<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 15, 1997
REGISTRATION NO. 333-18095
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 2
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
HONDA AUTO RECEIVABLES 1997-A GRANTOR TRUST
(Issuer with respect to the Certificates)
AMERICAN HONDA RECEIVABLES CORP.
(Originator of the Trust described herein)
(Exact name of Registrant as specified in its charter)
CALIFORNIA 6146 33-0526079
(State or other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Identification Number)
Incorporation or Classification Code
Organization) Number)
700 VAN NESS AVENUE
TORRANCE, CALIFORNIA 90501
(310) 781-4100
(Address, including zip code, and telephone number, including
area code, of Originator's principal executive offices)
Y. KOHAMA
PRESIDENT
700 VAN NESS AVENUE
TORRANCE, CALIFORNIA 90501
(310) 781-4100
(Name, address, including zip code, and telephone number, including
area code, of agent for service with respect to the Registrant)
----------------
COPIES TO:
<TABLE>
<S> <C>
C. Thomas Kunz, Esq.
Dale W. Lum, Esq. Skadden, Arps, Slate,
Brown & Wood LLP Meagher & Flom LLP
555 California Street 919 Third Avenue
San Francisco, California 94104 New York, New York 10022
</TABLE>
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.
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If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
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If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
PROPOSED TITLE OF AMOUNT TO OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED PRICE PER UNIT OFFERING PRICE REGISTRATION FEE
<S> <C> <C> <C> <C>
% Asset Backed Certificates, Class
A.................................. $1,000,000.00 100%(1) $1,000,000.00(1) $303.03(2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee on the
basis of the proposed maximum offering price per unit.
(2) Previously paid.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the offering of the Class A Certificates being
registered hereby are estimated as follows:
<TABLE>
<S> <C>
SEC registration fee.............................................. $ *
Legal fees and expenses........................................... *
Accounting fees and expenses...................................... *
Blue sky fees and expenses........................................ *
Rating agency fees................................................ *
Trustee's fees and expenses....................................... *
Printing.......................................................... *
Miscellaneous..................................................... *
-----------
Total........................................................... $ *
-----------
-----------
</TABLE>
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* To be completed by amendment.
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317(b) of the California Corporations Code (the "Corporations Code")
provides that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any "proceeding" (as defined in Section 317(a)
of the Corporations Code), other than an action by or in the right of the
corporation to procure a judgment in its favor, by reason of the fact that such
person is or was a director, officer, employee or other agent of the corporation
(collectively, an "Agent"), against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with such
proceeding if the Agent acted in good faith and in a manner the Agent reasonably
believed to be in the best interest of the corporation and, in the case of a
criminal proceeding, had no reasonable cause to believe the conduct was
unlawful.
Section 317(c) of the Corporations Code provides that a corporation shall
have power to indemnify any Agent who was or is a party or is threatened to be
made a party to any threatened, pending or completed action by or in the right
of the corporation to procure a judgment in its favor by reason of the fact that
such person is or was an Agent, against expenses actually and reasonably
incurred by the Agent in connection with the defense or settlement of such
action if the Agent acted in good faith and in a manner such Agent believed to
be in the best interest of the corporation and its shareholders.
Section 317(c) further provides that no indemnification may be made
thereunder for any of the following: (i) in respect of any matter as to which an
Agent shall have been adjudged to be liable to the corporation, unless the court
in which such proceeding is or was pending shall determine that such Agent is
fairly and reasonably entitled to indemnity for expenses, (ii) amounts paid in
settling or otherwise disposing of a pending action without court approval and
(iii) expenses incurred in defending a pending action which is settled or
otherwise disposed of without court approval.
Section 317(d) of the Corporations Code requires that an Agent be
indemnified against expenses actually and reasonably incurred to the extent the
Agent has been successful on the merits in the defense of proceedings referred
to in subdivisions (b) or (c) of Section 317.
Except as provided in Section 317(d), and pursuant to Section 317(e),
indemnification under Section 317 shall be made by the corporation only if
specifically authorized and upon a determination that indemnification is proper
in the circumstances because the Agent has met the applicable standard of
conduct, by any of the following: (i) a majority vote of a quorum consisting of
directors who are not parties to
II-1
<PAGE>
the proceeding, (ii) if such a quorum of directors is not obtainable, by
independent legal counsel in a written opinion, (iii) approval of the
shareholders, provided that any shares owned by the Agent may not vote thereon,
or (iv) the court in which such proceeding is or was pending.
Pursuant to Section 317(f) of the Corporations Code, the corporation may
advance expenses incurred in defending any proceeding upon receipt of an
undertaking by the Agent to repay such amount if it is ultimately determined
that the Agent is not entitled to be indemnified.
Section 317(h) provides, with certain exceptions, that no indemnification
shall be made under Section 317 where it appears that it would be inconsistent
with a provision of the corporation's articles, bylaws, a shareholder resolution
or an agreement which prohibits or otherwise limits indemnification, or where it
would be inconsistent with any condition expressly imposed by a court in
approving a settlement.
Section 317(i) authorizes a corporation to purchase and maintain insurance
on behalf of an Agent for liabilities arising by reason of the Agent's status,
whether or not the corporation would have the power to indemnify the Agent
against such liability under the provisions of Section 317.
Reference is also made to Section 7 of the Underwriting Agreement among
Credit Suisse First Boston Corporation, as representative of the several
Underwriters, the Registrant and American Honda Finance Corporation (see Exhibit
1.1), which provides for indemnification of the Registrant under certain
circumstances.
Article IX of the Articles of Incorporation of the Registrant provides for
the indemnification of the directors of the Registrant to the fullest extent
permissible under California law.
Article IV, Section 4.01 of the Bylaws of the Registrant (see Exhibit 3.2)
requires that the Registrant indemnify, and, in certain instances, advance
expenses to, its agents, with respect to certain costs, expenses, judgments,
fines, settlements and other amounts incurred in connection with any proceeding,
to the full extent permitted by applicable law.
In addition, Article IV, Section 4.03 of the Bylaws of the Registrant
authorizes the Registrant to purchase and maintain insurance to the extent
provided by Section 3.17(i) of the Corporations Code.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
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<PAGE>
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. Exhibits:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement*
3.1 Articles of Incorporation of American Honda Receivables Corp.**
3.2 Bylaws of American Honda Receivables Corp.**
4.1 Form of Pooling and Servicing Agreement among American Honda
Receivables Corp., as Seller, American Honda Finance Corporation, as
Servicer, and Bank of Tokyo - Mitsubishi Trust Company, as Trustee
(including forms of Class A and Class B Certificates and Servicer
Letter of Credit)
4.2 Form of Standard Terms and Conditions of Pooling and Servicing
Agreement
5.1 Opinion of Brown & Wood LLP with respect to legality
8.1 Opinion of Brown & Wood LLP with respect to tax matters
10.1 Form of Receivables Purchase Agreement
23.1 Consent of Brown & Wood LLP (included as part of Exhibit 5.1)
23.2 Consent of Brown & Wood LLP (included as part of Exhibit 8.1)
24.1 Power of Attorney **
24.2 Power of Attorney for M. Yoshimi**
</TABLE>
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* To be filed by amendment.
**Previously filed
b. Financial Statement Schedules:
Not applicable.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes as follows:
(a) To provide to the Underwriters at the closing date specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriters to provide prompt delivery to
each purchaser.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is therefore
unenforceable. In the event that a claim for indemnification against such
liabilities (other than payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of such Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(c) For purposes of determining any liability under the Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act will be deemed to be part of this registration
statement as of the time it was declared effective.
(d) For purposes of determining any liability under the Act, each
post-effective amendment that contains a form of prospectus will be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time will be deemed to
be the initial bona fide offering thereof.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Amendment No. 2 to Registration Statement on Form S-1 to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Torrance and State of California, on the 15th day of July, 1997.
AMERICAN HONDA RECEIVABLES CORP.
By: /s/ Y. KOHAMA
------------------------------------------
Y. Kohama
PRESIDENT
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
EXHIBIT DESCRIPTION PAGE
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<C> <S> <C>
1.1 Form of Underwriting Agreement*
3.1 Articles of Incorporation of American Honda Receivables Corp.**.............................
3.2 Bylaws of American Honda Receivables Corp.**................................................
4.1 Form of Pooling and Servicing Agreement among American Honda Receivables Corp., as Seller,
American Honda Finance Corporation, as Servicer, and Bank of Tokyo - Mitsubishi Trust
Company, as Trustee (including forms of Class A and Class B Certificates and Servicer
Letter of Credit)..........................................................................
4.2 Form of Standard Terms and Conditions of Pooling and Servicing Agreement....................
5.1 Opinion of Brown & Wood LLP with respect to legality
8.1 Opinion of Brown & Wood LLP with respect to tax matters
10.1 Form of Receivables Purchase Agreement......................................................
23.1 Consent of Brown & Wood LLP (included as part of Exhibit 5.1)
23.2 Consent of Brown & Wood LLP (included as part of Exhibit 8.1)
24.1 Power of Attorney **
24.2 Power of Attorney for M. Yoshimi**
</TABLE>
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* To be filed by amendment.
**Previously filed
b. Financial Statement Schedules:
<PAGE>
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AMERICAN HONDA RECEIVABLES CORP.,
as Seller
AMERICAN HONDA FINANCE CORPORATION,
as Servicer
and
BANK OF TOKYO-MITSUBISHI TRUST COMPANY,
as Trustee
on behalf of the Certificateholders
______________________________________
POOLING AND SERVICING AGREEMENT
Dated as of July 1, 1997
______________________________________
$__________
Honda Auto Receivables 1997-A Grantor Trust
_____% Asset Backed Certificates
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<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DEFINITIONS AND TERMS
Section 1.01. Special Definitions and Terms............................ 1
Section 1.02. Other Definitions and Terms.............................. 4
ARTICLE TWO
CREATION OF TRUST
Section 2.01. Creation of Trust........................................ 4
ARTICLE THREE
CONVEYANCE OF RECEIVABLES; SERVICER LETTER OF CREDIT
Section 3.01. Conveyance of Receivables................................ 4
Section 3.02. Servicer Letter of Credit................................ 5
ARTICLE FOUR
ACCEPTANCE BY TRUSTEE
Section 4.01. Acceptance by Trustee.................................... 5
ARTICLE FIVE
INCORPORATION OF STANDARD
TERMS AND CONDITIONS
Section 5.01. Incorporation of Standard Terms and Conditions........... 5
(i)
<PAGE>
Page
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ARTICLE SIX
ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF SELLER
Section 6.01. Additional Representations and Warranties of Seller...... 5
ARTICLE SEVEN
AMERICAN HONDA NOT TO RESIGN AS SERVICER
Section 7.01. American Honda Not to Resign as Servicer................. 6
ARTICLE EIGHT
AGENT FOR SERVICE
Section 8.01. Agent for Service........................................ 7
ARTICLE NINE
TRUSTEE TO HOLD CERTIFICATE AND PAYAHEAD
ACCOUNTS, RESERVE FUND AND YIELD SUPPLEMENT ACCOUNT
Section 9.01. Trustee to Hold Certificate and Payahead Accounts, Reserve
Fund and Yield Supplement Account............................. 7
ARTICLE TEN
[Reserved]
SCHEDULES
Schedule A - Schedule of Receivables.................................. SA-1
Schedule B - Locations of Receivable Files............................ SB-1
(ii)
<PAGE>
Page
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EXHIBITS
Exhibit A - Form of Class A Certificate.................................A-1
Exhibit B - Form of Class B Certificate.................................B-1
Exhibit C - Form of Letter of Representations...........................C-1
Exhibit D - Form of Servicer Letter of Credit...........................D-1
Exhibit E - Form of Servicer Report.....................................E-1
(iii)
<PAGE>
This Pooling and Servicing Agreement, dated as of July 1, 1997, is made
with respect to the formation of the Honda Auto Receivables 1997-A Grantor
Trust, among American Honda Receivables Corp., a California corporation (the
"Seller"), American Honda Finance Corporation, a California corporation (the
"Servicer"), and Bank of Tokyo-Mitsubishi Trust Company, a New York banking
corporation, as trustee (the "Trustee").
W I T N E S S E T H:
In consideration of the premises and of the mutual agreements herein
contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS AND TERMS
Section 1.01. SPECIAL DEFINITIONS AND TERMS. Whenever used in the
Standard Terms and Conditions and in this Agreement, the following words and
phrases shall have the following meanings, unless otherwise indicated by the
context:
"AGREEMENT" means this Pooling and Servicing Agreement and all amendments
hereof and supplements hereto.
"AGGREGATE NET LOSSES" means, with respect to a Collection Period, an
amount equal to the aggregate Principal Balance of all Receivables that became
Defaulted Receivables during such Collection Period minus all Net Liquidation
Proceeds collected during such Collection Period with respect to Defaulted
Receivables.
"CERTIFICATE REGISTRAR" means the Trustee unless a successor Certificate
Registrar is appointed pursuant to Section 15.03 of the Standard Terms and
Conditions. The Certificate Registrar initially designates its offices at
1251 Avenue of the Americas, 10th Floor, New York, New York 10020-1104, as its
offices where Certificates may be surrendered for registration of transfer or
exchange as described in Section 15.07 of the Standard Terms and Conditions.
"CHARGE-OFF RATE" means, with respect to a Collection Period, the
percentage equivalent of a fraction, the numerator of which is the Aggregate Net
Losses for such Collection Period, and the denominator of which is the average
of (i) the Pool Balance on the last day of the Collection Period immediately
preceding such Collection Period and (ii) the Pool Balance on the last day of
such current Collection Period; such quotient is then multiplied by twelve to
arrive at an annualized percentage.
"CLASS A PERCENTAGE" means __.__%.
"CLASS B PERCENTAGE" means _.__%.
<PAGE>
"CLOSING DATE" means July __, 1997.
"CORPORATE TRUST OFFICE" means, as of the date hereof, the office of the
Trustee located at 1251 Avenue of the Americas, 10th Floor, New York, New York
10020-1104, Attention: __________________________.
"CURRENT RECEIVABLE" means each Receivable that is not a Defaulted
Receivable or a Liquidated Receivable.
"CUTOFF DATE" means July 1, 1997.
"DELINQUENCY PERCENTAGE" means, with respect to a Collection Period, the
percentage equivalent of a fraction, the numerator of which is the number of (i)
all outstanding Receivables 61 days or more delinquent (after taking into
account permitted extensions) as of the last day of such Collection Period,
determined in accordance with the Servicer's normal practices, plus (ii) all
Receivables the related Financed Vehicles of which have been repossessed but
have not been liquidated (to the extent the related Receivable is not otherwise
reflected in clause (i) above or is not a Defaulted Receivable), and the
denominator of which is the aggregate number of Current Receivables on the last
day of such Collection Period.
The first "DISTRIBUTION DATE" shall be August 15, 1997.
The "FINAL SCHEDULED DISTRIBUTION DATE" shall be __________ 15, 20__.
"INITIAL SERVICER LETTER OF CREDIT AMOUNT" means $__________.
"LETTER OF CREDIT BANK" means ____________________, and its successors.
The Letter of Credit Bank initially designates its offices at
____________________, Attention: __________ Department, as its offices for
receiving demands, notices and communications as described in Section 21.05 of
the Standard Terms and Conditions.
"LETTER OF REPRESENTATIONS" means the Letter of Representations among the
Seller, the Trustee and DTC, substantially in the form attached hereto as
Exhibit C.
"ORIGINAL POOL BALANCE" means $__________.
"ORIGINAL CLASS A CERTIFICATE BALANCE" means $__________.
"ORIGINAL CLASS B CERTIFICATE BALANCE" means $__________.
"PASS-THROUGH RATE" means _____% per annum.
"RATING AGENCY" means each of Moody's and Standard & Poor's.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement, dated as of the Cutoff Date, between the Seller and American Honda.
2
<PAGE>
"REQUIRED RATING" means a rating on commercial paper or other short-term
unsecured debt obligations of Prime-1 by Moody's and A-1+ by Standard & Poor's;
and any requirement that commercial paper or short-term unsecured debt
obligations have the "Required Rating" shall mean that such commercial paper or
unsecured debt obligations shall be rated at least equal to the foregoing
ratings from Moody's and Standard & Poor's.
"REQUIRED SERVICER RATING" means a rating on short-term obligations of the
Servicer of at least Prime-1 by Moody's and A-1 by Standard & Poor's; and any
requirement that the Servicer have the "Required Servicer Rating" shall mean
that the short-term unsecured debt obligations of the Servicer shall be rated at
least equal to the foregoing ratings from Moody's and Standard & Poor's.
"RESERVE FUND INITIAL DEPOSIT" means $__________.
"SERVICER LETTER OF CREDIT PERCENTAGE" means _____%.
"SERVICING FEE RATE" means 1.00% per annum.
"SERVICER CERTIFICATE" means the monthly report by the Servicer, in the
form attached hereto as Exhibit E.
"SPECIFIED RESERVE FUND BALANCE" means, with respect to any Distribution
Date, $__________ except that, if on any Distribution Date (i) the average of
the Charge-off Rates for the preceding three Collection Periods exceeds ____% or
(ii) the average of the Delinquency Percentages for the preceding three
Collection Periods exceeds ____%, then the Specified Reserve Fund Balance for
such Distribution Date will be an amount equal to a specified percentage of the
Pool Balance as of the last day of the related Collection Period. Such
specified percentage shall be determined by deducting from ____% the following
fraction, expressed as a percentage: (a) one minus (b) a fraction, the numerator
of which is the Class A Certificate Balance on such Distribution Date (after
giving effect to distributions of principal made on such Distribution Date) and
the denominator of which is such Pool Balance. Notwithstanding the foregoing,
in no event will the Specified Reserve Fund Balance be more than $______________
or less than $______________. Finally, on any Distribution Date as to which the
Pool Balance as of the last day of the related Collection Period is
$___________________ or less, the Specified Reserve Fund Balance for such
Distribution Date will be the greater of the applicable amount determined as set
forth above or $____________.
"STANDARD TERMS AND CONDITIONS" means the Standard Terms and Conditions of
Agreement (Senior/Subordinated) for Honda Auto Receivables Grantor Trust
effective July 1, 1997, in the form attached hereto.
"YIELD SUPPLEMENT ACCOUNT DEPOSIT" means $_____________.
3
<PAGE>
Section 1.02. OTHER DEFINITIONS AND TERMS. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Standard Terms and Conditions.
ARTICLE TWO
CREATION OF TRUST
Section 2.01. CREATION OF TRUST. Upon the execution of this Agreement by
the parties hereto, there is hereby created the Honda Auto Receivables 1997-A
Grantor Trust.
ARTICLE THREE
CONVEYANCE OF RECEIVABLES; SERVICER LETTER OF CREDIT
Section 3.01. CONVEYANCE OF RECEIVABLES. In consideration of the
Trustee's delivery to the Seller of executed and authenticated Certificates, in
authorized denominations, in an aggregate amount equal to the Original Pool
Balance, the Seller does hereby sell, transfer, assign and otherwise convey to
the Trustee, in trust for the benefit of the Certificateholders, without
recourse (subject to the Seller's obligations herein) all right, title and
interest of the Seller in and to:
(i) the Receivables and all monies due thereon or paid thereunder
or in respect thereof (including proceeds of the repurchase of Receivables
by the Seller pursuant to Section 12.05 or 20.02 of the Standard Terms and
Conditions or the purchase of Receivables by the Servicer pursuant to
Section 13.08 or 20.02 of the Standard Terms and Conditions) on and after
the Cutoff Date;
(ii) the security interests in the Financed Vehicles and any
accessions thereto;
(iii) any proceeds of any physical damage insurance policies
covering the Financed Vehicles and in any proceeds of any credit life or
credit disability insurance policies relating to the Receivables or the
Obligors;
(iv) any proceeds of Dealer Recourse;
(v) the Receivables Purchase Agreement but not the obligations of
the Seller thereunder;
(vi) the right of the Seller to realize upon any property
(including the right to receive future Liquidation Proceeds) that shall have
secured a Receivable and have been repossessed by or on behalf of the
Trustee;
4
<PAGE>
(vii) all other assets comprising the Trust; and
(viii) all proceeds of the foregoing.
The parties hereto intend that the conveyance hereunder be a sale. In the
event that the conveyance hereunder is not for any reason considered a sale, the
Seller hereby grants to the Purchaser a first priority perfected security
interest in, all of its right, title and interest in, to and under the
Receivables, and all other property conveyed hereunder and all proceeds of any
of the foregoing and the parties intend that this Agreement constitute a
security agreement under applicable law.
Section 3.02. SERVICER LETTER OF CREDIT. Upon the obtaining of a Servicer
Letter of Credit pursuant to Sections 14.02(b) and 14.09 of the Standard Terms
and Conditions, the Trustee will hold the Servicer Letter of Credit and deliver
demands for payment pursuant thereto in accordance with its terms and the terms
of this Agreement.
ARTICLE FOUR
ACCEPTANCE BY TRUSTEE
Section 4.01. ACCEPTANCE BY TRUSTEE. The Trustee does hereby accept all
consideration conveyed by the Seller pursuant to Section 3.01 hereof, together
with the Servicer Letter of Credit, and declares that the Trustee shall hold
such consideration upon the trusts herein set forth for the benefit of holders
of the Certificates, subject to the terms and provisions of this Agreement.
ARTICLE FIVE
INCORPORATION OF STANDARD
TERMS AND CONDITIONS
Section 5.01. INCORPORATION OF STANDARD TERMS AND CONDITIONS. This
Pooling and Servicing Agreement does hereby incorporate by reference the
Standard Terms and Conditions, in the form attached hereto.
ARTICLE SIX
ADDITIONAL REPRESENTATIONS AND WARRANTIES
OF SELLER
Section 6.01. ADDITIONAL REPRESENTATIONS AND WARRANTIES OF SELLER. The
Seller does hereby make the following representations and warranties on which
the Trustee shall rely in accepting the Receivables in trust and authenticating
the Certificates.
5
<PAGE>
(i) MATURITY OF RECEIVABLES. Each Receivable shall have an
original maturity of not less than 12 months nor greater than 60 months and,
as of the Cutoff Date, a remaining maturity of not less than six months nor
greater than 60 months.
(ii) FINANCE CHARGE. Each Receivable provides for the payment of a
finance charge calculated at its APR based on the Rule of 78s, the actuarial
method or the simple interest method and such APR shall, if based on (A) the
Rule of 78s, be equal to or greater than _____% and equal to or less than
_____%, (B) the actuarial method, be equal to or greater than _____% and
equal to or less than _____% and (C) the simple interest method, be equal to
or greater than _____% and equal to or less than _____%.
(iii) PRINCIPAL BALANCE. Each Receivable had an original principal
balance of not less than $__________ nor more than $__________ and an unpaid
principal balance, as of the Cutoff Date, of not less than $__________ nor
more than $__________.
(iv) ORIGINATION. Each Receivable was originated on or before
1, 199_.
(v) NO OVERDUE PAYMENTS. No Receivable shall have a Scheduled
Payment that is more than 30 days past due as of the Cutoff Date.
(vi) LOCATION OF RECEIVABLE FILES. Each Receivable File shall be
kept at one of the locations listed in Schedule SB-1 hereto.
(vii) NEW OR USED FINANCED VEHICLES. Each Financed Vehicle shall be
a new Honda or Acura motor vehicle.
(viii) ADDRESS OF EACH OBLIGOR. The Obligor under each Receivable
had a current address in the United States as of the Cutoff Date.
ARTICLE SEVEN
AMERICAN HONDA NOT TO RESIGN AS SERVICER
Section 7.0 AMERICAN HONDA NOT TO RESIGN AS SERVICER. Subject to the
provisions of Section 17.03 of the Standard Terms and Conditions, the Servicer
shall not resign from the obligations and duties hereby imposed on it as
Servicer under this Agreement except upon determination that the performance of
its duties under this Agreement shall no longer be
6
<PAGE>
permissible under applicable law. Notice of any such determination permitting
the resignation of the Servicer shall be communicated to the 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 the Trustee concurrently with or promptly after such notice. No
such resignation shall become effective until the Trustee or a successor
Servicer shall have assumed the responsibilities and obligations of the Servicer
in accordance with Sections 17.05 and 18.03 of the Standard Terms and
Conditions.
ARTICLE EIGHT
AGENT FOR SERVICE
Section 8.01. AGENT FOR SERVICE. The agent for service for the Seller
shall be CT Corp., 818 West 7th Street, Second Floor, Los Angeles, California
90017, and the agent for service for the Servicer shall be its President, 700
Van Ness Avenue, Building 300, Torrance, California 90501.
ARTICLE NINE
TRUSTEE TO HOLD CERTIFICATE AND PAYAHEAD
ACCOUNTS, RESERVE FUND AND YIELD SUPPLEMENT ACCOUNT
Section 9.01. TRUSTEE TO HOLD CERTIFICATE AND PAYAHEAD ACCOUNTS, RESERVE
FUND AND YIELD SUPPLEMENT ACCOUNT. For so long as Bank of Tokyo-Mitsubishi
Trust Company (a) is the Trustee and (b) does not have a long-term debt rating
from Moody's, (i) the Certificate Account and the Payahead Account shall be
maintained with the Trustee as described in clause (ii) of the second sentence
of Section 14.01(a) of the Standard Terms and Conditions, (ii) the Reserve Fund
shall be maintained with the Trustee pursuant to clause (B)(2) of the second
sentence of Section 14.07(a)(i) of the Standard Terms and Conditions, and
(iii) the Yield Supplement Account shall be maintained with the Trustee as
described in clause (ii) of the second sentence of Section 14.11(a) of the
Standard Terms and Conditions. In the event that (i) the long-term debt of the
Trustee subsequently is rated but does not satisfy clause (ii) of the second
sentence of Section 14.01(a), clause (B) of the second sentence of Section
14.07(a)(i) of the Standard Terms and Conditions and clause (ii) of the second
sentence of Section 14.11(a) of the Standard Terms and Conditions or (ii)
Moody's informs the parties hereto that the first sentence of this Section shall
no longer be operative, the Servicer shall, with the assistance of the Trustee
as necessary, cause (1) the Certificate Account, the Payahead Account to be
moved to an institution or an account otherwise satisfying the requirements of
Section 14.01(a) of the Standard Terms and Conditions, (2) the Reserve Fund to
be moved to an institution or an account otherwise satisfying the requirements
of Section 14.07(a)(i) of the Standard Terms and Conditions and (3) the Yield
Supplement Account to be moved to an institution or account otherwise satisfying
the requirements of Section 14.11(a)(i) of the Standard Terms and Conditions.
7
<PAGE>
ARTICLE TEN
[Reserved]
8
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Pooling and Servicing
Agreement to be duly executed by their respective officers as of the day and
year first above written.
AMERICAN HONDA RECEIVABLES CORP.,
as Seller
By:
-----------------------------------
Y. Kohama
President
AMERICAN HONDA FINANCE
CORPORATION,
as Servicer
By:
-----------------------------------
Y. Kohama
President
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
as Trustee
By:
-----------------------------------
Name:
Title:
9
<PAGE>
SCHEDULE SA
SCHEDULE OF RECEIVABLES
Omitted - Originals on file at the offices of the Seller, the Servicer and
the Trustee.
SA-1
<PAGE>
SCHEDULE SB
LOCATIONS OF RECEIVABLE FILES
American Honda Finance Corporation
21041 South Western Avenue, Suite 200
Torrance, California 90501
American Honda Finance Corporation
1250 Northmeadow Parkway, Suite 120
Roswell, Georgia 30076
American Honda Finance Corporation
8505 Freeport Parkway, Suite 600
Irving, Texas 75063
American Honda Finance Corporation
8505 Freeport Parkway, Suite 625
Irving, Texas 75063
American Honda Finance Corporation
470 Granby Road, Suite 2
S. Hadley, Massachusetts 01075
American Honda Finance Corporation
601 Campus Drive, Suite C-7
Arlington Heights, Illinois 60004
American Honda Finance Corporation
2680 Bishop Drive, Suite 100
San Ramon, California 94583
American Honda Finance Corporation
8514 McAlpine Park Drive, Suite 100
Charlotte, North Carolina 28211
American Honda Finance Corporation
200 Continental Drive, Suite 301
Newark, Delaware 19713
American Honda Finance Corporation
700 Van Ness Avenue, Building 300
Torrance, California 90501
SB-1
<PAGE>
EXHIBIT A
FORM OF CLASS A CERTIFICATE
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
HONDA AUTO RECEIVABLES 1997-A GRANTOR TRUST
_____% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of retail installment
sale contracts secured by the new and used automobiles financed
thereby and sold to the Trust by American Honda Receivables Corp. The
Final Scheduled Distribution Date is __________ 15, 20__.
(This Certificate does not represent an interest in or obligation of
American Honda Receivables Corp., American Honda Finance Corporation
or any of their respective affiliates)
CUSIP _________
NUMBER RA-1 $___________
THIS CERTIFIES THAT CEDE & CO. is the registered owner of a __________
dollar ($__________) nonassessable, fully-paid, fractional undivided interest in
the Honda Auto Receivables 1997-A Grantor Trust (the "Trust") formed by American
Honda Receivables Corp., a California corporation (the "Seller"). The Trust was
created pursuant to a Pooling and Servicing Agreement, dated as of July 1, 1997
(the "Agreement"), among the Seller, American Honda Finance Corporation, as
Servicer, and ____________________, as trustee (the "Trustee"). A summary of
certain of the pertinent provisions of the Agreement is set forth below. To the
extent not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Agreement.
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Honda Auto Receivables 1997-A Grantor Trust
_____% Asset Backed
A-1
<PAGE>
Certificates, Class A" (the "Class A Certificates"). Also issued under the
Agreement are certificates designated as "Honda Auto Receivables 1997-A Grantor
Trust _____% Asset Backed Certificates, Class B" (the "Class B Certificates"
and, together with the Class A Certificates, the "Certificates"). The Class B
Certificates are subordinated to the Class A Certificates to the limited extent
described in the Agreement. The aggregate undivided interest in the Trust
evidenced by all Class A Certificates is _____%. This Class A Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Class A Certificate by virtue
of the acceptance hereof assents and by which such Holder is bound. The
property of the Trust includes, among other things, a pool of retail installment
sale contracts (the "Receivables") for the new and used automobiles financed
thereby (the "Financed Vehicles") and certain monies due or received under the
Receivables on and after the Cutoff Date, security interests in the Financed
Vehicles and accessions thereto, certain bank accounts, proceeds from claims on
physical damage, credit life and disability insurance policies covering each of
the Financed Vehicles, the Receivables or the related Obligors, the rights of
the Seller under the Receivables Purchase Agreement, the right of the Seller to
receive the proceeds of Dealer Recourse and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the fifteenth day of each
month or, if such day is not a Business Day, the next succeeding Business Day
(each, a "Distribution Date"), commencing on ________ 15, 1997, to the Person in
whose name this Class A Certificate is registered at the close of business on
the last calendar day immediately preceding the related Distribution Date or, if
Definitive Certificates are issued, the last day of the immediately preceding
calendar month (each, a "Record Date"), such Class A Certificateholder's
percentage interest in the Class A Distributable Amount for such Distribution
Date actually distributed, together with the payment of any outstanding Class A
Interest Carryover Shortfall and Class A Principal Carryover Shortfall actually
made on such Distribution Date, in each case to the extent and as more
specifically set forth in the Agreement.
Distributions on this Class A Certificate will be made by the Trustee by
check or money order mailed to the related Class A Certificateholder of record
in the Certificate Register without the presentation or surrender of this
Class A Certificate or the making of any notation hereon except that with
respect to Class A Certificates registered in the name of Cede & Co., the
nominee for The Depository Trust Company, distributions will be made in the form
of immediately available funds. Except as otherwise provided in the Agreement
and notwithstanding the foregoing, the final distribution on this Class A
Certificate will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A
Certificate at the office or agency maintained for that purpose by the Trustee
in the Borough of Manhattan, The City of New York.
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer or any of their respective affiliates. The Certificates
are limited in right of payment to certain collections and recoveries respecting
the Receivables and the monies on deposit in the Reserve Fund and the Yield
Supplement Account, all as more specifically set forth in the Agreement. A copy
of the Agreement may be examined during normal business hours at the
A-2
<PAGE>
principal office of the Trustee, and at such other places, if any, designated by
the Trustee, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement at
any time by the Seller, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing not less than 51% of the Voting Interests of
all Certificates, voting together as a single class. Any such consent by the
Holder of this Class A Certificate shall be conclusive and binding on such
Holder and on all future Holders of this Class A Certificate and of any Class A
Certificate issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon
this Class A Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Class A Certificate is registrable in the
Certificate Register upon surrender of this Class A Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in the
Borough of Manhattan, The City of New York, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Class A Certificates of authorized
denominations evidencing the same aggregate principal amount will be issued to
the designated transferee.
The Class A Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $1,000 and integral multiples
thereof (except for one Class A Certificate in a smaller minimum denomination
representing any remaining portion of the Original Class A Certificate Balance).
As provided in the Agreement and subject to certain limitations therein set
forth, Class A Certificates are exchangeable for new Class A Certificates of
authorized denominations evidencing the same aggregate principal amount, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
Prior to due presentation of this Class A Certificate for registration of
transfer, the Trustee, the Certificate Registrar and any of their respective
agents may treat the Person in whose name this Class A Certificate is registered
as the owner hereof for the purposes of receiving distributions and for all
other purposes, and none of the Trustee, the Certificate Registrar nor any such
agent shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement or the maturity or
liquidation of the last Receivable and the disposition of all property held as
part of the Trust. The Seller or the Servicer, or any successor to the
Servicer, may, at its option, purchase the corpus of the Trust at a price
A-3
<PAGE>
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is exercisable only on a Distribution Date following the
last day of any Collection Period as of which the Pool Balance is 10% or less of
the Original Pool Balance.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class A
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class A Certificate to be duly executed.
Dated: HONDA AUTO RECEIVABLES 1997-A
GRANTOR TRUST
By: ,
----------------
as Trustee
By: ------------------------------
Authorized Officer
[SEAL]
ATTEST:
- ------------------------------
Authorized Officer
This is one of the Class A Certificates referred to in the within-mentioned
Agreement.
,
-------------------
as Trustee
By:
------------------------------
Authorized Officer
A-4
<PAGE>
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 typewrite 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 as it
appears upon 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.
A-5
<PAGE>
EXHIBIT B
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A CERTIFICATES
AS DESCRIBED IN THE AGREEMENT REFERRED TO HEREIN.
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE APPLICABLE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
STATE LAWS OR IS SOLD OR TRANSFERRED IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND STATE LAWS AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 15.03 OF THE AGREEMENT REFERRED TO HEREIN.
HONDA AUTO RECEIVABLES 1997-A GRANTOR TRUST
_____% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined
below, the property of which includes a pool of retail installment
sale contracts secured by the new and used automobiles financed
thereby and sold to the Trust by American Honda Receivables Corp. The
Final Scheduled Distribution Date is __________ 15, 20__.
(This Certificate does not represent an interest in or obligation of
American Honda Receivables Corp., American Honda Finance Corporation
or any of their respective affiliates)
CUSIP __________
NUMBER RB-1 $__________
THIS CERTIFIES THAT AMERICAN HONDA RECEIVABLES CORP. is the registered
owner of a ____________________ dollar ($__________) nonassessable, fully-paid,
fractional undivided interest in the Honda Auto Receivables 1997-A Grantor Trust
(the "Trust") formed by American Honda Receivables Corp., a California
corporation (the "Seller"). The Trust was created pursuant to a Pooling and
Servicing Agreement dated as of July 1, 1997 (the "Agreement"), among the
Seller, American Honda Finance Corporation, as Servicer, and
____________________, as trustee (the "Trustee"). A summary of certain of the
pertinent provisions of the Agreement is set forth below. To the extent not
otherwise defined herein, the capitalized terms used herein have the meanings
assigned to them in the Agreement.
B-1
<PAGE>
This Certificate is one of the duly authorized Certificates issued under
the Agreement and designated as "Honda Auto Receivables 1997-A Grantor Trust
_____% Asset Backed Certificates, Class B" (the "Class B Certificates"). Also
issued under the Agreement are certificates designated as "Honda Auto
Receivables 1997-A Grantor Trust _____% Asset Backed Certificates, Class A" (the
"Class A Certificates" and, together with the Class B Certificates, the
"Certificates"). The Class B Certificates are subordinated to the Class A
Certificates to the limited extent described in the Agreement. The aggregate
undivided interest in the Trust evidenced by all Class B Certificates is _____%.
This Class B Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class B
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound. The property of the Trust includes, among other things, a pool of
retail installment sale contracts (the "Receivables") for the new and used
automobiles financed thereby (the "Financed Vehicles"), certain monies due or
received under the Receivables on and after the Cutoff Date, security interests
in the Financed Vehicles and accessions thereto, certain bank accounts, proceeds
from claims on physical damage, credit life and disability insurance policies
covering any of the Financed Vehicles, the Receivables or the related Obligors,
the rights of the Seller under the Receivables Purchase Agreement, the right of
the Seller to receive the proceeds of any Dealer Recourse and all proceeds of
the foregoing.
Under the Agreement, there will be distributed on the fifteenth day of each
month or, if such day is not a Business Day, the next succeeding Business Day
(each, a "Distribution Date"), commencing on _____ 15, 1997, to the Person in
whose name this Class B Certificate is registered at the close of business on
the last day of the immediately preceding calendar month (each, a "Record
Date"), such Class B Certificateholder's percentage interest in the Class B
Distributable Amount for such Distribution Date actually distributed, together
with the payment of any outstanding Class B Interest Carryover Shortfall and any
outstanding Class B Principal Carryover Shortfall actually made on such
Distribution Date, in each case to the extent and as more specifically set forth
in the Agreement.
Distributions on this Class B Certificate will be made by the Trustee by
check or money order mailed to the related Class B Certificateholder of record
in the Certificate Register without the presentation or surrender of this
Class B Certificate or the making of any notation hereon. Except as otherwise
provided in the Agreement and notwithstanding the foregoing, the final
distribution on this Class B Certificate will be made after due notice by the
Trustee of the pendency of such distribution and only upon presentation and
surrender of this Class B Certificate at the office or agency maintained for
that purpose by the Trustee in the Borough of Manhattan, The City of New York.
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer or any of their respective affiliates. The Certificates
are limited in right of payment to certain collections and recoveries respecting
the Receivables and the monies on deposit in the Reserve Fund and the Yield
Supplement Account, all as more specifically set forth in the Agreement. A copy
of the Agreement may be examined during normal business hours at the principal
office of the Trustee, and at such other places, if any, designated by the
Trustee, by any Certificateholder upon request.
B-2
<PAGE>
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
parties thereto and the rights of the Certificateholders under the Agreement at
any time by the Seller, the Servicer and the Trustee with the consent of the
Holders of Certificates evidencing not less than 51% of the Voting Interests of
all Certificates, voting together as a single class. Any such consent by the
Holder of this Class B Certificate shall be conclusive and binding on such
Holder and on all future Holders of this Class B Certificate and of any Class B
Certificate issued upon the registration of transfer hereof or in exchange
herefor or in lieu hereof whether or not notation of such consent is made upon
this Class B Certificate. The Agreement also permits the amendment thereof, in
certain circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Class B Certificate is registrable in the
Certificate Register upon surrender of this Class B Certificate for registration
of transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in the
Borough of Manhattan, The City of New York, accompanied by a written instrument
of transfer in form satisfactory to the Trustee and the Certificate Registrar
duly executed by the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Class B Certificates of authorized
denominations evidencing the same aggregate principal amount will be issued to
the designated transferee.
The Class B Certificates are issuable only as registered Certificates
without coupons in minimum denominations of $100,000 and integral multiples
thereof (except for one Class B Certificate in a smaller minimum denomination
representing any remaining portion of the Original Class B Certificate Balance).
As provided in the Agreement and subject to certain limitations therein set
forth, Class B Certificates are exchangeable for new Class B Certificates of
authorized denominations evidencing the same aggregate principal amount, as
requested by the Holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
Prior to due presentation of this Class B Certificate for registration of
transfer, the Trustee, the Certificate Registrar and any of their respective
agents may treat the Person in whose name this Class B Certificate is registered
as the owner hereof for the purpose of receiving distributions and for all other
purposes, and none of the Trustee, the Certificate Registrar nor any such agent
shall be affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and the Trust
created thereby shall terminate upon the payment to Certificateholders of all
amounts required to be paid to them pursuant to the Agreement or the maturity or
liquidation of the last Receivable and the disposition of all property held as
part of the Trust. The Seller or the Servicer, or any successor to the
Servicer, may, at its option, purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Certificates; however,
such right of purchase is
B-3
<PAGE>
exercisable only on a Distribution Date following the last day of any Collection
Period as of which the Pool Balance is 10% or less of the Original Pool Balance.
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the Trustee, by manual signature, this Class B
Certificate shall not entitle the Holder hereof to any benefit under the
Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this Class B Certificate to be duly executed.
Dated: HONDA AUTO RECEIVABLES 1997-A
GRANTOR TRUST
By: ,
---------------------
as Trustee
By:
------------------------------
Authorized Officer
[SEAL]
ATTEST:
- -----------------------------------
Authorized Officer
This is one of the Class B Certificates referred to in the within-mentioned
Agreement.
,
----------------------
as Trustee
By:
------------------------------
Authorized Officer
B-4
<PAGE>
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 typewrite 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 as it
appears upon 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.
B-5
<PAGE>
EXHIBIT C
LETTER OF REPRESENTATIONS
C-1
<PAGE>
EXHIBIT D
IRREVOCABLE LETTER OF CREDIT
July __, 1997
Credit No. __________
Bank of Tokyo-Mitsubishi Trust Company
1251 Avenue of the Americas
10th Floor
New York, New York 10020
Attention: Corporate Trust Office
Dear Sirs:
At the request and for the account of our customer, American Honda Finance
Corporation, a California corporation ("American Honda"), we (the "Letter of
Credit Bank") hereby establish in your favor this Irrevocable Letter of Credit
(this "Letter of Credit"), wherein you, as trustee (the "Trustee") under the
Pooling and Servicing Agreement dated as of July __, 1997 (the "Pooling and
Servicing Agreement") among American Honda Receivables Corp. ("AHRC"), American
Honda and you, pursuant to which $__________ aggregate principal amount of
_____% Asset Backed Certificates (the "Certificates") of the Honda Auto
Receivables 1997-A Grantor Trust (the "Trust") have been issued, are hereby
irrevocably authorized to draw upon the terms and conditions hereinafter set
forth, in an aggregate amount not exceeding ____________________ dollars
($__________) (hereinafter, as reduced from time to time in accordance with the
provisions hereof, the "Stated Amount"). This Letter of Credit is effective
immediately, is irrevocable and expires at the close of business on July __,
199_ (the "Expiration Date") at our counters.
Funds under this Letter of Credit are available to you in one or more
drawings against your draft, accompanied by your written certificate signed by
one who states therein that he or she is your duly authorized officer,
appropriately completed, in the form of Annex 1 hereto.
We hereby agree that each demand made under and in compliance with the
terms of this Letter of Credit will be duly honored by us upon due delivery of
the certificate(s), as specified above, appropriately completed (together with
such enclosures, if any, required thereby), if presented as specified on or
before the Termination Date (as hereinafter defined). If a presentation in
respect of payment is made by you hereunder at or prior to 11:00 a.m., New York
time, on a Business Day, and provided that the documents so presented conform to
D-1
<PAGE>
the terms and conditions hereof, payment shall be made to you of the amount
specified in immediately available funds, not later than 2:30 p.m., New York
time, on such Business Day. If a presentation in respect of payment is made by
you hereunder after 11:00 a.m., New York time, on a Business Day, such
presentation shall be deemed to have been made prior to 11:00 a.m., New York
time, on the next succeeding Business Day. You agree to use your best efforts
to provide us telephonic notice at the time any presentation in respect of
payment is made hereunder; provided, however, that failure to provide such
telephonic notice shall not affect our obligation to make payment in respect of
any such presentation in respect of payment. If requested by you, payment under
this Letter of Credit will be made by wire transfer to an account specified by
the Trustee in the related certificate. As used herein, "Business Day" shall
mean any day other than a Saturday, a Sunday, or any other day on which the
Trustee or banking institutions in New York, New York or Los Angeles, California
shall be authorized or obligated by law, executive order or governmental decree
to be closed.
Only you, as Trustee (or any successor trustee as hereinafter provided),
may make a drawing under this Letter of Credit. Upon the payment of the amount
specified in the related certificate(s) presented hereunder, we shall be fully
discharged of our obligation under this Letter of Credit with respect to such
certificate(s), and we shall not thereafter be obligated to make any further
payments under this Letter of Credit in respect of such certificate(s) to you or
any other person. By paying to you an amount demanded in accordance herewith,
we make no representation as to the correctness of the amount demanded.
This Letter of Credit shall automatically terminate at our close of
business in New York, New York on the first to occur of the following dates (the
"Termination Date"): (i) the Expiration Date, or if said date shall not be a
Business Day, on the Business Day next succeeding said date, (ii) the date of
receipt by us of your written certificate signed by your authorized officer,
appropriately completed, in the form of Annex 2 hereto, and (iii) the date of
payment by us of the final drawing available to be made hereunder. If we are
not then in default hereunder by reason of our having wrongfully failed to honor
a demand for payment hereunder, this Letter of Credit shall be promptly
surrendered to us upon the Termination Date.
Payments in respect of drawings hereunder honored by us shall not, in the
aggregate, exceed the initial Stated Amount. Each drawing honored by us
hereunder shall PRO TANTO reduce the Stated Amount in effect immediately prior
to such drawing.
The Stated Amount under the Letter of Credit shall be further reduced as
specified in any certificate in the form of Annex 3 hereto (each a "Reduction
Certificate") that you may deliver to us.
This Letter of Credit shall be governed by the internal laws of the State
of New York, including, without limitation, Article 5 of the Uniform Commercial
Code as in effect in the State of New York. This Letter of Credit shall be
supplemented by the provisions (to the extent that such provisions are not
inconsistent with this Letter of Credit and said Article 5) of the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce, Publication No. 500, except Article 41 thereof.
D-2
<PAGE>
All documents presented to us in connection with any demand for payment
hereunder, as well as all notices and other communications to us in, respect of
this Letter of Credit shall be in writing, or shall be transmitted by tested
telex or telecopier (promptly confirmed in either case in writing), and shall be
addressed to us at ______________, [address], Attention: ____________________,
specifically referring thereon to this Letter of Credit by number.
You may transfer your rights under this Letter of Credit in their entirety
(but not in part) to any transferee who has succeeded you as Trustee pursuant to
the Pooling and Servicing Agreement and such transferred rights may be
successively transferred. The transfer of your rights under this Letter of
Credit to any such transferee shall be effected upon the presentation to us of
this Letter of Credit accompanied by a transfer letter in the form attached
hereto as Annex 4.
This Letter of Credit sets forth in full our undertaking, and such
undertaking shall not in any way be modified, amended, amplified or limited by
reference to any document, instrument or agreement referred to herein except
only Annexes 1 through 4 hereto; and any such reference shall not be deemed to
incorporate herein by reference any document, instrument or agreement except as
set forth above.
Very truly yours,
_________________
-----------------------------------
Name:
Title:
D-3
<PAGE>
ANNEX 1 TO IRREVOCABLE
LETTER OF CREDIT NO. __________
CERTIFICATE FOR DRAWING
The undersigned, Bank of Tokyo-Mitsubishi Trust Company, as trustee (the
"Trustee"), acting through the undersigned duly authorized officer of the
Trustee, hereby certifies to ______________ (the "Letter of Credit Bank"), with
reference to the Bank's Irrevocable Letter of Credit No. __________ (the "Letter
of Credit"; terms defined in the Letter of Credit and not otherwise defined
herein are used herein as therein defined) issued in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) American Honda, as servicer ("Servicer") under the Pooling and
Servicing Agreement, has notified us, as Trustee under the Pooling and
Servicing Agreement, pursuant to a Servicer's Certificate (as such term is
defined in the Pooling and Servicing Agreement) (a copy of which is
attached hereto) furnished pursuant to Section 13.10 of the Pooling and
Servicing Agreement, that the following amount was required to be remitted
by the Servicer to the Certificate Account (as such term is defined in the
Pooling and Servicing Agreement) pursuant to Section 14.02 of the Pooling
and Servicing Agreement with respect to the Distribution Date (as such term
is defined in the Pooling and Servicing Agreement) occurring on [insert
applicable Distribution Date]: $[insert amount required to be remitted
pursuant to Section 14.02].
(3) American Honda has failed to deposit the following portion of
amounts owed by it with respect to such Distribution Date as set forth in
paragraph (2) above: $[insert amount of deficiency].
(4) The Trustee is making a drawing under the Letter of Credit in the
amount of $____________, which amount equals the lesser of (a) the amount
set forth in paragraph (3) and (b) the amount available on the date hereof
to be drawn under the Letter of Credit, as set forth in the attached
Servicer's Certificate.
(5) The Trustee has not received notice from American Honda or any
other person or entity contesting the accuracy of such Servicer's
Certificate.
(6) The account to which payment under the Letter of Credit is to be
wire transferred is Account No. ____________, maintained at
________________________.
D-1-1
<PAGE>
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the _____ day of ____________.
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as Trustee
By:
------------------------------
Name:
Title:
D-1-2
<PAGE>
ANNEX 2 TO
IRREVOCABLE LETTER OF CREDIT NO. __________
CERTIFICATE FOR THE TERMINATION
OF IRREVOCABLE LETTER OF CREDIT NO. __________
The undersigned, a duly authorized officer of Bank of Tokyo-Mitsubishi
Trust Company, as trustee (the "Trustee"), hereby certifies to _____________
(the "Letter of Credit Bank") with reference to the Letter of Credit Bank's
Irrevocable Letter of Credit No. __________ (the "Letter of Credit"; terms
defined in the Letter of Credit and not otherwise defined herein are used herein
as therein defined) issued in favor of the Trustee, that the Pooling and
Servicing Agreement has been terminated in accordance with its terms and the
Certificate Account defined therein contains sufficient funds to pay in full all
outstanding Certificates issued thereunder] or [the Letter of Credit has been
terminated on the date hereof in accordance with its terms] or [the Trustee has
received a notification to the effect that the short-term unsecured debt rating
of the Letter of Credit Bank as assigned by Standard & Poor's Ratings Service
("S&P") or Moody's Investors Service, Inc. ("Moody's") is not at least equal to
the Required Rating] or [the Trustee has received a notification to the effect
that the short-term unsecured debt ratings of American Honda as assigned by S&P
and Moody's have been upgraded to at least A-1 and P-1, respectively].(1)
Select appropriate alternative. Accordingly, we herewith return to you
for cancellation the Letter of Credit, which is terminated, as of the date
hereof, pursuant to its terms.
Date: ____________ BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as Trustee
By:
------------------------------
Name:
Title:
- ----------------------------
(1) Select appropriate alternative.
D-2-1
<PAGE>
ANNEX 3 TO IRREVOCABLE
LETTER OF CREDIT NO. __________
CERTIFICATE FOR THE REDUCTION OF THE STATED
AMOUNT OF IRREVOCABLE LETTER OF CREDIT NO. _______
The undersigned, a duly authorized officer of Bank of Tokyo-Mitsubishi
Trust Company, as trustee (the "Trustee"), hereby certifies to ______________
(the "Letter of Credit Bank"), with reference to the Letter of Credit Bank's
Irrevocable Letter of Credit No. __________ (the "Letter of Credit"; terms
defined in the Letter of Credit and not otherwise defined herein are used herein
as therein defined) issued in favor of the Trustee, that:
(1) The Trustee is the Trustee under the Pooling and Servicing
Agreement.
(2) On the basis of the Servicer's Certificate attached hereto,
the Trustee hereby confirms that, effective on the date hereof with respect
to the Reset Date on [insert appropriate Reset Date] the Stated Amount of
the Letter of Credit has been reduced from $____________ to $____________,
which amount equals the product of $_____________ and the Reset Percentage;
provided that if the Stated Amount would exceed the Pool Balance set forth
in such certificate as of the end of last month, the Stated Amount shall be
reduced to the amount of the Pool Balance, which is $____________.
(3) As used herein, the following terms shall have the following
respective meanings: (a) "Reset Date" means the 15th day of each calendar
month or, if such day is not a Business Day, the next following Business
Day; and (b) "Reset Percentage," as of any Reset Date, means a fraction the
numerator of which is the number of Receivables (as such term is defined in
the Pooling and Servicing Agreement) in the Trust at the close of business
on the last day of the calendar month preceding the calendar month in which
such Reset Date occurs, as evidenced by the Servicer's Certificate for such
calendar month, and the denominator of which is __________, which is the
number of Receivables in the Trust as of the close of business on
__________.
D-3-1
<PAGE>
IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate
as of the _____ day of ____________ 19___.
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY, as Trustee
By:
------------------------------
Name:
Title:
D-3-2
<PAGE>
ANNEX 4 TO IRREVOCABLE
LETTER OF CREDIT NO. __________
___________________, 19__
[name]
[address]
Attention:
Re: IRREVOCABLE LETTER OF CREDIT NO.
Dear Sirs:
For value received, the undersigned beneficiary hereby irrevocably
transfers to:
_____________________________
(Name of Transferee)
_____________________________
(Address)
all rights of the undersigned beneficiary to draw under the above-captioned
Irrevocable Letter of Credit (the "Letter of Credit"). The transferee has
succeeded the undersigned as Trustee under the Pooling and Servicing Agreement
(as such term is defined in the Letter of Credit).
By this transfer, all rights of the undersigned beneficiary in the Letter
of Credit are transferred to the transferee, and the transferee shall hereafter
have the sole right as beneficiary thereof; provided however, that no rights
shall be deemed to have been transferred to the transferee until such transfer
complies with the requirements of the Letter of Credit pertaining to transfer.
The Letter of Credit is returned herewith and in accordance therewith we
ask that this transfer be effective and that you cause the transfer of the
Letter of Credit to our transferee or that, if so requested by the transferee,
you cause the issuance of a new Letter of Credit in favor of the transferee with
provisions consistent with the Letter of Credit.
D-4-1
<PAGE>
Very truly yours,
Bank of Tokyo-Mitsubishi Trust Company
as predecessor Trustee
By:
-----------------------------------
Name:
Title:
D-4-2
<PAGE>
EXHIBIT E
HONDA AUTO RECEIVABLES 1997-A
GRANTOR TRUST
Servicer's Certificate
For the Month of ,
PRINCIPAL AND INTEREST COLLECTIONS
Beginning Pool Balance . . . . . . . . . . . . . . . . . . . . . (1)$_______
Beginning Pool Factor[(1)/$ ] . . . . . . . . . . . . . . . (2) _______
Principal Collected (including from Applied Payments Ahead) . . (3)$_______
Interest Collected (including from Applied Payments Ahead) . . . (4)$_______
Less: Outstanding Advances . . . . . . . . . . . . . . . . (5)$_______
Less: Total Servicing Fees . . . . . . . . . . . . . . . . . . (6)$_______
Total Interest Received [(4)-(5)+(6)] . . . . . . . . . . . . . (7)$_______
Amount of Receivables which became Defaulted Receivables . . . . .(8)$_______
Additional Deposits
(i) Warranty Purchase Payments . . . . . . . . . . . . . (9)$_______
(ii) Administrative Purchase Payments . . . . . . . . . . (10)$_______
(iii) Advances . . . . . . . . . . . . . . . . . . . . . . (11)$_______
(iv) Prepayments . . . . . . . . . . . . . . . . . . . . . (12)$_______
(v) Optional Termination Amount . . . . . . . . . . . . . (13)$_______
Total Additional Deposits . . . . . . . . . . . . . . . . . . . (14)$_______
Total Available Funds [(3)+(7)+(14)] . . . . . . . . . . . . . . (15)$_______
Ending Pool Balance [(1)-(3)] . . . . . . . . . . . . . . . . . (16)$_______
Ending Pool Factor [(16)/$ ] . . . . . . . . . . . . . . . . (17)$_______
CLASS A Class B
------- -------
DISTRIBUTIONS:
Class Percentage . . . . . . . . . . . . . . . . . . . _______% _______%
Pool Factor. . . . . . . . . . . . . . . . . . . . . . _______ _______
Beginning Pool Balance . . . . . . . . . . . . . . . . _______ _______
Ending Pool Balance. . . . . . . . . . . . . . . . . . _______ _______
Available Principal(3) . . . . . . . . . . . . . . . . _______ _______
Available Interest(7). . . . . . . . . . . . . . . . . _______ _______
Outstanding Advances . . . . . . . . . . . . . . . . . _______ _______
E-1
<PAGE>
CLASS A Class B
------- -------
Total Servicing Fee [(1.00%/12)x(1)] . . . . . . . . . (_______) (_______)
Total Available Funds(15). . . . . . . . . . . . . . . _______ _______
PAYMENTS TO CERTIFICATEHOLDERS
Monthly Principal Payment [(3)]. . . . . . . . . . . . _______ _______
Interest Distributable Amount [(1)x( %/12)] . . . . . . _______ _______
DISTRIBUTIONS:Total payments to Certificateholders . . . _______ _______
Amount due Class B but paid to Class A (subordination) _______ _______
Class A Interest Carryover Shortfall . . . . . . . . . _______ _______
Class A Principal Carryover Shortfall. . . . . . . . . _______ _______
Class B Interest Carryover Shortfall . . . . . . . . . _______ _______
Class B Principal Carryover Shortfall. . . . . . . . . _______ _______
Amounts to be paid to the Seller . . . . . . . . . . . _______ _______
Payments from/(to) Reserve Fund. . . . . . . . . . . . _______ _______
Specified Reserve Fund Balance . . . . . . . . . . . . _______ _______
Net Payment to the Trustee . . . . . . . . . . . . . . _______ _______
Payments from/(to) Payahead Account or Servicer. . . . . _______ _______
Payahead Account Balance or Payments Ahead held by
Servicer . . . . . . . . . . . . . . . . . . . . . . . _______ _______
Payments from/(to) Outstanding Advances. . . . . . . . _______ _______
Outstanding Advances . . . . . . . . . . . . . . . . . _______ _______
DETERMINATION OF THE SERVICER LETTER OF CREDIT AMOUNT
Number of Contracts -- End of Month. . . . . . . . . . (42)_______
Original number of Contracts . . . . . . . . . . . . . (43)_______
Percent of Original Contracts remaining [(42)/(43)x100] (44)_______%
Original Servicer Letter of Credit Amount. . . . . . . (45)$_______
Revised Servicer Letter of Credit Amount [Lesser of
[(44)x(45) or the Ending Pool Balance (1)] . . . . . . (46)$_______
Servicer Letter of Credit Fee [(46)x(0. /12)] . . . . . (47)$_______
RECONCILIATION OF RESERVE FUND
Beginning Reserve Fund Balance . . . . . . . . . . . . (48)$_______
Plus: Excess Amounts. . . . . . . . . . . . . . . (49)$_______
Less: Reserve Fund Payments . . . . . . . . . . . (50)$_______
Reserve Fund Prior to Payments to Certificateholders
and Seller . . . . . . . . . . . . . . . . . . . . . . (51)$_______
E-2
<PAGE>
Specified Reserve Fund Balance ("SRFB"):
(a) SRFB=$
Unless: average Charge-off Rate for preceding three Collection Periods is
greater than %, or average Delinquency Percentage for preceding
three Collection Periods is greater than _____%
(b) Then SRFB= % x (1)
(c) Regardless of (a) or (b) above, SRFB must be greater than __________,
but less than __________.
(d) If Class A Certificate Balance is $ or less after giving
effect to distributions, then SRFB must be greater than the amount in
(b) or $ .
Required Reserve Fund Amount . . . . . . . . . . . . . . . . . . (52)$_______
Amount of excess released [(51)-(52)]. . . . . . . . . . . . . . (53)$_______
Ending SRFB to be invested . . . . . . . . . . . . . . . . . . . (54)$_______
Units Amount Percent of Pool
----- ------ ---------------
DELINQUENT ACCOUNTS
PERIOD OF DELINQUENCY
30 - 59 days . . . . . . . . . . . _______ $_______ _______%
60 - 89 days . . . . . . . . . . . _______(A) $_______ _______%
90 days or more. . . . . . . . . . _______(B) $_______ _______%
Total . . . . . . . . . . . . _______ $_______ _______%
Repossession Inventory . . . . . . . . _______ $_______ _______%
First Second Third Average
Preceding Preceding Preceding of Three
Collection Collection Collection Collection
Period Period Period Periods
------- ------- ------- --------
Delinquency Percentage [(A)+(B) +
(repossessions)/number of outstanding
Receivables on last day of preceding
Collection Period] . . . . . . . . . . _______% _______% _______% _______%
CHARGE-OFF RATE
Recoveries in respect of Defaulted
Receivables. . . . . . . . . . . . . .$_______ $_______ $_______ $_______
Aggregate Net Losses . . . . . . . . .$_______ $_______ $_______ $_______
Aggregate Principal Balance on last
day of preceding Collection Period . $_______ $_______ $_______ $_______
Aggregate Principal Balance on last
day of current Collection Period . . .$_______ $_______ $_______ $_______
Charge-off Rate %
[Aggregate Net Losses/(x)+(y)]
-------
2 . . . . . . _______% _______% _______% _______%
E-3
<PAGE>
First Second Third Average
Preceding Preceding Preceding of Three
Collection Collection Collection Collection
Period Period Period Periods
------- ------- ------- --------
PROCEEDS FROM INSURANCE AND DEALER
RECOURSE
Proceeds received during the month
from physical damage insurance . . . $_______ $_______ $_______ $_______
Proceeds received during the month
from Dealer Recourse (repurchase
obligations relating to Defaulted
Receivables) . . . . . . . . . . . . $_______ $_______ $_______ $_______
E-4
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AMERICAN HONDA RECEIVABLES CORP.
Seller
and
AMERICAN HONDA FINANCE CORPORATION
Servicer
Standard Terms And Conditions Of Agreement
(Senior/Subordinated)
Effective July 1, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLES ONE - TEN
[Reserved]
ARTICLE ELEVEN
DEFINITIONS
Section 11.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . 1
Section 11.02. Usage of Terms . . . . . . . . . . . . . . . . . . . . . 18
Section 11.03. Cutoff Date and Record Date. . . . . . . . . . . . . . . 18
Section 11.04. Section References . . . . . . . . . . . . . . . . . . . 18
Section 11.05. Separate Agreements. . . . . . . . . . . . . . . . . . . 18
Section 11.06. Business Day Certificate . . . . . . . . . . . . . . . . 19
ARTICLE TWELVE
CONVEYANCE OF RECEIVABLES;
CUSTODY OF RECEIVABLE FILES
Section 12.01. Conveyance of Receivables. . . . . . . . . . . . . . . . 20
Section 12.02. Custody of Receivable Files. . . . . . . . . . . . . . . 20
Section 12.03. Acceptance by Trustee. . . . . . . . . . . . . . . . . . 21
Section 12.04. Representations and Warranties of Seller as to the
Receivables. . . . . . . . . . . . . . . . . . . . . . . 21
Section 12.05. Repurchase of Receivables Upon Breach. . . . . . . . . . 24
Section 12.06. Duties of Servicer as Custodian. . . . . . . . . . . . . 25
Section 12.07. Instructions; Authority to Act . . . . . . . . . . . . . 25
Section 12.08. Indemnification by Custodian . . . . . . . . . . . . . . 25
Section 12.09. Effective Period and Termination . . . . . . . . . . . . 26
ARTICLE THIRTEEN
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 13.01. Duties of Servicer . . . . . . . . . . . . . . . . . . . 27
Section 13.02. Collection of Receivable Payments. . . . . . . . . . . . 27
Section 13.03. Rebates on Full Prepayments. . . . . . . . . . . . . . . 28
Section 13.04. Realization Upon Receivables . . . . . . . . . . . . . . 28
Section 13.05. Maintenance of Physical Damage Insurance Policies. . . . 29
(i)
<PAGE>
PAGE
----
Section 13.06. Maintenance of Security Interests in Financed Vehicles . 29
Section 13.07. Covenants of Servicer. . . . . . . . . . . . . . . . . . 29
Section 13.08. Purchase of Receivables Upon Breach. . . . . . . . . . . 29
Section 13.09. Total Servicing Fee; Payment of Certain Expenses by
Servicer . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 13.10. Servicer's Certificate . . . . . . . . . . . . . . . . . 30
Section 13.11. Annual Statement as to Compliance; Notice of Default . . 31
Section 13.12. Annual Accountants' Report . . . . . . . . . . . . . . . 31
Section 13.13. Access to Certain Documentation and Information Regarding
Receivables. . . . . . . . . . . . . . . . . . . . . . . 31
Section 13.14. Amendments to Schedule of Receivables. . . . . . . . . . 31
Section 13.15. Reports to Certificateholders and Rating Agencies. . . . 32
ARTICLE FOURTEEN
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS; YIELD SUPPLEMENT ACCOUNT
Section 14.01. Accounts . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 14.02. Collections. . . . . . . . . . . . . . . . . . . . . . . 33
Section 14.03. Application of Collections . . . . . . . . . . . . . . . 35
Section 14.04. Advances . . . . . . . . . . . . . . . . . . . . . . . . 35
Section 14.05. Additional Deposits. . . . . . . . . . . . . . . . . . . 37
Section 14.06. Distributions. . . . . . . . . . . . . . . . . . . . . . 37
Section 14.07. Subordination; Reserve Fund; Priority of Distributions . 39
Section 14.08. Net Deposits . . . . . . . . . . . . . . . . . . . . . . 42
Section 14.09. Servicer Letter of Credit. . . . . . . . . . . . . . . . 42
Section 14.10. Statements to Certificateholders . . . . . . . . . . . . 44
Section 14.11. Yield Supplement Account . . . . . . . . . . . . . . . . 44
ARTICLE FIFTEEN
THE CERTIFICATES
Section 15.01. The Certificates . . . . . . . . . . . . . . . . . . . . 46
Section 15.02. Authentication and Delivery of Certificates. . . . . . . 46
Section 15.03. Registration of Transfer and Exchange of Certificates. . 46
Section 15.04. Mutilated, Destroyed, Lost or Stolen Certificates. . . . 48
Section 15.05. Persons Deemed Owners. . . . . . . . . . . . . . . . . . 48
Section 15.06. Access to List of Certificateholders' Names and
Addresses. . . . . . . . . . . . . . . . . . . . . . . . 48
Section 15.07. Maintenance of Office or Agency. . . . . . . . . . . . . 49
Section 15.08. Temporary Certificates . . . . . . . . . . . . . . . . . 49
Section 15.09. Book-Entry Certificates. . . . . . . . . . . . . . . . . 49
Section 15.10. Notices to Clearing Agency . . . . . . . . . . . . . . . 50
(ii)
<PAGE>
PAGE
----
Section 15.11. Definitive Certificates. . . . . . . . . . . . . . . . . 50
ARTICLE SIXTEEN
THE SELLER
Section 16.01. Representations of Seller. . . . . . . . . . . . . . . . 52
Section 16.02. Liability of Seller; Indemnities . . . . . . . . . . . . 53
Section 16.03. Merger, Consolidation or Assumption of the Obligations
of Seller; Certain Limitations . . . . . . . . . . . . . 53
Section 16.04. Limitation on Liability of Seller and Others . . . . . . 55
Section 16.05. Seller May Own Certificates. . . . . . . . . . . . . . . 55
Section 16.06. No Transfer of Excess Amounts. . . . . . . . . . . . . . 55
ARTICLE SEVENTEEN
THE SERVICER
Section 17.01. Representations of Servicer. . . . . . . . . . . . . . . 56
Section 17.02. Liability of Servicer; Indemnities . . . . . . . . . . . 57
Section 17.03. Merger, Consolidation or Assumption of the Obligations
of Servicer. . . . . . . . . . . . . . . . . . . . . . . 58
Section 17.04. Limitation on Liability of Servicer and Others . . . . . 58
Section 17.05. Servicer Not to Resign . . . . . . . . . . . . . . . . . 59
ARTICLE EIGHTEEN
EVENTS OF DEFAULT
Section 18.01. Events of Default. . . . . . . . . . . . . . . . . . . . 60
Section 18.02. Consequences of an Event of Default. . . . . . . . . . . 61
Section 18.03. Trustee to Act; Appointment of Successor Servicer. . . . 61
Section 18.04. Notification to Certificateholders . . . . . . . . . . . 62
Section 18.05. Waiver of Past Defaults. . . . . . . . . . . . . . . . . 62
Section 18.06. Repayment of Advances. . . . . . . . . . . . . . . . . . 62
ARTICLE NINETEEN
THE TRUSTEE
Section 19.01. Duties of Trustee. . . . . . . . . . . . . . . . . . . . 63
Section 19.02. Trustee's Certificate. . . . . . . . . . . . . . . . . . 64
(iii)
<PAGE>
PAGE
----
Section 19.03. Trustee's Assignment of Administrative Receivables and
Warranty Receivables . . . . . . . . . . . . . . . . . . 64
Section 19.04. Certain Matters Affecting the Trustee. . . . . . . . . . 65
Section 19.05. Trustee Not Liable for Certificates or Receivables . . . 66
Section 19.06. Trustee May Own Certificates . . . . . . . . . . . . . . 67
Section 19.07. Trustee's Fees and Expenses. . . . . . . . . . . . . . . 67
Section 19.08. Indemnity of Trustee and Successor Servicer. . . . . . . 67
Section 19.09. Eligibility Requirements for Trustee . . . . . . . . . . 68
Section 19.10. Resignation or Removal of Trustee. . . . . . . . . . . . 68
Section 19.11. Successor Trustee. . . . . . . . . . . . . . . . . . . . 69
Section 19.12. Merger or Consolidation of Trustee . . . . . . . . . . . 69
Section 19.13. Appointment of Co-Trustee or Separate Trustee. . . . . . 70
Section 19.14. Representations and Warranties of Trustee. . . . . . . . 71
Section 19.15. Tax Returns. . . . . . . . . . . . . . . . . . . . . . . 72
Section 19.16. Trustee May Enforce Claims Without Possession of
Certificates . . . . . . . . . . . . . . . . . . . . . . 72
Section 19.17. Suit for Enforcement . . . . . . . . . . . . . . . . . . 72
Section 19.18. Rights of Certificateholders to Direct Trustee . . . . . 72
ARTICLE TWENTY
TERMINATION
Section 20.01. Termination of the Trust . . . . . . . . . . . . . . . . 74
Section 20.02. Optional Termination of All Receivables . . . . . . . . 75
ARTICLE TWENTY ONE
MISCELLANEOUS PROVISIONS
Section 21.01. Amendment. . . . . . . . . . . . . . . . . . . . . . . . 76
Section 21.02. Protection of Title to Trust . . . . . . . . . . . . . . 77
Section 21.03. Limitation on Rights of Certificateholders . . . . . . . 79
Section 21.04. Governing Law. . . . . . . . . . . . . . . . . . . . . . 80
Section 21.05. Notices. . . . . . . . . . . . . . . . . . . . . . . . . 80
Section 21.06. Severability of Provisions . . . . . . . . . . . . . . . 80
Section 21.07. Assignment . . . . . . . . . . . . . . . . . . . . . . . 80
Section 21.08. Certificates Nonassessable and Fully Paid. . . . . . . . 80
Section 21.09. No Petition. . . . . . . . . . . . . . . . . . . . . . . 80
(iv)
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PAGE
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EXHIBITS
Exhibit A - Form of Trustee's Certificate. . . . . . . . . . . . . . . A-1
Exhibit B - Form of Purchaser's Letter . . . . . . . . . . . . . . . . B-1
(v)
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Honda Auto Receivables Grantor Trust
Standard Terms and Conditions of Agreement
(Senior/Subordinated)
Effective July 1, 1997
For Honda Auto Receivables Grantor Trust formed
on or subsequent to the date specified above
INTRODUCTION
These Standard Terms and Conditions of Agreement (Senior/Subordinated)
effective July 1, 1997 (the "Standard Terms and Conditions"), shall be
applicable to Honda Auto Receivables Grantor Trust formed on or after the
effective date hereof. For each Honda Auto Receivables Grantor Trust to which
the Standard Terms and Conditions are to be applicable, a Pooling and Servicing
Agreement shall be executed which incorporates by reference the Standard Terms
and Conditions and designates any exclusion from or exception to such
incorporation by reference or variation of the terms hereof for the purposes of
that Honda Auto Receivables Grantor Trust.
ARTICLE ELEVEN
DEFINITIONS
Section 11.01. DEFINITIONS. Except as otherwise provided in the
Agreement, whenever used in these Standard Terms and Conditions, the following
words and phrases, unless the context otherwise requires, shall have the
following meanings:
"ACCOUNTS" means the Certificate Account and the Payahead Account.
"ACTUAL PAYMENT" means, with respect to a Receivable and a Collection
Period, all payments received by the Servicer from or for the account of the
related Obligor on such Receivable during such Collection Period (and, in the
case of the first Collection Period, all payments received by the Servicer from
or for the account of such Obligor since the Cutoff Date through the last day of
such Collection Period), net of any Supplemental Servicing Fees attributable to
such Receivable. Actual Payments do not include Applied Payments Ahead.
"ACTUARIAL RECEIVABLE" means any Receivable which provides for the
allocation of payments according to the "actuarial" method.
"ADMINISTRATIVE PURCHASE PAYMENT" means, with respect to a Distribution
Date and to an Administrative Receivable purchased by the Seller or the Servicer
as of the end of the related Collection Period, which Receivable is (i) a
Precomputed Receivable, (a) the sum of (1) all Scheduled Payments on such
Receivable due after the last day of such Collection
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Period, (2) an amount equal to any reimbursement of Outstanding Advances made
pursuant to the first sentence of Section 14.04(c) with respect to such
Receivable (plus all Outstanding Advances made in respect of such Receivable, in
the case of an Administrative Purchase Payment made by the Seller) and (3) all
past due Scheduled Payments for which an Advance has not been made, minus (b)
the sum of (1) any Rebate and (2) all Payments Ahead in respect of such
Administrative Receivable held by the Servicer or on deposit in the Payahead
Account or (ii) a Simple Interest Receivable, the sum of (a) the unpaid
principal balance owed by the related Obligor in respect of such Receivable and
(b) interest on such unpaid principal balance at a rate equal to the sum of the
Pass-Through Rate and the Servicing Fee Rate to the last day of such Collection
Period.
"ADMINISTRATIVE RECEIVABLE" means a Receivable which the Servicer is
required to purchase pursuant to Section 13.02 or 13.08 or which the Seller or
the Servicer has elected to purchase pursuant to Section 20.02.
"ADVANCE" means a Precomputed Advance or a Simple Interest Advance.
"AFFILIATE" means, with respect to any specified Person, any other Person
controlling or controlled by or under common control with such specified
Person. For the purpose of this definition, "control", when used with respect
to any specified Person, means the power to direct the management and
policies of such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing.
"AGREEMENT" means a Pooling and Servicing Agreement executed by the Seller,
the Servicer and the Trustee as of the Cutoff Date, into which these Standard
Terms and Conditions shall be incorporated by reference, and all amendments
thereof and supplements thereto.
"AMERICAN HONDA" means American Honda Finance Corporation, and its
successors and assigns.
"AMOUNT FINANCED" in respect of a Receivable means the aggregate amount
advanced under such Receivable toward the purchase price of the related Financed
Vehicle and any related costs, including but not limited to accessories,
insurance premiums, service and warranty contracts and other items customarily
financed as part of retail motor vehicle installment sale contracts.
"ANNUAL PERCENTAGE RATE" or "APR" of a Receivable means the annual rate of
finance charges specified in such Receivable.
"APPLICANTS" shall have the meaning specified in Section 15.06.
"APPLIED PAYMENT AHEAD" means, with respect to a Precomputed Receivable and
a Collection Period as to which (i) the Actual Payment is less than the
Scheduled Payment and (ii) a Deferred Prepayment is on deposit in the Payahead
Account, an amount equal to the
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lesser of (a) such Deferred Prepayment and (b) the amount by which the Scheduled
Payment exceeds the Actual Payment.
"AUTOMOBILE RECEIVABLES" shall have the meaning specified in Section
16.03(b)(ii)(A).
"AVAILABLE INTEREST" means, with respect to any Distribution Date, the
total of the following amounts allocable to interest received by the Servicer on
or in respect of the Receivables during the related Collection Period (computed,
in the case of Precomputed Receivables, by the actuarial method and, in the case
of Simple Interest Receivables, by the simple interest method): (i) the sum of
the interest component of all (a) collections on or in respect of all
Receivables other than Defaulted Receivables (including Scheduled Surplus,
Prepayment Surplus and the interest portion of Applied Payments Ahead, but
otherwise excluding Payments Ahead), (b) Net Liquidation Proceeds, (c) Advances
made by the Servicer, (d) Warranty Purchase Payments and (e) Administrative
Purchase Payments, less (ii) the sum of all (a) amounts received on or in
respect of a particular Receivable (other than a Defaulted Receivable) to the
extent of the aggregate Outstanding Interest Advances in respect of such
Receivable and (b) Net Liquidation Proceeds with respect to a particular
Receivable to the extent of the aggregate Outstanding Interest Advances in
respect of such Receivable.
"AVAILABLE PRINCIPAL" means, with respect to any Distribution Date, the
total of the following amounts allocable to principal received by the Servicer
on or in respect of the Receivables during the related Collection Period
(computed, in the case of Precomputed Receivables, by the actuarial method and,
in the case of Simple Interest Receivables, by the simple interest method):
(i) the sum of the principal component of all (a) collections on or in respect
of all Receivables other than Defaulted Receivables (including the principal
portion of Applied Payments Ahead but excluding Payments Ahead), (b) Net
Liquidation Proceeds, (c) Advances made by the Servicer, (d) Warranty Purchase
Payments and (e) Administrative Purchase Payments, less (ii) an amount equal to
all (a) amounts received on or in respect of a particular Receivable (other than
a Defaulted Receivable) to the extent of the aggregate Outstanding Principal
Advances in respect of such Receivable and (b) Net Liquidation Proceeds with
respect to a particular Receivable to the extent of the aggregate Outstanding
Principal Advances in respect of such Receivable.
"BASIC SERVICING FEE" means the fee payable pursuant to Section 13.09 to
the Servicer on each Distribution Date for services rendered during the related
Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate
multiplied by the Pool Balance as of the first day of the related Collection
Period or, with respect to the first Distribution Date, the Original Pool
Balance.
"BOOK-ENTRY CERTIFICATES" means a beneficial interest in the Certificates,
ownership and transfers of which shall be made through book entries by a
Clearing Agency as described in Section 15.09.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which banking institutions in New York, New York or Los Angeles, California are
authorized or obligated by law, executive order or governmental decree to be
closed.
"CERTIFICATE ACCOUNT" means the account or accounts designated as such and
established and maintained pursuant to Section 14.01.
"CERTIFICATE OWNER" means, with respect to a Book-Entry Certificate, the
Person who is the owner of such Book-Entry Certificate, as reflected on the
books of the Clearing Agency, or on the books of a Person maintaining an account
with such Clearing Agency (directly or as an indirect participant, in either
case in accordance with the rules of such Clearing Agency) and shall mean, with
respect to a Definitive Certificate, the related Certificateholder.
"CERTIFICATE REGISTER" and "CERTIFICATE REGISTRAR" mean the register
maintained and the registrar (or any successor thereto) appointed pursuant to
Section 15.03.
"CERTIFICATEHOLDER" or "HOLDER" means the Person in whose name a
Certificate is registered in the Certificate Register, except that, solely for
the purposes of giving any consent, waiver, request or demand pursuant to the
Agreement, the interest evidenced by any Class A Certificate registered in the
name of the Seller or the Servicer, or any Person known to a Responsible Officer
to be controlling, controlled by or under common control with the Seller or the
Servicer, shall not be taken into account in determining whether the requisite
percentage necessary to effect any such consent, waiver, request or demand shall
have been obtained.
"CERTIFICATES" means the Class A Certificates and the Class B Certificates.
"CLASS" means all Certificates whose form is identical except for variation
in denomination, principal amount or owner.
"CLASS A CERTIFICATE" means one of the Class A Certificates executed and
authenticated by the Trustee in substantially the form set forth as Exhibit A to
the Agreement.
"CLASS A CERTIFICATE BALANCE" shall initially equal the Original Class A
Certificate Balance and, on any date thereafter, shall equal the Original Class
A Certificate Balance, reduced by all amounts distributed on or prior to such
date on or in respect of the Class A Certificates and allocable to principal.
"CLASS A DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Class A Principal Distributable Amount and the Class A
Interest Distributable Amount.
"CLASS A INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A Interest Distributable
Amount for such Distribution Date plus any outstanding Class A Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class A Interest Carryover Shortfall, to the extent
permitted by law, at the Pass-Through Rate from such immediately preceding
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<PAGE>
Distribution Date to but not including the current Distribution Date, over (ii)
the amount of interest distributed to Class A Certificateholders on such current
Distribution Date.
"CLASS A INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of one-twelfth of the Pass-Through Rate and the
Class A Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to distributions of principal made on such immediately
preceding Distribution Date) or, in the case of the first Distribution Date, the
Original Class A Certificate Balance.
"CLASS A PERCENTAGE" shall have the meaning specified in the Agreement.
"CLASS A POOL FACTOR" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class A Certificate Balance as of such
Distribution Date divided by the Original Class A Certificate Balance.
"CLASS A PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class A Principal
Distributable Amount plus any outstanding Class A Principal Carryover Shortfall
with respect to one or more prior Distribution Dates over (ii) the amount of
principal distributed to Class A Certificateholders on such current Distribution
Date.
"CLASS A PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class A Percentage of the following amounts
(but not exceeding the Class A Certificate Balance as of such Distribution
Date): (i) in the case of Precomputed Receivables, the principal portion of all
Scheduled Payments due during the related Collection Period, computed in
accordance with the actuarial method, (ii) in the case of Simple Interest
Receivables, the principal portion of all Scheduled Payments actually received
during the related Collection Period, (iii) the principal portion of all
Prepayments received during such Collection Period (to the extent such amounts
are not included in clauses (i) or (ii) above) and (iv) the Principal Balance of
each Receivable that became an Administrative Receivable, a Warranty Receivable
or a Defaulted Receivable during such Collection Period (to the extent such
amounts are not included in clauses (i), (ii) or (iii) above). In addition,
with respect to the Final Scheduled Distribution Date or the Distribution Date
upon which all remaining Receivables are to be purchased pursuant to
Section 20.02, the Class A Principal Distributable Amount will include the
portion of such amount necessary (after giving effect to the other amounts to be
distributed to the Class A Certificateholders on the Final Scheduled
Distribution Date or such Distribution Date and allocable to principal) to
reduce the Class A Certificate Balance to zero.
"CLASS B CERTIFICATE" means any one of the Class B Certificates executed
and authenticated by the Trustee in substantially the form set forth as Exhibit
B to the Agreement.
"CLASS B CERTIFICATE BALANCE" shall initially equal the Original Class B
Certificate Balance and, on any Distribution Date, shall equal the amount by
which the Pool Balance as of the last day of the related Collection Period
exceeds the Class A Certificate Balance on
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such Distribution Date (after giving effect to any distributions of principal on
such Distribution Date).
"CLASS B DISTRIBUTABLE AMOUNT" means, with respect to any Distribution
Date, the sum of the Class B Principal Distributable Amount and the Class B
Interest Distributable Amount.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class B Interest Distributable
Amount for such Distribution Date plus any outstanding Class B Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class B Interest Carryover Shortfall, to the extent
permitted by law, at the Pass-Through Rate from such immediately preceding
Distribution Date through the current Distribution Date over (ii) the amount of
interest distributed to Class B Certificateholders on such current Distribution
Date.
"CLASS B INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of one-twelfth of the Pass-Through Rate and the
Class B Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to distributions of principal made on such immediately
preceding Distribution Date) or, in the case of the first Distribution Date, the
Original Class B Certificate Balance.
"CLASS B PERCENTAGE" shall have the meaning specified in the Agreement.
"CLASS B PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the excess, if any, of (i) the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover Shortfall
with respect to one or more prior Distribution Dates over (ii) the amount of
principal distributed to Class B Certificateholders on such current Distribution
Date.
"CLASS B PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class B Percentage of the following amounts
(but not exceeding the Class B Certificate Balance as of such Distribution
Date): (i) in the case of Precomputed Receivables, the principal portion of all
Scheduled Payments due during the related Collection Period, computed in
accordance with the actuarial method, (ii) in the case of Simple Interest
Receivables, the principal portion of all Scheduled Payments actually received
during the related Collection Period, (iii) the principal portion of all
Prepayments received during such Collection Period (to the extent such amounts
are not included in clauses (i) or (ii) above) and (iv) the Principal Balance of
each Receivable that became an Administrative Receivable, a Warranty Receivable
or a Defaulted Receivable during such Collection Period (to the extent such
amounts are not included in clauses (i), (ii) or (iii) above).
"CLEARING AGENCY" means an organization registered as a "clearing agency"
pursuant to Section 17A of the Exchange Act.
"CLEARING AGENCY PARTICIPANT" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time a Clearing Agency effects
book-entry transfers and pledges of securities deposited with the Clearing
Agency.
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"CLOSING DATE" shall have the meaning specified in the Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION PERIOD" means, with respect to any Distribution Date, the
calendar month immediately preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, the period of time since
the Cutoff Date through the last day of the calendar month immediately preceding
the month in which the first Distribution Date occurs).
"COMMISSION" means the Securities and Exchange Commission, and its
successors.
"CORPORATE TRUST OFFICE" means the office of the Trustee at which its
corporate trust business shall be administered, which office shall be specified
in the Agreement, or such office at some other address as the Trustee may
designate from time to time by notice to the Certificateholders, the Seller, the
Servicer and the Letter of Credit Bank, if any.
"CUTOFF DATE" shall have the meaning specified in the Agreement.
"DEALER" means the dealer of motor vehicles who sold a Financed Vehicle and
who originated and assigned the Receivable relating to such Financed Vehicle to
American Honda under an existing agreement between such dealer and American
Honda.
"DEALER RECOURSE" means, with respect to a Receivable, all recourse rights
against the Dealer which originated the Receivable, and any successor to such
Dealer.
"DEFAULTED RECEIVABLE" means a Receivable (other than an Administrative
Receivable or a Warranty Receivable) as to which (i) a Scheduled Payment is 120
or more days past due and the Servicer has not repossessed the related Financed
Vehicle or (ii) the Servicer has, in accordance with its customary servicing
procedures, determined that eventual payment in full is unlikely and either
repossessed and liquidated the related Financed Vehicle or repossessed and held
the related Financed Vehicle in its repossession inventory for 90 days,
whichever occurs first.
"DEFERRED PREPAYMENT" means, with respect to a Receivable and a Collection
Period, the aggregate amount, if any, of Payments Ahead remitted to the Servicer
in respect of such Receivable during one or more prior Collection Periods and
currently held by the Servicer or in the Payahead Account.
"DEFINITIVE CERTIFICATES" shall have the meaning specified in Section
15.09.
"DELIVERY" means, when used with respect to Reserve Fund Property:
(i) with respect to certificated securities, bankers' acceptances,
commercial paper, negotiable certificates of deposit and other obligations
that constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery (collectively, "Physical
Property") transfer thereof to
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the Trustee or its Financial Intermediary in accordance with Sections
8-313(1)(a), 8-313(1)(d)(i) or 8-313(1)(g) of the UCC, and evidence that
any such Physical Property that is in registrable form has been registered
in the name of the Trustee, its Financial Intermediary, its custodian or
its nominee;
(ii) with respect to any Reserve Fund Property that is a book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations, the following procedures, all in accordance with
applicable law, including applicable federal regulations and Articles 8 and
9 of the UCC: (A) book-entry registration of such book-entry security to an
appropriate book-entry account maintained with a Federal Reserve Bank, by
the Trustee or by a custodian and issuance to the Trustee or to such
custodian, as the case may be, of a deposit advice or other written
confirmation of such book-entry registration, (B) the making by any such
custodian of entries in its books and records identifying such book-entry
security held through the Federal Reserve System pursuant to federal
book-entry regulations as belonging to the Trustee and indicating that such
custodian holds such book-entry security solely as agent for the Trustee,
and the making by the Trustee of entries in its books and records
establishing that it holds such book-entry security solely as Trustee
pursuant to Section 14.07, and (C) such additional or alternative
procedures as may hereafter become necessary to effect complete transfer of
ownership of any such book-entry security to the Trustee, consistent with
changes in applicable law or regulations or the interpretation thereof; and
(iii) with respect to any Reserve Fund Property that is an
uncertificated security under Article 8 of the UCC and that is not governed
by clause (ii) above, registration of the transfer to, and ownership of
such uncertificated security by, the Trustee, its Financial Intermediary,
its custodian or its nominee by the issuer of such uncertificated security.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
tenth calendar day of the month in which such Distribution Date occurs or, if
such day is not a Business Day, the immediately succeeding Business Day.
"DISCOUNT RECEIVABLE" means those Receivables which have APRs which are
less than the sum of (i) the Pass-Through Rate and (ii) the Servicing Fee
Rate.
"DISTRIBUTION DATE" means, with respect to a Collection Period, the
fifteenth calendar day of the following month or, if such day is not a Business
Day, the next succeeding Business Day, commencing with the date specified in the
Agreement.
"DTC" means The Depository Trust Company, and its successors.
"DUFF & PHELPS" means Duff & Phelps Inc., and its successors.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" shall have the meaning specified in Section 18.01.
"EXCESS AMOUNTS" shall have the meaning specified in Section 14.06(d).
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"EXCESS PAYMENT" means, with respect to a Receivable and a Collection
Period, the amount, if any, by which the Actual Payment exceeds the sum of (i)
the Scheduled Payment and (ii) any Overdue Payment.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FDIC" means the Federal Deposit Insurance Corporation, and its successors.
"FNMA" means the Federal National Mortgage Association, and its successors.
"FINAL SCHEDULED DISTRIBUTION DATE" shall have the meaning specified in the
Agreement.
"FINANCED VEHICLE" means, with respect to any retail installment sale
contract, the related motor vehicle, together with all accessions thereto,
securing the related Obligor's indebtedness under such retail installment
sale contract.
"FINANCIAL INTERMEDIARY" shall have the meaning specified in Section
8-313(4) of the UCC.
"INDEPENDENT DIRECTOR" means a director of the Seller who is not (i) a
director, officer or employee of any Affiliate of the Seller, (ii) a natural
person related to any director or officer of any Affiliate of the Seller, (iii)
a holder (directly or indirectly) of more than 10% of any voting securities of
any Affiliate of the Seller or (iv) a natural person related to a holder
(directly or indirectly) of more than 10% of any voting securities of any
Affiliate of the Seller.
"INITIAL SERVICER LETTER OF CREDIT AMOUNT" shall have the meaning specified
in the Agreement.
"INSURANCE POLICY" means, with respect to a Receivable, an insurance policy
covering physical damage, credit life, credit disability, theft, mechanical
breakdown or any similar event relating to the related Financed Vehicle or
Obligor.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
"LETTER OF CREDIT BANK" means any Person which has provided a Servicer
Letter of Credit in accordance with Section 14.09.
"LETTER OF REPRESENTATIONS" shall have the meaning specified in the
Agreement.
"LIEN" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind other than tax liens, mechanics' liens and any liens
that attach to a Receivable or any property, as the context may require, by
operation of law.
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"LIQUIDATED RECEIVABLE" means a Receivable that (i) has been the subject of
a Prepayment in full, or (ii) has been paid in full or the final amounts in
respect of such payment have been paid with respect to a Defaulted Receivable,
regardless of whether all or any part of such payment has been made by the
Obligor under such Receivable, the Seller pursuant to the Agreement or pursuant
to the Receivables Purchase Agreement, the Servicer pursuant hereto, an insurer
pursuant to an Insurance Policy or otherwise.
"LIQUIDATION EXPENSES" means, with respect to a Defaulted Receivable, the
amount charged by the Servicer, in accordance with its customary servicing
procedures, to or for its account for repossessing, refurbishing and disposing
of the related Financed Vehicle and other out-of-pocket costs related to such
liquidation.
"LIQUIDATION PROCEEDS" means, with respect to a Defaulted Receivable, all
amounts realized with respect to such Receivable from whatever sources
(including, without limitation, proceeds of any Insurance Policy), net of
amounts that are required by law or such Receivable to be refunded to the
related Obligor.
"MAXIMUM YIELD SUPPLEMENT AMOUNT" for any Distribution Date will equal the
aggregate amount, as of the last day of the related Collection Period, by which
interest on the Principal Balance of each Discount Receivable (other than any
such Receivable that is a Defaulted Receivable) for the remaining term of such
Receivable (assuming no prepayments or delinquencies) at the Required Rate
exceeds interest on such Principal Balance at the APR of each such Receivable;
provided that such amount may be discounted at a rate to be specified in the
Agreement.
"MONTHLY PAYMENT" means, with respect to any Receivable, the amount of each
fixed monthly payment payable to the obligee under such Receivable in accordance
with the terms thereof, net of any portion of such monthly payment that
represents late payment charges, extension fees or collections allocable to
payments to be made by Obligors for payment of insurance premiums, extended
service contracts or similar items.
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"NET LIQUIDATION PROCEEDS" means, with respect to a Defaulted Receivable,
Liquidation Proceeds less Liquidation Expenses.
"NONRECOVERABLE ADVANCE" shall have the meaning specified in
Section 14.04(c).
"OBLIGOR" on a Receivable means the purchaser or co-purchasers of the
related Financed Vehicle purchased in part or in whole by the execution and
delivery of such Receivable or any other Person who owes or may be liable for
payments under such Receivable.
"OFFERED SECURITIES" shall have the meaning specified in Section
16.03(b)(ii)(B).
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"OFFICER'S CERTIFICATE" means a certificate signed by the president, any
Vice President, the treasurer or the secretary of the Seller or the Servicer, as
the case may be, and delivered to the Trustee.
"OPINION OF COUNSEL" means a written opinion of counsel (who, in the case
of counsel to the Seller or the Servicer, may be an employee of or outside
counsel to the Seller or the Servicer), which counsel shall be acceptable to the
Trustee.
"ORIGINAL CLASS A CERTIFICATE BALANCE" shall have the meaning specified in
the Agreement.
"ORIGINAL CLASS B CERTIFICATE BALANCE" shall have the meaning specified in
the Agreement.
"ORIGINAL POOL BALANCE" shall have the meaning specified in the Agreement.
"OUTSTANDING ADVANCES" means, with respect to a Receivable and the last day
of a Collection Period, the sum of all Advances made as of or prior to such
date, minus all payments or collections as of or prior to such date which are
specified in Section 14.04(b) as applied to reimburse all unpaid Advances with
respect to such Receivable.
"OUTSTANDING INTEREST ADVANCES" means, as of the last day of a Collection
Period with respect to a Receivable, the portion of Outstanding Advances
allocable to interest.
"OUTSTANDING PRINCIPAL ADVANCES" means, as of the last day of a Collection
Period with respect to a Receivable, the portion of Outstanding Advances
allocable to principal.
"OVERDUE PAYMENT" shall have the meaning specified in Section 14.03(a).
"PASS-THROUGH RATE" means the interest rate on the Certificates payable to
Certificateholders, as specified in the Agreement.
"PAYAHEAD ACCOUNT" means the account or accounts designated as such and
established and maintained pursuant to Section 14.01.
"PAYMENT AHEAD" means, with respect to a Precomputed Receivable and a
Collection Period, any Excess Payment (not representing prepayment in full of
such Precomputed Receivable) which the Servicer, in accordance with its
customary servicing practices, will apply towards the payment of Scheduled
Payments due in one or more future Collection Periods.
"PERMITTED INVESTMENTS" means, at any time, any one or more of the
following obligations and securities:
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(i) obligations of, and obligations fully guaranteed as to timely
payment of principal and interest by, the United States or any agency
thereof, provided such obligations are backed by the full faith and credit
of the United States;
(ii) general obligations of or obligations guaranteed by FNMA, any
state of the United States, the District of Columbia or the Commonwealth of
Puerto Rico then rated the highest available credit rating of each Rating
Agency for such obligations;
(iii) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States, any state
thereof, the District of Columbia or the Commonwealth of Puerto Rico, so
long as at the time of such investment or contractual commitment providing
for such investment either the long-term unsecured debt of such corporation
has the highest available rating from each Rating Agency for such
obligations or the commercial paper or other short-term debt which is then
rated has the highest available credit rating of each Rating Agency for
such obligations;
(iv) certificates of deposit issued by any depository institution
or trust company (including the Trustee) incorporated under the laws of the
United States, any state thereof, the District of Columbia or the
Commonwealth of Puerto Rico and subject to supervision and examination by
banking authorities of one or more of such jurisdictions, provided that the
short-term unsecured debt obligations of such depository institution or
trust company has the highest available credit rating of each Rating Agency
for such obligations;
(v) certificates of deposit issued by any bank, trust company,
savings bank or other savings institution and fully insured by the FDIC;
(vi) repurchase obligations held by the Trustee that are acceptable
to the Trustee with respect to any security described in clauses (i), (ii)
or (vii) hereof or any other security issued or guaranteed by any other
agency or instrumentality of the United States, in either case entered into
with a federal agency or a depository institution or trust company (acting
as principal) described in clause (iv) above; and
(vii) such other investments acceptable to each Rating Agency (as
approved in writing by each Rating Agency) as will not result in the
qualification, downgrading or withdrawal of the rating then assigned to the
Rated Certificates by such Rating Agency;
provided that each of the foregoing investments shall mature no later than the
Business Day prior to the Distribution Date immediately following the date of
purchase (other than in the case of the investment of monies in instruments of
which the entity at which the Certificate Account, the Payahead Account or the
Reserve Fund, as the case may be, is located is the obligor, which may mature on
the related Distribution Date), and shall be required to be held to such
maturity.
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Notwithstanding anything to the contrary contained in this definition, (a)
no Permitted Investment may be purchased at a premium, (b) any of the foregoing
which constitutes a certificated security shall not be considered a Permitted
Investment unless it is registered in the name of the Trustee in its capacity as
such, and (c) any of the foregoing which constitutes an uncertificated security
shall not be considered a Permitted Investment unless (i) it is registered in
the name of the Trustee in its capacity as such or in the name of its Financial
Intermediary; (ii) no notation of the right of the issuer thereof to a Lien
thereon is contained in the initial transaction statement therefor sent to the
Trustee; (iii) the Trustee does not have notice or actual knowledge of (A) any
restriction on the transfer thereof imposed by the issuer thereof or (B) any
adverse claim, and no notation of any such restriction or of any specific
adverse claim as to which the issuer has a duty under the law of the state in
which the Corporate Trust Office is located at the time of registration is
contained in the initial transaction statement therefor sent to the Trustee; and
(iv) to the Trustee's knowledge, no creditor has served legal process upon the
issuer thereof at its chief executive office in the United States which legal
process attempts to place a Lien thereon prior to the registration thereof in
the name of the Trustee.
For purposes of this definition, any reference to the highest available
credit rating of an obligation shall mean the highest available credit rating
for such obligation, or such lower credit rating (as approved in writing by each
Rating Agency) as will not result in the qualification, downgrading or
withdrawal of the rating then assigned to the Rated Certificates by such Rating
Agency.
"PERSON" means any legal person, including any individual, corporation,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"PHYSICAL PROPERTY" shall have the meaning specified in the definition of
the term "Delivery."
"POOL BALANCE" means, as of any date, the aggregate Principal Balance of
the Receivables (exclusive of all Administrative Receivables for which the
Servicer has paid the Administrative Purchase Payment, Warranty Receivables for
which the Seller has paid the Warranty Purchase Payment and Defaulted
Receivables) as of the close of business on such date.
"POOL FACTOR" as of any Distribution Date, means a seven-digit decimal
figure equal to the Pool Balance as of such Distribution Date divided by the
Original Pool Balance.
"PRECOMPUTED ADVANCE" shall have the meaning specified in Section 14.04(a).
"PRECOMPUTED RECEIVABLE" means any Actuarial Receivable or Rule of 78s
Receivable.
"PREPAYMENT" means (i) with respect to any Precomputed Receivable, any
Excess Payment other than a Payment Ahead or (ii) with respect to any Simple
Interest Receivable, any prepayment, whether in part or in full, in respect of
such Simple Interest Receivable.
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"PREPAYMENT SURPLUS" means, with respect to any Distribution Date on which
a Prepayment is to be applied with respect to a Precomputed Receivable, that
portion of such Prepayment, net of any Rebate, which is not attributable to
principal in accordance with the actuarial method, net of one month's interest
at the Pass-Through Rate on the Principal Balance of such Receivable as of the
first day of the related Collection Period.
"PRINCIPAL BALANCE" means, with respect to any Receivable as of any date,
the Amount Financed minus the sum of the following amounts: (i) in the case of
a Precomputed Receivable, that portion of all Scheduled Payments due on or prior
to such date allocable to principal, computed in accordance with the actuarial
method, (ii) in the case of a Simple Interest Receivable, that portion of all
Scheduled Payments actually received on or prior to such date allocable to
principal, (iii) any Warranty Purchase Payment or Administrative Purchase
Payment with respect to such Receivable allocable to principal and (iv) any
Prepayments or other payments applied to reduce the unpaid principal balance of
such Receivable.
"PURCHASER'S LETTER" means a representation letter delivered pursuant to
Section 15.03(a) by a Person who is acquiring one or more Class B Certificates,
substantially in the form attached hereto as Exhibit B.
"RATED CERTIFICATES" means each Class of Certificates that has been rated
by a Rating Agency at the request of the Seller.
"RATING AGENCY" means each nationally recognized rating agency specified in
the Agreement as from time to time shall be rating the Rated Certificates.
"REBATE" means, with respect to a Precomputed Receivable and any date, the
rebate, calculated in accordance with the actuarial method, under such
Receivable that is or would be payable to the related Obligor for unearned
finance charges or any other charges rebatable to the Obligor if such Obligor
were to prepay such Receivable in full on such date.
"RECEIVABLE" means any retail installment sale contract executed by an
Obligor in respect of a Financed Vehicle, and all proceeds thereof and payments
thereunder.
"RECEIVABLE FILE" means the documents specified in Section 12.02 pertaining
to a particular Receivable.
"RECEIVABLES PURCHASE AGREEMENT" shall have the meaning specified in the
Agreement.
"RECORD DATE" means, with respect to each Distribution Date, (i) in the
case of the Class A Certificates, the calendar day immediately preceding such
Distribution Date (or, if Definitive Certificates have been issued, the last day
of the month immediately preceding the month in which such Distribution Date
occurs) and (ii) in the case of the Class B Certificates, the last day of the
month immediately preceding the month in which such Distribution Date occurs.
Any amount stated "as of a Record Date" or "on a Record Date" shall give effect
to (i) all applications of collections and (ii) all distributions to any party
under the Agreement or
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to the related Obligor, as the case may be, in each case as determined as of the
related Record Date.
"REDUCTION CERTIFICATE" shall have the meaning specified in the Servicer
Letter of Credit.
"RELEASED ADMINISTRATIVE AMOUNT" means, with respect to a Distribution Date
and to an Administrative Receivable, the Deferred Prepayment, if any, for such
Administrative Receivable.
"RELEASED WARRANTY AMOUNT" means, with respect to a Distribution Date and
to a Warranty Receivable, the Deferred Prepayment, if any, for such Warranty
Receivable.
"REQUIRED DEPOSIT RATING" means a rating on short-term deposits of Prime-1
by Moody's and A-1+ by Standard & Poor's; and any requirement that deposits have
the "Required Deposit Rating" shall mean that such deposits shall be rated at
least equal to the foregoing ratings from Moody's and Standard & Poor's.
"REQUIRED RATE" means, with respect to Discount Receivables, the sum of the
(i) Pass-Through Rate and (ii) the Servicing Fee Rate.
"REQUIRED RATING" means, the rating or ratings specified in the Agreement.
"REQUIRED SERVICER RATING" means the rating or ratings specified in the
Agreement.
"RESERVE FUND" means the account designated as such and established and
maintained pursuant to Section 14.07.
"RESERVE FUND INITIAL DEPOSIT" shall have the meaning specified in the
Agreement.
"RESERVE FUND PROPERTY" shall have the meaning specified in Section
14.07(a)(ii).
"RESET DATE" shall have the meaning specified in the Servicer Letter of
Credit, if any.
"RESET PERCENTAGE" shall have the meaning specified in the Servicer Letter
of Credit, if any.
"RESIDUAL CERTIFICATE" shall have the meaning specified in Section 15.01.
"RESPONSIBLE OFFICER" means an officer of the Trustee assigned to the
Corporate Trust Office, including any Vice President, any trust officer or any
other officer performing functions similar to those performed by the individuals
who at the time shall be such officers, and any other officer of the Trustee to
whom a matter is referred because of his knowledge of and familiarity with the
particular subject.
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"RULE OF 78S RECEIVABLE" means any Receivable which provides for the
allocation of payments according to the "sum of periodic balances" or "sum of
monthly payments" method.
"SCHEDULE OF RECEIVABLES" means the schedule of Receivables attached as
Schedule A to the Agreement, as it may be amended from time to time.
"SCHEDULED PAYMENT" means, with respect to any Distribution Date and to a
Receivable, the payment set forth in such Receivable as due from the Obligor in
the related Collection Period; provided, however, that in the case of the first
Collection Period, the Scheduled Payment shall include all such payments due
from the Obligor on or after the Cutoff Date.
"SCHEDULED SURPLUS" means, with respect to any Distribution Date for any
Receivable having an APR which exceeds the sum of the Pass-Through Rate and the
Servicing Fee Rate, the product of (i) the interest portion of the related
Scheduled Payment (determined in accordance with the actuarial method if such
Receivable is a Precomputed Receivable) and (ii) the remainder of (a) one minus
(b) a fraction, the numerator of which equals the sum of the Pass-Through Rate
and the Servicing Fee Rate and the denominator of which equals such APR.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SELLER" means American Honda Receivables Corp., in its capacity as seller
of the Receivables under the Agreement, and each successor thereto (in the same
capacity) pursuant to Section 16.03.
"SERVICER" means American Honda, in its capacity as servicer of the
Receivables pursuant to the Agreement, and each successor thereto (in the same
capacity) appointed pursuant to Section 18.03.
"SERVICER LETTER OF CREDIT" means, if the Servicer desires to remit
collections on or in respect of the Receivables to the Certificate Account on a
monthly basis upon satisfaction of the conditions described in clause (b) of the
second sentence of Section 14.02(b), an irrevocable letter of credit, issued by
the Letter of Credit Bank and naming the Trustee as beneficiary, substantially
in the form attached as an Exhibit to the Agreement.
"SERVICER LETTER OF CREDIT AMOUNT" means the amount determined pursuant to
Section 14.09(a).
"SERVICER LETTER OF CREDIT PERCENTAGE" shall have the meaning specified in
the Agreement, if any.
"SERVICER'S CERTIFICATE" means an Officer's Certificate of the Servicer
completed and executed pursuant to Section 13.10, substantially in the form
attached as an Exhibit to the Agreement.
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"SERVICING FEE RATE" shall have the meaning specified in the Agreement.
"SIMPLE INTEREST ADVANCE" shall have the meaning specified in Section
14.04(a).
"SIMPLE INTEREST RECEIVABLE" means any Receivable which provides for the
allocation of payments according to the "simple interest" method.
"SPECIFIED RESERVE FUND BALANCE" shall have the meaning specified in the
Agreement.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., and its successors.
"SUCCESSOR SERVICER" means any entity appointed as a successor to the
Servicer pursuant to Section 18.03.
"SUPPLEMENTAL SERVICING FEE" means any interest earned on investment of the
monies on deposit in the Accounts during a Collection Period, net of any losses
from such investments, plus all late fees, prepayment charges and other
administrative fees and expenses or similar charges allowed by applicable law
with respect to the Receivables, including, in the case of a Receivable that
provides for payments according to the Rule of 78s and that is prepaid in full,
the difference between the Principal Balance of such Receivable computed
according to the Rule of 78s, minus the Principal Balance of such Receivable
computed according to the actuarial method (plus accrued interest to the date of
prepayment), received by the Servicer during such Collection Period.
"TOTAL SERVICING FEE" means the sum of the Basic Servicing Fee and the
Supplemental Servicing Fee.
"TRUST" means the trust created by the Agreement, the estate of which
consists of (i) the Receivables (other than Warranty Receivables for which the
Seller has paid the Warranty Purchase Payment and Administrative Receivables for
which the Servicer or the Seller has paid the Administrative Purchase Payment)
and all monies paid thereunder or due and to become due thereunder, in each case
on and after the Cutoff Date; (ii) security interests in the Financed Vehicles;
(iii) such assets as are from time to time deposited in the Accounts (other than
investment earnings thereon); (iv) proceeds from claims on any Insurance
Policies; (v) the right to realize upon any property (including the right to
receive future Liquidation Proceeds) that shall have secured a Receivable and
have been repossessed by or on behalf of the Trustee; (vi) an assignment of the
Seller's rights under the Receivables Purchase Agreement; (vii) the right of the
Seller to receive payments pursuant to any Dealer Recourse; (viii) the Servicer
Letter of Credit, if any; and (ix) all proceeds of the foregoing. The Reserve
Fund and the Yield Supplement Account shall not be a part of or otherwise
includible in the Trust.
"TRUSTEE" means the Person acting as Trustee under the Agreement, its
successor in interest, and any successor trustee appointed pursuant to Section
19.11.
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"TRUSTEE'S CERTIFICATE" means a certificate completed and executed by a
Responsible Officer pursuant to Section 19.02 or 19.03, substantially in the
form attached hereto as Exhibit A.
"UCC" means the Uniform Commercial Code as in effect in the respective
jurisdiction.
"UNITED STATES" means the United States of America.
"VICE PRESIDENT" of any Person means any vice president of such Person,
whether or not designated by a number or words before or after the title "Vice
President", who is a duly elected officer of such Person.
"VOTING INTERESTS" means the aggregate voting strength evidenced by the
Class A Certificates or the Class B Certificates, as the case may be; provided,
however, that where the Voting Interests are relevant in determining whether the
vote of the requisite percentage of Class A Certificateholders or Class B
Certificateholders necessary to effect any consent, waiver, request or demand
shall have been obtained, the Voting Interests shall be deemed to be reduced,
except with respect to any amendment of the Agreement pursuant to the proviso in
the first sentence of Section 21.01(b), by the amount equal to the Voting
Interests (without giving effect to this provision) represented by the interests
evidenced by such Certificate registered in the name of the Seller, the Servicer
or any Person known to a Responsible Officer to be controlling, controlled by or
under common control with the Seller or the Servicer.
"WARRANTY PURCHASE PAYMENT" means, with respect to a Distribution Date and
to a Warranty Receivable repurchased by the Seller as of the end of the related
Collection Period, which Receivable is (i) a Precomputed Receivable, (a) the sum
of (1) all Scheduled Payments on such Receivable due after the last day of such
Collection Period, (2) all past due Scheduled Payments for which an Advance has
not been made, (3) an amount equal to any reimbursement of Outstanding Advances
made pursuant to the first sentence of Section 14.04(c) with respect to such
Receivable and (4) all Outstanding Advances made in respect of such Receivable,
minus (b) the sum of (1) all Payments Ahead in respect of such Warranty
Receivable held by the Servicer or on deposit in the Payahead Account, (2) any
Rebate and (3) any proceeds of the liquidation of such Receivable previously
received (to the extent applied to reduce the Principal Balance of such
Receivable) or (ii) a Simple Interest Receivable, the sum of (a) the unpaid
principal balance owed by the related Obligor in respect of such Receivable and
(b) interest on such unpaid principal balance at a rate equal to the sum of the
Pass-Through Rate and the Servicing Fee Rate to the last day of such Collection
Period.
"WARRANTY RECEIVABLE" means a Receivable which the Seller is required to
repurchase pursuant to Section 12.05.
"YIELD SUPPLEMENT ACCOUNT" means the account established and maintained
pursuant to Sections 14.01 and 14.11.
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"YIELD SUPPLEMENT ACCOUNT DEPOSIT" means the aggregate amount as of the
Cut-off Date by which interest on the Principal Balance of each Discount
Receivable for the remaining term of such Receivable (assuming no prepayments or
delinquencies) at a rate equal to the Required Rate exceeds interest on such
Receivable; provided that such aggregate amount may be discounted at a rate to
be specified in the Agreement.
"YIELD SUPPLEMENT DEPOSIT AMOUNT" means with respect to all payments made
on or in respect of a Discount Receivable (other than a Discount Receivable that
is a Defaulted Receivable) and on any Distribution Date, the aggregate amount by
which (i) one month's interest on the Principal Balance as of the first day of
the related Collection Period of each Discount Receivable at a rate equal to the
Required Rate exceeds interest on such Principal Balance at the APR of such
Receivable.
Section 11.02. USAGE OF TERMS. With respect to all terms in the
Agreement, the singular includes the plural and the plural the singular; words
importing any gender include the other genders; references to "writing" include
printing, typing, lithography and other means of reproducing words in a visible
form; references to agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered into in accordance with
their respective terms and not prohibited by the Agreement; references to
Persons include their permitted successors and assigns; and the term "including"
means "including without limitation."
Section 11.03. CUTOFF DATE AND RECORD DATE. All references to the Record
Date prior to the first Record Date in the life of the Trust shall be to the
Cutoff Date.
Section 11.04. SECTION REFERENCES. All section references shall be to
Sections in these Standard Terms and Conditions.
Section 11.05. SEPARATE AGREEMENTS. Each Agreement which shall
incorporate by reference these Standard Terms and Conditions shall be separate
and distinct from each other such Agreement, no provision of any such Agreement
shall be applicable to any other such Agreement, and all references to "the
Agreement" and to provisions thereof shall be references to a particular
Agreement which incorporates these Standard Terms and Conditions.
Section 11.06. BUSINESS DAY CERTIFICATE. On the Closing Date (with
respect to the time between the Closing Date and the end of the related calendar
year) and thereafter within 15 days prior to the end of each calendar year (with
respect to all succeeding calendar years) while any Certificates shall remain
outstanding, the Servicer shall provide to the Trustee an Officer's Certificate
specifying with respect to the related calendar year (or portion thereof, in the
case of an Officer's Certificate delivered on the Closing Date) the days on
which banking institutions in Los Angeles, California are authorized or
obligated by law, executive order or governmental decree to be closed.
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ARTICLE TWELVE
CONVEYANCE OF RECEIVABLES;
CUSTODY OF RECEIVABLE FILES
Section 12.01. CONVEYANCE OF RECEIVABLES. The Seller, pursuant to the
mutually agreed upon terms contained in the Agreement, shall sell, transfer,
assign and otherwise convey to the Trustee, without recourse (but subject to the
Seller's obligations in the Agreement), all of its right, title and interest in
and to the Receivables and any proceeds related thereto, including any Dealer
Recourse and such other items as shall be specified in the Agreement. It is the
intention of the Seller that the transfer and assignment contemplated by the
Agreement shall constitute a sale of the Receivables from the Seller to the
Trust and the beneficial interest in and title to the Receivables shall not be
part of the Seller's estate in the event of the filing of a bankruptcy petition
by or against the Seller under any bankruptcy law. The Seller agrees to execute
and file all filings (including filings under the UCC) necessary in any
jurisdiction to provide third parties with notice of the sale of the Receivables
pursuant to Section 3.01 of the Agreement and to perfect such sale under the
UCC.
Although the parties to the Agreement intend that the transfer and
assignment contemplated by the Agreement be a sale, in the event such transfer
and assignment is deemed to be other than a sale, the parties intend that all
filings described in the foregoing paragraph shall give the Trustee on behalf of
the Trust a first priority perfected security interest in, to and under the
Receivables, and other property conveyed hereunder and all proceeds of any of
the foregoing. The Agreement shall be deemed to be the grant of a security
interest from the Seller to the Trustee on behalf of the Trust, and the Trustee
on behalf of the Trust shall have all the rights, powers and privileges of a
secured party under the UCC.
Section 12.02. CUSTODY OF RECEIVABLE FILES. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Trustee, upon
the execution and delivery of the Agreement, revocably appoints the Servicer,
and the Servicer accepts such appointment, to act as the agent of the Trustee as
custodian of the following documents or instruments which are hereby
constructively delivered to the Trustee with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) documents evidencing or related to any Insurance Policy;
(c) the original credit application of each Obligor, fully
executed by such Obligor on American Honda's customary form, or on a form
approved by American Honda, for such application;
(d) the original certificate of title (or evidence that such
certificate of title has been applied for) or such documents that the
Servicer shall keep on file, in accordance with its customary procedures,
evidencing the security interest in the related Financed Vehicle; and
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(e) any and all other documents that the Seller or the Servicer,
as the case may be, shall keep on file, in accordance with its customary
procedures, relating to such Receivable or the related Obligor or Financed
Vehicle.
Section 12.03. ACCEPTANCE BY TRUSTEE. The Trustee shall acknowledge its
acceptance, pursuant to the Agreement, of all right, title and interest in and
to the Receivables conveyed by the Seller pursuant to the Agreement and shall
declare that the Trustee holds and shall hold such right, title and interest,
upon the trust set forth in the Agreement.
Section 12.04. REPRESENTATIONS AND WARRANTIES OF SELLER AS TO THE
RECEIVABLES. The Seller shall make the following representations and warranties
as to the Receivables on which the Trustee shall rely in accepting the
Receivables in trust and authenticating the Certificates. Such representations
and warranties shall speak as of the execution and delivery of the Agreement,
but shall survive the sale, transfer and assignment of the respective
Receivables to the Trustee.
(a) CHARACTERISTICS OF RECEIVABLES. Each Receivable (i) shall
have been originated in the United States by a Dealer for the retail sale
of the related Financed Vehicle in the ordinary course of such Dealer's
business, shall have been fully and properly executed by the parties
thereto, shall have been purchased by American Honda from such Dealer under
an existing agreement with American Honda and shall have been validly
assigned by such Dealer to American Honda in accordance with the terms of
such agreement and shall have been subsequently sold by American Honda to
the Seller pursuant to the Receivables Purchase Agreement, (ii) shall have
created or shall create a valid, subsisting and enforceable first priority
security interest in favor of American Honda in the related Financed
Vehicle, which security interest has been assigned by American Honda to the
Seller and shall be assignable, and shall be so assigned, by the Seller to
the Trustee, (iii) shall, except as otherwise provided in the Agreement,
provide for level Monthly Payments (provided that the payment in the first
or last month in the life of the Receivable may be minimally different from
the level payment) that fully amortize the Amount Financed over its
original term and shall provide for a finance charge or shall yield
interest at its APR, (iv) shall provide for, in the event that such
Receivable is prepaid, a prepayment that fully pays the Principal Balance
and includes accrued but unpaid interest at least through the date of
prepayment in an amount calculated by using an interest rate at least equal
to its APR, (v) shall provide for, in the event that such Receivable is
prepaid in full, a prepayment that fully pays the Principal Balance and
includes accrued but unpaid interest at least through the date of
prepayment in an amount calculated by using an interest rate at least equal
to its APR, (vi) shall have an Obligor that is not a federal, state or
local governmental entity and (vii) is a retail installment contract.
(b) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables shall be true and correct in all material respects
as of the opening of business on the Cutoff Date, and no selection
procedures adverse to the Certificateholders shall have been utilized in
selecting the Receivables from those
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motor vehicle receivables of American Honda which met the selection criteria
set forth in this Section and the Agreement.
(c) COMPLIANCE WITH LAW. Each Receivable and each sale of the
related Financed Vehicle shall have complied at the time it was originated
or made, and shall comply at the time of execution of the Agreement, in all
material respects with all requirements of applicable federal, state and
local laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty
Act, Federal Reserve Board Regulations B and Z, state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code and other
consumer credit, equal credit opportunity and disclosure laws.
(d) BINDING OBLIGATION. Each Receivable shall constitute the
genuine, legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder thereof in accordance with its
terms, except as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(e) NO BANKRUPT OBLIGORS. None of the Receivables shall be due,
to the best knowledge of the Seller, from any Obligor who is presently the
subject of a bankruptcy proceeding or is bankrupt or insolvent.
(f) SECURITY INTEREST IN FINANCED VEHICLES. Immediately prior to
the sale, assignment and transfer thereof, each Receivable shall be secured
by a validly perfected first priority security interest in the related
Financed Vehicle in favor of American Honda as secured party or all
necessary and appropriate action with respect to such Receivable shall have
been taken to perfect a first priority security interest in such Financed
Vehicle in favor of American Honda as secured party.
(g) RECEIVABLES IN FORCE. No Receivable shall have been
satisfied, subordinated or rescinded, nor shall any Financed Vehicle have
been released in whole or in part from the lien granted by the related
Receivable.
(h) NO WAIVERS. No provision of a Receivable shall have been
waived in such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect
thereto.
(i) NO AMENDMENTS. No Receivable shall have been amended or
modified in such a manner that the total number of Scheduled Payments has
been increased or that the related Amount Financed has been increased or
that such Receivable fails to meet all of the other representations and
warranties made by the Seller herein with respect thereto.
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(j) NO DEFENSES. No facts shall be known to the Seller which
would give rise to any right of rescission, setoff, counterclaim or
defense, nor shall the same have been asserted or threatened, with respect
to any Receivable.
(k) NO LIENS. To the knowledge of the Seller, no liens or claims
shall have been filed, including liens for work, labor or materials
relating to a Financed Vehicle, that shall be liens prior to, or equal or
coordinate with, the security interest in such Financed Vehicle granted by
the related Receivable.
(l) NO DEFAULT; NO REPOSSESSION. Except for payment defaults
that, as of the Cutoff Date, have been continuing for a period of not more
than 30 days, no default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have occurred as of
the Cutoff Date; no continuing condition that with notice or the lapse of
time would constitute a default, breach, violation or event permitting
acceleration under the terms of any Receivable shall have arisen; the
Seller shall not have waived any of the foregoing; and no Financed Vehicle
has been repossessed without reinstatement as of the Cutoff Date.
(m) INSURANCE. At the time of origination of each Receivable,
each Obligor was required under the terms of such Receivable to obtain and
maintain physical damage insurance covering the related Financed Vehicle.
(n) GOOD TITLE. It is the intention of the Seller that the
transfer and assignment herein contemplated, taken as a whole, constitute a
sale of the Receivables from the Seller to the Trust and that the
beneficial interest in and title to the Receivables not be part of the
debtor's estate in the event of the filing of a bankruptcy petition by or
against the Seller under any bankruptcy law. No Receivable has been sold,
transferred, assigned or pledged by the Seller to any Person other than the
Trustee, and no provision of a Receivable shall have been waived, except as
provided in clause (h) above; immediately prior to the transfer and
assignment herein contemplated, the Seller had good and marketable title to
each Receivable free and clear of all Liens and rights of others;
immediately upon the transfer and assignment thereof, the Trustee for the
benefit of the Certificateholders shall have good and marketable title to
each Receivable, free and clear of all Liens and rights of others; and the
transfer and assignment herein contemplated has been perfected under the
UCC.
(o) LAWFUL ASSIGNMENT. No Receivable shall have been originated
in, or shall be subject to the laws of, any jurisdiction under which the
sale, transfer and assignment of such Receivable under the Agreement or
pursuant to a transfer of the related certificate of title shall be
unlawful, void or voidable.
(p) ALL FILINGS MADE. All filings (including UCC filings)
necessary in any jurisdiction to give the Trustee a first priority
perfected security interest in the Receivables shall have been made.
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(q) ONE ORIGINAL. There shall be only one original executed copy
of each Receivable.
(r) CHATTEL PAPER. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(s) AGREEMENT. The additional representations and warranties as
to the Receivables contained in Article Six of the Agreement shall be true
and correct.
Section 12.05. REPURCHASE OF RECEIVABLES UPON BREACH. Upon discovery by
the Seller, the Servicer or the Trustee of a breach of any of the
representations and warranties of the Seller set forth in Article Six of the
Agreement or Section 12.04 hereof that materially and adversely affects the
interests of the Certificateholders in any Receivable, the party discovering
such breach shall give prompt written notice to the others. As of the last day
of the second Collection Period following the Collection Period in which it
discovers or receives notice of such breach (or, at the Seller's election, the
last day of the first Collection Period following the Collection Period in which
it discovers or receives notice of such breach), the Seller shall, unless such
breach shall have been cured in all material respects, repurchase such
Receivable, and, if necessary, the Seller shall enforce the obligation of
American Honda under the Receivables Purchase Agreement to repurchase such
Receivable from the Seller. This repurchase obligation shall obtain for all
representations and warranties of the Seller contained in Article Six of the
Agreement or Section 12.04 hereof whether or not the Seller has knowledge of the
breach at the time of the breach or at the time the representations and
warranties were made. In consideration of the repurchase of any such
Receivable, on the Business Day immediately preceding the related Distribution
Date, the Seller shall remit the Warranty Purchase Payment of such Receivable to
the Certificate Account in the manner specified in Section 14.05 and shall be
entitled to receive the Released Warranty Amount. In the event that any Liens
or claims shall have been filed, including Liens for work, labor or materials
relating to a Financed Vehicle, that shall be prior to, or equal or coordinate
with, the lien granted by the related Receivable, which Liens or claims shall
not have been satisfied or otherwise released in full as of the Closing Date,
and such breach materially and adversely affects the interests of the Trust in
such Receivable, the Seller shall repurchase such Receivable on the terms and in
the manner specified above. Upon any such repurchase, the Trustee shall,
without further action, be deemed to transfer, assign, set-over and otherwise
convey to the Seller, all right, title and interest of the Trustee in, to and
under such repurchased Receivable, all monies due or to become due with respect
thereto and all proceeds thereof. The Trustee shall execute such documents and
instruments of transfer and assignment and take such other actions as shall be
reasonably requested by the Seller to effect the conveyance of such Receivable
pursuant to this Section. The sole remedy of the Trustee, the Trust or the
Certificateholders with respect to a breach of the Seller's representations and
warranties pursuant to Article Six of the Agreement or Section 12.04 hereof or
with respect to the existence of any such Liens or claims shall be to require
the Seller to repurchase the related Receivable pursuant to this Section and to
enforce American Honda's obligation to repurchase such Receivables from the
Seller pursuant to the Receivables Purchase Agreement. The Trustee shall have
no duty to conduct any affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section.
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Section 12.06. DUTIES OF SERVICER AS CUSTODIAN.
(a) SAFEKEEPING. The Servicer, in its capacity as custodian, shall hold
the Receivable Files on behalf of the Trustee for the use and benefit of all
present and future Certificateholders, and maintain such accurate and
complete accounts, records and computer systems pertaining to each Receivable
File as shall enable the Trustee to comply with these Standard Terms and
Conditions. In performing its duties as custodian, the Servicer shall act
with reasonable care, using that degree of skill and attention that it
exercises with respect to the receivable files of comparable motor vehicle
receivables that the Servicer services for itself or others. The Servicer
shall conduct, or cause to be conducted, periodic examinations of the files
of all receivables owned or serviced by it which shall include the Receivable
Files held by it under the Agreement, and of the related accounts, records
and computer systems, in such a manner as shall enable the Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer shall promptly
report to the 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.
(b) MAINTENANCE OF AND ACCESS TO RECORDS. The Servicer shall maintain
each Receivable File solely in its capacity as Servicer at one of its offices
specified in a Schedule to the Agreement, or at such other office as shall be
specified to the Trustee by 30 days' prior written notice. The Servicer shall
make available to the Trustee or its duly authorized representatives, attorneys
or auditors the Receivable Files and the related accounts, records and computer
systems maintained by the Servicer at such times as the Trustee shall reasonably
instruct.
(c) RELEASE OF DOCUMENTS. Upon instruction from the Trustee, the Servicer
shall release any document in the Receivable Files to the Trustee or its agent
or designee, as the case may be, at such place or places as the Trustee may
designate, as soon as practicable. The Servicer shall not be responsible for
any loss occasioned by the failure of the Trustee to return any document or any
delay in doing so.
Section 12.07. INSTRUCTIONS; AUTHORITY TO ACT. The Servicer shall be
deemed to have received proper instructions with respect to the Receivable Files
upon its receipt of written instructions signed by a Responsible Officer. A
certified copy of a bylaw or of a resolution of the board of directors of the
Trustee shall constitute conclusive evidence of the authority of any such
Responsible Officer to act and shall be considered in full force and effect
until receipt by the Servicer of written notice to the contrary given by the
Trustee.
Section 12.08. INDEMNIFICATION BY CUSTODIAN. The Servicer, as custodian
of the Receivable Files, shall indemnify the Trustee for any and all
liabilities, obligations, losses, compensatory damages, payments, costs or
expenses of any kind whatsoever that may be imposed on, incurred or asserted
against the Trustee as the result of any improper act or omission in any way
relating to the maintenance and custody of the Receivable Files by the Servicer,
as custodian; provided, however, that the Servicer shall not be liable for any
portion of any such amount resulting from the willful misfeasance, bad faith or
negligence of the Trustee.
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Section 12.09. EFFECTIVE PERIOD AND TERMINATION. The Servicer's
appointment as custodian of the Receivable Files shall become effective as of
the Cutoff Date and shall continue in full force and effect until terminated
pursuant to this Section. If the Servicer shall resign as Servicer pursuant to
Section 17.05 or if all of the rights and obligations of the Servicer have been
terminated pursuant to Section 18.02, the appointment of the Servicer as
custodian of the Receivable Files shall be terminated by the Trustee, or by the
Holders of Certificates evidencing not less than 51% of the Voting Interests of
the Class A Certificates and the Class B Certificates, voting together as a
single class, in the same manner as the Trustee or such Holders may terminate
the rights and obligations of the Servicer under Section 18.02. The Trustee may
terminate the Servicer's appointment as custodian of the Receivable Files with
cause at any time immediately upon written notification to the Servicer. As
soon as practicable after any termination of such appointment, the Servicer
shall deliver the Receivable Files to the Trustee or its agent at such place or
places as the Trustee may reasonably designate. Notwithstanding the termination
of the Servicer as custodian of the Receivable Files, the Trustee agrees that
upon any such termination, the Trustee shall provide, or cause its agent to
provide, access to the Receivable Files to the Servicer for the purpose of
carrying out its duties and responsibilities with respect to the servicing of
the Receivables pursuant to the Agreement.
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ARTICLE THIRTEEN
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 13.01. DUTIES OF SERVICER. The Servicer shall manage, service,
administer and make collections on and in respect of the Receivables with
reasonable care, using that degree of skill and attention that the Servicer
exercises with respect to all comparable motor vehicle receivables that it
services for itself or others. The Servicer's duties shall include
collecting and posting of all payments, responding to inquiries of Obligors
or by federal, state or local government authorities with respect to the
Receivables, investigating delinquencies, sending payment coupons to
Obligors, reporting tax information to Obligors in accordance with its
customary practices, policing the collateral, accounting for collections and
furnishing monthly and annual statements to the Trustee with respect to
distributions, generating federal income tax information, making Advances and
performing the other duties specified herein. The Servicer shall follow its
customary standards, policies and procedures and shall have full power and
authority, acting alone, to do any and all things in connection with such
managing, servicing, administration and collection that it may deem necessary
or desirable. Without limiting the generality of the foregoing, the Servicer
shall be authorized and empowered by the Trustee to execute and deliver, on
behalf of itself, the Trust, the Trustee or the Certificateholders or any of
them, 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 and the Financed Vehicles. The Servicer is hereby
authorized to commence, in its own name or in the name of the Trustee, a
legal proceeding to enforce a Defaulted Receivable pursuant to Section 13.04
or to commence or participate in a legal proceeding (including without
limitation a bankruptcy proceeding) relating to or involving a Receivable,
including a Defaulted Receivable. If the Servicer commences or participates
in such a legal proceeding in its own name, the Trustee shall thereupon be
deemed to have automatically assigned, solely for the purpose of collection
on behalf of the party retaining an interest in such Receivable, such
Receivable and the other property conveyed to the Trust pursuant to Section
12.01 with respect to such Receivable to the Servicer for purposes of
commencing or participating in any such proceeding as a party or claimant,
and the Servicer is authorized and empowered by the Trustee to execute and
deliver in the Servicer's name any notices, demands, claims, complaints,
responses, affidavits or other documents or instruments in connection with
any such proceeding. If in any enforcement suit or legal proceeding it shall
be held that the Servicer may not enforce a Receivable on the grounds that it
shall not be a real party in interest or a holder entitled to enforce such
Receivable, the Trustee shall, at the Servicer's expense and written
direction, take steps to enforce such Receivable, including bring suit in its
name or the name of the Certificateholders. The Trustee shall furnish the
Servicer with any powers of attorney and other documents and take any other
steps which the Servicer may deem necessary or appropriate to enable the
Servicer to carry out its servicing and administrative duties under the
Agreement.
Section 13.02. COLLECTION OF RECEIVABLE PAYMENTS. The 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 shall
follow such collection procedures as it follows with respect to all comparable
motor vehicle receivables that it services
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for itself or others. The Servicer shall be authorized to grant extensions,
rebates or adjustments on a Receivable without the prior consent of the
Trustee. If, as a result of the extending of payments in accordance with the
customary servicing standards of the Servicer, any Receivable will be
outstanding later than the last day of the Collection Period immediately
preceding the Collection Period in which the Final Scheduled Distribution
Date occurs, the Servicer shall be obligated to repurchase such Receivable
pursuant to Section 13.08. In addition, in the event that any such
rescheduling or extension of a Receivable modifies the terms of such
Receivable in such a manner as to constitute a cancellation of such
Receivable and the creation of a new motor vehicle receivable that results in
a deemed exchange thereof within the meaning of Section 1001 of the Code, the
Servicer shall purchase such Receivable pursuant to Section 13.08, and the
receivable created shall not be included in the Trust. Notwithstanding the
foregoing, extensions or modifications of the payment schedule of a
Receivable can be made only in accordance with the customary servicing
procedures of the Servicer, provided that the amount of any extension fee
charged in connection with the extension of a Receivable is deposited into
the Certificate Account by the Servicer in accordance with Section 14.02.
The Servicer may, in accordance with its customary servicing procedures,
waive any prepayment charge, late payment charge or any other fees that may
be collected in the ordinary course of servicing the Receivables.
Section 13.03. REBATES ON FULL PREPAYMENTS. In the event that the amount
of a full Prepayment by an Obligor under a Precomputed Receivable, after
adjustment for the applicable Rebate, is less than the amount that would be
payable under the actuarial method if a full Prepayment were made at the end of
the billing month under such Precomputed Receivable, either because the Rebate
calculated under the terms of such Precomputed Receivable is greater than the
amount calculable under the actuarial method or because the Servicer's customary
servicing procedure is to credit a greater Rebate, the Servicer, as part of its
servicing duties, shall remit such difference to the Trust by deposit into the
Certificate Account pursuant to Section 14.05.
Section 13.04. REALIZATION UPON RECEIVABLES. On behalf of the Trust,
the Servicer shall use its best efforts, consistent with its customary
servicing procedures, to repossess or otherwise comparably convert the
ownership of any Financed Vehicle that it has reasonably determined should be
repossessed or otherwise converted following a default under the Receivable
secured by the Financed Vehicle (and shall specify such Receivables to the
Trustee no later than the Determination Date following the end of the
Collection Period in which the Servicer shall have made such determination).
The Servicer shall follow such practices and procedures as it shall deem
necessary or advisable and as shall be customary and usual in its servicing
of motor vehicle receivables, which practices and procedures may include
reasonable efforts to realize upon any Dealer Recourse, selling the related
Financed Vehicle at public or private sale and other actions by the Servicer
in order to realize upon such a Receivable. The Servicer shall be entitled to
recover its reasonable Liquidation Expenses with respect to each Defaulted
Receivable. All Net Liquidation Proceeds realized in connection with any
such action with respect to a Receivable shall be deposited by the Servicer
in the Certificate Account in the manner specified in Section 14.02. The
foregoing is subject to the proviso that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with any repair or towards the repossession of such Financed
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Vehicle unless it shall determine in its discretion that such repair and/or
repossession shall increase the Liquidation Proceeds of the related Receivable
by an amount greater than the amount of such expenses.
Section 13.05. MAINTENANCE OF PHYSICAL DAMAGE INSURANCE POLICIES. The
Servicer shall, in accordance with its customary servicing procedures and
underwriting standards, require that each Obligor shall have obtained physical
damage insurance covering each Financed Vehicle as of the origination of the
related Receivable.
Section 13.06. MAINTENANCE OF SECURITY INTERESTS IN FINANCED VEHICLES.
The Servicer shall, in accordance with its customary servicing procedures and at
its own expense, take such steps as are necessary to maintain perfection of the
security interest created by each Receivable in the related Financed Vehicle.
The Trustee hereby authorizes the Servicer, and the Servicer hereby agrees, to
take such steps as are necessary to reperfect such security interest on behalf
of the Trust in the event of the relocation of a Financed Vehicle or for any
other reason. In the event that the assignment of a Receivable to the Trust is
insufficient, without a notation on the related Financed Vehicle's certificate
of title, to grant to the Trust a first priority perfected security interest in
the related Financed Vehicle, the Servicer hereby agrees to serve as the agent
of the Trust for the purpose of perfecting the security interest of the Trust in
such Financed Vehicle and agrees that the Servicer's listing as the secured
party on the certificate of title is in this capacity as agent of the Trust.
Section 13.07. COVENANTS OF SERVICER. The Servicer shall make the
following covenants on which the Trustee shall rely in accepting the Receivables
in trust and authenticating the Certificates:
(a) LIENS IN FORCE. Except as contemplated by the Agreement, the
Servicer shall not release in whole or in part any Financed Vehicle from
the security interest securing the related Receivable.
(b) NO IMPAIRMENT. The Servicer shall do nothing to impair the
rights of the Certificateholders in the Receivables.
(c) NO AMENDMENTS. Subject to Section 13.02, the Servicer shall
not amend or otherwise modify any Receivable such that the total number of
Scheduled Payments is extended beyond the last day of the Collection Period
immediately preceding the Collection Period in which the Final Scheduled
Distribution Date occurs, or either the Amount Financed or the APR is
altered.
Section 13.08. PURCHASE OF RECEIVABLES UPON BREACH. Upon discovery by the
Seller, the Servicer or the Trustee of a breach of any of the covenants of the
Servicer set forth in Section 13.07 that materially and adversely affects the
interests of the Certificateholders in a Receivable, or if an improper
extension, rescheduling or modification of a Receivable is made by the Servicer
as described in Section 13.02, the party discovering such breach shall give
prompt written notice to the others. As of the last day of the second
Collection Period following the Collection Period in which it discovers or
receives notice of such breach (or, at
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the Servicer's election, the last day of the first Collection Period following
the Collection Period in which it discovers or receives notice of such breach),
the Servicer shall, unless such breach or impropriety shall have been cured in
all material respects, purchase from the Trust such Receivable. In
consideration of the purchase of any such Receivable, on the Business Day
immediately preceding the related Distribution Date the Servicer shall remit the
Administrative Purchase Payment to the Certificate Account in the manner
specified in Section 14.05, and shall be entitled to receive the Released
Administrative Amount. Upon such deposit of the Administrative Purchase
Payment, the Servicer shall for all purposes of the Agreement be deemed to have
released all claims for reimbursement of Outstanding Advances made in respect of
such Receivable. The sole remedy of the Trustee, the Trust or the
Certificateholders against the Servicer with respect to a breach pursuant to
Section 13.02 or 13.07 shall be to require the Servicer to purchase the related
Receivables pursuant to this Section, except as otherwise provided in Section
17.02. The Trustee shall have no duty to conduct any affirmative investigation
as to the occurrence of any condition requiring the repurchase of any Receivable
pursuant to this Section except as otherwise provided in Section 17.02.
Section 13.09. TOTAL SERVICING FEE; PAYMENT OF CERTAIN EXPENSES BY
SERVICER. As compensation for the performance of its obligations hereunder, the
Servicer shall be entitled to receive on each Distribution Date, out of
Available Interest, the Total Servicing Fee. The Basic Servicing Fee in respect
of a Collection Period shall be calculated based on a 360 day year comprised of
twelve 30-day months. Except to the extent otherwise provided herein, the
Servicer shall be required to pay all expenses incurred by it in connection with
its activities under the Agreement (including fees and disbursements of the
Trustee and independent accountants, taxes imposed on the Servicer, expenses
incurred in connection with distributions and reports to Certificateholders and
all other fees and expenses not expressly stated under the Agreement to be for
the account of the Certificateholders).
Section 13.10. SERVICER'S CERTIFICATE. On or before each Determination
Date, the Servicer shall deliver to the Trustee, each Rating Agency and the
Letter of Credit Bank, if any, a Servicer's Certificate executed by the
President or any Vice President of the Servicer substantially in the form of an
Exhibit to the Agreement (and setting forth such additional information as
requested by the Trustee or any Rating Agency from time to time which
information the Servicer is able to reasonably provide) containing all
information necessary to make the distributions required by Sections 14.06 and
14.07 in respect of the Collection Period immediately preceding the date of such
Servicer's Certificate and all information necessary for the Trustee to send
statements to Certificateholders pursuant to Section 14.10(a). The Servicer
shall also specify to the Trustee, no later than the Determination Date
following the last day of a Collection Period as of which the Seller shall be
required to repurchase or the Servicer shall be required to purchase a
Receivable, the identity of any such Receivable and the identity of any
Receivable which the Servicer shall have determined to be a Defaulted Receivable
during such Collection Period. Receivables purchased or to be purchased by the
Servicer or the Seller and Receivables as to which the Servicer has determined
during such Collection Period to be Defaulted Receivables and with respect to
which payment of the Administrative Purchase Payment or Warranty Purchase
Payment has been provided from
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whatever source as of last day of such Collection Period shall be identified by
the Seller's account number with respect to such Receivable (as specified in the
Schedule of Receivables).
Section 13.11. ANNUAL STATEMENT AS TO COMPLIANCE; NOTICE OF DEFAULT.
(a) The Servicer shall deliver to the Trustee, on or before June 30 of
each year, beginning with the June 30 that is at least six months after the
Closing Date, an Officer's Certificate of the Servicer, stating that (i) a
review of the activities of the Servicer during the preceding 12-month period
ended March 31 (or, if applicable, such shorter period in the case of the first
such Officer's Certificate) and of its performance under the Agreement has been
made under such officer's supervision, and (ii) to such officer's knowledge,
based on such review, the Servicer has fulfilled all its obligations under the
Agreement throughout such period, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustee, promptly after having
obtained knowledge thereof, but in no event later than five Business Days
thereafter, an Officer's Certificate specifying the nature and status of any
event which with the giving of notice or lapse of time, or both, would become an
Event of Default.
Section 13.12. ANNUAL ACCOUNTANTS' REPORT. The Servicer shall cause a firm
of independent accountants (who may also render other services to the Servicer
or to the Seller) to deliver to the Trustee on or before June 30 of each year,
beginning with the June 30 that is at least six months after the Closing Date, a
report with respect to the preceding 12-month period ended March 31 (or, if
applicable, such shorter period in the case of the first such report) to the
effect that such accountants have examined certain records and documents
relating to the servicing of the Receivables under the Agreement (using
procedures specified in such report, which procedures shall be substantially in
compliance with generally accepting auditing standards) and that nothing has
come to their attention indicating that such servicing has not been conducted in
compliance with the customary servicing procedures of the Servicer, including
but not limited to the procedures set forth in the Agreement, except for (i)
such exceptions as such firm shall believe to be immaterial and (ii) such other
exceptions as shall be set forth in such report. Such report shall also
indicate that the firm is independent with respect to the Seller and the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
Section 13.13. ACCESS TO CERTAIN DOCUMENTATION AND INFORMATION REGARDING
RECEIVABLES. The Servicer shall provide to the Trustee reasonable access to the
documentation regarding the Receivables. The Servicer shall provide such access
to any Certificateholder only in such cases where a Certificateholder is
required by applicable statutes or regulations to review such documentation. In
each case, such access shall be afforded without charge but only upon reasonable
request and during normal business hours at the respective offices of the
Servicer. Nothing in this Section shall derogate from the obligation of the
Servicer to observe any applicable law prohibiting disclosure of information
regarding the Obligors, and the failure of the Servicer to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.
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Section 13.14. AMENDMENTS TO SCHEDULE OF RECEIVABLES. If the Servicer,
during a Collection Period, assigns to a Receivable an account number that
differs from the original account number identifying such Receivable on the
Schedule of Receivables, the Servicer shall deliver to the Seller and the
Trustee on or before the Distribution Date relating to such Collection Period an
amendment to the Schedule of Receivables reporting the newly assigned account
number, together with the old account number of each such Receivable. The first
such delivery of amendments to the Schedule of Receivables to the Trustee shall
include monthly amendments reporting account numbers appearing on the Schedule
of Receivables with the new account numbers assigned to such Receivables during
any prior Collection Period.
Section 13.15. REPORTS TO CERTIFICATEHOLDERS AND RATING AGENCIES.
(a) The Trustee shall provide to any Certificateholder or Certificate
Owner who so requests in writing a copy of (i) any Servicer's Certificate, (ii)
any annual statement as to compliance described in Section 13.11(a), (iii) any
annual accountants' report described in Section 13.12, (iv) any statement to
Certificateholders pursuant to Section 14.10(a) or (v) the Agreement (without
Exhibits). The Trustee may require such Certificateholder or Certificate Owner
to pay a reasonable sum to cover the cost of the Trustee's complying with such
request.
(b) The Trustee shall forward to each Rating Agency a copy of each (i)
Servicer's Certificate, (ii) annual statement as to compliance described in
Section 13.11(a), (iii) Officer's Certificate of the Servicer described in
Section 13.11(b), (iv) annual accountants' report pursuant to Section 13.12, (v)
statement to Certificateholders pursuant to Section 14.10(a), (vi) Trustee's
Certificate delivered by the Trustee pursuant to Section 19.02 or 19.03 and
(vii) other report it may receive pursuant to the Agreement at its address
specified in Section 21.05 or in the Agreement.
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ARTICLE FOURTEEN
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO CERTIFICATEHOLDERS; YIELD SUPPLEMENT ACCOUNTS
Section 14.01. ACCOUNTS.
(a) The Servicer shall establish the Accounts in the name of the Trustee
for the benefit of the Certificateholders. Except as otherwise provided in the
Agreement, each Account shall be an account initially established with the
Trustee and maintained with the Trustee so long as (i) the commercial paper or
other short-term unsecured debt obligations of the Trustee have the Required
Rating, or (ii) such Account is a segregated trust account located in the
corporate trust department of the Trustee bearing a designation clearly
indicating that the funds deposited therein are held in trust for the benefit of
the Certificateholders, and the Trustee has a long-term deposit rating from
Moody's (so long as Moody's is a Rating Agency) of at least Baa3 (or such lower
rating as Moody's shall approve in writing) and corporate trust powers under
applicable federal and state laws (which may include the Trustee) and is
organized under the laws of the United States, any state thereof, the District
of Columbia or the Commonwealth of Puerto Rico. Except as otherwise provided in
the Agreement, in the event that the Trustee no longer meets either of the
foregoing requirements, then the Servicer shall, with the Trustee's assistance
as necessary, cause the Accounts to be moved to a bank or trust company that
satisfies either of such requirements.
(b) For so long as the depository institution or trust company then
maintaining the Accounts meets the requirements of Section 14.01(a)(i) or
(a)(ii), all amounts held in the Accounts shall, to the extent permitted by
applicable laws, rules and regulations, be invested, as directed in writing by
the Servicer, in Permitted Investments; otherwise such amounts shall be
maintained in cash. Earnings on investment of funds in the Accounts (net of
losses and investment expenses) shall be paid to the Servicer and any losses and
investment expenses shall be charged against the funds on deposit in the related
Account.
Section 14.02. COLLECTIONS.
(a) Except as otherwise provided in the Agreement, the Servicer shall
remit daily to the Certificate Account all payments received from or on behalf
of the Obligors on or in respect of the Receivables (other than, in the case of
Precomputed Receivables, payments constituting Payments Ahead) and all Net
Liquidation Proceeds within two Business Days after receipt thereof.
(b) Notwithstanding the provisions of Section 14.02(a), so long as
American Honda is acting as the Servicer, and subject to the conditions set
forth below, the Servicer may be permitted to make remittances of collections on
a less frequent basis than that specified in Section 14.02(a) upon compliance
with the specific terms and conditions set forth below in this Section and for
so long as such terms and conditions are fulfilled. Accordingly,
notwithstanding the provisions of Section 14.02(a), the Servicer will be
permitted to remit such collections to the Certificate Account in immediately
available funds no later than 9:00
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A.M., Los Angeles time, on the Business Day immediately preceding each
Distribution Date but only for so long as (a)(i) the Servicer shall be American
Honda, (ii) except as provided in clause (b) below, the short-term credit rating
of the Servicer is at least equal to the Required Servicer Rating by each Rating
Agency, and (iii) no Event of Default shall have occurred and be continuing,
provided, however, that immediately following the non-compliance with clause
(ii) above or in the event that an event of the nature specified in Section
18.01(c) has occurred (notwithstanding any period of grace contained in such
clause), the Servicer shall remit such collections to the Certificate Account on
a daily basis within two Business Days of receipt thereof, or (b)(i) if the
conditions specified in clause (a)(i) and (iii) above are satisfied, and (ii)
the Servicer shall have obtained a Servicer Letter of Credit issued in favor of
the Trustee by a depository institution or insurance company, as the case may
be, having a short-term credit rating at least equal to the Required Rating and
providing that the Trustee may draw thereon in the event that the Servicer fails
to deposit collections into the Certificate Account on a monthly basis; provided
that in connection with clause (b) above, the Servicer provides to the Trustee,
from each Rating Agency for which the Servicer's then-current short-term credit
rating is not at least equal to the Required Servicer Rating for such Rating
Agency, a letter to the effect that the satisfaction of the conditions in clause
(b) above and allowing the Servicer to make monthly deposits will not result in
a qualification, reduction or withdrawal of its then-current rating of the Rated
Certificates and, if applicable, an Officer's Certificate from the Servicer to
the effect that the Servicer's then-current short-term credit rating is at least
equal to the Required Servicer Rating from each other Rating Agency, if any;
and, provided further, that if the Servicer shall have obtained a Servicer
Letter of Credit in accordance with clause (b) above, the Servicer shall be
required to remit collections to the Certificate Account on each Business Day to
the extent provided for in Section 14.09(c). The Trustee shall not be deemed to
have knowledge of any event or circumstance under clause (a)(iii) above that
would require daily remittance by the Servicer to the Certificate Account unless
it has received notice of such event or circumstance from the Seller or the
Servicer in an Officer's Certificate, from Certificateholders as provided in
Section 18.01 or from the Letter of Credit Bank. For purposes of this Article
the phrase "payments made on behalf of Obligors" shall mean payments made by
Persons other than the Seller, the Servicer or the Letter of Credit Bank, if
any.
Any funds held by the Servicer which it determines are to be remitted (or
any of its own funds which the Seller or the Servicer determines to pay to the
Letter of Credit Bank) in respect of a failure previously to remit collections
which failure resulted in a payment under the Servicer Letter of Credit, if any,
pursuant to Section 14.09 shall not be remitted to the Certificate Account, but
shall instead be paid immediately and directly to the Letter of Credit Bank.
Any such payment to the Letter of Credit Bank shall be accompanied by a copy of
the Servicer's Certificate related to the previous failure to remit funds and an
Officer's Certificate which includes a statement identifying, by reference to
the items in such related Servicer's Certificate, each shortfall in Servicer
remittances to which such payment relates. The Servicer will also provide the
Trustee with copies of each such Servicer's Certificate and Officer's
Certificate delivered with any such payment to the Letter of Credit Bank.
(c) Except as otherwise provided in the Agreement, the Servicer shall
deposit all Payments Ahead in the Certificate Account within two Business Days
after receipt thereof,
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which Payments Ahead shall be transferred to the Payahead Account pursuant to
Section 14.06(a)(ii). Notwithstanding the foregoing, so long as the Servicer is
permitted to remit Collections to the Certificate Account on a monthly basis
pursuant to Section 14.02(b), the Servicer will not be required to deposit
Payments Ahead in the Payahead Account within two Business Days after receipt
thereof but shall be entitled to retain such Payments Ahead, without segregation
from its other funds, until such time as the Servicer shall be required to remit
Applied Payments Ahead to the Certificate Account pursuant to Section
14.06(a)(ii). Commencing with the first day of the first Collection Period that
begins at least two Business Days after the day on which the Servicer is no
longer permitted to remit collections to the Certificate Account on a monthly
basis pursuant to Section 14.02(b), and until such time as the Servicer is once
again permitted by Section 14.02(b) to remit collections to the Certificate
Account on a monthly basis, all Payments Ahead then held by the Servicer shall
be immediately deposited into the Payahead Account and all future Payments Ahead
shall be remitted by the Servicer to the Payahead Account within two Business
Days after receipt thereof.
Section 14.03. APPLICATION OF COLLECTIONS. As of each Record Date, all
collections for the related Collection Period shall be applied by the Servicer
as follows:
(a) With respect to each Receivable (other than an Administrative
Receivable or a Warranty Receivable), payments made by or on behalf of the
Obligor which are not Supplemental Servicing Fees shall be applied first to
reimburse the Servicer for Outstanding Advances made with respect to such
Receivable (each such payment, an "Overdue Payment"). Next, the amount of
any payment in excess of Supplemental Servicing Fees and Outstanding
Advances with respect to such Receivable shall be applied to the Scheduled
Payment with respect to such Receivable. If the amount of such payment
remaining after the applications described in the two preceding sentences
(i) equals (together with any Deferred Prepayment) the unpaid principal
balance of such Receivable, it shall be applied to prepay the principal
balance of such Receivable, or (ii) is less than the unpaid principal
balance of such Receivable, it shall constitute an Excess Payment with
respect to such Receivable.
(b) With respect to each Administrative Receivable and Warranty
Receivable, payments made by or on behalf of the Obligor shall be applied
in the same manner, except that any Released Administrative Amount or
Released Warranty Amount shall be remitted to the Servicer or the Seller,
as applicable. A Warranty Purchase Payment or an Administrative Purchase
Payment shall be applied to reduce Outstanding Advances and such Warranty
Purchase Payment or Administrative Purchase Payment, as applicable, shall
be applied to the Scheduled Payment, in each case to the extent that the
payments by the Obligor shall be insufficient, and then to prepay the
unpaid principal balance of such Receivable in full.
Section 14.04. ADVANCES.
(a) As of the last day of a Collection Period, if the payments during such
Collection Period by or on behalf of the Obligor on or in respect of a
Receivable (other than
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an Administrative Receivable or a Warranty Receivable) after application under
Section 14.03(a) shall be less than the Scheduled Payment, whether as a result
of any extension granted to the Obligor or otherwise, then (i) in the case of a
Precomputed Receivable, the Deferred Prepayment, if any, with respect to such
Precomputed Receivable shall be applied by the Servicer to the extent of the
shortfall, and such Deferred Prepayment shall be reduced accordingly and the
Servicer shall advance to the Trust an amount equal to such shortfall (each, a
"Precomputed Advance") and (ii) in the case of a Simple Interest Receivable, the
Servicer shall advance to the Trust an amount equal to the product of the
principal balance of such Receivable as of the first day of such Collection
Period and one-twelfth of its APR minus the amount of interest actually received
on such Receivable during such Collection Period (each, a "Simple Interest
Advance"). If the calculation in clause (ii) above in respect of a Simple
Interest Receivable results in a negative number, an amount equal to such
negative amount shall be paid to the Servicer in reimbursement of any
Outstanding Advances in respect of Simple Interest Receivables. In addition, in
the event that a Simple Interest Receivable becomes a Liquidated Receivable, the
amount of accrued and unpaid interest thereon (but not including interest for
the current Collection Period) shall, up to the amount of Outstanding Advances
in respect of Simple Interest Receivables in respect thereof, be withdrawn from
the Certificate Account and paid to the Servicer in reimbursement of such
Outstanding Advances. No Advances will be made with respect to the Principal
Balance of Simple Interest Receivables. Notwithstanding the foregoing, the
Servicer shall not be required to make any Advance (other than a Simple Interest
Advance in respect of an interest shortfall arising from the Prepayment of a
Simple Interest Receivable) to the extent that the Servicer, in its sole
discretion, shall determine that such Advance is unlikely to be recovered from
subsequent payments made by or on behalf of the related Obligor, Liquidation
Proceeds, by the Administrative Purchase Payment or by the Warranty Purchase
Payment, in each case, with respect to such Receivable or otherwise. On the
Business Day immediately preceding each Distribution Date, the Servicer will
deposit into the Certificate Account an amount equal to all Advances to be made
in respect of the related Collection Period.
(b) The Servicer shall be entitled to reimbursement for Outstanding
Advances, without interest, with respect to a Receivable from the following
sources with respect to such Receivable: (i) subsequent payments made by or on
behalf of the related Obligor, (ii) Liquidation Proceeds, (iii) the
Administrative Purchase Payment and (iv) the Warranty Purchase Payment.
(c) To the extent that during any Collection Period any funds described
above in Section 14.04(b) with respect to a Receivable as to which the Servicer
previously has made an unreimbursed Advance are received by the Trustee or the
Servicer, and the Servicer determines that any Outstanding Advances with respect
to such Receivable are unlikely to be recovered from payments made on or with
respect to such Receivable (each, a "Nonrecoverable Advance"), then, on the
related Distribution Date, upon the Servicer providing the Seller and the
Trustee with an Officer's Certificate setting forth the basis for its
determination of any such Nonrecoverable Advance, the Trustee shall promptly
remit to the Servicer from the Certificate Account, (i) from Available Interest
an amount equal to the portion of such Nonrecoverable Advance allocable to
interest and (ii) from Available Principal an amount equal to the portion of
such Nonrecoverable Advance allocable to principal, in
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each case without interest, in accordance with Section 14.06(c)(i). In lieu of
causing the Trustee to remit any such amounts or the amounts described in
clauses (i) through (iv) in Section 14.04(b), the Servicer may deduct such
amounts from deposits otherwise to be made into the Certificate Account in
accordance with Section 14.08.
Section 14.05. ADDITIONAL DEPOSITS.
(a) The following additional deposits shall be made to the Certificate
Account: (i) the Seller shall remit the aggregate Warranty Purchase Payments
with respect to Warranty Receivables pursuant to Section 12.05 or the amount
required upon the optional termination of the Trust by the Seller pursuant to
Section 20.02, (ii) the Servicer shall remit (A) the amount required to be
remitted in respect of certain full Prepayments pursuant to Section 13.03, (B)
the aggregate Advances pursuant to Section 14.04(a), (C) the aggregate
Administrative Purchase Payments with respect to Administrative Receivables
pursuant to Sections 13.02 and 13.08 and (D) the amount required upon the
optional termination of the Trust by the Servicer pursuant to Section 20.02 and
(iii) the Trustee shall deposit the aggregate of any amounts received from any
Letter of Credit Bank pursuant to Section 14.09.
(b) All deposits required to be made in respect of a Collection Period
pursuant to this Section by the Seller or the Servicer, as the case may be, may
be made in the form of a single deposit and shall be made in immediately
available funds, no later than 5:00 P.M., New York City time, on the Business
Day immediately preceding the related Distribution Date.
Section 14.06. DISTRIBUTIONS.
(a) On each Distribution Date (or, if both the Accounts are not maintained
by the Trustee, on the Business Day immediately preceding each Distribution
Date), the Trustee shall cause to be made the following transfers and
distributions in immediately available funds in the amounts set forth in the
Servicer's Certificate for such Distribution Date:
(i) from the Payahead Account (or directly from the Servicer in
the case of Payments Ahead held by the Servicer pursuant to Section
14.02(b) or (c)) to the Certificate Account, the aggregate Applied Payments
Ahead;
(ii) if the Servicer is not permitted to hold Payments Ahead
pursuant to Section 14.02(b) or (c), from the Certificate Account to the
Payahead Account, the aggregate Payments Ahead for the related Collection
Period; and
(iii) from monies on deposit in the Yield Supplement Account to the
Certificate Account, an amount equal to the Yield Supplement Deposit Amount
for such Distribution Date.
(b) On each Determination Date, the Servicer shall calculate the Available
Interest, the Available Principal, the Class A Distributable Amount, the Class B
Distributable Amount, the amount to be distributed to Certificateholders of each
Class and all other distributions to be made on the related Distribution Date.
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(c) The rights of the Class B Certificateholders to receive distributions
in respect of the Class B Certificates shall be and hereby are subordinated to
the rights of the Class A Certificateholders to receive distributions in respect
of the Class A Certificates to the limited extent provided in this Section. On
each Distribution Date, the Trustee shall, subject to Sections 14.06(d) and
14.06(e), make the following distributions from the Certificate Account in the
following order of priority and in the amounts set forth in the Servicer's
Certificate for such Distribution Date; provided, however, that except as
otherwise provided in Sections 14.05(a) or 14.06(a), such distributions shall be
made only from those funds deposited in the Certificate Account for the related
Collection Period:
(i) to the Servicer, from Available Interest or Available
Principal, an amount payable in respect of Nonrecoverable Advances pursuant
to Section 14.04(c);
(ii) to the Servicer, from Available Interest (after giving effect
to any reduction in Available Interest described in clause (i) above), the
Total Servicing Fee (including any unpaid Total Servicing Fees from one or
more prior Collection Periods);
(iii) to the Class A Certificateholders of record, from Available
Interest (after giving effect to the reduction in Available Interest
described in clauses (i) and (ii) above), an amount equal to the sum of the
Class A Interest Distributable Amount and any outstanding Class A Interest
Carryover Shortfall from the immediately preceding Distribution Date and,
if such Available Interest is insufficient, the Class A Certificateholders
will receive such shortfall first, from the Class B Percentage of Available
Principal and second, if such amounts are still insufficient, from monies
on deposit in the Reserve Fund;
(iv) to the Class B Certificateholders of record, from Available
Interest (after giving effect to the reduction in Available Interest
described in clauses (i), (ii) and (iii) above), an amount equal to the sum
of the Class B Interest Distributable Amount and any outstanding Class B
Interest Carryover Shortfall from the immediately preceding Distribution
Date and, if such Available Interest is insufficient, the Class B
Certificateholders will receive such shortfall from monies on deposit in
the Reserve Fund;
(v) to the Class A Certificateholders of record, from Available
Principal (after giving effect to any reduction in Available Principal
described in clauses (i) and (iii) above), an amount equal to the sum of
the Class A Principal Distributable Amount and any outstanding Class A
Principal Carryover Shortfall from the immediately preceding Distribution
Date and, if such Available Principal is insufficient, the Class A
Certificateholders will receive such shortfall first, from Available
Interest (after giving effect to the reduction in Available Interest
described in clauses (i) through (iv) above) and second, if such amounts
are still insufficient, from monies on deposit in the Reserve Fund; and
(vi) to the Class B Certificateholders of record, from Available
Principal (after giving effect to the reduction in Available Principal
described in clauses (i), (iii)
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and (v) above), an amount equal to the sum of the Class B Principal
Distributable Amount and any outstanding Class B Principal Carryover
Shortfall from the immediately preceding Distribution Date and, if such
Available Principal is insufficient, the Class B Certificateholders will
receive such shortfall first, from Available Interest (after giving effect
to the reduction in Available Interest described in clauses (i) through (v)
above) and second, if such amounts are still insufficient, from monies on
deposit in the Reserve Fund.
(d) On each Distribution Date, the Trustee shall, based on the information
set forth in the Servicer's Certificate for such Distribution Date, distribute
any excess amounts remaining in the Certificate Account after making the
distributions described in clauses (i) through (vi) above ("Excess Amounts") in
the following amounts and in the following order of priority: (i) into the
Reserve Fund until the amount on deposit therein equals the Specified Reserve
Fund Balance and (ii) to the Seller.
(e) Subject to Section 20.01 respecting the final payment upon retirement
of each Certificate, the Servicer shall on each Distribution Date instruct the
Trustee to distribute to each Certificateholder of record on the related Record
Date by check mailed to such Certificateholder at the address of such Holder
appearing in the Certificate Register (or, if DTC, its nominee or a Clearing
Agency is the relevant Certificateholder, by wire transfer of immediately
available funds or pursuant to other arrangements), the amount to be distributed
to such Certificateholder pursuant to such Holder's Certificates.
Section 14.07. SUBORDINATION; RESERVE FUND; PRIORITY OF DISTRIBUTIONS.
(a) (i) In order to effectuate the subordination provided for
herein and to assure that sufficient amounts to make required distributions
to Certificateholders will be available, the Servicer shall establish and
maintain with the Trustee a separate trust account (the "Reserve Fund")
which will include the money and other property deposited and held therein
pursuant to Section 14.06(d)(i) and this Section. Except as otherwise
provided in the Agreement, the Reserve Fund shall (A) be a segregated trust
account initially established with the Trustee and maintained with the
Trustee so long as the commercial paper or other short-term unsecured debt
obligations of the Trustee have the Required Rating and (B) in the event
that the commercial paper or other short-term unsecured debt obligations of
the Trustee no longer have the Required Rating, the Servicer shall, with
the assistance of the Trustee as necessary, cause the Reserve Fund to be
moved to (1) a segregated deposit account bearing designations clearly
indicating the funds deposited therein are held in trust for the benefit of
the Certificateholders, in a bank or trust company the commercial paper or
other short-term unsecured debt obligations of which shall have the
Required Rating, or (2) one or more segregated trust accounts bearing
designations clearly indicating the funds deposited therein are held in
trust for the benefit of the Certificateholders, located in the corporate
trust department of a depository institution or trust company (which may
include the Trustee) having a long-term deposit rating from Moody's (so
long as Moody's is a Rating Agency) of at least Baa3 (or such lower rating
as Moody's shall approve in writing) and corporate trust powers under
applicable federal and state laws
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and organized under the laws of the United States, any state thereof, the
District of Columbia or the Commonwealth of Puerto Rico.
On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Reserve Fund Initial Deposit into the Reserve Fund. The
Reserve Fund shall not be part of the Trust but instead will be held for
the benefit of the Holders of the Certificates. The Seller hereby
acknowledges that the Reserve Fund Initial Deposit (and any investment
earnings thereon) is owned directly by it, and the Seller hereby agrees to
treat the same as its assets (and earnings) for federal income tax and all
other purposes.
(ii) In order to give effect to the subordination provided for
herein and to assure availability of the amounts maintained in the Reserve
Fund, the Seller hereby sells, conveys and transfers to the Trustee, as
collateral agent, and its successors and assigns, the Reserve Fund Initial
Deposit and all proceeds thereof and hereby pledges to the Trustee as
collateral agent, and its successors and assigns, all other amounts
deposited in or credited to the Reserve Fund from time to time under the
Agreement, all Permitted Investments made with amounts on deposit therein,
all earnings and distributions thereon and proceeds thereof (other than
proceeds constituting net investment earnings attributable to the Reserve
Fund Property) subject, however, to the limitations set forth below, and
solely for the purpose of securing and providing for payment of the Class A
and Class B Distributable Amounts, together with any Class A and Class B
Interest Carryover Shortfalls and Class A and Class B Principal Carryover
Shortfalls, in accordance with Section 14.06 and this Section (all the
foregoing, subject to the limitations set forth below, being the "Reserve
Fund Property"), to have and to hold all the aforesaid property, rights and
privileges unto the Trustee, its successors and assigns, in trust for the
uses and purposes, and subject to the terms and provisions, set forth in
this Section. The Trustee hereby acknowledges such transfer and accepts
the trusts hereunder and shall hold and distribute the Reserve Fund
Property in accordance with the terms and provisions of this Section.
(b) Consistent with the limited purposes for which such trust is granted,
on each Distribution Date the amounts on deposit in the Reserve Fund shall be
available for distribution as provided in Section 14.06, in accordance with and
subject to the following: if the amount on deposit in the Reserve Fund on any
Distribution Date (after giving effect to all deposits thereto and withdrawals
therefrom on such Distribution Date) is greater than the Specified Reserve Fund
Balance, the Trustee shall release and distribute any such excess amounts to the
Seller. Upon any such distribution to the Seller, the Certificateholders will
have no further rights in, or claims to, such amounts.
(c) (i) Amounts held in the Reserve Fund may be invested in the
manner specified in Section 14.01(b). Such investments shall not be sold
or disposed of prior to their maturity. All such investments shall be made
in the name of the Trustee, its Financial Intermediary or its nominee, in
either case as collateral agent, and all income and gain realized thereon
shall be solely for the benefit of the Seller and shall be payable by the
Trustee to the Seller on each Distribution Date. Realized losses, if any,
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on investment of the Reserve Fund Property and all investment expenses
shall be charged first against undistributed investment earnings
attributable to the Reserve Fund Property and then against the Reserve Fund
Property.
(ii) With respect to the Reserve Fund Property, the Seller on
behalf of itself, its successors and assigns and the Trustee agree that:
(A) any Reserve Fund Property that is held in deposit
accounts shall be held solely in the name of the Trustee, as
collateral agent, at the Trustee (in a segregated trust account if the
deposits of the Trustee do not have the Required Rating) or at one or
more depository institutions which are eligible to maintain the
Reserve Fund as described in Section 14.07(a)(i); each such deposit
account shall be subject to the exclusive custody and control of the
Trustee, and the Trustee shall have sole signature authority with
respect thereto;
(B) any Reserve Fund Property that constitutes Physical
Property shall be delivered to the Trustee, as collateral agent, in
accordance with paragraph (i) of the definition of the term "Delivery"
and shall be held, pending maturity or disposition, solely by the
Trustee, as collateral agent, or by a Financial Intermediary acting
solely for the Trustee, as collateral agent;
(C) any Reserve Fund 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 (ii) of
the definition of the term "Delivery" and shall be maintained by the
Trustee, as collateral agent, pending maturity or disposition, through
continued book-entry registration of such book-entry security as
described in such paragraph; and
(D) any Reserve Fund Property that is an "uncertificated
security" under Article 8 of the UCC and that is not governed by
clause (C) above shall be delivered to the Trustee, as collateral
agent, in accordance with paragraph (iii) of the definition of the
term "Delivery" and shall be maintained by the Trustee, as collateral
agent, pending maturity or disposition, through continued registration
of the Trustee's or its Financial Intermediary's (or its custodian's
or its nominee's) ownership of such security, in its capacity as
collateral agent.
Effective upon Delivery of any Reserve Fund Property in the form of
Physical Property, book-entry securities or uncertificated securities, the
Trustee shall be deemed to have purchased such Reserve Fund Property for
value, in good faith and without notice of any adverse claim thereto.
(iii) Each of the Seller and the Servicer agrees 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, without limitation, any UCC financing statements or the
Agreement) as may be determined to be necessary, in an Opinion of Counsel
to the Seller delivered to the Trustee, in order to perfect the
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interests created by this Section and otherwise fully to effectuate the
purposes, terms and conditions of this Section. The Seller and/or the
Servicer, as the case may be, shall:
(A) 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 the Trustee's security interest in the
Reserve Fund Property; and
(B) make the necessary filings of financing statements or
amendments thereto within five days after the occurrence of any of the
following (and promptly notify the Trustee of each such filing): (1)
any change in its corporate name or any trade name, (2) any change in
the location of its chief executive office or principal place of
business or (3) any merger or consolidation or other change in its
identity or corporate structure.
(iv) The Trustee shall not enter into any subordination or
intercreditor agreement with respect to the Reserve Fund Property.
(d) Upon termination of the Trust pursuant to Section 20.01, any amounts
on deposit in the Reserve Fund, after payment of all amounts due to the Class A
and Class B Certificateholders, shall be paid to the Seller.
Section 14.08. NET DEPOSITS. For so long as American Honda shall be the
Servicer, the Seller, the Servicer and the Trustee may make any remittances
pursuant to this Article net of amounts to be distributed by the applicable
recipient to such remitting party. Nonetheless, each such party shall account
for all of the above described remittances and distributions as if the amounts
were deposited and/or transferred separately.
Section 14.09. SERVICER LETTER OF CREDIT.
(a) If, with respect to any Distribution Date which immediately follows a
Collection Period during which the Servicer is permitted to remit collections on
a monthly rather than a daily basis pursuant to Section 14.02 because the
Servicer has obtained a Servicer Letter of Credit, the Servicer shall have
failed to make in full the remittances to the Certificate Account pursuant to
Section 14.02(b) required for distribution to Certificateholders on such
Distribution Date by 9:00 A.M., Los Angeles time, on the Business Day
immediately preceding such Distribution Date, the Trustee shall, by 11:00 A.M.,
Los Angeles time, deliver a demand for payment under the Servicer Letter of
Credit to the Letter of Credit Bank requesting payment in the amount of the
shortfall between the amount of funds that are required to be remitted by the
Servicer to the Certificate Account as set forth in the related Servicer's
Certificate and the amount of funds actually so remitted. Upon receipt of a
completed demand for payment by the Trustee under the Servicer Letter of Credit,
the Letter of Credit Bank shall pay or cause to be paid, at the time and in the
manner provided in the Servicer Letter of Credit, an amount equal to the lesser
of (i) the amount demanded by the
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Trustee and (ii) the amount available under the Servicer Letter of Credit (the
"Servicer Letter of Credit Amount") to the Trustee for credit to the Certificate
Account. Except as otherwise provided in the Servicer Letter of Credit, the
Servicer Letter of Credit Amount shall equal the lesser of (A) the product of
the Initial Servicer Letter of Credit Amount and the Reset Percentage, or (B)
the Pool Balance as of the last day of the related Collection Period. The
Trustee hereby agrees to deliver a Reduction Certificate substantially in the
form of an Annex to the Servicer Letter of Credit, appropriately completed to
the Letter of Credit Bank after each Reset Date if doing so would have the
effect of reducing the Servicer Letter of Credit Amount as then in effect. For
the purpose of Section 14.06 or 18.01(a), amounts deposited by the Trustee
pursuant to this Section shall be deemed to constitute Servicer remittances with
respect to which the demand on the Servicer Letter of Credit was made.
(b) The Servicer Letter of Credit shall be terminated by the Trustee, at
the written direction of the Servicer, at any time when (i) American Honda is
the Servicer and (ii) American Honda's short-term debt obligations are at least
equal to the Required Servicer Rating by each Rating Agency; provided, however,
that prior to any such termination of the Servicer Letter of Credit, the
Servicer shall furnish to the Trustee, from each Rating Agency for which the
Servicer's then-current short-term credit rating is not at least as specified in
clause (b)(ii) above, a letter to the effect that the rating then assigned to
the Rated Certificates will not be qualified, reduced or withdrawn and, if
applicable, an Officer's Certificate of the Servicer to the effect that the
Servicer's then-current short-term credit rating is at least as specified in
clause (b)(ii) above from each other Rating Agency, if any. Notwithstanding the
foregoing, if the short-term debt obligations of the Servicer are subsequently
downgraded below the Required Servicer Rating by any Rating Agency, the Servicer
shall be required to obtain and deliver to the Trustee an insurance policy,
letter of credit or surety bond acceptable to each Rating Agency (as evidenced
by a letter from each Rating Agency to the effect that the rating then assigned
to the Rated Certificates will not be qualified, reduced or withdrawn) and
reasonably acceptable in form to the Trustee, or the Servicer shall remit
collections to the Certificate Account on a daily basis pursuant to Section
14.02(a). In addition, the Servicer may allow the Servicer Letter of Credit to
expire or direct the Trustee in writing to cancel the Servicer Letter of Credit,
in each case for so long as the Servicer is required to remit collections to the
Certificate Account on a daily basis pursuant to Section 14.02(a). The Servicer
shall provide prior notice of such cancellation of the Servicer Letter of Credit
pursuant to the immediately preceding sentence to each Rating Agency. The
Servicer shall also provide notice of the renewal or expiration, if any, of the
Servicer Letter of Credit to each Rating Agency and the Trustee.
(c) Notwithstanding the other provisions of this Section, in the event
that on any day during a Collection Period during which the Servicer is
permitted to remit collections on a monthly rather than a daily basis as a
result of having obtained a Servicer Letter of Credit pursuant to Section
14.02(b), and the aggregate amount of collections described in the first
sentence of Section 14.02 and received during such Collection Period exceeds the
product of the Servicer Letter of Credit Percentage and the Servicer Letter of
Credit Amount, then the Servicer shall cause all collections in excess of such
amount and all other collections received during the remainder of such
Collection Period to be deposited into the Certificate Account on a daily basis
within two Business Days of receipt.
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Section 14.10. STATEMENTS TO CERTIFICATEHOLDERS.
(a) On each Distribution Date, the Trustee shall include with each
distribution to each Certificateholder of record, a statement, prepared by the
Servicer, based on information in the Servicer's Certificate furnished pursuant
to Section 13.10, setting forth for the related Collection Period the following
information as of the last day of the related Collection Period or such
Distribution Date, as the case may be:
(i) the amount of such distribution allocable to principal;
(ii) the amount of such distribution allocable to interest;
(iii) the Pool Balance as of the close of business on the last day
of such Collection Period;
(iv) the amount of the Basic Servicing Fee paid to the Servicer
with respect to the related Collection Period and the Class A Percentage of
the Basic Servicing Fee;
(v) the amount of the Class A Principal and Interest Carryover
Shortfalls, if any, on such Distribution Date and the change in the Class A
Principal and Interest Carryover Shortfalls from the immediately preceding
Distribution Date;
(vi) the Pool Factor and the Class A Pool Factor as of such
Distribution Date, after giving effect to payments allocated to principal
reported under clause (i) above;
(vii) the amount otherwise distributable to the Class B
Certificateholders that is distributed to the Class A Certificateholders on
such Distribution Date;
(viii) the amount on deposit in the Reserve Fund on such
Distribution Date, after giving effect to distributions made on such
Distribution Date, and the change in such amount from the immediately
preceding Distribution Date and the Specified Reserve Fund Balance;
(ix) the amount on deposit in the Payahead Account or held by the
Servicer constituting Payments Ahead and the change in such amount from the
immediately preceding Distribution Date;
(x) the amount of Outstanding Advances on such Distribution Date
and the change in such amount from the immediately preceding Distribution
Date;
(xi) the Class A Certificate Balance and the Class B Certificate
Balance as of such Distribution Date, after giving effect to payments
allocated to principal reported under clause (i) above;
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(xii) the Yield Supplement Deposit Amount, the Maximum Yield
Supplement Amount and the amount on deposit in the Yield Supplement Account
after giving effect to distributions made on such Distribution Date; and
(xiii) the amount available under the Servicer Letter of Credit
Amount, if any, the Servicer Letter of Credit Amount, if any, and such
amount as a percentage of the Pool Balance as of the last day of the
related Collection Period.
Each amount set forth pursuant to subclauses (i), (ii), (iv) or (v) above shall
be expressed as a dollar amount per $1,000 of original principal balance of a
Class A Certificate.
(b) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the Trustee shall
mail, to each Person who at any time during such calendar year shall have been a
Holder of a Class A Certificate, a statement or statements, prepared by the
Servicer, which in the aggregate contain the sum of the amounts set forth in
clauses (i), (ii), (iv) and (v) above for such calendar year or, in the event
such Person shall have been a Holder of a Class A Certificate during a portion
of such calendar year, for the applicable portion of such year, for the purposes
of such Certificateholder's preparation of federal income tax returns. In
addition, the Servicer shall furnish to the Trustee for distribution to such
Person at such time any other information necessary under applicable law for the
preparation of such income tax returns, including information relating to
original issue discount calculation if any.
Section 14.11. YIELD SUPPLEMENT ACCOUNT.
(a) The Seller shall establish the Yield Supplement Account in the name of
the Trustee for the benefit of the Certificateholders. The Yield Supplement
Account shall be a segregated trust account initially established with the
Trustee and maintained with the Trustee so long as (i) the deposits of the
Trustee have the Required Deposit Rating, or (ii) the Yield Supplement Account
shall be maintained in a non-interest bearing segregated trust account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the Certificateholders, located in the corporate trust
department of a depository institution or trust company having corporate trust
powers under applicable federal and state laws (which may include the Trustee)
organized under the laws of the United States or any State and, if required by
any Rating Agency, having the Required Rating.
(b) For so long as the bank or trust company then maintaining the Yield
Supplement Account has the Required Deposit Rating, all amounts held in the
Yield Supplement Account shall, to the extent permitted by applicable laws,
rules and regulations, be invested, as directed by the Seller, in Permitted
Investments. In the event that the short-term unsecured debt obligations of the
Trustee no longer have the Required Deposit Rating, then the Seller shall, with
the Trustee's assistance as necessary, cause the Yield Supplement Account to be
moved within 15 days of such occurrence (i) to a bank or trust company, the
short-term unsecured debt obligations of which shall have the Required Deposit
Rating, or (ii) to a non-interest bearing segregated trust account bearing a
designation clearly indicating that the funds deposited therein are held in
trust for the benefit of the
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Certificateholders, located in the corporate trust department of a depository
institution or trust company having corporate trust powers under applicable
federal and state laws (which may include the Trustee) organized under the laws
of the United States or any state thereof or the District of Columbia and, if
required by any Rating Agency, having the Required Long Term Debt Rating.
Earnings on investment of funds in the Yield Supplement Account shall be
deposited in the Certificate Account pursuant to Section 14.07(a)(i).
(c) On or prior to the Closing Date, the Seller shall deposit an amount
equal to the Yield Supplement Account Deposit into the Yield Supplement
Account. The Yield Supplement Account shall not be part of the Trust but
instead will be owned by the Seller and held for the benefit of the Holders
of the Certificates.
(d) The Seller hereby sells, conveys and transfers to the Trustee and its
successors and assigns, the Yield Supplement Account, all funds on deposit
therein and all proceeds thereof, subject, however to the limitations set forth
below:
(i) all or a portion of the monies on deposit in the Yield Supplement
Account may be invested and reinvested in the manner specified in Section
14.11(b). All such investments shall be made in the name of the Trustee
and all income and gain realized thereon shall remain in the Yield
Supplement Account and distributed to the Certificate Account as required
by Section 14.06(a)(iii);
(ii) notwithstanding anything herein to the contrary, on each
Distribution Date the Trustee shall pay to the Seller the amount, if any,
of any funds on deposit in the Yield Supplement Account in excess of the
Maximum Yield Supplement Amount, after giving effect to all distributions
to be made on such date; and
(iii) upon termination of this Agreement in accordance with Article
20 or in the event that the Seller obtains a letter of credit, surety
bond or insurance policy or otherwise satisfies the requirements
established by the Rating Agencies, in either case as evidenced by a letter
to the Trustee from each Rating Agency to the effect that the foregoing
arrangements will not cause their then-current ratings of the Rated
Certificates to be qualified, reduced or withdrawn, all amounts on deposit
in the Yield Supplement Account shall be paid to the Seller.
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ARTICLE FIFTEEN
THE CERTIFICATES
Section 15.01. THE CERTIFICATES. The Class A Certificates and the Class B
Certificates shall be substantially in the form of Exhibits to the Agreement.
The Class A Certificates shall be issuable in minimum denominations of $1,000
and integral multiples in excess thereof and the Class B Certificates shall be
issuable in minimum denominations of $100,000 and integral multiples in excess
thereof; provided, however, that one Class A Certificate and one Class B
Certificate may be issued in a denomination that includes any remaining portion
of the Original Class A Certificate Balance and the Original Class B Certificate
Balance, respectively (each, a "Residual Certificate"). The Certificates shall
be executed on behalf of the Trust by manual or facsimile signature of a
Responsible Officer under the Trustee's seal imprinted thereon and authenticated
on behalf of the Trustee by the manual or facsimile signature of a Responsible
Officer. Certificates bearing the manual or facsimile signatures of individuals
who were, at the time when such signatures were affixed, authorized to sign on
behalf of the Trustee shall be valid and binding obligations of the Trust,
notwithstanding that such individuals or any of them 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 such Certificates. All Certificates shall
be dated the date of their authentication.
Section 15.02. AUTHENTICATION AND DELIVERY OF CERTIFICATES. The Trustee
shall cause to be authenticated and delivered to or upon the order of the
Seller, in exchange for the Receivables and the other assets of the Trust,
simultaneously with the sale, assignment and transfer to the Trustee of the
Receivables, and the constructive delivery to the Trustee of the Receivable
Files and the other components of the Trust, Certificates duly authenticated by
the Trustee, in authorized denominations equaling in the aggregate the Original
Pool Balance and evidencing the entire ownership of the Trust. No Certificate
shall be entitled to any benefit under the Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form set forth in the form of such
Certificate appearing as an Exhibit to the Agreement, executed by the Trustee by
manual signature, and such certificate upon any Certificate shall be conclusive
evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered under the Agreement.
Section 15.03. REGISTRATION OF TRANSFER AND EXCHANGE OF CERTIFICATES.
(a) The Certificate Registrar shall maintain a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and
transfers and exchanges of Certificates as provided in the Agreement. The
Trustee is hereby initially appointed Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as provided
in the Agreement. In the event that, subsequent to the Closing Date, the
Trustee notifies the Servicer that it is unable to act as Certificate Registrar,
the Servicer shall appoint another bank or trust company, having an office or
agency located in the Borough of Manhattan, The City of New York, agreeing to
act in accordance with the provisions of the Agreement
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applicable to it, and otherwise acceptable to the Trustee, to act as successor
Certificate Registrar under the Agreement.
The Class B Certificates shall initially be owned by the Seller. No
transfer of a Class B Certificate shall be made unless the registration
requirements of the Securities Act and any applicable state securities laws are
complied with, or such registration of transfer is exempt from the registration
requirements under the Securities Act and such state securities laws. In the
event that a transfer is to be made in reliance upon an exemption from the
Securities Act and such state securities laws in connection with such
registration of such transfer, (i) the Trustee shall require the Class B
Certificateholder desiring to effect such registration of transfer and such
Certificateholder's prospective transferee to deliver an Opinion of Counsel with
respect to the Securities Act and a memorandum of law with respect to any
applicable state securities laws acceptable to and in form and substance
satisfactory to the Trustee and the Seller upon which the Trustee and the Seller
may conclusively rely, to the effect that such registration of transfer may be
made pursuant to an exemption, describing the applicable exemption and the basis
therefor, from the Securities Act and such state securities laws or is being
made pursuant to the Securities Act and such state securities laws, which
Opinion of Counsel and memorandum of law, as the case may be, shall not be an
expense of the Trustee, the Seller or the Servicer, and (ii) the Trustee shall
require the transferee to deliver a Purchaser's Letter to the Seller and the
Trustee, which Purchaser's Letter shall not be an expense of the Trustee, the
Seller or the Servicer. The Holder of a Class B Certificate desiring to effect
such registration of transfer shall, and does hereby agree to, indemnify the
Trustee, the Seller and the Servicer against any liability that may result if
the transfer is not so exempt or is not made in accordance with the Securities
Act and such state laws. Neither the Seller, the Servicer nor the Trustee is
under any obligation to register the Class B Certificates under the Securities
Act or any state securities laws.
The Class B Certificates, this Agreement and related documents may be
amended or supplemented from time to time to modify restrictions on and
procedures for resale and other transfer of such Class B Certificates to reflect
any change in applicable law or regulation (or the interpretation thereof) or
practices relating to the resale or transfer of restricted securities generally.
(b) Subject to Section 15.03(a), upon surrender for registration of
transfer of any Certificate at the Corporate Trust Office, the Trustee on behalf
of the Trust shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of the same
Class in authorized denominations of a like aggregate principal amount.
(c) At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class of authorized denominations of a like
aggregate principal amount, upon surrender of the Certificates to be exchanged
at any such office or agency. Whenever any Certificates are so surrendered for
exchange the Trustee on behalf of the Trust shall execute, authenticate and
deliver the Certificates that the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form
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satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder thereof or his attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or
exchange of Certificates, but the Trustee 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.
(e) All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee.
(f) The Class B Certificates shall initially be retained by the Seller.
No transfer of a Class B Certificate shall be made unless the Class B
Certificateholder desiring to effect such transfer shall have given the Seller,
the Trustee and each Rating Agency written notice of such proposed transfer, and
each Rating Agency shall have notified such Class B Certificateholder, the
Seller and the Trustee that such proposed transfer shall not result in the
qualification, reduction or withdrawal of its then-current rating of the Rated
Certificates.
Section 15.04. MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated Certificate is surrendered to the Certificate Registrar, or the
Certificate Registrar receives evidence to its satisfaction of the destruction,
loss or theft of any Certificate, and (ii) there is delivered to the Certificate
Registrar and the Trustee such security or indemnity as may be required by them
to save each of them harmless, then, in the absence of notice that such
Certificate has been acquired by a bona fide purchaser, the Trustee on behalf of
the Trust shall execute and the Trustee shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor and fractional undivided interest.
In connection with the issuance of any new Certificate under this Section, the
Trustee may require the payment by the Holder of a sum sufficient to cover any
tax or other governmental charge that may be imposed in relation thereto. Any
duplicate Certificate issued pursuant to this Section shall constitute complete
and indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 15.05. PERSONS DEEMED OWNERS. Prior to due presentation of a
Certificate for registration of transfer, the Trustee, the Certificate Registrar
and any of their respective agents may treat the Person in whose name any
Certificate is registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 14.06 and for all other purposes
whatsoever, and neither the Trustee, the Certificate Registrar nor any of their
respective agents shall be affected by any notice to the contrary.
Section 15.06. ACCESS TO LIST OF CERTIFICATEHOLDERS' NAMES AND ADDRESSES.
The Certificate Registrar shall furnish or cause to be furnished to the
Servicer, within 15 days after receipt by the Certificate Registrar of a written
request therefor from the Servicer, a list, in such form as the Servicer may
reasonably require, of the names and addresses of the Certificateholders as of
the most recent Record Date. If three or more Certificateholders, or one or
more Holders of Class A Certificates or Class B Certificates evidencing not less
than
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25% of the Voting Interests of the Certificates of the related Class
(hereinafter referred to as "Applicants"), apply in writing to the Trustee,
and such application states that the Applicants desire to communicate with
other Certificateholders with respect to their rights under the Agreement or
under the Certificates and such application is accompanied by a copy of the
communication that such Applicants propose to transmit, then the 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. Every Certificateholder, by receiving and holding
a Certificate, agrees with the Servicer and the Trustee that neither the
Servicer nor the Trustee shall be held accountable by reason of the
disclosure of any such information as to the names and addresses of the
Certificateholders under the Agreement, regardless of the source from which
such information was derived.
Section 15.07. MAINTENANCE OF OFFICE OR AGENCY. The Trustee shall
maintain in the Borough of Manhattan, The City of New York, an office or offices
or agency or agencies where Certificates may be surrendered for registration of
transfer or exchange and where notices and demands to or upon the Trustee in
respect of the Certificates and the Agreement may be served. Unless otherwise
provided in the Agreement, the Trustee shall designate the Corporate Trust
Office as its office for such purposes. The Trustee shall give prompt written
notice to the Seller, the Servicer and to Certificateholders of any change in
the location of the Certificate Register or any such office or agency.
Section 15.08. TEMPORARY CERTIFICATES. Pending the preparation of
definitive Class A Certificates, the Trustee, on behalf of the Trust, may
execute, authenticate and deliver, temporary Class A Certificates that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
authorized denomination, substantially of the tenor of the definitive Class A
Certificates in lieu of which they are issued. If temporary Class A
Certificates are issued, the Seller will cause definitive Class A Certificates
to be prepared without unreasonable delay. After the preparation of definitive
Class A Certificates, the temporary Class A Certificates shall be exchangeable
for definitive Class A Certificates upon surrender of the temporary Class A
Certificates at the office or agency to be maintained as provided in Section
15.07, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Class A Certificates, the Trustee on behalf of the Trust shall
execute and authenticate and deliver in exchange therefor a like principal
amount of definitive Class A Certificates in authorized denominations. Until so
exchanged the temporary Class A Certificates shall in all respects be entitled
to the same benefits under the Agreement as definitive Class A Certificates.
Section 15.09. BOOK-ENTRY CERTIFICATES. Unless otherwise specified in the
Agreement, the Class A Certificates, upon original issuance (except for the
Residual Certificate with respect to the Class A Certificates) will be issued in
the form of one or more typewritten certificates representing the Book-Entry
Certificates, to be delivered to DTC, the initial Clearing Agency, by, or on
behalf of, the Seller. The certificate or certificates delivered to DTC
evidencing such Class A Certificates shall initially be registered on the
Certificate Register in the name of CEDE & CO., the nominee of the initial
Clearing Agency, and no Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the Class A Certificates,
except as provided in Section 15.11. Unless otherwise
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specified in the Agreement, subject to Section 15.11, unless and until
definitive, fully registered Class A Certificates (the "Definitive
Certificates") have been issued to Certificate Owners pursuant to Section 15.11:
(i) the provisions of this Section shall be in full force and
effect;
(ii) the Seller, the Servicer, the Certificate Registrar and the
Trustee may deal with the Clearing Agency for all purposes (including the
making of distributions on the Class A Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the provisions of this Section conflict
with any other provisions of the Agreement, the provisions of this Section
shall control;
(iv) the rights of Certificate Owners shall be exercised only
through the Clearing Agency (or through procedures established by the
Clearing Agency) and shall be limited to those established by law and
agreements between such Certificate Owners and the Clearing Agency and/or
the Clearing Agency Participants. Pursuant to the Letter of
Representations, unless and until Definitive Certificates are issued
pursuant to Section 15.11, the initial Clearing Agency will make book-entry
transfers among the Clearing Agency Participants and receive and transmit
distributions of principal and interest on the Class A Certificates to such
Clearing Agency Participants; and
(v) whenever the Agreement requires or permits actions to be taken
based upon instructions or directions of Holders of Class A Certificates
evidencing a specified percentage of the Voting Interests thereof the
Clearing Agency shall be deemed to represent such percentage only to the
extent that it has received instructions to such effect from Certificate
Owners and/or Clearing Agency Participants owning or representing,
respectively, such required percentage of the beneficial interest in Class
A Certificates and has delivered such instructions to the Trustee.
Section 15.10. NOTICES TO CLEARING AGENCY. Whenever notice or other
communication to the Class A Certificateholders is required under the Agreement,
other than to the Holder of the Residual Certificate with respect to the Class A
Certificates, unless and until Definitive Certificates shall have been issued to
Certificate Owners pursuant to Section 15.11, the Trustee and the Servicer shall
give all such notices and communications specified herein to be given to Holders
of the Class A Certificates to the Clearing Agency.
Section 15.11. DEFINITIVE CERTIFICATES. If (i)(A) the Seller advises the
Trustee in writing that the Clearing Agency is no longer willing or able to
properly discharge its responsibilities as described in the Letter of
Representations and (B) the Trustee or the Seller is unable to locate a
qualified successor, (ii) the Seller at its option, advises the Trustee in
writing that it elects to terminate the book-entry system through the Clearing
Agency, or (iii) after the occurrence of an Event of Default, Certificate Owners
representing beneficial interests in the Class A Certificates aggregating not
less than 51% of the Voting Interests thereof advise the Trustee and the
Clearing Agency through the Clearing Agency Participants in writing that the
continuation of a book-entry system through the Clearing Agency is no
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longer in the best interests of the Certificate Owners, then the Trustee shall
notify all Certificate Owners, through the Clearing Agency, of the occurrence of
any such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Class A
Certificates by the Clearing Agency, accompanied by instructions from the
Clearing Agency for registration, the Trustee shall issue the Definitive
Certificates and deliver such Definitive Certificates in accordance with the
instructions of the Clearing Agency. Neither the Seller, the Certificate
Registrar nor the 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 Trustee
shall recognize the Holders of the Definitive Certificates as Class A
Certificateholders hereunder. The Trustee shall not be liable if the Trustee or
the Seller is unable to locate a qualified successor Clearing Agency.
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ARTICLE SIXTEEN
THE SELLER
Section 16.01. REPRESENTATIONS OF SELLER. The Seller shall make the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations shall speak as of the execution and delivery of the Agreement
and shall survive the sale of the Receivables to the Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Seller has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of California, 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, and had at all relevant times, and has power,
authority and legal right to acquire, own and sell the Receivables.
(b) DUE QUALIFICATION. The Seller 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.
(c) POWER AND AUTHORITY. The Seller has the power and
authority to execute and deliver the Agreement and to carry out its terms,
the Seller has full power and authority to sell and assign the
property to be sold and assigned to and deposited with the Trustee as part
of the Trust has have duly authorized such sale and assignment to the
Trustee by all necessary corporate action; and the execution, delivery and
performance of the Agreement has been duly authorized by the Seller
by all necessary corporate action.
(d) VALID SALE; BINDING OBLIGATION. The Agreement evidences
a valid sale, transfer and assignment of the Receivables, enforceable
against creditors of and purchasers from the Seller; and constituted a
legal, valid and binding obligation of the Seller enforceable in accordance
with its terms, except as enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or at law.
(e) NO VIOLATION. THE EXECUTION, DELIVERY AND PERFORMANCE BY THE
SELLER OF THIS AGREEMENT AND THE consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms of the
Agreement shall not conflict with, result in any breach of any of the terms
and provisions of, nor constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or bylaws of the Seller, or
conflict with or violate any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture,
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agreement or other instrument to which the Seller is a party or by which it
shall be 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 the Agreement); nor violate any
law or, to the Seller's knowledge, any order, rule or regulation applicable
to the Seller of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or its properties; which breach, default,
conflict, lien or violation would have a material adverse effect on the
earnings, business affairs or business prospects of the Seller.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties: (i)
asserting the invalidity of the Agreement or the Certificates, (ii) seeking
to prevent the issuance of the Certificates or the consummation of any of
the transactions contemplated by the Agreement, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, the Agreement or the Certificates or (iv) relating to
the Seller and which might adversely affect the federal income tax
attributes of the Certificates.
Section 16.02. LIABILITY OF SELLER. The Seller shall be liable in
accordance with the Agreement only to the extent of the obligations in the
Agreement specifically undertaken by the Seller in such capacity under the
Agreement and shall have no other obligations or liabilities hereunder.
Section 16.03. MERGER, CONSOLIDATION OR ASSUMPTION OF THE OBLIGATIONS OF
SELLER; CERTAIN LIMITATIONS.
(a) Any corporation (i) into which the Seller may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Seller shall be a party or (ii) which may succeed to all or
substantially all of the business of the Seller, which corporation in any of the
foregoing cases executes an agreement of assumption to perform every obligation
of the Seller under the Agreement, shall be the successor to the Seller under
the Agreement without the execution or filing of any document or any further act
on the part of any of the parties to the Agreement, except that if the Seller in
any of the foregoing cases is not the surviving entity, then the surviving
entity shall execute an agreement of assumption to perform every obligation of
the Seller hereunder. The Seller shall provide notice of any merger,
consolidation or succession pursuant to this Section to each Rating Agency and
shall receive from each Rating Agency a letter to the effect that such merger,
consolidation or succession will not result in a qualification, downgrading or
withdrawal of its then-current rating of the Rated Certificates.
(b) (i) Subject to paragraph (ii) below, the purpose of the Seller
shall be to engage in any lawful activity for which a corporation may be
organized under the General Corporation Law of California other than the
banking business, the trust
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company business or the practice of a profession permitted to be
incorporated by the California Corporations Code.
(ii) Notwithstanding paragraph (b)(i) above, the purpose of the
Seller shall be limited to the following purposes, and activities incident
to and necessary or convenient to accomplish the following purposes: (A)
to acquire, own, hold, sell, transfer, assign, pledge, finance, refinance
and otherwise deal with, retail installment sale contracts or wholesale
loans secured by, new Honda and Acura motor vehicles (the "Motor Vehicle
Receivables"); (B) to authorize, issue, sell and deliver one or more series
of obligations, consisting of one or more classes of certificates or notes
or other evidence of indebtedness (the "Offered Securities") that are
collateralized by or evidence an interest in Motor Vehicle Receivables; and
(C) to negotiate, authorize, execute, deliver and assume the obligations or
any agreement relating to the activities set forth in clauses (A) and (B)
above, including but not limited to any pooling and servicing agreement,
indenture, reimbursement agreement, credit support agreement, receivables
purchase agreement or underwriting agreement and to engage in any lawful
activity which is incidental to the activities contemplated by any such
agreement. So long as any outstanding debt of the Seller or Offered
Securities are rated by any nationally recognized statistical rating
organization, the Seller shall not issue notes or otherwise borrow money
unless (1) the Seller has made a written request to the related nationally
recognized statistical rating organization to issue notes or incur
borrowings which notes or borrowings are rated by the related nationally
recognized statistical rating organization the same as or higher than the
rating afforded any outstanding rated debt or Offered Securities, or (2)
such notes or borrowings (X) are fully subordinated (and which shall
provide for payment only after payment in respect of all outstanding rated
debt and/or Offered Securities) or are nonrecourse against any assets of
the Seller other than the assets pledged to secure such notes or
borrowings, (Y) do not constitute a claim against the Seller in the event
such assets are insufficient to pay such notes or borrowings, and (Z) where
such notes or borrowings are secured by the rated debt or Offered
Securities, are fully subordinated (and which shall provide for payment
only after payment in respect of all outstanding rated debt and/or Offered
Securities) to such rated debt or Offered Securities.
(c) Notwithstanding any other provision of this Section and any provision
of law, the Seller shall not do any of the following:
(i) engage in any business or activity other than as set forth in
clause (b) above;
(ii) without the affirmative vote of a majority of the members of
the Board of Directors of the Seller (which must include the affirmative
vote of all duly appointed Independent Directors, as required by the
articles of incorporation and bylaws of the Seller), (A) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (B) consent to the institution of bankruptcy or
insolvency proceedings against it, (C) file a petition seeking or consent
to reorganization or relief under any applicable federal or state law
relating to
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bankruptcy, (D) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the
corporation or a substantial part of its property, (E) make a general
assignment for the benefit of creditors, (F) admit in writing its inability
to pay its debts generally as they become due, or (G) take any corporate
action in furtherance of the actions set forth in clauses (A) through (F)
above; provided, however, that no director may be required by any
shareholder of the Seller to consent to the institution of bankruptcy or
insolvency proceedings against the Seller so long as it is solvent; or
(iii) merge or consolidate with any other corporation, company or
entity or sell all or substantially all of its assets or acquire all or
substantially all of the assets or capital stock or other ownership
interest of any other corporation, company or entity (except for the
acquisition of Motor Vehicle Receivables of American Honda and the sale of
Motor Vehicle Receivables to one or more trusts in accordance with the terms
of clause (b)(ii) above, which shall not be otherwise restricted by this
Section 16.03(c)).
Section 16.04. LIMITATION ON LIABILITY OF SELLER AND OTHERS. The Seller
and any director or officer or employee or agent of the 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 the Agreement. The Seller shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its obligations
as Seller of the Receivables under the Agreement and that in its opinion may
involve it in any expense or liability.
Section 16.05. SELLER MAY OWN CERTIFICATES. The Seller and any Person
controlling, controlled by or under common control with the Seller may in its
individual or any other capacity become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Seller or an Affiliate
thereof except as otherwise specifically provided in the definition of the term
"Certificateholder." Certificates so owned by or pledged to the Seller or such
controlling or commonly controlled Person shall have an equal and proportionate
benefit under the provisions of the Agreement, without preference, priority or
distinction as among all of the Certificates.
Section 16.06. NO TRANSFER OF EXCESS AMOUNTS. The Seller hereby covenants
that, except as otherwise provided in the Agreement, it will not transfer,
pledge or assign to any Person any part of its right to receive any Excess
Amounts pursuant to Section 14.06(d)(ii) unless it has first delivered to the
Trustee and each Rating Agency an Opinion of Counsel in form and substance
satisfactory to the Trustee stating that such transfer will not (i) adversely
affect the status of the Trust as a grantor trust pursuant to subpart E, part I
of subchapter J of the Code or (ii) cause the Reserve Fund to be taxable as a
corporation under the Code. The Seller shall give written notice to each Rating
Agency of any proposed transfer, pledge or assignment to any Person of all or
any part of its right to receive Excess Amounts pursuant to
Section 14.06(d)(ii).
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ARTICLE SEVENTEEN
THE SERVICER
Section 17.01. REPRESENTATIONS OF SERVICER. The Servicer shall make the
following representations on which the Trustee shall rely in accepting the
Receivables in trust and executing and authenticating the Certificates. The
representations shall speak as of the execution and delivery of the Agreement
and shall survive the sale of the Receivables to the Trustee.
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been
duly organized and is validly existing as a corporation in good
standing under the laws of the State of California, 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, and had at all relevant times, and has power, authority
and legal right to acquire, own, sell and service the Receivables and to
hold the Receivable Files as custodian on behalf of the Trustee.
(b) DUE QUALIFICATION. The Servicer 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 (including
the servicing of the Receivables as required by the Agreement) shall
require such qualifications.
(c) POWER AND AUTHORITY. The Servicer has the power and
authority to execute and deliver the Agreement and to carry out its terms;
and the execution, delivery and performance of the Agreement has
been duly authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATION. The Agreement constitutes a legal,
valid and binding obligation of the Servicer enforceable in accordance with
its terms, except as enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or other
similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability
shall be considered in a proceeding in equity or in law.
(e) NO VIOLATION. The consummation of the transactions
contemplated by the Agreement and the fulfillment of the terms of the
Agreement shall not conflict with, result in any breach of any of the terms
and provisions of, nor constitute (with or without notice or lapse of time)
a default under, the articles of incorporation or bylaws of the Servicer,
or conflict with or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement or other instrument to which the Servicer is a party
or by which it shall be 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 the Agreement); nor
violate any law or, to the Servicer's knowledge, any order, rule or
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regulation applicable to the Servicer of any court or of any federal or
state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties;
which breach, default, conflict, lien or violation would have a material
adverse effect on the earnings, business affairs or business prospects of
the Servicer.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to the Servicer's best knowledge, threatened, before any court,
regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Servicer or its properties:
(i) asserting the invalidity of the Agreement or the Certificates, (ii)
seeking to prevent the issuance of the Certificates or the consummation of
any of the transactions contemplated by the Agreement, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, the Agreement or the Certificates or (iv) relating to
the Servicer and which might adversely affect the federal income tax
attributes of the Certificates.
Section 17.02. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer shall be liable in accordance herewith only to the extent
of the obligations specifically undertaken by the Servicer under the Agreement
and shall have no other obligations or liabilities under the Agreement. Such
obligations shall include the following:
(i) the Servicer shall defend, indemnify and hold harmless the
Trustee, the Trust and the Certificateholders 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 or operation by the Servicer or any
Affiliate thereof of any Financed Vehicle;
(ii) the Servicer shall indemnify, defend and hold harmless the
Trustee and the Trust from and against any taxes that may at any time be
asserted against the Trustee or the Trust with respect to the transactions
contemplated in the Agreement, including, without limitation, any sales,
gross receipts, general corporation, tangible or intangible personal
property, privilege or license taxes (but not including any taxes asserted
with respect to, and as of the date of, the sale of the Receivables to the
Trustee or the issuance and original sale of the Certificates, or asserted
with respect to ownership of the Receivables, or federal or other income
taxes arising out of distributions on the Certificates) and costs and
expenses in defending against the same;
(iii) the Servicer shall indemnify, defend and hold harmless the
Trustee, the Trust and the Certificateholders from and against any and all
costs, expenses, losses, claims, damages and liabilities to the extent that
such cost, expense, loss, claim, damage or liability arose out of, and was
imposed upon the Trustee, the Trust or the Certificateholders through the
negligence, willful misfeasance or bad faith of the
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Servicer in the performance of its duties under the Agreement or by reason
of reckless disregard of its obligations and duties under the Agreement;
and
(iv) the Servicer shall indemnify, defend and hold harmless the
Trustee from and against 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 contained in the Agreement, except to
the extent that such cost, expense, loss, claim, damage or liability: (A)
shall be due to the willful misfeasance, bad faith or negligence of the
Trustee, (B) shall arise from the breach by the Trustee of any of its
representations or warranties set forth in Section 19.14, (C) relates to
any tax other than the taxes with respect to which either the Seller or the
Servicer shall be required to indemnify the Trustee, or (D) shall arise out
of or be incurred in connection with the performance by the Trustee of the
duties of a Successor Servicer under the Agreement.
(b) Indemnification under this Section shall include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer has made any indemnity payments pursuant to this Section and the
recipient thereafter collects any of such amounts from others, the recipient
shall promptly repay such amounts collected to the Servicer, without interest.
(c) The provisions of this Section shall survive the resignation or
removal of the Trustee and the termination of the Agreement.
Section 17.03. MERGER, CONSOLIDATION OR ASSUMPTION OF THE OBLIGATIONS OF
SERVICER. Any corporation (i) into which the Servicer may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the Servicer shall be a party or (iii) which may succeed to all or
substantially all of the business of the Servicer, which corporation in any of
the foregoing cases executes an agreement of assumption to perform every
obligation of the Servicer under the Agreement, shall be the successor to the
Servicer under the Agreement without the execution or filing of any paper or any
further act on the part of any of the parties to the Agreement. The Servicer
shall provide notice of any merger, consolidation or succession pursuant to this
Section to the Trustee and each Rating Agency.
Section 17.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
(a) Neither the Servicer nor any of its directors, officers, employees or
agents shall be under any liability to the Trust, the Trustee or the
Certificateholders, except as provided in the Agreement, for any action taken or
for refraining from the taking of any action pursuant to the Agreement, or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such person against any liability that would otherwise be
imposed by reason of willful misfeasance, bad faith or negligence in the
performance of duties or by reason of reckless disregard of obligations and
duties under the Agreement. The Servicer and any director, officer, employee or
agent of the Servicer 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 the Agreement.
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(b) Except as provided in the Agreement, the Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action that shall not
be incidental to its duties to service the Receivables in accordance with the
Agreement, and that in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may undertake any reasonable action that it
may deem necessary or desirable in respect of the Agreement and the rights and
duties of the parties to the Agreement and the interests of the
Certificateholders under the Agreement.
(c) The Servicer and any director, officer, employee or agent of the
Servicer 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 the Agreement. The Servicer shall not be under any
obligation to appear in, prosecute, nor defend any legal action that shall not
be incidental to its obligations under the Agreement, and that in its opinion
may involve it in any expense or liability.
Section 17.05. SERVICER NOT TO RESIGN. Subject to the provisions of
Section 17.03, the Servicer shall not resign from the obligations and duties
imposed on it by the Agreement as Servicer except upon determination that the
performance of its duties under the Agreement is no longer permissible under
applicable law. Any such determination permitting the resignation of the
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Trustee. No such resignation shall become effective until the Trustee or a
Successor Servicer shall have assumed the responsibilities and obligations of
the Servicer in accordance with Section 18.03.
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ARTICLE EIGHTEEN
EVENTS OF DEFAULT
Section 18.01. EVENTS OF DEFAULT. For purposes of the Agreement, each of
the following shall constitute an "Event of Default":
(a) failure by the Servicer to deliver to the Trustee the
Servicer's Certificate for the related Collection Period, or any failure by
the Servicer (or, so long as the Servicer is American Honda, the Seller) to
deliver to the Trustee, for distribution to Certificateholders, any
proceeds or payment required to be so delivered under the terms of the
Certificates or the Agreement, in each case that continues unremedied for a
period of three Business Days after discovery by an officer of the Servicer
(or, so long as the Servicer is American Honda, the Seller) or written
notice of such failure, requiring the same to be remedied, shall have been
given (i) to the Servicer or the Seller, as the case may be, by the Trustee
or (ii) to the Trustee and the Servicer or the Seller, as the case may be,
by the Holders of Certificates evidencing not less than 25% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class; or
(b) failure on the part of the Servicer (or so long as the
Servicer is American Honda, the Seller) duly to observe or to perform in
any material respect any other covenants or agreements of the Servicer (or
so long as the Servicer is American Honda, the Seller) set forth in the
Certificates or in the Agreement, which failure shall (i) materially and
adversely affect the rights of the Certificateholders and (ii) continue
unremedied for a period of 90 days after the date on which written notice
of such failure, requiring the same to be remedied, shall have been given
(A) to the Servicer or the Seller, as the case may be, by the Trustee or
(B) to the Trustee and the Servicer or the Seller, as the case may be, by
the Holders of Certificates evidencing not less than 25% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class; or
(c) the entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a trustee in bankruptcy, conservator, receiver or liquidator
for the Servicer (or, so long as the Servicer is American Honda, the
Seller) in any bankruptcy, insolvency, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding up or
liquidation of their respective affairs, and the continuance of any such
decree or order unstayed and in effect for a period of 90 consecutive days;
or
(d) the consent by the Servicer (or, so long as the Servicer is
American Honda, the Seller) to the appointment of a trustee in bankruptcy,
conservator or receiver or liquidator in any bankruptcy, insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings of or relating to the Servicer (or, so long as the Servicer is
American Honda, the Seller) of or relating to substantially all of its
property; or the Servicer (or, so long as the Servicer is American Honda,
the Seller)
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shall admit in writing its inability to pay its debts generally as they
become due, file a petition to take advantage of any applicable insolvency
or reorganization statute, make an assignment for the benefit of its
creditors or voluntarily suspend payment of its obligations.
Section 18.02. CONSEQUENCES OF AN EVENT OF DEFAULT. If an Event of
Default shall occur and be continuing, so long as such Event of Default has not
been cured or waived, either the Trustee or the Holders of Certificates
evidencing not less than 51% of the Voting Interests of the Class A Certificates
and the Class B Certificates, voting together as a single class, by notice then
given in writing to the Servicer (and to the Trustee if given by
Certificateholders) may terminate all of the rights and obligations of the
Servicer under the Agreement. On or after the receipt by the Servicer of such
written notice, all authority and power of the Servicer under the Agreement,
whether with respect to the Certificates, the Receivables or otherwise, shall,
without further action, pass to and be vested in the Trustee pursuant to and
under this Section or such Successor Servicer as may be appointed under Section
18.03; and, without limitation, the Trustee shall be 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 and the Trustee
in effecting the termination of the responsibilities and rights of the
predecessor Servicer under the Agreement, including, without limitation, 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 have
been deposited by the predecessor Servicer, in the Accounts or the Reserve Fund
or thereafter received with respect to the Receivables and all Payments Ahead
that shall at that time be held by the predecessor Servicer. All reasonable
costs and expenses (including servicer conversion costs and attorneys' fees)
incurred in connection with transferring the Receivable Files to the Successor
Servicer and amending the Agreement to reflect such succession as Servicer
pursuant to this Section shall be paid by the predecessor Servicer (or, if the
predecessor Servicer is the initial Trustee, the initial Servicer) upon
presentation of reasonable documentation of such costs and expenses.
Section 18.03. TRUSTEE TO ACT; APPOINTMENT OF SUCCESSOR SERVICER. On and
after the time the Servicer receives a notice of termination pursuant to Section
18.02 or tenders its resignation pursuant to Section 17.05, the Trustee shall,
by an instrument in writing, assume the rights and responsibilities of the
Servicer in its capacity as Servicer under the Agreement and the transactions
set forth or provided for in the Agreement, and shall be subject to all the
responsibilities, restrictions, duties and liabilities relating thereto placed
on the Servicer by the terms and provisions of the Agreement. As compensation
therefor, the Trustee shall be entitled to such compensation (whether payable
out of the Certificate Account or otherwise) as the Servicer would have been
entitled to under the Agreement if no such notice of termination or resignation
had been given. Notwithstanding the foregoing, the Trustee may, if it shall be
unwilling so to act, or shall, if it is legally 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 includes the servicing of motor vehicles
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receivables, as the successor to the Servicer under the Agreement, provided that
the appointment of any such Successor Servicer will not result in the
qualification, reduction or withdrawal of the rating then assigned to the Rated
Certificates by each Rating Agency. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
Successor Servicer out of payments on or in respect of the Receivables as it and
such Successor Servicer shall agree; provided, however, that no such
compensation shall be in excess of that permitted the original Servicer under
the Agreement. The Trustee and such Successor Servicer shall take such action,
consistent with the Agreement, as shall be necessary to effectuate any such
succession. The Trustee shall not be relieved of its duties as Successor
Servicer under this Section until the newly appointed Servicer shall have
assumed the responsibilities and obligations of the Servicer under the
Agreement.
Section 18.04. NOTIFICATION TO CERTIFICATEHOLDERS. Upon a Responsible
Officer obtaining knowledge of (i) the occurrence of an Event of Default and the
expiration of any cure period applicable thereto or (ii) any termination of, or
appointment of a successor to, the Servicer pursuant to this Section, the
Trustee shall give prompt written notice thereof to Certificateholders at their
respective addresses appearing in the Certificate Register and to each Rating
Agency.
Section 18.05. WAIVER OF PAST DEFAULTS. The Holders of Certificates
evidencing not less than 51% of the Voting Interests of the Class A Certificates
and the Class B Certificates, voting together as a single class, may, on behalf
of all Holders of Certificates, waive any Event of Default or default by the
Servicer in the performance of its obligations hereunder and its consequences,
except a default in making any required deposits to or payments from the
Accounts or the Reserve Fund in accordance with the Agreement or in respect of a
covenant or provision of the Agreement that under Section 21.01 cannot be
modified or amended without the consent of the Holder of each Certificate. Upon
any such waiver of a past default, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been remedied for
every purpose of the Agreement. No such waiver shall extend to any subsequent
or other default or impair any right consequent thereon except to the extent
expressly so waived.
Section 18.06. REPAYMENT OF ADVANCES. If a Successor Servicer replaces
the Servicer, the predecessor Servicer shall be entitled to receive
reimbursement for Outstanding Advances pursuant to Sections 14.03 and 14.04, in
the manner specified in Section 14.06, with respect to all Advances made by the
predecessor Servicer.
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ARTICLE NINETEEN
THE TRUSTEE
Section 19.01. DUTIES OF TRUSTEE.
(a) The Trustee, both prior to and after the occurrence of an Event of
Default, undertakes to perform such duties and only such duties as are
specifically set forth in the Agreement. If, to the knowledge of a Responsible
Officer, an Event of Default has occurred and has not been cured or waived, the
Trustee shall exercise such of the rights and powers vested in it by the
Agreement, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs; provided, however, that if the Trustee assumes the duties of the
Servicer pursuant to Section 18.03, the Trustee in performing such duties shall
use the degree of skill and attention customarily exercised by a servicer with
respect to motor vehicle receivables that it services for itself or others.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that shall be specifically required to be furnished pursuant to
any provision of the Agreement, shall examine them to determine whether they
conform to the requirements of the Agreement.
(c) No provision of the Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, its own bad faith or its own willful misfeasance; provided, however,
that:
(i) prior to the occurrence of an Event of Default known to a
Responsible Officer, and after the curing or waiving of all such Events of
Default that may have occurred, the duties and obligations of the Trustee
shall be determined solely by the express provisions of the Agreement, the
Trustee shall not be liable except for the performance of such duties and
obligations as are specifically set forth in the Agreement, no implied
covenants or obligations shall be read into the Agreement against the
Trustee, the permissive right of the Trustee to do things enumerated in the
Agreement shall not be construed as a duty and, in the absence of bad faith
on the part of the Trustee, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of the Agreement;
(ii) the Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in performing its duties in
accordance with the terms of the Agreement; and
(iii) the Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken in good faith in accordance
with the direction of the Holders of Certificates evidencing not less than
25% of the Voting Interests of the Class A Certificates and the Class B
Certificates, voting together as a single class,
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relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under the Agreement.
(d) The Trustee shall not be required to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties
under the Agreement, or in the exercise of any of its rights or powers, if there
shall be reasonable grounds for believing that the repayment of such funds or
adequate indemnity against such risk or liability is not reasonably assured to
it, and none of the provisions contained in the Agreement shall in any event
require the Trustee to perform, or be responsible for the manner of performance
of, any of the obligations of the Servicer under the Agreement except during
such time, if any, as the Trustee shall be the successor to, and be vested with
the rights, duties, powers and privileges of, the Servicer in accordance with
the terms of the Agreement.
(e) Except for actions expressly authorized by the Agreement, the Trustee
shall take no action reasonably likely to impair the security interests created
or existing under any Receivable or to impair the value of any Receivable.
(f) All information obtained by the Trustee regarding the Obligors and the
Receivables, whether upon the exercise of its rights under the Agreement or
otherwise, shall be maintained by the Trustee in confidence and shall not be
disclosed to any other Person, unless such disclosure is required by the
Agreement or any applicable law or regulation.
Section 19.02. TRUSTEE'S CERTIFICATE. On or as soon as practicable after
each date on which the Seller or the Servicer shall purchase Administrative
Receivables or the Seller shall repurchase Warranty Receivables, the Trustee
shall, at the written request of the Servicer, submit to the Servicer or the
Seller, as applicable, a Trustee's Certificate, identifying the purchaser and
the Receivables so purchased, executed by the Trustee and completed as to its
date and the date of the Agreement, and accompanied by a copy of the Servicer's
Certificate for the related Collection Period. The Trustee's Certificate
submitted with respect to such Distribution Date shall operate, as of such
Distribution Date, as an assignment, without recourse, representation or
warranty, to the Seller or the Servicer, as the case may be, of all the
Trustee's right, title and interest in and to such Administrative Receivable or
Warranty Receivable and to the other property conveyed to the Trust pursuant to
Section 12.01 with respect to such Administrative Receivable or Warranty
Receivable, and all security and documents relating thereto, such assignment
being an assignment outright and not for security.
Section 19.03. TRUSTEE'S ASSIGNMENT OF ADMINISTRATIVE RECEIVABLES AND
WARRANTY RECEIVABLES. With respect to all Administrative Receivables and
Warranty Receivables, the Trustee shall at the written request of Servicer, by a
Trustee's Certificate assign, without recourse, representation or warranty, to
the Seller or the Servicer, as applicable, all the Trustee's right, title and
interest in and to each such repurchased Receivable and the other property
conveyed to the Trust pursuant to Section 12.01 with respect to such Receivable,
and all security and any documents relating thereto, such assignment being an
assignment outright and not for security; and the Seller or the Servicer, as
applicable, shall thereupon own such Receivable, and all such security and
documents, free of any further obligation to the Trustee
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or the Certificateholders with respect thereto. If in any enforcement suit or
legal proceeding it is held that the Servicer may not enforce a Receivable on
the ground that it is not a real party in interest or a holder entitled to
enforce the Receivable, the Trustee shall, at the Servicer's written direction
and expense, take such steps as the Trustee deems necessary to enforce the
Receivable, including bringing suit in the Trustee's name or the names of the
Certificateholders.
Section 19.04. CERTAIN MATTERS AFFECTING THE TRUSTEE.
(a) Except as otherwise provided in Section 19.01:
(i) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect
of any action taken or suffered or omitted by it under the Agreement in
good faith and in accordance with such Opinion of Counsel;
(iii) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by the Agreement, or to institute,
conduct or defend any litigation under the Agreement or in relation to the
Agreement, at the request, order or direction of any of the
Certificateholders pursuant to the provisions of the Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities that may be incurred
therein or thereby; nothing contained in the Agreement shall, however,
relieve the Trustee of the obligations, upon the occurrence of an Event of
Default known to a Responsible Officer (that shall not have been cured or
waived), to exercise such of the rights and powers vested in it by the
Agreement, and to use the same degree of care and skill in their exercise
as a prudent man would exercise or use under the circumstances in the
conduct of his own affairs;
(iv) the Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by the Agreement;
(v) prior to the occurrence of an Event of Default and after the
curing or waiving of all Events of Default that may have occurred, the
Trustee shall not be bound to make any investigation into the facts of
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by Holders of
Certificates evidencing not less than 25% of the Voting Interests of the
Class A Certificates and the Class B Certificates, voting together as a
single class;
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provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of the Agreement, the Trustee may require reasonable indemnity
against such cost, expense or liability as a condition to so proceeding;
the reasonable expense of every such examination shall be paid by the
Seller or, if paid by the Trustee, shall be reimbursed by the Servicer upon
demand; and nothing in this clause shall derogate from the obligation of
the Servicer to observe any applicable law prohibiting disclosure of
information regarding the Obligors; and
(vi) the Trustee may execute any of the trusts or powers under the
Agreement or perform any duties under the Agreement either directly or by
or through agents or attorneys or a custodian and shall not be liable or
responsible for the misconduct or negligence of any of its agents or
attorneys or a custodian appointed with due care by the Trustee.
(b) No Certificateholder will have any right to institute any proceeding
with respect to the Agreement, unless such Holder shall have given to the
Trustee written notice of default and (i) the Event of Default arises from the
Servicer's failure to remit collections or payments when due or (ii) the Holders
of Certificates evidencing not less than 25% of the Voting Interests of the
Class A Certificates and the Class B Certificates, voting together as a single
class, have made written request upon the Trustee to institute such proceeding
in its own name as Trustee thereunder, and have offered to the Trustee
reasonable indemnity, and the Trustee for 30 days has neglected or refused to
institute any such proceedings.
Section 19.05. TRUSTEE NOT LIABLE FOR CERTIFICATES OR RECEIVABLES. The
Trustee shall make no representations as to the validity or sufficiency of the
Agreement or of the Certificates (other than the execution by the Trustee on
behalf of the Trust of, or the certificate of authentication on, the
Certificates), or of any Receivable or related document. The Trustee shall have
no obligation to perform any of the duties of the Seller or the Servicer unless
explicitly set forth in the Agreement. The Trustee shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any security interest in any Financed Vehicle or any
Receivable, or the perfection and priority of such a security interest or the
maintenance of any such perfection and priority, or for or with respect to the
efficacy of the Trust or its ability to generate the payments to be distributed
to Certificateholders under the Agreement, including without limitation, the
existence, condition, location and ownership of any Financed Vehicle; the
existence and enforceability of any physical damage or credit life or credit
disability insurance; the existence and contents of any Receivable or any
computer or other record thereof; the validity of the assignment of any
Receivable to the Trust or of any intervening assignment; the completeness of
any Receivable; the performance or enforcement of any Receivable; the compliance
by the Seller or the Servicer with any covenant or the breach by the Seller or
the Servicer of any warranty or representation made under the Agreement or in
any related document and the accuracy of any such warranty or representation
prior to the Trustee's receipt of notice or other discovery of any noncompliance
therewith or any breach thereof; any investment of monies by the Servicer or any
loss resulting therefrom (it being understood that the Trustee shall remain
responsible
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for any Trust property that it may hold); the acts or omissions of the
Seller, the Servicer or any Obligor; or any action of the Servicer taken in
the name of or as the agent of the Trustee; or any action by the Trustee
taken at the instruction of the Servicer; provided, however, that the
foregoing shall not relieve the Trustee of its obligation to perform its
duties under the Agreement. Except with respect to a claim based on the
failure of the Trustee to perform its duties under the Agreement or based on
the Trustee's negligence or willful misconduct, bad faith or negligence, no
recourse shall be had for any claim based on any provision of the Agreement,
the Certificates or any Receivable or assignment thereof against the
institution serving as Trustee in its individual capacity. The Trustee shall
not have any personal obligation, liability or duty whatsoever to any
Certificateholder or any other Person with respect to any such claim, and any
such claim shall be asserted solely against the Trust or any indemnitor who
shall furnish indemnity as provided in the Agreement. The Trustee shall not
be accountable for the use or application by the Seller of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Servicer in respect of the Receivables.
The 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 (unless the Trustee shall have become the successor Servicer)
or to prepare or file any Commission filing for the Trust or to record this
Agreement.
Section 19.06. TRUSTEE MAY OWN CERTIFICATES. The Trustee in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not the Trustee.
Section 19.07. TRUSTEE'S FEES AND EXPENSES. The Servicer covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by it in the execution of the trusts created by the
Agreement and in the exercise and performance of any of the powers and duties of
the Trustee under the Agreement, and the Servicer shall pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ) incurred or made by the
Trustee in defense of any action brought against it in connection with the
Agreement except any such expense, disbursement or advance as may arise from its
negligence, willful misfeasance or bad faith or that is the responsibility of
Certificateholders under the Agreement. Additionally, the Servicer, pursuant to
Section 17.02, shall indemnify the Trustee with respect to certain matters.
Section 19.08. INDEMNITY OF TRUSTEE AND SUCCESSOR SERVICER. Upon the
appointment of a Successor Servicer pursuant to Section 18.03, such Successor
Servicer and the Trustee and their respective agents and employees shall be
indemnified by the Trust and held harmless against any loss, liability or
expense (including reasonable attorney's fees and expenses) arising out of or
incurred in connection with the acceptance of performance of the trusts and
duties contained in the Agreement to the extent that (i) the Successor Servicer
or the Trustee, as the case may be, shall not be indemnified for such loss,
liability or expense by the Servicer
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pursuant to Section 17.02; (ii) such loss, liability, or expense shall not have
been incurred by reason of the Successor Servicer's or the Trustee's wilful
misfeasance, bad faith or negligence; and (iii) such loss, liability or expense
shall not have been incurred by reason of the Successor Servicer's or the
Trustee's breach of its respective representations and warranties pursuant to
Sections 18.03, 19.09 and 19.14, respectively.
The Successor Servicer and/or the Trustee shall be entitled to the
indemnification provided by this Section only to the extent all amounts due the
Servicer and the Certificateholders with respect to any Distribution Date
pursuant to Sections 14.06 and 14.07 have been paid in full and all amounts
required to be deposited in the Reserve Fund with respect to any Distribution
Date pursuant to Section 14.07 have been so deposited.
Section 19.09. ELIGIBILITY REQUIREMENTS FOR TRUSTEE.
Except as otherwise provided in the Agreement, the Trustee under the
Agreement shall at all times (i) be a corporation having its corporate trust
office in the same state (or the District of Columbia or the Commonwealth of
Puerto Rico) as the location of the Corporate Trust Office; (ii) be organized
and doing business under the laws of such state (or the District of Columbia or
the Commonwealth of Puerto Rico) or the United States; (iii) be authorized under
such laws to exercise corporate trust powers; (iv) have a combined capital and
surplus of at least $50,000,000 and be subject to supervision or examination by
federal or state authorities; and (v) have a long-term deposit rating no lower
than Baa3 by Moody's (if Moody's is a Rating Agency), or be otherwise acceptable
to each Rating Agency, as evidenced by a letter to such effect (which acceptance
may be evidenced in the form of a letter, dated on or shortly before the Closing
Date, assigning an initial rating to the Rated Certificates).
If the Trustee 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 the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 19.10.
Section 19.10. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may at any time resign and be discharged from the trusts
created by the Agreement by giving written notice thereof to the Seller and the
Servicer. Upon receiving such notice of resignation, the Servicer shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor Trustee. If no successor Trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
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(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 19.09 and shall fail to resign after written
request therefor by the Seller or the Servicer, or if at any time the Trustee
shall be legally unable to act, or shall be adjudged a bankrupt or insolvent, or
a receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Seller or the Servicer may remove the Trustee. If it shall remove the Trustee
under the authority of the immediately preceding sentence, the Servicer shall
promptly appoint a successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the Trustee so removed and one
copy to the successor Trustee, and shall promptly pay all fees owed to the
outgoing Trustee.
(c) Any resignation or removal of the Trustee and appointment of a
successor Trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor Trustee as
provided in Section 19.11. The Servicer shall give each Rating Agency notice of
any such resignation or removal of the Trustee and appointment and acceptance of
a successor Trustee.
Section 19.11. SUCCESSOR TRUSTEE. Any successor Trustee appointed as
provided in Section 19.10 shall execute, acknowledge and deliver to the Servicer
and to its predecessor Trustee an instrument accepting such appointment under
the Agreement, and thereupon the resignation or removal of the predecessor
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become fully vested with all the rights, powers,
duties and obligations of its predecessor under the Agreement, with like effect
as if originally named as Trustee. The predecessor Trustee shall deliver to the
successor Trustee all documents and statements held by it under the Agreement;
and the Servicer and the predecessor 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 Trustee all such rights,
powers, duties and obligations. No successor Trustee shall accept appointment
as provided in this Section unless at the time of such acceptance such successor
Trustee shall be eligible under the provisions of Section 19.09. Upon
acceptance of appointment by a successor Trustee as provided in this Section,
the Servicer shall mail notice of the successor of such Trustee under the
Agreement to all Certificateholders at their addresses as shown in the
Certificate Register and shall give notice by mail to each Rating Agency. If
the Servicer fails to mail such notice within ten days after acceptance of
appointment by the successor Trustee, the successor Trustee shall cause such
notice to be mailed at the expense of the Servicer.
Section 19.12. MERGER OR CONSOLIDATION OF TRUSTEE. Any corporation (i)
into which the Trustee may be merged or consolidated, (ii) which may result from
any merger, conversion, or consolidation to which the Trustee shall be a party
or (iii) which may succeed to all or substantially all the corporate trust
business of the Trustee, which corporation executes an agreement of assumption
to perform every obligation of the Trustee under the Agreement, shall be the
successor of the Trustee hereunder, provided such corporation shall be eligible
pursuant to Section 19.09, 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
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notwithstanding. Notice of any such merger shall be given by the Trustee to
each Rating Agency.
Section 19.13. APPOINTMENT OF CO-TRUSTEE OR SEPARATE TRUSTEE.
Notwithstanding any other provisions of the Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Financed Vehicle may at the time be located, the Servicer
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee, jointly with the Trustee, or separate trustee or separate
trustees, of all or any part of the Trust, and to vest in such Person, in such
capacity and for the benefit of the Certificateholders, such title to the Trust,
or any part thereof, and, subject to the other provisions of this Section, such
powers, duties, obligations, rights and trusts as the Servicer and the Trustee
may consider necessary or desirable. If the Servicer shall not have joined in
such appointment within 15 days after the receipt by it of a request so to do,
or in the case an Event of Default shall have occurred and be continuing, the
Trustee alone shall have the power to make such appointment. No co-trustee or
separate trustee under the Agreement shall be required to meet the terms of
eligibility as a successor trustee pursuant to Section 19.09 and no notice of a
successor Trustee pursuant to Section 19.11 and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required
pursuant to Section 19.11.
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 the Trustee shall be conferred upon and exercised or performed
by the 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 the 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 (whether as Trustee under the Agreement or as
successor to the Servicer under the Agreement), the 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
the Trust 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 the Trustee;
(ii) no trustee under the Agreement shall be personally liable by
reason of any act or omission of any other trustee under the Agreement; and
(iii) the Servicer and the Trustee acting jointly (or during the
continuation of an Event of Default, the Trustee alone) may at any time
accept the resignation of or remove any separate trustee or co-trustee.
Any notice, request or other writing given to the 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 the
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Agreement and the conditions of this Section. 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 the Trustee or separately, as may be provided therein, subject to
all the provisions of the Agreement, including, but not limited to, every
provision of the Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Trustee. Each such instrument shall be
filed with the Trustee and a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any time appoint the 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 the Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee. Notwithstanding anything to the contrary in the Agreement,
the appointment of any separate trustee or co-trustee shall not relieve the
Trustee of its obligations and duties under the Agreement.
Section 19.14. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. The Trustee
shall make the following representations and warranties on which the Seller and
Certificateholders may rely:
(i) ORGANIZATION AND GOOD STANDING. The Trustee is a New York
banking corporation duly organized, existing and in good standing under the
laws of the State of New York.
(ii) POWER AND AUTHORITY. The Trustee has full power, authority
and right to execute, deliver and perform the Agreement and has taken all
necessary action to authorize the execution, delivery and performance by it
of the Agreement.
(iii) NO VIOLATION. The execution, delivery and performance by the
Trustee of the Agreement (a) shall not violate any provision of any law
governing the banking and trust powers of the Trustee or, to the best of
the Trustee's knowledge, any order, writ, judgment or decree of any court,
arbitrator or governmental authority applicable to the Trustee or any of
its assets, (b) shall not violate any provision of the corporate charter or
by-laws of the Trustee and (c) shall not violate any provision of, or
constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of any Lien on any properties included
in the Trust pursuant to the provisions of any mortgage, indenture,
contract, agreement or other undertaking to which it is a party, which
violation, default or Lien could reasonably be expected to materially and
adversely affect the Trustee's performance or ability to perform its duties
under the Agreement or the transactions contemplated in the Agreement.
(iv) NO AUTHORIZATION REQUIRED. The execution, delivery and
performance by the Trustee of the Agreement shall not require the
authorization, consent or approval of, the giving of notice to, the filing
or registration with or the taking of any
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other action in respect of, any governmental authority or agency regulating
the banking and corporate trust activities of the Trustee.
(v) DULY EXECUTED. The Agreement shall have been duly executed
and delivered by the Trustee and shall constitute the legal, valid and
binding obligation of the Trustee, enforceable in accordance with its
terms, except as enforceability may be subject to or limited by bankruptcy,
insolvency, reorganization, moratorium, liquidation or other similar laws
affecting the enforcement of creditors' rights in general and by general
principles of equity, regardless of whether such enforceability shall be
considered in a proceeding in equity or in law.
Section 19.15. TAX RETURNS. In the event the Trust shall be required to
file tax returns, the Servicer shall prepare or shall cause to be prepared any
tax returns required to be filed by the Trust and shall remit such returns to
the Trustee for signature at least five days before such returns are due to be
filed. The Trustee, upon request, shall furnish the Servicer with all such
information known to the Trustee as may be reasonably required in connection
with the preparation of all tax returns of the Trust, and shall, upon request,
execute such returns.
Section 19.16. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
CERTIFICATES. All rights of action and claims under the Agreement or the
Certificates may be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as Trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Certificateholders in respect of which such judgment has
been obtained.
Section 19.17. SUIT FOR ENFORCEMENT. If an Event of Default shall occur
and be continuing, the Trustee, in its discretion may, subject to the provisions
of Section 19.01, proceed to protect and enforce its rights and the rights of
the Certificateholders under the Agreement by a suit, action or proceeding in
equity or at law or otherwise, whether for the specific performance of any
covenant or agreement contained in the Agreement or in aid of the execution of
any power granted in the Agreement or for the enforcement of any other legal,
equitable or other remedy as the Trustee, being advised by counsel, shall deem
most effectual to protect and enforce any of the rights of the Trustee or the
Certificateholders.
Section 19.18. RIGHTS OF CERTIFICATEHOLDERS TO DIRECT TRUSTEE. Holders of
Certificates evidencing not less the 25% of the Voting Interests of the Class A
Certificates and the Class B Certificates, voting together as a single class,
shall have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that subject to Section
19.01, the Trustee shall have the right to decline to follow any such direction
if the Trustee being advised by counsel determines that the action so directed
may not lawfully be taken, or if the Trustee in good faith shall, by a
Responsible Officer, determine that the proceedings so directed would be illegal
or subject it to personal liability or be unduly
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prejudicial to the rights of Certificateholders not parties to such direction;
and provided further that nothing in the Agreement shall impair the right of the
Trustee to take any action deemed proper by the Trustee and which is not
inconsistent with such direction by the Certificateholders.
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ARTICLE TWENTY
TERMINATION
Section 20.01. TERMINATION OF THE TRUST.
(a) The Trust and the respective obligations and responsibilities of the
Seller, the Servicer, any Servicer Letter of Credit Bank and the Trustee shall
terminate upon (i) the purchase as of any Distribution Date by the Seller or
Servicer, or any successor to the Servicer, at its option of the corpus of the
Trust as described in Section 20.02, (ii) the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement or (iii) the
maturity or liquidation of the last Receivable and the disposition of all
property held as part of the Trust; provided, however, that in no event shall
the trust created by the Agreement continue beyond the expiration of 21 years
from the death of the last survivor of the descendants of George Herbert Walker
Bush of the State of Texas, living on the date of the Agreement. The Servicer
shall promptly notify the Trustee and each Rating Agency of any prospective
termination pursuant to this Section.
(b) Notice of any termination, specifying the Distribution Date upon which
the Certificateholders must surrender their Certificates to the Trustee for
payment of the final distribution and retirement of the Certificates, shall be
given promptly by the Trustee (at the written direction of the Servicer) by
letter to Certificateholders mailed not later than the 15th day and not earlier
than the 30th day prior to the date on which such final distribution is expected
to occur specifying (i) the Distribution Date upon which final payment of the
Certificates shall be made upon presentation and surrender of Certificates at
the office of the Trustee therein specified, (ii) the amount of any such final
payment and (iii) if applicable, 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 the Trustee
therein specified. The Trustee shall give such notice to the Certificate
Registrar (if other than the Trustee) at the time such notice is given to
Certificateholders. In the event such notice is given, the Seller, the
Servicer, or any successor to the Servicer, or the Trustee, as the case may be,
shall make deposits into the Certificate Account in accordance with Section
14.05, or, in the case of an optional purchase of Receivables pursuant to
Section 20.02, shall deposit the amount specified in Section 20.02. Upon
presentation and surrender of the Certificates, the Trustee shall cause to be
distributed to Certificateholders amounts distributable on such Distribution
Date pursuant to Section 14.06.
(c) In the event that all of the Certificateholders shall not surrender
their Certificates for retirement within six months after the date specified in
the above-mentioned written notice, the Trustee shall give a second written
notice to the remaining Certificateholders to surrender their Certificates for
retirement 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 retirement, the 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 remain subject to
the Agreement. Any funds remaining in the Trust after
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exhaustion of such remedies shall be distributed by the Trustee to the United
Negro College Fund.
Section 20.02. OPTIONAL TERMINATION OF ALL RECEIVABLES. On each
Distribution Date following the last day of a Collection Period as of which
the Pool Balance is 10% or less of the Original Pool Balance, the Seller or
the Servicer, or any successor to the Servicer, shall have the option to
purchase the corpus of the Trust; provided that the option to purchase
provided in this Section shall not be exercised if the final distribution to
Certificateholders would be less than the aggregate outstanding principal
amount of the Certificates plus the sum of (i) the Class A Interest
Distributable Amount for the related Distribution Date, (ii) any outstanding
Class A Interest Carryover Shortfall, (iii) the Class B Interest
Distributable Amount for such Distribution Date and (iv) any outstanding
Class B Interest Carryover Shortfall. To exercise such option, the Seller or
the Servicer, or any successor to the Servicer, as the case may be, shall
notify the Trustee in writing, no later than the tenth day of the month
preceding the month in which the Distribution Date as of which such purchase
is to be effected and shall deposit pursuant to Section 14.05 in the
Certificate Account an amount equal to the aggregate Administrative Purchase
Payments for the Receivables (including Defaulted Receivables), plus the
related Yield Supplement Deposit Amount and the appraised value of any other
property held by the Trust (less liquidation expenses to be incurred in
connection with the recovery thereof), such value to be determined by an
appraiser mutually agreed upon by the Seller, the Servicer and the Trustee,
and shall succeed to all interests in and to the Trust. Notwithstanding the
foregoing, if Moody's is a Rating Agency, the Seller or the Servicer, or any
Successor Servicer, as the case may be, may not effect any such purchase if
the long-term unsecured debt obligations of the related entity are rated less
than Baa3, unless the Trustee shall have received an Opinion of Counsel that
such purchase will not constitute a fraudulent conveyance, or Moody's is
otherwise satisfied, as evidenced by written notice from Moody's to the
Trustee. Upon such deposit of the amount necessary to purchase the corpus of
the Trust, the Servicer shall for all purposes of the Agreement be deemed to
have released all claims for reimbursement of Outstanding Advances made in
respect of the Receivables. The payment shall be made in the manner
specified in Section 14.05, and shall be distributed pursuant to Section
14.06. In the event that both the Seller and the Servicer, or any successor
to the Servicer, elect to purchase the Receivables pursuant to this Section,
the party first notifying the Trustee (based on the Trustee's receipt of such
notice) shall be permitted to purchase the Receivables.
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ARTICLE TWENTY ONE
MISCELLANEOUS PROVISIONS
Section 21.01. AMENDMENT.
(a) The Agreement may be amended by the Seller, the Servicer and the
Trustee, without the consent of any of the Certificateholders or the Letter of
Credit Bank, if any, (i) to cure any ambiguity, to correct or supplement any
provision in the Agreement which may be inconsistent with any other provision of
the Agreement, to add, change or eliminate any other provision of the Agreement
with respect to matters or questions arising under the Agreement that shall not
be inconsistent with the provisions of the Agreement, to add or amend any
provision therein in connection with permitting transfers of the Class B
Certificates or to add or provide for any credit enhancement for the Class B
Certificates, (ii) to change the formula for determining the Specified Reserve
Fund Balance or the manner in which the Reserve Fund is funded or to amend or
modify any provisions of the Agreement relating to the remittance schedule with
respect to collections deposited into the Certificate Account or the Payahead
Account pursuant to Section 14.02 or (iii) to amend or modify any provisions in
the Agreement relating to the Servicer Letter of Credit, if any, or the
acquisition thereof (provided that no such amendment or modification pursuant to
this clause (iii) shall be made without the consent of the Letter of Credit
Bank, which consent shall not be unreasonably withheld); provided, however, that
any such action shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder and
provided, further, that in connection with any amendment pursuant to clause (ii)
or (iii) above, the Servicer shall deliver to the Trustee a letter from each
Rating Agency to the effect that such amendment will not cause its then-current
rating on the Rated Certificates to be qualified, reduced or withdrawn.
(b) The Agreement may also be amended from time to time by the Seller, the
Servicer and the Trustee, with the consent of the Holders of Certificates (which
consent of any Holder of a Certificate given pursuant to this Section or
pursuant to any other provision of the Agreement shall be conclusive and binding
on such Holder and on all future Holders of such Certificate and of any
Certificate issued upon the transfer thereof or in exchange thereof or in lieu
thereof whether or not notation of such consent is made upon the Certificate),
evidencing not less than 51% of the Voting Interests of the Class A Certificates
and the Class B Certificates, voting together as a single class, for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of the Agreement, or of modifying in any manner the rights of either
Class of Certificateholders or the Letter of Credit Bank, if any; provided,
however, that no such amendment shall (i) except as otherwise provided in
Section 21.01(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 on any Certificate or to or by the Letter of
Credit Bank, if any, or the Pass-Through Rate or the Specified Reserve Fund
Balance or (ii) reduce the aforesaid percentage of the Voting Interests of the
Certificates of either Class required to consent to any such amendment, without
the consent of the Holders of all Certificates of the relevant Class then
outstanding and provided, further, that in connection with any amendment
pursuant to
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this clause (b), the Servicer shall deliver to the Trustee a letter from each
Rating Agency to the effect that such amendment will not cause its then-current
rating on the Rated Certificates to be qualified, reduced or withdrawn.
(c) Prior to the execution of any such amendment or consent, the Trustee
shall furnish written notification of the substance of such amendment or consent
to each Rating Agency and the Letter of Credit Bank, if any.
(d) Promptly after the execution of any such amendment or consent, the
Trustee shall furnish written notification of the substance of such amendment or
consent to each Certificateholder. It shall not be necessary for the consent of
Certificateholders pursuant to Section 21.01(b) to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents and
of evidencing the authorization by Certificateholders of the execution thereof
shall be subject to such reasonable requirements as the Trustee may prescribe.
(e) Prior to the execution of any amendment to the Agreement, the 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 the Agreement.
The Trustee may, but shall not be obligated to, enter into any such amendment
which affects the Trustee's own rights, duties or immunities under the Agreement
or otherwise.
Section 21.02. PROTECTION OF TITLE TO TRUST.
(a) Each of the Seller and the Servicer or both shall execute and file
such financing statements and cause to be executed and filed such continuation
and other statements, all in such manner and in such places as may be required
by law fully to preserve, maintain and protect the interests of the
Certificateholders, the Letter of Credit Bank, if any, and the Trustee under the
Agreement in the Receivables and in the proceeds thereof. Each of the Seller
and the Servicer shall deliver (or cause to be delivered) to the Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither the Seller nor the 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 by the Seller in accordance with
Section 21.02(a) seriously misleading within the meaning of Section 9-402(7) of
the UCC, unless it shall have given the Trustee and the Letter of Credit Bank,
if any, at least 60 days' prior written notice thereof and shall have promptly
filed appropriate amendments to all previously filed financing statements or
continuation statements.
(c) Each of the Seller and the Servicer shall give the Trustee and the
Letter of Credit Bank, if any, 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
78
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statement or of any new financing statement and shall promptly file any such
amendment. The Servicer shall at all times maintain each office from which it
services Receivables and its principal executive office within the United
States.
(d) The 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 Accounts and any Payments Ahead held by the
Servicer in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under the Agreement of the Receivables to the Trustee,
the Servicer's master computer records (including any back-up archives) that
refer to any Receivable indicate clearly the interest of the particular grantor
trust in such Receivable and that the Receivable is owned by the Trustee.
Indication of the Trustee's ownership of a Receivable shall be deleted from or
modified on the Servicer's computer systems when, and only when, the Receivable
has been paid in full, repurchased or assigned pursuant to the Agreement.
(f) If at any time the Seller or the Servicer shall propose to sell, grant
a security interest in or otherwise transfer any interest in motor vehicle
receivables to any prospective purchaser, lender or other transferee, the
Servicer shall give to such prospective purchaser, lender or other transferee
computer tapes, records or print-outs (including any restored from back-up
archives) that, if they refer in any manner whatsoever to any Receivable,
indicate clearly that such Receivable has been sold and is owned by the Trustee
unless such Receivable has been paid in full, repurchased or assigned pursuant
to the Agreement.
(g) The Servicer shall permit the Trustee and its agents at any time to
inspect, audit and make copies of and abstracts from the Servicer's records
regarding any Receivables then or previously included in the Trust.
(h) Upon request, the Servicer shall furnish to the Trustee, within five
Business Days, a list of all Receivables (by contract number and name of
Obligor) then held as part of the Trust, together with a reconciliation of such
list to the Schedule of Receivables and to each of the Servicer's Certificates
furnished before such request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Trustee promptly after the execution
and delivery of each amendment to any financing statement, an Opinion of Counsel
either (i) 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 the 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 (ii) stating that, in
the opinion of such Counsel, no such action is necessary to preserve and protect
such interest.
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(j) The Seller shall, to the extent required by applicable law, cause the
Certificates 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.
(k) The Agreement may be executed simultaneously in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
Section 21.03. LIMITATION ON RIGHTS OF CERTIFICATEHOLDERS.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate the Agreement or the Trust, nor entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a partition or winding up of the Trust,
nor otherwise affect the rights, obligations and liabilities of the parties to
the Agreement or any of them.
(b) No Certificateholder shall have any right to vote (except as provided
in Sections 18.05 and 21.01) or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties to the Agreement,
nor shall anything set forth in the Agreement, or contained in the terms of the
Certificates, be construed so as to constitute the Certificateholders from time
to time as partners or members of an association; nor shall any
Certificateholder be under any liability to any third person by reason of any
action pursuant to any provision of the Agreement.
(c) No Certificateholder shall have any right by virtue or by availing
itself of any provisions of the Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to the Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of default and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates evidencing not less the 25% of the Voting
Interests of the Class A Certificates and the Class B Certificates, voting
together as a single class, shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as Trustee under the
Agreement and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby, and the Trustee, for 30 days after its receipt of such notice,
request and offer of indemnity, shall have neglected or refused to institute any
such action, suit or proceeding and during such 30-day period, no request or
waiver inconsistent with such written request has been given to the Trustee
pursuant to this Section or Section 19.04; it being understood and intended, and
being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of the Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under the Agreement, except in the manner provided in the Agreement and
for the equal, ratable and common benefit of all Certificateholders. For the
protection and enforcement of the provisions of this Section, each and every
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Certificateholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Section 21.04. GOVERNING LAW. The Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the
obligations, rights and remedies of the parties under the Agreement shall be
determined in accordance with such laws.
Section 21.05. NOTICES. All demands, notices and communications under the
Agreement shall be in writing, personally delivered or mailed by certified mail,
return receipt requested, and shall be deemed to have been duly given upon
receipt (i) in the case of the Seller or the Servicer, to the agent for service
as specified in the Agreement, or at such other address as shall be designated
by the Seller or the Servicer in a written notice to the Trustee; (ii) in the
case of the Trustee, at the Corporate Trust Office; (iii) in the case of
Standard & Poor's, at 26 Broadway, 15th Floor, New York, New York 10004,
Attention: Asset Backed Surveillance Department; (iv) in the case of Moody's,
at 99 Church Street, New York, New York 10007 Attention: ABS Monitoring
Department; (v) in the case of Duff & Phelps, at 55 East Monroe, Chicago,
Illinois 60603; and (vi) in the case of a Letter of Credit Bank, if any, to the
address provided in the Servicer Letter of Credit. Any notice required or
permitted to be mailed 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 the Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder shall receive such notice.
Section 21.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of the Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of the Agreement and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of the
Agreement or of the Certificates or the rights of the Holders thereof.
Section 21.07. ASSIGNMENT. Notwithstanding anything to the contrary
contained in the Agreement, except as provided in Sections 16.03 and 17.03 and
as provided in the provisions of the Agreement concerning the resignation of the
Servicer, the Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of Holders of Certificates evidencing not less
than 51% of the Voting Interests of the Class A Certificates and the Class
B Certificates, voting together as a single class.
Section 21.08. CERTIFICATES NONASSESSABLE AND FULLY PAID.
Certificateholders shall not be personally liable for obligations of the Trust.
The interests represented by the Certificates shall be nonassessable for any
losses or expenses of the Trust or for any reason whatsoever, and, upon the
authentication thereof by the Trustee pursuant to Section 15.02, 15.03, 15.04,
15.08, 15.09 or 15.11, the Certificates are and shall be deemed fully paid.
Section 21.09. NO PETITION. Each of the Servicer and the Trustee (not in
its individual capacity but solely as Trustee) covenants and agrees that prior
to the date which is one year and one day after the date upon which each Class
of Certificates has been paid in full, it will
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not institute against, or join any other Person in instituting against the
Seller any bankruptcy, reorganization arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy or similar
law. This Section shall survive the termination of the Agreement or the
termination of the Servicer or the Trustee, as the case may be, under the
Agreement.
* * * * *
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EXHIBIT A
TRUSTEE'S CERTIFICATE
PURSUANT TO SECTION 19.02 OR 19.03
OF THE POOLING AND SERVICING
AGREEMENT
____________________, as trustee (the "Trustee") of the Honda Auto
Receivables 199__-__ Grantor Trust created pursuant to the Pooling and Servicing
Agreement (the "Agreement") dated as of __________, 199__ among American Honda
Receivables Corp., as Seller, American Honda Finance Corporation, as Servicer,
and the Trustee, does hereby sell, transfer, assign and otherwise convey to the
[Seller][Servicer], without any recourse, representation or warranty, all of the
Trustee's right, title and interest in and to all of the Receivables identified
in the attached Servicer's Certificate as "Repurchased Receivables," which are
to be repurchased by the [Seller pursuant to Section 12.05 or 20.02] [Servicer
pursuant to Section 13.02, 13.08 or 20.02] of the Agreement, and all security
and documents relating thereto.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Agreement.
IN WITNESS WHEREOF, I have hereunto set my hand this th day of ______,
____.
,
--------------------
as Trustee
By:
---------------------------------
Title:
A-1
<PAGE>
EXHIBIT B
PURCHASER'S LETTER
PURSUANT TO SECTION 15.03(a)
-----------, ----
American Honda Receivables Corp.
700 Van Ness Avenue
Torrance, California 90501
- --------------------
- --------------------
- --------------------
- --------------------
Attention: Corporate Trust Office
Re: Honda Auto Receivables 199__-__ Grantor Trust
CLASS B CERTIFICATES
Dear Sirs:
Reference is made to that certain pooling and servicing agreement, dated as
of __________, 199_ (the "Pooling and Servicing Agreement"), among American
Honda Receivables Corp. (the "Seller"), American Honda Finance Corporation and
____________________, as trustee. In connection with our acquisition of the
above Certificates we certify that (a) we understand that the Certificates are
not being registered under the Securities Act of 1933, as amended (the "Act"),
or any state securities laws and are being transferred to us in a transaction
that is exempt from the registration requirements of the Act and any such laws,
(b) we are an "accredited investor," as defined in Regulation D under the Act,
and have such knowledge and experience in financial and business matters that we
are capable of evaluating the merits and risks of investments in the
Certificates, (c) we have had the opportunity to ask questions of and receive
answers from the Seller concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (d) we are not an employee benefit plan
that is subject to the Employee Retirement Income Security Act of 1974, as
amended, nor are we acting on behalf of any such plan, (e) we are acquiring the
Certificates for investment for our own account and not with a view to any
distribution of such Certificates (but without prejudice to our right at all
times to sell or otherwise dispose of the Certificates in accordance with clause
(g) below), (f) we have not offered or sold any Certificates to, or solicited
offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, or taken any other action
B-1
<PAGE>
which would result in a violation of Section 5 of the Act, and (g) we will not
sell, transfer or otherwise dispose of any Certificates unless (1) such sale,
transfer or other disposition is made pursuant to an effective registration
statement under the Act or is exempt from such registration requirements, and if
requested, we will at our expense provide an opinion of counsel satisfactory to
the addressees of this Certificate that such sale, transfer or other disposition
may be made pursuant to an exemption from the Act, (2) the purchaser or
transferee of such Certificate has executed and delivered to you a certificate
to substantially the same effect as this certificate, and (3) the purchaser or
transferee has otherwise complied with any conditions for transfer set forth in
the Pooling and Servicing Agreement.
Capitalized terms used herein that are not otherwise defined shall have the
meanings ascribed thereto in the Pooling and Servicing Agreement.
Very truly yours,
-------------------------
By:
----------------------
Name:
Title:
B-2
<PAGE>
July __, 1997
American Honda Receivables Corp.
700 Van Ness Avenue
Torrance, California 90501
Re: Honda Auto Receivables 1997-A Grantor Trust
Asset Backed Certificates, Class A
-------------------------------------------
Dear Sirs:
We have acted as counsel to American Honda Receivables Corp., a California
corporation (the "Company") and a wholly owned subsidiary of American Honda
Finance Corporation ("American Honda"), in connection with the issuance of Asset
Backed Certificates, Class A (the "Certificates") representing undivided
interests in the Honda Auto Receivables 1997-A Grantor Trust (the "Trust") and
the sale of the Certificates by the Company. A registration statement on
Form S-1 (File No. 333-18095) relating to the Certificates has been filed with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended. Such registration statement, as amended by Amendments No. 1 and No. 2
thereto, is referred to herein as the "Registration Statement."
We have examined copies of the Company's Articles of Incorporation and
Bylaws, minutes of meetings of the Company's Board of Directors, the form of
pooling and servicing agreement filed as an exhibit to the Registration
Statement pursuant to which the Trust will be created and the Certificates will
be issued (the "Pooling and Servicing Agreement"), the form of Certificate
included in the Pooling and Servicing Agreement and such other records and
documents, certificates of corporate and public officials and statutes as we
have considered necessary or appropriate for the purpose of this opinion.
Based upon the foregoing, we are of the opinion that appropriate action has
been taken by the Company to authorize the execution and delivery of the Pooling
and Servicing Agreement and that the Certificates, in substantially the form
included in the Pooling and Servicing Agreement, when executed, authenticated
and delivered in accordance with the terms of the Pooling and Servicing
Agreement against payment of the consideration therefor (subject to the terms
thereof being otherwise in compliance with then-applicable law), will be
<PAGE>
legally issued, fully paid and non-assessable, and the holders thereof will be
entitled to the benefits of the Pooling and Servicing Agreement.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration Statement
under the captions "Certain Legal Aspects of the Receivables -- Certain
Bankruptcy Considerations" and "Legal Matters."
Very truly yours,
<PAGE>
EXHIBIT 8.1
July ___, 1997
American Honda Receivable Corp.
700 Van Ness Avenue
Torrance, California 90501
Re: Honda Auto Receivables 1997-A Grantor Trust
Asset Backed Certificates, Class A
-------------------------------------------
Dear Sirs:
We have acted as counsel to American Honda Receivables Corp., a
California corporation (the "Company") and a wholly owned subsidiary of
American Honda Finance Corporation ("American Honda"). You have asked our
opinion in connection with certain federal income tax matters arising under
the Company's Registration Statement on form S-1 (No. 333-18095), including
Amendment Nos. 1 and 2 thereto (collectively, the "Registration Statement"),
filed with the Securities and Exchange Commission pursuant to the Securities
Act of 1933, as amended.
As such counsel, we have examined the following (collectively, the
"Documents"):
1. The Registration Statement;
2. The Articles of Incorporation and Bylaws of the Company and
American Honda, in each case as now in effect;
3. The form of Pooling and Servicing Agreement to be dated as of
July 1, 1997 (the "Agreement"), among the Company, as seller, American Honda,
as servicer (in such capacity, the "Servicer"), and Bank of Tokyo-Mitsubishi
Trust Company, as a trustee (the "Trustee''); and
4. The form of Receivables Purchase Agreement to be dated as of July
1, 1997 (the "Receivables Purchase Agreement"), between the American Honda and
the Company and filed as an exhibit to the Registration Statement.
We understand that the structure of the proposed transaction is as set
forth in the proposed transaction is as set forth in the Registration
Statement. Pursuant to the Receivables Purchaser Agreement, American Honda
<PAGE>
will transfer retail installment sale contracts secured by the new Honda and
Acura motor vehicles financed thereby (the "Receivables") generated in the
ordinary course of its business to the Company. The company will in turn
transfer the Receivables to the Honda Auto Receivables 1997-A Grantor Trust
(the "Trust") which will be formed pursuant to the Pooling and Servicing
Agreement and will cause Asset Backed Certificates (the "Certificates") to be
issued thereunder. The Certificates will represent undivided interests in the
assets of the Trust and will consist of one class of senior certificates (the
"Class A Certificates") and one class of subordinated certificates (the
"Class B Certificates"). The Company will sell the Class A Certificates to
Credit Suisse First Boston Corporation, who in turn will sell the Class A
Certificates to investors. Initially, the Company will retain the Class B
Certificates. The Trustee will hold legal title to the Receivables and other
assets of the Trust for the benefit of the Certificateholders, but will have
no power to reinvest proceeds attributable to the Receivables or other assets
of the Trust or to vary investments in the Trust in any manner.
In rendering this opinion, we have relied, as to factual matters,
solely upon the Registration Statement and on representations of the Servicer
that, among other things, the Servicing Fee to be received by the Servicer
pursuant to the Pooling and Servicing Agreement will be an ordinary and
customary charge for the performance of management and servicing functions
described in the Pooling and Servicing Agreement and that the terms of the
Receivables Purchase Agreement and the Pooling and Servicing Agreement are
fair and arm's-length. Our opinion is subject to the qualification that facts
materially different from those set forth above may affect the opinion as
expressed herein or prevent us from rendering this opinion. Capitalized terms
used herein that are not otherwise defined shall have the meanings ascribed
thereto in the Pooling and Servicing Agreement.
In addition, we have made such investigations of such matters of law as
we deemed appropriate as a basis for the opinion expressed below. Further, we
have assumed the genuineness of all signatures and the authenticity of all
documents submitted to us as originals. Our opinion is also based on the
assumption that there are no agreements or understanding with respect to the
transactions contemplated in the Documents other than those contained in the
Documents.
On the the basis of the foregoing and in reliance thereon and our
consideration of such other matters of fact and questions of law as we have
deemed necessary, we confirm (1) our opinion set forth in the Registration
Statement under the heading "Federal Income Tax Consequences" and (2) that,
subject to the qualifications set forth therein, the discussion set forth in
the Registration Statement under such heading is an accurate summary of the
United States federal income tax matters described therein.
The opinion set forth herein is based on the exiting provisions of the
Code and Treasury regulations issued or proposed thereunder, published
Revenue Rulings and releases of the Internal Revenue Service and existing
case law, any of which could be changed at any time. Any such changes may be
retroactive in application and could modify the legal
2
<PAGE>
conclusions on which such opinion is based. The opinion expressed herein is
limited as described above, and we do not express an opinion on any other
legal or income tax aspect of the transactions contemplated by the Documents
relating to the transaction.
In rendering the foregoing opinion, we express no opinion as to the
laws of any jurisdiction other than the federal income tax laws of the United
States. This opinion is rendered as of the date hereof and we undertake no
obligation to update this opinion or advise you of changes in the event that
there is any change in legal authorities, facts, assumptions or Documents
pursuant to any opinion of counsel or a waiver, or any inaccuracy in any of
the representations, warranties or assumptions upon which we have relied in
rendering this opinion, unless we are specifically engaged to do so. This
opinion is rendered only to those to whom it is addressed and may not be
relied on in connection with any transactions other than the transactions
contemplated herein. This opinion may not be relied upon for any other
purpose, or relied upon by any other person, firms or corporation for any
purpose, without our prior written consent.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name in the Registration
Statement under the captions "Federal Income Tax Consequences" and "Legal
Matters".
Very truly yours,
<PAGE>
- --------------------------------------------------------------------------------
AMERICAN HONDA FINANCE CORPORATION,
as Seller
and
AMERICAN HONDA RECEIVABLES CORP.,
as Purchaser
--------------------------------------------------------
RECEIVABLES PURCHASE AGREEMENT
Dated as of July 1, 1997
--------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitional Provisions . . . . . . . . . . . . . . . 2
ARTICLE TWO
CONVEYANCE OF RECEIVABLES
Section 2.01. Conveyance of Receivables . . . . . . . . . . . . . . . . . 2
Section 2.02. Representations and Warranties of the Seller and the
Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Representations and Warranties as to the Receivables. . . . 6
Section 2.04. Covenants of the Seller . . . . . . . . . . . . . . . . . . 10
ARTICLE THREE
PAYMENT OF RECEIVABLES PURCHASE PRICE
Section 3.01. Payment of Receivables Purchase Price . . . . . . . . . . . 11
ARTICLE FOUR
TERMINATION
Section 4.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
Section 5.01. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 5.02. Protection of Right, Title and Interest to Receivables . . 11
Section 5.03. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 12
(i)
<PAGE>
Section 5.05. Severability of Provisions. . . . . . . . . . . . . . . . . 12
Section 5.06. Assignment . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.07. Further Assurances . . . . . . . . . . . . . . . . . . . . 13
Section 5.08. No Waiver; Cumulative Remedies. . . . . . . . . . . . . . . 13
Section 5.09. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 5.10. Third-Party Beneficiaries . . . . . . . . . . . . . . . . . 13
Section 5.11. Merger and Integration . . . . . . . . . . . . . . . . . . 13
Section 5.12. Headings . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5.13. Seller Indemnification. . . . . . . . . . . . . . . . . . . 14
Section 5.14. Merger, Consolidation or Assumption of the Obligations of the
Seller . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SCHEDULES
Schedule A - Schedule of Receivables . . . . . . . . . . . . . . . . . . . A-1
(ii)
<PAGE>
RECEIVABLES PURCHASE AGREEMENT, dated as of July 1, 1997, between American
Honda Finance Corporation, a California corporation, as seller, and American
Honda Receivables Corp., a California corporation, as purchaser.
In consideration of the premises and mutual agreements herein contained,
each party agrees as follows for the benefit of the other party and for the
benefit of the Trustee:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used in this Agreement, the following
words and phrases shall have the following meanings:
"AGREEMENT" means this Receivables Purchase Agreement and all amendments
hereof and supplements hereto.
"CLOSING DATE" means July __, 1997.
"CUTOFF DATE" means July 1, 1997.
"POOLING AND SERVICING AGREEMENT" means the Pooling and Servicing Agreement
dated as of the date hereof, among American Honda Receivables Corp., as seller,
American Honda Finance Corporation, as servicer, and the Trustee.
"PURCHASER" means American Honda Receivables Corp., in its capacity as
purchaser of the Receivables under this Agreement, and its successors and
assigns.
"RECEIVABLES PURCHASE PRICE" means $________________.
"SELLER" means American Honda Finance Corporation, in its capacity as
seller of the Receivables under this Agreement, and its successors and assigns.
"STANDARD TERMS AND CONDITIONS" means the Standard Terms and Conditions of
Agreement (Senior/Subordinated), for Honda Auto Receivables Grantor Trust dated
as of July 1, 1997.
"SCHEDULE OF RECEIVABLES" means the schedule of receivables attached as
Schedule A hereto.
"TRUSTEE" means Bank of Tokyo-Mitsubishi Trust Company, as trustee under
the Pooling and Servicing Agreement, or any successor trustee thereunder.
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"WARRANTY RECEIVABLE" means a Receivable purchased by the Seller pursuant
to Section 2.03(c).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) All capitalized terms not otherwise defined in this Agreement shall
have the defined meanings used in the Pooling and Servicing Agreement.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement; Section, subsection and
Schedule references contained in this Agreement are references to Sections,
subsections and Schedules in or to this Agreement unless otherwise specified;
and the word "including" means including without limitation.
ARTICLE TWO
CONVEYANCE OF RECEIVABLES
Section 2.01. CONVEYANCE OF RECEIVABLES.
(a) On the Closing Date the Seller agrees to sell, transfer, assign and
otherwise convey to the Purchaser, and the Purchaser agrees to purchase from the
Seller, without recourse (subject to the Seller's obligations hereunder) all of
the right, title and interest of the Seller in and to the following:
(i) the Receivables listed in the Schedule of Receivables and
all monies due thereon or paid thereunder or in respect thereof (including
proceeds of the repurchase of Receivables by the Seller pursuant to Section
2.03(c) hereof) on or after the Cutoff Date;
(ii) the security interests in the Financed Vehicles and any
accessions thereto;
(iii) any proceeds from physical damage insurance policies
covering the Financed Vehicles and in any proceeds of any credit life or
credit disability insurance policies relating to the Receivables or the
Obligors;
(iv) any proceeds of Dealer Recourse;
(v) the right to realize upon any property (including the right
to receive future Liquidation Proceeds) that shall have secured a
Receivable and have been repossessed by or on behalf of the Trustee; and
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(vi) any and all proceeds of the foregoing.
(b) In connection with the foregoing conveyance, the Seller agrees to
record and file, at its own expense, one or more financing statements with
respect to the Receivables now existing and hereafter created for the sale of
accounts (as defined in Section 9106 of the UCC as in effect in the State of
California) meeting the requirements of applicable state law in such manner as
is necessary to perfect the sale of the Receivables to the Purchaser, and the
proceeds thereof (and any continuation statements as are required by applicable
state law), and to deliver a file-stamped copy of each such financing statement
(or continuation statement) or other evidence of such filings (which may, for
purposes of this Section, consist of telephone confirmation of such filings with
the file stamped copy of each such filings to be provided to the Purchaser in
due course), as soon as is practicable after receipt by the Seller thereof.
In connection with the foregoing conveyance, the Seller further agrees, at
its own expense, on or prior to the Closing Date (i) to annotate and indicate in
its computer files that the Receivables have been transferred to the Purchaser
pursuant to this Agreement, (ii) to deliver to the Purchaser a computer file or
printed or microfiche list containing a true and complete list of all such
Receivables, identified by account number and by the Principal Balance of each
Receivable as of the Cutoff Date, which file or list shall be marked as
Schedule A to this Agreement and is hereby incorporated into and made a part of
this Agreement and (iii) to deliver the Receivable Files to or upon the order of
the Purchaser.
The parties hereto intend that the conveyance hereunder be a sale. In the
event that the conveyance hereunder is not for any reason considered a sale, the
Seller hereby grants to the Purchaser a first priority perfected security
interest in, all of its right, title and interest in, to and under the
Receivables, and all other property conveyed hereunder and listed in
Section 2.01 hereof and all proceeds of any of the foregoing and the parties
intend that this Agreement constitute a security agreement under applicable law.
Section 2.02. REPRESENTATIONS AND WARRANTIES OF THE SELLER AND THE
PURCHASER.
(a) The Seller hereby represents and warrants to the Purchaser as of
the date of this Agreement and the Closing Date that:
(i) ORGANIZATION AND GOOD STANDING. The Seller is a corporation duly
organized, validly existing and in good standing under the laws of the
State of California, and has power and authority to own its properties and
to conduct its business as such properties are currently owned and such
business is presently conducted, and had at all relevant times, and shall
have, power, authority and legal right to acquire, own and sell the
Receivables.
(ii) DUE QUALIFICATION. The Seller 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
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conduct of its business (including the servicing of the Receivables as
required by the Pooling and Servicing Agreement) shall require such
qualifications.
(iii) POWER AND AUTHORITY. The Seller shall have the power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement shall have
been duly authorized by the Seller by all necessary corporate action.
(iv) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Seller, enforceable against it in accordance
with its terms, except as enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization, moratorium, liquidation or other
similar laws affecting the enforcement of creditors' rights in general and
by general principles of equity, regardless of whether such enforceability
shall be considered in a proceeding in equity or at law.
(v) NO VIOLATION. The execution, delivery and performance by the
Seller of this Agreement and the consummation of the transactions
contemplated by this Agreement and the fulfillment of the terms hereof
shall not conflict with, result in any breach of any of the terms and
provisions of, nor constitute (with or without notice or lapse of time) a
default under, the articles of incorporation or bylaws of the Seller, or
conflict with or breach any of the material terms or provisions of, or
constitute (with or without notice or lapse of time) a default under, any
indenture, agreement or other instrument to which the Seller is a party or
by which it may be bound or any of its properties are subject; 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 this Agreement); nor violate any law or, to the knowledge of
the Seller, any order, rule or regulation applicable to it or its
properties of any court or of any federal or state regulatory body,
administrative agency or other governmental instrumentality having
jurisdiction over the Seller or any of its properties.
(vi) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the knowledge of the Seller, threatened against the Seller,
before any court, regulatory body, administrative agency or other tribunal
or governmental instrumentality (i) asserting the invalidity of this
Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that, in the reasonable judgment of the Seller,
would materially and adversely affect the performance by the Seller of its
obligations under this Agreement.
(b) The Purchaser hereby represents and warrants to the Seller as of the
date of this Agreement and the Closing Date that:
(i) ORGANIZATION AND GOOD STANDING. The Purchaser is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California, and has power and authority to own its properties and
to conduct its
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business as such properties are currently owned and such business is
presently conducted, and had at all relevant times, and shall have, power,
authority and legal right to acquire, own and sell the Receivables.
(ii) DUE QUALIFICATION. The Purchaser 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.
(iii) POWER AND AUTHORITY. The Purchaser shall have the power and
authority to execute and deliver this Agreement and to carry out its terms;
and the execution, delivery and performance of this Agreement shall have
been duly authorized by the Purchaser by all necessary corporate action.
(iv) BINDING OBLIGATION. This Agreement constitutes a legal, valid
and binding obligation of the Purchaser, enforceable against it in
accordance with its terms, except as enforceability may be subject to or
limited by bankruptcy, insolvency, reorganization, moratorium, liquidation
or other similar laws affecting the enforcement of creditors' rights in
general and by general principles of equity, regardless of whether such
enforceability shall be considered in a proceeding in equity or at law.
(v) NO VIOLATION. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time) a default under, the articles of
incorporation or bylaws of the Purchaser, or conflict with or breach any of
the material terms or provisions of, or constitute (with or without notice
or lapse of time) a default under, any indenture, agreement or other
instrument to which the Purchaser is a party or by which it may be bound or
any of its properties are subject; 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 this Agreement); nor
violate any law or, to the knowledge of the Purchaser, any order, rule or
regulation applicable to it or its properties of any court or of any
federal or state regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over the Purchaser or any
of its properties.
(vi) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the knowledge of the Purchaser, threatened against the
Purchaser, before any court, regulatory body, administrative agency or
other tribunal or governmental instrumentality (i) asserting the invalidity
of this Agreement, (ii) seeking to prevent the consummation of any of the
transactions contemplated by this Agreement or (iii) seeking any
determination or ruling that, in the reasonable judgment of the Purchaser,
would materially and adversely affect the performance by the Purchaser of
its obligations under this Agreement.
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(c) The representations and warranties set forth in this Section shall
survive the sale of the Receivables by the Seller to the Purchaser and the sale
of the Receivables by the Purchaser to the Trust. Upon discovery by the Seller,
the Purchaser or the Trustee of a breach of any of the foregoing representations
and warranties, the party discovering such breach shall give prompt written
notice to the others.
Section 2.03. REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES.
(a) ELIGIBILITY OF RECEIVABLES. The Seller hereby represents and
warrants as of the Cutoff Date that:
(i) CHARACTERISTICS OF RECEIVABLES. Each Receivable (A) shall have
been originated in the United States by a Dealer for the retail sale of the
related Financed Vehicle in the ordinary course of such Dealer's business,
shall have been fully and properly executed by the parties thereto, shall
have been purchased by the Seller from such Dealer under an existing
agreement with the Seller and shall have been validly assigned by such
Dealer to the Seller in accordance with its terms, (B) shall have created
or shall create a valid, subsisting and enforceable first priority security
interest in favor of the Seller in the related Financed Vehicle, (C) shall
contain customary and enforceable provisions such that the rights and
remedies of the holder thereof shall be adequate for realization against
the collateral of the benefits of the security, (D) shall provide for level
Monthly Payments (provided that the payment in the first or last month in
the life of the Receivable may be minimally different from the level
payment) that fully amortize the Amount Financed over its original term and
shall provide for a finance charge or shall yield interest at its APR, (E)
shall provide for, in the event that such Receivable is prepaid, a
prepayment that fully pays the Principal Balance and includes accrued but
unpaid interest at least through the date of prepayment in an amount
calculated by using an interest rate at least equal to its APR, (F) shall
have an Obligor that is not a federal, state or local governmental entity
and (G) is a retail installment contract.
(ii) SCHEDULE OF RECEIVABLES. The information set forth in the
Schedule of Receivables shall be true and correct in all material respects
as of the opening of business on the Cutoff Date, the Receivables were
selected at random from the retail installment sale contracts included in
the portfolio of the Seller meeting the selection criteria set forth in
this Section and no selection procedures believed to be adverse to the
Certificateholders shall have been utilized in selecting the Receivables.
(iii) COMPLIANCE WITH LAW. Each Receivable and each sale of the
related Financed Vehicle shall have complied at the time it was originated
or made, and shall comply at the time of execution of this Agreement in all
material respects with all requirements of applicable federal, state and
local laws, and regulations thereunder, including usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Billing Act, the Fair Credit Reporting Act, the Fair Debt Collection
Practices Act, the Federal Trade Commission Act, the Magnuson-Moss
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Warranty Act, Federal Reserve Board Regulations B and Z, state adaptations
of the National Consumer Act and of the Uniform Consumer Credit Code and
other consumer credit, equal credit opportunity and disclosure laws.
(iv) BINDING OBLIGATION. Each Receivable shall constitute the
genuine, legal, valid and binding payment obligation in writing of the
related Obligor, enforceable by the holder there of in accordance with
its terms, except as enforceability may be subject to or limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights in general and by general principles of
equity, regardless of whether such enforceability shall be considered in a
proceeding in equity or at law.
(v) NO BANKRUPT OBLIGORS. According to the records of the Seller
as of the Cutoff Date, no Obligor is the subject of a bankruptcy
proceeding.
(vi) SECURITY INTEREST IN FINANCED VEHICLES. According to the
records of the Seller, as of the Cutoff Date no Financed Vehicle has been
repossessed and not reinstated and immediately prior to the sale,
assignment and transfer there of, each Receivable shall be secured by a
validly perfected first priority security interest in the related Financed
Vehicle in favor of the Seller as secured party or all necessary and
appropriate action with respect to such Receivable shall have been taken
to perfect a first priority security interest in such Financed Vehicle in
favor of the Seller as secured party.
(vii) RECEIVABLES IN FORCE. No Receivable shall have been satisfied,
subordinated or rescinded, nor shall any Financed Vehicle have been
released from the lien granted by the related Receivable in whole or in
part.
(viii) NO WAIVERS. No provision of a Receivable shall have been
waived in such a manner that such Receivable fails to meet all of the other
representations and warranties made by the Seller herein with respect
thereto.
(ix) NO AMENDMENTS. No Receivable shall have been amended in such a
manner that the number of Scheduled Payments has been increased or that the
related Amount Financed has been increased or such Receivable fails to meet
all of the other representations and warranties made by the Seller herein
with respect thereto.
(x) NO DEFENSES. No facts shall be known to the Seller which would
give rise to any right of rescission, setoff, counterclaim or defense, nor
shall the same have been asserted or threatened, with respect to any
Receivable.
(xi) NO LIENS. To the knowledge of the Seller, no liens or claims
shall have been filed, including liens for work, labor or materials
relating to a Financed Vehicle, that shall be liens prior to, or equal or
coordinate with, the security interest in such Financed Vehicle granted by
the related Receivable.
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(xii) NO DEFAULTS. Except for payment defaults continuing for a
period of not more than 30 days as of the Cutoff Date, no default, breach,
violation or event permitting acceleration under the terms of any
Receivable shall have occurred and no continuing condition that with notice
or the lapse of time would constitute a default, breach, violation or event
permitting acceleration under the terms of any Receivable shall have
arisen; and the Seller shall not have waived any of the foregoing except as
otherwise permitted hereunder.
(xiii) INSURANCE. Pursuant to the Receivables, each Obligor has been
required to obtain physical damage insurance covering the related Financed
Vehicle and the Obligor is required under the terms of the related
Receivable to maintain such insurance.
(xiv) GOOD TITLE. It is the intention of the Seller that the transfer
and assignment herein contemplated, taken as a whole, constitute a sale of
the Receivables from the Seller to the Purchaser and that the beneficial
interest in and title to the Receivables not be part of the debtor's estate
in the event of the filing of a bankruptcy petition by or against the
Seller under any bankruptcy law. No Receivable has been sold, transferred,
assigned or pledged by the Seller to any Person other than the Purchaser,
and no provision of a Receivable shall have been waived, except as provided
in clause (viii) above; immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to each
Receivable, free and clear of all Liens and rights of others; immediately
upon the transfer and assignment thereof, the Purchaser shall have good and
marketable title to each Receivable, free and clear of all Liens and rights
of others; and the transfer and assignment herein contemplated has been
perfected under the UCC.
(xv) LAWFUL ASSIGNMENT. No Receivable shall have been originated in,
or shall be subject to the laws of, any jurisdiction under which the sale,
transfer and assignment of such Receivable under this Agreement or pursuant
to transfers of the Certificates shall be unlawful, void or voidable.
(xvi) ALL FILINGS MADE. All filings (including UCC filings) necessary
in any jurisdiction to give the Trustee a first priority perfected
ownership interest in the Receivables shall have been made.
(xvii) ONE ORIGINAL. There shall be only one original executed copy
of each Receivable.
(xviii) CHATTEL PAPER. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(xix) ADDITIONAL REPRESENTATIONS AND WARRANTIES. (A) Each
Receivable shall have an original maturity of at least 12 months and not
more than 60 months and, as of the Cutoff Date, a remaining maturity of not
less than 6 months nor greater
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than 60 months; (B) each Receivable shall provide for payment of a finance
charge or shall yield interest calculated on the basis of the Rule of 78s,
the simple interest method or the actuarial method and the APR of each
Receivable shall, if based on (1) the Rule of 78s, be equal to or greater
than ____% and equal to or less than ____%, (2) the actuarial method, be
equal to or greater than ____% and equal to or less than ____% and (3) the
simple interest method, be equal to or greater than ____% and equal to or
less than ____%; (C) each Receivable shall have had an original principal
balance of not less than $__________ nor more than $__________ and, as of
the Cutoff Date, a principal balance of not less than $__________ and not
more than $__________; (D) each Receivable was originated on or before
__________; (E) each Financed Vehicle shall be a new Honda or Acura motor
vehicle; and (F) the Obligor under each Receivable had a current billing
address in the United States as of the Cutoff Date.
(b) NOTICE OF BREACH. The representations and warranties set forth in
this Section shall speak as of the execution and delivery of this Agreement,
but shall survive the sale, transfer and assignment of the Receivables to the
Purchaser and any subsequent assignment or transfer pursuant to Article Three of
the Pooling and Servicing Agreement. The Purchaser, the Seller or the Trustee,
as the case may be, shall inform the other parties promptly, in writing, upon
discovery of any breach of the Seller's representations and warranties pursuant
to this Section which materially and adversely affects the interests of the
Certificateholders on any Receivable.
(c) REPURCHASE OF RECEIVABLES. In the event of a breach of any
representation or warranty set forth in Section 2.03(a) which materially and
adversely affects the interests of the Certificateholders in any Receivable and
unless the breach shall have been cured by the last day of the second Collection
Period following the Collection Period in which the discovery of the breach is
made or notice is received, as the case may be (or, at option of the Seller, the
last day in the first Collection Period following the Collection Period in which
such discovery is made), the Seller shall repurchase such Receivable. In
consideration of the purchase of any such Receivable, the Seller shall remit an
amount equal to the Warranty Purchase Payment in respect of such Receivable to
the Purchaser and shall be entitled to receive the Released Warranty Amount. In
the event that, as of the date of execution and delivery of this Agreement, any
Liens or claims shall have been filed, including Liens for work, labor or
materials relating to a Financed Vehicle, that shall be liens prior to, or equal
or coordinate with, the lien granted by the related Receivable (whether or not
the Seller has knowledge thereof), and such breach materially and adversely
affects the interests of the Certificateholders in such Receivable, the Seller
shall repurchase such Receivable on the terms and in the manner specified above.
Upon any such repurchase, the Purchaser shall, without further action, be deemed
to transfer, assign, set-over and otherwise convey to the Seller, without
recourse, representation or warranty, all the right, title and interest of the
Purchaser in, to and under such repurchased Receivable, all monies due or to
become due with respect thereto and all proceeds thereof. The Purchaser or the
Trustee, as applicable, shall execute
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such documents and instruments of transfer or assignment and take such
other actions as shall reasonably be requested by the Seller to effect the
conveyance of such Receivable pursuant to this Section. The sole remedy of
the Purchaser with respect to a breach of the Seller's representations and
warranties pursuant to Section 2.03(a) or with respect to the existence of
any such Liens or claims shall be to require the Seller to repurchase the
related Receivables pursuant to this Section.
Section 2.04. COVENANTS OF THE SELLER. The Seller hereby covenants
that:
(a) SECURITY INTERESTS. Except for the conveyances hereunder,
the Seller will not sell, pledge, assign or transfer to any other
Person, or grant, create, incur, assume or suffer to exist any Lien on
any Receivable, whether now existing or hereafter created, or any
interest therein; the Seller will immediately notify the Purchaser of
the existence of any Lien on any Receivable and, in the event that the
interests of the Certificateholders in such Receivable are materially
and adversely affected, such Receivable shall be repurchased from the
Purchaser by the Seller in the manner and with the effect specified in
Section 2.03(c), and the Seller shall defend the right, title and
interest of the Purchaser in, to and under the Receivables, whether
now existing or hereafter created, against all claims of third parties
claiming through or under the Seller; provided, however, that nothing
in this subsection shall prevent or be deemed to prohibit the Seller
from suffering to exist upon a Receivable any Lien for municipal or
other local taxes if such taxes shall not at the time be due and
payable or if the Seller shall currently be contesting the validity of
such taxes in good faith by appropriate proceedings and shall have set
aside on its books adequate reserves with respect thereto.
(b) DELIVERY OF PAYMENTS. The Seller agrees to deliver in kind
upon receipt to the Servicer under the Pooling and Servicing Agreement
(if other than the Seller) all payments received by the Seller in
respect of the Receivables as soon as practicable after receipt
thereof by the Seller.
(c) CONVEYANCE OF RECEIVABLES. The Seller covenants and agrees
that it will not convey, assign, exchange or otherwise transfer the
Receivables to any Person prior to the termination of this Agreement
pursuant to Article Four hereof.
(d) NO IMPAIRMENT. The Seller shall take no action, nor omit to
take any action, which would impair the rights of the Purchaser in any
Receivable, nor shall it, except as otherwise provided in this
Agreement or the Pooling and Servicing Agreement, reschedule, revise
or defer payments due on any Receivable.
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ARTICLE THREE
PAYMENT OF RECEIVABLES PURCHASE PRICE
Section 3.01. PAYMENT OF RECEIVABLES PURCHASE PRICE. In consideration of
the sale of the Receivables from the Seller to the Purchaser as provided in
Section 2.01, on the Closing Date the Purchaser agrees to pay the Seller an
amount equal to the Receivables Purchase Price. The Receivables Purchase Price
shall be paid in the form of (i) $____________, the net cash proceeds from the
public offering by the Purchaser of the Class A Certificates and
(ii) $____________, being deemed paid and returned to the Purchaser as a capital
contribution.
ARTICLE FOUR
TERMINATION
Section 4.01. TERMINATION. The respective obligations and
responsibilities of the Seller and the Purchaser created hereby shall terminate,
except for the indemnity obligations of the Seller as provided herein, upon the
termination of the Trust as provided in Article Twenty of the Standard Terms and
Conditions.
ARTICLE FIVE
MISCELLANEOUS PROVISIONS
Section 5.01. AMENDMENT.
(a) This Agreement may be amended from time to time by the Purchaser and
the Seller to cure any ambiguity, to correct or supplement any provision herein
which may be inconsistent with any other provision herein or to add any other
provision with respect to matters or questions arising under this Agreement
which shall not be inconsistent with the provisions of this Agreement or the
Pooling and Servicing Agreement; provided, however, that such action shall not,
as evidenced by an Opinion of Counsel to the Purchaser delivered to the Trustee,
adversely affect in any material respect the interests of the Trust.
(b) This Agreement may also be amended from time to time by the Purchaser
and the Seller with the consent of the Trustee for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement.
Section 5.02. PROTECTION OF RIGHT, TITLE AND INTEREST TO RECEIVABLES.
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(a) The Seller, at its expense, shall cause this Agreement and/or all
financing statements and continuation statements and any other necessary
documents covering the Purchaser's right, title and interest to the Receivables
and other property conveyed by the Seller to the Purchaser hereunder to be
promptly recorded, registered and filed, and at all times to be kept recorded,
registered and filed, all in such manner and in such places as may be required
by law fully to preserve and protect the right, title and interest of the
Purchaser hereunder to all of the Receivables and such other property. The
Seller shall deliver to the Purchaser file-stamped copies of, or filing receipts
for, any document recorded, registered or filed as provided above, as soon as
available following such recording, registration or filing. The Purchaser and
the Trustee shall cooperate fully with the Seller in connection with the
obligations set forth above and will execute any and all documents reasonably
required to fulfill the intent of this subsection.
(b) Within 30 days after the Seller makes any change in its name, identity
or corporate structure which would make any financing statement or continuation
statement filed in accordance with Section 5.02(a) seriously misleading within
the meaning of Section 9402(7) of the UCC as in effect in the applicable state,
the Seller shall give the Purchaser notice of any such change and shall execute
and file such financing statements or amendments as may be necessary to continue
the perfection of the Purchaser's security interest in the Receivables and the
proceeds thereof.
(c) The Seller will give the Purchaser prompt written notice of any
relocation of any office from which the Seller keeps records concerning the
Receivables or of its principal executive office and whether, 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 execute and file such financing
statements or amendments as may be necessary to continue the perfection of the
interest of the Purchaser in the Receivables and the proceeds thereof.
Section 5.03. GOVERNING LAW. This Agreement shall be construed in
accordance with the laws of the State of New York, and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 5.04. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be deemed to have been duly given if personally
delivered at or mailed by registered mail, return receipt requested, to (a) in
the case of the Purchaser, to American Honda Receivables Corp., 700 Van Ness
Avenue, Building 300, Torrance, California 90501, Attention: President; (b) in
the case of American Honda Finance Corporation, 700 Van Ness Avenue, Building
300, Torrance, California 90501, Attention: President; and (c) in the case of
the Trustee, to the 1251 Avenue of the Americas, 10th Floor, New York, New York
10020-1104, Attention: _____________; or, as to any of such Persons, at such
other address as shall be designated by such Person in a written notice to the
other Persons.
Section 5.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held
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invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions and terms of this
Agreement and shall in no way affect the validity or enforceability of the other
provisions of this Agreement.
Section 5.06. ASSIGNMENT. This Agreement may not be assigned by the
Purchaser or the Seller except as contemplated by this Section and the Pooling
and Servicing Agreement; provided, however, that simultaneously with the
execution and delivery of this Agreement, the Purchaser shall assign all of its
right, title and interest herein to the Trustee for the benefit of the
Certificateholders as provided in Section 2.01 of the Pooling and Servicing
Agreement, to which the Seller hereby expressly consents. The Seller agrees to
perform its obligations hereunder for the benefit of the Trust and that the
Trustee may enforce the provisions of this Agreement, exercise the rights of the
Purchaser and enforce the obligations of the Seller hereunder without the
consent of the Purchaser.
Section 5.07. FURTHER ASSURANCES. The Seller and the Purchaser 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 the other party hereto
or by the Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements,
amendments, continuation statements or releases relating to the Receivables for
filing under the provisions of the UCC or other law of any applicable
jurisdiction.
Section 5.08. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and
no delay in exercising, on the part of the Purchaser, the Trustee or the Seller,
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 herein provided are cumulative and not exhaustive of any
rights, remedies, powers and privileges provided by law.
Section 5.09. COUNTERPARTS. This Agreement may be executed in two or more
counterparts (and by different parties on separate counterparts), each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
Section 5.10. THIRD-PARTY BENEFICIARIES. This Agreement will inure to the
benefit of and be binding upon the parties hereto, and the Trustee for the
benefit of the Certificateholders, which shall be considered to be a third-party
beneficiary hereof. Except as otherwise provided in this Agreement, no other
Person will have any right or obligation hereunder.
Section 5.11. MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement sets forth the entire understanding of the
parties relating to the subject matter hereof, and all prior understandings,
written or oral, are superseded by this Agreement. This Agreement may not be
modified, amended, waived or supplemented except as provided herein.
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Section 5.12. HEADINGS. The headings herein are for purposes of reference
only and shall not otherwise affect the meaning or interpretation of any
provision hereof.
Section 5.13. SELLER INDEMNIFICATION.
(a) PURCHASER AND TRUST. The Seller shall indemnify and hold harmless the
Purchaser, the Trust and the Certificateholders from and against any loss,
liability, expense or damage suffered or sustained by reason of any acts,
omissions or alleged acts or omissions arising out of activities of the Seller
pursuant to this Agreement or as a result of the transactions contemplated
hereby, including, but not limited to, any judgment, award, settlement,
reasonable attorneys' fees and other costs or expenses incurred in connection
with the defense of any actual or threatened action, proceeding or claim;
provided, however, that the Seller shall not indemnify the Purchaser, the Trust
or the Certificateholders if such acts, omissions or alleged acts or omissions
constitute negligence or willful misconduct by the Purchaser or the
Certificateholders.
(b) TRUSTEE. The Seller shall indemnify, defend and hold harmless the
Trustee from and against any and all costs, expenses, losses, claims, damages
and liabilities to the extent that such cost, expense, loss, claim, damage or
liability arose out of, and was imposed upon the Trustee through the negligence,
willful misfeasance or bad faith of the Seller in the performance of its duties
under this Agreement or by reason of reckless disregard of its obligations and
duties under this Agreement.
Section 5.14. MERGER, CONSOLIDATION OR ASSUMPTION OF THE OBLIGATIONS OF
THE SELLER.
(a) The Seller shall not consolidate with or merge into any other
corporation or convey or transfer its properties and assets substantially as an
entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which
the Seller is merged or the Person which acquires by conveyance or transfer
the properties and assets of the Seller substantially as an entirety shall
be organized and existing under the laws of the United States, any State or
the District of Columbia, and, if the Seller is not the surviving entity,
shall expressly assume, by an agreement supplemental hereto, executed and
delivered to the Purchaser and the Trustee, in form satisfactory to the
Purchaser and the Trustee, the performance of every covenant and obligation
of the Seller hereunder and shall benefit from all the rights granted to
the Seller hereunder; and
(ii) the Seller shall have delivered to the Purchaser and the
Trustee an Officer's Certificate of the Seller and an Opinion of Counsel
each stating that such consolidation, merger, conveyance or transfer and
such supplemental agreement comply with this Section and that all
conditions precedent herein provided for relating to such transaction have
been complied with.
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(b) The obligations of the Seller hereunder shall not be assignable nor
shall any Person succeed to the obligations of the Seller hereunder except in
each case in accordance with the provisions of Section 5.06 and this Section.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers as of the day and year first above
written.
AMERICAN HONDA FINANCE
CORPORATION,
as Seller
By:
--------------------------------
Y. Kohama
President
AMERICAN HONDA RECEIVABLES CORP.,
as Purchaser
By:
--------------------------------
Y. Kohama
President
ACCEPTED:
BANK OF TOKYO-MITSUBISHI TRUST
COMPANY,
as Trustee
By:
-----------------------------------
Name:
Title:
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SCHEDULE A
SCHEDULE OF RECEIVABLES
Omitted -- originals on file at the offices
of the Seller, the Purchaser and the Trustee
A-1
