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SECURITIES AND EXCHANGE COMMISSION
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) December 3, 1997
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Key Consumer Acceptance Corporation
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(Exact Name of Registrant as Specified in its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
333-38211 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) 689-3335
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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.
EXHIBIT
NO. DOCUMENT DESCRIPTION
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1.1 Underwriting Agreement among Key Consumer Acceptance
Corporation, Key Bank USA, National Association, AutoFinance
Group, Inc., and Credit Suisse First Boston Corporation, as
representative of the underwriters, dated as of December 4,
1997.
4.1 Indenture between Key Auto Finance Trust 1997-2, and Bankers
Trust Company, as indenture trustee, dated as of December
16, 1997.
4.2 Trust Agreement between Key Consumer Acceptance Corporation,
as depositor, and Chase Manhattan Bank Delaware, as owner
trustee, dated as of November 24, 1997.
4.3 Amended and Restated Trust Agreement between Key Consumer
Acceptance Corporation and Chase Manhattan Bank Delaware, as
owner trustee, dated as of December 16, 1997.
99.1 Sale and Servicing Agreement among Key Auto Finance
Trust 1997-2, Key Consumer Acceptance Corporation, as
seller, Key Bank, USA, National Association, as servicer,
and Bankers Trust Company, as indenture trustee, dated as
of December 16, 1997.
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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: January 5, 1998 By: /s/ Craig T. Platt
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Name: Craig T. Platt
Title: President and Chief Executive Officer
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INDEX TO EXHIBITS
EXHIBIT
No. Document Description
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1.1 Underwriting Agreement among Key Consumer Acceptance
Corporation, Key Bank USA, National Association, AutoFinance
Group, Inc., and Credit Suisse First Boston Corporation, as
representative of the underwriters, dated as of December 4,
1997.
4.1 Indenture between Key Auto Finance Trust 1997-2, and Bankers
Trust Company, as indenture trustee, dated as of December 16,
1997.
4.2 Trust Agreement between Key Consumer Acceptance Corporation,
as depositor, and Chase Manhattan Bank Delaware, as owner
trustee, dated as of November 24, 1997.
4.3 Amended and Restated Trust Agreement between Key Consumer
Acceptance Corporation and Chase Manhattan Bank Delaware, as
owner trustee, dated as of December 16, 1997.
99.1 Sale and Servicing Agreement among Key Auto Finance Trust
1997-2, Key Consumer Acceptance Corporation, as seller, Key
Bank, USA, National Association, as servicer, and Bankers
Trust Company, as indenture trustee, dated as of December 16,
1997.
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EXHIBIT 1.1
KEY AUTO FINANCE TRUST 1997-2
$268,000,000 Class A-1 5.835% Asset Backed
Notes $132,000,000 Class A-2 5.99% Asset
Backed Notes $150,000,000 Class A-3 6.10%
Asset Backed Notes $148,000,000 Class A-4
6.15% Asset Backed Notes $151,800,000 Class
A-5 6.25% Asset Backed Notes $125,000,000
Class A-P 6.15% Asset Backed Notes
$63,620,000 Class B 6.30% Asset Backed Notes
$24,300,000 Class C 6.65% Asset Backed Notes
KEY CONSUMER ACCEPTANCE CORPORATION
(Seller)
KEY BANK USA, NATIONAL ASSOCIATION
(Servicer)
UNDERWRITING AGREEMENT
December 4, 1997
CREDIT SUISSE FIRST
BOSTON CORPORATION,
As Representative of the
Underwriters Listed in
Schedule I
(the "REPRESENTATIVE")
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 the Underwriters listed in Schedule
I hereto (the "Underwriters") $268,000,000 aggregate principal amount of Class
A-1 5.835% Asset Backed Notes (the "CLASS A-1 NOTES"), $132,000,000 aggregate
principal amount of Class A-2 5.99% Asset Backed Notes (the "CLASS A-2 NOTES"),
$150,000,000 aggregate principal amount of Class A-3 6.10% Asset Backed Notes
(the "CLASS A-3 NOTES"),$148,000,000 aggregate principal amount of Class A-4
6.15% Asset Backed Notes (the "CLASS A-4 NOTES"), $151,800,000 aggregate
principal amount of Class A-5 6.25% Asset Backed Notes (the "CLASS A-5 NOTES"),
$125,000,000 aggregate principal amount of Class A-P 6.15% Asset Backed Notes
(the "CLASS A-P NOTES"),$63,620,000 aggregate principal amount of Class B 6.30%
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Asset Backed Notes (the "CLASS B NOTES") and $24,300,000 aggregate principal
amount of Class C 6.65% Asset Backed Notes (the "CLASS C NOTES," and, together
with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes, the Class A-P Notes, and the Class B Notes, the
"NOTES"). The Notes are issued by the Key Auto Finance Trust 1997-2 (the
"TRUST"). The Trust also will issue $17,280,000 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 (the "RECEIVABLES") and certain monies
received under the Receivables after November 30, 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 an Amended and Restated
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
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Commission thereunder (the "RULES AND REGULATIONS"), and filed with the
Securities and Exchange Commission (the "COMMISSION") a registration statement
(Reg. No. 333-38211), including a prospectus, relating to the Securities. The
Seller has also prepared an ABS term sheet for the Notes (the "ABS NOTE TERM
SHEET") in conformity in all material respects with the Act, the Rules and
Regulations and all requirements applicable to ABS term sheets and computational
materials set forth in no-action letters issued by the Commission. 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".
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 Underwriters as follows:
1. The Seller agrees to sell and deliver to the Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally and not jointly, from the
Seller, the respective aggregate principal amounts and classes of Notes set
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forth opposite such Underwriter's name in Schedule I hereto. 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 Underwriters intend (i) to make a
public offering of the Notes purchased by the Underwriters hereunder as soon
after the Registration Statement and this Agreement have become effective as in
the judgment of the Seller and the Representative is advisable and (ii)
initially to offer the Notes purchased by the Underwriters hereunder upon the
terms set forth in the Prospectus.
3. Payment for the Notes purchased by the Underwriters 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 December 16, 1997, or at such other
time on the same or such other date, not later than the fifth Business Day
thereafter, as the Representative and the 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.
Payment for the Notes purchased by the Underwriters hereunder shall be
made against delivery to the Representative for the respective accounts of the
Underwriters 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 Representative 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
Underwriters of the Notes duly paid by the Seller. The Seller shall make such
definitive certificates representing the Notes available for inspection by the
Representative 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 each 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
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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 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 any
Underwriter through the Representative expressly for use in the
Registration Statement or the Prospectus (collectively, "UNDERWRITER
INFORMATION"). Each Participating Entity hereby agrees with the
Underwriters 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 and the clause after the comma in the first sentence in the
third paragraph under the caption "Underwriting" in the Prospectus
Supplement.
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(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 Representative 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, 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
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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 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.
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(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 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 LLP are independent public accountants with
respect to the Participating Entities within the meaning of the Act and
the Rules and Regulations.
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5. Each Participating Entity covenants and agrees (severally and not
jointly) with the Underwriters 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 Representative a copy of the proposed amendment or
supplement and giving the Representative 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 the Seller will cause
the ABS Note Term Sheet to be filed with the Commission pursuant to a
Current Report on Form 8-K within the second business day following the
first day the ABS Note Term Sheet has been sent to a prospective
investor in the Notes and will provide evidence satisfactory to the
Underwriters of such timely filing. The Seller will promptly advise the
Underwriters (i) when the Prospectus, and any supplement thereto, shall
have been filed with the Commission pursuant to Rule 424(b) and the ABS
Note Term Sheet shall have been filed pursuant to a Current Report on
Form 8-K, (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 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
Representative 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
Representative, 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
each Underwriter as many copies of the Prospectus (including all
amendments and
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supplements thereto) as the Representative may reasonably
request.
(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
Underwriters a prospectus relating to the Notes is required by law to
be delivered in connection with sales by an 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 Underwriters and to the dealers (whose names and addresses the
Underwriters will furnish to the Seller) to which Notes may have been
sold by the Underwriters and upon request by the Representative to any
other dealers identified by the Representative, such amendments or
supplements to the Prospectus as may be necessary so that the
statements in the Prospectus as so amended or supplemented will not, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, be materially misleading or so that the Prospectus will
comply with applicable law. Neither your consent to, nor the
Underwriters' 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 Representative shall reasonably request and will continue such
qualification in effect so long as reasonably required for distribution
of the Notes and will pay all reasonable fees and expenses (including
fees and disbursements of counsel to the Representative 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 Representative 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 Representative all financial
information required to be sent to Securityholders pursuant to the
Basic Documents.
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(f) For the period from the date of this Agreement until the
retirement of all of the Securities the Servicer will furnish to the
Representative (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 Representative 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, 1999.
(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.
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 the ABS Note Term Sheet(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
Representative may designate (including fees and disbursements of counsel for
the Underwriters 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)
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and delivery of this Agreement, the Basic Documents and any Blue Sky Memorandum
and the furnishing to the Underwriters and dealers of copies of the Registration
Statement, the ABS Note Term Sheet 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 Underwriters' counsel other than a portion of such
fees and disbursements to be agreed between Seller and the Representative, (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 Underwriters 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 LLP shall have furnished to the Representative 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
Representative previously agreed and otherwise in form and substance
satisfactory to the Representative and Ernst & Young LLP.
(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; the ABS Note Term Sheet shall have been filed with the
Commission pursuant to a Current Report on Form 8-K within two business
days following the first day the ABS Note Term Sheet is first sent to
prospective investors in the Notes; 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 Representative.
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<PAGE> 13
(c) The Representative 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, 1996, 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.
(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 Representative, 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 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 Representative his written opinion, dated
the Closing Date, in form and substance satisfactory to the
Representative, 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,
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<PAGE> 14
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 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
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<PAGE> 15
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 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.
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<PAGE> 16
(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 Representative its
written opinion, dated the Closing Date, in form and substance
satisfactory to the Representative, 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
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<PAGE> 17
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 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
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<PAGE> 18
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 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
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<PAGE> 19
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, and (ii) the characterization of the 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 such opinions shall be in substantially the forms
previously agreed with the Representative and its counsel and in any
event satisfactory in form and in substance to the Representative and
its counsel.
(h) (i) The Representative shall have received an opinion of
Mayer, Brown & Platt, counsel to the Underwriters dated the Closing
Date, with respect to the validity of the Securities and such other
related matters as the Representative 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.
(ii) Mayer, Brown & Platt, shall have furnished its
written opinion, dated the Closing Date, that the Trust and the
Indenture Trustee will have a
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<PAGE> 20
first priority perfected security interest in the Financed Vehicles
located in the State of New York and such opinion shall be satisfactory
in form and in substance to the Representative.
(i) The Representative shall have received an opinion
addressed to the Underwriters from counsel to the Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative 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 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
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<PAGE> 21
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 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.
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<PAGE> 22
(j) The Representative shall have received from counsel for the
Indenture Trustee a favorable opinion, dated the Closing Date and
satisfactory in form and substance to the Representative 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 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
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<PAGE> 23
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 Representative also shall have received such legal
opinion, officer's certificate or other document together with a letter
from the party delivering such opinion, certificate or document
allowing the Underwriters to rely on such opinion, certificate or
document as if it were addressed to the Underwriters.
(l) The Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes, Class A-5 Notes and Class A-P Notes shall have been
rated the highest possible rating category by at least two Rating
Agencies, the Class B Notes shall have been rated at least in the "A"
category or its equivalent by at least two Rating Agencies and the
Class C Notes shall have been rated at least in the "BBB" category or
its equivalent by at least two Rating Agencies.
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<PAGE> 24
(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 and a deposit to the Class C Reserve Account in the amount of
the Class C Reserve Account Initial Deposit.
(p) The Representative 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 each Underwriter and each person, if any, who controls each 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 such 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 the ABS Note Term Sheet, or caused by any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, 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
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<PAGE> 25
or omission in the ABS Note Term Sheet shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such Underwriter) from
whom the person asserting any losses, claims or damages purchased Securities if
such untrue statement or omission or alleged untrue statement or omission made
in the ABS Note Term Sheet 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 such 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 such
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 such Underwriter or such controlling person for or to the extent
of any such losses, claims, damages or liabilities.
Each Underwriter agrees, severally and not jointly, 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
each Underwriter, but only with reference to Underwriter Information delivered
by such Underwriter.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "INDEMNIFIED PERSON") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person 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
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<PAGE> 26
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 Underwriters and such control persons of the Underwriters
shall be designated in writing by the Representative 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 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
-26-
<PAGE> 27
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
Underwriters 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 Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Participating Entities on the one hand and the
Underwriters on the other shall be deemed to be in the same respective
proportions as the net proceeds from the offering (before deducting expenses)
received by the Participating Entities and the total underwriting discounts and
the commissions received by the Underwriters, in each case as set forth in the
table on the cover of the Prospectus, bear to the aggregate public offering
price of the Securities. The relative fault of the Participating Entities on the
one hand and the Underwriters on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by the Participating Entities or by any of the Underwriters
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The Participating Entities and the Underwriters 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 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
-27-
<PAGE> 28
event shall an 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 such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations to
contribute pursuant to this Section 8 are several in proportion to the
respective aggregate principal amount of Securities set forth opposite their
names in Schedule I hereto, and not joint.
The indemnity and contribution agreements contained in this Section 8
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this Section 8
and the representations and warranties of the 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 any Underwriter or any person controlling any 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 Representative, 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 Representative is material and
adverse and which, in the judgment of the Representative, makes it impracticable
to market the Notes on the terms and in the manner contemplated in the
Prospectus.
-28-
<PAGE> 29
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 on the Closing Date (i) any Underwriter shall fail or refuse to
purchase any Notes which it has agreed to purchase hereunder on such date, (ii)
such failure or refusal shall constitute a default in the performance of such
Underwriter's obligations hereunder, and (iii) the aggregate principal amount of
Notes which such defaulting Underwriter agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Notes to be
purchased by the Underwriters on such date, the other Underwriters shall be
obligated to purchase Notes which such defaulting Underwriter agreed but failed
or refused to purchase on such date. If on the Closing Date (i) any Underwriter
shall fail or refuse to purchase Notes which it has agreed to purchase hereunder
on such date, (ii) such failure or refusal shall constitute a default in the
performance of such Underwriter's obligations hereunder, (iii) the aggregate
principal amount of Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Notes to be purchased by the
Underwriters on such date, and (iv) arrangements satisfactory to the
non-defaulting Underwriters and the Seller for the purchase of such Notes are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or any
Participating Entity. In any such case either the Representative or the Seller
shall have the right to postpone the Closing Date, but in no event for longer
than seven business days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
12. If this Agreement shall be terminated by the Underwriters, or any
one of them, 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
Underwriters' obligations cannot be fulfilled, in each case, other than in
connection with any default by the Underwriters under the preceding paragraph
eleven, the Participating Entities agree to reimburse the Underwriters,
severally, or such Underwriter which has so terminated this Agreement with
respect to itself, for all out-of-pocket expenses (including the fees and
expenses of their counsel) reasonably incurred by such
-29-
<PAGE> 30
Underwriter(s) in connection with this Agreement or the offering contemplated
thereunder.
13. Any action by the Underwriters hereunder may be taken by the
Representative alone on behalf of the Underwriters, and any such action taken by
the Representative alone shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed, delivered by hand or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be given to the
Representative, c/o 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.
14. This Agreement shall inure to the benefit of and be binding upon
the Participating Entities, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Notes from any Underwriter shall be deemed to be a successor by reason merely
of such purchase.
15. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
[SIGNATURE PAGES FOLLOW]
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<PAGE> 31
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
Underwriters in accordance with its terms.
Very truly yours,
KEY CONSUMER ACCEPTANCE CORPORATION
By: /S/ Craig T. Platt
-------------------------------
Name: Craig T. Platt
Title:President and Chief
Executive Officer
S-1
<PAGE> 32
KEY BANK USA, NATIONAL ASSOCIATION
By: /S/ Craig T. Platt
-------------------------------
Name: Craig T. Platt
Title: Senior Vice-President
S-2
<PAGE> 33
AUTOFINANCE GROUP, INC.
By: /s/ Blair T. Nance
-------------------------------
Name: Blair T. Nance
Title:Chief Financial Officer
S-3
<PAGE> 34
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the date
first above written.
CREDIT SUISSE FIRST BOSTON
CORPORATION, As Representative
of the Underwriter
By:/s/ Philip Weingord
-------------------------------
Name: Philip Weingord
Title: Managing Director
S-4
<PAGE> 35
SCHEDULE I
<TABLE>
<CAPTION>
Initial Initial Initial Initial Initial
Principal Amount Principal Amount Principal Amount Principal Amount Principal Amount
of Class A-1 of Class A-2 of Class A-3 of Class A-4 of Class A-5
Asset-Backed Asset-Backed Asset-Backed Asset-Backed Asset-Backed
Notes Notes Notes Notes Notes
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Credit Suisse First $134,000,000 $66,000,000 $75,000,000 $74,000,000 $75,900,000
============ =========== =========== =========== ===========
Boston Corporation
Key Capital Markets, $134,000,000 $66,000,000 $75,000,000 $74,000,000 $75,900,000
Inc. ============ =========== =========== =========== ===========
Total: $268,000,000 $132,000,000 $150,000,000 $148,000,000 $151,800,000
============ ============ ============ ============ ============
Purchase Price: 99.825000% 99.770000% 99.687500% 99.646875% 99.609375%
</TABLE>
<TABLE>
<CAPTION>
Initial Initial Initial
Principal Amount Principal Amount Principal Amount
of Class A-P of Class B of Class C
Asset-Backed Asset-Backed Asset-Backed
Notes Notes Notes Total
------- ------- ------- ------
<S> <C> <C> <C> <C>
Credit Suisse First $62,500,000 $31,810,000 $12,150,000 $531,360,000
=========== =========== =========== ============
Boston Corporation
Key Capital Markets, $62,500,000 $31,810,000 $12,150,000 $531,360,000
Inc. =========== =========== =========== ============
Total: $125,000,000 $63,620,000 $24,300,000 $1,062,720,000
============ =========== =========== ==============
Purchase Price: 99.578125% 99.365625% 99.381250% $1,059,281,766.88
</TABLE>
<PAGE> 36
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
II-1
<PAGE> 37
provisions of a contract that purport to require waiver 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> 38
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 4.1
================================================================================
KEY AUTO FINANCE TRUST 1997-2
Class A-1 5.835%
Asset Backed Notes
Class A-2 5.99%
Asset Backed Notes
Class A-3 6.10%
Asset Backed Notes
Class A-4 6.15%
Asset Backed Notes
Class A-5 6.25%
Asset Backed Notes
Class A-P 6.15%
Asset Backed Notes
Class B 6.30% Asset Backed Notes
Class C 6.65% Asset Backed Notes
_____________________
INDENTURE
Dated as of December 16, 1997
BANKERS TRUST COMPANY
as Indenture Trustee
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
CROSS REFERENCE TABLE(1)
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
- - --------
<FN>
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.
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
(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
(a) (2)..........................................................
N.A.
(b) ........................................................
5.7
(c) ........................................................
N.A.
317 (a) (1)..........................................................
5.3
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
(a) (2)..........................................................
5.3
(b) ........................................................
3.3
318 (a) ........................................................
11.7
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
|| TABLE OF CONTENTS
-----------------
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> 6
<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
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee........................................ 40
</TABLE>
(ii)
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C>
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
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
</TABLE>
(iii)
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C>
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 A-4 Note
Exhibit H Form of Class A-5 Notes
Exhibit I Form of Class A-P Note
Exhibit J Form of Class B Note
Exhibit K Form of Class C Note
(iv)
<PAGE> 9
INDENTURE dated as of December 16, 1997, between KEY AUTO FINANCE
TRUST 1997-2, 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
5.835% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 5.99% Asset Backed
Notes (the "Class A-2 Notes"), Class A-3 6.10% Asset Backed Notes (the "Class
A-3 Notes"), Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes"), Class
A-5 6.25% Asset Backed Notes (the "Class A-5 Notes"), and Class A-P 6.15% Asset
Backed Notes (the "Class A-P Notes"; and together with the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5
Notes, the "Class A Notes"), and then for the equal and ratable benefit of the
Holders of the Issuer's Class B 6.30% Asset Backed Notes (the "Class B Notes"),
and then for the equal and ratable benefit of the Holders of the Issuer's Class
C 6.65% Asset Backed Notes (the "Class C Notes" and, together with the Class A
Notes and the Class B 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
INDENTURE
<PAGE> 10
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 and Class C 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 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, and 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 December 16, 1997, among Key Consumer Acceptance Corporation, as Seller, the
Issuer, Key Bank USA, National Association, as Servicer, and the Indenture
Trustee.
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
2
<PAGE> 11
"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.
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, Class A-4 Notes, Class A-5 Notes, Class A-P Notes, Class B Notes and
Class C 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, G, H, I, J and K 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
INDENTURE
3
<PAGE> 12
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.
Each Note shall be dated the date of its authentication. The
terms of the Notes set forth in Exhibits D, E, F, G, H, I, J and K 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
$268,000,000, Class A-2 Notes for original issue in an aggregate principal
amount of $132,000,000, Class A-3 Notes for original issue in an aggregate
principal amount of $150,000,000, Class A-4 Notes for original issue in an
aggregate principal amount of $148,000,000, Class A-5 Notes for original issue
in an aggregate principal amount of $151,800,000, Class A-P Notes for original
issue in an aggregate principal amount of $125,000,000, Class B Notes for
original issue in an aggregate principal amount of $63,620,000 and Class C Notes
for original issue in an aggregate principal amount of $24,300,000. The
aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes,
Class A-4 Notes, Class A-5 Notes, Class A-P Notes, Class B Notes and Class C
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
INDENTURE
4
<PAGE> 13
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, 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.
INDENTURE
5
<PAGE> 14
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.
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.
INDENTURE
6
<PAGE> 15
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 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.
INDENTURE
7
<PAGE> 16
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, Class A-4 Note, Class A-5 Note, Class A-P Note, Class B
Note and Class C Note set forth in Exhibits D, E, F, G, H, I, J and K
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 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 Section 8.2(c) of this Indenture.
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
INDENTURE
8
<PAGE> 17
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 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 ss.ss.
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;
INDENTURE
9
<PAGE> 18
(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 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
INDENTURE
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<PAGE> 19
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.
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,
2.5 and 2.12, 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.
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(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, solely for
federal, state and local income and franchise tax purposes, the Notes shall
qualify as indebtedness 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.
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, (iv) in the Class A-4 Noteholders' Interest
Distributable Amount, to Class A-4 Noteholders, (v) in the Class A-5
Noteholders' Interest Distributable Amount, to Class A-5 Noteholders, (vi) in
the Class A-P Noteholders' Interest Distributable Amount, to Class A-P
Noteholders, (vii) in the Class B Noteholders' Interest Distributable Amount, to
Class B Noteholders and (viii) in the Class C Noteholders' Interest
Distributable Amount, to Class C 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
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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.
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
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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 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.
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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
(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, re-
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recording 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.
(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.
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(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) 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
INDENTURE
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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 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
INDENTURE
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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 (or in the case of the first such delivery, after the end of the period
from the Closing Date to December 31, 1998) ended December 31, beginning on
December 31, 1998, and otherwise in compliance with the 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
it shall have obtained written consent from the Holders of Certificates
representing a majority of the Certificate Balance then Outstanding and 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
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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 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
it shall have obtained written consent from the Holders of Certificates
representing a majority of the Certificate Balance then Outstanding and 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,
INDENTURE
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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
(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 1997-2
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 1997-2 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
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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.
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
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of Default hereunder and each Servicer Termination Event 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 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
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(3) are to be called
for redemption within one year under
arrangements satisfactory to
Indenture Trustee for the giving of
notice of redemption by Indenture
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), 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 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.
Promptly after the satisfaction and discharge of
the Indenture in accordance with clauses (i) through (iv) above, the Indenture
Trustee will provide written notice of such satisfaction and discharge to
Moody's.
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
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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;
(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
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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.
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
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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 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
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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:
(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
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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.
(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, then for the ratable
benefit of the Holders of the Class B Notes and then for the ratable benefit of
the Holders of the Class C 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.
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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 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.
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(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, but not including
amounts in the Class C 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, Class A-3 Notes, Class A-4 Notes, Class A-5
Notes and Class A-P Notes for amounts due and unpaid on the Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes,
Class A-5 Notes and Class A-P 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
Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and Class A-P
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 C Notes for
amounts due and unpaid on the Class C Notes for interest,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class C Notes for interest;
SIXTH: to the Holders of the Class A-1 Notes, Class
A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and
Class A-P Notes for amounts due and unpaid on the Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class
A-5 Notes and Class A-P 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, Class A-3
Notes, Class A-4 Notes, Class A-5 Notes and Class A-P Notes for
principal;
SEVENTH: 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;
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EIGHTH: to the Holders of the Class C Notes for
amounts due and unpaid on the Class C Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class C Notes for principal;
and
NINTH: to Issuer for distribution to the
Certificateholders.
Any amounts held on deposit in the Class C Reserve Account shall
be paid in the following priority:
FIRST: to the Holders of the Class C Notes for
amounts due and unpaid on the Class C Notes for interest,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class C Notes for interest and
not paid pursuant to clause FIFTH immediately above;
SECOND: to the Holders of the Class C Notes for
amounts due and unpaid on the Class C Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class C Notes for principal
and not paid pursuant to clause EIGHTH immediately above; and
THIRD: in the priorities set forth in clauses
THIRD through NINTH immediately above to the extent not paid
thereunder.
The 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.
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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
(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
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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.
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;
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(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 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
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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 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.
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(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.
(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;
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(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.
(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
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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.
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 and Moody's 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.
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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.
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.
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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.
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. Subject to
Section 6.11, 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
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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.
(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
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(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 Indenture 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 Indenture 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.
SECTION 6.11 Eligibility; Disqualification. Indenture Trustee
shall at all times satisfy the requirements of TIA ss. 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 ss. 310(b), including the optional provision permitted by the second
sentence of TIA ss. 310(b)(9); provided that there shall be excluded from the
operation of TIA ss. 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 ss. 310(b)(1) are met.
SECTION 6.12 Preferential Collection of Claims Against Issuer.
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.
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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 ss. 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 ss. 312(b)), the Indenture
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 ss. 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;
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(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 ss. 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 ss.
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 ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). Indenture
Trustee also shall comply with TIA ss. 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.
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
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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, and if the Outstanding
Amount of the Class A-1 Notes has not been reduced to zero, on or before the
Final Scheduled Distribution Date for the Class A-1 Notes 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, and if the Outstanding Amount of
the Class A-1 Notes has not been reduced to zero, on or before the Final
Scheduled Distribution Date for the Class A-1 Notes 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, and if the
Outstanding Amount of the Class A-1 Notes has not been reduced to zero, on or
before the Final Scheduled Distribution Date for the Class A-1 Notes 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, (C) in the Class A-3 Noteholders' Interest
Distributable Amount, to the Class A-3 Noteholders; (D) in the
Class A-4 Noteholders' Interest Distributable Amount, to the
Class A-4 Noteholders; (E) in the Class A-5 Noteholders' Interest
Distributable Amount, to the Class A-5 Noteholders; and (F) in
the Class A-P Noteholders' Interest Distributable Amount, to the
Class A-P 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 or Final Scheduled Distribution
Date for the Class A-1 Notes, the amount in the Note Distribution
Account shall be applied to the payment of such interest 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 or Final Scheduled Distribution Date for the
Class A-1 Notes;
(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
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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) accrued and unpaid interest on the Class C
Notes to the Class C 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 C Notes for the related Distribution Date, the amount in
the Note Distribution Account shall be applied to payment of such
interest on the Class C Notes on a pro rata basis;
(iv) to Holders of the Class A-1 Notes, on a pro
rata basis, an amount equal to the Class A-1 Noteholders'
Principal Distributable Amount for such Distribution Date or
Final Scheduled Distribution Date for the Class A-1 Notes;
(v) to Holders of the Class A-2 Notes and the Class
A-P Notes, on a pro rata basis, an amount equal to the respective
Class A-2 Noteholders' Principal Distributable Amount and the
Class A-P Noteholders' Principal Distributable Amount, for such
Distribution Date;
(vi) to Holders of the Class A-3 Notes and the
Class A-P Notes, on a pro rata basis, an amount equal to the
respective Class A-3 Noteholders' Principal Distributable Amount
for such Distribution Date and any Class A-P Noteholders'
Principal Distributable Amount for such Distribution Date not
previously distributed for such Distribution Date;
(vii) to Holders of the Class A-4 Notes and the
Class A-P Notes, on a pro rata basis, an amount equal to the
respective Class A-4 Noteholders' Principal Distributable Amount
for such Distribution Date and any Class A-P Noteholders'
Principal Distributable Amount for such Distribution Date not
previously distributed for such Distribution Date;
(viii) to Holders of the Class A-5 Notes and the
Class A-P Notes, on a pro rata basis, an amount equal to the
respective Class A-5 Noteholders' Principal Distributable Amount
for such Distribution Date and any Class A-P Noteholders'
Principal Distributable Amount for such Distribution Date not
previously distributed for such Distribution Date;
(ix) to Holders of the Class B Notes, on a pro rata
basis, an amount equal to the Class B Noteholders' Principal
Distributable Amount for such Distribution Date; and
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(x) to Holders of the Class C Notes, on a pro rata
basis, an amount equal to the Class C Noteholders' Principal
Distributable Amount for such Distribution Date.
(d) On each Distribution Date and Redemption Date, the Class C
Reserve Account Transfer Amount on deposit in the Class C Reserve Account shall
be distributed by the Indenture Trustee to the holders of the Class C Notes in
the following order of priority:
(i) first, to the Holders of the Class C Notes, on
a pro rata basis, an amount equal to any Class C Noteholders'
Interest Distributable Amount remaining unpaid after the
distribution in clause (c)(iii) above for such Distribution Date;
and
(ii) second, to the Holders of the Class C Notes,
on a pro rata basis, an amount equal to any Class C Noteholders'
Principal Distributable Amount remaining unpaid after the
distribution in clause (c)(x) above for such Distribution Date.
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 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.
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(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 (so
long as such fund is an Eligible Investment provided however that such fund
shall be deemed to be an Eligible Investment unless a Responsible Officer of the
Indenture Trustee receives written notice to the contrary) 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.
(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
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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:
(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;
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(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" under the Code 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
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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 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 Certificateholders holding a majority of the Certificate Balance,
modify Sections 5.4 or 3.10 if such modification would adversely affect the
Certificateholders and provided further 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);
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(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
(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.
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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.
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.
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ARTICLE X REDEMPTION OF NOTES.
SECTION 10.1 Redemption. Each of the Class A-5 Notes, Class A-P
Notes, Class B Notes and the Class C Notes are subject to redemption in whole,
but not in part, at the direction of Seller pursuant to Section 9.1(a) of the
Sale and Servicing Agreement, on any Distribution Date on which Seller 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 A-5 Notes, Class A-P
Notes, Class B Notes and the Class C Notes are to be redeemed pursuant to this
Section 10.1, 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 A-5 Notes, Class A-P Notes, Class B Notes and the
Class C Notes to be redeemed whereupon all such Class A-5 Notes, Class A-P
Notes, Class B Notes and the Class C 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 A-5 Notes, Class A-P Notes, Class B Notes and the Class
C Notes.
SECTION 10.2 Form of Redemption Notice. Notice of redemption
under Section 10.1 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 A-5 Notes, Class A-P Notes, Class B
Notes and Class C 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 A-5
Notes, Class A-P Notes, Class B Notes or Class C
Notes, as applicable, and the place where such
Class A-5 Notes, Class A-P Notes, Class B Notes and
Class C 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
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(iv) that interest on the Class A-5
Notes, Class A-P Notes, Class B Notes and the Class
C Notes shall cease to accrue on the Redemption
Date.
Notice of redemption of the Class A-5 Notes, Class A-P Notes,
Class B Notes and Class C 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 A-5 Note, Class A-P Note, Class B
Note or Class C Note shall not impair or affect the validity of the redemption
of any other Class A-5 Note, Class A-P Note, Class B Note or Class C Note.
SECTION 10.3 Notes Payable on Redemption Date. The Class A-5
Notes, Class A-P Notes, Class B Notes and Class C 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), 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 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;
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(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 Indenture 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 Indenture
Trustee an Independent Certificate 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
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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 Indenture 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
Indenture 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.
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,
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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 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.
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(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 1997-2, 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 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, Attention
of ABS Monitoring Department, (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
INDENTURE
60
<PAGE> 69
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 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 Indenture 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.
INDENTURE
61
<PAGE> 70
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.
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.
INDENTURE
62
<PAGE> 71
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 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
INDENTURE
63
<PAGE> 72
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.
INDENTURE
64
<PAGE> 73
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 1997-2,
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: Vice-President
BANKERS TRUST COMPANY, a New York
banking corporation, not in its individual
capacity but solely as Indenture Trustee,
By:/s/ Lillian Peros
----------------------------------------
Name: Lillian Peros
Title: Assistant Vice-President
INDENTURE
65
<PAGE> 74
EXHIBIT A
SCHEDULE OF RECEIVABLES
Delivered on Disk to Indenture Trustee
INDENTURE
<PAGE> 75
EXHIBIT B
FORM OF SALE AND SERVICING AGREEMENT
(see Exhibit 99.1)
INDENTURE
<PAGE> 76
EXHIBIT C
FORM OF NOTE DEPOSITORY AGREEMENT
(on file with Owner Trustee and Indenture Trustee)
INDENTURE
<PAGE> 77
EXHIBIT D
FORM OF CLASS A-1 NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
5.835% CLASS A-1 ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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 Class A-1 Notes pursuant to Section 8.2(c) 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
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
INDENTURE
<PAGE> 78
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: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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:_____________________________________
INDENTURE
2
<PAGE> 79
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely
as Indenture Trustee
By:______________________________
Authorized Signatory
INDENTURE
3
<PAGE> 80
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 5.835% Class A-1 Asset Backed Notes (herein called the
"A-1 Notes" or the "Notes"), all issued under an Indenture dated as of December
16, 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 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 measured in whole or in part by income, the Notes will qualify as
indebtedness
INDENTURE
<PAGE> 81
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.
INDENTURE
2
<PAGE> 82
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> 83
EXHIBIT E
FORM OF CLASS A-2 NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
5.99% CLASS A-2 ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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 Class A-2 Notes pursuant to Section 8.2(c) 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
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 84
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class A-2 Notes will be made until the principal of the
Class 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 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: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 85
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely
as Indenture Trustee
By:___________________________________
Authorized Signatory
3
<PAGE> 86
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 5.99% Class A-2 Asset Backed Notes (herein called the
"A-2 Notes" or the "Notes"), all issued under an Indenture dated as of December
16, 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, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes and the Class A-P 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.
<PAGE> 87
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> 88
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> 89
EXHIBIT F
FORM OF CLASS A-3 NOTES
REGISTERED $____________(1)
No. R-____ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
6.10% CLASS A-3 ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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 Class A-3 Notes pursuant to Section 8.2(c) 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
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 90
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class A-3 Notes will be made until the principal of the
Class A-1 Notes and the Class 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
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: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 91
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely as
Indenture Trustee
By:_______________________________
Authorized Signatory
3
<PAGE> 92
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.10% Class A-3 Asset Backed Notes (herein called the
"Class A-3 Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, the Class A-2 Notes, the Class
A-4 Notes, the Class A-5 Notes and the Class A-P 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.
<PAGE> 93
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> 94
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> 95
EXHIBIT G
FORM OF CLASS A-4 NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
6.15% CLASS A-4 ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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-4 Notes ("the Fraction") by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-4 Notes pursuant to Section 8.2(c) 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-4 Notes and the
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 96
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class A-4 Notes will be made until the principal of the
Class A-1 Notes, the Class A-2 Notes and the Class 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 A-4 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: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 97
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely as
Indenture Trustee
By:_______________________________
Authorized Signatory
3
<PAGE> 98
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.15% Class A-4 Asset Backed Notes (herein called the
"Class A-4 Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, the Class A-2 Notes, the Class
A-3 Notes, Class A-5 Notes and the Class A-P 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-4 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> 99
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> 100
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> 101
EXHIBIT H
FORM OF CLASS A-5 NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
6.25% CLASS A-5 ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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-5 Notes ("the Fraction") by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-5 Notes pursuant to Section 8.2(c) 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-5 Notes and the
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 102
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class A-5 Notes will be made until the principal of the
Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4
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-5 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: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 103
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely as
Indenture Trustee
By:_______________________________
Authorized Signatory
3
<PAGE> 104
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.25% Class A-5 Asset Backed Notes (herein called the
"Class A-5 Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, the Class A-2 Notes, the Class
A-3 Notes, Class A-4 Notes and the Class A-P 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-5 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> 105
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> 106
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> 107
EXHIBIT I
FORM OF CLASS A-P NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
KEY AUTO FINANCE TRUST 1997-2
6.15% CLASS A-P ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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-P Notes ("the Fraction") by (ii) the aggregate
amount, if any, payable from the Note Distribution Account in respect of
principal on the Class A-P Notes pursuant to Section 8.2(c) 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-P Notes and the
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 108
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class A-P Notes will be made until the principal of the
Class 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-P
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: December __, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 109
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely as
Indenture Trustee
By:______________________________
Authorized Signatory
3
<PAGE> 110
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.15% Class A-P Asset Backed Notes (herein called the
"Class A-P Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, the Class A-2 Notes, the Class
A-3 Notes, the Class A-4 Notes and the Class A-5 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-P 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> 111
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> 112
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> 113
EXHIBIT J
FORM OF CLASS B NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS
SUBORDINATED TO THE CLASS A-1 NOTES, CLASS A-2 NOTES, CLASS A-3 NOTES, CLASS A-4
NOTES, CLASS A-5 NOTES AND CLASS A-P NOTES ON THE TERMS AND CONDITIONS PROVIDED
IN THE INDENTURE.
KEY AUTO FINANCE TRUST 1997-2
6.30% CLASS B ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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,
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 114
payable from the Note Distribution Account in respect of principal on the Class
B Notes pursuant to Section 8.2(c) 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 Class 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 B 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.
2
<PAGE> 115
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 116
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New
York banking corporation, not in
its individual capacity, but
solely as Indenture Trustee
By:_____________________________
Authorized Signatory
4
<PAGE> 117
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.30% Class B Asset Backed Notes (herein called the
"Class B Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, Class A-3 Notes, Class A-4
Notes, Class A-5 Notes and Class A-P 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,
Class A-3 Notes, Class A-4 Notes, Class A-5 Notes and Class A-P 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.
<PAGE> 118
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 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.
2
<PAGE> 119
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.
3
<PAGE> 120
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> 121
EXHIBIT K
FORM OF CLASS C NOTES
REGISTERED $____________(1)
No. R-___ CUSIP NO. _____________
Unless this Note is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to the Issuer or
its agent for registration of transfer, exchange or payment, and any Note issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET
FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY
TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. THIS NOTE IS
SUBORDINATED TO THE CLASS A-1 NOTES, CLASS A-2 NOTES, CLASS A-3 NOTES, CLASS A-4
NOTES, CLASS A-5 NOTES, CLASS A-P NOTES AND CLASS B NOTES ON THE TERMS AND
CONDITIONS PROVIDED IN THE INDENTURE.
KEY AUTO FINANCE TRUST 1997-2
6.65% CLASS C ASSET BACKED NOTES
Key Auto Finance Trust 1997-2, a trust organized and existing
under the laws of the State of Delaware (including any successor, the "Issuer"),
for value received, hereby promises to pay to CEDE & CO., or registered assigns,
the principal sum of __________________ DOLLARS ($___________), 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 C Notes ("the Fraction") by (ii) the aggregate
amount, if
- - --------
(1)Denominations of $1,000 and integral multiples of $1,000 in excess thereof.
<PAGE> 122
any, payable from the Note Distribution Account in respect of principal on the
Class C Notes pursuant to Section 8.2(c) 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 C Notes and the
Redemption Date, if any, pursuant to Section 10.1 of the Indenture. No payments
of principal of the Class C Notes will be made until the principal of the Class
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 C
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.
2
<PAGE> 123
IN WITNESS WHEREOF, the Issuer has caused this instrument to be
signed, manually or in facsimile, by its Authorized Officer.
Dated: December 16, 1997
KEY AUTO FINANCE TRUST 1997-2
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> 124
INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: December 16, 1997
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity, but solely as
Indenture Trustee
By:__________________________________
Authorized Signatory
4
<PAGE> 125
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its 6.65% Class C Asset Backed Notes (herein called the
"Class C Notes" or the "Notes"), all issued under an Indenture dated as of
December 16, 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, Class A-3 Notes, Class A-4
Notes, Class A-5 Notes and Class A-P 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,
Class A-3 Notes, Class A-4 Notes, Class A-5 Notes, Class A-P Notes and the Class
B 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 C Interest Rate to the extent lawful.
<PAGE> 126
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 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.
2
<PAGE> 127
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.
3
<PAGE> 128
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
TRUST AGREEMENT, dated as of November 24, 1997,
between Key Consumer Acceptance Corporation, a Delaware corporation, as
Depositor and Chase Manhattan Bank Delaware, a Delaware banking
corporation, not in its individual capacity but solely as Owner
Trustee. The Depositor and the Owner
Trustee hereby agree as follows:
1. The trust created hereby shall be known as "Key
Auto Finance Trust 1997-2", in which name the Owner Trustee may conduct
the business of the Trust, make and execute contracts and sue and be
sued.
2. The Depositor hereby assigns, transfers, conveys
and signs over to the Owner Trustee the sum of $1. The Owner Trustee
hereby acknowledges receipt of such amount in trust from the Depositor,
which amount shall constitute the initial trust estate. The Owner
Trustee hereby declares that it will hold the trust assets in trust for
the Depositor. It is the intention of the parties hereto that the Trust
created hereby constitutes a business trust under Chapter 38 of Tile 12
of the Delaware Code, 12 Del. C. sec. 3801 et. seq. and that this
document constitutes the governing Instrument of the Trust. The Owner
Trustee is hereby authorized and directed to execute and file a
certificate of Trust with the Delaware Secretary of State in the form
attached hereto.
3. The Depositor and the Owner Trustee will enter
into an amended and restated Trust Agreement, satisfactory to each such
party, to provide for the contemplated operation of the Trust created
hereby. Prior to the execution and delivery of such amended and
restated Trust Agreement, the Owner Trustee shall not have any duty or
obligation hereunder or with respect to the trust estate, except as
otherwise required by applicable law or as may be necessary to obtain
prior to such execution and delivery any licenses, contracts or
approvals required by applicable law or otherwise.
4. This Trust Agreement may be executed in one or
more counterparts.
5. The Owner Trustee may resign upon thirty days
prior notice to the Depositor.
<PAGE> 2
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.
KEY CONSUMER ACCEPTANCE CORPORATION,
as Depositor
By: /s/ Richard S. Hawrylak
-----------------------------------
Name: Richard S. Hawrylak
Title: Assistant Secretary
CHASE MANHATTAN BANK DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By: /s/ John J. Cashin
-----------------------------------
Name: John J. Cashin
Title: Vice President
-2-
<PAGE> 1
EXHIBIT 4.3
================================================================================
KEY AUTO FINANCE TRUST 1997-2
AMENDED AND RESTATED TRUST AGREEMENT
between
KEY CONSUMER ACCEPTANCE CORPORATION
and
CHASE MANHATTAN BANK DELAWARE,
as Owner Trustee
Dated as of December 16, 1997
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
|| TABLE OF CONTENTS
- - -- -----------------
Page
----
<S> <C>
ARTICLE I DEFINITIONS....................................................................1
SECTION 1.1. Capitalized Terms.......................................................1
SECTION 1.2. Other Interpretive Provisions...........................................1
ARTICLE II ORGANIZATION..................................................................2
SECTION 2.1. Name....................................................................2
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. Definitive Certificates...............................................10
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
SECTION 4.4. Restrictions on Certificateholders' Power..............................13
SECTION 4.5. Majority Control.......................................................13
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
<S> <C>
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..................................15
SECTION 5.5. Accounting and Reports to the Noteholders, Certificateholders,
the Internal Revenue Service and Others...............................15
SECTION 5.6. Signature on Returns; Tax Matters Partner..............................16
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE........................................16
SECTION 6.1. General Authority......................................................16
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.........................................................18
SECTION 6.6. Restrictions...........................................................18
ARTICLE VII CONCERNING OWNER TRUSTEE....................................................19
SECTION 7.1. Acceptance of Trusts and Duties........................................19
SECTION 7.2. Furnishing of Documents................................................20
SECTION 7.3. Representations and Warranties.........................................20
SECTION 7.4. Reliance; Advice of Counsel............................................21
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...........................22
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
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES..............................................25
SECTION 10.1. Eligibility Requirements for Owner Trustee............................25
SECTION 10.2. Resignation or Removal of Owner Trustee...............................25
SECTION 10.3. Successor Owner Trustee...............................................26
SECTION 10.4. Merger or Consolidation of Owner Trustee..............................27
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.........................27
</TABLE>
-ii-
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
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.......................................31
SECTION 11.4. Notices...............................................................31
SECTION 11.5. Severability..........................................................31
SECTION 11.6. Separate Counterparts.................................................32
SECTION 11.7. Successors and Assigns................................................32
SECTION 11.8. No Petition...........................................................32
SECTION 11.9. No Recourse...........................................................32
SECTION 11.10. Headings.............................................................32
SECTION 11.11. GOVERNING LAW........................................................32
SECTION 11.12. Certificate Transfer Restrictions....................................33
SECTION 11.13. Servicer.............................................................33
SECTION 11.14. Sale and Servicing Agreement.........................................33
</TABLE>
-iii-
<PAGE> 5
EXHIBITS
Exhibit A Form of Certificate
Exhibit B Form of Certificate of Trust
Exhibit C Issuer's Certificate to Thompson Hine & Flory LLP
||
-iv-
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT dated as of December 16, 1997
between KEY CONSUMER ACCEPTANCE CORPORATION, a Delaware corporation, as
Depositor, and CHASE MANHATTAN BANK DELAWARE, a Delaware banking corporation, as
Owner Trustee, amending and restating that certain Trust Agreement (the
"Original Trust Agreement") dated as of November 24, 1997 between the parties
hereto.
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 December 16, 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.
TRUST AGREEMENT
<PAGE> 7
ARTICLE II ORGANIZATION.
SECTION 2.1. Name. The trust created under the Original Trust Agreement
shall be known as "KEY AUTO FINANCE TRUST 1997-2", in which name Owner Trustee
may conduct 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.
TRUST AGREEMENT
2
<PAGE> 8
(g) on the Closing Date the Owner Trustee will execute and
deliver on behalf of the Issuer a certificate in the form annexed
hereto as Exhibit C.
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.
SECTION 2.4. Appointment of Owner Trustee. Depositor hereby confirms
the appointment of 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. Pursuant to
the Original Trust Agreement, Depositor has, assigned, transferred, conveyed and
set over to Owner Trustee, as of the date thereof, the sum of $1. Owner Trustee
hereby acknowledges receipt in trust from Depositor, as of the date thereof, 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
federal, state and local 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
will be treated as debt 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 has filed 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.
TRUST AGREEMENT
3
<PAGE> 9
(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.
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
TRUST AGREEMENT
4
<PAGE> 10
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 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 franchise tax 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:
TRUST AGREEMENT
5
<PAGE> 11
(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 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.
TRUST AGREEMENT
6
<PAGE> 12
ARTICLE III CERTIFICATES AND TRANSFER OF INTERESTS.
SECTION 3.1. Initial Ownership. Upon the formation of Issuer by the
contribution by Depositor pursuant to the Original Trust Agreement and until the
issuance of the Certificates, Depositor shall be the sole beneficiary of the
Trust.
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. The
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
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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, 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
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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
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
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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
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. Definitive Certificates. The Certificates, upon original
issuance, will be issued in the form of a typewritten Certificate or
Certificates representing Definitive Certificates and shall be registered in the
name of Credit Suisse First Boston Corporation, with respect to a $17,200,000
8.05% Asset
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Backed Certificate, and in the name of Key Consumer Acceptance Corporation, with
respect to an $80,000 8.05% Asset Backed Certificate, each as the initial
registered owner thereof. Owner Trustee shall execute and authenticate, or cause
to be authenticated, the Definitive Certificates in accordance with the
instructions of the Depositor. 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, the Owner Trustee and the 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 the Owner Trustee, as evidenced by its execution thereof.
SECTION 3.12. Book-Entry Certificates. If Certificateholders
representing all of the Certificate Balance shall agree to adopt a book-entry
system for the Certificates through a Clearing Agency, then upon the surrender
to the Certficate Registrar of the Definitive Certificates, accompanied by
registration instructions, Owner Trustee shall execute and authenticate, or
cause to be authenticated, Book-Entry Certificates, in accordance with the
instructions of the Certificateholders, to be delivered to the initial Clearing
Agency selected by Certficateholders holding a majority of the Certificate
Balance. Such Book- Entry Certificates shall initially be registered on the
Certificate Register in the name of the initial Clearing Agency or its nominee.
If Book-Entry Certificates are issued pursuant to this Section 3.12:
(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. The initial Clearing Agency will
make
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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;
(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; and
(f) whenever a notice or other communication to Owners is
required under this Agreement, 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.
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 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
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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
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.
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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
(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
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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, if Book-Entry
Certificates have been issued pursuant to Section 3.12, with respect to
Certificates registered on the Record Date in the name of the nominee of the
Clearing Agency, 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.
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SECTION 5.5. Accounting and Reports to the Noteholders,
Certificateholders, the Internal Revenue Service and Others. Subject to Section
2.6, 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 but subject to Section 2.6,
Depositor shall sign on behalf of Issuer the tax returns (if any) 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.
(b) Subject to Section 2.6, Depositor shall be designated 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
$268,000,000, Class A-2 Notes in the aggregate principal amount of $132,000,000,
Class A-3 Notes in the aggregate principal amount of $150,000,000, Class A-4
Notes in the aggregate principal amount of
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$148,000,000, Class A-5 Notes in the aggregate principal amount of $151,800,000,
Class A-P Notes in the aggregate principal amount of $125,000,000, Class B Notes
in the aggregate principal amount of $63,620,000, and Class C Notes in the
aggregate principal amount of $24,300,000. 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.
(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
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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 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.
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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;
(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;
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(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, any Paying Agent, 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 any Paying Agent under this Agreement,
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 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:
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(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 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.
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(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 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, any Paying Agent, Administrator or Servicer or any subservicer taken in
the name of Owner Trustee.
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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, "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
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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
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
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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.
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
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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 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
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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 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
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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, 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.
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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 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" under the
Code, 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
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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, 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 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
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.
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(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, 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
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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,
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
Indenture 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
TRUST AGREEMENT
32
<PAGE> 38
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"), except that, if any
Certificates are purchased with assets of an "insurance company general account"
(as such term is defined in Prohibited Transactions Class Exception 95-60 ("PTCE
95-60") Part V, that such general account shall satisfy all applicable
requirements for relief set forth in Parts I and IV of PTCE 95-60. By accepting
and holding a Certificate, the Holder 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.
TRUST AGREEMENT
33
<PAGE> 39
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: Vice President
KEY CONSUMER ACCEPTANCE
CORPORATION, as Depositor
By: /s/ Craig T. Platt
------------------------------------------
Name: Craig T. Platt
Title: President and Chief Executive Officer
TRUST AGREEMENT
34
<PAGE> 40
EXHIBIT A
NUMBER $
R- CUSIP NO. _________
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 1997-2
8.05% 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 1997-2 ("Issuer") formed by Key Consumer
Acceptance Corporation, a Delaware corporation ("Seller"). This Certificate has
a Certificate Rate of 8.05% per annum.
TRUST AGREEMENT
Exhibit A, Page 1
<PAGE> 41
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 November
24, 1997, between Seller and Chase Manhattan Bank Delaware, as owner trustee
("Owner Trustee") as amended by an Amended and Restated Trust Agreement dated as
of December 16, 1997 between the Seller and the Owner Trustee (the "Trust
Agreement"), 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, Key Bank USA, National Association, as Servicer, and Bankers Trust
Company, as Indenture Trustee, dated as of December 16, 1997, as the same may be
amended or supplemented from time to time.
This Certificate is one of the duly authorized Certificates designated
as "8.05% Asset Backed Certificates" (herein called the "Certificates"). Also
issued under the Indenture dated as of December 16, 1997, between Issuer and
Bankers Trust Company as Indenture Trustee, are eight classes of Notes
designated as "Class A-1 5.835% Asset Backed Notes" (the "Class A-1
Notes"),"Class A-2 5.99% Asset Backed Notes" (the "Class A-2 Notes"), "Class A-3
6.10% Asset Backed Notes" (the "Class A-3 Notes"), "Class A-4 6.15% Asset Backed
Notes" (the "Class A-4 Notes"), "Class A-5 6.25% Asset Backed Notes" (the "Class
A-5 Notes"), "Class A-P 6.15% Asset Backed Notes" (the "Class A-P Notes"),
"Class B 6.30% Asset Backed Notes" (the "Class B Notes") and "Class C 6.65%
Asset Backed Notes" (the "Class C Notes" and, together with the Class A-1 Notes,
Class A-2 Notes, Class A-3 Notes, Class A-4 Notes, Class A-5 Notes, Class A-P
Notes and Class B 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
Exhibit A, Page 2
<PAGE> 42
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 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, solely for federal, state and local income and franchise tax purposes, the
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.
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"), except that, if the Certificates are purchased with assets of an
"insurance company general account" (as such term is defined in Prohibited
Transactions Class Exception 95-60 ("PTCE 95-60") Part V, that such general
account shall satisfy all applicable requirements for relief set forth in Parts
I and IV of PTCE 95-60. 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
TRUST AGREEMENT
Exhibit A, Page 3
<PAGE> 43
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.
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 1997-2
By: CHASE MANHATTAN BANK
DELAWARE, a Delaware banking
corporation, not in its individual
capacity, but solely as Owner Trustee
Dated: By:_________________________________
TRUST AGREEMENT
Exhibit A, Page 4
<PAGE> 44
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.
TRUST AGREEMENT
Exhibit A, Page 5
<PAGE> 45
EXHIBIT B
[FORM OF]
CERTIFICATE OF TRUST OF
KEY AUTO FINANCE TRUST 1997-2
THIS Certificate of Trust of Key Auto Finance Trust 1997-2 (the
"Trust"), dated as of November ___, 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 1997-2.
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 November ___, 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:
TRUST AGREEMENT
<PAGE> 46
EXHIBIT C
ISSUER'S CERTIFICATE
TO
THOMPSON HINE & FLORY LLP
DECEMBER 16, 1997
Key Auto Finance Trust 1997-2, a Delaware business trust created
pursuant to the Trust Agreement dated as of November 24, 1997, and amended and
restated as of December 16, 1997 between Key Consumer Acceptance Corporation and
Chase Manhattan Bank Delaware, as Owner Trustee, hereby certifies to Thompson
Hine & Flory LLP the following:
1. Key Auto Finance Trust 1997-2 did not and will not (i) execute the
Basic Documents to which it is a party, (ii) acquire from Key Bank USA, National
Association ("Key Bank USA") any security interest, (iii) cause, permit, or
suffer the perfection or attachment of any security interest, (iv) otherwise
effectuate or consummate any transfer from Key Bank USA pursuant to any of the
Basic Documents, or (v) take its interest under any Basic Documents or accept
the Trust Property:
(A) in contemplation of Key Bank USA's insolvency;
(B) with a view to preferring one creditor of Key Bank USA over
another or to preventing the application of Key Bank USA's
assets in the manner required by applicable law or
regulations;
(C) after Key Bank USA committed an act of insolvency; or
(D) with any intent to hinder, delay, or defraud Key Bank USA or
Key Bank USA's creditors.
2. Key Auto Finance Trust 1997-2 will not attempt to foreclose on the
Receivables after the appointment of the FDIC as conservator or receiver for Key
Bank USA, (i) in a manner that is not commercially reasonable, (ii) in a manner
that requires the involvement of the FDIC, (iii) in a manner that requires
judicial action, (iv) without the existence of an event of default other than
the appointment of a conservator or receiver for Key Bank USA or the insolvency
of Key Bank USA, or (v) in a manner that does not comply with any applicable law
(other than the receivership and conservatorship provisions of the FDIA).
The undersigned hereby acknowledges that this certificate is being
delivered to Thompson Hine & Flory LLP in connection with the opinion, dated
TRUST AGREEMENT
Exhibit C, Page 1
<PAGE> 47
December 16, 1997, to be delivered by Thompson Hine & Flory LLP to Credit Suisse
First Boston Corporation as Representative of the Underwriters and to the
Initial Purchasers in connection with the transactions contemplated by the Basic
Documents (the "Opinion"). The undersigned further acknowledges that Thompson
Hine & Flory LLP will rely on the information contained in this certificate in
connection with the delivery of the Opinion. Unless otherwise defined herein,
all capitalized terms used herein shall have the meanings ascribed to them in
Appendix X to the Sale and Servicing Agreement, dated as of December 16, 1997,
between Key Auto Finance Trust, as Issuer, Key Consumer Acceptance Corporation,
as Seller, Key Bank USA National Association, as Servicer, and Bankers Trust
Company, as Indenture Trustee.
KEY AUTO FINANCE TRUST 1997-2
By: Chase Manhattan Bank Delaware,
as Owner Trustee
By: _____________________________
John Cashin
Senior Trust Officer
TRUST AGREEMENT
Exhibit C, Page 2
<PAGE> 1
EXHIBIT 99.1
================================================================================
SALE AND SERVICING
AGREEMENT
among
KEY AUTO FINANCE TRUST 1997-2
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 December 16, 1997
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
|| TABLE OF CONTENTS
-----------------
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................................................................6
SECTION 3.3. Repurchase upon Breach.....................................................7
SECTION 3.4. Custodian of Receivable Files..............................................7
ARTICLE IV. ADMINISTRATION AND SERVICING OF RECEIVABLES..................................11
SECTION 4.1. Duties of Servicer........................................................11
SECTION 4.2. Collection of Receivable Payments.........................................12
SECTION 4.3. Realization upon Receivables..............................................13
SECTION 4.4. Physical Damage Insurance.................................................13
SECTION 4.5. Maintenance of Security Interests in Financed Vehicles....................14
SECTION 4.6. Covenants of Servicer.....................................................15
SECTION 4.7. Purchase by Servicer upon Breach..........................................15
SECTION 4.8. Servicing Fee.............................................................15
SECTION 4.9. Servicer's Report.........................................................16
SECTION 4.10. Annual Statement as to Compliance; Notice of Default.....................16
SECTION 4.11. Annual Independent Certified Public Accountants' Report..................17
SECTION 4.12. Access to Certain Documentation and Information Regarding
Receivables....................................................................18
SECTION 4.13. Reports to the Commission................................................18
SECTION 4.14. Reports to the Rating Agencies...........................................18
SECTION 4.15. Servicer Expenses........................................................18
ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT
AND CLASS C RESERVE ACCOUNT;
STATEMENTS TO CERTIFICATEHOLDERS
AND NOTEHOLDERS....................................................................18
SECTION 5.1. Establishment of Trust Accounts...........................................18
SECTION 5.2. Collections...............................................................21
SECTION 5.3. [Reserved]................................................................22
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
SECTION 5.4. Additional Deposits.........................................................22
SECTION 5.5. Distributions...............................................................22
SECTION 5.6. Statements to Certificateholders and Noteholders............................24
SECTION 5.7. Net Deposits................................................................26
SECTION 5.8. Reserve Account.............................................................26
ARTICLE VI. SELLER.........................................................................30
SECTION 6.1. Representations of Seller...................................................30
SECTION 6.2. Continued Existence.........................................................31
SECTION 6.3. Liability of Seller; Indemnities............................................32
SECTION 6.4. Merger or Consolidation of, or Assumption of the
Obligations of, Seller...........................................................33
SECTION 6.5. Limitation on Liability of Seller and Others................................34
SECTION 6.6. Seller May Own Certificates or Notes........................................34
SECTION 6.7. Indebtedness of Seller......................................................34
ARTICLE VII. SERVICER......................................................................34
SECTION 7.1. Representations of Servicer.................................................34
SECTION 7.2. Indemnities of Servicer.....................................................36
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations of,
Servicer.........................................................................37
SECTION 7.4. Limitation on Liability of Servicer and Others..............................38
SECTION 7.5. Key Bank USA Not To Resign as Servicer......................................38
SECTION 7.6. Existence...................................................................39
SECTION 7.7. Servicer May Own Notes or Certificates......................................39
ARTICLE VIII. SERVICER TERMINATION EVENTS..................................................39
SECTION 8.1. Servicer Termination Event..................................................39
SECTION 8.2. Appointment of Successor....................................................41
SECTION 8.3. Payment of Servicing Fee....................................................42
SECTION 8.4. Notification to Noteholders and Certificateholders..........................42
SECTION 8.5. Waiver of Past Defaults.....................................................42
ARTICLE IX. TERMINATION....................................................................43
SECTION 9.1. Optional Purchase of All Receivables; Termination Notice....................43
ARTICLE X. MISCELLANEOUS PROVISIONS........................................................43
SECTION 10.1. Amendment..................................................................43
SECTION 10.2. Protection of Title to Trust Property......................................45
SECTION 10.3. Notices....................................................................47
SECTION 10.4. Assignment.................................................................48
SECTION 10.5. Limitations on Rights of Others............................................48
SECTION 10.6. Severability...............................................................48
SECTION 10.7. Separate Counterparts......................................................48
</TABLE>
SALE AND SERVICING AGREEMENT
ii
<PAGE> 4
<TABLE>
<S> <C>
SECTION 10.8. Headings...................................................................48
SECTION 10.9. Governing Law..............................................................48
SECTION 10.10. Assignment to Indenture Trustee...........................................49
SECTION 10.11. Nonpetition Covenant......................................................49
SECTION 10.12. Limitation of Liability of Owner Trustee and Indenture Trustee............49
SECTION 10.13. Further Assurances........................................................49
SECTION 10.14. No Waiver; Cumulative Remedies............................................50
SECTION 10.15. Pennsylvania Motor Vehicle Sales Finance Act Licenses.....................50
</TABLE>
||
SALE AND SERVICING AGREEMENT
iii
<PAGE> 5
SCHEDULES
Schedule A -- Schedule of Receivables
Schedule B -- Location of Receivables Files
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
SALE AND SERVICING AGREEMENT
iv
<PAGE> 6
SALE AND SERVICING AGREEMENT dated as of December 16, 1997 (this
"Agreement") among KEY AUTO FINANCE TRUST 1997-2, 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 purposes of reference only and shall not
otherwise affect the meaning or interpretation of any provision hereof.
SALE AND SERVICING AGREEMENT
<PAGE> 7
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);
(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
SALE AND SERVICING AGREEMENT
2
<PAGE> 8
(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 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 6.00%
and not
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more than 29.90%; (iii) each Receivable had a remaining term, as of the Cutoff
Date, of not less than three months and not more than 72 months; (iv) each
Receivable had an Initial Principal Balance of not less than $776.59 and not
more than $57,550.98; (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 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.
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(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.
(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
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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.
(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 $1,045,965,160.79.
(b) Aggregate Characteristics. The Receivables had the following
characteristics in the aggregate as of the Cutoff Date: (i) approximately 34.33%
of the Original Pool Balance was attributable to loans for purchases of new
Financed Vehicles, and approximately 65.67% of the Original Pool Balance was
attributable
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to loans for purchases of used Financed Vehicles; (ii) approximately 21.92% 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 New York and
9.71% 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
Maine, 8.83% in the State of Washington, 8.63% in the State of Ohio, and 6.56%
in the State of Florida, and no other state accounts for more than 5% of the
Original Pool Balance; (iii) the weighted average Contract Rate of the
Receivables was 11.49%; (iv) there are 96,446 Receivables being conveyed by
Seller to Issuer; (v) the average Cutoff Date Principal Balance of the
Receivables was $10,845.09; and (vi) the weighted average original term and
weighted average remaining term of the Receivables were 59.40 months and 49.08
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 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,
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which are hereby constructively delivered to Issuer with respect to each
Receivable (collectively, a "Receivable File"):
(i) 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
(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
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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
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
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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 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
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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 Affiliate of
Seller; 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.
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
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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, 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 or its
successor or assigns 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.
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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 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
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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 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 Issuer 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 and 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.
SECTION 4.8. Servicing Fee. The servicing fee for each Distribution
Date 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,
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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).
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, 1999, an
Officer's Certificate, dated as of the preceding December 31, 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, 1998) 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
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throughout such period 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, 1999, 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, 1998), 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.
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.
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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.
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.
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ARTICLE V. DISTRIBUTIONS; RESERVE ACCOUNT
AND CLASS C 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, the Reserve Account and the Class C 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 for in Section 5.5 and shall not otherwise be subject to any claims or
rights of Holders. Other than as permitted in writing 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
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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, Indenture Trustee
agrees, by its 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;
(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
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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 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
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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 and distributed from the Class C Reserve Account to Holders of the Class
C Notes.
(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:
(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;
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(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;
(iii) withdraw from the Reserve Account and deposit in the
Collection Account the Reserve Account Transfer Amount for such
Distribution Date; and
(iv) withdraw from the Class C Reserve Account for
distribution to Holders of the Class C Notes in accordance with Section
8.2(d) of the Indenture, the Class C Reserve Account Transfer Amount.
(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;
(iii) to Owner Trustee for deposit in 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 Owner Trustee for deposit in the Certificate
Distribution Account, from the Total Distribution Amount remaining
after the application of clauses (i) through (iv), the
Certificateholders' Principal Distributable Amount;
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(vi) to the Reserve Account, from the Total Distribution
Amount remaining after the application of clauses (i) through (v),
until the amount on deposit in the Reserve Account equals the Specified
Reserve Account Balance;
(vii) to the Class C Reserve Account, from the Total
Distribution Amount remaining after the application of clauses (i)
through (vi), until the amount on deposit in the Class C Reserve
Account equals the Specified Class C 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.
(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. The initial
Paying Agent with respect to the Notes shall be the Indenture Trustee.
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;
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(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) (i) 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, and (ii) the Class C Reserve Account Transfer Amount, if any, for such
Distribution Date, the Specified Class C Reserve Account Balance for such
Distribution Date, the amount distributed to Seller from the Class C Reserve
Account on such Distribution Date, and the balance of the Class C Reserve
Account (if any) on such Distribution Date, after giving effect to changes
therein on such Distribution Date;
(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.
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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 and Class C 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
for the benefit of all Securityholders (the "Reserve Account") and an Eligible
Deposit Account for the benefit of the Holders of the Class C Notes (the "Class
C Reserve Account"). The Reserve Account and the Class C Reserve Account each
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 and shall deposit or cause to be deposited in the Class C Reserve
Account an amount equal to the Class C 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 and the Class C 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 (except to the extent such Person is the
obligor on such Eligible Investment). Funds on deposit in the Reserve Account
and the Class C Reserve Account shall be invested in Eligible Investments that
will mature 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
and the Class C Reserve Account may be invested in Eligible Investments that
mature later than the next Deposit Date. Funds deposited in the Reserve Account
and the Class C 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
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assets credited to the Reserve Account and the Class C Reserve Account; (ii) the
investments or financial assets credited to the Reserve Account and the Class C
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 and the Class C Reserve Account other than the Indenture Trustee.
(d) The Reserve Account and the Class C Reserve Account each shall be
under the sole custody and control of Indenture Trustee. If, at any time, the
Reserve Account or the Class C 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 or Class C Reserve Account, as applicable, 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 or Class C 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 Premium Reduction Amount
for such Distribution Date;
(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.
(f) 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 Class C Reserve Account
to the extent
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of any Class C 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 Servicer, the excess of (A) the Additional
Servicing for such Distribution Date over (B) the aggregate of any
amounts distributed as Additional Servicing for such Distribution Date
pursuant to Section 5.5(c)(viii) and Section 5.8(e)(ii); and
(ii) to Seller, any amounts remaining.
Upon any distribution to Servicer or Seller of amounts from the Reserve
Account or the Class C 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 or the Class C 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.
(g) With respect to the Reserve Account Property and the Class C
Reserve Account Property, Seller, Issuer and the Indenture Trustee agree that
the Reserve Account Deposit and the Class C Reserve Account Deposit and all
other funds and Reserve Account Property, in the case of the Reserve Account,
all other funds and Class C Reserve Account Property, in the case of the Class C
Reserve Account shall be delivered to Indenture Trustee for credit to the
Reserve Account or the Class C Reserve Account, as the case may be. In addition:
(i) any Reserve Account Property or Class C 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 or Class C 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 or Class C Reserve Account Property, as
the case may be, as described in such paragraph; and
(iii) any Reserve Account Property or Class C Reserve
Account Property that is an "uncertificated security" under Article 8
of the UCC and
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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.
Effective upon the crediting of any Reserve Account Property to the Reserve
Account or any Class C Reserve Account Property to the Class C Reserve Account,
as the case may be, the Indenture Trustee shall be deemed to have represented
that it has purchased such Reserve Account Property or Class C Reserve Account
Property, as the case may be, for value, in good faith and without notice of any
adverse claim thereto.
(h) 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.
(i) Investment earnings attributable to the Reserve Account Property
and Class C 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 and Class C 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 and the Class C Reserve Account to be distributed on each
Distribution Date to Seller.
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(j) 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 or the Class C 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 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.
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(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 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 Notes or 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
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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.
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
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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
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
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.
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(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
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
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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 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.
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(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
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
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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.
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
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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.
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
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(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 (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
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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 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
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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
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. Servicer shall provide Standard
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& Poor's with written notice of any waiver of a Servicer Termination Event
arising under Section 8.1(c).
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 A-5, Class A-P, Class B and Class C Notes, plus accrued and
unpaid interest thereon, plus (b) the Certificate Balance plus accrued and
unpaid interest thereon. The Class A-5, Class A-P, Class B and Class C 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.
(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, Issuer 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
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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 under the Code, 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 the Rating Agency
Condition shall have been met.
(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 (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 the Rating Agency
Condition shall have been met.
(b) This Agreement may also be amended from time to time by Seller,
Servicer, Issuer 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.
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(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
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.
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(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 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
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(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
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, with a copy to AutoFinance Group, Inc. 601 Oakmont Lane,
Westmont, Illinois 60559-5549, Attention: Chief Accounting 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.
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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
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
SALE AND SERVICING AGREEMENT
48
<PAGE> 54
Receivables and/or the assignment of any or all of Issuer's rights and
obligations hereunder to Indenture Trustee.
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 Trustee,
the
SALE AND SERVICING AGREEMENT
49
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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, in its individual capacity, shall use its best efforts to
maintain, and the Owner Trustee shall cause the Issuer to use its best efforts
to maintain, and the Indenture Trustee shall 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.
SALE AND SERVICING AGREEMENT
50
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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 1997-2
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: Vice President
KEY CONSUMER ACCEPTANCE
CORPORATION, Seller
By: /s/ Craig T. Platt
-----------------------------------------
Name: Craig T. Platt
Title: President and Chief Executive Officer
KEY BANK USA, NATIONAL
ASSOCIATION, Servicer,
By: /s/ Craig T. Platt
----------------------------------------
Name: Craig T. Platt
Title: Senior Vice President
BANKERS TRUST COMPANY, a New York
banking corporation, not in its
individual capacity but solely as
Indenture Trustee,
By: /s/ Lillian Peros
----------------------------------------
Name: Lillian Peros
Title: Assistant Vice President
SALE AND SERVICING AGREEMENT
S-1
<PAGE> 57
SCHEDULE A
Schedule of Receivables
-----------------------
Delivered on Disk to Trustee and Owner Trustee
SALE AND SERVICING AGREEMENT
Schedule A-1
<PAGE> 58
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
SALE AND SERVICING AGREEMENT
Schedule B-1
<PAGE> 59
EXHIBITS A, B and C
-------------------
Form of Monthly Certificateholder Statement
-------------------------------------------
Form of Monthly Noteholder Statement
------------------------------------
Form of Servicer's Report
-------------------------
(on file with Owner Trustee and Indenture Trustee)
SALE AND SERVICING AGREEMENT
Exhibit A-1
