereby promises to pay to CEDE & CO., or registered assigns, the
principal sum of __________________ DOLLARS ($___________), partially payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is the initial principal amount of this
Note and the denominator of which is the aggregate initial principal amount of
the Class B Notes ("the Fraction") by (ii) the aggregate amount, if any, payable
from the Note Distribution Account in respect of principal on the Class
- --------
(6)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 92
B Notes pursuant to Section 3.1 of the Indenture; provided that the entire
unpaid principal amount of this Note shall be due and payable on the earlier of
the Final Scheduled Distribution Date for the Class B Notes and the Redemption
Date, if any, pursuant to Section 10.1 of the Indenture. No payments of
principal of the Class B Notes will be made until the principal of the A-3 Notes
has been paid in full. The Issuer will pay interest on this Note on each
Distribution Date until the principal of this Note is paid or made available for
payment in an amount equal to the product of the Class B Noteholders' Interest
distributable Amount for the related Transfer Date multiplied by the Fraction,
subject to certain limitations contained in Section 3.1 and Section 8.2 of the
Indenture. Such principal of and interest on this Note shall be paid in the
manner specified in the Indenture.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the Issuer
with respect to this Note shall be applied first to interest due and payable on
this Note as provided above and then to the unpaid principal of this Note.
Reference is made to the further provisions of this Note set forth on
the reverse hereof, which shall have the same effect as though fully set forth
on the face of this Note.
Unless the certificate of authentication hereon has been executed by
the Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
2
<PAGE> 93
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer.
Dated: February 21, 1997
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement
By:
--------------------------------
Name:
--------------------------------
Title:
--------------------------------
3
<PAGE> 94
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: February 21, 1997
BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity,
but solely as Indenture Trustee
By:
-----------------------------------
Authorized Signatory
4
<PAGE> 95
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its 6.40% Class B Asset Backed Notes (herein called the "Class B
Notes" or the "Notes"), all issued under an Indenture dated as of February 21,
1997 (such Indenture, as supplemented or amended, is herein called the
"Indenture"), between the Issuer and Bankers Trust Company, a New York banking
corporation, not in its individual capacity but solely as trustee (the
"Indenture Trustee"), which term includes any successor Indenture Trustee under
the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and
obligations thereunder of the Issuer, the Indenture Trustee and the Holders of
the Notes. The Notes are subject to all terms of the Indenture. All terms used
in this Note that are not otherwise defined herein and that are defined in the
Indenture shall have the meanings assigned to them in or pursuant to the
Indenture.
The Class A-1 Notes, Class A-2 Notes and Class A-3 Notes are and will
be equally and ratably secured by the collateral pledged as security therefor as
provided in the Indenture. The Notes are subordinated to the Class A-1 Notes,
Class A-2 Notes and Class A-3 Notes and are secured by the collateral pledged as
security therefor on a subordinated basis as provided in the Indenture.
The Issuer shall pay interest on overdue installments of interest at
the Class B Interest Rate to the extent lawful.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of
a Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of Issuer, Seller, Servicer, Owner Trustee or Indenture Trustee on the Notes or
under this Indenture or any certificate or other writing delivered in connection
herewith or therewith, against (i) Seller, Servicer, Indenture Trustee or Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of Seller, Servicer, Indenture Trustee or Owner Trustee in its
individual capacity, any holder of a beneficial interest in Issuer, Seller,
Servicer, Owner Trustee or Indenture Trustee or of any successor or assign of
Seller, Servicer, Indenture Trustee or Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
Indenture Trustee and Owner Trustee have no such obligations in their individual
capacity) and except that any such partner, owner or beneficiary shall be fully
liable, to the extent provided by applicable law, for any unpaid consideration
for stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
<PAGE> 96
It is the intent of the Seller, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, agree to treat, and to
take no action inconsistent with the treatment of, the Notes for such tax
purposes as indebtedness of the Issuer.
Each Noteholder or Note Owner, by acceptance of a Note, or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that they
will not at any time institute against Seller or Issuer, or join in any
institution against Seller or Issuer of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States Federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic
Documents.
This Note and the Indenture shall be construed in accordance with the
laws of the State of New York, without reference to its conflict of law
provisions, and the obligations, rights and remedies of the parties hereunder
and thereunder shall be determined in accordance with such laws.
No reference herein to the Indenture and no provision of this Note or
of the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note at
the times, place and rate, and in the coin or currency, herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, neither Chase Manhattan Bank Delaware, a
Delaware banking corporation, in its individual capacity, any owner of a
beneficial interest in the Issuer, nor any of their respective partners,
beneficiaries, agents, officers, directors, employees, successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal of or interest on, or performance of, or omission to
perform, any of the covenants, obligations or indemnifications contained in this
Note or the Indenture, it being expressly understood that said covenants,
obligations and indemnifications have been made by the Owner Trustee for the
sole purposes of binding the interests of the Owner Trustee in the assets of the
Issuer. The Holder of this Note by the acceptance hereof agrees that, except as
expressly provided in the Basic Documents, in the case of an Event of Default
under the Indenture, the Holder shall have no claim against any of the foregoing
for any deficiency, loss or claim therefrom; provided that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
2
<PAGE> 97
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
- ------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
- ------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ _______________________________ *
Signature Guaranteed:
----------------------------------------
Signatures must be guaranteed by an
"eligible guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
- -------------------------
* NOTE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Note in
every particular without alteration, enlargement or any change
whatsoever.
<PAGE> 1
EXHIBIT 4.2
KEY AUTO FINANCE TRUST 1997-1
TRUST AGREEMENT
between
KEY CONSUMER ACCEPTANCE CORPORATION
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of February 21, 1997
<PAGE> 2
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS............................................... 1
SECTION 1.1. Capitalized Terms................................ 1
SECTION 1.2. Other Interpretive Provisions.................... 1
ARTICLE II ORGANIZATION............................................. 1
SECTION 2.1. Name............................................. 1
SECTION 2.2. Office........................................... 2
SECTION 2.3. Purposes and Powers.............................. 2
SECTION 2.4. Appointment of Owner Trustee..................... 3
SECTION 2.5. Initial Capital Contribution of Trust Estate..... 3
SECTION 2.6. Declaration of Trust............................. 3
SECTION 2.7. Organizational Expenses; Liabilities of the
Holders ......................................... 3
SECTION 2.8. Title to Issuer Property......................... 3
SECTION 2.9. Situs of Issuer.................................. 4
SECTION 2.10. Representations and Warranties of Depositor...... 4
SECTION 2.11. Federal Income Tax Allocations................... 5
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS................... 6
SECTION 3.1. Initial Ownership................................ 6
SECTION 3.2. The Certificates................................. 7
SECTION 3.3. Authentication of Certificates................... 7
SECTION 3.4. Registration of Transfer and Exchange of
Certificates .................................... 7
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates 8
SECTION 3.6. Persons Deemed Certificateholders................ 9
SECTION 3.7. Access to List of Certificateholders' Names and
Addresses........................................ 9
SECTION 3.8. Maintenance of Office or Agency.................. 9
SECTION 3.9. Appointment of Paying Agent...................... 10
SECTION 3.10. [Reserved]...................................... 10
SECTION 3.11. Book-Entry Certificates......................... 10
SECTION 3.12. Notices to Clearing Agency...................... 11
SECTION 3.13. Definitive Certificates......................... 12
ARTICLE IV ACTIONS BY OWNER TRUSTEE................................. 12
SECTION 4.1. Prior Notice to Owners with Respect to Certain
Matters ......................................... 12
SECTION 4.2. Action by Certificateholders with Respect to Certain
Matters.......................................... 13
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy ...................................... 13
<PAGE> 3
SECTION 4.4. Restrictions on Certificateholders' Power........ 14
SECTION 4.5. Majority Control................................. 14
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES................ 14
SECTION 5.1. Establishment of Certificate Distribution Account 14
SECTION 5.2. Application of Funds in Certificate Distribution
Account............................................. 14
SECTION 5.3. Method of Payment................................ 15
SECTION 5.4. No Segregation of Monies; No Interest............ 16
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue
Service and Others .............................. 16
SECTION 5.6. Signature on Returns; Tax Matters Partner........ 16
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE.................... 17
SECTION 6.1. General Authority................................ 17
SECTION 6.2. General Duties................................... 17
SECTION 6.3. Action upon Instruction.......................... 17
SECTION 6.4. No Duties Except as Specified in this Agreement
or in Instructions............................... 18
SECTION 6.5. No Action Except under Specified Documents or
Instructions........................................ 19
SECTION 6.6. Restrictions..................................... 19
ARTICLE VII CONCERNING OWNER TRUSTEE................................ 19
SECTION 7.1. Acceptance of Trusts and Duties.................. 19
SECTION 7.2. Furnishing of Documents.......................... 21
SECTION 7.3. Representations and Warranties................... 21
SECTION 7.4. Reliance; Advice of Counsel...................... 22
SECTION 7.5. Not Acting in Individual Capacity................ 22
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Receivables...................................... 22
SECTION 7.7. Owner Trustee May Own Certificates and Notes..... 23
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE.......................... 23
SECTION 8.1. Owner Trustee's Fees and Expenses................ 23
SECTION 8.2. Indemnification.................................. 23
SECTION 8.3. Payments to Owner Trustee........................ 24
ARTICLE IX TERMINATION OF TRUST AGREEMENT........................... 24
SECTION 9.1. Termination of Trust Agreement................... 24
-ii-
<PAGE> 4
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES.................................... 26
SECTION 10.1. Eligibility Requirements for Owner Trustee...... 26
SECTION 10.2. Resignation or Removal of Owner Trustee......... 26
SECTION 10.3. Successor Owner Trustee......................... 27
SECTION 10.4. Merger or Consolidation of Owner Trustee........ 27
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee... 28
ARTICLE XI MISCELLANEOUS............................................ 29
SECTION 11.1. Supplements and Amendments...................... 29
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders.............................. 31
SECTION 11.3. Limitations on Rights of Others................. 32
SECTION 11.4. Notices......................................... 32
SECTION 11.5. Severability.................................... 32
SECTION 11.6. Separate Counterparts........................... 32
SECTION 11.7. Successors and Assigns.......................... 32
SECTION 11.8. No Petition..................................... 33
SECTION 11.9. No Recourse..................................... 33
SECTION 11.10. Headings........................................ 33
SECTION 11.11. GOVERNING LAW................................... 33
SECTION 11.12. Certificate Transfer Restrictions............... 33
SECTION 11.13. Servicer........................................ 34
SECTION 11.14. Sale and Servicing Agreement.................... 34
-iii-
<PAGE> 5
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Form of Certificate Depository Agreement
-iv-
<PAGE> 6
TRUST AGREEMENT dated as of February 21, 1997 between KEY CONSUMER
ACCEPTANCE CORPORATION, a Delaware corporation, as Depositor, and CHASE
MANHATTAN BANK DELAWARE, a Delaware banking corporation, as Owner Trustee.
ARTICLE I DEFINITIONS.
SECTION 1.1. Capitalized Terms. Capitalized terms are used in this
Agreement as defined in Appendix X to the Sale and Servicing Agreement among the
trust established by this Agreement, Key Consumer Acceptance Corporation, as
Seller, Key Bank USA, National Association, as Servicer, and Bankers Trust
Company, as Indenture Trustee dated as of February 21, 1997, as the same may be
amended and supplemented from time to time.
SECTION 1.2. Other Interpretive Provisions. All terms defined in this
Agreement shall have the defined meanings when used in any certificate or other
document delivered pursuant hereto unless otherwise defined therein. For
purposes of this Agreement and all such certificates and other documents, unless
the context otherwise requires: (a) accounting terms not otherwise defined in
this Agreement, and accounting terms partly defined in this Agreement to the
extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles; (b) terms defined in Article 9 of the
UCC as in effect in the State of Delaware and not otherwise defined in this
Agreement are used as defined in that Article; (c) the words "hereof," "herein"
and "hereunder" and words of similar import refer to this Agreement as a whole
and not to any particular provision of this Agreement; (d) references to any
Article, Section , Schedule or Exhibit are references to Articles, Sections ,
Schedules and Exhibits in or to this Agreement, and references to any paragraph,
subsection, clause or other subdivision within any Section or definition refer
to such paragraph, subsection, clause or other subdivision of such Section or
definition; (e) the term "including" means "including without limitation"; (f)
references to any law or regulation refer to that law or regulation as amended
from time to time and include any successor law or regulation; (g) references to
any Person include that Person's successors and assigns; and (h) headings are
for purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
ARTICLE II ORGANIZATION.
SECTION 2.1. Name. The trust created hereby shall be known as "KEY
AUTO FINANCE TRUST 1997-1", in which name Owner Trustee may conduct
<PAGE> 7
the business of such trust, make and execute contracts and other instruments on
behalf of such trust and sue and be sued.
SECTION 2.2. Office. The office of Issuer shall be in care of Owner
Trustee at the Corporate Trust Office or at such other address as Owner Trustee
may designate by written notice to the Certificateholders and Depositor.
SECTION 2.3. Purposes and Powers. The purpose of Issuer is, and Issuer
shall have the power and authority, to engage in the following activities:
(a) to issue the Notes pursuant to the Indenture and the
Certificates pursuant to this Agreement, and to sell, transfer and
exchange the Notes and the Certificates and to pay interest on and
principal of the Notes and distributions on the Certificates;
(b) to acquire the property and assets set forth in the Sale and
Servicing Agreement from the Depositor pursuant to the terms thereof, to
make deposits to and withdrawals from the Reserve Account and to pay the
organizational, start-up and transactional expenses of Issuer;
(c) to assign, grant, transfer, pledge, mortgage and convey the
Trust Estate pursuant to the Indenture and to hold, manage and distribute
to the Certificateholders pursuant to the terms of the Sale and Servicing
Agreement any portion of the Trust Estate released from the Lien of, and
remitted to Issuer pursuant to, the Indenture;
(d) to enter into and perform its obligations under the Basic
Documents to which it is a party;
(e) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish the
foregoing or are incidental thereto or connected therewith; and
(f) subject to compliance with the Basic Documents, to engage in
such other activities as may be required in connection with conservation
of the Owner Trust Estate and the making of distributions to the
Certificateholders and the Noteholders.
Issuer is hereby authorized to engage in the foregoing activities. Issuer shall
not engage in any activity other than in connection with the foregoing or other
than as required or authorized by the terms of this Agreement or the Basic
Documents.
2
<PAGE> 8
SECTION 2.4. Appointment of Owner Trustee. Depositor hereby appoints Owner
Trustee as trustee of Issuer effective as of the date hereof, to have all the
rights, powers and duties set forth herein.
SECTION 2.5. Initial Capital Contribution of Trust Estate. Depositor
hereby sells, assigns, transfers, conveys and sets over to Owner Trustee, as of
the date hereof, the sum of $1. Owner Trustee hereby acknowledges receipt in
trust from Depositor, as of the date hereof, of the foregoing contribution,
which shall constitute the initial Owner Trust Estate and shall be deposited in
the Certificate Distribution Account.
SECTION 2.6. Declaration of Trust. Owner Trustee hereby declares that it
will hold the Owner Trust Estate in trust upon and subject to the conditions set
forth herein for the use and benefit of the Certificateholders, subject to the
obligations of Issuer under the Basic Documents. It is the intention of the
parties hereto that Issuer constitute a business trust under the Business Trust
Statute and that this Agreement constitute the governing instrument of such
business trust. It is the intention of the parties hereto that, solely for
income and franchise tax purposes, Issuer shall be treated as a partnership, the
partners of such partnership being the Certificateholders, (including the
Depositor, as general partner) and the Notes constituting indebtedness of the
partnership. The parties agree that, unless otherwise required by appropriate
tax authorities, Issuer will file or cause to be filed annual or other necessary
returns, reports and other forms consistent with the characterization of Issuer
as a partnership for such tax purposes. Effective as of the date hereof, Owner
Trustee shall have all rights, powers and duties set forth herein and, to the
extent not inconsistent herewith, in the Business Trust Statute with respect to
accomplishing the purposes of Issuer. Owner Trustee shall file the Certificate
of Trust with the Secretary of State of Delaware.
SECTION 2.7. Organizational Expenses; Liabilities of the Holders. (a)
Depositor shall pay organizational expenses of Issuer as they may arise or
shall, upon the request of Owner Trustee, promptly reimburse Owner Trustee for
any such expenses paid by Owner Trustee.
(b) No Holder or Owner shall have any personal liability for any
liability or obligation of the Trust.
SECTION 2.8. Title to Issuer Property. Legal title to all the Owner Trust
Estate shall be vested at all times in Issuer as a separate legal entity except
where applicable law in any jurisdiction requires title to any part of the Owner
Trust Estate to be vested in a trustee or trustees, in which case title shall be
deemed to be vested in Owner Trustee, a co-trustee and/or a separate trustee, as
the case may be.
3
<PAGE> 9
SECTION 2.9. Situs of Issuer. Issuer will be located and administered in
the State of Delaware. All bank accounts maintained by Owner Trustee on behalf
of Issuer shall be located in the State of Delaware or the State of New York.
Payments will be received by Issuer only in Delaware or New York, and payments
will be made by Issuer only from Delaware or New York. The only office of Issuer
will be at the Corporate Trust Office in Delaware.
SECTION 2.10. Representations and Warranties of Depositor. Depositor
hereby represents and warrants to Owner Trustee that:
(a) Depositor is duly organized and validly existing as a Delaware
corporation with power and authority to own its properties and to conduct
its business as such properties are currently owned and such business is
presently conducted.
(b) Depositor is duly qualified to do business as a foreign
corporation in good standing, and has obtained all necessary licenses and
approvals in all jurisdictions in which the ownership or lease of property
or the conduct of its business shall require such qualifications, licenses
and approvals, except where the failure to have such qualifications,
licenses and approvals would not have a material adverse effect on the
Depositor.
(c) Depositor has the corporate power and authority to execute and
deliver this Agreement and to carry out its terms; Depositor has full
power and authority to sell and assign the property to be sold and
assigned to and deposited with Issuer and Depositor has duly authorized
such sale and assignment and deposit to Issuer by all necessary corporate
action; and the execution, delivery and performance of this Agreement has
been duly authorized by Depositor by all necessary corporate action.
(d) This Agreement constitutes a legal, valid, and binding
obligation of the Depositor, enforceable against the Depositor in
accordance with its terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute
(with or without notice or lapse of time) a default under, the certificate
of incorporation or by-laws of Depositor, or any material indenture,
agreement or other instrument to which Depositor is a party or by which
4
<PAGE> 10
it is bound; nor result in the creation or imposition of any Lien upon any
of its properties pursuant to the terms of any such indenture, agreement
or other instrument (other than pursuant to the Basic Documents); nor
violate any law or, to the best of Depositor's knowledge, any order, rule
or regulation applicable to Depositor of any court or of any Federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over Depositor or its properties.
(f) There are no proceedings or investigations pending or, to the
Depositor's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, (ii) seeking to prevent the
issuance of the Notes or the Certificates or the consummation of any of
the transactions contemplated by this Agreement, the Indenture or any of
the other Basic Documents, (iii) seeking any determination or ruling that
might materially and adversely affect the performance by the Depositor or
its obligations under, or the validity or enforceability of, this
Agreement or (iv) which might adversely affect the federal income tax
attributes, or applicable state tax franchise or income tax attributes, of
the Notes and the Certificates.
SECTION 2.11. Federal Income Tax Allocations. The Certificateholders
acknowledge that it is their intent and that they understand that it is the
intent of Depositor and Servicer that, for the purposes of federal income, state
and local income and franchise taxes and any other income taxes, Issuer will be
treated as a partnership and the Certificateholders (including Depositor) will
be treated as partners in that partnership (except, in the case of any state
tax, where the Depositor or the Servicer in good faith determines that treatment
of the Issuer as other than a partnership is required by applicable state law).
Depositor and the other Certificateholders by acceptance of a Certificate agree
to such treatment and agree to take no action inconsistent with such treatment.
For purposes of federal income, state and local income and franchise tax and any
other income taxes each month:
(a) amounts paid to Certificateholders pursuant to Section 5.2(a)(i)
shall be treated as "guaranteed payments" within the meaning of Section
707(c) of the Code;
(b) to the extent that the characterization provided for in
paragraph (a) of this Section is not respected, gross ordinary income of
Issuer for such month as determined for federal income tax purposes shall
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be allocated among the Certificateholders as of the first Record Date
following the end of such month, in proportion to their ownership of
principal amount of the Certificates on such date, in an amount up to the
sum of (i) the Certificateholders' Monthly Interest Distributable Amount
for such month, (ii) interest on the excess, if any, of the
Certificateholders' Interest Distributable Amount for the preceding
Distribution Date over the amount in respect of interest at the
Certificate Rate that is actually deposited in the Certificate
Distribution Account on such preceding Distribution Date, to the extent
permitted by law, at the Certificate Rate from such preceding Distribution
Date through the current Distribution Date, and (iii) the portion of the
market discount on the Receivables accrued during such month that is
allocable to the excess of the initial aggregate principal amount of the
Certificates over their initial aggregate issue price; and
(c) thereafter all remaining net income of Issuer for such month as
determined for federal income tax purposes (and each item of income, gain,
credit, loss or deduction entering into the computation thereof) shall be
allocated to Depositor, to the extent thereof;
If the gross ordinary income of Issuer for any month is insufficient for the
allocations described in clause (b), subsequent gross ordinary income shall
first be allocated to make up such shortfall before being allocated as provided
in clause (c). Net losses of Issuer, if any, for any month as determined for
Federal income tax purposes (and each item of income, gain, loss, credit and
deduction entering into the computation thereof) shall be allocated to Depositor
to the extent Depositor is reasonably expected as determined by Servicer to bear
the economic burden of such net losses, then net losses shall be allocated among
the Certificateholders as of the first Record Date following the end of such
month in proportion to their ownership of principal amount of Certificates on
such Record Date until the principal balance of the Certificates is reduced to
zero. Depositor is authorized to modify the allocations in this paragraph if
necessary or appropriate, in its sole discretion, for the allocations to fairly
reflect the economic income, gain or loss to Depositor, the Certificateholders,
or as otherwise required by the Code.
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS.
SECTION 3.1. Initial Ownership. Upon the formation of Issuer by the
contribution by Depositor pursuant to Section 2.5 and until the issuance of the
Certificates, Depositor shall be the sole beneficiary of the Trust.
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SECTION 3.2. The Certificates. The Certificates shall be issued in
denominations of $1,000 and integral multiples thereof; provided that one
Certificate may be issued that includes any residual portion of the initial
Certificate Balance in a denomination other than an integral multiple of $1,000.
The Certificates shall be executed on behalf of Issuer by manual or facsimile
signature of an authorized officer of Owner Trustee. Certificates bearing the
manual or facsimile signatures of individuals who were, at the time when such
signatures shall have been affixed, authorized to sign on behalf of Issuer,
shall be validly issued and entitled to the benefit of this Agreement,
notwithstanding that such individuals or any of them shall have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of authentication and delivery of such
Certificates. A transferee of a Certificate shall become a Certificateholder,
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder, upon due registration of such Certificate in such
transferee's name pursuant to Section 3.4.
SECTION 3.3. Authentication of Certificates. Concurrently with the initial
sale of the Receivables to Issuer pursuant to the Sale and Servicing Agreement,
Owner Trustee shall cause the Certificates in an aggregate principal amount
equal to the initial Certificate Balance to be executed on behalf of Issuer,
authenticated and delivered to or upon the written order of Depositor, signed by
its chairman of the board, its president, its chief financial officer, its chief
accounting officer, any vice president, its secretary, any assistant secretary,
its treasurer or any assistant treasurer, without further corporate action by
Depositor, in authorized denominations. No Certificate shall entitle its Holder
to any benefit under this Agreement, or be valid for any purpose, unless there
shall appear on such Certificate a certificate of authentication substantially
in the form set forth in Exhibit A, executed by Owner Trustee or The Chase
Manhattan Bank, as Owner Trustee's authentication agent, by manual signature;
such authentication shall constitute conclusive evidence that such Certificate
shall have been duly authenticated and delivered hereunder. All Certificates
shall be dated the date of their authentication.
SECTION 3.4. Registration of Transfer and Exchange of Certificates.
Certificate Registrar shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 3.8, a Certificate Register in which, subject to
such reasonable regulations as it may prescribe, Owner Trustee shall provide for
the registration of Certificates and of transfers and exchanges of Certificates
as herein provided. The Chase Manhattan Bank shall be the initial Certificate
Registrar.
Upon surrender for registration of transfer of any Certificate at the
office or agency maintained pursuant to Section 3.8, Owner Trustee shall
execute,
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authenticate and deliver (or shall cause The Chase Manhattan Bank as its
authenticating agent to authenticate and deliver), in the name of the designated
transferee or transferees, one or more new Certificates in authorized
denominations of a like class and aggregate face amount dated the date of
authentication by Owner Trustee or any authenticating agent. At the option of a
Holder, Certificates may be exchanged for other Certificates of the same class
in authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.8.
Every Certificate presented or surrendered for registration of transfer or
exchange shall be accompanied by a written instrument of transfer in form
satisfactory to Owner Trustee and Certificate Registrar duly executed by the
Certificateholder or his attorney duly authorized in writing, with such
signature guaranteed by a member firm of the New York Stock Exchange, a
commercial bank or trust company or an "eligible guarantor institution" with
membership or participation in STAMP or such other "signature guarantee program"
as may be determined by Certificate Registrar in addition to, or substitution
for, STAMP, all in accordance with the Exchange Act. Each Certificate
surrendered for registration of transfer or exchange shall be canceled and
subsequently disposed of by Owner Trustee or Certificate Registrar in accordance
with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Certificates, but Owner Trustee or Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer or exchange of Certificates.
The preceding provisions of this Section 3.4 notwithstanding, Owner
Trustee shall not make and the Certificate Registrar need not register any
transfer or exchange of Certificates for a period of fifteen (15) days preceding
any Distribution Date for any payment with respect to the Certificates.
SECTION 3.5. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any
mutilated Certificate shall be surrendered to Certificate Registrar, or if
Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered
to Certificate Registrar and Owner Trustee such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Certificate shall have been acquired by a bona fide purchaser, Owner
Trustee on behalf of Issuer shall execute and Owner Trustee, or The Chase
Manhattan Bank, as Owner Trustee's authenticating agent, shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen
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Certificate, a new Certificate of like class, tenor and denomination. In
connection with the issuance of any new Certificate under this Section , Owner
Trustee or Certificate Registrar may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in Issuer, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 3.6. Persons Deemed Certificateholders. Every Person by virtue of
becoming a Certificateholder or Owner in accordance with this Agreement shall be
deemed to be bound by the terms of this Agreement. Prior to due presentation of
a Certificate for registration of transfer, Owner Trustee, Certificate Registrar
or any agent of Owner Trustee or Certificate Registrar may treat the Person in
whose name any Certificate shall be registered in the Certificate Register as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 5.2 and for all other purposes whatsoever, and none of Owner
Trustee, Certificate Registrar or any agent of Owner Trustee or Certificate
Registrar shall be bound by any notice to the contrary.
SECTION 3.7. Access to List of Certificateholders' Names and Addresses.
Owner Trustee shall furnish or cause to be furnished to Servicer, Depositor or
Indenture Trustee, within 15 days after receipt by Owner Trustee of a request
therefor from Servicer, Depositor or Indenture Trustee in writing, a list, in
such form as Servicer, Depositor or Indenture Trustee may reasonably require, of
the names and addresses of the Certificateholders as of the most recent Record
Date. If three or more Holders of Certificates, or one or more Holders of
Certificates evidencing not less than 25% of the Certificate Balance, apply in
writing to Owner Trustee, and such application states that the applicants desire
to communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates and such application is accompanied by
a copy of the communication that such applicants propose to transmit, then Owner
Trustee shall, within five Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Holder, by receiving and holding a Certificate,
shall be deemed to have agreed not to hold Depositor, Certificate Registrar or
Owner Trustee accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was derived.
SECTION 3.8. Maintenance of Office or Agency. Owner Trustee shall maintain
in the Borough of Manhattan, The City of New York, an office or offices or
agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon Owner Trustee in
respect of the Certificates and the Basic Documents may be
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served. Owner Trustee initially designates The Chase Manhattan Bank, 55 Water
Street, New York, New York 10041, as its principal corporate trust office for
such purposes. Owner Trustee shall give prompt written notice to Depositor and
to the Certificateholders of any change in the location of the Certificate
Register or any such office or agency.
SECTION 3.9. Appointment of Paying Agent. Paying Agent shall make
distributions to Certificateholders from the Certificate Distribution Account
pursuant to Section 5.2 and shall report the amounts of such distributions to
Owner Trustee. Any Paying Agent shall have the revocable power to withdraw funds
from the Certificate Distribution Account for the purpose of making the
distributions referred to above. Owner Trustee may revoke such power and remove
Paying Agent if Owner Trustee determines in its sole discretion that Paying
Agent shall have failed to perform its obligations under this Agreement in any
material respect. Paying Agent shall initially be The Chase Manhattan Bank, and
any co-paying agent chosen by The Chase Manhattan Bank, and acceptable to Owner
Trustee. Paying Agent shall be permitted to resign upon 30 days' written notice
to Owner Trustee and Servicer. In the event that The Chase Manhattan Bank shall
no longer be Paying Agent, Owner Trustee shall appoint a successor to act as
Paying Agent (which shall be a bank or trust company). Owner Trustee shall cause
such successor Paying Agent or any additional Paying Agent appointed by Owner
Trustee to execute and deliver to Owner Trustee an instrument in which such
successor Paying Agent or additional Paying Agent shall agree with Owner Trustee
that as Paying Agent, such successor Paying Agent or additional Paying Agent
will hold all sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto until such sums
shall be paid to such Certificateholders. Paying Agent shall return all
unclaimed funds to Owner Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to Owner Trustee. The
provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to Owner Trustee also
in its role as Paying Agent, for so long as Owner Trustee shall act as Paying
Agent and, to the extent applicable, to any other paying agent appointed
hereunder. Any reference in this Agreement to Paying Agent shall include any
co-paying agent unless the context requires otherwise.
SECTION 3.10. [Reserved]
SECTION 3.11. Book-Entry Certificates. The Certificates, upon original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by or on behalf of
Issuer. Such Book-Entry Certificate or Certificates shall initially be
registered on the Certificate Register in the name of Cede & Co., the nominee of
the initial Clearing Agency,
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and no beneficial owner will receive a Definitive Certificate representing such
beneficial owner's interest in such Certificate, except as provided in Section
3.13. Unless and until Definitive Certificates have been issued to beneficial
owners pursuant to Section 3.13:
(a) the provisions of this Section shall be in full force and
effect;
(b) Certificate Registrar, each Paying Agent and Owner Trustee shall
be entitled to deal with the Clearing Agency for all purposes of this
Agreement relating to the Book-Entry Certificates (including the payment
of principal of and interest on the Book-Entry Certificates and the giving
of instructions or directions to Owners of Book-Entry Certificates) as the
sole Holder of Book-Entry Certificates and shall have no obligations to
Owners thereof;
(c) to the extent that the provisions of this Section conflict with
any other provisions of this Agreement, the provisions of this Section
shall control;
(d) the rights of Owners of the Book-Entry Certificates shall be
exercised only through the Clearing Agency and shall be limited to those
established by law and agreements between such Owners and the Clearing
Agency and/or Clearing Agency Participants or Persons acting through
Clearing Agency Participants. Pursuant to the Certificate Depository
Agreement, unless and until Definitive Certificates are issued pursuant to
Section 3.13, the initial Clearing Agency will make book-entry transfers
among Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Book-Entry Certificates to such Clearing
Agency Participants; and
(e) whenever this Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Certificates
evidencing a specified percentage of the Certificate Balance, the Clearing
Agency shall be deemed to represent such percentage only to the extent
that it has received instructions to such effect from Owners and/or
Clearing Agency Participants or Persons acting through Clearing Agency
Participants owning or representing, respectively, such required
percentage of the beneficial interest in the Book-Entry Certificates and
has delivered such instructions to Owner Trustee.
SECTION 3.12. Notices to Clearing Agency. Whenever a notice or other
communication to Owners is required under this Agreement, unless and until
Definitive Certificates shall have been issued to Owners pursuant to Section
3.13,
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Owner Trustee and each Paying Agent shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to Owners.
SECTION 3.13. Definitive Certificates. If (a) Servicer advises Owner
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities with respect to the Certificates, and
Servicer is unable to locate a qualified successor, (b) Servicer at its option
advises Owner Trustee in writing that it elects to terminate the book-entry
system through the Clearing Agency or (c) after the occurrence of an Event of
Default, Owners of Certificates representing beneficial interests aggregating at
least a majority of the Certificate Balance advise the Clearing Agency and Owner
Trustee in writing that the continuation of a book-entry system through the
Clearing Agency is no longer in the best interest of Owners of Certificates,
then the Clearing Agency shall notify all Owners and Owner Trustee of the
occurrence of any such event and of the availability of the Definitive
Certificates to Owners requesting the same. Upon surrender to Owner Trustee of
the typewritten Certificate or Certificates representing the Book Entry
Certificates by the Clearing Agency, accompanied by registration instructions,
Owner Trustee shall execute and authenticate, or cause to be authenticated, the
Definitive Certificates in accordance with the instructions of the Clearing
Agency. Neither Certificate Registrar nor Owner Trustee shall be liable for any
delay in delivery of such instructions and may conclusively rely on, and shall
be protected in relying on, such instructions. Upon the issuance of Definitive
Certificates, Owner Trustee and each Paying Agent shall recognize the Holders of
the Definitive Certificates as Certificateholders. The Definitive Certificates
shall be printed, lithographed or engraved or may be produced in any other
manner as is reasonably acceptable to Owner Trustee, as evidenced by its
execution thereof.
ARTICLE IV ACTIONS BY OWNER TRUSTEE.
SECTION 4.1. Prior Notice to Owners with Respect to Certain Matters. With
respect to the following matters, Owner Trustee shall not take action unless at
least 30 days before the taking of such action, Owner Trustee shall have
notified the Certificateholders in writing of the proposed action and the
Certificateholders shall not have notified Owner Trustee in writing prior to the
30th day after such notice is given that such Certificateholders have withheld
consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by Issuer
(except claims or lawsuits brought in connection with the collection of
the Receivables) and the compromise of any material action, claim or
lawsuit
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brought by or against Issuer (except with respect to the aforementioned
claims or lawsuits for collection of the Receivables);
(b) the election by Issuer to file an amendment to the Certificate
of Trust (unless such amendment is required to be filed under the Business
Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture
in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in
circumstances where the consent of any Noteholder is not required and such
amendment materially adversely affects the interest of the
Certificateholders;
(e) the amendment, change or modification of the Sale and Servicing
Agreement or the Administration Agreement, except to cure any ambiguity or
defect or to amend or supplement any provision in a manner that would not
materially adversely affect the interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor
Indenture Trustee or the consent to the assignment by the Note Registrar,
Paying Agent or Indenture Trustee or Certificate Registrar of its
obligations under the Indenture or this Agreement, as applicable.
Owner Trustee shall notify the Certificateholders in writing of any appointment
of a successor Paying Agent or Certificate Registrar within five Business Days
thereof.
SECTION 4.2. Action by Certificateholders with Respect to Certain Matters.
Owner Trustee shall not have the power, except upon the direction of the
Certificateholders, to (a) remove Servicer under the Sale and Servicing
Agreement pursuant to Section 8.1 thereof, (b) except as expressly provided in
the Basic Documents, sell the Receivables after the termination of the
Indenture, (c) remove the Administrator under the Administration Agreement
pursuant to Section 9 thereof or (d) appoint a successor Administrator pursuant
to Section 9 of the Administration Agreement. Owner Trustee shall take the
actions referred to in the preceding sentence only upon written instructions
signed by the Certificateholders.
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy.
Owner Trustee shall not have the power to commence a voluntary proceeding in
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bankruptcy relating to Issuer until the Outstanding Amount of all the Notes has
been reduced to zero and without the unanimous prior approval of all
Certificateholders and the delivery to Owner Trustee by each such
Certificateholder of a certificate certifying that such Certificateholder
reasonably believes that Issuer is insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct Owner Trustee to take or refrain from taking
any action if such action or inaction would be contrary to any obligation of
Issuer or Owner Trustee under this Agreement or any of the Basic Documents or
would be contrary to Section 2.3 nor shall Owner Trustee be obligated to follow
any such direction, if given.
SECTION 4.5. Majority Control. Except as expressly provided herein, any
action that may be taken by the Certificateholders under this Agreement may be
taken by the Holders of Certificates evidencing not less than a majority of the
Certificate Balance. Except as expressly provided herein, any written notice of
the Certificateholders delivered pursuant to this Agreement shall be effective
if signed by Holders of Certificates evidencing not less than a majority of the
Certificate Balance at the time of the delivery of such notice.
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES.
SECTION 5.1. Establishment of Certificate Distribution Account. Owner
Trustee, for the benefit of the Certificateholders, shall establish and maintain
in the name of Issuer an Eligible Deposit Account (the "Certificate Distribution
Account"), bearing a designation clearly indicating that the funds deposited
therein are held for the benefit of the Certificateholders. Except as otherwise
provided herein, the Certificate Distribution Account shall be under the sole
dominion and control of Owner Trustee for the benefit of the Certificateholders.
SECTION 5.2. Application of Funds in Certificate Distribution Account. (a)
On each Distribution Date, Owner Trustee will, or will cause Paying Agent to,
based on the information contained in Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9 of the Sale and Servicing Agreement,
distribute to Certificateholders, to the extent of the funds available, amounts
deposited in the Certificate Distribution Account pursuant to the Sale and
Servicing Agreement on such Distribution Date in the following order of
priority:
(i) first, to the Certificateholders, on a pro rata basis, an
amount equal to the Certificateholders' Interest Distributable
Amount; and
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(ii) second, to the Certificateholders, on a pro rata basis,
an amount equal to the Certificateholders' Principal Distributable
Amount.
(b) On each Distribution Date, Owner Trustee shall send, or cause to
be sent, to each Certificateholder the statement provided to Owner Trustee
by Servicer pursuant to Section 5.6 of the Sale and Servicing Agreement on
such Distribution Date.
(c) In the event that any withholding tax is imposed on the Trust's
payment (or allocations of income) to a Certificateholder, such tax shall
reduce the amount otherwise distributable to the Certificateholder in
accordance with this Section . Owner Trustee is hereby authorized and
directed to retain from amounts otherwise distributable to the
Certificateholders sufficient funds for the payment of any tax that is
legally owed by Issuer (but such authorization shall not prevent Owner
Trustee from contesting any such tax in appropriate proceedings, and
withholding payment of such tax, if permitted by law, pending the outcome
of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by Issuer and remitted
to the appropriate taxing authority. If there is a possibility that
withholding tax is payable with respect to a distribution (such as a
distribution to a non-United States Certificateholder), Owner Trustee may
in its sole discretion withhold such amounts in accordance with this
clause (c). In the event that an Owner wishes to apply for a refund of any
such withholding tax, Owner Trustee shall reasonably cooperate with such
Certificateholder in making such claim so long as such Certificateholder
agrees to reimburse Owner Trustee for any out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c), distributions
required to be made to Certificateholders on any Distribution Date shall be made
to each Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such Holder at a
bank or other entity having appropriate facilities therefor, if (a) such
Certificateholder shall have provided to Certificate Registrar appropriate
written instructions at least five Business Days prior to such Distribution Date
and such Holder's Certificates in the aggregate evidence an amount of not less
than $1,000,000 or (b) such Certificateholder is the Depositor, or an Affiliate
thereof, or, if not, by check mailed to such Certificateholder at the address of
such Holder appearing in the Certificate Register; provided that, unless
Definitive Certificates have been issued pursuant to Section 3.13, with respect
to Certificates registered
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on the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), distributions will be made by wire transfer in
immediately available funds to the account designated by such nominee.
Notwithstanding the foregoing, the final distribution in respect of any
Certificate (whether on the Final Scheduled Distribution Date or otherwise) will
be payable only upon presentation and surrender of such Certificate at the
office or agency maintained for that purpose by Owner Trustee pursuant to
Section 3.8.
SECTION 5.4. No Segregation of Monies; No Interest. Subject to Sections
5.1 and 5.2, monies received by Owner Trustee or any Paying Agent hereunder need
not be segregated in any manner except to the extent required by law or the
Indenture or the Sale and Servicing Agreement and may be deposited under such
general conditions as may be prescribed by law, and neither Owner Trustee nor
any Paying Agent shall be liable for any interest thereon.
SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Owner Trustee shall
(a) maintain (or cause to be maintained) the books of Issuer on a calendar year
basis on the accrual method of accounting, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its Federal and state
income tax returns, (c) prepare and file such tax returns relating to Issuer
(including a partnership information return, Form 1065), and make such elections
as may from time to time be required or appropriate under any applicable state
or Federal statute or rule or regulation thereunder so as to maintain the
Issuer's characterization as a partnership for Federal income tax purposes, (d)
cause such tax returns to be signed in the manner required by law and (e)
collect or cause to be collected any withholding tax as described in and in
accordance with Section 5.2(c) with respect to income or distributions to
Certificateholders. Owner Trustee shall cooperate with the Depositor in making
all elections pursuant to this Section as directed in writing by the Depositor.
Owner Trustee shall elect under Section 1278 of the Code to include in income
currently any market discount that accrues with respect to the Receivables.
Owner Trustee shall not make the election provided under Section 754 of the
Code.
SECTION 5.6. Signature on Returns; Tax Matters Partner. (a)
Notwithstanding the provisions of Section 5.5, Depositor shall sign on behalf of
Issuer the tax returns of Issuer, unless applicable law requires Owner Trustee
to sign such documents, in which case such documents shall be signed by Owner
Trustee at the written direction of Depositor.
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(b) Depositor shall be the "tax matters partner" of Issuer pursuant
to the Code.
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE.
SECTION 6.1. General Authority. Owner Trustee is authorized and directed
to execute and deliver the Basic Documents to which Issuer is named as a party
and each certificate or other document attached as an exhibit to or contemplated
by the Basic Documents to which Issuer is named as a party and any amendment
thereto, in each case, in such form as Depositor shall approve, as evidenced
conclusively by Owner Trustee's execution thereof, and on behalf of Issuer at
the written direction of Depositor, to direct Indenture Trustee to authenticate
and deliver Class A-1 Notes in the aggregate principal amount of $300,000,000,
Class A-2 Notes in the aggregate principal amount of $66,000,000, Class A-3
Notes in the aggregate principal amount of $46,141,000, and Class B Notes in the
aggregate principal amount of $26,307,000. In addition to the foregoing, Owner
Trustee is authorized, but shall not be obligated, to take all actions required
of Issuer pursuant to the Basic Documents. Owner Trustee is further authorized
from time to time to take such action as Servicer or Administrator recommends or
directs in writing with respect to the Basic Documents, except to the extent
that this Agreement expressly requires the consent of Certificateholders for
such action.
SECTION 6.2. General Duties. It shall be the duty of Owner Trustee to
discharge (or cause to be discharged) all of its responsibilities pursuant to
the terms of this Agreement and the other Basic Documents and to administer
Issuer in the interest of Owners, subject to the Basic Documents and in
accordance with the provisions of this Agreement. Notwithstanding the foregoing,
Owner Trustee shall be deemed to have discharged its duties and responsibilities
hereunder and under the Basic Documents to the extent Administrator has agreed
in the Administration Agreement to perform any act or to discharge any duty of
Owner Trustee or Issuer hereunder or under any Basic Document, and Owner Trustee
shall not be liable for the default or failure of Administrator to carry out its
obligations under the Administration Agreement. Except as expressly provided in
the Basic Documents, the Owner Trustee shall have no obligation to administer,
service or collect the Receivables or to maintain, monitor or otherwise
supervise the administration, servicing or collection of the Receivables.
SECTION 6.3. Action upon Instruction. (a) Subject to Article IV, the
Certificateholders may, by written instruction, direct Owner Trustee in the
management of Issuer. Such direction may be exercised at any time by written
instruction of the Certificateholders pursuant to Article IV.
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(b) Owner Trustee shall not be required to take any action hereunder
or under any Basic Document if Owner Trustee shall have reasonably
determined or been advised by counsel that such action is likely to result
in liability on the part of Owner Trustee or is contrary to the terms
hereof or of any Basic Document or is otherwise contrary to law and a copy
of such opinion has been provided to Seller and Servicer.
(c) Whenever Owner Trustee is unable to decide between alternative
courses of action permitted or required by the terms of this Agreement or
any Basic Document or is unsure as to the application of any provision of
this Agreement or any Basic Document or any such provision is ambiguous as
to its application, or is, or appears to be, in conflict with any other
applicable provision, or in the event that this Agreement permits any
determination by Owner Trustee or is silent or is incomplete as to the
course of action that Owner Trustee is required to take with respect to a
particular set of facts, Owner Trustee shall promptly give notice (in such
form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted or application of such provision, and to the extent Owner Trustee
acts or refrains from acting in good faith in accordance with any written
instruction of the Certificateholders received, Owner Trustee shall not be
liable on account of such action or inaction to any Person. If Owner
Trustee shall not have received appropriate instruction within ten days of
such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it
may, but shall be under no duty to, take or refrain from taking such
action, not inconsistent with this Agreement or the Basic Documents, as it
shall deem to be in the best interests of the Certificate- holders, and
shall have no liability to any Person for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions. Owner Trustee shall not have any duty or obligation to manage,
make any payment with respect to, register, record, sell, dispose of, or
otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from
taking any action under, or in connection with, any document contemplated hereby
to which Owner Trustee is a party, except as expressly provided by the terms of
this Agreement or in any document or written instruction received by Owner
Trustee pursuant to Section 6.3; and no implied duties or obligations shall be
read into this Agreement or any Basic Document against Owner Trustee. Owner
Trustee shall have no responsibility for filing any financing or continuation
statement in any public office at any time or to otherwise perfect or maintain
the perfection of any security interest or lien granted to it hereunder or to
prepare or file any
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Commission filing for Issuer or to record this Agreement or any Basic Document.
Owner Trustee nevertheless agrees that it will, at its own cost and expense,
promptly take all action as may be necessary to discharge any Liens on any part
of the Owner Trust Estate that result from actions by, or claims against, Owner
Trustee that are not related to the ownership or the administration of the Owner
Trust Estate.
SECTION 6.5. No Action Except under Specified Documents or Instructions.
Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal
with any part of the Owner Trust Estate except (i) in accordance with the powers
granted to and the authority conferred upon Owner Trustee pursuant to this
Agreement, (ii) in accordance with the Basic Documents and (iii) in accordance
with any document or instruction delivered to Owner Trustee pursuant to Section
6.3.
SECTION 6.6. Restrictions. Owner Trustee shall not take any action (a)
that is inconsistent with the purposes of Issuer set forth in Section 2.3 or (b)
that, to the actual knowledge of Owner Trustee, would (i) affect the treatment
of the Notes as indebtedness for federal income or state income or franchise tax
purposes, (ii) be deemed to cause a taxable exchange of the Notes for federal
income or state income or franchise tax purposes or (iii) cause Issuer or any
portion thereof to be taxable as an association or publicly traded partnership
taxable as a corporation for federal income or state income or franchise tax
purposes. The Certificateholders shall not direct Owner Trustee to take action
that would violate the provisions of this Section.
ARTICLE VII CONCERNING OWNER TRUSTEE.
SECTION 7.1. Acceptance of Trusts and Duties. Owner Trustee accepts the
trusts hereby created and agrees to perform its duties hereunder with respect to
such trusts but only upon the terms of this Agreement. Owner Trustee also agrees
to disburse all moneys actually received by it constituting part of the Owner
Trust Estate upon the terms of the Basic Documents and this Agreement. Owner
Trustee shall not be answerable or accountable hereunder or under any Basic
Document under any circumstances, except (i) for its own willful misconduct, bad
faith or negligence or (ii) in the case of the inaccuracy of any representation
or warranty contained in Section 7.3 expressly made by Owner Trustee. In
particular, but not by way of limitation (and subject to the exceptions set
forth in the preceding sentence):
(a) Owner Trustee shall not be liable for any error of judgment
made by a Responsible Officer of Owner Trustee;
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(b) Owner Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with the instructions of
Depositor, Servicer, Administrator or any Certificateholder;
(c) no provision of this Agreement or any Basic Document shall
require Owner Trustee to expend or risk funds or otherwise incur any
financial liability in the performance of any of its rights or powers
hereunder or under any Basic Document if Owner Trustee shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to it;
(d) under no circumstances shall Owner Trustee be liable for
indebtedness evidenced by or arising under any of the Basic Documents,
including the principal of and interest on the Notes or amounts
distributable on the Certificates;
(e) Owner Trustee shall not be responsible for or in respect of the
validity or sufficiency of this Agreement or for the due execution hereof
by Depositor or for the form, character, genuineness, sufficiency, value
or validity of any of the Owner Trust Estate or for or in respect of the
validity or sufficiency of the Basic Documents, other than the certificate
of authentication on the Certificates, and Owner Trustee shall in no event
assume or incur any liability, duty or obligation to any Noteholder or to
any Certificateholder, other than as expressly provided for herein and in
the Basic Documents;
(f) Owner Trustee shall not be liable for the default or misconduct
of Indenture Trustee, Servicer, Custodian or Administrator under any of
the Basic Documents or otherwise and Owner Trustee shall have no
obligation or liability to perform the obligations of Issuer under this
Agreement or the Basic Documents that are required to be performed by
Indenture Trustee under the Indenture, Servicer or Custodian under the
Sale and Servicing Agreement or Administrator under the Administration
Agreement; and
(g) Owner Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Agreement, or to institute,
conduct or defend any litigation under this Agreement or otherwise or in
relation to this Agreement or any Basic Document, at the request, order or
direction of any of the Certificateholders, unless such Certificateholders
have offered to Owner Trustee security or indemnity satisfactory to it
against the costs, expenses and liabilities that may be incurred by Owner
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Trustee therein or thereby. The right of Owner Trustee to perform any
discretionary act enumerated in this Agreement or in any Basic Document
shall not be construed as a duty, and Owner Trustee shall not be
answerable for other than its negligence, bad faith or willful misconduct
in the performance of any such act.
SECTION 7.2. Furnishing of Documents. Owner Trustee shall furnish to the
Certificateholders promptly upon receipt of a written request therefor,
duplicates or copies of all reports, notices, requests, demands, certificates,
financial statements and any other instruments furnished to Owner Trustee under
the Basic Documents.
SECTION 7.3. Representations and Warranties. Owner Trustee hereby
represents and warrants to Depositor, for the benefit of the Certificateholders,
that:
(a) It is a banking corporation duly organized and validly existing
in good standing under the laws of the State of Delaware and having an
office within the State of Delaware. It has all requisite corporate power
and authority to execute, deliver and perform its obligations under this
Agreement.
(b) It has taken all corporate action necessary to authorize the
execution and delivery by it of this Agreement, and this Agreement will be
executed and delivered by one of its officers who is duly authorized to
execute and deliver this Agreement on its behalf.
(c) This Agreement constitutes a legal, valid and binding obligation
of Owner Trustee, enforceable against Owner Trustee in accordance with its
respective terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws affecting enforcement of the rights of creditors of
banks generally and to equitable limitations on the availability of
specific remedies.
(d) Neither the execution nor the delivery by it of this Agreement,
nor the consummation by it of the transactions contemplated hereby nor
compliance by it with any of the terms or provisions hereof will
contravene any federal or Delaware law, governmental rule or regulation
governing the banking or trust powers of Owner Trustee or any judgment or
order binding on it, or constitute any default under its charter documents
or by-laws or any indenture, mortgage, contract, agreement or
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instrument to which it is a party or by which any of its properties may be
bound.
SECTION 7.4. Reliance; Advice of Counsel. (a) Owner Trustee shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond or other
document or paper believed by it to be genuine and believed by it to be signed
by the proper party or parties. Owner Trustee may accept a certified copy of a
resolution of the board of directors or other governing body of any corporate
party as conclusive evidence that such resolution has been duly adopted by such
body and that the same is in full force and effect. As to any fact or matter the
method of the determination of which is not specifically prescribed herein,
Owner Trustee may for all purposes hereof rely on a certificate, signed by the
president or any vice president or by the treasurer, secretary or other
authorized officers of the relevant party, as to such fact or matter, and such
certificate shall constitute full protection to Owner Trustee for any action
taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in
the performance of its duties and obligations under this Agreement or the
Basic Documents, Owner Trustee (i) may act directly or through its agents
or attorneys pursuant to agreements entered into with any of them, but
Owner Trustee shall not be liable for the conduct or misconduct of such
agents or attorneys selected with reasonable care and (ii) may consult
with counsel, accountants and other skilled persons knowledgeable in the
relevant area to be selected with reasonable care and employed by it.
Owner Trustee shall not be liable for anything done, suffered or omitted
in good faith by it in accordance with the written opinion or advice of
any such counsel, accountants or other such persons and not contrary to
this Agreement or any Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as provided in this
Article VII, in accepting the trusts hereby created, Chase Manhattan Bank
Delaware acts solely as Owner Trustee hereunder and not in its individual
capacity and all Persons having any claim against Owner Trustee by reason of the
transactions contemplated by this Agreement or any Basic Document shall look
only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or Receivables. The
recitals contained herein and in the Certificates (other than the signature and
countersignature of Owner Trustee on the Certificates) shall be taken as the
statements of Depositor, and Owner Trustee assumes no responsibility for the
correctness thereof. Owner Trustee makes no representations as to the validity
or
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sufficiency of this Agreement, of any Basic Document or of the Certificates
(other than the signature and countersignature of Owner Trustee on the
Certificates) or the Notes, or of any Receivable or related documents. Owner
Trustee shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including: the existence,
condition and ownership of any Financed Vehicle; the existence and
enforceability of any insurance thereon; the existence and contents of any
Receivable on any computer or other record thereof; the validity of the
assignment of any Receivable to Issuer or of any intervening assignment; the
completeness of any Receivable; the performance or enforcement of any
Receivable; the compliance by Depositor or Servicer with any warranty or
representation made under any Basic Document or in any related document or the
accuracy of any such warranty or representation or any action of Indenture
Trustee, Administrator or Servicer or any subservicer taken in the name of Owner
Trustee.
SECTION 7.7. Owner Trustee May Own Certificates and Notes. Owner Trustee
in its individual or any other capacity may become the owner or pledgee of
Certificates or Notes and may deal with Depositor, Indenture Trustee,
Administrator and Servicer in banking transactions with the same rights as it
would have if it were not Owner Trustee.
ARTICLE VIII COMPENSATION OF OWNER TRUSTEE.
SECTION 8.1. Owner Trustee's Fees and Expenses. Owner Trustee shall
receive as compensation for its services hereunder such fees as have been
separately agreed upon in writing before the date hereof between Depositor and
Owner Trustee, and Owner Trustee shall be entitled to be reimbursed by Depositor
for its other reasonable expenses hereunder, including the reasonable
compensation, expenses and disbursements of such agents, representatives,
experts and counsel as Owner Trustee may employ in connection with the exercise
and performance of its rights and its duties hereunder.
SECTION 8.2. Indemnification. Depositor shall be liable as primary obligor
for, and shall indemnify Owner Trustee and its successors, assigns, agents and
servants (collectively, the "Indemnified Parties") from and against, any and all
liabilities, obligations, losses, damages, taxes, claims, actions and suits, and
any and all reasonable costs, expenses and disbursements (including reasonable
legal fees and expenses) of any kind and nature whatsoever (collectively,
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"Expenses") which may at any time be imposed on, incurred by, or asserted
against Owner Trustee or any Indemnified Party in any way relating to or arising
out of this Agreement, the Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of Owner
Trustee hereunder, except only that Depositor shall not be liable for or
required to indemnify Owner Trustee from and against Expenses arising or
resulting from any of the matters described in the third sentence of Section
7.1. The indemnities contained in this Section shall survive the resignation or
termination of Owner Trustee or the termination of this Agreement. If any suit,
action, proceeding (including any governmental or regulatory investigation),
claim or demand shall be brought or asserted against any Indemnified Party in
respect of which indemnity may be sought pursuant to this Section , such
Indemnified Party shall promptly notify Depositor in writing, and Depositor upon
request of the Indemnified Party, shall retain counsel reasonably satisfactory
to the Indemnified Party to represent the Indemnified Party and any others
Depositor may designate in such proceeding and shall pay the reasonable fees and
expenses of such counsel related to such proceeding. Depositor shall not be
liable for any settlement of any claim or proceeding effected without its
written consent, but if settled with such consent or if there be a final
judgment for the plaintiff, Depositor agrees to indemnify any Indemnified Party
from and against any loss or liability by reason of such settlement or judgment.
Depositor shall not, without the prior written consent of the Indemnified Party,
effect any settlement of any pending or threatened proceeding in respect of
which any Indemnified Party is or could have been a party and indemnity could
have been sought hereunder by such Indemnified Party, unless such settlement
includes an unconditional release of such Indemnified Party from all liability
on claims that are the subject matter of such proceeding.
SECTION 8.3. Payments to Owner Trustee. Any amounts paid to Owner Trustee
pursuant to this Article VIII shall be deemed not to be a part of the Owner
Trust Estate immediately after such payment.
ARTICLE IX TERMINATION OF TRUST AGREEMENT.
SECTION 9.1. Termination of Trust Agreement. (a) This Agreement (other
than Article VIII) and Issuer shall terminate and be of no further force or
effect, upon the final distribution by Owner Trustee of all moneys or other
property or proceeds of the Owner Trust Estate in accordance with the terms of
the Indenture, the Sale and Servicing Agreement and Article V. The bankruptcy,
liquidation, dissolution, death or incapacity of any Certificateholder or Owner
shall not (x) operate to terminate this Agreement or Issuer, nor (y) entitle
such Certificateholder's or Owner's legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or
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winding up of all or any part of Issuer or Owner Trust Estate nor (z) otherwise
affect the rights, obligations and liabilities of the parties hereto.
(b) Except as provided in clause (a), neither Depositor nor any
Certificateholder shall be entitled to revoke or terminate the Issuer.
(c) Notice of any termination of Issuer, specifying the Distribution
Date upon which the Certificateholders shall surrender their Certificates
to Paying Agent for payment of the final distribution and cancellation,
shall be given by Owner Trustee by letter to Certificateholders mailed
within five Business Days of receipt of notice of such termination from
Servicer given pursuant to Section 9.1(c) of the Sale and Servicing
Agreement, stating (i) the Distribution Date upon or with respect to which
final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of Paying Agent therein
designated, (ii) the amount of any such final payment (per $1,000 of
Certificate Balance) and (iii) that the Record Date otherwise applicable
to such Distribution Date is not applicable, payments being made only upon
presentation and surrender of the Certificates at the office of Paying
Agent therein specified. Owner Trustee shall give such notice to
Certificate Registrar (if other than Owner Trustee) and Paying Agent at
the time such notice is given to Certificateholders. Upon presentation and
surrender of the Certificates, Paying Agent shall cause to be distributed
to Certificateholders amounts distributable on such Distribution Date
pursuant to Section 5.2.
If all of the Certificateholders shall not surrender their Certificates
for cancellation within six months after the date specified in the above
mentioned written notice, Owner Trustee shall give a second written notice to
the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
one year after the second notice all the Certificates shall not have been
surrendered for cancellation, Owner Trustee may take appropriate steps, or may
appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets that shall remain
subject to this Agreement. Any funds remaining in Issuer after exhaustion of
such remedies shall be distributed, subject to applicable escheat laws, by Owner
Trustee to Depositor.
(d) Upon the winding up of Issuer and its termination, Owner Trustee
shall cause the Certificate of Trust to be canceled by filing a
certificate of cancellation with the Secretary of State in accordance with
the provisions of Section 3810 of the Business Trust Statute.
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ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES.
SECTION 10.1. Eligibility Requirements for Owner Trustee. Owner Trustee
shall at all times be a corporation (i) authorized to exercise corporate trust
powers, (ii) having a combined capital and surplus of at least $50,000,000 and
(iii) subject to supervision or examination by Federal or state authorities. If
such corporation shall publish reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purpose of this Section , the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time Owner Trustee shall cease to be eligible in accordance with the
provisions of this Section, Owner Trustee shall resign immediately in the manner
and with the effect specified in Section 10.2. In addition, at all times Owner
Trustee or a co-trustee shall be a Person that satisfies the requirements of
Section 3807(a) of the Business Trust Statute (the "Delaware Trustee").
SECTION 10.2. Resignation or Removal of Owner Trustee. Owner Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice thereof to Administrator. Upon receiving such notice of
resignation, Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the resigning Owner Trustee and one copy to the successor Owner
Trustee. If no successor Owner Trustee shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice of
resignation, the resigning Owner Trustee may petition any court of competent
jurisdiction for the appointment of a successor Owner Trustee; provided,
however, that such right to appoint or to petition for the appointment of any
such successor shall in no event relieve the resigning Owner Trustee from any
obligations otherwise imposed on it under the Basic Documents until such
successor has in fact assumed such appointment.
If at any time Owner Trustee shall cease to be eligible in accordance with
the provisions of Section 10.1 and shall fail to resign after written request
therefor by Administrator, or if at any time Owner Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of
Owner Trustee or of its property shall be appointed, or any public officer shall
take charge or control of Owner Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then Administrator may
remove Owner Trustee. If Administrator shall remove Owner Trustee under the
authority of the immediately preceding sentence, Administrator shall promptly
appoint a successor Owner Trustee by written instrument, in duplicate, one copy
of which instrument shall
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be delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee and payment of all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of Owner Trustee and appointment of a successor
Owner Trustee pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor Owner Trustee
pursuant to Section 10.3 and payment of all fees and expenses owed to the
outgoing Owner Trustee and the filing of a certificate of amendment to the
Certificate of Trust if required by the Business Trust Statute. Administrator
shall provide notice of such resignation or removal of Owner Trustee to each of
the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner Trustee
appointed pursuant to Section 10.2 shall execute, acknowledge and deliver to
Administrator and to its predecessor Owner Trustee an instrument accepting such
appointment under this Agreement, and thereupon the resignation or removal of
the predecessor Owner Trustee shall become effective and such successor Owner
Trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor under
this Agreement, with like effect as if originally named as Owner Trustee. The
predecessor Owner Trustee shall upon payment of its fees and expenses deliver to
the successor Owner Trustee all documents and statements and monies held by it
under this Agreement; and Administrator and the predecessor Owner Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee all such rights, powers, duties and obligations.
No successor Owner Trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee pursuant to
this Section, Administrator shall mail notice of the successor of such Owner
Trustee to all Certificateholders, Indenture Trustee, the Noteholders and the
Rating Agencies. If Administrator shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Owner Trustee, the successor
Owner Trustee shall cause such notice to be mailed at the expense of
Administrator.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which Owner Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
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or consolidation to which Owner Trustee shall be a party, or any corporation
succeeding to all or substantially all of the corporate trust business of Owner
Trustee, shall, without the execution or filing of any instrument or any further
act on the part of any of the parties hereto, anything herein to the contrary
notwithstanding, be the successor of Owner Trustee hereunder; provided that such
corporation shall be eligible pursuant to Section 10.1; and provided further
that Owner Trustee shall mail notice of such merger or consolidation to the
Rating Agencies.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
Administrator and Owner Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
Owner Trustee to act as co-trustee, jointly with Owner Trustee, or separate
trustee or separate trustees, of all or any part of the Owner Trust Estate, and
to vest in such Person, in such capacity, such title to Issuer, or any part
thereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as Administrator and Owner Trustee may
consider necessary or desirable. If Administrator shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, Owner
Trustee alone shall have the power to make such appointment. If Delaware Trustee
shall become incapable of acting, resign or be removed, unless Owner Trustee is
qualified to act as Delaware Trustee, a successor co-trustee shall promptly be
appointed in the manner specified in this Section 10.5 to act as Delaware
Trustee. No co-trustee or separate trustee under this Agreement shall be
required to meet the terms of eligibility as a successor trustee pursuant to
Section 10.1 and no notice of the appointment of any co-trustee or separate
trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon Owner Trustee shall be conferred upon and exercised or
performed by Owner Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without Owner Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be
performed, Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights,
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powers, duties and obligations (including the holding of title to
Issuer or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or
co-trustee, but solely at the direction of Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) Administrator and Owner Trustee acting jointly may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to Owner Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article. Each separate trustee and co-trustee, upon its acceptance of
the trusts conferred, shall be vested with the estates or property specified in
its instrument of appointment, either jointly with Owner Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, Owner Trustee. Each
such instrument shall be filed with Owner Trustee and a copy thereof given to
Administrator.
Any separate trustee or co-trustee may at any time appoint Owner Trustee,
its agent or attorney-in-fact with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall become
incapable of acting, resign or be removed, all of its estates, properties,
rights, remedies and trusts shall vest in and be exercised by Owner Trustee, to
the extent permitted by law, without the appointment of a new or successor
trustee.
ARTICLE XI MISCELLANEOUS.
SECTION 11.1. Supplements and Amendments. (a) This Agreement may
be amended by Depositor and Owner Trustee, with prior written notice to the
Rating Agencies, without the consent of any of the Noteholders or the
Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement
any provisions in this Agreement or for the purpose of adding any
provisions to or changing in any manner or eliminating
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any of the provisions in this Agreement or of modifying in any
manner the rights of the Noteholders or the Certificateholders;
provided that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of
any Noteholder or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer
to qualify as, and to permit an election to be made to cause all or
a portion of Issuer to be treated as, a "financial asset
securitization investment trust" as described in the provisions of
the "Small Business Job Protection Act of 1996," or to enable all or
a portion of the Issuer to qualify and an election to be made for
similar treatment under such comparable subsequent federal income
tax provisions as may ultimately be enacted into law, and (B) in
connection with any such election, to modify or eliminate existing
provisions set forth in this Agreement relating to the intended
federal income tax treatment of the Notes or Certificates and Issuer
in the absence of the election; it being a condition to any such
amendment that each Rating Agency shall have notified the Depositor,
the Servicer, Indenture Trustee and the Owner Trustee in writing
that the amendment will not result in a reduction or withdrawal of
the rating of any outstanding Notes or Certificates with respect to
which it is a Rating Agency; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer
of all or any portion of the Receivables to be derecognized under
GAAP by Depositor to Issuer, (b) Issuer to avoid becoming a member
of Seller's consolidated group under GAAP or (c) the Depositor, any
Seller Affiliate or any of their Affiliates to otherwise comply with
or obtain more favorable treatment under any law or regulation or
any accounting rule or principle; it being a condition to any such
amendment that each Rating Agency shall have notified the Depositor,
the Servicer, Indenture Trustee and the Owner Trustee in writing
that the amendment will not result in a reduction or withdrawal of
the rating of any outstanding Notes or Certificates with respect to
which it is a Rating Agency.
(b) This Agreement may also be amended from time to time by Depositor and
Owner Trustee, with prior written notice to the Rating Agencies, with the
consent of the Holders of Notes evidencing not less than a majority of the
Outstanding Amount of the Notes and, to the extent affected thereby, the consent
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of the Holders of Certificates evidencing not less than a majority of the
Certificate Balance for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the Certificateholders;
provided that no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on
Receivables or distributions that shall be required to be made for the benefit
of the Noteholders or the Certificateholders or (b) reduce the aforesaid
percentage of the Outstanding Amount of the Notes and the Certificate Balance
required to consent to any such amendment, without the consent of the Holders of
all the outstanding Notes and Holders of all outstanding Certificates.
(c) Promptly after the execution of any such amendment or consent, Owner
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder, Indenture Trustee and each of the Rating
Agencies.
(d) It shall not be necessary for the consent of Certificateholders, the
Noteholders or Indenture Trustee pursuant to this Section to approve the
particular form of any proposed amendment or consent, but it shall be sufficient
if such consent, where required, shall approve the substance thereof. The manner
of obtaining such consents (and any other consents of Certificateholders
provided for in this Agreement or in any other Basic Document) and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable requirements as Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the Certificate of
Trust, Owner Trustee shall cause the filing of such amendment with the Secretary
of State.
(f) Prior to the execution of any amendment to this Agreement or the
Certificate of Trust, Owner Trustee shall be entitled to receive and rely upon
an Opinion of Counsel stating that the execution of such amendment is authorized
or permitted by this Agreement and that all conditions precedent to the
execution and delivery of such amendment have been satisfied. Owner Trustee may,
but shall not be obligated to, enter into any such amendment which affects Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their undivided ownership interest therein
only in accordance with Articles V and IX. No transfer, by operation of law or
otherwise,
31
<PAGE> 37
of any right, title or interest of the Certificateholders to and in their
ownership interest in the Owner Trust Estate shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or
to the transfer to it of legal title to any part of the Owner Trust Estate.
SECTION 11.3. Limitations on Rights of Others. Except for Section 2.7, the
provisions of this Agreement are solely for the benefit of Owner Trustee,
Issuer, Depositor, Administrator, Certificateholders, Servicer and, to the
extent expressly provided herein, Indenture Trustee and the Noteholders, and
nothing in this Agreement, whether express or implied, shall be construed to
give to any other Person any legal or equitable right, remedy or claim in the
Owner Trust Estate or under or in respect of this Agreement or any covenants,
conditions or provisions contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt personally delivered, delivered by overnight courier
or mailed certified mail, return receipt requested, if to Owner Trustee,
addressed to the Corporate Trust Office; if to Depositor, addressed to 127 Key
Tower, Cleveland Ohio 44114-1306, Attention: President; or, as to each party, at
such other address as shall be designated by such party in a written notice to
each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at
the address of such Holder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 11.7. Successors and Assigns. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, Depositor,
32
<PAGE> 38
Owner Trustee and its successors and each Certificateholder and its successors
and permitted assigns, all as herein provided. Any request, notice, direction,
consent, waiver or other instrument or action by a Certificateholder shall bind
the successors and assigns of such Certificateholder.
SECTION 11.8. No Petition. Owner Trustee (not in its individual capacity
but solely as Owner Trustee), by entering into this Agreement, each
Certificateholder or Certificate Owner, by accepting a Certificate, and Trustee
and each Noteholder or Note Owner by accepting the benefits of this Agreement,
hereby covenants and agrees that they will not at any time institute against
Depositor, or join in any institution against Depositor of any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States Federal or state bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes, this
Agreement or any of the Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder or Certificate Owner by
accepting a Certificate acknowledges that such Certificateholder's or
Certificate Owner's Certificates represent beneficial interests in Issuer only
and do not represent interests in or obligations of Seller, Servicer,
Administrator, Depositor, Owner Trustee, Indenture Trustee or any Affiliate
thereof and no recourse may be had against such parties or their assets, except
as may be expressly set forth or contemplated in this Agreement, the
Certificates or the Basic Documents.
SECTION 11.10. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 11.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 11.12. Certificate Transfer Restrictions. The Certificates may not
be acquired by or for the account of or with assets of (i) an employee benefit
plan (as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974 ("ERISA")) that is subject to the provisions of Title 1 of ERISA, (ii) a
plan described in Section 4975(e)(1) of the Code, or (iii) any entity whose
underlying assets include plan assets by reason of a plan's investment in the
entity (each, a "Benefit Plan"). By accepting and holding a Certificate, the
Holder
33
<PAGE> 39
thereof shall be deemed to have represented and warranted that it is not a
Benefit Plan and is not purchasing Certificates on behalf of a Benefit Plan.
SECTION 11.13. Servicer. Servicer is authorized to execute on behalf of
Issuer all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of Issuer to prepare, file or deliver pursuant
to the Basic Documents. Upon written request, Owner Trustee shall execute and
deliver to Servicer a power of attorney appointing Servicer as Issuer's agent
and attorney-in-fact to execute all such documents, reports, filings,
instruments, certificates and opinions.
SECTION 11.14. Sale and Servicing Agreement. Owner Trustee is hereby
authorized and directed to perform the duties and obligations of the Owner
Trustee set forth in Sections 4.4(b), 4.7, 5.1(c), 8.4 and 10.15 of the Sale and
Servicing Agreement.
34
<PAGE> 40
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement to
be duly executed by their respective officers hereunto duly authorized as of the
day and year first above written.
CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, as Owner Trustee
By: /s/ John J. Cashin
__________________________
Name: John J. Cashin
Title: Senior Trust Officer
KEY CONSUMER ACCEPTANCE
CORPORATION, as Depositor
By: /s/ Joseph A. Pampush
_________________________
Name: Joseph A. Pampush
Title: Vice President -- Controller
35
<PAGE> 41
EXHIBIT A
NUMBER $
R- CUSIP NO. _________
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE IN INSTALLMENTS AS SET
FORTH IN THE TRUST AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL OF THIS
CERTIFICATE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-1
7.70% ASSET BACKED CERTIFICATE
evidencing a beneficial ownership interest in certain distributions of Issuer,
as defined below, the property of which includes a pool of Motor Vehicle Loans
sold to Issuer by Key Consumer Acceptance Corporation.
(THIS CERTIFICATE DOES NOT REPRESENT AN INTEREST IN OR OBLIGATION OF KEY
CONSUMER ACCEPTANCE CORPORATION OR ANY OF ITS AFFILIATES, EXCEPT TO THE EXTENT
DESCRIBED BELOW.)
THIS CERTIFIES THAT is the registered owner of
DOLLARS nonassessable, fully-paid, beneficial ownership interest in certain
distributions of KEY AUTO FINANCE TRUST 1997-1 ("Issuer") formed by Key Consumer
Acceptance Corporation, a Delaware corporation ("Seller"). This Certificate has
a Certificate Rate of 7.70% per annum.
Exhibit A, Page 1
<PAGE> 42
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned Trust
Agreement.
CHASE MANHATTAN BANK CHASE MANHATTAN BANK
DELAWARE DELAWARE
or
as Owner Trustee as Owner Trustee
By _______________________
Authenticating Agent
By________________________ By _______________________
Authorized Signatory Authorized Signatory
Issuer was created pursuant to a Trust Agreement dated as of February 21,
1997 (the "Trust Agreement"), between Seller and Chase Manhattan Bank Delaware,
as owner trustee ("Owner Trustee"), a summary of certain of the pertinent
provisions of which is set forth below. To the extent not otherwise defined
herein, the capitalized terms used herein have the meanings assigned to them in
Appendix X to the Sale and Servicing Agreement among Issuer, Key Consumer
Acceptance Corporation, as Seller, and Key Bank USA, National Association, as
Servicer, dated as of February 21, 1997, as the same may be amended or
supplemented from time to time.
This Certificate is one of the duly authorized Certificates designated as
"7.07% Asset Backed Certificates" (herein called the "Certificates"). Also
issued under the Indenture dated as of February 21, 1997, between Issuer and
Bankers Trust Company as indenture trustee, are four classes of Notes designated
as "Class A-1 5.85% Asset Backed Notes" (the "Class A-1 Notes"), "Class A-2
6.05% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3 6.15% Asset Backed
Notes" (the "Class A-3 Notes") and "Class B 6.40% Asset Backed Notes" (the
"Class B Notes" and, together with the Class A-1 Notes, Class A-2 Notes and
Class A-3 Notes, the "Notes"). This Certificate is issued under and is subject
to the terms, provisions and conditions of the Trust Agreement, to which Trust
Agreement the holder of this Certificate by virtue of the acceptance hereof
assents and by which such holder is bound.
The holder of this Certificate acknowledges and agrees that its rights to
receive distributions in respect of this Certificate are subordinated to the
rights
Exhibit A, Page 2
<PAGE> 43
of the Noteholders as described in the Sale and Servicing Agreement, the
Indenture and the Trust Agreement, as applicable.
It is the intent of Seller, Servicer, Depositor and Certificateholders
that, for purposes of Federal income taxes, Issuer will be treated as a
partnership and the Certificateholders (including Depositor) will be treated as
partners in that partnership. Depositor and the other Certificateholders by
acceptance of a Certificate, agree to treat, and to take no action inconsistent
with the treatment of, the Certificates for such tax purposes as partnership
interests in the Trust.
Each Certificateholder and Certificate Owner, by its acceptance of a
Certificate, covenants and agrees that such Certificateholder and Certificate
Owner will not at any time institute against Depositor, or join in any
institution against Depositor of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States Federal or state bankruptcy or similar law in connection with any
obligations relating to the Certificates, the Notes, the Trust Agreement or any
of the Basic Documents.
The Certificates do not represent an obligation of, or an interest in,
Seller, Servicer, Administrator, Depositor, Owner Trustee or any Affiliates of
any of them and no recourse may be had against such parties or their assets,
except as may be expressly set forth or contemplated herein or in the Trust
Agreement, the Indenture or the Basic Documents.
The Certificates may not be acquired by or for the account of or with the
assets of (a) an employee benefit plan (as defined in Section 3(3) of ERISA)
that is subject to the provisions of Title 1 of ERISA, (b) a plan described in
Section 4975(e)(1) of the Code or (c) any entity whose underlying assets include
plan assets by reason of a plan's investment in the entity (each, a "Benefit
Plan"). By accepting and holding this Certificate, the Holder hereof shall be
deemed to have represented and warranted that it is not a Benefit Plan and is
not purchasing on behalf of a Benefit Plan.
Unless the certificate of authentication hereon shall have been executed
by an authorized officer of Owner Trustee, by manual signature, this Certificate
shall not entitle the holder hereof to any benefit under the Trust Agreement or
the Sale and Servicing Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
Exhibit A, Page 3
<PAGE> 44
IN WITNESS WHEREOF, Owner Trustee, on behalf of Issuer and not in its
individual capacity, has caused this Certificate to be duly executed.
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity, but solely as Owner Trustee
Dated: By: ____________________________________
Exhibit A, Page 4
<PAGE> 45
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip
code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing
____________________________________________________ Attorney to transfer said
Certificate on the books of the Certificate Registrar, with full power of
substitution in the premises.
Dated:
_____________________________*
Signature Guaranteed:
_____________________________*
__________________
* NOTICE: The signature to this assignment must correspond with the name of
the registered owner as it appears on the face of the within Certificate
in every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by a member firm of the New
York Stock Exchange or a commercial bank or trust company.
Exhibit A, Page 5
<PAGE> 46
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
KEY AUTO FINANCE TRUST 1997-1
THIS Certificate of Trust of Key Auto Finance Trust 1997-1 (the "Trust"),
dated as of February ___, 1997, is being duly executed and filed by Chase
Manhattan Bank Delaware, a Delaware banking corporation, as trustee, to form a
business trust under the Delaware Business Trust Act (12 Del. Code, Section 3801
et seq.).
1. Name. The name of the business trust formed hereby is KEY
AUTO FINANCE TRUST 1997-1.
2. Delaware Trustee. The name and business address of the trustee of
the Trust resident in the State of Delaware is Chase Manhattan Bank Delaware,
1201 Market Street, Wilmington, Delaware, 19801.
3. This Certificate of Trust will be effective February ___, 1997.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the Trust,
have executed this Certificate of Trust as of the date first above written.
CHASE MANHATTAN BANK
DELAWARE, a Delaware banking corporation, not in
its individual capacity, but solely as owner
trustee of the Trust.
By: ______________________________________________
Name:
Title:
<PAGE> 47
EXHIBIT C
CERTIFICATE DEPOSITORY AGREEMENT
<PAGE> 1
EXHIBIT 99.1
SALE AND SERVICING
AGREEMENT
among
KEY AUTO FINANCE TRUST 1997-1
as
Issuer
KEY CONSUMER ACCEPTANCE CORPORATION,
as
Seller
KEY BANK USA, NATIONAL ASSOCIATION,
as Servicer
and
BANKERS TRUST COMPANY
as Indenture Trustee
Dated as of February 21, 1997
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I. DEFINITIONS.............................................. 1
SECTION 1.1. Definitions...................................... 1
SECTION 1.2. Other Interpretive Provisions.................... 1
ARTICLE II. CONVEYANCE OF RECEIVABLES............................... 2
SECTION 2.1. Conveyance of Receivables........................ 2
ARTICLE III. THE RECEIVABLES........................................ 3
SECTION 3.1. Representations and Warranties as to
Each Receivable ................................. 3
SECTION 3.2. Representations and Warranties as to the
Receivables in the Aggregate..................... 7
SECTION 3.3. Repurchase upon Breach........................... 7
SECTION 3.4. Custodian of Receivable Files.................... 8
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES............. 12
SECTION 4.1. Duties of Servicer............................... 12
SECTION 4.2. Collection of Receivable Payments................ 13
SECTION 4.3. Realization upon Receivables..................... 13
SECTION 4.4. Physical Damage Insurance........................ 14
SECTION 4.5. Maintenance of Security Interests in Financed
Vehicles ........................................ 15
SECTION 4.6. Covenants of Servicer............................ 16
SECTION 4.7. Purchase by Servicer upon Breach................. 16
SECTION 4.8. Servicing Fee.................................... 17
SECTION 4.9. Servicer's Report................................ 17
SECTION 4.10. Annual Statement as to Compliance; Notice of
Default ......................................... 18
SECTION 4.11. Annual Independent Certified Public Accountants'
Report .......................................... 18
SECTION 4.12. Access to Certain Documentation and Information
Regarding Receivables............................ 19
SECTION 4.13. Reports to the Commission....................... 19
SECTION 4.14. Reports to the Rating Agencies.................. 19
SECTION 4.15. Servicer Expenses............................... 20
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS.............................................. 20
SECTION 5.1. Establishment of Trust Accounts.................. 20
SECTION 5.2. Collections...................................... 22
SECTION 5.3. [Reserved]....................................... 23
SECTION 5.4. Additional Deposits.............................. 23
</TABLE>
ii
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5.5. Distributions.................................... 23
SECTION 5.6. Statements to Certificateholders and Noteholders. 26
SECTION 5.7. Net Deposits..................................... 27
SECTION 5.8. Reserve Account.................................. 27
ARTICLE VI. SELLER.................................................. 31
SECTION 6.1. Representations of Seller........................ 31
SECTION 6.2. Continued Existence.............................. 32
SECTION 6.3. Liability of Seller; Indemnities................. 33
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller........................... 34
SECTION 6.5. Limitation on Liability of Seller and Others..... 35
SECTION 6.6. Seller May Own Certificates or Notes............. 35
SECTION 6.7 Indebtedness of Seller........................... 35
ARTICLE VII. SERVICER............................................... 35
SECTION 7.1. Representations of Servicer...................... 35
SECTION 7.2. Indemnities of Servicer.......................... 37
SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer......................... 39
SECTION 7.4. Limitation on Liability of Servicer and Others... 39
SECTION 7.5. Key Bank USA Not To Resign as Servicer........... 40
SECTION 7.6. Existence........................................ 40
SECTION 7.7. Servicer May Own Notes or Certificates........... 40
ARTICLE VIII. SERVICER TERMINATION EVENTS........................... 41
SECTION 8.1. Servicer Termination Event....................... 41
SECTION 8.2. Appointment of Successor......................... 42
SECTION 8.3. Payment of Servicing Fee......................... 43
SECTION 8.4. Notification to Noteholders and
Certificateholders .............................. 44
SECTION 8.5. Waiver of Past Defaults.......................... 44
ARTICLE IX. TERMINATION............................................. 44
SECTION 9.1. Optional Purchase of All Receivables;
Termination Notice .............................. 44
ARTICLE X. MISCELLANEOUS PROVISIONS................................. 45
SECTION 10.1. Amendment....................................... 45
SECTION 10.2. Protection of Title to Trust Property........... 47
SECTION 10.3. Notices......................................... 49
SECTION 10.4. Assignment...................................... 49
SECTION 10.5. Limitations on Rights of Others................. 50
SECTION 10.6. Severability.................................... 50
SECTION 10.7. Separate Counterparts........................... 50
</TABLE>
iii
<PAGE> 4
SECTION 10.8. Headings........................................ 50
SECTION 10.9. Governing Law................................... 50
SECTION 10.10. Assignment to Indenture Trustee................ 50
SECTION 10.11. Nonpetition Covenant........................... 51
SECTION 10.12. Limitation of Liability of Owner Trustee
and Indenture Trustee.......................... 51
SECTION 10.13. Further Assurances............................. 51
SECTION 10.14. No Waiver; Cumulative Remedies................. 51
SECTION 10.15. Pennsylvania Motor Vehicle Sales Finance Act
Licenses ...................................... 52
iv
<PAGE> 5
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables
EXHIBITS
Exhibit A -- Form of Monthly Certificateholder Statement
Exhibit B -- Form of Monthly Noteholder Statement
Exhibit C -- Form of Servicer's Report
APPENDIX
Appendix X -- Definitions
v
<PAGE> 6
Exhibit 99.1
SALE AND SERVICING AGREEMENT dated as of February 21, 1997 (this
"Agreement") among KEY AUTO FINANCE TRUST 1997-1, a Delaware business trust
("Issuer"), KEY CONSUMER ACCEPTANCE CORPORATION, a Delaware corporation (in its
capacity as seller, "Seller"), KEY BANK USA, NATIONAL ASSOCIATION, (in its
capacity as servicer, "Servicer") and BANKERS TRUST COMPANY, a New York banking
corporation (in its capacity as indenture trustee, "Indenture Trustee").
WHEREAS, Issuer desires to purchase from Seller a portfolio of receivables
arising in connection with Motor Vehicle Loans purchased or originated by the
Seller Affiliates and sold to Seller under the Purchase Agreements;
WHEREAS, Seller is willing to sell such receivables to Issuer; and
WHEREAS, Servicer is willing to service such receivables.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS.
SECTION 1.1. Definitions. Capitalized terms are used in this Agreement
as defined in Appendix X to this Agreement.
SECTION 1.2. Other Interpretive Provisions. For purposes of this
Agreement, unless the context otherwise requires: (a) accounting terms not
otherwise defined in this Agreement, and accounting terms partly defined in this
Agreement to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles; (b) terms defined in
Article 9 of the UCC as in effect in the relevant jurisdiction and not otherwise
defined in this Agreement are used as defined in that Article; (c) the words
"hereof," "herein" and "hereunder" and words of similar import refer to this
Agreement as a whole and not to any particular provision of this Agreement; (d)
references to any Article, Section , Schedule, Appendix or Exhibit are
references to Articles, Sections , Schedules, Appendices and Exhibits in or to
this Agreement and references to any paragraph, subsection, clause or other
subdivision within any Section or definition refer to such paragraph,
subsection, clause or other subdivision of such Section or definition; (e) the
term "including" means "including without limitation"; (f) except as otherwise
expressly provided herein, references to any law or regulation refer to that law
or regulation as amended from time to time and include any successor law or
regulation; (g) references to any Person include that Person's successors and
assigns; and (h) headings are for
<PAGE> 7
purposes of reference only and shall not otherwise affect the meaning or
interpretation of any provision hereof.
ARTICLE II. CONVEYANCE OF RECEIVABLES.
SECTION 2.1. Conveyance of Receivables. In consideration of Issuer's
delivery to, or upon the order of, Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amounts of the Notes
and the initial Certificate Balance, respectively, Seller does hereby sell,
transfer, assign, set over and otherwise convey to Issuer, without recourse,
subject to the obligations herein (collectively, the "Trust Property"):
(a) all right, title and interest of Seller in and to the Receivables, and
all moneys received thereon after the Cutoff Date;
(b) all right, title and interest of Seller in the security interests in
the Financed Vehicles granted by Obligors pursuant to the Receivables and any
other interest of Seller in the Financed Vehicles and any other property that
shall secure the Receivables;
(c) the interest of Seller in any proceeds with respect to the Receivables
from claims on any Insurance Policies covering Financed Vehicles or the Obligors
or from claims under any lender's single interest insurance policy naming any
Seller Affiliate as an insured;
(d) rebates of premiums relating to Insurance Policies and rebates of
other items such as extended warranties financed under the Receivables, in each
case, to the extent the Servicer would, in accordance with its customary
practices, apply such amounts to the Principal Balance of the related
Receivable;
(e) the interest of Seller in any proceeds from (i) any Receivable
repurchased by a Dealer, pursuant to a Dealer Agreement, as a result of a breach
of representation or warranty in the related Dealer Agreement, (ii) a default by
an Obligor resulting in the repossession of the Financed Vehicle under the
applicable Motor Vehicle Loan or (iii) any Dealer Recourse or other rights
relating to the Receivables under Dealer Agreements;
(f) all right, title and interest in all funds on deposit from time to
time in the Certificate Distribution Account and the Trust Accounts, and in all
investments and proceeds thereof (but excluding all investment income thereon);
2
<PAGE> 8
(g) all right, title and interest of Seller under each Purchase Agreement,
including the right of Seller to cause a Seller Affiliate to repurchase
Receivables from Seller;
(h) all right, title and interest of Seller in any instrument or document
relating to the Receivables; and
(i) the proceeds of any and all of the foregoing.
The sale, transfer, assignment, setting over and conveyance made hereunder
shall not constitute and is not intended to result in an assumption by Issuer of
any obligation of any Seller Affiliates to the Obligors, the Dealers or any
other Person in connection with the Receivables and the other assets and
properties conveyed hereunder or any agreement, document or instrument related
thereto.
ARTICLE III. THE RECEIVABLES.
SECTION 3.1. Representations and Warranties as to Each Receivable. Seller
hereby makes the following representations and warranties as to each Receivable
conveyed by it to Issuer hereunder on which Issuer shall rely in acquiring the
Receivables. Unless otherwise indicated, such representations and warranties
shall speak as of the Closing Date, but shall survive the sale, transfer and
assignment of the Receivables to Issuer and the pledge thereof to Indenture
Trustee pursuant to the Indenture.
(a) Characteristics of Receivables. The Receivable has been fully and
properly executed by the parties thereto and (i) is a Direct Loan made by an
Originator or has been originated by a Dealer in the ordinary course of such
Dealer's business and has been purchased by an Originator, in either case, in
the ordinary course of such Originator's business and in accordance with such
Originator's underwriting standards to finance the retail sale by a Dealer of
the related Financed Vehicle or has otherwise been acquired by a Seller
Affiliate, (ii) the Originator of which has underwriting standards that require
physical damage insurance to be maintained on the related Financed Vehicle,
(iii) is secured by a valid, subsisting, binding and enforceable first priority
security interest in favor of a Seller Affiliate in the Financed Vehicle
(subject to administrative delays and clerical errors on the part of the
applicable government agency and to any statutory or other lien arising by
operation of law after the Closing Date which is prior to such security
interest), which security interest is assignable together with such Receivable,
and has been so assigned to Seller, and subsequently assigned by Seller to
Issuer, (iv) contains customary and enforceable provisions such that the rights
and remedies of the holder thereof are adequate for realization
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against the collateral of the benefits of the security, (v) provided, at
origination, for level monthly payments (provided, that the amount of the last
payment may be different), which fully amortize the Initial Principal Balance
over the original term, (vi) provides for interest at the Contract Rate
specified in the Schedule of Receivables, (vii) was originated in the United
States and (viii) constitutes "chattel paper" as defined in the UCC.
(b) Individual Characteristics. The Receivables have the following
individual characteristics as of the Cutoff Date; (i) each Receivable is secured
by a Motor Vehicle; (ii) each Receivable has a Contract Rate of at least 6.99%
and not more than 29.51%; (iii) each Receivable had a remaining term, as of the
Cutoff Date, of not less than three months and not more than 84 months; (iv)
each Receivable had an Initial Principal Balance of not less than $567.36 and
not more than $49,048.60; (v) no Receivable was more than 30 days past due as of
the Cutoff Date; (vi) no Financed Vehicle had been repossessed as of the Cutoff
Date; (vii) no Receivable is subject to a force placed Physical Damage Insurance
Policy on the related Financed Vehicle; and (viii) the Dealer of the Financed
Vehicle has no participation in, or other right to receive, any proceeds of the
Receivable. The Receivables were selected using selection procedures that were
not intended by any Seller Affiliate or Seller to be adverse to the Holders.
(c) Schedule of Receivables. The information with respect to each
Receivable set forth in the Schedule of Receivables, including (without
limitation) the account number of the Obligor, the Initial Principal Balance,
and the Contract Rate, was true and correct in all material respects as of the
close of business on the Cutoff Date.
(d) Compliance with Law. The Receivable complied at the time it was
originated or made, and will comply as of the Closing Date, in all material
respects with all requirements of applicable federal, state and local laws, and
regulations thereunder, including, to the extent applicable, usury laws, the
Federal Truth in Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Federal Trade Commission Act,
the Magnuson-Moss Warranty Act, the Fair Debt Collection Practices Act, Federal
Reserve Board Regulations B and Z and any other consumer credit, consumer
protection, equal opportunity and disclosure laws.
(e) Binding Obligation. The Receivable constitutes the genuine, legal,
valid and binding payment obligation in writing of the Obligor, enforceable in
all material respects by the holder thereof in accordance with its terms,
subject to the effect of bankruptcy, insolvency, reorganization, or other
similar laws affecting the enforcement of creditors' rights generally, and the
Receivable is not subject
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to any right of rescission, setoff, counterclaim or defense, including the
defense of usury.
(f) Lien in Force. Neither Seller nor any Seller Affiliate has taken any
action which would have the effect of releasing the related Financed Vehicle
from the Lien granted by the Receivable in whole or in part.
(g) No Amendment or Waiver. No material provision of the Receivable has
been amended, waived, altered or modified in any respect, except such waivers as
would be permitted under this Agreement, and no amendment, waiver, alteration or
modification causes such Receivable not to conform to the other representations
or warranties contained in this Section .
(h) No Liens. Neither Seller nor any Seller Affiliate has received notice
of any Liens or claims, including Liens for work, labor, materials or unpaid
state or federal taxes, relating to the Financed Vehicle securing the
Receivable, that are or may be prior to or equal to the Lien granted by the
Receivable.
(i) No Default. Except for payment delinquencies continuing for a period
of not more than 30 days as of the Cutoff Date, to the knowledge of Seller, no
default, breach, violation or event permitting acceleration under the terms of
the Receivable exists and no continuing condition that with notice or lapse of
time, or both, would constitute a default, breach, violation or event permitting
acceleration under the terms of the Receivable has arisen.
(j) Insurance. The Receivable requires the Obligor to insure the Financed
Vehicle under a Physical Damage Insurance Policy, pay the premiums for such
insurance and keep such insurance in full force and effect.
(k) Good Title. It is the intention of Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from Seller
to Issuer and that the beneficial interest in and title to the Receivables not
be part of Seller's estate in the event of the filing of a bankruptcy petition
by or against Seller under any bankruptcy law. No Receivable has been sold,
transferred, assigned, or pledged by Seller to any Person other than Issuer.
Immediately prior to the transfer and assignment herein contemplated, Seller had
good and marketable title to the Receivable free and clear of any Lien and had
full right and power to transfer and assign the Receivable to Issuer and
immediately upon the transfer and assignment of the Receivable to Issuer, Issuer
shall have good and marketable title to the Receivable, free and clear of any
Lien; and Issuer's interest in the Receivable resulting from the transfer has
been perfected under the UCC.
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(l) Obligations. Each Seller Affiliate has duly fulfilled all material
obligations on its part to be fulfilled under, or in connection with, the
Receivable.
(m) Possession. There is only one original executed Receivable, and
immediately prior to the Closing Date, the applicable Seller Affiliate will have
possession of such original executed Receivable.
(n) No Government Obligor. The Obligor on the Receivable is not the United
States of America or any state thereof or any local government, or any agency,
department, political subdivision or instrumentality of the United States of
America or any state thereof or any local government.
(o) Marking Records. By the Closing Date, Seller shall have caused the
portions of Seller's and each Seller Affiliate's electronic master record of
Motor Vehicle Loans relating to the Receivables to be clearly and unambiguously
marked to show that the Receivable is owned by Issuer in accordance with the
terms of this Agreement.
(p) No Assignment. As of the Closing Date, Seller shall not have taken any
action to convey any right to any Person that would result in such Person having
a right to payments received under the Insurance Policies or Dealer Agreements,
or payments due under the Receivable, that is senior to, or equal with, that of
Issuer.
(q) Lawful Assignment. The Receivable has not been originated in, and is
not subject to the laws of, any jurisdiction under which the sale, transfer or
assignment of such Receivable hereunder or pursuant to transfers of the Notes or
Certificates are unlawful, void or voidable. Neither Seller nor any Seller
Affiliate has entered into any agreement with any Obligor that prohibits,
restricts or conditions the assignment of any portion of the Receivables.
(r) Dealer Agreements. A Dealer Agreement for each Receivable is in effect
whereby the Dealer warrants title to the Motor Vehicle and indemnifies the
Seller Affiliate that is a party to said Dealer Agreement against the
unenforceability of each Receivable sold thereunder, and the rights of such
Seller Affiliate thereunder, with regard to the Receivable sold hereunder, have
been validly assigned to and are enforceable against the Dealer by the Seller
and then to and by the Issuer, along with any Dealer Recourse.
(s) Composition of Receivable. No Receivable has a Principal Balance
which includes capitalized interest or late charges.
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(t) Database File. The information included with respect to each
Receivable in the database file delivered pursuant to Section 4.9(b) is accurate
and complete in all material respects.
SECTION 3.2. Representations and Warranties as to the Receivables in the
Aggregate. Seller hereby makes the following representations and warranties as
to the Receivables conveyed by it to Issuer hereunder on which Issuer shall rely
in acquiring the Receivables. Unless otherwise indicated, such representations
and warranties shall speak as of the Closing Date, but shall survive the sale,
transfer and assignment of the Receivables to Issuer and the pledge thereof to
Indenture Trustee pursuant to the Indenture.
(a) Amounts. The Original Pool Balance was $438,448,050.31.
(b) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately 18.99%
of the Original Pool Balance was attributable to loans for purchases of new
Financed Vehicles, and approximately 81.01% of the Original Pool Balance was
attributable to loans for purchases of used Financed Vehicles; (ii)
approximately 20.09% of the Original Pool Balance was attributable to
Receivables the mailing addresses of the Obligors with respect to which are
located in the State of Washington and 9.40% of the Original Pool Balance was
attributable to Receivables the mailing addresses of the Obligors with respect
to which are located in the State of Oregon, 8.46% in the State of New York,
7.87% in the State of Ohio, and 7.61% in the State of Colorado, and no other
state accounts for more than 5% of the Original Pool Balance; (iii) the weighted
average Contract Rate of the Receivables was 13.00%; (iv) there are 36,825
Receivables being conveyed by Seller to Issuer; (v) the average Cutoff Date
Principal Balance of the Receivables was $11,906.26; and (vi) the weighted
average original term and weighted average remaining term of the Receivables
were 59.84 months and 57.60 months, respectively.
SECTION 3.3. Repurchase upon Breach. Seller, Servicer, Indenture Trustee
or Owner Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery (or, with respect to the
Indenture Trustee or Owner Trustee, upon actual knowledge of a Responsible
Officer) of any breach or failure to be true of the representations or
warranties made by Seller in Section 3.1, provided that the failure to give such
notice shall not affect any obligation of Seller. If the breach or failure shall
not have been cured by the last day of the Collection Period which includes the
60th day (or if Seller elects, the 30th day) after the date on which Seller
becomes aware of, or receives written notice from Owner Trustee, Indenture
Trustee or Servicer of, such breach or failure, and such breach or failure
materially and adversely affects
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the interests of Issuer and the Holders in any Receivable, Seller shall
repurchase each such affected Receivable from Issuer as of such last day of such
Collection Period at a purchase price equal to the Purchase Amount for such
Receivable as of such last day of such Collection Period. Notwithstanding the
foregoing, any such breach or failure with respect to the representations and
warranties contained in Section 3.1 will not be deemed to have such a material
and adverse effect with respect to a Receivable if the facts resulting in such
breach or failure do not affect the ability of Issuer to receive and retain
payment in full on such Receivable. In consideration of the repurchase of a
Receivable hereunder, Seller shall remit the Purchase Amount of such Receivable,
no later than the close of business on the next Deposit Date, in the manner
specified in Section 5.4. The sole remedy of Issuer, the Owner Trustee, the
Indenture Trustee or the Holders with respect to a breach or failure to be true
of the representations or warranties made by Seller pursuant to Section 3.1
shall be to require Seller to repurchase Receivables pursuant to this Section .
SECTION 3.4. Custodian of Receivable Files. (a) Custody. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, Issuer,
upon the execution and delivery of this Agreement, revocably appoints Custodian,
as agent, and Custodian accepts such appointment, to act as agent on behalf of
Issuer to maintain custody of the following documents or instruments, which are
hereby constructively delivered to Issuer with respect to each Receivable
(collectively, a "Receivable File"):
(i) the fully executed original of the Receivable;
(ii) any documents customarily delivered to or held by Seller
or Servicer evidencing the existence of any Physical Damage Insurance
Policies;
(iii) the original credit application, fully executed by the
Obligor;
(iv) the original certificate of title, or such other documents as
the applicable Seller Affiliate, as appropriate, keeps on file, in
accordance with its customary procedures, evidencing the security interest
of such Seller Affiliate in the Financed Vehicle;
(v) originals or true copies of all documents, instruments or
writings relating to extensions, amendments or waivers of the Receivable;
and
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(vi) any and all other documents or electronic records that Seller,
any Seller Affiliate or Servicer, as the case may be, keeps on file, in
accordance with its customary procedures, relating to the Receivable, any
Insurance Policies, the Obligor or the Financed Vehicle.
(b) Safekeeping. Servicer, in its capacity as Custodian, shall hold the
Receivable Files as agent on behalf of Issuer and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable as
shall enable Servicer and Issuer to comply with the terms and provisions of this
Agreement applicable to them. In performing its duties as Custodian hereunder,
Custodian shall act with reasonable care, exercising the degree of skill,
attention and care that Custodian exercises with respect to receivable files
relating to other similar motor vehicle loans owned and/or serviced by Custodian
and that is consistent with industry standards. In accordance with its customary
practice with respect to its retail installment sale contracts, Custodian shall
conduct, or cause to be conducted, periodic audits of the Receivable Files held
by it under this Agreement, and of the related accounts, records, and computer
systems, and shall maintain the Receivable Files in such a manner as shall
enable Owner Trustee to verify, if Owner Trustee so elects, the accuracy of the
record keeping of Custodian. Custodian shall promptly report to Owner Trustee
any failure on its part to hold the Receivable Files and maintain its accounts,
records and computer systems as herein provided, and promptly take appropriate
action to remedy any such failure. Custodian hereby acknowledges receipt of the
Receivable File for each Receivable listed on the Schedule of Receivables.
Nothing herein shall be deemed to require Issuer, Owner Trustee or Indenture
Trustee to verify the accuracy of the record keeping of the Custodian.
(c) Maintenance of and Access to Records. Custodian shall maintain each
Receivable File at the location specified in Schedule B to this Agreement, or at
such other office of Custodian within the United States (or, in the case of any
successor Custodian, within the State in which its principal place of business
is located) as shall be specified to Issuer by 30 days' prior written notice. At
the reasonable direction of the Owner Trustee or Indenture Trustee, Custodian
shall make available to Owner Trustee, Indenture Trustee and their respective
agents (or, when requested in writing by Owner Trustee or Indenture Trustee,
their respective attorneys or auditors) the Receivable Files and the related
accounts, records and computer systems maintained by Custodian at such times
during the normal business hours of Custodian for purposes of inspecting,
auditing or making copies of abstracts of the same.
(d) Release of Documents. Upon written instructions from Indenture Trustee
(or, if no Notes are then Outstanding, Owner Trustee), Custodian shall release
any document in the Receivable Files to Indenture Trustee or Owner
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Trustee or its respective agent or designee, as the case may be, at such place
or places as Indenture Trustee or Owner Trustee may designate, as soon
thereafter as is practicable. Any document so released shall be handled by
Indenture Trustee or Owner Trustee with due care and returned to Custodian for
safekeeping as soon as Indenture Trustee or Owner Trustee or its respective
agent or designee, as the case may be, shall have no further need therefor.
(e) Title to Receivables. Custodian agrees that, in respect of any
Receivable File held by Custodian hereunder, Custodian will not at any time have
or in any way attempt to assert any interest in such Receivable File or the
related Receivable, other than solely for the purpose of collecting or enforcing
the Receivable for the benefit of Issuer and that the entire equitable interest
in such Receivable and the related Receivable File shall at all times be vested
in Issuer.
(f) Instructions; Authority to Act. Custodian shall be deemed to have
received proper instructions with respect to the Receivable Files upon its
receipt of written instructions signed by an Authorized Officer of Indenture
Trustee or Owner Trustee, as applicable. A certified copy of excerpts of certain
resolutions of the Board of Directors of Indenture Trustee or Owner Trustee, as
applicable, shall constitute conclusive evidence of the authority of any such
Authorized Officer to act and shall be considered in full force and effect until
receipt by Custodian of written notice to the contrary given by Indenture
Trustee or Owner Trustee, as applicable.
(g) Custodian's Indemnification. Custodian shall indemnify and hold
harmless Issuer, Owner Trustee and Indenture Trustee, and each of their
respective officers, directors, employees and agents and the Holders from and
against any and all liabilities, obligations, losses, compensatory damages,
payments, costs or expenses (including legal fees if any) of any kind whatsoever
that may be imposed on, incurred or asserted against Issuer, Owner Trustee,
Indenture Trustee or the Holders as the result of any act or omission of
Custodian relating to the maintenance and custody of the Receivable Files;
provided that Custodian shall not be liable hereunder to the Owner Trustee or
Indenture Trustee to the extent that such liabilities, obligations, losses,
compensatory damages, payments, costs or expenses result from the willful
misfeasance, bad faith or negligence of Owner Trustee or Indenture Trustee, as
the case may be. Indemnification under this subsection (g) shall include
reasonable fees and expenses of counsel and expenses of litigation and shall
survive termination of this Agreement and the resignation or removal of Owner
Trustee or Indenture Trustee, as the case may be. If Custodian shall have made
any indemnity payments to Owner Trustee or Indenture Trustee pursuant to this
Section and Owner Trustee or Indenture Trustee thereafter shall collect any of
such amounts from Persons other than Custodian, Owner Trustee or Indenture
Trustee, as the
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case may be, shall, as soon as practicable following such receipt thereof, repay
such amounts to Custodian, without interest.
(h) Effective Period and Termination. Servicer's appointment as Custodian
shall become effective as of the Cutoff Date and shall continue in full force
and effect until terminated pursuant to this subsection (h). If Servicer shall
resign as Servicer in accordance with Section 7.5 or if all of the rights and
obligations of Servicer shall have been terminated under Section 8.1, the
appointment of Servicer as Custodian hereunder may be terminated by the Owner
Trustee or Indenture Trustee or by the Holders of Notes evidencing not less than
50% of the aggregate Outstanding Amount of the Notes (or, if no Notes are then
Outstanding, the Holders of Certificates representing not less than 50% of the
Certificate Balance), in each case in the same manner as Owner Trustee or
Indenture Trustee or such Holders may terminate the rights and obligations of
Servicer under Section 8.1. The Indenture Trustee, at the direction of Holders
of Notes evidencing not less than 50% of the aggregate Outstanding Amount of the
Notes, or, if no Notes are then Outstanding, the Owner Trustee at the direction
of Holders of Certificates evidencing not less than 50% of the Certificate
Balance, may terminate Servicer's appointment as Custodian hereunder at any time
with cause, or with 30 days' prior written notice without cause. As soon as
practicable after any termination of such appointment Servicer shall deliver, or
cause to be delivered, the Receivable Files to Indenture Trustee or Owner
Trustee, as applicable, or its respective agent or designee at such place or
places as Indenture Trustee or Owner Trustee, as applicable, may reasonably
designate. Notwithstanding any termination of Servicer as Custodian hereunder
(other than in connection with a termination resulting from the termination of
Servicer, as such, pursuant to Section 8.1), from and after the date of such
termination, and for so long as Servicer is acting as such pursuant to this
Agreement, Indenture Trustee shall provide, or cause the successor Custodian to
provide, access to the Receivable Files to Servicer, at such times as Servicer
shall reasonably request, for the purpose of carrying out its duties and
responsibilities with respect to the servicing of the Receivables hereunder.
(i) Delegation. Custodian may, at any time without notice or consent,
delegate any or all of its duties under the Basic Documents to any Seller
Affiliate; provided that no such delegation shall relieve Custodian of its
responsibility with respect to such duties and Custodian shall remain obligated
and liable to Issuer and the Holders for its duties hereunder as if Custodian
alone were performing such duties.
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ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES.
SECTION 4.1. Duties of Servicer. (a) Servicer is hereby authorized to act
as agent for Issuer and in such capacity shall manage, service, administer and
make collections on the Receivables (other than Purchased Receivables), and
perform the other actions required by Servicer under this Agreement, with
reasonable care. Without limiting the standard set forth in the preceding
sentence, Servicer shall use a degree of skill, attention and care that is not
less than Servicer exercises with respect to comparable Motor Vehicle Loans that
it services for itself or others and that is consistent with prudent industry
standards. Servicer's duties shall include the collection and posting of all
payments, responding to inquiries by Obligors on the Receivables, or by federal,
state or local governmental authorities, investigating delinquencies, sending
payment coupons or monthly invoices to Obligors, reporting required tax
information to Obligors, accounting for Collections, monitoring the status of
Physical Damage Insurance Policies with respect to the Financed Vehicles as
provided in Section 4.4(a), furnishing monthly and annual statements to Owner
Trustee and Indenture Trustee with respect to distributions, providing
collection and repossession services in the event of Obligor default and
performing the other duties specified herein.
In accordance with its customary servicing procedures, Servicer shall also
administer and enforce all rights and responsibilities of the holder of the
Receivables provided for in the Physical Damage Insurance Policies as provided
in Section 4.4 and the Dealer Agreements. Without limiting the generality of the
foregoing, Servicer is hereby authorized and empowered by Issuer to execute and
deliver, on behalf of itself, Indenture Trustee, Issuer, Owner Trustee and the
Holders, any and all instruments of satisfaction or cancellation, or of partial
or full release or discharge, and all other comparable instruments, with respect
to the Receivables or to the Financed Vehicles, all in accordance with this
Agreement; provided that notwithstanding the foregoing, Servicer shall not,
except pursuant to an order from a court of competent jurisdiction, release an
Obligor from payment of any unpaid amount under any Receivable or waive the
right to collect the unpaid balance of any Receivable from the Obligor, except
in connection with a de minimis deficiency which Servicer would not attempt to
collect in accordance with its customary procedures. If Servicer shall commence
a legal proceeding to enforce a Receivable, Issuer shall thereupon be deemed to
have automatically assigned such Receivable to Servicer, which assignment shall
be solely for purposes of collection.
(b) Servicer may, at any time without notice (except that Servicer shall
give written notice to each Rating Agency of any delegation outside the ordinary
course of business of the substantial portion of its servicing business) or
consent,
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delegate (i) any or all duties under this Agreement to any Person more than 50%
of the voting securities of which are owned, directly or indirectly, by KeyCorp,
an Ohio corporation, so long as Key Bank USA acts as Servicer, or (ii) specific
duties to sub-contractors who are in the business of performing such duties;
provided that no such delegation shall relieve Servicer of its responsibility
with respect to such duties and Servicer shall remain obligated and liable to
Issuer and the Holders for servicing and administering the Receivables in
accordance with this Agreement as if Servicer alone were performing such duties.
SECTION 4.2. Collection of Receivable Payments. (a) Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due, and
otherwise act with respect to the Receivables, the Physical Damage Insurance
Policies, the Dealer Agreements and related property in such manner as will, in
the reasonable judgment of Servicer, maximize the amount to be received by
Issuer with respect thereto, in accordance with the standard of care required by
Section 4.1. Servicer shall be entitled to amend or modify any Receivable in
accordance with its customary procedures if Servicer believes in good faith that
such amendment or modification is in Issuer's best interests; provided that
Servicer may not, unless ordered by a court of competent jurisdiction or
otherwise required by applicable law, (i) extend a Receivable beyond the Final
Scheduled Maturity Date or (ii) reduce the Principal Balance or Contract Rate of
any Receivable. If Servicer fails to comply with the provisions of the preceding
sentence, Servicer shall be required to purchase the Receivable or Receivables
affected thereby, for the Purchase Amount, in the manner specified in Section
4.7 as of the last day of the Collection Period in which such failure occurs.
Servicer may, in its discretion (in accordance with its customary standards,
policies and procedures), waive any prepayment charge, late payment charge,
extension fee or any other fee that may be collected in the ordinary course of
servicing a Receivable.
(b) If in the course of collecting payments under the Receivables,
Servicer determines to set off any obligation of Servicer to an Obligor against
an amount payable by the Obligor with respect to such Receivable, Servicer shall
deposit the amount so set off in the Collection Account, no later than the close
of business on the Deposit Date for the Collection Period in which the set-off
occurs. All references herein to payments or Liquidation Proceeds collected by
Servicer shall include amounts set-off by Servicer.
SECTION 4.3. Realization upon Receivables. On behalf of Issuer, Servicer
shall charge off a Receivable that had been purchased by the Seller from Key
Bank USA as a Defaulted Receivable in accordance with its customary standards
and shall charge off a Receivable that had been purchased by the Seller
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from AFG as a Defaulted Receivable in no event later than 120 days after such
Receivable shall have become delinquent and shall use reasonable efforts to
repossess and liquidate the Financed Vehicle securing any Defaulted Receivable
as soon as feasible after such Receivable becomes a Defaulted Receivable, in
accordance with the standard of care required by Section 4.1. In taking such
action, Servicer shall follow such customary and usual practices and procedures
as it shall deem necessary or advisable in its servicing of Motor Vehicle Loans,
and as are otherwise consistent with the standard of care required under Section
4.1, which shall include exercising any rights under the Dealer Agreements and
selling the Financed Vehicle at public or private sale. Servicer shall be
entitled to recover all reasonable expenses incurred by it in the course of
repossessing and liquidating a Financed Vehicle into cash proceeds or pursuing
any deficiency claim against the related Obligor, but only out of the cash
proceeds of such Financed Vehicle or any deficiency obtained from the Obligor.
The foregoing shall be subject to the provision that, in any case in which a
Financed Vehicle shall have suffered damage, Servicer shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle unless
it shall determine in its discretion that such repair and/or repossession will
increase the Liquidation Proceeds of the related Receivable by an amount equal
to or greater than the amount of such expenses.
If Servicer elects to commence a legal proceeding to enforce a Dealer
Agreement, the act of commencement shall be deemed to be an automatic assignment
from Issuer to Servicer of the rights under such Dealer Agreement. If, however,
in any enforcement suit or legal proceeding, it is held that Servicer may not
enforce a Dealer Agreement on the grounds that it is not a real party in
interest or a Person entitled to enforce the Dealer Agreement, Owner Trustee, on
behalf of Issuer, at Servicer's expense, or Seller, at Servicer's expense, shall
take such steps as Servicer deems necessary to enforce the Dealer Agreement,
including bringing suit in Issuer's name or the name of Owner Trustee or
Indenture Trustee.
SECTION 4.4. Physical Damage Insurance. (a) The Receivables require that
each Financed Vehicle be insured under a Physical Damage Insurance Policy.
Servicer shall monitor or cause to be monitored, the status of such physical
damage insurance coverage to the extent consistent with its customary servicing
procedures. If Servicer shall determine that an Obligor has failed to obtain or
maintain a Physical Damage Insurance Policy covering the related Financed
Vehicle, Servicer shall use reasonable efforts in accordance with its customary
servicing procedures to enforce the rights of the holder of the Receivable under
the Receivable to require the Obligor to obtain such physical damage insurance,
provided that Servicer shall not be required to take such actions if there is in
place a lender's single interest policy with respect to the related Financed
Vehicle
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that complies with Servicer's customary requirements. It is understood that
Servicer will not "force-place" any Physical Damage Insurance Policy on any
Financed Vehicle.
(b) Servicer may sue to enforce or collect upon the Physical Damage
Insurance Policies, in its own name, if possible, or as agent for Issuer. If
Servicer elects to commence a legal proceeding to enforce a Physical Damage
Insurance Policy, the act of commencement shall be deemed to be an automatic
assignment of the rights of Issuer under such Physical Damage Insurance Policy
to Servicer for purposes of collection only. If, however, in any enforcement
suit or legal proceeding it is held that Servicer may not enforce a Physical
Damage Insurance Policy on the grounds that it is not a real party in interest
or a holder entitled to enforce the Physical Damage Insurance Policy, Owner
Trustee, on behalf of Issuer, at Servicer's expense, or Seller, at Servicer's
expense, shall take such steps as Servicer deems necessary to enforce such
Physical Damage Insurance Policy, including bringing suit in Issuer's name or
the name of Owner Trustee or Indenture Trustee. Servicer shall make all claims
and enforce its rights under any lender's single interest insurance policy (to
the extent such claims or rights relate to Receivables) for the benefit of the
Issuer and shall treat as Collections all related proceeds of such policies.
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles.
Servicer, in accordance with the standard of care required under Section 4.1,
shall take such reasonable steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle for
the benefit of Issuer and the Indenture Trustee. Issuer hereby authorizes
Servicer, and Servicer hereby agrees, to take such reasonable steps as are
necessary to re-perfect such security interest on behalf of Issuer in the event
Servicer receives notice of the relocation of a Financed Vehicle. If there has
been a Servicer Termination Event, Seller and Servicer, at their expense, shall
promptly and duly execute and deliver such documents and instruments, and take
such other reasonable actions as may be necessary, as evidenced by an Opinion of
Counsel delivered to Issuer, Owner Trustee and Indenture Trustee to perfect
Issuer's and Indenture Trustee's interest in the Trust Property against all
other Persons, including the delivery of the Receivables and the Receivable
Files to Indenture Trustee (or Owner Trustee if no Notes are then Outstanding)
its agent or designee, the endorsement and delivery of the Physical Damage
Insurance Policies or the notification of the insurers thereunder, the execution
of transfer instruments, and the endorsement to Indenture Trustee (or Owner
Trustee if no Notes are then Outstanding) and the delivery of the certificates
of title to the Financed Vehicles to the appropriate department or departments
of motor vehicles (or other appropriate governmental agency).
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SECTION 4.6. Covenants of Servicer. Servicer makes the following
covenants on which Issuer relies in acquiring the Receivables:
(a) Security Interest to Remain in Force. Servicer shall not release any
Financed Vehicle from the security interest granted by the related Receivable in
whole or in part, except upon payment in full of the Receivable or as otherwise
contemplated herein.
(b) No Impairment. Servicer shall not impair in any material respect the
rights of the Trust or the Holders in the Receivables, the Dealer Agreements or
the Physical Damage Insurance Policies or, subject to clause (c), otherwise
amend or alter the terms thereof if, as a result of such amendment or
alteration, the interests of Issuer and the Holders hereunder would be
materially adversely affected.
(c) Amendments. Servicer shall not amend or otherwise modify any
Receivable (including the grant of any extension thereunder), except in
accordance with Section 4.2.
SECTION 4.7. Purchase by Servicer upon Breach. Seller, Servicer, Indenture
Trustee or Owner Trustee, as the case may be, shall inform the other parties
promptly, in writing, upon the discovery (or, in the case of the Indenture
Trustee or Owner Trustee, upon actual knowledge of a Responsible Officer) of any
breach by Servicer of its covenants under Section 4.5 or 4.6; provided that the
failure to give such notice shall not affect any obligation of Servicer. Unless
the breach shall have been cured by the last day of the Collection Period which
includes the 60th day (or the 30th day, if Servicer so elects) after the date on
which Servicer becomes aware of, or receives written notice of, such breach, and
such breach materially and adversely affects the interests of Issuer and the
Holders in any Receivable, Servicer shall purchase such Receivable from Issuer
as of the last day of the Collection Period at a purchase price equal to the
Purchase Amount for such Receivable as of the last day of such Collection
Period; provided that in the case of a breach of the covenant contained in
Section 4.6(c), Servicer shall be obligated to purchase the affected Receivable
or Receivables on the Deposit Date immediately succeeding the Collection Period
during which Servicer becomes aware of, or receives written notice of, such
breach. In consideration of the purchase of a Receivable hereunder, Servicer
shall remit the Purchase Amount of such Receivable in the manner specified in
Section 5.4. The sole remedy of Issuer, Owner Trustee, Indenture Trustee or the
Holders against Servicer with respect to a breach pursuant to Section 4.5 or 4.6
shall be to require Servicer to repurchase Receivables pursuant to this Section.
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SECTION 4.8. Servicing Fee. The servicing fee for (a) the March 17, 1997
Distribution Date shall equal the product of (i) the actual number of days from
and including the Closing Date to but excluding March 17, 1997 divided by 360,
(ii) the Servicing Fee Rate and (iii) the Pool Balance as of the close of
business on the Cut-off Date, and (b) for each Distribution Date thereafter
shall equal the product of (i) one-twelfth, (ii) the Servicing Fee Rate and
(iii) the Pool Balance as of the opening of business on the first day of the
related Collection Period (the "Servicing Fee"). Servicer shall also be entitled
to retain any late fees, extension fees, prepayment charges (including, in the
case of any Rule of 78's Receivable or Sum of Periodic Balances Receivable that
is prepaid in full, amounts received in excess of the outstanding Principal
Balance of such Receivable and accrued interest thereon calculated as if such
Receivable were an Actuarial Receivable) and certain non-sufficient funds
charges and other administrative fees or similar charges allowed by applicable
law with respect to Receivables collected (from whatever source) on the
Receivables and shall be paid any interest earned on deposits in the Trust
Accounts and the Certificate Distribution Account (the "Supplemental Servicing
Fee"). It is understood and agreed that Available Interest or Available
Principal shall not include any amounts retained by Servicer which constitute
Supplemental Servicing Fees. The Servicing Fee in respect of a Collection Period
(together with any portion of the Servicing Fee that remains unpaid from prior
Distribution Dates), if the Rating Agency Condition is satisfied, may be paid at
the beginning of such Collection Period out of Collections for such Collection
Period. As provided in Section 5.5(c), as additional compensation, Servicer
shall be entitled to receive on each Distribution Date, any Additional Servicing
for such Distribution Date.
SECTION 4.9. Servicer's Report. (a) On each Determination Date, Servicer
shall deliver to Owner Trustee, Indenture Trustee, each Paying Agent and Seller,
with a copy to the Rating Agencies, a Servicer's Report substantially in the
form of Exhibit A, containing all information necessary to make the transfers
and distributions pursuant to Sections 5.4, 5.5 and 5.8 for the Collection
Period preceding the date of such Servicer's Report together with all
information necessary for the Owner Trustee to send statements to
Certificateholders pursuant to Section 5.6 and Indenture Trustee to send copies
of statements received by the Indenture Trustee to Noteholders pursuant to the
Indenture and Section 5.6 of this Agreement. Receivables to be purchased by
Servicer or to be repurchased by Seller shall be identified by Servicer by
account number with respect to such Receivable (as specified in the Schedule of
Receivables).
(b) Servicer shall provide Indenture Trustee with a database file for the
Receivables at or prior to the Closing Date (but with information as of the
close of business on the Cutoff Date).
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SECTION 4.10. Annual Statement as to Compliance; Notice of Default. (a)
Servicer shall deliver to Owner Trustee, Indenture Trustee and each Rating
Agency, on or before April 30 of each year beginning on April 30, 1998, an
Officer's Certificate, dated as of December 31 of the preceding year, stating
that (i) a review of the activities of Servicer during the preceding 12-month
period (or, in the case of the first such report, during the period from the
Closing Date to December 31, 1997) and of its performance under this Agreement
has been made under such officer's supervision and (ii) to the best of such
officer's knowledge, based on such review, Servicer has fulfilled all its
obligations in all material respects under this Agreement throughout such year
or, if there exists any uncured default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. A copy of such certificate and the report referred to in
Section 4.11 may be obtained by any Certificateholder by a request in writing to
Owner Trustee addressed to the Corporate Trust Office or by any Noteholder by a
request in writing to Indenture Trustee addressed to the Corporate Trust Office.
Upon the written request of Owner Trustee, Indenture Trustee will promptly
furnish Owner Trustee a list of Noteholders as of the date specified by Owner
Trustee.
(b) Servicer shall deliver to Owner Trustee, Indenture Trustee and the
Rating Agencies, promptly after having obtained knowledge thereof, but in no
event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which constitutes, or with the giving of
notice or lapse of time, or both, would become a Servicer Termination Event
under Section 8.1.
SECTION 4.11. Annual Independent Certified Public Accountants' Report. The
Servicer shall cause a firm of independent certified public accountants (who may
also render other services to the Servicer or Seller) to deliver to the Seller,
Owner Trustee, Indenture Trustee and each Rating Agency on or before April 30 of
each year beginning on April 30, 1998, a report to the effect that such firm has
examined the Servicer's assertion that it has complied with the minimum
servicing standards set forth in the Mortgage Banker's Association of America's
Uniform Single Attestation Program for Mortgage Bankers ("USAP") for the twelve
months ended December 31 of the preceding year (or, in the case of the first
such certificate, from the Closing Date until December 31, 1997), and that such
examination (1) included tests relating to the servicing or administration of
the Receivables in accordance with the requirements of the USAP, to the extent
the procedures in such program apply to the servicing or administration of the
Receivables and (2) except as described in the report, disclosed no exceptions
or errors in the records relating to the servicing or administration of the
Receivables that, in the firm's opinion, paragraph six of such program requires
such firm to report.
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In the event such firm requires the Indenture Trustee or Owner Trustee to
agree to the procedures performed by such firm, Servicer shall direct the
Indenture Trustee or Owner Trustee, as the case may be, in writing to so agree;
it being understood and agreed that the Indenture Trustee or Owner Trustee, as
the case may be, will deliver such letter of agreement in conclusive reliance
upon the direction of Servicer, and the Indenture Trustee or Owner Trustee, as
the case may be, need not make any independent inquiry or investigation as to,
and shall have no obligation or liability in respect of, the sufficiency,
validity or correctness of such procedures.
Such report will also indicate that the firm is independent of Servicer
within the meaning of the Code of Professional Ethics of the American Institute
of Certified Public Accountants.
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables. Servicer shall provide to the Certificateholders, Noteholders, Bank
Regulatory Authorities, and the supervisory agents and examiners of Bank
Regulatory Authorities access to the Receivable Files in such cases where the
Certificateholders, Noteholders or Bank Regulatory Authorities shall be required
by applicable statutes or regulations to review such documentation as
demonstrated by evidence satisfactory to Servicer in its reasonable judgment.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the respective offices of Servicer. Nothing
in this Section shall affect the obligation of Servicer to observe any
applicable law prohibiting disclosure of information regarding the Obligors and
the failure of Servicer to provide access to information as a result of such
obligation shall not constitute a breach of this Section . Any Holder, by its
acceptance of a Certificate or Note, as applicable, shall be deemed to have
agreed to keep any information obtained by it pursuant to this Section
confidential and not to use such information for any other purpose, except as
required by applicable law.
SECTION 4.13. Reports to the Commission. Servicer shall, on behalf of the
Issuer, cause to be filed with the Commission any periodic reports required to
be filed under the provisions of the Exchange Act, and the rules and regulations
of the Commission thereunder. Seller shall, at its expense, cooperate in any
reasonable request made by Servicer in connection with such filings.
SECTION 4.14. Reports to the Rating Agencies. Servicer shall deliver to
each Rating Agency a copy of all reports or notices furnished or delivered
pursuant to this Article and a copy of any amendments, supplements or
modifications to this Agreement and any other information reasonably requested
by such Rating Agency to monitor this transaction.
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SECTION 4.15. Servicer Expenses. Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Owner Trustee, Indenture Trustee, independent
accountants, taxes imposed on Servicer and expenses incurred in connection with
distributions and reports to Certificateholders and Noteholders.
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS AND
NOTEHOLDERS.
SECTION 5.1. Establishment of Trust Accounts. (a) Servicer shall cause
to be established:
(i) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture Trustee, an Eligible Deposit Account (the
"Collection Account"), bearing a designation clearly indicating that the
funds deposited therein are held for the benefit of the Noteholders and
the Certificateholders.
(ii) For the benefit of the Noteholders, in the name of Indenture
Trustee, an Eligible Deposit Account (the "Note Distribution Account"),
bearing a designation clearly indicating that the funds deposited therein
are held for the benefit of the Noteholders.
(iii) For the benefit of the Noteholders and the Certificateholders,
in the name of Indenture Trustee, an Eligible Deposit Account (the
"Payahead Account"), bearing a designation clearly indicating that the
funds therein are held for the benefit of the Noteholders and the
Certificateholders.
(b) Funds on deposit in the Collection Account, the Note Distribution
Account, the Payahead Account and the Reserve Account (collectively the "Trust
Accounts") and the Certificate Distribution Account shall be invested by
Indenture Trustee with respect to the Trust Accounts (or any custodian with
respect to funds on deposit in any such account) in Eligible Investments
selected in writing by Servicer (pursuant to standing instructions or
otherwise); provided that it is understood and agreed that neither Servicer,
Indenture Trustee nor Owner Trustee shall be liable for any loss arising from
such investment in Eligible Investments. All such Eligible Investments shall be
held by or on behalf of Indenture Trustee for the benefit of the Noteholders and
the Certificateholders; provided that on each Distribution Date all interest and
other investment income (net of losses and investment expenses) on funds on
deposit in the Trust Accounts shall be distributed to Seller and shall not be
available to pay the distributions provided
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for in Section 5.5 and shall not otherwise be subject to any claims or rights of
Holders. Other than as permitted by the Rating Agencies, funds on deposit in the
Trust Accounts shall be invested in Eligible Investments that will mature so
that such funds will be available at the close of business on the Deposit Date
preceding the next Distribution Date. No Eligible Investment shall be sold or
otherwise disposed of prior to its scheduled maturity unless a default occurs
with respect to such Eligible Investment and Servicer directs Indenture Trustee
in writing to dispose of such Eligible Investment. Funds deposited in a Trust
Account on a Deposit Date which immediately precedes a Distribution Date upon
the maturity of any Eligible Investments are not required to be (but are
permitted to be) invested overnight.
(c) Indenture Trustee shall possess all right, title and interest in all
funds on deposit from time to time in the Trust Accounts and in all proceeds
thereof (excluding investment income thereon) and all such funds, investments
and proceeds shall be part of the Owner Trust Estate. Except as otherwise
provided herein, the Trust Accounts shall be under the sole dominion and control
of Indenture Trustee for the benefit of the Noteholders and the
Certificateholders; provided, however, the Indenture Trustee shall not be
charged with any obligation for the benefit of the Certificateholders except as
provided by the terms of this Agreement. If, at any time, any of the Trust
Accounts or the Certificate Distribution Account ceases to be an Eligible
Deposit Account, Indenture Trustee (or Servicer on its behalf) or Owner Trustee,
as applicable, shall within 10 Business Days (or such longer period as to which
each Rating Agency may consent) establish a new Trust Account or Certificate
Distribution Account, as applicable, as an Eligible Deposit Account and shall
transfer any cash and/or any investments to such new Trust Account or new
Certificate Distribution Account, as applicable. In connection with the
foregoing, Servicer agrees that, in the event that any of the Trust Accounts are
not accounts with Indenture Trustee, Servicer shall notify Indenture Trustee in
writing promptly upon any of such Trust Accounts ceasing to be an Eligible
Deposit Account.
(d) With respect to the Trust Account Property, each of Indenture Trustee
agrees, by its respective acceptance hereof, that:
(i) any Trust Account Property that is held in deposit accounts
shall be held solely in the Eligible Deposit Accounts and, except as
otherwise provided herein, each such Eligible Deposit Account shall be
subject to the exclusive custody and control of Indenture Trustee with
respect to the Trust Accounts, and, except as otherwise provided in the
Basic Documents, Indenture Trustee shall have sole signature authority
with respect thereto;
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(ii) any Trust Account Property that constitutes Physical Property
shall be delivered to Indenture Trustee, in accordance with paragraph (a)
of the definition of "Delivery" and shall be held, pending maturity or
disposition, solely by Indenture Trustee, or a financial intermediary (as
such term is defined in Section 8-313(4) of the UCC) acting solely for
Indenture Trustee;
(iii) any Trust Account Property that is a book-entry security held
through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued book-entry registration
of such Trust Account Property as described in such paragraph; and
(iv) any Trust Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(iii) above shall be delivered to Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained by
Indenture Trustee pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's) ownership of such
security.
Effective upon Delivery of any Trust Account Property, Indenture Trustee shall
be deemed to have represented that it has purchased such Trust Account Property
for value, in good faith and without notice of any adverse claim thereto.
SECTION 5.2. Collections. (a) Servicer shall remit within two Business
Days of receipt thereof to the Collection Account all payments by or on behalf
of the Obligors with respect to the Receivables (other than any amounts
constituting Supplemental Servicing Fees) and all Liquidation Proceeds, both as
collected during the Collection Period. Notwithstanding the foregoing, if Key
Bank USA is the Servicer and (i) shall have the Required Rating or (ii)
Indenture Trustee otherwise shall have received written notice from each of the
Rating Agencies that the then outstanding rating on the Notes or the
Certificates would not be lowered or withdrawn as a result, Servicer may deposit
all amounts referred to above for any Collection Period into the Collection
Account not later than the close of business on the Deposit Date with respect to
such Collection Period; provided that (i) if a Servicer Termination Event has
occurred and is continuing, (ii) Servicer has been terminated as such pursuant
to Section 8.1 or (iii) Servicer ceases to have the Required Rating, Servicer
shall deposit such amounts (including any amounts then being held by Servicer)
into the Collection Account as provided in the preceding sentence. For purposes
of this Article V the phrase "payments by or on behalf of Obligors" shall mean
payments made with
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respect to the Receivables by Persons other than Servicer, Seller or any Seller
Affiliate.
(b) With respect to each Receivable (other than a Purchased Receivable or
a Precomputed Receivable), collections and payments by or on behalf of the
Obligor (other than any amounts constituting Supplemental Servicing Fees) for
each Collection Period shall be applied to interest and principal in accordance
with the Simple Interest Method, as applied by Servicer. Any excess shall be
applied to prepay the Receivable. All Liquidation Proceeds shall be treated as
Interest Collections.
(c) With respect to each Precomputed Receivable, collections and payments
by or on behalf of an Obligor (other than any amounts constituting Supplemental
Servicing Fees) for each Collection Period shall be applied to the scheduled
payments due on such Precomputed Receivable for such Collection Period. To the
extent such collections and payments on a Precomputed Receivable during a
Collection Period exceed the scheduled payment on such Precomputed Receivable
and are insufficient to prepay the Precomputed Receivable in full, collections
shall be treated as Payaheads until such later Collection Period as such
Payaheads may be transferred to the Collection Account and applied either to the
scheduled payments due or to prepay the Precomputed Receivable in full in
accordance with Section 5.5.
SECTION 5.3. [Reserved].
SECTION 5.4. Additional Deposits. Servicer and Seller shall deposit or
cause to be deposited in the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables and Seller or Servicer shall deposit
therein all amounts, if any, to be paid under Section 9.1. All such deposits
shall be made not later than the Deposit Date following the end of the related
Collection Period.
SECTION 5.5. Distributions. (a) On each Determination Date, Servicer shall
calculate all amounts required to determine the amounts to be deposited on the
related Distribution Date from the Reserve Account and the Payahead Account into
the Collection Account and from the Collection Account into the Note
Distribution Account, the Certificate Distribution Account and the Payahead
Account.
(b) On or before each Distribution Date, Servicer shall instruct Indenture
Trustee in writing (based on the information contained in the Servicer's Report
delivered on the related Determination Date pursuant to Section 4.9) to, and the
Indenture Trustee shall:
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(i) withdraw from the Payahead Account and deposit in the
Collection Account, in immediately available funds, (x) with respect to
each Precomputed Receivable for which the payments made by or on behalf of
the Obligor for the related Collection Period are less than the scheduled
payment for the related Collection Period, the amount of Payaheads, if
any, made with respect to such Receivable which, when added to the amount
of such payments, is equal to the amount of such scheduled payment, (y)
with respect to each Precomputed Receivable for which prepayments
insufficient to prepay the Receivable in full have been made by or on
behalf of the Obligor for the related Collection Period, the amount of
Payaheads, if any, made with respect to such Receivable which, when added
to the amount of such prepayments, is equal to an amount sufficient to
prepay such Receivable in full, and (z) the amount of all Payaheads, if
any, made with respect to any Purchased Receivable;
(ii) withdraw from the Collection Account and deposit in the
Payahead Account (or receive from the Servicer, which will remit to the
Indenture Trustee for deposit in the Payahead Account, as the case may
be), in immediately available funds, the aggregate amount of Collections
on Precomputed Receivables treated as Payaheads pursuant to Section 5.2
for the Collection Period related to such Distribution Date; and
(iii) withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount for such
Distribution Date.
(c) Subject to the last paragraph of this Section 5.5(c), on each
Distribution Date, Servicer shall instruct Indenture Trustee in writing (based
on the information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to make, and Indenture Trustee shall
make, the following deposits and distributions from the Collection Account for
deposit in the applicable account by 11:00 a.m. (New York time), to the extent
of the Total Distribution Amount, in the following order of priority:
(i) to Servicer, from the Total Distribution Amount, the
Servicing Fee for the related Collection Period and all accrued and unpaid
Servicing Fees for prior Collection Periods;
(ii) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i), the Noteholders'
Interest Distributable Amount;
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(iii) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clause (i) and
clause (ii), the Certificateholders' Interest Distributable Amount;
(iv) to the Note Distribution Account, from the Total Distribution
Amount remaining after the application of clause (i) through clause (iii),
the Noteholders' Principal Distributable Amount;
(v) to the Note Distribution Account (or, if the Outstanding
Amount of the Notes has been reduced to zero, to the Certificate
Distribution Account) for distribution in respect of principal, from the
Total Distribution Amount remaining after the application of clause (i)
through clause (iv), the lesser of (A) such remaining Total Distribution
Amount and (B) the Additional Principal Distributable Amount for such
Distribution Date;
(vi) to the Certificate Distribution Account, from the Total
Distribution Amount remaining after the application of clauses (i) through
(v), the Certificateholders' Principal Distributable Amount;
(vii) to the Reserve Account, from the Total Distribution Amount
remaining after the application of clauses (i) through (vi), until the
amount on deposit in the Reserve Account equals the Specified Reserve
Account Balance;
(viii) to the Servicer, Additional Servicing for such Distribution
Date; and
(ix) to Seller, any amounts remaining.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes, the Total Distribution Amount remaining after the application of clause
(i) and (ii) above will be deposited in the Note Distribution Account to the
extent necessary to reduce the principal amount of the Notes to zero in
accordance with and in the priority set forth in Section 5.4 of the Indenture,
and the Certificateholders will not receive any distributions until the
principal amount and accrued interest on the Notes have been paid in full. In
the event that the Collection Account is maintained with an institution other
than Indenture Trustee, Indenture Trustee shall instruct and cause such
institution to make all deposits and distributions pursuant to this Section
5.5(c) on the related Deposit Date.
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(d) Indenture Trustee shall continue to perform its duties under this
Agreement after the Outstanding Amount of the Notes has been reduced to zero and
the Indenture has been discharged in accordance with its terms. The protections,
immunities and standard of care afforded the Indenture Trustee under the
Indenture shall apply to the performance of its duties hereunder.
SECTION 5.6. Statements to Certificateholders and Noteholders. On each
Determination Date, Servicer shall provide to Indenture Trustee (with a copy to
each Rating Agency) written instructions for Indenture Trustee to forward to
each Noteholder of record, to each Paying Agent, if any, and to Owner Trustee
for Owner Trustee to forward to each Certificateholder of record, a statement
substantially in the form of Exhibit A setting forth at least the following
information as to the Notes and the Certificates to the extent applicable:
(a) the amount of such distribution allocable to principal of each class
of Notes and to the Certificate Balance of the Certificates;
(b) the amount of such distribution allocable to interest on or with
respect to each class of Notes and to the Certificates;
(c) the Pool Balance as of the close of business on the last day of the
preceding Collection Period;
(d) the aggregate outstanding principal balance of each class of the
Notes, the Note Pool Factor for each such class, the Certificate Balance and the
Certificate Pool Factor after giving effect to payments allocated to principal
reported under clause (a) above;
(e) the amount of the Servicing Fee paid to Servicer with respect to the
related Collection Period and with respect to previously accrued and unpaid
Servicing Fees;
(f) the amount of the aggregate Realized Losses, if any, for such
Collection Period;
(g) the Reserve Account Transfer Amount, if any, for such Distribution
Date, the Specified Reserve Account Balance for such Distribution Date, the
amount distributed to Seller from the Reserve Account on such Distribution Date,
and the balance of the Reserve Account (if any) on such Distribution Date, after
giving effect to changes therein on such Distribution Date;
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(h) the Noteholders' Interest Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall, the Noteholders' Principal Carryover Shortfall,
and the Certificateholders' Principal Carryover Shortfall, if any, in each case
as applicable to each class of Securities, and the change in such amounts from
the preceding statement;
(i) the Additional Principal Distributable Amount for such Distribution
Date;
(j) the aggregate Purchase Amounts paid by Seller or Servicer with respect
to the related Collection Period; and
(k) the number, and aggregate Principal Balance outstanding, of
Receivables past due 30-59, 60-89 and 90 and over 90 days.
Each amount set forth pursuant to paragraph (a), (b), (e) or (h) above shall be
expressed as a dollar amount per $1,000 of the initial principal balance of the
Notes (or class thereof) or the initial Certificate Balance, as applicable.
SECTION 5.7. Net Deposits. As an administrative convenience, unless
Servicer is required to remit Collections within two Business Days of receipt
thereof, Servicer will be permitted to make the deposit of Collections and
Purchase Amounts for or with respect to the Collection Period net of
distributions to be made to Servicer with respect to the Collection Period.
Servicer, however, will account to Owner Trustee, Indenture Trustee, the
Noteholders and the Certificateholders as if all deposits, distributions and
transfers were made individually.
SECTION 5.8. Reserve Account. (a) Seller shall establish and maintain in
the name of the Indenture Trustee, as agent for the Issuer, the Noteholders and
Certificateholders, an Eligible Deposit Account (the "Reserve Account"). The
Reserve Account shall be initially established and maintained with the Indenture
Trustee (the "Securities Intermediary"). On the Closing Date, Seller shall
deposit or cause to be deposited in the Reserve Account an amount equal to the
Reserve Account Deposit.
(b) Indenture Trustee shall, at the written direction of Servicer, direct
the Securities Intermediary to invest funds on deposit in the Reserve Account in
Eligible Investments selected by Servicer and confirmed in writing by Servicer
to Indenture Trustee; provided that it is understood and agreed that none of
Indenture Trustee, Securities Intermediary, Servicer or Issuer shall be liable
for any loss arising from such investment in Eligible Investments. Funds on
deposit in the Reserve Account shall be invested in Eligible Investments that
will mature
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so that all such funds will be available at the close of business on each
Deposit Date; provided that to the extent permitted by the Rating Agencies
following written request by Servicer, funds on deposit in the Reserve Account
may be invested in Eligible Investments that mature later than the next Deposit
Date. Funds deposited in the Reserve Account on a Deposit Date upon the maturity
of any Eligible Investments are not required to be (but may be) invested
overnight.
(c) The Securities Intermediary hereby expressly agrees with the Indenture
Trustee that: (i) the Securities Intermediary will treat the Indenture Trustee
as entitled to exercise the rights comprising the investments or financial
assets credited to the Reserve Account; (ii) the investments or financial assets
credited to the Reserve Account shall not be registered in the name of, payable
to the order of, or specially indorsed to the Indenture Trustee; and (iii) the
Securities Intermediary will not agree to comply with entitlement orders
originated by any Person with respect to the investments or financial assets
held in the Reserve Account other than the Indenture Trustee.
(d) The Reserve Account shall be under the sole custody and control of
Indenture Trustee. If, at any time, the Reserve Account ceases to be an Eligible
Deposit Account, Indenture Trustee shall within 10 Business Days (or such longer
period, not to exceed 30 calendar days, as to which each Rating Agency may
consent) establish a new Reserve Account as an Eligible Deposit Account and
shall transfer or cause to be transferred any cash and/or any investments that
are in the existing account which is no longer an Eligible Deposit Account to
such new Reserve Account.
(e) Servicer shall instruct Indenture Trustee in writing (based on the
information contained in the Servicer's Report delivered on the related
Determination Date pursuant to Section 4.9) to make, and Indenture Trustee shall
make, the following deposits and distributions from the Reserve Account to the
extent of any Reserve Account Excess for such Distribution Date, for deposit in
the applicable account by 11:00 a.m. (New York time), in the following order of
priority:
(i) to the Note Distribution Account (or, if the Outstanding
Amount of the Notes has been reduced to zero, to the Certificate
Distribution Account) for distribution in respect of principal, the lesser
of (A) such Reserve Account Excess, if any and (B) the excess, if any, of
(1) the Additional Principal Distributable Amount for such Distribution
Date over (2) the amounts deposited in the Note Distribution Account and
Certificate Distribution Account for such Distribution Date pursuant to
Section 5.5(c)(v);
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(ii) to the Servicer, the excess of (A) the Additional Servicing
for such Distribution Date over (B) any amount distributed as Additional
Servicing for such Distribution Date pursuant to Section 5.5(c)(viii); and
(iii) to Seller, any amounts remaining after the Additional
Principal Distributable Amount has been reduced to zero.
Upon any distribution to Servicer or Seller of amounts from the Reserve
Account, the Holders will not have any rights in, or claims to, such amounts.
Amounts distributed to Servicer or Seller from the Reserve Account in accordance
with this Section shall not be available under any circumstances to Issuer,
Owner Trustee, Indenture Trustee or the Holders and neither Servicer nor Seller
shall in any event thereafter be required to refund any such distributed
amounts.
(f) With respect to the Reserve Account Property, Seller, Issuer and the
Indenture Trustee agree that the Reserve Account Deposit and all other funds and
Reserve Account Property shall be delivered to Indenture Trustee for credit to
the Reserve Account. In addition:
(i) any Reserve Account Property that constitutes Physical
Property shall be delivered to Indenture Trustee in accordance with
paragraph (a) of the definition of "Delivery" and shall be held, pending
maturity or disposition, solely by Indenture Trustee or a financial
intermediary (as such term is defined in Section 8-313(4) of the UCC)
acting solely for Indenture Trustee;
(ii) any Reserve Account Property that is a book entry security
held through the Federal Reserve System pursuant to Federal book-entry
regulations shall be delivered in accordance with paragraph (b) of the
definition of "Delivery" and shall be maintained by Indenture Trustee
pending maturity or disposition, through continued book entry registration
of such Reserve Account Property as described in such paragraph; and
(iii) any Reserve Account Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by clause
(ii) above shall be delivered to Indenture Trustee in accordance with
paragraph (c) of the definition of "Delivery" and shall be maintained by
Indenture Trustee pending maturity or disposition, through continued
registration of Indenture Trustee's (or its nominee's) ownership of such
security.
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Effective upon the crediting of any Reserve Account Property to the Reserve
Account, Indenture Trustee shall be deemed to have represented that it has
purchased such Reserve Account Property for value, in good faith and without
notice of any adverse claim thereto.
(g) Issuer and Servicer agree to take or cause to be taken such further
actions, to execute, deliver and file or cause to be executed, delivered and
filed such further documents and instruments (including any UCC financing
statements or this Agreement) as may be determined to be necessary, in an
Opinion of Counsel to Issuer delivered to Owner Trustee and Indenture Trustee in
order to perfect the interests created by this Section 5.8 and otherwise fully
to effectuate the purposes, terms and conditions of this Section 5.8. Issuer and
Servicer shall:
(1) promptly execute, deliver and file any financing statements,
amendments, continuation statements, assignments, certificates and other
documents with respect to such interests and perform all such other acts
as may be necessary in order to perfect or to maintain the perfection of
Indenture Trustee's security interest; and
(2) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following: (1) any change in their respective names or any trade names,
(2) any change in the location of their respective chief executive offices
or principal places of business and (3) any merger or consolidation or
other change in their respective identities or corporate structures; and
shall promptly notify Owner Trustee and Indenture Trustee of any such
filings.
(h) Investment earnings attributable to the Reserve Account Property and
proceeds therefrom shall be held by Indenture Trustee for the benefit of Seller.
Investment earnings attributable to the Reserve Account Property shall not be
available to pay the distributions provided for in Section 5.5 and shall not
otherwise be subject to any claims or rights of the Holders or Servicer.
Indenture Trustee shall cause all investment earnings attributable to the
Reserve Account to be distributed on each Distribution Date to Seller.
(i) Seller may at any time, without consent of Holders, sell, transfer,
convey or assign in any manner its rights to and interests in distributions from
the Reserve Account provided that (i) the Rating Agencies confirm in writing
that such action will not result in a reduction or withdrawal of the rating of
any class of Notes or Certificates, (ii) Seller provides to Owner Trustee and
Indenture Trustee an Opinion of Counsel from independent counsel that such
action will not cause Issuer to be classified as an association (or publicly
traded partnership) taxable as a corporation for federal income tax purposes and
(iii) such transferee
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or assignee agrees in writing to take positions for federal income tax purposes
consistent with the federal income tax positions agreed to be taken by Seller.
ARTICLE VI. SELLER.
SECTION 6.1. Representations of Seller. Seller makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of this
Agreement and shall survive the sale of the Receivables to Issuer and the pledge
thereof to Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Seller has been duly organized and is
validly existing as a Delaware corporation in good standing under the laws of
the State of Delaware, with the power and authority to own its properties and to
conduct its business as such properties are presently owned and such business is
presently conducted and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell the Receivables and the other
properties and rights included in the Owner Trust Estate assigned to Issuer
pursuant to Article II.
(b) Power and Authority. Seller has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms and to sell and assign the
property to be sold and assigned to and deposited with Issuer as the Owner Trust
Estate; and the execution, delivery and performance of this Agreement and the
Basic Documents to which it is a party have been duly authorized by Seller by
all necessary corporate action.
(c) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement or the Basic Documents to which it is
a party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(d) Valid Sale; Binding Obligation. Seller intends this Agreement to
effect a valid sale, transfer, and assignment of the Receivables and the other
properties and rights included in the Owner Trust Estate conveyed by Seller to
Issuer hereunder, enforceable against creditors of and purchasers from Seller;
and each of this Agreement and the Basic Documents to which it is a party
constitutes
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a legal, valid and binding obligation of Seller, enforceable against Seller in
accordance with its respective terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws affecting enforcement of the
rights of creditors generally and to equitable limitations on the availability
of specific remedies.
(e) No Violation. The execution, delivery and performance by Seller of
this Agreement and the Basic Documents to which it is a party and the
consummation of the transactions contemplated hereby and thereby will not
conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under or result in the creation or imposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the certificate of
incorporation or bylaws of Seller, (ii) any material indenture, contract, lease,
mortgage, deed of trust or other instrument or agreement to which Seller is a
party or by which Seller is bound, or (iii) any law, order, rule or regulation
applicable to Seller of any federal or state regulatory body, any court,
administrative agency, or other governmental instrumentality having jurisdiction
over Seller.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the knowledge of Seller, threatened, before any court, regulatory body,
administrative agency, or other tribunal or governmental instrumentality having
jurisdiction over Seller or its properties: (i) asserting the invalidity of this
Agreement, any other Basic Document, the Notes or the Certificates, (ii) seeking
to prevent the issuance of the Notes or Certificates or the consummation of any
of the transactions contemplated by this Agreement or any other Basic Document,
(iii) seeking any determination or ruling that might materially and adversely
affect the performance by Seller of its obligations under, or the validity or
enforceability of, this Agreement, any other Basic Document, the Notes or the
Certificates, to the extent applicable, or (iv) that may materially and
adversely affect the federal or state income, excise franchise or similar tax
attributes of the Certificates.
(g) Chief Executive Office. The chief executive office of Seller is Key
Tower, 127 Public Square, Cleveland, Ohio 44114-1306.
SECTION 6.2. Continued Existence. During the term of this Agreement,
subject to Section 6.4, Seller will keep in full force and effect its existence,
rights and franchises as a corporation organized under the laws of the State of
Delaware and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the
validity and enforceability of this Agreement, the Basic Documents and each
other instrument or agreement necessary or appropriate to the proper
administration of this Agreement and the transactions contemplated hereby.
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SECTION 6.3. Liability of Seller; Indemnities. Seller shall be liable in
accordance herewith only to the extent of the obligations specifically
undertaken by Seller under this Agreement.
(a) Seller shall indemnify, defend and hold harmless Issuer, Owner Trustee
and Indenture Trustee and their respective officers, directors, employees and
agents from and against any taxes that may at any time be asserted against any
such Person with respect to, and on the date of, the sale of the Receivables to
Issuer or the issuance and original sale of the Notes and Certificates,
including any sales, gross receipts, general corporation, tangible personal
property, privilege or license taxes (but, in the case of all indemnified
Persons other than Issuer, not including any taxes asserted with respect to
Federal or other income taxes arising out of transactions contemplated by this
Agreement and the other Basic Documents) and costs and expenses in defending
against the same.
(b) Seller shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, the Certificateholders and the Noteholders and the
respective officers, directors, employees and agents of Issuer, Owner Trustee
and Indenture Trustee from and against any and all costs, expenses, losses,
claims, damages and liabilities to the extent arising out of, or imposed upon
such Person through or as a result of (i) Seller's willful misfeasance, bad
faith or gross negligence (other than errors in judgment) in the performance of
its duties under this Agreement, or by reason of reckless disregard of its
obligations and duties under this Agreement, (ii) Seller's violation of Federal
or state securities laws in connection with the offering and sale of the Notes
and the Certificates or in connection with any application relating to the Notes
or Certificates under any state securities laws and (iii) the failure of any
Receivable conveyed by it to Issuer hereunder, or the sale of the related
Financed Vehicle, to comply with all requirements of applicable law.
(c) Seller shall be liable as primary obligor for, and shall indemnify,
defend and hold harmless Owner Trustee, Indenture Trustee and their respective
officers, directors, employees and agents from and against any and all costs,
expenses, losses, claims, damages and liabilities arising out of, or incurred in
connection with, the acceptance or performance of the trusts and duties set
forth herein and in the Trust Agreement, in the case of Owner Trustee, and
herein and in the Indenture, in the case of Indenture Trustee, except to the
extent that such cost, expense, loss, claim, damage or liability: (i) in the
case of Owner Trustee, shall be due to the willful misfeasance, bad faith or
negligence (except for errors in judgment) of Owner Trustee, or, in the case of
Indenture Trustee, shall be due to the willful misfeasance, bad faith or
negligence of Indenture Trustee; (ii) in the case of Owner Trustee, shall arise
from the breach by Owner Trustee of any of its representations or warranties set
forth in the Trust Agreement or any other
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Basic Document; or (iii) in the case of Indenture Trustee, shall arise from the
breach by Indenture Trustee of any of its representations and warranties or
covenants set forth in the Indenture. Such liability shall survive the
termination of Issuer, the discharge of the Notes and Certificates and removal
or resignation of such Indenture Trustee or Owner Trustee.
(d) Seller shall pay any and all taxes levied or assessed upon the Issuer
or upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Seller shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall promptly repay such amounts to Seller,
without interest.
SECTION 6.4. Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (a) into which Seller may be merged or consolidated, (b)
which may result from any merger or consolidation to which Seller shall be a
party or (c) which may succeed to the properties and assets of Seller
substantially as a whole, shall be the successor to Seller without the execution
or filing of any document or any further act by any of the parties to this
Agreement; provided that Seller hereby covenants that it will not consummate any
of the foregoing transactions except upon satisfaction of the following: (i) the
surviving Seller if other than Key Consumer Acceptance Corporation, executes an
agreement of assumption to perform every obligation of Seller under this
Agreement, (ii) immediately after giving effect to such transaction, no
representation or warranty made pursuant to Section 3.1 or 6.1 shall have been
breached, (iii) Seller shall have delivered to Owner Trustee and Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such consolidation, merger or succession and such agreement of assumption comply
with this Section and that all conditions precedent, if any, provided for in
this Agreement relating to such transaction have been complied with, and that
the Rating Agency Condition shall have been satisfied with respect to such
transaction, (iv) the surviving Seller shall have a consolidated net worth at
least equal to that of the predecessor Seller, (v) such transaction will not
result in a material adverse federal or state tax consequence to Issuer, the
Noteholders or the Certificateholders and (vi) unless Key Consumer Acceptance
Corporation is the surviving entity, Seller shall have delivered to Owner
Trustee and Indenture Trustee an Opinion of Counsel either (A) stating that, in
the opinion of such counsel, all financing statements and continuation
statements and amendments
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thereto have been executed and filed that are necessary fully to preserve and
protect the interest of Owner Trustee and Indenture Trustee, respectively, in
the Receivables and reciting the details of such filings, or (B) stating that,
in the opinion of such counsel, no such action shall be necessary to preserve
and protect such interests.
SECTION 6.5. Limitation on Liability of Seller and Others. Seller and any
director or officer or employee or agent of Seller may rely in good faith on the
advice of counsel or on any document of any kind, prima facie properly executed
and submitted by any Person respecting any matters arising under any Basic
Document (provided that such reliance shall not limit in any way Seller's
obligations under Section 3.2 or 6.3). Seller shall not be under any obligation
to appear in, prosecute or defend any legal action that shall not be incidental
to its obligations under this Agreement, and that in its opinion may involve it
in any expense or liability.
SECTION 6.6. Seller May Own Certificates or Notes. Seller and any
Affiliate thereof may in its individual or any other capacity become the owner
or pledgee of Certificates or Notes with the same rights as it would have if it
were not Seller or an Affiliate thereof, except as expressly provided herein or
in any Basic Document. Except as set forth herein or in the other Basic
Documents, Notes and Certificates so owned by or pledged to Seller or any such
Affiliate shall have an equal and proportionate benefit under the provisions of
this Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
SECTION 6.7 Indebtedness of Seller. Seller shall provide written notice to
the Rating Agencies at least thirty (30) days prior to the date it incurs any
material indebtedness or assumes or guarantees any material indebtedness of any
other entity in connection with the acquisition or transfer of receivables
(other than the Receivables) or the issuance and sale of securities (other than
the Notes and Certificates) secured by or evidencing beneficial ownership
interests in such receivables, or any other activity set forth in paragraph 3 of
its certificate of incorporation or incurs any material, non-incidental
indebtedness in connection with the accomplishment of any of the foregoing.
ARTICLE VII. SERVICER.
SECTION 7.1. Representations of Servicer. Servicer makes the following
representations on which Issuer is deemed to have relied in acquiring the
Receivables and the other properties and rights included in the Owner Trust
Estate. The representations speak as of the execution and delivery of the
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Agreement and shall survive the sale, transfer and assignment of the Receivables
to Issuer and the pledge thereof to Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. Servicer has been duly organized and
is validly existing as a national banking association in good standing under the
laws of the United States, with the power and authority to own its properties
and to conduct its business as such properties are presently owned and such
business is presently conducted, and had at all relevant times, and shall have,
the power, authority and legal right to service the Receivables and the other
properties and rights included in the Owner Trust Estate.
(b) Due Qualification. Servicer shall be duly qualified to do business as
a foreign corporation in good standing, and shall have obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease of
property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(c) Power and Authority. Servicer has the power, authority and legal right
to execute and deliver this Agreement and the Basic Documents to which it is a
party and to carry out their respective terms; and the execution, delivery and
performance of this Agreement and the Basic Documents to which it is a party
have been duly authorized by Servicer by all necessary corporate action.
(d) No Consent Required. No approval, authorization, consent, license or
other order or action of, or filing or registration with, any governmental
authority, bureau or agency is required in connection with the execution,
delivery or performance of this Agreement, the Basic Documents to which it is a
party or the consummation of the transactions contemplated hereby or thereby,
other than (i) as may be required under the blue sky or securities laws of any
State or the Securities Act of 1933, as amended, and (ii) the filing of UCC
financing statements.
(e) Binding Obligation. Each of this Agreement and the Basic Documents to
which it is a party constitutes a legal, valid and binding obligation of
Servicer, enforceable against Servicer in accordance with its respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws affecting enforcement of the rights of creditors of banks generally and to
equitable limitations on the availability of specific remedies.
(f) No Violation. The execution, delivery and performance by
Servicer of this Agreement and the Basic Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby will not
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conflict with, result in any material breach of any of the terms and provisions
of, constitute (with or without notice or lapse of time) a material default
under, or result in the creation or disposition of any Lien upon any of its
material properties pursuant to the terms of, (i) the articles of association or
bylaws of Servicer, (ii) any material indenture, contract, lease, mortgage, deed
of trust or other instrument or agreement to which Servicer is a party or by
which Servicer is bound, or (iii) any law, order, rule or regulation applicable
to Servicer of any federal or state regulatory body, any court, administrative
agency, or other governmental instrumentality having jurisdiction over Servicer.
(g) No Proceedings. There are no proceedings or investigations pending,
or, to Servicer's knowledge, threatened, before any court, regulatory body,
administrative agency, or tribunal or other governmental instrumentality having
jurisdiction over Servicer or its properties: (i) asserting the invalidity of
this Agreement, any other Basic Document, the Notes or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the Notes or the
consummation of any of the transactions contemplated by this Agreement or any
other Basic Document, (iii) seeking any determination or ruling that might
materially and adversely affect the performance by Servicer of its obligations
under, or the validity or enforceability of, this Agreement, any other Basic
Document, the Notes or the Certificates, to the extent applicable, or (iv) that
may materially and adversely affect the federal or state income, excise,
franchise or similar tax attributes of the Certificates.
SECTION 7.2. Indemnities of Servicer. (a) Servicer shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by Servicer under this Agreement.
(b) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
and any of the respective officers, directors, employees and agents of Issuer,
Owner Trustee, Indenture Trustee or Seller from any and all costs, expenses,
losses, claims, damages and liabilities (including reasonable attorneys' fees
and expenses) to the extent arising out of, or imposed upon any such Person
through, the gross negligence, willful misfeasance or bad faith (other than
errors in judgment) of Servicer in the performance of its obligations and duties
under this Agreement or in the performance of the obligations and duties of any
subservicer under any subservicing agreement.
(c) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, and Indenture Trustee and their respective officers, directors,
employees and agents from and against any taxes that may at any time be asserted
against any such Person with respect to the transactions contemplated in this
Agreement
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or in the other Basic Documents, including any sales, gross receipts, general
corporation, tangible or intangible personal property, franchise, privilege, or
license taxes, or any taxes of any kind which may be asserted (but, in the case
of all indemnified Persons other than Issuer, not including any Federal or other
income taxes arising out of transactions contemplated by this Agreement and the
other Basic Documents) against the Issuer, and costs and expenses in defending
against the same.
(d) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, Certificateholders and the Noteholders or
any of the respective officers, directors, employees and agents of Issuer, Owner
Trustee, Indenture Trustee or Seller from any and all costs, expenses, losses,
claims, damages and liabilities (including reasonable attorneys' fees and
expenses) to the extent arising out of or imposed upon any such Person as a
result of any compensation payable to any subcustodian or subservicer (including
any fees payable in connection with the release of any Receivable File from the
custody of such subservicer or in connection with the termination of the
servicing activities of such subservicer with respect to any Receivable) whether
pursuant to the terms of any subservicing agreement or otherwise.
(e) Servicer shall indemnify, defend and hold harmless Issuer, Owner
Trustee, Indenture Trustee, Seller, the Certificateholders and the Noteholders
or any of the respective directors, officers, employees and agents of Issuer,
Owner Trustee, Indenture Trustee and Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, including reasonable fees and
expenses of counsel and expenses of litigation, arising out of or resulting from
the use, ownership, or operation of any Financed Vehicle.
(f) Servicer shall indemnify, defend and hold harmless Indenture Trustee
and Owner Trustee or any of their respective officers, directors, employees and
agents from any and all costs, expenses, losses, claims, damages and liabilities
(including reasonable attorneys' fees and expenses) to the extent arising out of
the transactions contemplated by the Indenture, the Sale and Servicing Agreement
and the Administration Agreement unless such costs, expenses, losses, claims,
damages and liabilities are due to the negligence, willful misfeasance or bad
faith of the Indenture Trustee or Owner Trustee, respectively.
Indemnification under this Section shall survive the resignation or removal of
Owner Trustee or Indenture Trustee and the termination of this Agreement or the
Indenture or the Trust Agreement, as applicable, and shall include reasonable
fees and expenses of counsel and other expenses of litigation. If Servicer shall
have made any indemnity payments pursuant to this Section and the Person to or
on behalf of whom such payments are made thereafter shall collect any of such
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amounts from others, such Person shall promptly repay such amounts to Servicer,
without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (a) into which Servicer may be merged or consolidated,
(b) which may result from any merger or consolidation to which Servicer shall be
a party, (c) which may succeed to the properties and assets of Servicer,
substantially as a whole, or (d) 50% of the voting stock of which is owned
directly or indirectly by KeyCorp, may become the successor to Servicer;
provided that, unless Key Bank USA is the surviving party to such transaction,
Servicer hereby covenants that it will not consummate any of the foregoing
transactions except upon satisfaction of the following: (i) the surviving
Servicer if other than Key Bank USA, executes an agreement of assumption to
perform every obligation of Servicer under this Agreement, (ii) immediately
after giving effect to such transaction, no representation or warranty made
pursuant to Section 7.1 shall have been breached and no Servicer Termination
Event, and no event that, after notice or lapse of time, or both, would become a
Servicer Termination Event shall have occurred and be continuing, (iii) Servicer
shall have delivered to Owner Trustee and Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such consolidation,
merger or succession and such agreement of assumption comply with this Section
and that all conditions precedent, if any, provided for in this Agreement
relating to such transaction have been complied with, and that the Rating Agency
Condition shall have been satisfied with respect to such transaction, (iv) the
surviving Servicer shall have a consolidated net worth at least equal to that of
the predecessor Servicer, and (v) such transaction will not result in a material
adverse Federal or state tax consequence to Issuer, the Noteholders or the
Certificateholders.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither
Servicer nor any of its directors, officers, employees or agents shall be under
any liability to Issuer, the Noteholders or the Certificateholders, except as
provided under this Agreement, for any action taken or for refraining from the
taking of any action by Servicer or any subservicer pursuant to this Agreement
or for errors in judgment; provided that this provision shall not protect
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties (except for errors in judgment) or by reason of reckless
disregard of obligations and duties under this Agreement. Servicer or any
subservicer and any of their respective directors, officers, employees or agents
may rely in good faith on any document of any kind prima facie properly executed
and submitted by any Person respecting any matters arising under this Agreement.
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Except as provided in this Agreement, Servicer shall not be under any
obligation to appear in, prosecute or defend any legal action that shall be
incidental to its duties to service the Receivables in accordance with this
Agreement, and that in its opinion may involve it in any expense or liability;
provided that Servicer, may (but shall not be required to) undertake any
reasonable action that it may deem necessary or desirable in respect of the
Basic Documents to protect the interests of the Certificateholders under this
Agreement and the Noteholders under the Indenture. In such event, the legal
expense and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Servicer.
SECTION 7.5. Key Bank USA Not To Resign as Servicer. Subject to the
provisions of Section 7.3, Key Bank USA hereby agrees not to resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties hereunder shall no
longer be permissible under applicable law or if such resignation is required by
regulatory authorities. Notice of any such determination permitting the
resignation of Key Bank USA as Servicer shall be communicated to Owner Trustee
and Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to Owner Trustee and Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the earlier of Indenture Trustee or a Successor Servicer
having assumed the responsibilities and obligations of the resigning Servicer in
accordance with Section 8.2 or the date upon which any regulatory authority
requires such resignation.
SECTION 7.6. Existence. Subject to the provisions of Section 7.3, during
the term of this Agreement, Key Bank USA will keep in full force and effect its
existence, rights and franchises as a national banking association under the
laws of the jurisdiction of its organization.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity, become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as expressly
provided herein or in any Basic Document. Except as set forth herein or in the
other Basic Documents, Notes and Certificates so owned by or pledged to Servicer
or any such Affiliate shall have an equal and proportionate benefit under the
provisions of this Agreement and the other Basic Documents, without preference,
priority, or distinction as among all of the Notes and Certificates.
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ARTICLE VIII. SERVICER TERMINATION EVENTS.
SECTION 8.1. Servicer Termination Event. If any one of the following
events (a "Servicer Termination Event") shall occur and be continuing:
(a) any failure by Servicer to deliver to Indenture Trustee and Owner
Trustee the Servicer's Report in accordance with Section 4.9, or any failure by
Servicer or Seller to deliver to Indenture Trustee or Owner Trustee for deposit
in any of the Trust Accounts or the Certificate Distribution Account any
required payment or to direct Indenture Trustee or Owner Trustee to make any
required distributions therefrom that shall continue unremedied for a period of
five Business Days after written notice of such failure is received by Servicer
from Owner Trustee or Indenture Trustee or after discovery of such failure by an
Authorized Officer of Servicer; or
(b) failure on the part of Servicer or Seller duly to observe or to
perform in any material respect any other covenants or agreements of Servicer or
Seller, as applicable, set forth in this Agreement or any other Basic Document
to which it is a party, which failure shall (i) materially and adversely affect
the rights of either the Certificateholders or Noteholders and (ii) continue
unremedied for a period of 60 days after the date on which written notice of
such failure, requiring the same to be remedied, shall have been given (A) to
Servicer by Owner Trustee or Indenture Trustee or (B) to Servicer and to Owner
Trustee and Indenture Trustee by the Holders of Notes evidencing not less than
25% of the Outstanding Amount of the Notes or Holders of Certificates evidencing
not less than 25% of the outstanding Certificate Balance, as applicable (or for
such longer period, not in excess of 120 days, as may be reasonably necessary to
remedy such default; provided that such default is capable of remedy within 120
days and Servicer delivers an Officer's Certificate to Owner Trustee and
Indenture Trustee to such effect and to the effect that Servicer or Seller, as
applicable, has commenced or will promptly commence, and will diligently pursue,
all reasonable efforts to remedy such default); or
(c) an Insolvency Event occurs with respect to Servicer, Seller, any
Seller Affiliate or any of their respective successors;
then, and in each and every case, so long as any Servicer Termination Event
shall not have been remedied, either Indenture Trustee, or the Holders of Notes
evidencing greater than 50% of the Outstanding Amount of the Notes (or, if no
Notes are then Outstanding, either the Owner Trustee or the Holders of
Certificates evidencing greater than 50% of the Certificate Balance), by notice
then given in writing to Servicer (and to Owner Trustee or Indenture Trustee, as
applicable, if given by the Holders) may terminate all the rights and
obligations
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(other than the obligations set forth in Section 7.2) of Servicer under this
Agreement. On or after the receipt by Servicer of such written notice, all
authority and power of Servicer under this Agreement, whether with respect to
the Notes, the Certificates or the Receivables or otherwise, shall, without
further action, pass to and be vested in Indenture Trustee or such Successor
Servicer as may be appointed under Section 8.2; and, without limitation,
Indenture Trustee and Owner Trustee are hereby authorized and empowered to
execute and deliver, on behalf of the predecessor Servicer, as attorney-in-fact
or otherwise, any and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate to effect the
purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise. The
predecessor Servicer shall cooperate with the Successor Servicer, Indenture
Trustee and Owner Trustee in effecting the termination of the responsibilities
and rights of the predecessor Servicer under this Agreement, including the
transfer to the Successor Servicer for administration by it of all cash amounts
that shall at the time be held by the predecessor Servicer for deposit, or shall
thereafter be received by it with respect to a Receivable. Servicer shall
promptly transfer its electronic records relating to the Receivables to the
Successor Servicer in such electronic form as the Successor Servicer may
reasonably request and shall promptly transfer to the Successor Servicer all
other records, correspondence and documents necessary for the continued
servicing of the Receivables in the manner and at such times as the Successor
Servicer shall reasonably request. All reasonable costs and expenses (including
attorneys' fees) incurred in connection with transferring the Receivable Files
to the Successor Servicer and amending this Agreement to reflect such succession
as Servicer pursuant to this Section shall be paid by the predecessor Servicer
upon presentation of reasonable documentation of such costs and expenses. Upon
receipt of notice of the occurrence of a Servicer Termination Event, Indenture
Trustee shall give notice thereof to the Rating Agencies.
SECTION 8.2. Appointment of Successor. (a) Upon Servicer's receipt of
notice of termination, pursuant to Section 8.1 or Servicer's resignation (if and
to the extent permitted in accordance with the terms of this Agreement), the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the earlier of (i) the date 45 days from the delivery to Owner Trustee and
Indenture Trustee of written notice of such resignation (or written confirmation
of such notice) in accordance with the terms of this Agreement and (ii) the date
upon which the predecessor Servicer shall become unable to act as Servicer, as
specified in the notice of resignation and accompanying Opinion of Counsel. In
the event of Servicer's termination or resignation hereunder, Indenture Trustee
shall appoint a Successor
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Servicer, and the Successor Servicer shall accept its appointment by a written
assumption in form acceptable to Owner Trustee and Indenture Trustee. In the
event that a Successor Servicer has not been appointed at the time when the
predecessor Servicer has ceased to act as Servicer in accordance with this
Section , Indenture Trustee without further action shall automatically be
appointed the Successor Servicer and Indenture Trustee shall be entitled to the
Servicing Fee. Notwithstanding the above, Indenture Trustee shall, if it shall
be unwilling or unable so to act, appoint or petition a court of competent
jurisdiction to appoint, any established institution, having a net worth of not
less than $50,000,000 and whose regular business shall include the servicing of
motor vehicle receivables, as the successor to Servicer under this Agreement;
provided, that the appointment of any such Successor Servicer will not result in
the withdrawal or reduction of the outstanding rating assigned to the
Certificates or Notes by any Rating Agency.
(b) Upon appointment, the Successor Servicer (including Indenture Trustee
acting as Successor Servicer) shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the responsibilities, duties
and liabilities arising thereafter relating thereto placed on the predecessor
Servicer and shall be entitled to the Servicing Fee and all the rights granted
to the predecessor Servicer by the terms and provisions of this Agreement. No
Successor Servicer shall be liable for any acts or omissions of any predecessor
Servicer.
(c) A transfer of servicing hereunder shall not affect the rights and
duties of the parties hereunder (including the obligations and indemnities of
Seller pursuant to Sections 3.3, 4.3, 6.1 and 6.3 or, with respect to
obligations and indemnities arising prior to, or concurrently with, a transfer
of servicing hereunder, the predecessor Servicer pursuant to Section 4.7, 7.1 or
7.2) other than those relating to the management, administration, servicing,
custody or collection of the Receivables and the other rights and properties
included in the Owner Trust Estate. The Successor Servicer shall, upon its
appointment pursuant to Section 8.2 and as part of its duties and
responsibilities under this Agreement, promptly take all action it deems
necessary or appropriate so that the predecessor Servicer (in whatever capacity)
is paid or reimbursed all amounts it is entitled to receive under this Agreement
on each Distribution Date subsequent to the date on which it is terminated as
Servicer hereunder. Without limiting the generality of the foregoing, the
predecessor Servicer will be entitled to receive all accrued and unpaid
Servicing Fees through and including the effective date of the termination of
the predecessor Servicer.
SECTION 8.3. Payment of Servicing Fee. If Servicer shall be replaced,
the predecessor Servicer shall be entitled to receive any accrued and unpaid
Servicing Fees through the date of the Successor Servicer's acceptance hereunder
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and any Supplemental Servicing Fees accrued and unpaid or received prior to such
date, in each case, in accordance with Section 4.8.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon any
termination of, or appointment of a successor to, Servicer pursuant to this
Article VIII, Owner Trustee shall give prompt written notice thereof to
Certificateholders and Indenture Trustee shall give prompt written notice
thereof to Noteholders subject to the Rating Agency Condition.
SECTION 8.5. Waiver of Past Defaults. The Holders of Notes evidencing not
less than a majority of the Outstanding Amount of the Notes (or the Holders of
Certificates evidencing not less than a majority of the outstanding Certificate
Balance, as applicable, in the case of any default which does not adversely
affect Indenture Trustee or the Noteholders) may, on behalf of all Noteholders
and Certificateholders, waive in writing any default by Servicer in the
performance of its obligations hereunder and its consequences, except a default
in making any required deposits to any of the Trust Accounts in accordance with
this Agreement. Upon any such waiver of a past default, such default shall cease
to exist, and any Servicer Termination Event arising therefrom shall be deemed
to have been remedied for every purpose of this Agreement. No such waiver shall
extend to any subsequent or other default or impair any right consequent
thereto.
ARTICLE IX. TERMINATION.
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice. (a)
On the last day of any Collection Period immediately preceding a Determination
Date as of which the then outstanding Pool Balance is 5% or less of the Original
Pool Balance, Seller shall have the option to purchase the Owner Trust Estate,
other than the Trust Accounts, and the Certificate Distribution Account and any
funds or investments therein. To exercise such option, Seller shall deposit
pursuant to Section 5.4 in the Collection Account an amount which, when added to
the amounts on deposit in the Collection Account for such Distribution Date,
equals the sum of (a) the unpaid principal amount of the then outstanding Class
B Notes, plus accrued and unpaid interest thereon, plus (b) the Certificate
Balance plus accrued and unpaid interest thereon. The Class B Notes and the
Certificates will be redeemed concurrently therewith.
(b) Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, the
Certificateholders will succeed to the rights of the Noteholders hereunder.
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(c) Notice of any termination of Issuer shall be given by Servicer to
Owner Trustee, Indenture Trustee and the Rating Agencies as soon as practicable
after Servicer has received notice thereof.
ARTICLE X. MISCELLANEOUS PROVISIONS.
SECTION 10.1. Amendment. (a) This Agreement may be amended by
Seller, Servicer, Owner Trustee and Indenture Trustee (which consent may not
be unreasonably withheld), but without the consent of any of the Noteholders or
the Certificateholders:
(i) to cure any ambiguity or defect, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions in this
Agreement or of modifying in any manner the rights of the Noteholders or
the Certificateholders; provided that such action shall not, as evidenced
by an Opinion of Counsel delivered to Owner Trustee and Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder
or Certificateholder;
(ii) (A) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable all or a portion of Issuer to
qualify as, and to permit an election to be made to cause all or a portion
of Issuer to be treated as, a "financial asset securitization investment
trust" as described in the provisions of the "Small Business Job
Protection Act of 1996," or to enable all or a portion of the Issuer to
qualify and an election to be made for similar treatment under such
comparable subsequent federal income tax provisions as may ultimately be
enacted into law, and (B) in connection with any such election, to modify
or eliminate existing provisions set forth in this Agreement relating to
the intended federal income tax treatment of the Notes or Certificates and
Issuer in the absence of the election; it being a condition to any such
amendment that each Rating Agency will have notified the Seller, the
Servicer, the Indenture Trustee and the Owner Trustee in writing that the
amendment will not result in a reduction or withdrawal of the rating of
any outstanding Notes or Certificates with respect to which it is a Rating
Agency; and
(iii) to add, modify or eliminate such provisions as may be
necessary or advisable in order to enable (a) the transfer to Issuer of
all or any portion of the Receivables to be derecognized under generally
accepted accounting principles ("GAAP") by Seller to Issuer, (b) Issuer to
avoid becoming a member of Seller's consolidated group under GAAP or
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(c) the Seller, any Seller Affiliate or any of their Affiliates to
otherwise comply with or obtain more favorable treatment under any law or
regulation or any accounting rule or principle; it being a condition to
any such amendment that each Rating Agency will have notified the Seller,
the Servicer, the Indenture Trustee and the Owner Trustee in writing that
the amendment will not result in a reduction or withdrawal of the rating
of any outstanding Notes or Certificates with respect to which it is a
Rating Agency.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Owner Trustee and Indenture Trustee, with the consent of the Holders
of Notes evidencing not less than a majority of the Outstanding Amount of the
Notes and the consent of the Holders of Certificates evidencing not less than a
majority of the Certificate Balance for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided that no such amendment shall (i) increase or reduce
in any manner the amount of, or accelerate or delay the timing of, collections
of payments on Receivables or distributions that shall be required to be made
for the benefit of the Noteholders or the Certificateholders or (ii) reduce the
aforesaid percentage of the Outstanding Amount of the Notes and the Certificate
Balance, the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all the outstanding Notes and the Holders
of all the outstanding Certificates of each class affected thereby.
(c) Prior to the execution of any such amendment or consent, Servicer
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency. Promptly after the execution of any such amendment or
consent, Servicer shall furnish written notification of the substance of such
amendment or consent to each Noteholder and Certificateholder.
(d) It shall not be necessary for the consent of Certificateholders or
Noteholders pursuant to this Section to approve the particular form of any
proposed amendment or consent, but it shall be sufficient if such consent shall
approve the substance thereof.
(e) Prior to the execution of any amendment to this Agreement, Owner
Trustee and Indenture Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and that all conditions precedent to
the execution and delivery of such amendment have been satisfied and the Opinion
of Counsel referred to in Section 10.2(i)(1) has been delivered. Owner Trustee
and Indenture Trustee may, but shall not be obligated to, enter into any such
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amendment which affects Owner Trustee's or Indenture Trustee's, as applicable,
own rights, duties or immunities under this Agreement or otherwise.
SECTION 10.2. Protection of Title to Trust Property. (a) Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain and protect the interest of Issuer
and the interests of Indenture Trustee in the Receivables and the proceeds
thereof. Seller shall deliver (or cause to be delivered) to Owner Trustee and
Indenture Trustee file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) Neither Seller nor Servicer shall change its name, identity or
corporate structure in any manner that would, could or might make any financing
statement or continuation statement filed in accordance with paragraph (a) above
seriously misleading within the meaning of Section 9-402(7) of the UCC, unless
it shall have given Owner Trustee and Indenture Trustee at least five days'
prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) Each of Seller and Servicer shall have an obligation to give Owner
Trustee and Indenture Trustee at least 60 days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file any such amendment or new financing
statement. Servicer shall at all times maintain each office from which it shall
service Receivables, and its principal executive office, within the United
States of America.
(d) Servicer shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit (i) the reader thereof to know at
any time the status of such Receivable, including payments and recoveries made
and payments owing (and the nature of each) and (ii) reconciliation between
payments or recoveries on (or with respect to) each Receivable and the amounts
from time to time deposited in the Collection Account in respect of such
Receivable.
(e) Servicer shall maintain its computer systems so that, from and after
the time of sale under this Agreement of the Receivables, Servicer's master
computer records (including any backup archives) that refer to a Receivable
shall indicate clearly the interest of Issuer and Indenture Trustee in such
Receivable and that such Receivable is owned by Issuer and has been pledged to
Indenture Trustee pursuant to the Indenture. Indication of Issuer's and
Indenture Trustee's
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interest in a Receivable shall be deleted from or modified on Servicer's
computer systems when, and only when, the related Receivable shall have been
paid in full or repurchased by Seller or purchased by Servicer.
(f) If at any time Seller or Servicer shall propose to sell, grant a
security interest in or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender or other transferee, Servicer
shall give to such prospective purchaser, lender or other transferee computer
tapes, records or printouts (including any restored from backup archives) that,
if they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned by Issuer and has been
pledged to Indenture Trustee.
(g) Servicer shall permit Indenture Trustee, Owner Trustee and their
respective agents at any time during normal business hours to inspect, audit and
make copies of and abstracts from Servicer's records regarding any Receivable.
(h) Upon request at any time Owner Trustee or Indenture Trustee shall have
reasonable grounds to believe that such request is necessary in connection with
the performance of its duties under this Agreement or any of the Basic
Documents, Servicer shall furnish to Owner Trustee or to Indenture Trustee,
within thirty Business Days, a list of all Receivables (by contract number and
name of Obligor) then owned by Issuer, together with a reconciliation of such
list to the Schedule of Receivables and to each of Servicer's Reports furnished
before such request indicating removal of Receivables from Issuer.
(i) Servicer shall deliver to Owner Trustee and Indenture Trustee:
(1) promptly after the execution and delivery of this Agreement and
of each amendment thereto, an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of Issuer and Indenture Trustee in the
Receivables, and reciting the details of such filings or referring to
prior Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such counsel, no such action shall be necessary to
preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during
such 120-day period, either (A) stating that, in the opinion of such
counsel, all financing statements and continuation statements have been
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executed and filed that are necessary fully to preserve and protect the
interest of Issuer and Indenture Trustee in the Receivables, and reciting
the details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of such
counsel, no such action shall be necessary to preserve and protect such
interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall
specify any action necessary (as of the date of such opinion) to be taken in the
following year to preserve and protect such interest.
(j) Seller shall, to the extent required by applicable law, cause the
Certificates and the Notes to be registered with the Commission pursuant to
Section 12(b) or Section 12(g) of the Exchange Act within the time periods
specified in such sections.
SECTION 10.3. Notices. All demands, notices and communications upon or to
Seller, Servicer, Owner Trustee, Indenture Trustee or the Rating Agencies under
this Agreement shall be in writing, personally delivered, sent by overnight
courier or mailed by certified mail, return receipt requested, and shall be
deemed to have been duly given upon receipt (a) in the case of Seller, to Key
Consumer Acceptance Corporation, Key Tower, 127 Public Square, Cleveland, Ohio
44114-1306, Attention: President (b) in the case of Servicer, to Key Bank USA,
Key Tower, 127 Public Square, Cleveland, Ohio 44114-1306, Attention: Chief
Financial Officer, (c) in the case of Issuer or Owner Trustee, at the Corporate
Trust Office, (d) in the case of Indenture Trustee, at the Corporate Trust
Office, (e) in the case of Moody's, to Moody's Investors Service, Inc., to 99
Church Street, New York, New York 10004, Attention of Asset Backed Securities
Group, (f) in the case of Standard & Poor's, to Standard & Poor's Ratings
Services, a division of The McGraw-Hill Companies, Inc., 26 Broadway (15th
Floor), New York, New York 10004, Attention of Asset Backed Surveillance
Department, and (g) in the case of Fitch, to Fitch Information Services, Inc.,
1201 East 7th Street, Powell, Wyoming 82435. Any notice required or permitted to
be mailed to a Noteholder or Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Person as shown in the Note
Register or the Certificate Register, as applicable. Any notice so mailed within
the time prescribed in this Agreement shall be conclusively presumed to have
been duly given, whether or not the Noteholder or Certificateholder shall
receive such notice.
SECTION 10.4. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 3.4, 4.1, 6.4 and 7.3 and as
provided in the provisions of this Agreement concerning the resignation of
Servicer, this Agreement may not be assigned by Seller or Servicer without the
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prior written consent of the Owner Trustee, Indenture Trustee, the Noteholders
evidencing not less than 66 2/3% of the Outstanding Amount of the Notes and the
Certificateholders evidencing not less than 66 2/3% of the outstanding
Certificate Balance.
SECTION 10.5. Limitations on Rights of Others. The provisions of this
Agreement are solely for the benefit of Seller, Servicer, Issuer, Owner Trustee
and for the benefit of the Certificateholders and the Noteholders, as
third-party beneficiaries, and nothing in this Agreement, whether express or
implied, shall be construed to give to any other Person any legal or equitable
right, remedy or claim in the Owner Trust Estate or under or in respect of this
Agreement or any covenants, conditions or provisions contained herein.
SECTION 10.6. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not create or render unenforceable
such provision in any other jurisdiction.
SECTION 10.7. Separate Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 10.8. Headings. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
SECTION 10.9. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.10. Assignment to Indenture Trustee. Seller hereby acknowledges
and consents to any mortgage, pledge, assignment and grant of a security
interest by Issuer to Indenture Trustee pursuant to the Indenture for the
benefit of the Noteholders of all right, title and interest of Issuer in, to and
under the Receivables and/or the assignment of any or all of Issuer's rights and
obligations hereunder to Indenture Trustee.
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SECTION 10.11. Nonpetition Covenant. Notwithstanding any prior termination
of this Agreement, Servicer and Seller shall not, prior to the date which is one
year and one day after the termination of this Agreement with respect to Issuer,
acquiesce, petition or otherwise invoke or cause Issuer to invoke the process of
any court or government authority for the purpose of commencing or sustaining a
case against Issuer under any Federal or state bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of Issuer or any substantial part of its
property, or ordering the winding up or liquidation of the affairs of Issuer.
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by Chase Manhattan Bank Delaware not in its
individual capacity but solely in its capacity as Owner Trustee of Issuer and in
no event shall Chase Manhattan Bank Delaware in its individual capacity or,
except as expressly provided in the Trust Agreement, as Owner Trustee have any
liability for the representations, warranties, covenants, agreements or other
obligations of Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of Issuer. For all purposes of this Agreement, in the
performance of its duties or obligations hereunder or in the performance of any
duties or obligations of Issuer hereunder, Owner Trustee shall be subject to,
and entitled to the benefits of, the terms and provisions of Articles VI, VII
and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by Bankers Trust Company not in its individual
capacity but solely as Indenture Trustee and in no event shall Bankers Trust
Company have any liability for the representations, warranties, covenants,
agreements or other obligations of Issuer hereunder or in any of the
certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of Issuer.
SECTION 10.13. Further Assurances. Seller and the Servicer agree to do and
perform, from time to time, any and all acts and to execute any and all further
instruments required or reasonably requested by Owner Trustee or Indenture
Trustee more fully to effect the purposes of this Agreement, including, without
limitation, the execution of any financing statements or continuation statements
relating to the Receivables for filing under the provisions of the UCC of any
applicable jurisdiction.
SECTION 10.14. No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Owner Trustee, Indenture
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Trustee, the Noteholders or the Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy,
power or privilege. The rights, remedies, powers and privileges therein provided
are cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 10.15. Pennsylvania Motor Vehicle Sales Finance Act Licenses. The
Owner Trustee and Indenture Trustee, in their individual capacities, shall use
their respective best efforts to maintain, and the Owner Trustee shall cause the
Issuer to use its best efforts to obtain within 90 days after the date hereof
and to maintain, the effectiveness of all licenses required under the
Pennsylvania Motor Vehicle Sales Finance Act in connection with this Agreement
and the Basic Documents and the transactions contemplated hereby and thereby
until such time as the Issuer shall terminate in accordance with the terms of
the Trust Agreement. Servicer shall be responsible for the payment of all fees
and expenses of the Issuer, the Owner Trustee and the Indenture Trustee paid by
any of them in connection with any of their obligations under the Basic
Documents to obtain or maintain any required license under the Pennsylvania
Motor Vehicle Sales Finance Act.
52
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
KEY AUTO FINANCE TRUST 1997-1
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity, but solely as Owner Trustee
By: /s/ John J. Cashin
__________________________
Name: John J. Cashin
Title: Senior Trust Officer
KEY CONSUMER ACCEPTANCE
CORPORATION, Seller
By: /s/ Joseph A. Pampush
__________________________
Name: Joseph A. Pampush
Title: Vice President -- Controller
KEY BANK USA, NATIONAL
ASSOCIATION, Servicer,
By: /s/ Joseph A. Pampush
__________________________
Name: Joseph A. Pampush
Title: Assistant Secretary
S-1
<PAGE> 59
BANKERS TRUST COMPANY, a New York banking
corporation, not in its individual capacity but
solely as Indenture Trustee,
By: /s/ Melissa Kaye Adelson
__________________________
Name: Melissa Kaye Adelson
Title: Vice President
S-2
<PAGE> 60
SCHEDULE A
(Delivered on Disk to Trustee and Owner Trustee)
Schedule A-1
<PAGE> 61
SCHEDULE B
Location of Receivables Files
The Receivables sold by each Seller Affiliate to Seller and sold by Seller to
Issuer are located at the offices of such Seller Affiliate listed below.
Key Bank USA, National Association
Key Tower
127 Public Square
Cleveland, Ohio 44114-1306
Records Management
5000 Tiedeman Road
Brooklyn, Ohio 44144
OH-01-50-0602
Nancy Morris
Records Management
431 East Park Center Boulevard
Boise, Idaho 83706
ID-56-PC-0104
Sherrie Crisman
Records Management
22 Corporate Woods Boulevard
Albany, New York 12211
NY-31-22-0262
Pat Savoie
AutoFinance Group, Inc.
601 Oakmont Lane
Suite 110
Westmont, Illinois 60559-5549
Schedule B-1
<PAGE> 62
EXHIBIT A
Form of Servicer's Report
Exhibit A-1
