<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 10, 1999
REGISTRATION NOS. 333-72303-01
333-72303-02
333-72303-03
333-72303-04
333-72303-05
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
AMENDMENT NO. 1 TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------
HONDA AUTO LEASE TRUST 1999-A
(Issuer of the Notes)
HONDA TITLING C L.P.
(Originator of the trust and transferor of the 98.802%
SUBI Certificate to the trust)
HONDA TITLING D L.P.
(Originator of the trust and transferor of the 0.998% SUBI
Certificate to the trust)
HONDA LEASE TRUST
(Issuer of the SUBI, the 98.802% SUBI Certificate and the 0.998% SUBI
Certificate)
HONDA TITLING A L.P. AND HONDA TITLING B L.P.
(Originators of the Honda Lease Trust and transferors of the SUBI to Honda
Titling C L.P. and Honda Titling D L.P.)
(Exact names as specified in Originators' charter)
<TABLE>
<CAPTION>
DELAWARE 6146 333-0769181
<S> <C> <C>
(State or other jurisdiction of (Primary Standard Industrial (I.R.S Employer
incorporation or organization) Classification Code Number) Identification Number)
</TABLE>
<TABLE>
<S> <C> <C> <C>
HONDA TITLING A L.P. HONDA TITLING B L.P. HONDA TITLING C L.P. HONDA TITLING D L.P.
700 VAN NESS AVENUE 700 VAN NESS AVENUE 700 VAN NESS AVENUE 700 VAN NESS AVENUE
TORRANCE, CALIFORNIA 90501 TORRANCE, CALIFORNIA 90501 TORRANCE, CALIFORNIA 90501 TORRANCE, CALIFORNIA 90501
(310) 781-6132 (310) 781-6136 (310) 781-6146 (310) 781-6148
</TABLE>
(Addresses, including zip codes, and telephone numbers, including
area codes, of Registrants' principal executive offices)
Y. KOHAMA
700 VAN NESS AVENUE
TORRANCE, CALIFORNIA 90501
(310) 781-4106
(Name, address, including zip code, and telephone number, including
area code, of agent for service with respect to the Registrants)
--------------------
COPIES TO:
Warren R. Loui Reed D. Auerbach
O'Melveny & Myers LLP Stroock & Stroock & Lavan LLP
400 South Hope Street 180 Maiden Lane
Los Angeles, CA 90071 New York, New York 10038
--------------------
Approximate date of commencement of proposed sale to the public: As
soon as practicable after this Registration Statement becomes effective.
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. / / __________
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. / / _________
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. / /
--------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Proposed Maximum Proposed Maximum
Proposed Title of Each Class 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>
Auto Lease Asset Backed Notes, Class A-1........... $200,000 100% $200,000 $55.60
- ------------------------------------------------------------------------------------------------------------------------------------
Auto Lease Asset Backed Notes, Class A-2........... $200,000 100% $200,000 $55.60
- ------------------------------------------------------------------------------------------------------------------------------------
Auto Lease Asset Backed Notes, Class A-3........... $200,000 100% $200,000 $55.60
- ------------------------------------------------------------------------------------------------------------------------------------
Auto Lease Asset Backed Notes, Class A-4........... $200,000 100% $200,000 $55.60
- ------------------------------------------------------------------------------------------------------------------------------------
Auto Lease Asset Backed Notes, Class B............. $200,000 100% $200,000 $55.60
- ------------------------------------------------------------------------------------------------------------------------------------
1999-A Special Unit of Beneficial Interest Certificates (1) (1) (1) (1)
- ------------------------------------------------------------------------------------------------------------------------------------
Total.............................................. $1,000,000 100% $1,000,000 $278(2)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Inapplicable.
(2) Previously paid.
--------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
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.
<PAGE>
Subject to Completion, Preliminary Prospectus dated July _, 1999
$----------
AUTO LEASE ASSET BACKED NOTES
HONDA AUTO LEASE TRUST 1999-A,
ISSUER
HONDA TITLING C L.P.
AND
HONDA TITLING D L.P.,
TRANSFERORS
AMERICAN HONDA FINANCE CORPORATION,
SERVICER
The sources for payment of the notes are a selected portfolio of Honda
and Acura lease contracts and the related Honda and Acura leased vehicles,
payments due on the lease contracts, cash and other interests held
beneficially by the trust. Interest and principal on the notes are scheduled
to be paid monthly on the 15th day of the month. The first scheduled payment
date is [August] 15, 1999.
BEFORE YOU PURCHASE ANY NOTES, YOU SHOULD REVIEW CAREFULLY THE RISK
FACTORS BEGINNING ON PAGE 13 OF THIS PROSPECTUS.
THE NOTES WILL REPRESENT OBLIGATIONS OF, AND BENEFICIAL INTERESTS IN, A
TRUST AND ARE NOT INTERESTS IN OR OBLIGATIONS OF HONDA TITLING C L.P., HONDA
TITLING D L.P., AMERICAN HONDA FINANCE CORPORATION OR ANY OF THEIR AFFILIATES.
THE TRUST WILL ISSUE THE FOLLOWING CLASSES OF NOTES FOR SALE:
<TABLE>
<CAPTION>
Original Interest Underwriting Proceeds to
Principal Rate Final Scheduled Price to Discounts and the
Amount (per annum) Payment Date Public Commissions transferors
--------- ----------- --------------- -------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Per Class A-1
Note........... $
-------------- -----% ----------- ----------% -----% $---------
Per Class A-2
Note........... $
-------------- -----% ----------- ----------% -----% $---------
Per Class A-3
Note........... $
-------------- -----% ----------- ----------% -----% $---------
Per Class A-4
Note........... $
-------------- -----% ----------- ----------% -----% $---------
Per Class B
Note........... $
-------------- -----% ----------- ----------% -----% $---------
Total.......... $
-------------- -----% ----------
</TABLE>
- The price to the public and the proceeds to the transferors
listed above exclude interest accrued from July _, 1999, the
date the notes will be issued.
- The proceeds to the transferors exclude expenses, estimated at $_.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
1
<PAGE>
CREDIT SUISSE FIRST BOSTON
Prospectus dated July _, 1999
2
<PAGE>
IMPORTANT NOTICE ABOUT INFORMATION PRESENTED IN THIS PROSPECTUS
CONTENT OF PROSPECTUS
You should rely only on the information contained in this prospectus.
We have not authorized anyone to provide you with different information.
We include cross-references in this prospectus to captions in these
materials where you can find further related discussions. The following table of
contents provides the pages on which these captions are located.
LIMITATIONS ON OFFERS OR SOLICITATIONS
We do not intend this document to be an offer or solicitation:
(1) if used in a jurisdiction where the offer or solicitation is
not authorized;
(2) if the person making the offer or solicitation is not
qualified to do so; or
(3) if the offer or solicitation is made to anyone to whom it is
unlawful to make the offer or solicitation.
DEALER PROSPECTUS DELIVERY REQUIREMENTS
Until [October __, 1999] all dealers that effect transactions in the
notes, whether or not participating in this offering, may be required to deliver
a prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as underwriters with respect to their unsold
allotments or subscriptions.
3
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
SUMMARY OF TERMS OF THE SECURITIES.............................................7
RISK FACTORS..................................................................13
You May Have Difficulty Selling Your Notes and/or Obtaining Your
Desired Price Due to the Absence of a Secondary Market.......................13
You May Experience Losses on Your Investment Resulting From
Defaults on the Lease Contracts or Residual Value Losses.....................14
The Return on the Notes May Be Affected by Payments by Lessees, Interest
Rates and Possible Termination of the Trust..................................15
Subordination of the Class B Notes Makes It More Likely that the Class B
Notes Will Not Receive Payments or Will Be Allocated Losses..................16
Allocation of Losses May Cause Notes with Lower Priority to Experience a
Greater Percentage of Losses.................................................17
The Geographic Concentration of the Lessees and Performance of the Lease
Contracts May Increase the Risk of Loss on Your Investment...................18
Concentration of Certain Vehicle Types and Related Factors May Increase
the Risk of Loss on Your Investment..........................................18
Failure to Comply with Consumer Protection Laws Could Result in a Loss
on Your Investment...........................................................18
If ERISA Liens Are Placed on the Assets of the Honda Lease Trust, You
Could Suffer a Loss on Your Investment.......................................19
Possible Liability of the Trust due to a Lessee's Operation of a
Leased Vehicle...............................................................19
The Bankruptcy or Other Insolvency of American Honda Finance Corporation,
Honda Titling A L.P., Honda Titling B L.P., Honda Titling C L.P. or
Honda Titling D L.P. Could Delay or Prevent Payments on the Notes............20
The Failure to Make Payments on the Notes Will Generally Not Result in
an Event of Default..........................................................20
Computer Problems in the Year 2000 May Result in Losses.......................21
The Notes Are Not Suitable Investments for All Investors......................21
Withdrawal or Downgrading of the Initial Ratings of the Notes Will Affect
the Prices for Notes Upon Resale.............................................21
OVERVIEW OF TRANSACTION.......................................................22
THE TRUST AND THE SUBI........................................................23
General.......................................................................23
The Trust.....................................................................23
The SUBI......................................................................24
THE ORIGINATION TRUST.........................................................26
General.......................................................................26
Allocation of Origination Trust Liabilities...................................27
HTA LP and HTB LP.............................................................27
The Origination Trustee.......................................................28
Property of the Origination Trust.............................................28
Contract Origination; Titling of Leased Vehicles; Dealer Repurchase
Obligations..................................................................29
USE OF PROCEEDS...............................................................29
HONDA TITLING C L.P...........................................................29
HONDA TITLING D L.P...........................................................30
AMERICAN HONDA FINANCE CORPORATION............................................30
General.......................................................................30
Lease Contract Underwriting Procedures........................................31
Maximum Advance...............................................................32
Determination of Residual Values..............................................33
Remarketing Program...........................................................33
Insurance.....................................................................34
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
Collection and Repossession Procedures........................................34
Deferral and Extension Policy.................................................35
Methods of Vehicle Disposal...................................................36
Year 2000.....................................................................37
Delinquency, Repossession and Loss Data.......................................37
THE CONTRACTS.................................................................41
General.......................................................................41
Characteristics of the Contracts..............................................43
Representations, Warranties and Covenants.....................................46
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS.................................48
NOTE FACTORS AND TRADING INFORMATION REPORTS TO NOTEHOLDERS...................55
DESCRIPTION OF THE NOTES......................................................56
General.......................................................................56
Transfer of the SUBI Certificates.............................................58
Reallocation Payments.........................................................59
Calculation of Investor Percentage............................................59
Distributions on the Notes....................................................60
The Accounts..................................................................67
Statements to Noteholders.....................................................73
Termination of the Trust; Redemption of the Notes.............................75
Book-Entry Registration.......................................................76
Definitive Notes..............................................................80
The Indenture Trustee.........................................................81
SECURITY FOR THE NOTES........................................................83
General.......................................................................83
The Reserve Fund..............................................................83
The Contingent and Excess Liability Insurance Policies........................85
ADDITIONAL DOCUMENT PROVISIONS................................................85
The Indenture.................................................................85
Additional Agreement Provisions...............................................89
The SUBI Trust Agreement......................................................89
The Servicing Agreement.......................................................94
Amendment of Basic Documents.................................................103
CERTAIN LEGAL ASPECTS OF THE ORIGINATION TRUST AND THE SUBI..................104
The Origination Trust........................................................104
Qualification of HVT, Inc. as Fiduciary......................................105
Structural Considerations....................................................105
Allocation of Origination Trust Liabilities..................................105
Back-up Security Interest in Certain SUBI Assets.............................106
The SUBI.....................................................................107
Insolvency Related Matters...................................................108
Legal Proceedings............................................................110
CERTAIN LEGAL ASPECTS OF THE CONTRACTS AND THE LEASED VEHICLES...............110
Back-up Security Interests...................................................110
Vicarious Tort Liability.....................................................111
Repossession of Leased Vehicles..............................................112
Deficiency Judgments.........................................................112
Consumer Protection Laws.....................................................112
Other Limitations............................................................114
THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES.................................114
Federal Taxation.............................................................114
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
Federal Income Tax Consequences to United States Noteholders.................115
Federal Income Tax Consequences to Foreign Investors.........................117
Backup Withholding...........................................................118
New Withholding Regulations..................................................118
Possible Alternative Treatment of the Notes..................................118
ERISA CONSIDERATIONS.........................................................119
UNDERWRITING.................................................................120
RATINGS OF THE NOTES.........................................................122
LEGAL MATTERS................................................................122
AVAILABLE INFORMATION........................................................123
FORWARD LOOKING STATEMENTS...................................................123
INDEX OF TERMS...............................................................124
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES................I-1
</TABLE>
6
<PAGE>
SUMMARY OF TERMS OF THE SECURITIES
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS AND MAY NOT
CONTAIN ALL OF THE INFORMATION THAT YOU NEED TO CONSIDER IN MAKING YOUR
INVESTMENT DECISION. YOU SHOULD CAREFULLY READ THIS ENTIRE PROSPECTUS TO
UNDERSTAND ALL OF THE TERMS OF THE OFFERING.
<TABLE>
<S> <C>
Transferors: Honda Titling C L.P. and Honda Titling D L.P.
Issuer/Trust: Honda Auto Lease Trust 1999-A
Servicer: American Honda Finance Corporation
Indenture Trustee: The Bank of New York
Owner Trustee: U.S. Bank National Association
Origination Trust: Honda Lease Trust
Origination
Trustee: HVT, Inc.
Delaware
Trustee: Delaware Trust Capital Management, Inc.
Delaware
Owner Trustee: Wilmington Trust Company
Cut-Off Date: [June 30], 1999
Pricing Date: [July _], 1999
Closing Date: [July _], 1999
Clearance and
Settlement: The Depository Trust Company, Cedelbank and Euroclear
Trust Assets: Beneficial interest in lease contracts and leased vehicles
and related proceeds
Notes to be issued:
Class A notes: $_
Class B notes: $_
Interest rates:
Class A-1 notes: _%
Class A-2 notes: _%
Class A-3 notes: _%
Class A-4 notes: _%
Class B notes: _%
Annual Servicing
Fee: 1% of the principal balance of the lease contracts
represented by THE SPECIAL UNIT OF BENEFICIAL INTEREST, or
SUBI
Credit
Enhancement: A reserve fund, subordination of the class B notes and
subordination of the certificates
Payment Dates: The 15th of each month or the next business day
First Payment
Date: [August 15], 1999
Final Scheduled
Payment Date: ___________
Record Date: Noteholders of record for each month are determined one
business day prior to the payment date
</TABLE>
<PAGE>
OVERVIEW OF TRANSACTION
All of the motor vehicle dealers in the American Honda Finance Corporation
network of dealers have assigned closed-end lease contracts and the related
leased automobiles, minivans and sport utility vehicles to the Honda Lease
Trust. The leased vehicles will include the following:
- Acura CLs, Integras and TLs and
- Honda Accords, Civics, CRVs, Odysseys, Passports and Preludes.
Some of these lease contracts and the related leased vehicles have been
allocated to a separate portfolio of assets and the Honda Lease Trust will issue
a SPECIAL UNIT OF BENEFICIAL INTEREST, or a SUBI, that will be transferred to
the trust by way of two SUBI certificates. The SUBI will represent the
beneficial interest in the lease contracts and the related leased vehicles that
are in the portfolio of assets. Payment on the notes offered pursuant to this
prospectus will be backed by the SUBI. Prospective noteholders should understand
that the lease contracts and the related leased vehicles will INDIRECTLY back
payments on the notes. Neither the trust nor the noteholders will have an
interest in any assets of the Honda Lease Trust other than the portfolio of
assets backing the SUBI. The following chart represents the transfer of the SUBI
to the trust and the flow of funds invested by investors:
[Graphic]
ISSUER
Honda Auto Lease Trust 1999-A, a Delaware business trust, will use the proceeds
from the issuance and sale of the securities to purchase the SUBI certificates
from Honda Titling C L.P. and Honda Titling D L.P. American Honda Finance
Corporation will service the lease contracts. The trust will rely upon
collections on the lease contracts and funds on deposit in specified accounts to
make payments on the securities. The trust will be solely liable for payments
made on the securities.
OFFERED SECURITIES
The following securities are being offered pursuant to this prospectus:
- $__ __% class A-1 notes,
- $__ __% class A-2 notes,
- $__ __% class A-3 notes,
- $__ __% class A-4 notes, and
- $__ __% class B notes.
The trust is also issuing $_ aggregate principal amount of _% asset backed
certificates. The certificates are not being offered through this prospectus.
CLOSING DATE
The trust expects to issue the securities on [July _,] 1999.
TRUSTEES
- - HVT, Inc., a Delaware corporation, is the origination trustee and Delaware
Trust Capital Management, Inc., a Delaware corporation, is the Delaware trustee.
- - U.S. Bank National Association, a national banking association, is the owner
trustee and Wilmington Trust Company, a Delaware corporation, is the Delaware
owner trustee.
- - The Bank of New York, a New York banking corporation, is the indenture
trustee.
INTEREST AND PRINCIPAL PAYMENT DATES
On the 15th day of each month, the trust will pay interest and principal on the
securities. If the 15th is not a business day, the trust will pay the interest
and principal on the securities on the next business day.
<PAGE>
FIRST SCHEDULED PAYMENT DATE
The first scheduled payment date on the securities will be [August 15], 1999.
RECORD DATES
On each payment date, the trust will pay interest and principal on the notes to
noteholders of record for that particular payment date. The record date for the
notes will be one business day prior to the payment date.
INTEREST PAYMENTS
Noteholders and certificateholders are entitled to receive payments of interest
and principal from the trust only to the extent that collections from the
trust's assets and funds on deposit in specified accounts are sufficient to make
those payments. Interest and principal collections will be divided among the
various classes of notes and the certificates in specified proportions.
INTEREST RATES
The applicable rate of interest for each class of notes is specified on the
cover page of this prospectus. Interest on the class A-1 notes will be
calculated on the basis of the actual number of days elapsed in the related
interest period and a 360-day year. Interest on the other classes of notes will
be calculated on the basis of a 360-day year of twelve 30-day months.
PRINCIPAL PAYMENTS
On each payment date, to the extent funds from principal collections and excess
interest collections on the lease contracts and leased vehicles are available
from the preceding month, the trust will pay principal on the notes in an amount
generally equal to:
- 99.8% of the principal collections on the lease contracts, and
- reimbursement of 99.8% of losses until the notes have been paid in full.
Principal collections generally will equal all payments on the lease contracts
and leased vehicles allocable to principal, after the servicer discounts
principal payments on the lease contracts with low lease rates, as described in
this prospectus under "Description of the Notes -- Distributions on the Notes".
PRIORITY OF PAYMENTS
In general, the trust will make principal payments on the notes in sequential
order. This means that the trust will not pay the principal on any class of
notes until it first pays each class of notes with a lower numerical or
alphabetical designation in full. For example, the trust will not pay principal
on the class A-2 notes until it pays the class A-1 notes in full.
There are two exceptions to this rule of sequential payment. The first exception
is that, after the trust pays the class A-3 notes in full, it will make
principal payments on the class A-4 notes and the class B notes pro rata, based
on the principal balance of the class A-4 notes and the class B notes on the day
the trust paid the class A-3 notes in full.
The second exception to the rule of sequential payment is that, if there is (1)
a default under the indenture and the maturity date of the notes is accelerated
or (2) an insolvency of either Honda Titling C L.P. or Honda Titling D L.P., the
transferors, the trust will pay principal received from a sale of trust assets
first to the class A notes on a pro rata basis, until they have been paid in
full, and second, to the class B notes until they are paid in full.
FOR MORE DETAILED INFORMATION CONCERNING PAYMENTS OF PRINCIPAL, YOU SHOULD REFER
TO "DESCRIPTION OF THE NOTES -- DISTRIBUTIONS ON THE NOTES" IN THIS PROSPECTUS.
ALLOCATION OF LOSSES
The trust may experience losses on the lease contracts due to defaults, early
terminations and insufficient proceeds received upon disposition of the related
leased vehicles. If existing funds are unavailable to pay losses, those loss
amounts will be allocated in the following order of priority:
- to the certificates until the principal balance of the certificates has
been reduced to zero,
- to the class B notes until the principal balance of the class B notes
has been reduced to zero, and
- to each class of class A notes, pro rata.
FOR MORE DETAILED INFORMATION CONCERNING ALLOCATION OF LOSSES ON THE LEASE
CONTRACTS, YOU SHOULD REFER TO "DESCRIPTION OF THE NOTES -- DISTRIBUTIONS ON THE
NOTES" IN THIS PROSPECTUS.
<PAGE>
FINAL SCHEDULED PAYMENT DATES
On each final scheduled payment date listed on the cover page of this
prospectus, the trust will be obligated to pay the unpaid principal amount of
the applicable class of notes in full, to the extent the trust has not paid the
amounts prior to the final scheduled payment date.
OPTIONAL REDEMPTION
The servicer has the option to purchase the assets of the trust if the combined
principal amount of the notes and the certificates is less than or equal to 10%
of the combined initial principal amount of the notes and the certificates.
On any payment date on which the servicer exercises its option to purchase the
assets of the trust, the servicer will pay any notes that remain outstanding in
full at the applicable redemption price. The redemption price for any class of
notes will equal the unpaid principal amount of that class of notes, plus
accrued and unpaid interest on such amount.
FOR MORE INFORMATION ABOUT THE SERVICER'S OPTION TO PURCHASE THE ASSETS OF THE
TRUST, SEE "DESCRIPTION OF THE NOTES -- TERMINATION OF THE TRUST; REDEMPTION OF
THE NOTES" IN THIS PROSPECTUS.
TRUST PROPERTY
GENERAL
The trust's primary property will consist of:
- two SUBI certificates representing the SPECIAL UNIT OF BENEFICIAL
INTEREST, or SUBI, as described below, and
- monies on deposit in the reserve fund.
THE SUBI CERTIFICATES
Two SUBI certificates representing the SPECIAL UNIT OF BENEFICIAL INTEREST, or
the SUBI, will evidence a 99.8% beneficial interest, rather than a direct
ownership interest, in designated assets of the Honda Lease Trust. These
designated assets are a selected portfolio of lease contracts and leased
vehicles and particular rights and monies associated with the lease contracts
and leased vehicles. As the holder of the SUBI certificates, the trust will
receive 99.8% of all payments from the lease contracts and the related leased
vehicles. Honda Titling C L.P. and Honda Titling D L.P., the transferors, will
retain a collective 0.2% beneficial interest in the leased contracts and leased
vehicles and this interest will not be available to make payments on the notes
or the certificates.
The SUBI certificates will represent a beneficial interest in the following
assets of the Honda Lease Trust:
- - lease contracts and related leased vehicles,
- - collections on the lease contracts,
- - specified bank accounts,
- - rights to proceeds under selected insurance policies that cover lessees and
the leased vehicles,
- - remedies for breaches of representations and warranties made by dealers
that originated the lease contracts, and
- - other rights under documents relating to the lease contracts and leased
vehicles
FOR MORE DETAILED DESCRIPTION OF THE PROPERTY OF THE TRUST, YOU SHOULD REFER TO
"THE TRUST AND THE SUBI" IN THIS PROSPECTUS.
COMPOSITION OF THE LEASE CONTRACTS AND THE LEASED VEHICLES
The lease contracts consist of retail closed-end lease contracts originated in
the United States for the lease of Honda and Acura motor vehicles. As of [June
30], 1999, the cutoff date, the composition of the lease contracts was as
follows:
- the original outstanding principal balance of the lease contracts was
$__________,
- the discounted outstanding principal balance of the lease contracts was
$___________,
- the aggregate residual value of the leased vehicles, which is the
expected value of the leased vehicles at the time each individual lease
contract terminates, was $__________,
- the weighted average lease interest rate of the lease contracts was
____%,
- the weighted average length of the lease contracts was ____ months, and
<PAGE>
- the weighted average remaining term to maturity of the contracts was
_____ months.
SERVICING
American Honda Finance Corporation will service the lease contracts. The trust
will pay the servicer a servicing fee each month equal to the product of
one-twelfth of 1.00% and the outstanding principal balance of the lease
contracts represented by the SUBI certificates at the beginning of the preceding
month.
ADVANCES
The servicer will be obligated to advance to the trust the aggregate monthly
payments on lease contracts due but not received during the related collection
period on lease contracts (1) that are 31 days or more past due as of the end of
the related collection period or (2) for which the servicer has granted a
deferral. However, the servicer will not be required to make an advance if it
believes that the advance is unrecoverable. The trust will subsequently
reimburse the servicer for these advances.
FOR MORE DETAILED DESCRIPTION OF THE SERVICER'S OBLIGATIONS WITH RESPECT TO THE
LEASE CONTRACTS, SEE "ADDITIONAL DOCUMENT PROVISIONS -- THE SERVICING AGREEMENT"
IN THIS PROSPECTUS.
CREDIT ENHANCEMENT
GENERALLY
This transaction includes certain features designed to provide protection
against losses and delays in payments to the class A noteholders and, to a
lesser extent, the class B noteholders. These features are referred to as
CREDIT ENHANCEMENT. Losses on the lease contracts or other shortfalls of cash
flow will be covered by allocating available cash flow to the class A
noteholders before making allocations to the class B noteholders and the
certificateholders and by withdrawing amounts on deposit in the reserve fund.
The reallocation of funds for payment on the class A notes is referred to as
subordination.
FOR MORE DETAILED INFORMATION CONCERNING THE CREDIT ENHANCEMENT FEATURES OF THIS
OFFERING, SEE "DESCRIPTION OF THE NOTES" IN THIS PROSPECTUS.
THE RESERVE FUND
Honda Titling C L.P. and Honda Titling D L.P. will establish a reserve fund to
help cover any shortfalls in distributions of interest and principal on the
notes and the certificates. The reserve fund will be funded as follows:
- on or prior to the closing date, Honda Titling C L.P. and Honda Titling
D L.P. will collectively deposit $________ into the reserve fund;
- on any date during the time the notes and the certificates are
outstanding, the reserve fund will generally be required to have a
balance equal to ___% of 99.8% of the sum of the discounted outstanding
principal balances of the lease contracts and the residual value of
terminated contracts;
- on each payment date, if there are shortfalls in the funds available to
pay interest or principal on the notes or the certificates, funds will
be withdrawn from the reserve fund for the payment of that interest
and/or principal; and
- if funds are removed from the reserve fund for the payment of principal
and/or interest on the notes or the certificates, these funds may be
replenished through excess interest collections received on the lease
contracts in a subsequent collection period.
FOR MORE DETAILED INFORMATION CONCERNING THE RESERVE FUND, YOU SHOULD REFER TO
"SECURITY FOR THE NOTES -- THE RESERVE FUND" IN THIS PROSPECTUS.
TAX STATUS
O'Melveny & Myers LLP, as special federal income tax counsel to the transferors,
is of the opinion that the notes will be characterized as indebtedness that is
secured by the trust's assets for federal income tax purposes. Each noteholder,
by its acceptance of a note, or its acquisition of a beneficial interest in a
note, will agree to treat the note as indebtedness for federal, state and local
income and franchise tax purposes.
It is suggested that prospective investors consult their own tax advisors
regarding the federal income tax consequences of the purchase, ownership or
disposition of the notes, and the
<PAGE>
tax consequences arising under the laws of any
state or other taxing jurisdiction.
YOU SHOULD REFER TO "THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES" IN THIS
PROSPECTUS FOR ADDITIONAL INFORMATION CONCERNING THE APPLICATION OF UNITED
STATES FEDERAL INCOME TAX LAWS TO THE TRUST AND THE NOTES.
RATINGS
It is a condition to the issuance of the notes that:
- the class A-1 notes be rated in the highest short-term rating category
by at least two nationally recognized rating agencies,
- the class A-2 notes, class A-3 notes and class A-4 notes be rated in
the highest long-term rating category by at least two nationally
recognized rating agencies, and
- the class B notes be rated in the single A category by at least two
nationally recognized rating agencies.
ERISA CONSIDERATIONS
The notes are generally eligible for purchase by employee benefit plans subject
to the considerations discussed under "ERISA Considerations" in this prospectus.
YOU SHOULD REFER TO "ERISA CONSIDERATIONS" IN THIS PROSPECTUS FOR MORE
INFORMATION CONCERNING THE APPLICATION OF ERISA LAWS TO THE TRUST AND THE NOTES.
LEGAL INVESTMENT
The class A-1 notes are structured to be eligible for purchase by money market
funds under Rule 2a-7 of the Investment Company Act of 1940, as amended.
INVESTOR INFORMATION
The mailing address of Honda Titling C L.P., one of the transferors, is:
700 Van Ness Avenue
Torrance, California 90501
The telephone number is (310) 781-6146
The mailing address of Honda Titling D L.P., one of the transferors, is:
700 Van Ness Avenue
Torrance, California 90501
The telephone number is (310) 781-6148
The mailing address of American Honda Finance Corporation, the servicer, is:
700 Van Ness Avenue
Torrance, California 90501
The telephone number is (310) 781-4100
<PAGE>
RISK FACTORS
YOU SHOULD CONSIDER THE FOLLOWING RISK FACTORS IN DECIDING WHETHER TO
PURCHASE ANY OF THE NOTES.
YOU MAY HAVE DIFFICULTY SELLING The notes will not be listed on any
YOUR NOTES AND/OR OBTAINING securities exchange. Therefore, in order
YOUR DESIRED PRICE DUE TO THE to sell your notes, you must first locate
ABSENCE OF A SECONDARY MARKET a willing purchaser. The absence of a
secondary market for the notes could limit
your ability to resell them. Currently, no
secondary market exists for the notes. We
cannot assure you that a secondary market
will develop. The underwriter intends to
make a secondary market for the notes by
offering to buy the notes from investors
that wish to sell. However, the
underwriter is not obligated to make
offers to buy the notes and it may stop
making offers at any time. In addition,
the underwriter's offered prices, if any,
may not reflect prices that other
potential purchasers would be willing to
pay were they given the opportunity. There
have been times in the past when very few
buyers of asset backed securities existed
and there may be similar times in the
future. As a result, you may be unable to
sell your notes when you want to do so or
you may be unable to obtain the price that
you wish to receive for your notes.
13
<PAGE>
YOU MAY EXPERIENCE LOSSES ON YOUR The trust may experience losses on
INVESTMENT RESULTING FROM the lease contracts if (1) there are
DEFAULTS ON THE LEASE CONTRACTS OR defaults on, or early terminations of, the
RESIDUAL VALUE LOSSES lease contracts, or (2) the proceeds from
the sale of a leased vehicle following
termination of the related lease contract
are less than the residual value
established for the leased vehicle.
American Honda Finance Corporation
establishes the residual value for each
leased vehicle at the time the lease
contract for the leased vehicle is
originated. The trust will not be entitled
to receive payments made by lessees for
any excess wear and tear on the leased
vehicles. This increases the likelihood
that proceeds from the sale of leased
vehicles will be less than the residual
values and result in losses suffered by
the trust. If losses experienced on the
lease contracts exceed the funds available
on the related payment date to make
principal payments on the notes, those
losses will be allocated as if the
noteholder received a principal payment.
Consequently, you may incur a loss on your
investment. Losses will be allocated as
principal payments in the following order:
(1) to the certificates until the
certificate balance has been
reduced to zero;
(2) to the class B notes until the
note balance has been reduced to
zero; and
(3) to the class A notes, pro rata,
based on the outstanding principal
balance of the notes.
The following factors will affect the
severity of the trust's losses in
disposing of leased vehicles:
- the servicer's lease maturity
remarketing program,
- the supply of vehicles similar to the
leased vehicles being disposed of,
- the demand for vehicles similar to the
leased vehicles being disposed of, and
- the economic and geographic conditions
generally existing at the time of
disposition of the leased vehicles.
14
<PAGE>
THE RETURN ON THE NOTES MAY BE - THE TIMING AND AMOUNT OF PRINCIPAL
AFFECTED BY PAYMENTS BY LESSEES, PAYMENTS MAY VARY. You may receive
INTEREST RATES AND POSSIBLE payment of principal on your notes earlier
TERMINATION OF THE TRUST or later than expected. The amount and
timing of principal payments on the notes
depend upon the amount and the times at
which lessees make principal payments on
the lease contracts and the rate of
defaults on the lease contracts. The
lessees' principal payments may consist of
regularly scheduled payments or
unscheduled payments resulting from
prepayments of, or defaults on, the lease
contracts. If there are prepayments on the
lease contracts, it is likely that the
life of the notes will be shortened.
The rate of prepayments on the
lease contracts may be influenced by a
variety of economic, social and other
factors. The servicer has limited
historical experience with respect to
prepayments on lease contracts. In
addition, the servicer is not aware of
publicly available industry statistics
that detail the prepayment experience for
contracts similar to the lease contracts.
For these reasons, the servicer cannot
predict the actual prepayment rates for
the lease contracts. The servicer,
however, believes that the actual rate of
prepayments of the lease contracts will
result in the weighted average life of the
lease contracts being shorter than the
period from the closing date to the final
scheduled maturity dates for the notes. If
this is the case, the weighted average
life of each class of notes will be
correspondingly shorter.
In addition, to the extent
available, funds will be distributed to
noteholders covering losses on the lease
contracts and leased vehicles as principal
payments, as discussed above. This will
affect the total amount of principal
payments made on the notes.
- YOU BEAR THE REINVESTMENT RISK.
Asset backed securities, like the notes,
usually produce more returns of principal
to investors when market interest rates
fall below the interest rates on the lease
contracts and produce less returns of
principal when market interest rates rise
above the interest rates on the lease
contracts. As a result, you will likely
receive more money to reinvest at a time
when other investments generally are
producing a lower yield than that on the
notes, and will likely receive less money
to reinvest when other investments
generally are producing a higher yield
than that on the notes. You will bear the
risk that the timing and amount of
distributions on your notes may prevent
you from attaining your desired yield.
- FAILURE BY THE SERVICER TO
PURCHASE ASSETS OF THE TRUST. The servicer
has the right to purchase all of the
assets of the trust when the combined
balance of the notes and certificates is
10% or less of the combined initial
balance of the notes and the certificates.
If the servicer does not exercise these
rights, the weighted average life of the
notes will be longer than you expected.
15
<PAGE>
SUBORDINATION OF THE CLASS B NOTES - CLASS A NOTEHOLDERS ARE ENTITLED
MAKES IT MORE LIKELY THAT THE TO PRIORITY OF PAYMENTS. The class B
CLASS B NOTES WILL NOT RECEIVE notes are subordinated to the class A
PAYMENTS OR WILL BE ALLOCATED notes. If available funds are insufficient
LOSSES to make the payments on all of the notes,
the trust will not pay the class B
noteholders some or all of the amounts
otherwise distributable on the class B
notes. Consequently, the class B notes are
subject to a greater risk of nonpayment or
delayed payment or loss than the class A
notes if collections are significantly
below expected levels.
- ALLOCATION OF LOSSES. The class
B notes are scheduled to be outstanding
longer than the class A-1 notes, class A-2
notes, class A-3 notes and class A-4
notes. As a result, if the trust incurs
losses on the lease contracts later in the
transaction, the credit enhancement
provided by the certificates is less
likely to be available to support the
class B notes. If the certificate balance
is reduced to zero, the class B
noteholders will bear all the subsequent
losses on the lease contracts and leased
vehicles since the certificates will not
be available to absorb such losses. As a
result, the class B noteholders may
experience a greater risk of loss on their
investment than the class A noteholders.
16
<PAGE>
ALLOCATION OF LOSSES MAY CAUSE NOTES If there are insufficient funds to
WITH LOWER PRIORITY TO EXPERIENCE make principal payments following the
A GREATER PERCENTAGE OF LOSSES reduction of the certificate balance to
zero, losses will be allocated:
- first, to the class B notes as
principal until the principal balance
of the Class B notes has been reduced
to zero, and
- second, to the class A notes, pro
rata, as principal based on the
outstanding principal balance for each
class of class A notes.
As a result of the order of allocation
described above, more losses will be
allocated to the class B notes than to the
class A notes.
In addition, since principal payments will
be made to the class A notes in sequential
order, it follows that the outstanding
principal balance of the classes of class
A notes which have higher priority for
principal payments, such as the class A-1
notes, will be reduced faster than the
outstanding principal balance of the
classes of class A notes which have lower
priority for those payments, such as the
class A-4 notes. Therefore, because losses
will be allocated to the class A notes on
a pro rata basis based on outstanding
principal balance and because the
outstanding principal balance of some
class A notes will be reduced faster than
will the outstanding principal balance of
other class A notes, more losses will be
allocated to:
- class A-2 notes than to the class A-1
notes as a relative percentage of
their respective initial principal
balances,
- class A-3 notes than to the class A-1
or class A-2 notes as a relative
percentage of their respective initial
principal balances, and
- class A-4 notes than to the class A-1,
class A-2 or class A-3 notes as a
relative percentage of their
respective initial principal balances.
17
<PAGE>
THE GEOGRAPHIC CONCENTRATION OF THE Economic conditions in the states where
LESSEES AND PERFORMANCE OF THE lessees reside may affect delinquencies,
LEASE CONTRACTS MAY INCREASE THE losses and prepayments on the lease
RISK OF LOSS ON YOUR INVESTMENT contracts and the leased vehicles. The
following economic conditions may affect
payments on the lease contracts:
- unemployment,
- interest rates,
- inflation rates, and
- consumer perceptions of the economy.
If a large number of lessees are located
in a particular state, these conditions
could increase the delinquency, credit
loss or repossession experience of the
lease contracts and leases allocated to
the trust. As of [June 30], 1999, the
cutoff date, the lease contracts (based on
outstanding principal balance) were most
highly concentrated in California, New
York, New Jersey, Florida, Ohio and
Pennsylvania. If there is a concentration
of lessees and lease contracts in
particular states, any adverse economic
conditions in those states may affect the
performance of the notes more than if this
concentration did not exist.
FOR A DISCUSSION OF THE BREAKDOWN OF THE
LEASE CONTRACTS BY STATE, SEE "THE
CONTRACTS -- CHARACTERISTICS OF THE
CONTRACTS -- DISTRIBUTION OF THE CONTRACTS
BY STATE" IN THIS PROSPECTUS.
CONCENTRATION OF CERTAIN VEHICLE The existence of similar model types may
TYPES AND RELATED FACTORS MAY affect the used car market for any
INCREASE THE RISK OF LOSS ON YOUR particular model type. In addition, the
INVESTMENT used car market is affected by changes in
consumer tastes, the economy and the
discovery of a particular model type's
defects. These factors may negatively
affect the amount of proceeds received
upon the disposition of leased vehicles.
____, ____ and ______ represent
approximately __%, __% and __% of the
leased vehicles. Any adverse change
affecting a specific model type would
reduce the proceeds received upon the
disposition of leased vehicles of that
model type. As a result, you may incur a
loss on your investment.
FAILURE TO COMPLY WITH CONSUMER Many federal and state consumer protection
PROTECTION LAWS COULD RESULT IN laws impose requirements on retail lease
A LOSS ON YOUR INVESTMENT contracts. If any of the lease contracts
do not comply with these laws, there may
be delays or reductions in collections on
the contracts. This delay or reduction
would result in a loss on your investment.
The trust requires American Honda Finance
Corporation, the servicer, to reimburse it
for any liability or loss of the Honda
Lease Trust or the trust relating to
consumer protection laws.
FOR A DISCUSSION OF THE PARTICULAR FEDERAL
AND STATE CONSUMER PROTECTION LAWS, WHICH
MAY AFFECT THE LEASE CONTRACTS, SEE
"CERTAIN LEGAL ASPECTS OF THE CONTRACTS
AND THE LEASED VEHICLES - VICARIOUS TORT
LIABILITY" IN THIS PROSPECTUS.
18
<PAGE>
IF ERISA LIENS ARE PLACED ON THE Liens in favor of the Pension Benefit
ASSETS OF THE HONDA LEASE TRUST, Guaranty Corporation could possibly attach
YOU COULD SUFFER A LOSS ON YOUR to the lease contracts and leased vehicles
INVESTMENT to satisfy unpaid ERISA obligations of any
member of a CONTROLLED group that includes
American Honda Finance Corporation and its
affiliates. The likelihood of this
liability being asserted against the lease
contracts and leased vehicles or, if so
asserted, being successfully pursued, is
remote. However, you cannot be sure the
lease contracts and leased vehicles will
not become subject to an ERISA liability.
POSSIBLE LIABILITY OF THE TRUST DUE State laws differ as to whether a party
TO A LESSEE'S OPERATION OF A injured by a leased vehicle may sue the
LEASED VEHICLE owner of the vehicle merely by virtue of
that ownership. Most states either
prohibit this liability or limit the
owner's liability to the amount of
liability insurance that the lessee was
legally required to carry but had failed
to maintain. However, the laws of some
states, such as New York, may hold an
origination trust, as owner, and/or the
servicer-agent of the origination trust,
jointly and severally liable with the
lessee for the negligent use or operation
of a leased motor vehicle.
If liability imposed upon the Honda Lease
Trust in connection with any leased
vehicles it owns exceeds the coverage
provided by the liability insurance
policies held by the Honda Lease Trust, or
if lawsuits are brought against either the
Honda Lease Trust or American Honda
Finance Corporation involving the
negligent use or operation of a leased
vehicle, you could experience delays in
payments or incur a loss on your
investment due to any liabilities
resulting from those lawsuits.
FOR A DISCUSSION OF THE POSSIBLE LIABILITY
OF THE TRUST IN CONNECTION WITH THE
NEGLIGENT USE OR OPERATION OF THE LEASED
VEHICLES, SEE "CERTAIN LEGAL ASPECTS OF
THE CONTRACTS AND THE LEASED VEHICLES --
CONSUMER PROTECTION LAWS" IN THIS
PROSPECTUS.
19
<PAGE>
THE BANKRUPTCY OR OTHER INSOLVENCY If American Honda Finance Corporation,
OF AMERICAN HONDA FINANCE Honda Titling A L.P., Honda Titling
CORPORATION, HONDA TITLING A B L.P., Honda Titling C L.P. or Honda
L.P., HONDA TITLING B L.P., HONDA Titling D L.P. were to become subject to
TITLING C L.P. OR HONDA bankruptcy or other insolvency
TITLING D L.P. COULD DELAY OR proceedings, a court could conclude that
PREVENT PAYMENTS ON THE NOTES American Honda Finance Corporation, Honda
Titling A L.P., Honda Titling B L.P.,
Honda Titling C L.P. or Honda Titling D
L.P. owns the special unit of beneficial
interest, the SUBI, conveyed to the trust.
This conclusion could be reached if a
court were to:
- determine that the transfer of the
SUBI certificates representing the
SUBI, from Honda Titling C L.P. and/or
Honda Titling D L.P. to the trust did
not constitute a TRUE SALE, or
- treat Honda Titling A L.P., Honda
Titling B L.P., Honda Titling C L.P.,
Honda Titling D L.P. or the trust as
the same entity as American Honda
Finance Corporation for bankruptcy
purposes.
If a court were to reach any of these
conclusions, you could experience
reduction, delay or elimination of
interest and principal payments due on
your notes.
The parties to this transaction have taken
steps in structuring the transactions
described in this prospectus to minimize
the risk that a court would conclude that
the transfer of the SUBI certificates by
Honda Titling C L.P. and Honda Titling D
L.P. to the trust was not a TRUE SALE or
consolidate Honda Titling A L.P., Honda
Titling B L.P., Honda Titling C L.P.,
Honda Titling D L.P. or the trust with
American Honda Finance Corporation for
bankruptcy purposes.
FOR A DISCUSSION OF HOW A BANKRUPTCY
PROCEEDING OF AMERICAN HONDA FINANCE
CORPORATION, HONDA TITLING A L.P., HONDA
TITLING B L.P., HONDA TITLING C L.P. OR
HONDA TITLING D L.P. MAY AFFECT THE TRUST
AND THE NOTES, SEE "CERTAIN LEGAL ASPECTS
OF THE ORIGINATION TRUST AND THE SUBI -
INSOLVENCY RELATED MATTERS" IN THIS
PROSPECTUS.
THE FAILURE TO MAKE PAYMENTS ON THE You should be aware that the amount of
NOTES WILL GENERALLY NOT RESULT IN principal or interest required to be paid
AN EVENT OF DEFAULT to you prior to the final scheduled
payment date for a class of notes
generally will be limited to amounts
available for those purposes. Therefore,
the failure to pay principal of, or
interest on, a class of notes generally
will not result in the occurrence of an
event of default under the indenture until
the final scheduled payment date for the
class of notes.
FOR A DISCUSSION OF THE CIRCUMSTANCES
UNDER WHICH AN EVENT OF DEFAULT MAY BE
DECLARED UNDER THE INDENTURE, SEE
"ADDITIONAL DOCUMENT PROVISIONS-- THE
INDENTURE" IN THIS PROSPECTUS.
20
<PAGE>
COMPUTER PROBLEMS IN THE YEAR 2000 Many computers and computer chips do not
MAY RESULT IN LOSSES recognize more than two digits in a year
of a date. As a result, in the year 2000,
those computers will not know whether the
`00 refers to the year 1900 or the year
2000. American Honda Finance Corporation
will have significant obligations to the
trust in its role as servicer. If American
Honda Finance Corporation, its affiliates
or an external supplier were to experience
a year 2000 problem in its computer
system, this could affect American Honda
Finance Corporation's ability to service
the lease contracts. This could result in
errors or delays in making collections on
the leases and payments on the notes. To
address this problem, American Honda
Finance Corporation initiated, and
recently completed, a comprehensive
program for the year 2000 conversion.
American Honda Finance Corporation's
computer systems are year 2000 complaint.
However, if American Honda Finance
Corporation's systems were to experience
problems in the year 2000 and later, the
amount and timing of payments to
noteholders could be adversely affected,
due to, for example, American Honda
Finance Corporation's inability to process
payments or make distributions in a timely
manner. The inability of American Honda
Finance Corporation or of third parties
who deal with American Honda Finance
Corporation to make the necessary year
2000 modifications of their systems could
also have a significant adverse effect on
American Honda Finance Corporation's
operations and financial results. Possible
adverse consequences include the inability
to (1) collect the receivables, (2) pay
obligations, (3) process new business and
(4) occupy facilities. These consequences
could have a material adverse effect on
the value of your notes.
THE NOTES ARE NOT SUITABLE The notes are not a suitable investment
INVESTMENTS FOR ALL INVESTORS for any investor that requires a regular
or predictable schedule of payments or
payment on specific dates. The notes are
complex investments. We suggest that only
investors who, either alone or with their
financial, tax and legal advisors, have
the expertise to analyze the prepayment,
reinvestment and default risks, the tax
consequences of the investment and the
interaction of these factors should
consider purchasing the notes.
WITHDRAWAL OR DOWNGRADING OF THE A security rating is not a recommendation
INITIAL RATINGS OF THE NOTES WILL to buy, sell or hold securities. Similar
AFFECT THE PRICES FOR NOTES UPON ratings on different types of securities
RESALE do not necessarily mean the same thing.
You should analyze the significance of
each rating independently from any other
rating. A rating agency may change its
rating of the notes after the notes are
issued if that rating agency believes that
circumstances have changed. Any subsequent
change in a rating will likely affect the
price that a subsequent purchaser would be
willing to pay for the notes.
21
<PAGE>
OVERVIEW OF TRANSACTION
YOU CAN FIND A LISTING OF THE PAGES WHERE CAPITALIZED TERMS ARE USED IN
THIS PROSPECTUS UNDER THE CAPTION "INDEX OF TERMS" BEGINNING ON PAGE 124 OF THIS
PROSPECTUS.
All of the motor vehicle dealers ("Dealers") in the American Honda
Finance Corporation ("AHFC") network of dealers have entered into agreements
with AHFC ("Dealer Agreements") pursuant to which they have assigned and will
assign retail closed-end motor vehicle lease contracts to the Honda Lease Trust,
a Delaware business trust (the "Origination Trust"). The Origination Trust was
created in July 1997 to avoid the administrative difficulty and expense
associated with retitling leased vehicles for the securitization of motor
vehicle lease contracts. The Origination Trust issued to Honda Titling A L.P.
("HTA LP") and Honda Titling B L.P. ("HTB LP" and, together with HTA LP, the
"UTI Beneficiaries") a 99% and a 1% beneficial interest, respectively, in the
undivided trust interest (the "UTI") representing the entire beneficial interest
in the unallocated assets of the Origination Trust. See "The Origination Trust
- -- Property of the Origination Trust".
The UTI Beneficiaries will instruct the trustee of the Origination
Trust to (1) allocate a separate portfolio of lease contracts and leased
vehicles within the Origination Trust and (2) create a special unit of
beneficial interest (the "SUBI") which will represent the entire beneficial
interest in this separate portfolio. Upon its creation, this separate portfolio
will no longer be a part of the assets of the Origination Trust represented by
the UTI. The Origination Trust will issue a 99% beneficial interest in the SUBI
to HTA LP and a 1% beneficial interest in the SUBI to HTB LP. On the closing
date, HTA LP and HTB LP will sell their beneficial interests in the SUBI to
Honda Titling C L.P. ("HTC LP") and Honda Titling D L.P. ("HTD LP" and, together
with HTC LP, the "Transferors"). HTC LP and HTD LP will in turn contribute and
transfer two certificates, (the "SUBI Certificates") representing 99.8% of their
collective beneficial interest in the SUBI (the "SUBI Interest") to the Honda
Auto Lease Trust 1999-A (the "Trust"). HTC LP and HTD LP will retain the
remaining 0.2% beneficial interest in the SUBI. In return for the SUBI Interest
transferred to the Trust by HTC LP and HTD LP, the Trust will issue the class A
notes and the class B notes offered hereby and certificates, which are not being
offered hereby. The UTI Beneficiaries from time to time in the future may create
additional special units of beneficial interest similar to the SUBI ("Other
SUBIs") out of the UTI to sell to HTC LP and HTD LP or other entities.
The Trust will issue the following aggregate principal amounts of notes
pursuant to an indenture, dated as of [June 30], 1999 (the "Indenture"), between
the Trust and The Bank of New York, as indenture trustee (the "Indenture
Trustee"):
- Class A-1 notes (the "Class A-1 Notes") in the aggregate
principal amount of $__________ (the "Initial Class A-1 Note
Balance"),
- Class A-2 notes (the "Class A-2 Notes") in the aggregate
principal amount of $__________ (the "Initial Class A-2 Note
Balance"),
- Class A-3 notes (the "Class A-3 Notes") in the aggregate
principal amount of $__________ (the "Initial Class A-3 Note
Balance"),
- Class A-4 notes (the "Class A-4 Notes") in the aggregate
principal amount of $__________ (the "Initial Class A-4 Note
Balance" and, together with the Initial Class A-1 Note
Balance, the Initial Class A-2 Note Balance and the Initial
Class A-3 Note Balance, the "Initial Class A Note Balance")
and
22
<PAGE>
- Class B notes (the "Class B Notes") in the aggregate principal
amount of $__________ (the "Initial Class B Note Balance" and,
together with the Initial Class A Note Balance, the "Initial
Note Balance").
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes are collectively referred to herein as the "Class A Notes". The
Class A Notes and the Class B Notes are collectively referred to as the "Notes".
Each class of Notes is referred to as a "class".
The Trust will also issue $__________ ( the "Initial Certificate
Balance") of certificates (the "Certificates") which HTC LP and HTD LP will
retain. HTC LP will retain 99% of the Certificates and HTD LP will retain 1% of
the Certificates.
AHFC is the servicer for the assets of the Origination Trust (in such
capacity, the "Servicer") pursuant to a servicing agreement dated as of April 1,
1998, among the Origination Trust, the UTI Beneficiaries and AHFC (the "Basic
Servicing Agreement"), as supplemented by a servicing supplement dated as of
[June 30], 1999, among the Origination Trust, the UTI Beneficiaries, U.S. Bank
National Association ("U.S. Bank"), as trust agent (in such capacity, the "Trust
Agent"), and AHFC (the "Servicing Supplement" and, together with the Basic
Servicing Agreement, the "Servicing Agreement").
THE TRUST AND THE SUBI
GENERAL
Neither the Trust nor the holders of Class A Notes or Class B Notes
(collectively, the "Noteholders") will have an interest in: (1) the UTI, (2) any
Other SUBI, (3) any assets of the Origination Trust evidenced by the UTI or any
Other SUBI, or (4) payments made on assets of the Origination Trust not
represented by the SUBI. For further information regarding the Origination
Trust, see "The Origination Trust".
THE TRUST
The Trust was formed as a Delaware business trust pursuant to a
certificate of trust filed on March 4, 1999. On the date the Notes are issued
(the "Closing Date"), the Trust will be established pursuant to a securitization
trust agreement dated as of [June 30], 1999 (the "Agreement"), among HTC LP, HTD
LP, U.S. Bank, as owner trustee (in such capacity, the "Owner Trustee"),
Wilmington Trust Company, as Delaware owner trustee, and the Indenture Trustee.
The property of the Trust will include:
- the SUBI Certificates, the rights in and benefits of the SUBI
Interest evidenced by the SUBI Certificates and all monies due
and paid in respect thereof,
- the right to realize upon any property that may be deemed to
secure the foregoing,
- all rights accruing to the holder of the SUBI Certificates as a
third-party beneficiary under the SUBI Trust Agreement and the
Servicing Agreement,
- all rights of HTC LP and HTD LP, as transferees, with respect to
the SUBI Certificates,
- all rights of the Trust as a third-party beneficiary of the
administration agreement to which it is a party,
23
<PAGE>
- accounts relating to the SUBI Certificates, and
- all payments on or under and all proceeds of every kind and
nature in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary,
into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds (excluding proceeds
from residual value insurance policies received with respect to
the Leased Vehicles and the Contracts), condemnation awards,
rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property that
at any time constitute all or part of or are included in the
proceeds of any of the foregoing.
Through its ownership of the SUBI Certificates, the Trust also will
have a beneficial interest in specified amounts as may be held from time to time
in the SUBI Collection Account.
Because of the administrative difficulty and expense associated with
retitling leased vehicles, including federal and state regulatory requirements
to obtain odometer readings and to pay vehicle transfer fees and taxes, the
Trust will have an interest only in the SUBI Certificates and the assets of the
SUBI transferred to it by HTC LP and HTD LP and will not have a direct ownership
interest in any of the Leased Vehicles.
Credit enhancement for the Noteholders will be provided by:
- excess Interest Collections,
- available monies on deposit in a reserve fund established to
support payments to Noteholders and Certificateholders,
- the subordination of payments otherwise payable to
Certificateholders, and
- in the case of the Class A Notes, the subordination of payments
otherwise payable to Class B Noteholders.
If the foregoing credit enhancement is insufficient, the Noteholders
will ultimately have to look to payments made on the Contracts and the Leased
Vehicles (including under related insurance policies) and the proceeds of Dealer
repurchase obligations, if any, for distributions on the Notes. In such event,
certain factors, such as the Trust's lack of (1) a direct ownership interest in
the Contracts or the Leased Vehicles or (2) a perfected security interest in the
Leased Vehicles (which will be titled in the name of the Origination Trust or
the Origination Trustee) may result in the Trust realizing an amount which is
less than that due from the related lessees. Payments to Noteholders may be
reduced, delayed or eliminated as a result of defaults or delinquencies by
lessees and because of depreciation in the value of the related Leased Vehicles.
See "The Origination Trust -- Allocation of Origination Trust Liabilities",
"Security for the Notes -- The Reserve Fund", "Additional Document Provisions --
The Servicing Agreement -- Monitoring Lessees' Insurance on Leased Vehicles",
"Certain Legal Aspects of the Origination Trust and the SUBI -- The SUBI" and
"Certain Legal Aspects of the Contracts and the Leased Vehicles" for a
discussion of these matters.
THE SUBI
Pursuant to a supplement to the Origination Trust Agreement, dated as
of [June 30], 1999, among the UTI Beneficiaries, the Servicer, HVT, Inc., as
trustee of the Origination Trust (the
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"Origination Trustee"), Delaware Trust Capital Management, Inc., as Delaware
trustee, and the Owner Trustee (the "SUBI Supplement" and, together with the
Origination Trust Agreement, the "SUBI Trust Agreement"), the Origination
Trust will issue (1) upon the order of HTA LP, a 99% beneficial interest in
the SUBI to HTA LP, evidenced by a 98.01% certificate and a 0.99% certificate
and (2) upon the order of HTB LP, a 1% beneficial interest in the SUBI to HTB
LP, evidenced by a 0.99% certificate and a 0.01% certificate. The Indenture
Trustee and the Owner Trustee will be third-party beneficiaries of the SUBI
Trust Agreement.
On the Closing Date, the following transactions will occur:
- HTA LP will transfer its 98.01% certificate to HTC LP and its
0.99% certificate to HTD LP,
- HTB LP will transfer its 0.99% certificate to HTC LP and its
0.01% certificate to HTD LP,
- HTC LP and HTD LP will each exchange their 99% and 1% beneficial
interests in the SUBI for four SUBI certificates collectively
representing a 100% beneficial interest in the SUBI,
- HTC LP will receive a SUBI certificate representing 98.802% of
the SUBI and HTD LP will receive a SUBI certificate representing
0.998% of the SUBI (such certificates, the "SUBI Certificates");
in addition, HTC LP will receive and retain a 0.198% interest in
the SUBI and HTD LP will receive and retain a 0.002% interest in
the SUBI (together, the "Retained SUBI Interest") and the
Retained SUBI Interest will be evidenced by two SUBI
certificates (together, the "Retained SUBI Certificates"),
- HTC LP and HTD LP will transfer and assign the SUBI Certificates
to the Owner Trustee pursuant to the Agreement as property of
the Trust and the Trust will pledge the SUBI Certificates to the
Indenture Trustee pursuant to the Indenture,
- In return for the SUBI Certificates transferred by HTC LP and
HTD LP, the Trust will issue the Class A Notes and the Class B
Notes offered pursuant to this prospectus, and the Certificates,
- The Retained SUBI Certificates will not be transferred to the
Trust and will be permanently retained by HTC LP and HTD LP, and
- HTC LP and HTD LP will be entitled to receive 0.2% of all
payments made on or in respect of the SUBI Assets and will share
in 0.2% of all losses and liabilities incurred by the SUBI
Assets. Any payments made in respect of the Retained SUBI
Interest will not be available to make payments on the Notes.
The SUBI will be issued pursuant to the SUBI Supplement and will
evidence a beneficial interest in specified assets of the Origination Trust
consisting of:
(1) specified lease contracts (the "Contracts"), automobiles,
minivans and sport utility vehicles relating to the Contracts
(the "Leased Vehicles") and all proceeds or payments received or
due on or after [June 30], 1999 (the "Cutoff Date"), and
(2) all other assets of the Origination Trust allocated to the SUBI,
including:
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(a) the SUBI Collection Account (to the extent of funds
therein relating to the Contracts and Leased Vehicles),
(b) rights to receive payments made to AHFC, the Origination
Trust or the Origination Trustee under insurance policies
relating to the Contracts (excluding any residual value
insurance policies), the related lessees or the Leased
Vehicles, and
(c) all proceeds of the foregoing (collectively, the "SUBI
Assets").
The SUBI will evidence an indirect beneficial interest, rather than a
direct legal interest, in the SUBI Assets. The SUBI will not represent a
beneficial interest in any assets of the Origination Trust other than the SUBI
Assets. Payments made on or in respect of assets of the Origination Trust other
than the SUBI Assets will not be available to make payments on the Notes.
THE ORIGINATION TRUST
GENERAL
The Origination Trust is a Delaware business trust formed as of July
17, 1997 and is governed by a second amended and restated trust and servicing
agreement (the "Origination Trust Agreement"), among the UTI Beneficiaries, the
Servicer, the Origination Trustee, Delaware Trust Capital Management, Inc., as
Delaware trustee, and U.S. Bank, as Trust Agent. The primary business purpose of
the Origination Trust is to take assignments of, and serve as record holder of
title to, substantially all lease contracts and the related leased vehicles
originated through Dealers in the AHFC network of dealers. Pursuant to the
Servicing Agreement, AHFC will service the lease contracts included in the
assets of the Origination Trust, including the Contracts. See "Additional
Document Provisions -- The SUBI Trust Agreement" and " -- The Servicing
Agreement" and "Certain Legal Aspects of the Origination Trust and the SUBI --
The Origination Trust".
Except as otherwise described under "Additional Document Provisions --
The SUBI Trust Agreement", the Origination Trust Agreement prohibits the
Origination Trust from:
(1) issuing interests or securities other than the SUBI Interest,
the Retained SUBI Interest, the SUBI Certificates, the Retained
SUBI Certificates, Other SUBIs representing divided interests in
other portfolios of assets of the Origination Trust (the "Other
SUBI Assets") and certificates representing Other SUBIs or
portions thereof (the "Other SUBI Certificates"), the UTI
representing a divided interest in all Origination Trust Assets
not allocated as SUBI Assets or Other SUBI Assets (the "UTI
Assets") and the certificates representing the UTI (the "UTI
Certificates");
(2) borrowing money (except from the UTI Beneficiaries or their
affiliates in connection with funds used to acquire lease
contracts and the related leased vehicles);
(3) making loans;
(4) investing in or underwriting securities, other than Eligible
Investments or as otherwise permitted by the Origination Trust
Agreement or the SUBI Trust Agreement;
(5) offering securities in exchange for property (other than the
SUBI Certificates, the Retained SUBI Certificates, the Other
SUBI Certificates or the UTI Certificates);
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(6) repurchasing or otherwise reacquiring its securities (other
than for purposes of cancellation) except in connection with
financing or refinancing the acquisition of lease contracts and
the related leased vehicles or as otherwise permitted by each
such financing or refinancing; and
(7) granting any security interest in, or lien upon, any assets of
the Origination Trust.
ALLOCATION OF ORIGINATION TRUST LIABILITIES
The UTI Beneficiaries from time to time may (1) allocate assets of the
Origination Trust to Other SUBIs or (2) sell or pledge Other SUBI Certificates
in connection with other financings. Similarly, the UTI Beneficiaries may at
some time in the future pledge the UTI Certificates as security for obligations
to third-party lenders. The Origination Trust Agreement will permit the
Origination Trust, in the course of its activities, to incur selected
liabilities relating to its assets other than the SUBI Assets, or relating to
its assets generally, and to which, in certain circumstances, the SUBI Assets
may be subject. Pursuant to the Origination Trust Agreement, as among the
beneficiaries of the Origination Trust and their pledgees, an Origination Trust
liability relating to a particular Origination Trust will be allocated to and
charged against the allocated portfolio of Origination Trust to which it
belongs. Origination Trust liabilities that are incurred with respect to the
assets of the Origination Trust generally will be borne pro rata among all
portfolios of assets of the Origination Trust in proportion to the value of the
lease contracts and leased vehicles in each portfolio. The Origination Trustee,
the beneficiaries of the Origination Trust (including the Owner Trustee) and
their pledgees (including the Indenture Trustee) will be bound by this
allocation. In particular, the Origination Trust Agreement will require the
holders from time to time of Other SUBI Certificates and any UTI Certificates to
waive any claim that they might otherwise have with respect to the SUBI Assets
and to fully subordinate any claims to the SUBI Assets in the event that this
waiver is not given effect. Similarly, by virtue of holding Notes or a
beneficial interest in the Notes, Noteholders and Note Owners will be deemed to
have waived any claim that they might otherwise have with respect to Other SUBI
Assets and the UTI Assets. See "Additional Document Provisions -- The SUBI Trust
Agreement -- The SUBI, the Other SUBIs and the UTI" and "Certain Legal Aspects
of the Origination Trust and the SUBI -- The SUBI".
HTA LP AND HTB LP
HTA LP and HTB LP are the UTI Beneficiaries under the Origination Trust
Agreement. The sole general partner of HTA LP is Honda Titling A LLC ("HTA LLC")
and the sole general partner of HTB LP is Honda Titling B LLC ("HTB LLC"). Each
of HTA LLC and HTB LLC is a Delaware limited liability company formed in July
1997 for the purpose of serving as general partners of HTA LP and HTB LP,
respectively. AHFC is the sole limited partner of each of HTA LP and HTB LP.
Honda Titling Inc., a Delaware corporation ("HTI"), is a wholly owned special
purpose subsidiary of AHFC and is the independent member of each of HTA LLC and
HTB LLC. HTI's certificate of incorporation requires it to at all times have two
independent directors who are unaffiliated with AHFC. AHFC is the other member
of each of HTA LLC and HTB LLC. HTA LP and HTB LP were formed as limited
partnerships under the laws of Delaware in July 1997 for the purpose of:
(1) being the grantors and the initial beneficiaries of the
Origination Trust;
(2) holding the UTI Certificates;
(3) acquiring, pledging and transferring interests in the SUBI and
Other SUBIs; and
(4) engaging in related transactions.
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The limited liability company agreements of each of HTA LLC and HTB LLC
and the limited partnership agreements of each of HTA LP and HTB LP limit their
respective activities to the purposes listed above and to any activities
incidental or necessary to accomplish those purposes. Neither HTA LLC nor HTB
LLC may transfer its general partnership interest in HTA LP or HTB LP. The
principal offices of HTA LP and HTB LP are located at 700 Van Ness Avenue,
Torrance, California 90501. HTA LP's telephone number is (310) 781-6132; HTB
LP's phone number is (310) 781-6136.
THE ORIGINATION TRUSTEE
HVT, Inc., the Origination Trustee, is a wholly owned, special purpose
subsidiary of U.S. Bank that was organized in October 1996 solely for the
purpose of acting as trustee of the Honda Lease Trust. The Origination Trustee
is not affiliated with AHFC or any of its affiliates. U.S. Bank, as trust agent,
serves as agent for the Origination Trustee to perform certain functions of the
Origination Trustee pursuant to the Origination Trust Agreement. The Origination
Trust Agreement provides that if U.S. Bank no longer can be the trust agent, the
designee of the UTI Beneficiaries (which designee may not be either UTI
Beneficiary or any affiliate) will have the option to purchase the stock of the
Origination Trustee for a nominal amount. If that designee does not timely
exercise this option, then the Origination Trustee will appoint a new trust
agent, and that new trust agent (or its designee) will next have the option to
purchase the stock of the Origination Trustee. If neither the designee of the
UTI Beneficiaries nor the new trust agent exercises their options in a timely
manner, U.S. Bank may sell the stock of the Origination Trustee to
another party.
PROPERTY OF THE ORIGINATION TRUST
The property of the Origination Trust consists of:
- fixed rate retail closed-end lease contracts originated
throughout the United States and assigned to the Origination
Trust by AHFC or Dealers and all monies due from lessees under
these contracts,
- the automobiles, minivans and sport utility vehicles
(collectively, the "motor vehicles") leased pursuant thereto
and all proceeds from these motor vehicles,
- all of AHFC's rights (but not its obligations) with respect to
the lease contracts and motor vehicles, including the right to
receive proceeds of Dealer repurchase obligations, if any,
- the rights to selected insurance proceeds received by the
Servicer, the Origination Trust or the Origination Trustee on
behalf of the Origination Trust, from any physical damage,
credit life, disability and all other insurance policies or
self-insurance, if any, to the extent applicable to the
Origination Trust, any lease contract or motor vehicle or the
ability of a lessee to make required payments with respect to
the related contract or the related motor vehicle (each, an
"Insurance Policy"), including the Contingent and Excess
Insurance Policies,
- all security deposits on the lease contracts to the extent due
to the lessor under the contracts, and
- all proceeds of the assets listed above (collectively, the
"Origination Trust Assets").
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From time to time after the date of this prospectus, AHFC will cause
Dealers to originate additional retail closed-end lease contracts, assign those
lease contracts to the Origination Trust and title the related leased vehicles
in either the name of the Origination Trust or the Origination Trustee, as
described below.
CONTRACT ORIGINATION; TITLING OF LEASED VEHICLES; DEALER REPURCHASE OBLIGATIONS
All lease contracts originated by the Dealers and assigned to the
Origination Trust have been, or will be, underwritten using the underwriting
criteria described under "American Honda Finance Corporation -- Lease Contract
Underwriting Procedures". In originating each lease contract, the Origination
Trust or, if required by the department of motor vehicles of a particular state,
the Origination Trustee or a co-trustee, will be listed as the owner of the
related leased vehicle on the related certificate of title. Liens will not be
placed on these certificates of title, nor will new certificates of title be
issued, to reflect the interest of the Owner Trustee, as holder of the SUBI
Certificates, or the Indenture Trustee, as pledgee of the SUBI Certificates, in
the Leased Vehicles. The certificates of title to the leased vehicles registered
in several states will, however, reflect a first lien held by any of the
Origination Trust, AHFC or HVT, Inc. (the "Administrative Lien") which will
exist solely to assure delivery of the certificates of title to the leased
vehicles to the Servicer. Each entity which records an Administrative Lien will
enter into an agreement by which it acknowledges that it has no interest in the
related leased vehicles and additionally waives, quitclaims and releases any
claim that it may have against the leased vehicles by virtue of such liens.
The Dealer Agreements obligate each Dealer to repurchase lease
contracts which fail to meet certain representations and warranties made by the
Dealer. These representations and warranties relate primarily to the adherence
of certain procedures by the Dealers in connection with the origination of the
lease contracts and the titling of the related leased vehicles. The Dealer
Agreements do not generally provide for recourse against the Dealer for unpaid
amounts on a defaulted lease contract, other than when the Dealer breaches these
representations and warranties. The rights of the Origination Trust to receive
proceeds of those Dealer repurchase obligations will constitute Origination
Trust Assets (and accordingly will constitute SUBI Assets to the extent they
relate to the Contracts and Leased Vehicles), although the related Dealer
Agreements will not constitute Origination Trust Assets.
USE OF PROCEEDS
HTC LP and HTD LP will apply the net proceeds from the sale of the
Notes (I.E., the proceeds of the public offering of the Notes minus expenses
relating thereto) to purchase the SUBI from HTA LP and HTB LP and to establish
the Reserve Fund.
HONDA TITLING C L.P.
HTC LP is a limited partnership formed under the laws of state of
Delaware on February 1, 1999. The sole general partner of HTC LP is Honda
Titling C LLC, a Delaware limited liability company ("HTC LLC"). AHFC is the
sole limited partner of HTC LP. Honda Funding Inc., a Delaware special purpose
corporation ("HFI") and a wholly owned subsidiary of AHFC, is the independent
member of HTC LLC. HFI's certificate of incorporation requires it to have at all
times two independent directors who are unaffiliated with AHFC. AHFC is the
other member of HTC LLC. HTC LLC may not transfer its general partnership
interest in HTC LP. The principal office of HTC LP is located at 700 Van Ness
Avenue, Torrance, California 90501 and its telephone number is (310) 781-6146.
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HTC LLC was organized to serve as HTC LP's general partner. HTC LP's
purposes are:
- to act as the grantor of entities such as the Trust,
- to acquire, pledge or transfer interests in the SUBI and Other
SUBIs,
- to cause securities similar to the Notes to be issued, and
- to engage in related transactions.
The limited partnership agreement of HTC LP and the limited liability
company agreement of HTC LLC limit their respective activities to these purposes
and to any activities incidental or necessary to achieve these purposes.
HONDA TITLING D L.P.
HTD LP is a limited partnership formed under the laws of state of
Delaware on June 8, 1999. The sole general partner of HTD LP is Honda Titling D
LLC, a Delaware limited liability company ("HTD LLC"). AHFC is the sole limited
partner of HTD LP. HFI is the independent member of HTD LLC. AHFC is the other
member of HTD LLC. HTD LLC may not transfer its general partnership interest in
HTD LP. The principal office of HTD LP is located at 700 Van Ness Avenue,
Torrance, California 90501 and its telephone number is (310) 781-6148.
HTD LLC was organized to serve as HTD LP's general partner. HTD LP's
purposes are:
- to act as the grantor of entities such as the Trust,
- to acquire, pledge or transfer interests in the SUBI and Other
SUBIs,
- to cause securities similar to the Notes to be issued, and
- to engage in related transactions.
The limited partnership agreement of HTD LP and the limited liability
company agreement of HTD LLC limit their respective activities to these purposes
and to any activities incidental or necessary to achieve these purposes.
AMERICAN HONDA FINANCE CORPORATION
GENERAL
AHFC was incorporated in the state of California in February 1980.
AHFC's principal executive offices are located at 700 Van Ness Avenue, Torrance,
California 90501. Its telephone number is (310) 781-4100. AHFC and its wholly
owned subsidiary, Honda Canada Finance Inc. ("HCFI"), provide wholesale and
retail financing to authorized dealers in the United States and Canada for the
following:
(1) Honda and Acura automobiles, minivans, sport utility vehicles;
(2) Honda motorcycles (including scooters and all terrain vehicles);
and
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(3) Honda power equipment, such as lawn and utility tractors,
lawnmowers, snow throwers, water pumps, portable outboard
motors, outboard marine engines and generators.
AHFC and HCFI also offer retail leasing for Honda and Acura motor
vehicles throughout the United States and Canada. AHFC and its wholly owned
subsidiary, American Honda Service Contract Corporation, administer the sale of
vehicle service contracts throughout the United States for American Honda Motor
Co., Inc. ("AHMC"), a California corporation.
AHFC has the following wholly owned special purpose finance
subsidiaries:
- American Honda Receivables Corp.,
- American Honda Receivables Corp. II,
- HTI, and
- HFI.
AHFC is a wholly owned subsidiary of AHMC. AHMC is a wholly owned
subsidiary of Honda Motor Co., Ltd., a Japanese corporation which is a worldwide
manufacturer and distributor of motor vehicles and power equipment.
AHMC is the sole authorized distributor in the United States of the following:
(1) Honda and Acura motor vehicles;
(2) power equipment; and
(3) parts and accessories.
As of March 31, 1999, March 31, 1998 and March 31, 1997, AHFC and its
affiliates (excluding HCFI) had approximately 444,233, 459,553 and 396,573
retail lease contracts outstanding, respectively. The aggregate net outstanding
principal balances of retail lease contracts at such dates (including retail
lease contracts that were sold but are still being serviced by AHFC) were
$8,224,793,498, $8,500,408,933 and $7,351,966,324, respectively. Of these
amounts, the related leased vehicles had an estimated aggregate residual value
as of the end of their lease terms of approximately $6,361,997,115,
$6,770,297,697 and $5,736,890,436, respectively.
LEASE CONTRACT UNDERWRITING PROCEDURES
AHFC originates retail lease contracts secured by new and used Honda
and Acura motor vehicles from approximately 1,255 Dealers located throughout the
United States. In keeping with AHFC's practice, Dealers originated the Contracts
in accordance with AHFC's underwriting standards and other requirements, as
described below, under existing agreements with the Dealers. AHFC's underwriting
standards emphasize the prospective purchaser's ability to pay and
creditworthiness, as well as the asset value of the motor vehicle to be
financed.
Applications submitted to AHFC for the lease of a new or used Honda or
Acura motor vehicle must list sufficient information to process the application,
including the applicant's:
- income,
- residential information,
- monthly mortgage or rent payment,
- employment(s), and
- other personal information.
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Upon receipt of a credit application, AHFC obtains a credit report from
an independent credit bureau. AHFC reviews this credit report to determine the
applicant's current credit status and past credit performance. AHFC generally
considers the following factors to be negative in a credit report: (1) past due
credit; (2) repossessions; (3) loans charged off by other lenders; (4) previous
bankruptcy proceedings; (5) foreclosures and (6) tax liens. AHFC also considers
positive factors such as amount of credit available to the applicant and
favorable payment history.
In addition to other considerations, AHFC uses a credit scoring system
to make a credit decision. AHFC's credit scoring system includes:
- an assessment of residence and employment stability,
- credit bureau information,
- income requirements, and
- the ratio of income to total debt and income to requested lease
payment.
AHFC assesses the relative degree of credit risk indicated by these
criteria and the underwriting staff at the applicable AHFC branch office decides
whether to grant or deny credit. The system will recommend approval for scores
above a predetermined threshold and will recommend rejection for scores below
that level. However, the underwriting staff for the particular branch has the
ultimate approval or rejection authority and may, in certain circumstances,
override the recommendation provided by the system.
MAXIMUM ADVANCE
A maximum allowable advance is the maximum allowable amount a dealer
can include for the purchase of a leased vehicle and assignment of the lease
contract at lease inception. AHFC's maximum allowable advance for new Honda and
Acura automobiles (excluding all maintenance) is as follows:
- 100% of the vehicle manufacturer's suggested retail price,
including destination and handling and emissions, plus
- AHFC-approved new vehicle add-ons up to maximum published
amounts, plus
- AHFC-approved enhancement products (soft adds) up to $1,000,
plus
- AHFC-approved optional service contracts up to maximum published
amounts, if capitalized, plus
- acquisition fee for Honda Lease Trust, if capitalized, plus
- dealer-paid or paid up front sales tax due at lease signing, if
capitalized, plus
- dealer-paid federal luxury tax due at lease signing, if
capitalized.
After an AHFC branch office approves an application and the prospective
lessee agrees to the terms of the lease contract, including an assignment of the
lease contract from the Dealer to the Origination Trust, AHFC receives from the
Dealer a lease contract package containing, among other things:
- the standard form lease contract between the Dealer and the
lessee,
- the lessee's credit application,
- applicable insurance information (company, agent and additional
insured(s), with the Origination Trust or Origination Trustee
named as loss payee), and
- any payments due from the lessee.
AHFC determines whether the lease contract package complies with AHFC's
underwriting requirements. AHFC compares the specifics of the lease contract to
the credit application approved
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by the branch office and verifies the rate, truth-in-leasing disclosures and
purchase price from the Dealer.
DETERMINATION OF RESIDUAL VALUES
Each lease contract contains a residual value, which is the projected
value of the leased vehicle at the termination of the lease contract. AHFC's
residual value committee is responsible for setting appropriate residual values
on all leased Honda and Acura motor vehicles. The residual value committee
determines residual values for each model, leasing term, and contractual
mileage. Where warranted, this committee establishes separate residual values
for different body styles, trim levels or engine size within a given model.
The residual value committee consists of the Vice President of the
Consumer Financial Services Division, the Senior Managers from Corporate
Operations and Sales and Marketing, the Manager of Vehicle Remarketing and
Assistant Managers from Sales and Marketing and Risk Management. The committee
meets in March, July and November of each year. Special meetings are called when
either operational factors or the releasing of a new model require a review of
existing residual values or the establishment of new residual values. After the
committee determines residual values, the insurance carrier, Premier Lease and
Loan Services, and AHFC's President give the final approval for those residual
values.
Prior to each residual value committee meeting, the Sales and Marketing
Division reviews the following items before preparing its residual value
recommendations for the committee:
- the residual values determined by AHFC's insurance carrier,
Premier Lease and Loan Services,
- the residual values established by Honda's and Acura's major
competitors, and
- industry trends on the valuation of vehicles.
The factors that the committee considers prior to making a final
determination of residual values are:
- insured residual values,
- competitive positioning, and
- AHFC's historical performance of residual values.
The residual value insurance policies will not be an asset of either
the SUBI or the Trust. The residual value insurance policies will remain as an
asset of the Origination Trust and will be allocated solely to the UTI.
REMARKETING PROGRAM
AHFC's Lease Maturity Center handles all remarketing of leased
vehicles. The Lease Maturity Center is a centralized operation located in
Irving, Texas. As of March 1999, the Lease Maturity Center employed (1) a senior
manager, (2) three operations supervisors, (3) three customer service
supervisors, (4) one collections supervisor and (5) over 90 permanent employees
and 73 temporary employees in the areas of customer service, collections,
accounting and titling.
The Lease Maturity Center begins to contact the lessee and service the
lease contract six months prior to lease maturity by mailing each lessee
information outlining the lessee's end of lease options. At approximately six
months to maturity and 45 days prior to maturity, the Lease Maturity Center
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mails each lessee additional information regarding their lease obligations,
including the motor vehicle inspection and turn-in process and the required
documentation. At three months prior to the maturity of lease contracts, the
Lease Maturity Center mails the original Acura or Honda dealership a list of
those lease contracts. Included on this list is a designation of lessees with
AHFC pre-approval for new lease contracts. Based on the lessee's credit history
with AHFC and other creditors, AHFC pre-approves approximately 83% of its lease
end-of-term lessees for a new lease through AHFC on behalf of the Origination
Trust.
AHFC encourages each lessee to visit the lessee's Acura or Honda
dealership. Whether or not the lessee has decided to return the leased motor
vehicle, AHFC encourages the lessee to have the motor vehicle inspected through
independent inspection companies. AHFC continues to contact each lessee until
either (1) it receives a full residual value payoff or (2) the lessee returns
the motor vehicle to an Acura or Honda dealership. In some cases a customer can
obtain an adjustment on the full residual payoff amount, depending on the
auction market for their vehicle.
INSURANCE
AHFC's form of lease contract requires that lessees maintain motor
vehicle liability and motor vehicle physical damage insurance on the leased
vehicle. The motor vehicle liability coverage must provide minimum limits of
$100,000 per person and $300,000 combined limit per accident for bodily injury
to third parties, and $50,000 for damage to the property of third parties. These
limits exceed the minimum required by statute in many states. The insurance
policy must name the Origination Trust as an additional insured and loss payee.
The motor vehicle physical damage coverage must provide comprehensive and
collision coverage for the actual cash value of the vehicle, with maximum
deductibles of $1,000 for each such coverage. Since lessees may choose their own
insurers to provide the required coverage, the specific terms and conditions of
policies vary. AHFC requires lessees to provide evidence that the specified
insurance coverage and additional insured/loss payee provisions are in effect
for the duration of the lease.
AHFC does not require lessees to carry credit disability, credit life,
credit health or other similar insurance coverage, which provides for payments
to be made on the lease contracts on behalf of lessees in the event of
disability or death. To the extent that the lessee obtains this type of
insurance coverage, payments received on such coverage may be applied to
payments on the related lease contract to the extent that the lessee's
beneficiary chooses to do so.
COLLECTION AND REPOSSESSION PROCEDURES
There are two methods for lessees to make monthly payments on lease
contracts. Most lessees mail payments, along with a statement, to AHFC's
lockbox. A small percentage of lessees use AHFC's automatic bank account debit
program. AHFC considers a lease contract to be past due and delinquent for
servicing and enforcement of collection purposes when the lessee fails to pay at
least 90% of a scheduled payment by the due date. Any portion of a scheduled
payment not paid on the due date automatically becomes due with the next
scheduled payment. When a lease contract is past due and delinquent, AHFC
employs the following collection and repossession procedures:
(1) AHFC mails a computer generated delinquency notice to the
lessee on the eleventh day of delinquency and makes a follow up
telephone call on the fifteenth day of delinquency;
34
<PAGE>
(2) If the delinquent contract cannot be brought current or
completely collected within approximately 60 days, AHFC
generally attempts to repossess the related leased vehicle;
(3) AHFC holds repossessed vehicles in inventory to comply with
statutory requirements and then sells them (generally within 60
days after repossession);
(4) AHFC pursues any deficiencies remaining after repossession and
sale of the vehicle or after the full charge-off of the related
contract to the extent practicable and legally permitted; and
(5) AHFC contacts lessees and, when warranted by individual
circumstances, establishes repayment schedules which it monitors
until the deficiencies are either paid in full or become
impractical to pursue.
DEFERRAL AND EXTENSION POLICY
DISASTER RELIEF DEFERRAL. In response to natural disasters (E.G.,
floods, hurricanes and tornadoes), AHFC's policy is to negotiate with any
affected lessee to insure payment on the lease contract. AHFC generally allows
lessees affected by a natural disaster to defer a lease payment without charge
or penalty. Deferral of a lease payment will not extend the maturity date of the
lease contract. All disaster relief deferrals require both supervisor and
manager approval at the applicable AHFC branch office. AHFC requires these
lessees to sign a lease deferral agreement.
NON-DISASTER RELIEF PAYMENT DEFERRAL. Lessees who have encountered
financial difficulties due to extraordinary circumstances such as illness,
temporary unemployment or unexpected expenses may qualify for a non-disaster
lease payment deferral. AHFC uses non-disaster lease payment deferrals in
extreme circumstances and not in its normal business practices. The deferral of
a lease payment does not extend the maturity date of the lease contract. All
non-disaster relief deferrals require both supervisor and assistant manager or
manager approval at the applicable AHFC branch office. AHFC requires these
lessees to sign a lease deferral agreement.
The Servicing Agreement will prohibit the Servicer from granting
more than [six] deferrals on any Contract. In the event that the Servicer
grants more than [six] deferrals on any Contract, the Servicing Agreement will
require that the Servicer deposit into the SUBI Collection Account an amount
equal to the Reallocation Payment in respect of such Contract on the Deposit
Date relating to the Collection Period in which such deferral was granted (or
on the Deposit Date relating to the Collection Period in which the Servicer
discovers or is notified that an improper deferral was granted), at which
time such Contract and the related Leased Vehicle will no longer constitute
SUBI Assets as they will be reallocated as UTI Assets or, in some cases, will
be transferred to the Servicer.
TERM EXTENSIONS. AHFC only grants lease term extensions during the
end of lease process, normally during the last 45 days of a lease contract.
Lessees at the end of a lease contract who intend to lease another Honda or
Acura motor vehicle but cannot do so at lease maturity for reasons such as
awaiting delivery of a new vehicle, preference for next model year or other
timing circumstances, may qualify for a lease term extension of up to a
maximum of six months. In addition, certain lease contracts may be extended
by 12 or 24 months, up to a maximum lease term, including extensions, of 84
months (except for lease contracts with originally scheduled termination
dates between April 1, 1999 and December 31, 1999, for which the maximum
lease term is 73 months). A lessee must have exhibited a good past payment
history with AHFC on the
35
<PAGE>
lessee's current lease contract to qualify for a lease term extension and
must sign a lease extension agreement.
The Servicing Agreement will prohibit extension of Contracts by more
than [six] months in the aggregate, but in any case not later than a date on
or after the first day of the month preceding the month in which the Final
Scheduled Distribution Date for the Class B Notes occurs. In the event that
the Servicer extends any Contract in contravention of the foregoing, the
Servicing Agreement will require that the Servicer deposit into the SUBI
Collection Account an amount equal to the Reallocation Payment in respect of
such Contract on the Deposit Date relating to the Collection Period in which
such extension was granted (or on the Deposit Date relating to the Collection
Period in which the Servicer discovers or is notified that an improper
extension was granted), at which time such Contract and the related Leased
Vehicle will no longer constitute SUBI Assets as they will be reallocated as
UTI Assets or, in some cases, will be transferred to the Servicer.
METHODS OF VEHICLE DISPOSAL
AHFC's Remarketing Department handles all motor vehicle sales for AHFC
including repossession and end of lease sales. The Remarketing Department is
managed at a centralized location in Irving, Texas, with field representative
administrators located near their respective auction sites. As of March 1999,
the Remarketing Department consisted of (1) a remarketing manager, (2) a
remarketing supervisor, (3) six field representative administrators and (4) 30
administrative staff persons.
Upon lease contract maturity, the lessee has the opportunity to
purchase the motor vehicle at the residual value stated in the lease contract.
On selected leased vehicles, based on auction sale results as determined by
AHFC, the lessee may be offered a discount on the residual value to purchase the
related leased vehicle. This program is referred to as the Customer Discount
Program. If the lessee does not purchase the motor vehicle and returns it to the
dealership, the receiving dealer also has the option of purchasing the motor
vehicle at the residual value stated in the lease contract. On selected motor
vehicles, as determined by AHFC, the receiving dealer has the option of
purchasing the returned motor vehicle at a price lower than the residual value.
This program is referred to as the Market Based Purchased Option Program (the
"MBPO Program"). AHFC sets the value of the motor vehicle sold in the MBPO
Program at a market price as determined by current AHFC auction information.
If the dealership does not purchase the motor vehicle at the full
residual value or through the Customer Discount Program or MBPO Program, AHFC
consigns the motor vehicle to be picked up by either an auction or independent
transport company. AHFC maintains operating standards for auction and transport
companies. AHFC requires assignment of each motor vehicle to a carrier within 24
hours of consignment receipt and delivery of the consigned vehicle to auction
sites within 72 hours of carrier assignment.
Each motor vehicle undergoes an auction condition report, including a
motor vehicle condition grade. Each auction condition report is subsequently
faxed to AHFC. Each auction site is given latitude to repair minor damage, but
an AHFC field representative administrator reviews all major damage prior to any
repair. Each auction site should sell the motor vehicle within 60 days of taking
the motor vehicle into inventory.
AHFC has regular sales at over 20 major auction locations across the
United States. AHFC's highest volume of sales is in the Northeast. In some
instances, AHFC will transport motor vehicles into different regions of the
country where it perceives there to be greater demand for such motor vehicles.
Each auction sells motor vehicles to licensed dealerships and does not sell to
the public. During March 1999, AHFC had 50 scheduled sales of motor vehicles.
AHFC also sells motor vehicles through the Internet through ADT and
Manheim's auction Internet websites, which are accessible by registered Acura or
Honda dealers. Approximately 800 vehicles were sold over the Internet during
March 1999. Field remarketing administrators determine prices of motor vehicles
sold on the Internet based upon various vehicle and market conditions.
36
<PAGE>
YEAR 2000
AHFC initiated and has completed a program designed to resolve the
potential impact of year 2000 on the ability of AHFC's computerized information
systems to accurately process information that may be date sensitive. AHFC
identified the critical data storage and operating systems and developed plans
to ensure the readiness of AHFC's systems to process dates beyond the year 2000.
AHFC has initiated communications with dealers, financial institutions, and
suppliers to determine the extent of risk created by those third parties'
failure to remediate their own year 2000 issues. At present, AHFC cannot
determine the effect of failed remediation efforts by these outside parties.
The total estimated costs associated with the required modifications to
AHFC's computerized information systems have not had, and are not expected to
have, a material impact on AHFC's condition, financial and otherwise. Costs
associated with the year 2000 systems and software modifications have been and
will be expensed as incurred.
The inability of AHFC, its vendors and the parties with whom it
contracts to address the necessary year 2000 modifications of computerized
information systems could result in a significant adverse effect on AHFC's
operations and financial results including the inability to:
- collect receivables,
- pay obligations,
- process new business, and
- occupy facilities.
Any year 2000 problems described herein could have a material adverse effect on
ability of Noteholders to receive payments on the Notes.
AHFC has begun to develop a contingency plan. The plan will cover three
areas: (1) early warning, (2) preventative actions, and (3) alternative
processes. Quick response teams will be formed to identify and correct problems
as they occur. AHFC is considering the following plans of action in anticipation
of any potential year 2000 problems: (1) additional data back-ups, (2) computer
shut downs and restarts, (3) finishing 1999 transactions early, (4) freezing new
system installations, and (5) alternative means of communication. Alternative
suppliers are being considered and AHFC will continue to develop and analyze
contingency plans throughout 1999.
DELINQUENCY, REPOSSESSION AND LOSS DATA
Set forth below is information concerning AHFC's experience with
respect to its entire portfolio of new and used Honda and Acura motor vehicle
lease contracts, which includes lease contracts owned by AHFC or the Origination
Trust and also lease contracts that have been sold but are still being serviced
by AHFC. The data set forth below represents, as of specified dates, all lease
contracts owned and/or serviced by AHFC as of such dates. The dollar amounts of
the lease contracts outstanding include the residual value of the related leased
vehicle. Credit losses are an expected cost in the business of extending credit
and are considered in AHFC's rate-setting process. AHFC's strategy is to
minimize credit losses while providing financing support for the sale of Honda
and Acura motor vehicles.
AHFC establishes an allowance for expected credit losses and deducts
amounts reflecting lease contracts against such allowance. For lease contracts,
AHFC charges the account balance related to a lease contract against the
allowance for credit losses when the contract has been delinquent for 120 days,
unless AHFC has repossessed the related leased vehicle. In these cases, AHFC
does not charge the account balances against the allowance for credit losses
until AHFC has either sold the repossessed
related leased vehicle or held it in repossession inventory for more than 90
days. AHFC credits any recoveries from charge-offs related to a lease
contract to the allowance.
Delinquency, repossession and loss experience may be influenced by a
variety of economic, social and geographic conditions and other factors beyond
the control of AHFC. There is no assurance that AHFC's delinquency, repossession
and loss experience with respect to its lease contracts and the related leased
vehicles in the future, or the experience of the Trust with respect to the
Contracts and the Leased Vehicles, will be similar to that set forth below.
37
<PAGE>
ENTIRE AHFC PORTFOLIO
RETAIL VEHICLE LEASE CONTRACT DELINQUENCY EXPERIENCE
(INCLUDES LEASE CONTRACTS THAT HAVE BEEN SOLD
BUT ARE STILL BEING SERVICED BY AHFC)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
For the fiscal year ended March 31,
------------------------------------------------------------------------------------------------
1999 1998 1997 1996
------------------- --------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Ending Dollar Amount of
Lease Contracts
Outstanding (1)........ $8,224,793,498 $8,500,408,933 $7,351,966,324 $5,198,380,472
Ending Number of Lease
Contracts Outstanding.. 444,233 459,553 396,573 288,133
Percentage of Lease
Contracts Delinquent... Units % Units % Units % Units %
- - - ----- -
31-60 Days............. 2,478 .558% 2,825 .615% 2,630 .663% 2,002 .695%
61-90 Days............. 385 .087% 463 .101% 499 .126% 391 .136%
91-120 Days............ 114 .026% 131 .029% 130 .033% 112 .039%
121 Days or More....... 19 .004% 24 .005% 32 .008% 32 .011%
Total............... 2,996 .674% 3,443 .749% 3,291 .830% 2,537 .881%
__________________
(1) This amount is based upon the sum of all principal amounts outstanding
under the lease contracts and includes of the residual values of the
related leased vehicles.
</TABLE>
ENTIRE AHFC PORTFOLIO
RETAIL VEHICLE LEASE CONTRACT REPOSSESSION AND LOSS
EXPERIENCE (INCLUDES LEASE CONTRACTS THAT HAVE BEEN SOLD BUT ARE
STILL BEING SERVICED BY AHFC)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
For the Fiscal Year Ended March 31,
----------------------------------------------------------------------------------
1999 1998 1997 1996
------------------ -------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Number of Lease Contracts
Outstanding(1).................................. 444,233 459,553 396,573 288,133
Average Lease Contracts
Outstanding..................................... 459,870 444,719 345,151 250,147
Repossessions:
Number of Repossessions..................... 5,760 6,869 4,672 3,180
Number of Repossessions as a Percentage of:
Number of Lease Contracts Outstanding....... 1.30% 1.495% 1.178% 1.104%
Average Number of Lease Contracts
Outstanding................................. 1.25% 1.545% 1.354% 1.271%
</TABLE>
38
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
Losses:
Dollar Amount of Lease Contracts
Outstanding (1)............................. $8,224,793,498 $8,500,408,933 $7,351,966,324 $5,198,380,472
Average Net Receivables Outstanding......... $8,513,660,121 $8,250,925,865 $6,368,683,826 $4,549,487,755
Net Repossession Losses..................... $32,251,101 $39,986,361 $24,083,589 $16,325,856
Average Net Repossession Loss per
Liquidated Lease Contract................... $5,599.15 $5,821.28 $5,154.88 $5,133.92
Net Repossession Losses as a Percentage of
Average Net Receivables Outstanding......... .379% .485% .378% .359%
__________________
(1) This amount is based upon the sum of all principal amounts outstanding
under the lease contracts, and includes the residual values of the related
leased vehicles.
</TABLE>
In both of the tables listed above, the percentage of delinquent lease
contracts excludes lease contracts the related lessees of which are bankrupt or
have commenced bankruptcy proceedings. As of March 31, 1999, approximately _____
lease contracts involving bankrupt lessees were delinquent for at least _____
days. The delinquency period is based on the number of days payments of at least
10% of a monthly payment are contractually past due. The calculation of
delinquent lease contracts is expressed as a percentage of the total number of
lease contracts at period end.
39
<PAGE>
ENTIRE AHFC PORTFOLIO
(INCLUDES LEASE CONTRACTS THAT HAVE BEEN SOLD
BUT ARE STILL BEING SERVICED BY AHFC)
RESIDUAL VALUE LOSS EXPERIENCE
($ IN THOUSANDS)
<TABLE>
<CAPTION>
For the Fiscal Year Ended March 31,
------------------------------------------------------------------------
1999 1998 1997 1996
----------------- ------------- ------------- --------------
<S> <C> <C> <C> <C>
Total Number of Leased Vehicles Scheduled
to Terminate.................................. 175,172 150,375 86,793 45,627
Number of Returned Vehicles Sold by AHFC......... 91,028 43,507 9,492 3,491
Full Termination Ratio(1)........................ 52% 29% 11% 8%
Total Losses on Returned
Vehicles Sold by AHFC(2)...................... $194,634 $81,718 $11,509 $1,211
Average Loss Per Returned Vehicle Sold by AHFC(3) $2,138.18 $1,878.28 $1,212.50 $347.01
Losses as a Percentage of Residual Values of
Returned
Vehicles Sold by AHFC(4)...................... 13.99% 12.40% 7.42% 2.33%
Losses as a Percentage of Residual Values of
Scheduled Terminations(5)..................... 7.34% 3.80% 0.95% 0.20%
____________________________________
(1) The ratio of returned vehicles sold during the stated period over vehicles
scheduled on their date of origination to terminate during the stated
period expressed as a percentage.
(2) Losses include expenses incurred to dispose of vehicles but exclude certain
amounts received after the sale and disposition of the vehicle.
(3) Dollars not in thousands.
(4) The ratio of total losses on returned vehicles sold by AHFC during the
stated period over the residual values of such vehicles expressed as a
percentage.
(5) The ratio of total losses on returned vehicles sold by AHFC during the
stated period over the residual values of all vehicles under lease
contracts scheduled to terminate during the stated period expressed as a
percentage.
</TABLE>
This table includes lease contracts that have been sold but are still
being serviced by AHFC. To the extent that the average maturity of lease
contracts vary over time, the residual value loss experience for the periods in
the table may not be fully comparable.
40
<PAGE>
THE CONTRACTS
GENERAL
The Contracts will consist of a pool of ________ motor vehicle retail
closed-end lease contracts, for Honda and Acura motor vehicles, having an
aggregate principal balance of $_______ as of [June 30], 1999 (the "Cutoff
Date") and an aggregate discounted principal balance of $_______ as of the
Cutoff Date. Each of the Contracts in the portfolio have the following
characteristics:
(1) each Contract was originated by Dealers located throughout the
United States;
(2) each Contract has an original term to maturity not exceeding ___
months; and
(3) each Contract was selected from the Origination Trust's
portfolio of retail closed-end Honda and Acura motor vehicle
lease contracts and was not evidenced by or reserved for
allocation to an Other SUBI.
Dealers originated the Contracts and assigned them to the Origination
Trust, in accordance with the underwriting procedures previously described under
"American Honda Finance Corporation -- Lease Contract Underwriting Procedures".
AHFC selected the Contracts based upon the criteria specified in the SUBI Trust
Agreement and described under "The Contracts -- Characteristics of the Contracts
- -- General" and "The Contracts -- Representations, Warranties and Covenants".
AHFC will represent and warrant that (1) no adverse selection procedures were
employed or will be employed in selecting the Contracts for inclusion in the
SUBI Assets and (2) it is not aware of any bias in the selection of the
Contracts that would cause the delinquencies or losses on these Contracts to be
greater than those experienced on other retail closed-end lease contracts held
in the Origination Trust's portfolio. However, it is nonetheless possible that
the delinquencies or losses on the Contracts could exceed experience on other
lease contracts.
Each Contract will be a finance lease for accounting purposes. In
addition, each contract will have been written for a capitalized cost (which may
exceed the manufacturer's suggested retail price), plus an implicit rate in each
Contract calculated as an annual percentage rate (the "Lease Rate") on a
constant yield basis. The Contracts will provide for equal monthly payments (the
"Monthly Payments") so that by the end of the related Contract term, the
capitalized cost will have been amortized to an amount equal to the related
Leased Vehicle's residual value established at the time of origination of the
Contract (the "Residual Value"). The amount of a Contract's capitalized cost
which has been amortized at any point in time is referred to in this prospectus
as its "Outstanding Principal Balance".
The "Aggregate Net Investment Value" as of any day will equal the sum
of:
(1) the Discounted Principal Balance of all Contracts other than (a)
Charged-off Contracts, (b) Liquidated Contracts, (c) Matured Contracts and (d)
Additional Loss Contracts; and
(2) the aggregate Residual Value of all Leased Vehicles to the
extent that (a) the related Contracts have reached their scheduled maturities
and (b) as to which all payments relating to the Contracts have been made (each,
a "Matured Contract") within the three immediately preceding Collection Periods
but which Leased Vehicles, as of the last day of the most recent Collection
Period, have remained unsold and not otherwise disposed of by the Servicer for
two full Collection Periods or less (the "Matured Leased Vehicle Inventory").
41
<PAGE>
The "Discounted Principal Balance" of (1) a Contract (or the related
Leased Vehicle) with a Lease Rate less than _____% (each, a "Discounted
Contract") will equal (a) the present value of all remaining Monthly Payments on
the Contract and (b) the Residual Value of the related Leased Vehicle,
calculated using a discount rate of _____% and (2) any Contract other than a
Discounted Contract will equal the Contract's Outstanding Principal Balance. As
of the Cutoff Date, the aggregate Discounted Principal Balance of the Contracts
and the Aggregate Net Investment Value was $__________. A "Collection Period" is
the calendar month immediately preceding the calendar month in which a
Distribution Date occurs.
All of the Contracts will be closed-end leases. At the end of the term
of a closed-end lease, the lessee may elect to purchase the related leased
vehicle by exercising the purchase option contained in the lease contract. The
purchase price for the Leased Vehicle will be a fixed dollar amount equal to the
Residual Value plus any applicable taxes and all other incidental charges that
may be due under the Contract. In contrast, under an open-end lease, the lessee
is also obligated to pay at the end of the lease term any deficit between the
fair market value of the leased vehicle at that time and the residual value
established at the time of origination of such lease. If the lessee declines the
purchase option, the lessee is required to return the leased vehicle to, or upon
the order of, the lessor and will then owe only incidental charges for excess
mileage, excessive wear and use and other items that may be due under such
lease. As a consequence of the frequency of prepayments by lessees prior to the
termination date of the Contract, most of the Contracts are not expected to run
to their full terms. See "Risk Factors -- The Return on the Notes May Be
Affected by Payments by Lessees, Interest Rates and Possible Termination of the
Trust " and "Maturity, Prepayment and Yield Considerations".
Each Contract allows the lessor to terminate the Contract and repossess
the Leased Vehicle if the lessee defaults under the Contract. Events of default
under a Contract will include, but will not be limited to:
(1) the failure by a lessee to make a payment when due;
(2) the bankruptcy or other insolvency of the lessee;
(3) the lessee's failure to maintain the insurance required by the
Contract;
(4) the lessee's failure to maintain or repair the Leased Vehicle as
required by the Contract; or
(5) the lessee's failure to comply with any other term or condition
of the Contract having a material adverse effect on either (a)
the lessee's ability to make payments or (b) the lessor's
ability to recover the Leased Vehicle's full Residual Value.
Under the Contracts, upon a Contract's early termination where the
lessee is not in default and does not exercise its option to purchase the Leased
Vehicle, the amount owed by the lessee (the "Early Termination Charge") will be
determined by adding:
(1) any due but unpaid Monthly Payments and any incidental charges
owing under the Contract except excess mileage charges; and
(2) the Outstanding Principal Balance less (a) the Realized Value
(as described below) from the sale or other disposition of the
related Leased Vehicle and (b) the security deposit which shall
be applied to reduce any deficiency.
42
<PAGE>
If the Contract terminates early because the lessee is in default, the
lessee owes an amount determined by adding the following:
- the Early Termination Charge,
- payments accrued under the Contract through the date of
termination,
- collection, repossession, transportation and storage expenses,
- official fees and taxes, and
- reasonable attorneys' fees and court costs, to the extent
permitted by law.
The "Realized Value" of a Leased Vehicle is either (1) the actual sale
price less any fees and taxes incurred on the sale or (2) the sale price
determined by AHFC and the lessee in a written agreement. Each Contract provides
the lessee with the right to obtain (at the lessee's expense), from an
independent third party acceptable to the lessor, a professional appraisal of
the amount that could be realized from the sale of the Leased Vehicle. This
appraised value then would be used as the realized value for purposes of
calculating sums due from the lessee. Although AHFC cannot predict whether any
lessee will challenge the Realized Value, management of AHFC is unaware of any
successful challenge by a lessee under its retail closed-end lease contracts.
In the event of early termination of a Contract where the lessee is in
default, the amounts collected on that Contract and the related Leased Vehicle
(after deducting the costs and other sums retained by the Servicer in connection
therewith) may be less than the Outstanding Principal Balance of the Contract,
this shortfall may result from, among other things, a wholesale appraisal of a
Leased Vehicle as described above. If a Contract reaches the date on which the
last Monthly Payment is due, as such date may have been extended (the "Maturity
Date"), but the related Leased Vehicle cannot be sold or otherwise disposed of
for a net amount at least equal to its Residual Value, there may be an
additional shortfall in amounts otherwise expected to be received in respect of
the SUBI Interest. If any of these shortfalls are not covered from the Investor
Percentage of certain excess Interest Collections, amounts on deposit in the
Reserve Fund, and, in the case of the Class A-4 Notes, the subordination of
principal payments otherwise payable to the Class B Noteholders, investors in
the Notes could suffer a loss on their investments.
CHARACTERISTICS OF THE CONTRACTS
GENERAL
The Contracts were randomly selected from a pool of eligible lease
contracts which all met several criteria. These criteria include, as of the
Cutoff Date, that each Contract:
- is written with respect to a Leased Vehicle that was at the time
of the origination of the related lease contract a new motor
vehicle, a dealer demonstration motor vehicle driven fewer than
6,000 miles or a manufacturer's program motor vehicle,
- was originated in the United States after ________, 199_,
- has a Maturity Date on or after ________, 200_ and no later than
________, 200_,
- fully amortizes to an amount equal to the Residual Value of the
related Leased Vehicle based on a fixed Lease Rate calculated on
a constant yield basis and provides for level payments over its
term (except for payment of the Residual Value),
- was not more than 30 days past due as of the Cutoff Date, and
- has not been extended for more than [six] months in the
aggregate.
As of the Closing Date, no more than 5% of the Contracts will have
characteristics that differ from the criteria set forth above.
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<PAGE>
The selected Contracts, in the aggregate, possess the following
characteristics:
- the Lease Rate of the Contracts ranged from _____% to _____%,
with a weighted average Lease Rate of _____%,
- the aggregate Outstanding Principal Balance of the Contracts was
$__________,
- the aggregate Residual Value of the Leased Vehicles was
$__________,
- the Contracts had a weighted average original term of _____
months and a weighted average remaining term to scheduled
maturity of _____ months, and
- the aggregate of original principal balances of the Contracts,
as of their respective dates of origination, was $_________.
Appearing below is some additional information regarding the
characteristics of the Contracts:
<TABLE>
<CAPTION>
Average Minimum Maximum
-------- -------- --------
<S> <C> <C> <C>
Original Principal Balance..................... $ $ $
Outstanding Principal Balance(1)............... $ $ $
Residual Value................................. $ $ $
Lease Rate(1).................................. %(2) % %
Seasoning (months)(1).......................... (2)
Remaining Term (months)(1)..................... (2)
- ------------------------------------
(1) As of the Cutoff Date.
(2) Weighted by Outstanding Principal Balance as of the Cutoff Date.
</TABLE>
44
<PAGE>
DISTRIBUTION OF THE LEASED VEHICLES BY MAKE
As of the Cutoff Date, the following vehicle makes composed the pool of
Leased Vehicles:
<TABLE>
<CAPTION>
Number of Percentage of
Contracts Number of Contracts
----------------- --------------------
<S> <C> <C>
Honda................................................ %
Acura................................................
----------------- ---------------
Total....................................... 100.00%
----------------- ---------------
----------------- ---------------
</TABLE>
DISTRIBUTION OF THE CONTRACTS BY LEASE RATE
The distribution of the Contracts as of the Cutoff Date by Lease Rate
was as follows:
<TABLE>
<CAPTION>
Percentage of
Percentage of Cutoff Date Aggregate Cutoff
Number of Total Number of Outstanding Date Outstanding
Lease Rate Range Contracts Contracts Principal Balance Principal Balance
- --------------------- --------- --------------- ------------------ -----------------
<S> <C> <C> <C> <C>
3.00% to 3.99%.............. % $ %
4.00% to 4.99%..............
5.00% to 5.99%..............
6.00% to 6.99%..............
7.00% to 7.99%..............
8.00% to 8.99%..............
9.00% to 9.99%..............
10.00% to 10.99%..............
11.00% to 11.99%..............
12.00% to 12.99%..............
------ ------ ---------- ------
Total 100.00% $ 100.00%
------ ------ ---------- ------
------ ------ ---------- ------
</TABLE>
DISTRIBUTION OF THE CONTRACTS BY MATURITY
The distribution of the Contracts as of the Cutoff Date by year of
maturity was as follows:
<TABLE>
<CAPTION>
Percentage of
Percentage of Cutoff Date Aggregate Cutoff
Number of Total Number of Outstanding Date Outstanding
Year of Maturity Contracts Contracts Principal Balance Principal Balance
----------------- --------- --------------- ----------------- -----------------
<S> <C> <C> <C> <C>
1999.......................... % $ %
2000..........................
2001..........................
2002..........................
------ ------ ---------- ------
Total 100.00% $ 100.00%
------ ------ ---------- ------
------ ------ ---------- ------
</TABLE>
45
<PAGE>
DISTRIBUTION OF THE CONTRACTS BY STATE
The distribution of the Contracts as of the Cutoff Date by state of
origination, specified for states representing 5% or more of the number of
Contracts, was as follows:
<TABLE>
<CAPTION>
Percentage of
Percentage of Cutoff Date Aggregate Cutoff
Number of Total Number of Outstanding Date Outstanding
State Contracts Contracts Principal Balance Principal Balance
----- --------- --------------- ----------------- ------------------
<S> <C> <C> <C> <C>
California.................... % $ %
......................
......................
......................
......................
All other states..............
------ ------ ---------- ------
Total 100.00% $ 100.00%
------ ------ ---------- ------
------ ------ ---------- ------
</TABLE>
Concentration of the Contracts in any geographic area can expose the
return on the Contracts and thus the return on the Notes, to risks particular to
that geographic area, such as region-specific or state-specific economic trends
or changes in laws. See "Risk Factors -- The Geographic Concentration of the
Lessees and Performance of the Lease Contracts May Increase the Risk of Loss on
Your Investment" and "Certain Legal Aspects of the Contracts and the Leased
Vehicles" in this prospectus.
REPRESENTATIONS, WARRANTIES AND COVENANTS
The Contracts and Leased Vehicles will be described in a schedule
appearing as an exhibit to the SUBI Supplement (the "Schedule of Contracts and
Leased Vehicles"). For each Contract, the Schedule of Contracts and Leased
Vehicles will identify its:
- date of origination,
- Maturity Date,
- Monthly Payment,
- [adjusted] capitalized cost,
- adjusted lease balance as of the last day of the immediately
preceding month, and
- Residual Value.
In the Servicing Agreement, AHFC will make representations and
warranties with respect to each Contract and Leased Vehicle as described in the
first paragraph under "The Contracts -- Characteristics of the Contracts --
General". AHFC will make certain other representations and warranties,
including, among other things, that each Contract and, to the extent applicable,
the related Leased Vehicle or lessee:
(1) was originated by a Dealer located in the United States in the
ordinary course of its business and in compliance with AHFC's
customary credit and collection policies and practices;
(2) is owned by the Origination Trust or the Origination Trustee,
free of all liens, encumbrances or rights of others (other than
the holder of any Administrative Liens);
46
<PAGE>
(3) was originated in compliance with, and complies with, all
material applicable legal requirements;
(4) have obtained all material consents, licenses, approvals or
authorizations of, or registrations or declarations with, any
governmental authority required to be obtained, effected or
given by the originator of the Contract and the Origination
Trustee related to:
(a) the origination of the Contract,
(b) the execution, delivery and performance by such
originator of the Contract, and
(c) the Origination Trust's acquisition of the Contract
and Leased Vehicle, was duly obtained, effected or
given and is in full force and effect as of such date
of creation or acquisition;
(5) is the legal, valid and binding obligation of the lessee;
(6) to the knowledge of the Servicer, is not subject to any right
of rescission, setoff, counterclaim or other defense of the
related lessee to pay amounts due under such Contract and no
such right of rescission, offset, defense or counterclaim has
been asserted or threatened;
(7) the related Dealer, the Servicer and the Origination Trustee has
each satisfied all obligations it is required to fulfill;
(8) is payable solely in United States dollars in the United States;
(9) the lessee under the Contract is located in the United States
and is not:
(a) AHFC, HTC LP, HTD LP or any of their respective
affiliates or
(b) the United States, any state or local government, or
any agency, department or instrumentality of the
United States or any state or local government
thereof;
(10) requires the lessee to maintain insurance against loss or damage
to the related Leased Vehicle under an insurance policy that
names the Origination Trust, the Origination Trustee or a
co-trustee as loss payee;
(11) the related certificate of title is registered in the name of
the Origination Trust or the Origination Trustee, or,
alternatively, a properly completed application for such title
has been submitted to the appropriate titling authority;
(12) is a closed-end lease that requires:
(a) equal monthly payments to be made within 60 months of
the date of the Contract's origination; and
(b) payments to be made by the lessee within 30 days after
the billing date for such payment;
47
<PAGE>
(13) is fully assignable and does not require the consent of the
lessee as a condition to any transfer, sale or assignment of
the rights of the originator;
(14) has a Residual Value that does not exceed an amount reasonably
established by the Servicer consistent with its policies and
practices;
(15) has not been extended by more than [six] MONTHS in the aggregate
or otherwise modified except in accordance with AHFC's normal
credit and collection policies and practices;
(16) is not an Other SUBI Asset;
(17) to the knowledge of AHFC, the lessee under the Contract is not
bankrupt or currently the subject of a bankruptcy proceeding;
(18) is not more than 60 days past due;
(19) is a finance lease for accounting purposes; and
(20) is a "true lease" for applicable state law purposes relating to
the perfection of security interests.
The Servicing Agreement will provide that if the Origination Trustee,
AHFC, the Owner Trustee, the Indenture Trustee, HTC LP or HTD LP discovers a
breach of any representation, warranty or covenant referred to in the preceding
paragraph that materially and adversely affects the Origination Trust, the
owners of interests in the SUBI or the Noteholders in the related Contract or
Leased Vehicle, which breach is not cured in all material respects within 60
days after AHFC discovers the breach or is given notice of the breach, the
Contract and Leased Vehicle (and any other related SUBI Assets) will be
reallocated to the UTI or, in certain circumstances, to AHFC. In connection with
this reallocation, AHFC will be required to deposit (or cause to be deposited)
into the SUBI Collection Account an amount (the "Reallocation Payment") equal
to:
(1) the Discounted Principal Balance of the Contract as of the
Deposit Date related to the Collection Period during which the
related cure period ended; plus
(2) an amount equal to any: (i) imputed interest, (ii) lease
charges and (iii) Monthly Payments on such Contract at the
related Lease Rate that were delinquent as of the end of such
Collection Period.
The foregoing payment obligation will survive any termination of AHFC
as Servicer under the Servicing Agreement.
MATURITY, PREPAYMENT AND YIELD CONSIDERATIONS
The rate of payment of principal of the Notes will depend on the rate
of payments on the Contracts and the Leased Vehicles (including scheduled
payments on and prepayments and liquidations of the Contracts) and losses on the
Contracts and Leased Vehicles, which cannot be predicted with certainty. In
addition, because the Trust will distribute payments made on the Contracts and
the Leased Vehicles that are allocable to the SUBI Interest to Noteholders
according to the timing of their receipt, the rate of principal payments on the
Notes and the yield to maturity of the Notes generally will directly relate to
the rate at which payments on the Contracts and the Leased Vehicles are made.
The rate of
48
<PAGE>
principal payment of the Notes may also be affected by (1) Reallocation
Payments by AHFC for Contracts as to which an uncured breach of certain
representations and warranties or certain servicing covenants has occurred and
(2) the exercise by the Servicer of its right to purchase all of the assets of
the Trust at its option under certain circumstances pursuant to the Agreement,
thereby triggering a redemption of the Notes. A substantial increase in the
rate of payments on or in respect of the Contracts and Leased Vehicles
(including prepayments and liquidations of the Contracts) or a substantial
increase in the Loss Amounts may shorten the final maturity of and may
significantly affect the yields on each class of Notes. See "Description of
the Notes -- Termination of the Trust; Redemption of the Notes", "The
Contracts -- Representations, Warranties and Covenants" and "Additional
Document Provisions -- The Servicing Agreement -- Collections."
In general, the Trust will make no principal payments (including
allocations of Covered Loss Amounts) on:
(1) the Class A-2 Notes until the Class A-1 Notes have been paid in
full;
(2) the Class A-3 Notes until the Class A-2 Notes have been paid in
full; or
(3) the Class A-4 or Class B Notes until the Class A-3 Notes have
been paid in full.
Principal payments in respect of the Class A-4 and Class B Notes will
be based on the fixed Class A Percentage and Class B Percentage. AHFC will
calculate the fixed Class A Percentage and Class B Percentage when the Trust has
paid the Class A-1 Notes, Class A-2 Notes and Class A-3 Notes in full, and then
will use these percentages to determine the distribution of principal payments
on the Class A-4 Notes and the Class B Notes, which may affect the maturity and
yield on the Class A-4 Notes. AHFC will allocate the Investor Percentage of
Uncovered Loss Amounts as follows:
(1) first to the Certificates until the Certificate Balance has been
reduced to zero;
(2) then to the Class B Notes until the Class B Note Balance has
been reduced to zero; and
(3) then, on a pro rata basis, among each class of Class A Notes
based on the related Class Allocation Percentages.
As a result of the sequential payment of principal to each class of
Class A Notes, because Uncovered Loss Amounts incurred following the reduction
of the Class B Note Balance to zero will be allocated on each Distribution Date
based on the then-current Class Allocation Percentages, each class of Class A
Notes with a later maturity may be allocated more Loss Amounts than each class
of Class A Notes with an earlier maturity as a relative percentage of their
respective Initial Note Balances.
A lessee may prepay a Contract, in whole or in part, at any time
without penalty. The prepayment experience for the Contracts will affect the
life of the Notes. In general, economic, social and geographic factors, in
addition to other factors beyond AHFC's control, may influence prepayments on
the Contracts. The Origination Trust began to accept assignments of lease
contracts on November 25, 1997. All of the lease contracts assigned to the
Origination Trust for allocation as SUBI Assets since that time have been, and
all of the lease contracts to be assigned to the Origination Trust subsequent to
the date of this prospectus will be, assigned by Dealers using AHFC's
underwriting standards. As more fully described under "American Honda Finance
Corporation -- Methods of Vehicle Disposal", AHFC actively encourages lessees
under lease contracts with remaining terms of less than twelve to eighteen
months, depending on the model and lease term to either buy, trade in or
refinance the related leased vehicles prior to the scheduled maturities of the
related lease contracts. As
49
<PAGE>
part of this program, during the last several months of a lease contract, AHFC
may selectively offer incentives to encourage lease contract terminations,
which may result in residual value losses. AHFC estimates that for the four
fiscal years ended March 31, 1999, an average of approximately __% of the
number of retail lease contracts in its portfolio (including those owned by
AHFC or the Origination Trust and those that had been sold but still were
being serviced by AHFC) which were scheduled to mature during such period were
terminated prior to maturity because of voluntary prepayment by the lessees
under the related lease contracts. AHFC is unaware of any publicly available
industry statistics that describe termination rates for retail closed-end
lease contracts similar to the Contracts.
Historical levels of (1) lease contract defaults, (2) leased vehicle
repossessions and losses and (3) residual value losses are discussed under
"American Honda Finance Corporation -- Delinquency, Repossession and Loss Data".
AHFC can give no assurances that the Contracts will experience the same rate of
prepayment or default or any greater or lesser rate than AHFC's historical rate,
or that the residual value experience of Leased Vehicles related to Contracts
that have reached their Maturity Dates will differ from AHFC's historical
residual value loss experience for all of the retail lease contracts in its
portfolio (including those owned by the Origination Trust or the Origination
Trustee and those that had been sold but still were being serviced by AHFC).
The effective yield on, and average life of, each class of Notes will
depend upon, among other things, (1) the amount of scheduled and unscheduled
payments on or in respect of the Contracts and the Leased Vehicles and (2) the
rate at which such payments are paid to the Noteholders. In the event of
prepayments of the Contracts (and payment of the Residual Value of the related
Leased Vehicles), Noteholders who receive such amounts may be unable to reinvest
the related payments of principal received on the Notes at yields as high as the
related Note Rate. The timing of changes in the rate of prepayments on the
Contracts and payments in respect of the Leased Vehicles may also significantly
affect an investor's actual yield to maturity and the average life of the
related class of Notes. A substantial increase in the rate of payments on or in
respect of the Contracts and Leased Vehicles (including prepayments and
liquidations of the Contracts) may shorten the final maturity of, and may
significantly affect the yield on, the Notes.
The yield to an investor who purchases Notes in the secondary market at
a price other than par will vary from the anticipated yield if the rate of
prepayment on the Contracts is actually different than the rate the investor
anticipates at the time it purchases the Notes.
In sum, the following factors will affect an investor's expected yield:
(1) the price the investor paid for the Notes;
(2) the rate of prepayments in respect of the Contracts and Leased
Vehicles; and
(3) the investor's assumed reinvestment rate.
These factors do not operate independently, but are interrelated. For
example, if the rate of prepayments on the Contracts and Leased Vehicles is
slower than anticipated, the investor's yield will be lower if interest rates
exceed the investor's expectations and higher if interest rates fall below the
investor's expectations. Conversely, if the rate of prepayments on or in respect
of the Contracts and Leased Vehicles is faster than anticipated, the investor's
yield will be higher if interest rates surpass the investor's expectations and
lower if interest rates fall below the investor's expectations.
In addition, the Investor Percentage of the net proceeds of any sale or
other disposition of the SUBI Interest, the SUBI Certificates and other property
of the Trust, which may occur under
50
<PAGE>
circumstances involving an event of default under the Indenture, to the extent
the net proceeds constitute Principal Collections, will be distributed first,
on a pro rata basis, to the Class A Noteholders based on their respective
Class Note Balances until the Class A Notes have been paid in full, and
second, to the Class B Noteholders.
Prepayments on motor vehicle lease contracts may be measured by a
prepayment standard or model. The prepayment model used for the Contracts is
based on a prepayment assumption (the "Prepayment Assumption") expressed in
terms of percentages of ABS. "ABS" refers to a prepayment model which assumes a
constant percentage of the original number of Contracts in a pool prepay each
month. However, as used in this prospectus, a 100% Prepayment Assumption assumes
that, based on the assumptions below, the original Outstanding Principal Balance
of a Contract will prepay as follows:
(1) ____% ABS for the first six months of the life of the Contract;
(2) ____% ABS for the seventh through twelfth month of the life of
the Contract;
(3) ____% ABS for the thirteenth through eighteenth month of the
life of the Contract;
(4) ____% ABS for the nineteenth through twenty-fourth month of the
life of the Contract; and
(5) ____% ABS following the twenty-fourth month of the life of the
Contract until the original Outstanding Principal Balance of
the Contract has been paid in full.
Neither ABS nor the Prepayment Assumption purports to be a historical
description of prepayment experience or a prediction of the anticipated rate of
prepayment of lease contracts, including the Contracts. There can be no
assurance that the Contracts will prepay at the indicated levels of the
Prepayment Assumption or at any other rate.
The tables below were prepared on the basis of certain assumptions,
including that:
(1) all Collections including Monthly Payments and net sale proceeds
from the Leased Vehicles relating to Matured Contracts are
timely received, and that no Contracts are ever delinquent;
(2) no Reallocation Payment is made on any Contract;
(3) there are no Loss Amounts;
(4) the Servicer exercises its optional purchase of the Trust's
property as described in this prospectus;
(5) the Trust makes all principal and interest distributions on the
Notes on the dates specified herein;
(6) the Servicing Fee is 1% per annum of 99.8% of the Aggregate Net
Investment Value;
(7) all prepayments are full Prepayments; and
(8) the Contracts have assumed Lease Rates of ___% and were
originated ____ months prior to the Cutoff Date.
51
<PAGE>
AHFC makes no representation as to what the actual levels of losses and
delinquencies on the Contracts will be. Because the Contracts will have
characteristics which differ from those assumed in preparing the following
tables, distributions of principal on the Notes may be made earlier or later
than set forth in the tables. The tables are provided solely to illustrate the
effect of prepayments of the Contracts on (1) the Class A-1 Note Balance, (2)
the Class A-2 Note Balance, (3) the Class A-3 Note Balance, (4) the Class A-4
Note Balance and (5) the Class B Note Balance. The weighted average life of each
class of Notes under the assumptions stated above are not a prediction of the
prepayment rates that might actually be experienced with respect to the
Contracts. Investors are urged to make their investment decisions on a basis
that includes their determination as to anticipated prepayment rates under a
variety of the assumptions discussed herein.
The following tables set forth the percentages of the Initial Note
Balance of each class of Notes that would be outstanding after each of the dates
shown, based on a rate equal to 0%, 50%, 100%, 150% and 200% of the Prepayment
Assumption. As used in the table, "0% Prepayment Assumption" assumes no
prepayments on a Contract, "50% Prepayment Assumption" assumes that a Contract
will prepay at 50% of the Prepayment Assumption, and so forth.
52
<PAGE>
PERCENTAGE OF INITIAL CLASS A-1 PRINCIPAL BALANCE REMAINING AND
WEIGHTED AVERAGE LIFE OF CLASS A-1 NOTES
<TABLE>
<CAPTION>
Prepayment Assumption
---------------------------------------------------------------------
Distribution Date 0% 50% 100% 150% 200%
- ------------------- ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
________ 1999......................... 100% 100% 100% 100% 100%
________ 2000.........................
________ 2001.........................
________ 2002.........................
________ 2003.........................
Weighted Average Life (Years).........
------------ ------------ ------------ ------------ ---------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average life of the Class A-1 Notes is determined by (a)
multiplying the amount of each principal payment by the number of years from the
Closing Date to the related Distribution Date, (b) adding the results, and (c)
dividing the sum by the Initial Class A-1 Note Balance.
PERCENTAGE OF INITIAL CLASS A-2 PRINCIPAL BALANCE REMAINING AND
WEIGHTED AVERAGE LIFE OF CLASS A-2 NOTES
<TABLE>
<CAPTION>
Prepayment Assumption
---------------------------------------------------------------------
Distribution Date 0% 50% 100% 150% 200%
- ------------------- ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
________ 1999......................... 100% 100% 100% 100% 100%
________ 2000.........................
________ 2001.........................
________ 2002.........................
________ 2003.........................
Weighted Average Life (Years).........
------------ ------------ ------------ ------------ ---------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average life of the Class A-2 Notes is determined by (a)
multiplying the amount of each principal payment by the number of years from the
Closing Date to the related Distribution Date, (b) adding the results, and (c)
dividing the sum by the Initial Class A-2 Note Balance.
53
<PAGE>
PERCENTAGE OF INITIAL CLASS A-3 PRINCIPAL BALANCE REMAINING AND
WEIGHTED AVERAGE LIFE OF CLASS A-3 NOTES
<TABLE>
<CAPTION>
Prepayment Assumption
---------------------------------------------------------------------
Distribution Date 0% 50% 100% 150% 200%
- ------------------- ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
________ 1999......................... 100% 100% 100% 100% 100%
________ 2000.........................
________ 2001.........................
________ 2002.........................
________ 2003.........................
Weighted Average Life (Years).........
------------ ------------ ------------ ------------ ---------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average life of the Class A-3 Notes is determined by (a)
multiplying the amount of each principal payment by the number of years from
the Closing Date to the related Distribution Date, (b) adding the results,
and (c) dividing the sum by the Initial Class A-3 Note Balance.
PERCENTAGE OF INITIAL CLASS A-4 PRINCIPAL BALANCE REMAINING AND
WEIGHTED AVERAGE LIFE OF CLASS A-4 NOTES
<TABLE>
<CAPTION>
Prepayment Assumption
---------------------------------------------------------------------
Distribution Date 0% 50% 100% 150% 200%
- ------------------- ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
________ 1999......................... 100% 100% 100% 100% 100%
________ 2000.........................
________ 2001.........................
________ 2002.........................
________ 2003.........................
Weighted Average Life (Years).........
------------ ------------ ------------ ------------ ---------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average life of the Class A-4 Notes is determined by (a)
multiplying the amount of each principal payment by the number of years from
the Closing Date to the related Distribution Date, (b) adding the results,
and (c) dividing the sum by the Initial Class A-4 Note Balance.
54
<PAGE>
PERCENTAGE OF INITIAL CLASS B PRINCIPAL BALANCE REMAINING AND
WEIGHTED AVERAGE LIFE OF CLASS B NOTES
<TABLE>
<CAPTION>
Prepayment Assumption
---------------------------------------------------------------------
Distribution Date 0% 50% 100% 150% 200%
- ------------------- ------------ ------------ ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
________ 1999......................... 100% 100% 100% 100% 100%
________ 2000.........................
________ 2001.........................
________ 2002.........................
________ 2003.........................
Weighted Average Life (Years).........
------------ ------------ ------------ ------------ ---------
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
The weighted average life of the Class B Notes is determined by (a)
multiplying the amount of each principal payment by the number of years from
the Closing Date to the related Distribution Date, (b) adding the results,
and (c) dividing the sum by the Initial Class B Note Balance.
NOTE FACTORS AND TRADING INFORMATION
REPORTS TO NOTEHOLDERS
The "Note Factor" for any class of Notes will be a seven-digit decimal
that the Servicer will compute each month indicating the Note Balance of the
related class of Notes as of the close of business on the Distribution Date in
the month as a fraction of the Initial Note Balance of that class of Notes. Each
Note Factor will initially be 1.0000000 and will decline to reflect reductions
in the related Note Balance resulting from distributions of principal and
unreimbursed Note Principal Loss Amounts, if any. A Noteholder of a class of
Notes can determine the portion of the Note Balance for a given month allocable
to that Noteholder the portion of the Note Balance by multiplying the original
denomination of the Noteholder's Note by the related Note Factor for that month.
Pursuant to the Agreement, the Indenture Trustee will provide to all
registered holders of the Notes (which shall be Cede & Co. ("Cede"), as the
nominee of the Depository Trust Company ("DTC"), unless Definitive Notes are
issued under the limited circumstances described herein) unaudited monthly
reports concerning:
(1) payments received on or in respect of the Contracts and the
Leased Vehicles,
(2) the Aggregate Net Investment Value,
(3) the Investor Percentage,
(4) the Class A-1, Class A-2, Class A-3, Class A-4 and Class B
Note Factors, and
(5) various other items of information.
A person acquiring an interest in the Notes, as a note owner, may
obtain copies of these reports upon a written request to the Indenture Trustee.
In addition, Noteholders during each calendar year will
55
<PAGE>
be furnished information for tax reporting purposes not later than the latest
date permitted by law. For further details concerning information furnished to
Noteholders and Note Owners, see "Description of the Notes -- Statements to
Noteholders" and "-- Book-Entry Registration".
DESCRIPTION OF THE NOTES
The Notes will be issued pursuant to the Indenture, a form of which,
together with forms of the Agreement, the SUBI Trust Agreement and the Servicing
Agreement, has been filed as an exhibit to the Registration Statement on Form
S-1 (together with all amendments and exhibits thereto, the "Registration
Statement"), of which this prospectus is a part. The following summaries of all
material provisions of the foregoing documents and the summaries of all material
provisions included under "Overview of Transaction", "The Trust and the SUBI",
"Maturity, Prepayment and Yield Considerations", "Note Factors and Trading
Information Reports to Noteholders", "Additional Document Provisions", "Certain
Legal Aspects of the Origination Trust and the SUBI", "Certain Legal Aspects of
the Contracts and the Leased Vehicles -- Back-up Security Interests" and
"Ratings of the Notes" do not purport to be complete and are subject to, and
qualified in their entirety by reference to, the actual provisions of those
documents. Where particular provisions of or terms used in the Indenture, the
Agreement, the SUBI Trust Agreement and the Servicing Agreement are referred to,
the actual provisions (including definitions of terms) are incorporated by
reference as part of such summaries.
GENERAL
Each Note will represent the right to receive monthly interest payments
at the related Note Rate and, to the extent described in this prospectus,
monthly principal payments. These payments will be funded from the Investor
Percentage of distributions to the Trust of Interest Collections and Principal
Collections allocable to the SUBI Interest and monies on deposit in the Reserve
Fund, in each case to the extent described herein. The Class B Notes and the
Certificates will be subordinated to the Class A Notes so that:
(1) monthly interest payments will not be made on the Class B
Notes or the Certificates until interest on the Class A Notes
has been paid;
(2) no principal payments will be made on the Class B Notes or the
Certificates until the Class A-1, Class A-2 and Class A-3 Notes
have been paid in full; and
(3) if other sources available to make payments of principal and
interest on the Class A-4 Notes are insufficient, amounts that
otherwise would be paid on the Class B Notes generally will be
available for that purpose, as more fully described under
"Description of the Notes -- Distributions on the Notes".
In addition, the Certificates will be subordinated to the Class B
Notes.
The Notes will be issued in denominations of $1,000 and integral
multiples thereof in book-entry form. The Notes will initially be represented by
global Notes registered in the name of Cede, the nominee of DTC. No Note Owner
will be entitled to receive a note representing such Owner's Note, except as set
forth below. Unless and until Notes are issued in fully registered certificated
form ("Definitive Notes") under the limited circumstances described below, all
references in this prospectus to distributions, notices, reports and statements
to Noteholders will refer to the same actions made with respect to DTC or Cede,
as the case may be, for the benefit of Note Owners in accordance with DTC
procedures. See "Description of the Notes -- Book-Entry Registration" and " --
Definitive Notes".
56
<PAGE>
On the fifteenth day of each month or, if that day is not a Business
Day, on the next succeeding Business Day, beginning on [August 15], 1999 (each,
a "Distribution Date"), distributions of interest will be made to the holders of
record of the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4
Notes (respectively, the "Class A-1 Noteholders", the "Class A-2 Noteholders",
the "Class A-3 Noteholders" and the "Class A-4 Noteholders", and collectively,
the "Class A Noteholders"), the holders of record of the Class B Notes (the
"Class B Noteholders") and the holders of record of the Certificates (the
"Certificateholders"). With respect to the Class A Noteholders and the Class B
Noteholders, the record date for distributions will be the day immediately
preceding such Distribution Date or, if Definitive Notes are issued, the last
day of the immediately preceding calendar month (each such date, a "Record
Date").
On each Distribution Date, the Indenture Trustee will distribute
interest to the Noteholders based on the related Class Note Balance as of the
immediately preceding Distribution Date (after giving effect to reductions in
such Class Note Balance as of such immediately preceding Distribution Date) or,
in the case of the first Distribution Date, on the Initial Class Note Balance,
at an annual percentage rate equal to, in the case of:
(1) the Class A-1 Notes, _____% (the "Class A-1 Note Rate");
(2) the Class A-2 Notes, _____% (the "Class A-2 Note Rate");
(3) the Class A-3 Notes, _____% (the "Class A-3 Note Rate");
(4) the Class A-4 Notes, _____% (the "Class A-4 Note Rate");and
(5) the Class B Notes, ____% (the "Class B Note Rate" and,
together with the Class A-1, Class A-2, Class A-3 and Class A-4
Note Rates, the "Note Rates").
Interest will be payable to Certificateholders on the Certificate
Balance at an annual percentage rate not expected to exceed ___% (the
"Certificate Rate"). Information regarding distributions to the
Certificateholders is set forth herein to provide a better understanding to
Noteholders of distributions on the Notes. All payments on the Class A-1 Notes
will be calculated on the basis of the actual number of days elapsed and a
360-day year. All payments on the Class A-2 Notes, Class A-3 Notes, Class A-4
Notes and Class B Notes and on the Certificates will be calculated on the basis
of a 360-day year consisting of twelve 30-day months. A "Business Day" will be a
day other than a Saturday or Sunday or a day on which banking institutions in
New York, New York, Chicago, Illinois, Wilmington, Delaware or Los Angeles,
California are authorized or obligated by law, executive order or government
decree to be closed.
To the extent not previously paid prior to such dates, the outstanding
principal amount of each class of Notes will be payable in full on the final
scheduled distribution date for each class of Notes set forth on the cover page
of this prospectus (each, a "Final Scheduled Distribution Date").
The "Class Note Balance" of any class of Notes as of any date will be
equal to the Initial Class Note Balance of such class of Notes, less the sum of:
(1) all payments made on or prior to the distribution date
allocable to principal (including any reimbursements of Loss
Amounts allocable to the Principal Loss Amounts in respect of
the class);
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(2) the amount of Note Principal Loss Amounts allocable to the class
of Notes, if any, which have not been reimbursed as described
herein; and
(3) in the case of the Class B Notes, any unreimbursed Class B Note
Principal Carryover Shortfall.
The "Class A Note Balance" will mean the sum of the Class A-1, Class
A-2, Class A-3 and Class A-4 Note Balances. The "Note Balance" will mean the sum
of the Class A Note Balance and the Class B Note Balance. See "Description of
the Notes -- Distributions on the Notes". The "Certificate Balance" at any time
will be equal to the Initial Certificate Balance less the sum of (1) all
payments made on or prior to such date allocable to principal (including any
reimbursements of Loss Amounts allocable to the Certificates and Certificate
Principal Loss Amounts) and (2) the amount of Certificate Principal Loss
Amounts, if any, which have not been reimbursed as described herein.
During the period when the Notes are outstanding, the Note Balance will
decline as the Investor Percentage of Principal Collections and Covered Loss
Amounts are distributed to the Noteholders and as Note Principal Loss Amounts
are incurred and not reimbursed. The Aggregate Net Investment Value can change
daily as (1) principal payments are made on the Contracts and the Leased
Vehicles, (2) AHFC makes Reallocation Payments in respect of Contracts as to
which an uncured breach of certain representations and warranties or servicing
covenants has occurred, (3) liquidation losses and other losses in respect of
Contracts and Leased Vehicles are incurred and (4) Leased Vehicles in the
Matured Leased Vehicle Inventory are sold or otherwise disposed of.
The amount of principal and interest the Trust is required to pay to
Noteholders of any class of the Notes prior to the Final Scheduled Distribution
Date for that class of Notes generally will be limited to amounts available in
the Note Distribution Account for payment to Noteholders. Therefore, the failure
to pay principal of or interest on a class of Notes generally will not result in
the occurrence of an event of default under the Indenture until the Final
Scheduled Distribution Date for the class of Notes.
TRANSFER OF THE SUBI CERTIFICATES
Pursuant to the SUBI Supplement, on the Closing Date, the Origination
Trust will (1) upon the order of HTA LP, issue to HTA LP two certificates
collectively representing a 99% beneficial interest in the SUBI, and (2) upon
the order of HTB LP, issue to HTB LP two certificates collectively representing
a 1% beneficial interest in the SUBI. Subsequent to such issuance, (a) HTA LP
will transfer (i) its 98.01% beneficial interest in the SUBI to HTC LP and (ii)
its 0.99% beneficial interest in the SUBI to HTD LP, and (b) HTB LP will
transfer (i) its 0.99% beneficial interest in the SUBI to HTC LP and (ii) its
0.01% beneficial interest in the SUBI to HTD LP. HTC LP and HTD LP will then
exchange the 99% and the 1% beneficial interests in the SUBI for the SUBI
Certificates and the Retained SUBI Certificates. Simultaneously, HTC LP and HTD
LP, pursuant to the Agreement, will deliver the SUBI Certificates to the Owner
Trustee and transfer and assign to the Owner Trustee as property of the Trust,
without recourse, all of their right, title and interest in and to the SUBI
Interest represented by the SUBI Certificates. Pursuant to the Indenture, the
Trust will pledge and deliver the SUBI Certificates to the Indenture Trustee.
The Owner Trustee will, concurrently with such delivery, transfer and
assignment, deliver the Notes and the Certificates to or upon the order of HTC
LP and HTD LP.
Pursuant to the Agreement, each of HTC LP and HTD LP will represent and
warrant that immediately prior to the transfer and assignment of the SUBI
Certificates to the Owner Trustee as property of the Trust each of HTC LP and
HTD LP had good title to, and was the sole legal and beneficial owner of, the
SUBI Certificates, free and clear of liens and claims.
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REALLOCATION PAYMENTS
As more fully described under "The Contracts -- Representations,
Warranties and Covenants" and "Additional Document Provisions -- The Servicing
Agreement -- Collections", under certain circumstances AHFC will be required to
make Reallocation Payments for Contracts (and the related Leased Vehicles)
discovered not to comply with AHFC's representations or warranties or Contracts
as to which certain servicing procedures have not been followed, in either case
that materially and adversely affects the Contract. A Reallocation Payment will
cause the Aggregate Net Investment Value to decline by an amount equal to the
Discounted Principal Balance of the related Contract, and that Contract and the
related Leased Vehicle will no longer constitute SUBI Assets as they will be
reallocated and become UTI Assets, or, in certain cases, be transferred to the
Servicer.
CALCULATION OF INVESTOR PERCENTAGE
The Servicer will allocate to the Trust the Investor Percentage of all
Interest Collections and Principal Collections collected during the related
Collection Period. In addition, the Servicer will allocate to the Trust the
Investor Percentage of:
(1) an amount equal to the Discounted Principal Balance during the
related Collection Period, of any Contract that became a
Charged-off Contract during that Collection Period (the sum of
all the amounts in any Collection Period, the "Charged-off
Amount");
(2) the Residual Value Loss Amount for that Collection Period; and
(3) any Additional Loss Amounts incurred during that Collection
Period.
"Additional Loss Amounts" will be incurred in the event of any
uninsured liability to third parties (E.G., litigation risk) on the part of the
Origination Trust and ultimately borne by the SUBI Assets, whether such
liability is incurred:
(1) with respect to the SUBI Assets and is allocated to the SUBI
Assets pursuant to the SUBI Trust Agreement;
(2) with respect to the Origination Trust Assets generally and a pro
rata portion of such liability is allocated to the SUBI Assets
pursuant to the SUBI Trust Agreement; or
(3) with respect to UTI Assets or Other SUBI Assets if those UTI
Assets or Other SUBI Assets are insufficient to pay the
liability.
See "Certain Legal Aspects of the Origination Trust and the SUBI -- The
SUBI" for a discussion of related risks. "Additional Loss Amounts" will include
both losses incurred on the foregoing uninsured liabilities and monies reserved
within the SUBI Collection Account against future losses on such liabilities by
the Servicer on behalf of the Origination Trustee.
A "Charged-off Contract" is a Contract (1) with respect to which the
related Leased Vehicle has been repossessed and sold or otherwise disposed of or
(2) which has been written off by the Servicer in accordance with its normal
policies for writing off lease contracts other than with respect to
repossessions.
The "Investor Percentage" means 99.8%.
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The "Residual Value Loss Amount" for any Collection Period generally
will represent the aggregate net losses on dispositions of Leased Vehicles in
the Matured Leased Vehicle Inventory, and will be equal to the sum of:
(1) the aggregate of the Residual Values of all those Leased
Vehicles that were included in Matured Leased Vehicle Inventory
but that had remained unsold and not otherwise disposed of by
the Servicer for at least two full Collection Periods as of the
last day of that Collection Period;
(2) the excess, if any, of:
(a) the aggregate of the Residual Values of all Leased
Vehicles which had been previously included in the
Matured Leased Vehicle Inventory but that were sold or
otherwise disposed of during such Collection Period,
over
(b) the Net Matured Leased Vehicle Proceeds for such
Collection Period; and
(3) any losses (up to the respective Discounted Principal Balance)
on Contracts terminated on or prior to their Maturity Dates
during such Collection Period by agreement between the Servicer
and the lessee in connection with the payment of less than the
respective Outstanding Principal Balances of such Contracts.
DISTRIBUTIONS ON THE NOTES
GENERAL
On the tenth calendar day of each month or, if that day is not a
Business Day, the following Business Day (each, a "Determination Date"), the
Servicer will inform the Origination Trustee, the Owner Trustee and the
Indenture Trustee of, among other things:
(1) the amount of Interest Collections and Principal Collections;
(2) the Class A-1, Class A-2, Class A-3, Class A-4 and Class B Note
Factors;
(3) the Class A-1, Class A-2, Class A-3, Class A-4 and Class B
Allocation Percentages;
(4) the amount of Advances to be made by the Servicer;
(5) the Required Amount, if any, to be withdrawn from the Reserve
Fund; and
(6) the Servicing Fee and other servicing compensation payable to
the Servicer, in each case with respect to the Collection Period
immediately preceding the Collection Period in which the
Determination Date occurs.
On or prior to each Determination Date, the Servicer shall also
determine the Reserve Fund Requirement and the amounts to be distributed to the
Noteholders and to HTC LP and HTD LP in respect of the Certificates. The
"Allocation Percentage" with respect to any class of Notes and Distribution
Date, will equal the Note Balance of the class of Notes as a percentage of the
Note Balance, calculated as of the last day of the related Collection Period.
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DISTRIBUTIONS OF INTEREST
On each Distribution Date, the Servicer, pursuant to the instructions
of the Owner Trustee, will make the following payments in the amounts and order
of priority described below. Pursuant to such instructions, the Servicer will
distribute from amounts on deposit in the SUBI Collection Account, the Investor
Percentage of Interest Collections collected during or received in respect of
the related Collection Period, together with (x) to the extent necessary to make
the distributions described below other than in clause (9), the amount withdrawn
from the Reserve Fund in respect of the Required Amount, if any, and (y) to the
extent needed to make distributions described in clauses (10) through (12), to
the Class A-4 Noteholders, amounts that would otherwise be distributable to the
Class B Noteholders in respect of the Class B Percentage of the Investor
Percentage of Principal Collections for that Collection Period:
(1) in the event of an Indenture Event of Default as a
result of the Indenture Trustee having received written instructions
from holders of Class A Notes evidencing not less than a majority of
the voting interests thereof, voting together as a single class, or
holders of Class A Notes and Class B Notes evidencing not less than a
majority of the voting interests thereof, voting together as a single
class, to sell or dispose of the SUBI Interest, to the Indenture
Trustee, the Investor Percentage of Capped Indenture Trustee
Administrative Expenses, and to the Owner Trustee, the Investor
Percentage of Capped Owner Trustee Administrative Expenses;
(2) to the Note Distribution Account for the pro rata
payment to each class of Class A Noteholders, interest at the related
Note Rate on the Class A-1, Class A-2, Class A-3 or Class A-4 Note
Balance, as applicable, as of the immediately preceding Distribution
Date (after giving effect to any reduction in such Note Balance on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, on the Initial Class A-1, Initial Class A-2, Initial
Class A-3 or Initial Class A-4 Note Balance, as applicable, together
with any unpaid Class A-1, Class A-2, Class A-3 or Class A-4 Interest
Carryover Shortfall, as applicable;
(3) to the Note Distribution Account for payment to the
Class B Noteholders, interest at the Class B Note Rate on the Class B
Note Balance as of the immediately preceding Distribution Date (after
giving effect to any reduction in the Class B Note Balance on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, on the Initial Class B Note Balance, together with
any unpaid Class B Interest Carryover Shortfall;
(4) to the Certificate Distribution Account for payment
to the Certificateholders, interest at the Certificate Rate on the
Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to any reduction in the Certificate Balance on
such immediately preceding Distribution Date) or, in the case of the
first Distribution Date, on the Initial Certificate Balance, together
with any unpaid Certificate Interest Carryover Shortfall;
(5) to the Servicer, reimbursement of the Investor
Percentage of Capped Contingent and Excess Liability Premiums;
(6) to the Origination Trustee, the Investor Percentage
of Capped Origination Trust Administrative Expenses;
(7) in circumstances other than as set forth in clause
(1) above, to the Indenture Trustee, the Investor Percentage of Capped
Indenture Trustee Administrative Expenses, and to the Owner Trustee,
the Investor Percentage of Capped Owner Trustee Administrative
Expenses;
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(8) to the Servicer, the Investor Percentage of (a) the
Servicing Fee and (b) any unpaid Servicing Fees payable in respect of
compensation to the Servicer with respect to one or more prior
Collection Periods;
(9) to the Reserve Fund, until the amount on deposit
therein equals the Reserve Fund Requirement;
(10) to the Note Distribution Account for payment to the
Class A Noteholders, (a) so long as the Class B Note Balance has not
been reduced to zero, an amount equal to the Covered Loss Amount for
the related Distribution Date sequentially, commencing with the Class
A-1 Noteholders until the Note Balance of each such class has been
reduced to zero, or (b) if the Class B Note Balance has been reduced to
zero, pro rata, based on the Class A-1, Class A-2, Class A-3 or Class
A-4 Allocation Percentage, as applicable, an amount equal to the sum of
the Covered Loss Amount and the Uncovered Loss Amount for the related
Distribution Date;
(11) to the Note Distribution Account for payment to
each class of Class A Noteholders, pro rata, based upon the aggregate
of the amounts allocable to such class pursuant to clause (10) above
that were not previously distributed pursuant to clause (10) or this
clause (each such amount, a "Class A-1 Note Principal Loss Amount",
"Class A-2 Note Principal Loss Amount," "Class A-3 Note Principal Loss
Amount" or "Class A-4 Note Principal Loss Amount", respectively);
(12) to the Note Distribution Account for payment to
each class of Class A Noteholders, accrued and unpaid interest at the
related Note Rate, on any unreimbursed Class A-1, Class A-2, Class A-3
or Class A-4 Note Principal Loss Amount, as applicable;
(13) to the Note Distribution Account for payment to the
Class B Noteholders, (a) if the Certificate Balance has been reduced to
zero, an amount equal to the Uncovered Loss Amount for the related
Distribution Date plus (b) following the reduction of the Note Balance
of the Class A Notes to zero, the Covered Loss Amount for the related
Distribution Date, until the Note Balance of the Class B Notes is
reduced to zero;
(14) to the Note Distribution Account for payment to the
Class B Noteholders, the aggregate of the amounts allocable pursuant to
clause (13) above that were not previously distributed pursuant to
clause (13) or this clause (each such amount, a "Class B Note Principal
Loss Amount"), together with any Class B Note Principal Carryover
Shortfall;
(15) to the Note Distribution Account for payment to the
Class B Noteholders, accrued and unpaid interest at the Class B Note
Rate on any unreimbursed Class B Note Principal Loss Amount and any
unreimbursed Class B Note Principal Carryover Shortfall;
(16) to the Certificate Distribution Account for payment
to the Certificateholders, (a) an amount equal to the Uncovered Loss
Amount for the related Distribution Date plus (b) following the
reduction of the Note Balance of the Class B Notes to zero, the Covered
Loss Amount for the related Distribution Date, until the Certificate
Balance is reduced to zero;
(17) to the Certificate Distribution Account for payment
to the Certificateholders, the aggregate of the amounts allocable
pursuant to clause (16) above that were not previously distributed
pursuant to clause (16) or this clause (each such amount, a
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"Certificate Principal Loss Amount"), together with any Certificate
Principal Carryover Shortfall;
(18) to the Certificate Distribution Account for payment
to the Certificateholders, accrued and unpaid interest at the
Certificate Rate on any unreimbursed Certificate Principal Loss Amount
and any unreimbursed Certificate Principal Carryover Shortfall; and
(19) to the Indenture Trustee, the Owner Trustee and the
Origination Trustee, as applicable, the Investor Percentage of all
Uncapped Administrative Expenses.
The balance, if any, of the Interest Collections allocated to the Notes and
Certificates for the related Collection Period, after giving effect to the
distributions in clauses (1) through (19) above and net of any amount required
to maintain the Note Distribution Account or the Certificate Distribution
Account in good standing, will constitute "Excess Interest Collections".
The entire amount of Excess Interest Collections will be paid to HTC LP
and HTD LP based upon their percentage ownership of the Retained SUBI Interest;
provided, however, in the event the ERISA Compliance Test is not met on any
Distribution Date, all Excess Interest Collections shall be deposited into the
Reserve Fund. See "Additional Document Provisions--The Servicing
Agreement--Compliance with ERISA".
If on any Distribution Date there remains any shortfall in amounts
required to be distributed to the Class A-1 Noteholders, Class A-2 Noteholders,
Class A-3 Noteholders and Class A-4 Noteholders under clauses (2), (10), (11) or
(12) above, then the amount available will be distributed pro rata to such
Noteholders based on the Class A-1 Allocation Percentage, the Class A-2
Allocation Percentage, the Class A-3 Allocation Percentage and the Class A-4
Allocation Percentage, respectively.
If and to the extent that the collections available to make
distributions on a Distribution Date are insufficient to make distributions
pursuant to clauses (1) through (4) and (10) through (18) above exceeds the
Investor Percentage of Interest Collections for the related Collection Period,
then the Required Amount will be withdrawn from the Reserve Fund and applied to
that shortfall.
"Capped Origination Trust Administrative Expenses" will equal the
amounts sufficient to pay specified administrative costs and expenses of the
Origination Trust that are allocable to the SUBI Interest up to but not
exceeding $100,000 in any calendar year. "Capped Indenture Trustee
Administrative Expenses" will equal the amounts sufficient to pay the Indenture
Trustee's compensation and certain other expenses up to but not exceeding
$50,000 in any calendar year (or $100,000 in a calendar year in which an
Indenture Event of Default occurs with respect to which the Indenture Trustee
sells or otherwise disposes of the SUBI Interest). "Capped Owner Trustee
Administrative Expenses" will equal amounts sufficient to pay the Owner
Trustee's compensation and certain other expenses up to but not exceeding $5,000
in any calendar year.
"Capped Contingent and Excess Liability Premiums" will equal the
amounts sufficient to pay the premiums then due on the portion of the Contingent
and Excess Liability Insurance Policies allocable to the SUBI Interest, up to
but not exceeding $550,000 in any calendar year.
The "Class A-1 Interest Carryover Shortfall" for any Distribution Date
will equal the excess, if any, of (1) the amount of interest distributable on
the Class A-1 Notes for such Distribution Date and any outstanding Class A-1
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest at the Class A-1 Note Rate on the outstanding Class A-1 Interest
Carryover Shortfall from such
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immediately preceding Distribution Date to but not including the current
Distribution Date, over (2) the amount of interest distributed to the Class
A-1 Noteholders on that Distribution Date. The "Class A-2 Interest Carryover
Shortfall", the "Class A-3 Interest Carryover Shortfall", the "Class A-4
Interest Carryover Shortfall", the "Class B Interest Carryover Shortfall" and
the "Certificate Interest Carryover Shortfall" will be calculated in the same
manner as the Class A-1 Interest Carryover Shortfall, appropriately modified
to relate to the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes,
the Class B Notes and the Certificates, respectively.
The "Class B Note Principal Carryover Shortfall", for any Distribution
Date from and after the Distribution Date on which the Class A-3 Notes are paid
in full, will equal the amount, if any, of the Class B Percentage of the
Investor Percentage of Principal Collections allocable to the SUBI Interest for
that Distribution Date that is instead applied to the distribution of principal
to the Class A-4 Noteholders, pursuant to clauses (10) through (12) above. The
Class B Percentage of the Investor Percentage of Principal Collections will be
applied for such purposes only to the extent that the other amounts available
therefor are insufficient.
"Loss Amounts" for any Collection Period will include Charged-off
Amounts, Residual Value Loss Amounts and Additional Loss Amounts.
"Covered Loss Amounts" for any Distribution Date will equal the lesser
of (a) the Investor Percentage of Loss Amounts for that Distribution Date and
(b) amounts available for distribution described above remaining after
application of (i) clauses (1) through (9) above prior to the reduction of the
Class A Note Balance to zero or (ii) clauses (1) through (12) above following
the reduction of the Class A Note Balance to zero.
"Uncovered Loss Amounts" for any Distribution Date will equal the
excess of (1) the Investor Percentage of Loss Amounts for that Distribution Date
over (2) Covered Loss Amounts for that Distribution Date.
"Note Principal Loss Amount" with respect to any Distribution Date will
equal the sum of all Class A-1, Class A-2, Class A-3, Class A-4 and Class B Note
Principal Loss Amounts and will represent a loss of principal in respect of Loss
Amounts allocable to the Notes and will arise when (1) the Investor Percentage
of Interest Collections, (2) the Required Amount and (3) with respect to any
Class A-4 Note Principal Loss Amount, amounts otherwise payable in respect of
principal to the Class B Noteholders, are insufficient to cover such loss. As
described under "Description of the Notes -- General", any Note Principal Loss
Amounts allocable to a class of Notes which are not reimbursed as provided
herein will reduce the Note Balance of such class of Notes.
"Uncapped Administrative Expenses" with respect to any Collection
Period will mean all specified expenses that would be Capped Contingent and
Excess Liability Premiums, Capped Origination Trust Administrative Expenses,
Capped Indenture Trustee Administrative Expenses or Capped Owner Trustee
Administrative Expenses, except that they exceed $550,000, $100,000, $50,000 (or
$100,000, as applicable) or $5,000 in any calendar year, respectively.
ALLOCATION OF PRINCIPAL
The amount of Principal Collections allocable to the Notes for a
Collection Period (the "Principal Allocation") generally will mean the Principal
Collections for that Collection Period allocable to the SUBI multiplied by the
Investor Percentage.
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"Principal Collections" will mean, with respect to any Collection
Period, all Collections allocated to the principal component of any Contract
(including any payment in respect of the Residual Value of the related Leased
Vehicle, but other than any payment as to which a Loss Amount has already
allocated during any prior Collection Period), discounted to the extent required
below. For purposes of determining Principal Collections, the principal
component of all payments made on a Discounted Contract will be discounted to
present value at a rate of _____%, thereby effectively reallocating a portion of
the payments received in respect of the principal component of the Contracts to
Interest Collections and providing additional credit enhancement for the benefit
of the Noteholders. "Collections" with respect to any Collection Period will
include all net collections received on the Contracts and Leased Vehicles during
such Collection Period, such as Monthly Payments (including amounts that were
previously Payments Ahead but which represent Monthly Payments due during such
Collection Period), Prepayments, Advances, Net Matured Leased Vehicle Proceeds,
Net Repossession Proceeds, all other Net Liquidation Proceeds, any Net Insurance
Proceeds not included in Net Liquidation Proceeds and any other payment by a
lessee under a Contract in respect of the immediately preceding Collection
Period, but shall not include proceeds of claims made under any residual value
insurance policies and shall be net of:
(1) Payments Ahead with respect to one or more future Collection
Periods;
(2) to the extent not covered by the inclusive list above, amounts
paid to the Servicer in respect of outstanding Advances, Matured
Leased Vehicle Expenses, Repossession Expenses, all other
Liquidation Expenses and Insurance Expenses;
(3) Administrative Charges, including Extension Fees; and
(4) Additional Loss Amounts in respect of that Collection Period.
"Interest Collections" with respect to any Collection Period generally
will equal the amount by which Collections received during a Collection Period
exceed Principal Collections received during a Collection Period. "Net
Repossession Proceeds" will equal Repossession Proceeds net of Repossession
Expenses, and "Net Liquidation Proceeds" will equal Liquidation Proceeds net of
related Liquidation Expenses. "Net Matured Leased Vehicle Proceeds" will be
Matured Leased Vehicle Proceeds received during a Collection Period net of
Matured Leased Vehicle Expenses incurred during such Collection Period and "Net
Insurance Proceeds" will be Insurance Proceeds received during a Collection
Period net of Insurance Expenses incurred during a Collection Period.
APPLICATION AND DISTRIBUTIONS OF PRINCIPAL
On each Distribution Date, beginning with the [August 15], 1999,
Distribution Date and ending on the Distribution Date before the Distribution
Date on which the Class A-3 Notes have been paid in full, the Indenture Trustee
will distribute to Noteholders an amount equal to the Investor Percentage of all
Principal Collections collected or received for the related Collection Period.
Principal payments will be made:
- first, to the Class A-1 Noteholders until the Class A-1 Notes
have been paid in full,
- second, to the Class A-2 Noteholders until the Class A-2 Notes
have been paid in full, and
- third, to the Class A-3 Noteholders until the Class A-3 Notes
have been paid in full.
Thereafter, the Class A Percentage and the Class B Percentage of any
remaining Principal Collections will be distributed pro rata as principal to the
Class A-4 Noteholders and the Class B Noteholders, respectively.
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The "Class A Percentage" will mean the Class A Note Balance immediately
after the Class A-3 Notes have been paid in full as a percentage of the Note
Balance at that time, and the "Class B Percentage" will mean the Class B Note
Balance immediately after the Class A-3 Notes have been paid in full as a
percentage of the Note Balance at that time. The Class A Percentage and the
Class B Percentage will not change after they are set.
In general, no principal payments (including amounts with respect to
Covered Loss Amounts) will be made:
(1) on the Class A-2 Notes until the Class A-1 Notes have been paid
in full,
(2) on the Class A-3 Notes until the Class A-1 and Class A-2 Notes
have been paid in full, or
(3) on the Class A-4 or Class B Notes until the Class A-1, Class A-2
and Class A-3 Notes have been paid in full.
Following the reduction of the Class B Note Balance to zero, the Trust
will distribute principal payments on a pro rata basis on the Class A Notes.
Uncovered Loss Amounts will be allocated:
(1) first, to the Class B Notes until the Class B Note Balance has
been reduced to zero; and
(2) then, to the Class A Notes, pro rata, based on the Class A-1,
Class A-2, Class A-3 and Class A-4 Allocation Percentages.
Amounts with respect to Uncovered Loss Amounts will not be allocated or
reimbursed to any Noteholder once the balance of the related Notes has been
reduced to zero. In addition, the Investor Percentage of the net proceeds of any
sale or other disposition of the SUBI, the SUBI Certificates or other property
of the Trust, which may occur under certain circumstances involving an event of
default under the Indenture (as described under "Additional Document
Provisions--The Indenture--Events of Default"), to the extent these net proceeds
constitute Principal Collections, will be distributed first, on a pro rata
basis, to the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders based on
their respective Class Note Balances until the Class A Notes have been paid in
full, and second, to the Class B Noteholders.
In addition, on any Distribution Date from and after the Distribution
Date on which the Trust pays the Class A-3 Notes in full, but only to the extent
that other amounts available therefor are insufficient, amounts that would
otherwise be distributable to the Class B Noteholders for the Class B Percentage
of the Investor Percentage of Principal Collections collected or received for
the related Collection Period will instead be distributed as principal payments
to the Class A-4 Noteholders up to an amount equal to the sum of:
(1) the Class A-4 Allocation Percentage of the Investor Percentage
of Loss Amounts incurred during the related Collection Period
and allocable to the SUBI Interest;
(2) any Class A-4 Note Principal Loss Amounts; and
(3) accrued and unpaid interest on any Class A-4 Note Principal Loss
Amounts, as set forth under "Description of the Notes --
Distributions on the Notes -- Distributions of Interest".
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THE ACCOUNTS
THE SUBI COLLECTION ACCOUNT
On or prior to the Closing Date, the Servicer, on behalf of the
Origination Trustee, will establish a trust account in the Origination Trustee's
name for the benefit of the beneficiaries of the SUBI Certificates and the
Retained SUBI Certificates, into which it will generally deposit collections on
the Contracts and the Leased Vehicles (the "SUBI Collection Account" and,
together with the Note Distribution Account and any Payahead Account, the
"Accounts"). As the holder of the SUBI Certificates, the Owner Trustee will have
certain beneficial rights to amounts on deposit from time to time in the SUBI
Collection Account which, as part of the property of the Trust, will be pledged
by the Trust to the Indenture Trustee to secure payments on the Notes.
DEPOSITS INTO THE SUBI COLLECTION ACCOUNT. Pursuant to the Servicing
Agreement, unless the Monthly Remittance Conditions are met (described below),
within two Business Days after receipt, the Servicer generally will deposit
payments made on the Contracts and the Leased Vehicles into the SUBI Collection
Account. Such deposits will include, but will not be limited to, the following
payments made in respect of the SUBI Assets:
(1) Monthly Payments;
(2) early payments of the Outstanding Principal Balance of a
Contract, including any payment of a lease charge or interest,
or payment by the Servicer of a Reallocation Payment (each, a
"Prepayment");
(3) proceeds from the sale or other disposition of Leased Vehicles
in the Matured Leased Vehicle Inventory (excluding proceeds paid
under any residual value insurance policy) ("Matured Leased
Vehicle Proceeds");
(4) proceeds received in connection with the sale or other
disposition of Leased Vehicles that have been repossessed or
have been returned to the Servicer in connection with the
Prepayment of the related Contract ("Repossession Proceeds");
(5) all proceeds received by the Servicer, the Origination Trust or
the Origination Trustee on behalf of the Origination Trust from
any Insurance Policy (excluding any residual value insurance
policy) ("Insurance Proceeds"); and
(6) other amounts received in connection with the realization of the
amounts due under any Contract (together with Matured Leased
Vehicle Proceeds, Repossession Proceeds and Insurance Proceeds,
"Liquidation Proceeds").
On the day before the Distribution Date (the "Deposit Date"), the
Servicer will deposit the following amounts into the SUBI Collection Account:
(1) Advances by the Servicer;
(2) Reallocation Payments made by the Servicer on Contracts as to
which an uncured breach of certain representations and
warranties or certain servicing covenants has occurred;
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(3) with respect to any Contract as to which the related lessee has
failed to remit all or a portion of the Monthly Payment for the
related Collection Period, an amount equal to the lesser of:
(a) the portion of the Monthly Payment not received, and
(b) any Payments Ahead received by the Servicer which have
not yet been applied against any outstanding Monthly
Payments (each, a "Payahead Credit"); and
(4) any security deposits which became Liquidation Proceeds in the
related Collection Period.
The Servicer will be entitled to reimbursement for expenses incurred in
connection with:
(1) the realization of Matured Leased Vehicle Proceeds ("Matured
Leased Vehicle Expenses");
(2) Repossession Proceeds ("Repossession Expenses");
(3) Insurance Proceeds ("Insurance Expenses"); and
(4) other Liquidation Proceeds (such expenses, together with Matured
Leased Vehicle Expenses, Repossession Expenses and Insurance
Expenses, the "Liquidation Expenses"), either:
(a) from amounts on deposit in the SUBI Collection Account;
or
(b) as a deduction from:
(i) Matured Leased Vehicle Proceeds,
(ii) Repossession Proceeds,
(iii) Insurance Proceeds, or
(iv) other Liquidation Proceeds, as appropriate,
deposited into the SUBI Collection Account.
Additionally, the Servicer shall be entitled to reimbursement for any
Monthly Payments for which the Servicer has made an unreimbursed Advance and for
all Reimbursable Servicer Expenses as described under "Additional Document
Provisions -- The Servicing Agreement -- Advances" and " -- Servicing
Compensation".
MONTHLY REMITTANCE CONDITIONS. As discussed above, the Servicing
Agreement will require the Servicer to make all deposits of Collections received
on the Contracts and the Leased Vehicles into the SUBI Collection Account on the
second Business Day following receipt thereof. However, so long as the Monthly
Remittance Conditions are satisfied, the Servicer may deposit Collections into
the SUBI Collection Account on a monthly basis on each Deposit Date. The
"Monthly Remittance Conditions" will be satisfied so long as:
(1) no Servicer Termination Event exists and is continuing; and
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(2) the short-term unsecured debt of the Servicer is rated at least
"A-1" or its equivalent by the Rating Agencies.
Pending deposit into the SUBI Collection Account, the Servicer may use
Collections received on the SUBI Assets at its own risk and for its own benefit
and will not segregate these collections from its own funds. Additionally,
unless any of the Monthly Remittance Conditions are not met, Payments Ahead need
not be deposited in the Payahead Account. The Servicer may retain Payments Ahead
until the Deposit Date related to the Collection Period in which such Payments
Ahead became Payahead Credits. On the Deposit Date on which any Payment Ahead
becomes a Payahead Credit, the Servicer will deposit the Payahead Credit in the
SUBI Collection Account. If either of the Monthly Remittance Conditions are not
met, the Servicer will have to deposit immediately all Payments Ahead then held
by the Servicer into the Payahead Account and remit all future Payments Ahead to
the Payahead Account within two days of receipt and on each Deposit Date
transfer any Payahead Credits to the SUBI Collection Account from the Payahead
Account.
NET DEPOSITS. Pursuant to the Servicing Agreement, the Servicer may
deduct from the Collections to be deposited in the SUBI Collection Account, all
or any part of the Reimbursable Servicer Expenses for the related Collection
Period. Additionally, so long as AHFC is the Servicer and each Monthly
Remittance Condition is satisfied, the Servicer will be permitted to deposit in
the SUBI Collection Account only the net amount distributable with respect to
the SUBI Certificates and the Retained SUBI Certificates. The Servicer, however,
will account to the Origination Trustee, the Indenture Trustee, the Noteholders,
HTC LP and HTD LP as if all of the deposits and distributions described herein
were made individually. This net deposit provision will be for the
administrative convenience of the parties involved and will not affect amounts
required to be deposited into the Accounts.
WITHDRAWALS FROM THE SUBI COLLECTION ACCOUNT. On each Distribution
Date, the Servicer, pursuant to the instructions of the Owner Trustee, or the
Owner Trustee, as applicable, will transfer all Collections related to the SUBI
Interest on deposit in the SUBI Collection Account for the related Collection
Period (including any Payahead Credits) as set forth in "Description of the
Notes -- Distributions on the Notes -- Distributions of Interest" and "--
Application and Distributions of Principal". The Origination Trustee will
distribute the remaining 0.2% of Collections from the SUBI Collection Account on
the Distribution Date to HTC LP and HTD LP in respect of the Retained SUBI
Interest, which amounts will not be available to make payments on the Notes. The
Trust will generally pay to HTC LP and HTD LP any funds in excess of the amounts
to be distributed to the Note Distribution Account for payment to the
Noteholders, the Servicer for the Servicing Fee, the Reserve Fund in order to
meet the Reserve Fund Requirement and the trustees for any fees and expenses in
respect of the related Collection Period.
In the event that on any date the Servicer provides the Origination
Trustee and the Indenture Trustee with an officer's certificate setting forth
the basis for such withdrawal, the Origination Trustee shall remit to the
Servicer, without interest and prior to any other distribution from the SUBI
Collection Account on such date, monies from the SUBI Collection Account
representing:
(1) unreimbursed Matured Leased Vehicle Expenses, Repossession
Expenses, Insurance Expenses and other Liquidation Expenses;
(2) Monthly Payments with respect to which the Servicer has made an
unreimbursed Advance; and
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(3) an amount equal to any unreimbursed Advances that the Servicer
has concluded are Nonrecoverable Advances.
THE NOTE DISTRIBUTION ACCOUNT
On or prior to the Closing Date, a trust account will be established
with and in the name of the Indenture Trustee for the benefit of the Noteholders
(the "Note Distribution Account") from which all payments with respect to the
Notes will be made. On each Distribution Date, the Owner Trustee (acting on its
own behalf or through the Servicer) shall transfer or cause to be transferred to
the Note Distribution Account from the SUBI Collection Account and the Servicer,
on behalf of the Indenture Trustee, shall transfer to the Note Distribution
Account from the Reserve Fund, if necessary, all amounts allocable to the
Noteholders for the related Distribution Date. On each Distribution Date, the
Indenture Trustee will distribute to the Noteholders the allocated amounts for
the related Collection Period. See "Description of the Notes -- The Accounts --
The SUBI Collection Account".
THE CERTIFICATE DISTRIBUTION ACCOUNT
On or prior to the Closing Date, a trust account will be established
with and in the name of the Owner Trustee for the benefit of the
Certificateholders from which all payments with respect to the Certificates will
be made (the "Certificate Distribution Account"). On each Distribution Date, the
Owner Trustee (acting on its own behalf or through the Servicer) shall transfer
or cause to be transferred to the Certificate Distribution Account from the SUBI
Collection Account, all amounts allocable to the Certificateholders. On each
Distribution Date, the Owner Trustee will distribute to the Certificateholders
the allocated amounts for the related Collection Period.
THE PAYAHEAD ACCOUNT
In the event that any of the Monthly Remittance Conditions are not met,
the Origination Trustee will establish and the Trust Agent will maintain an
account with the Trust Agent into which Payments Ahead received by the Servicer
will be deposited (the "Payahead Account"). For so long as the Monthly
Remittance Conditions are not met, the Servicer will (1) continue to deposit all
Payments Ahead into the Payahead Account and (2) on each Deposit Date, transfer
the amount of any Payments Ahead which became Payahead Credits into the SUBI
Collection Account. As long as the Monthly Remittance Conditions are met, the
Servicer will not be required to use the Payahead Account and may deposit the
applicable Payahead Credits on each Deposit Date into the SUBI Collection
Account.
MAINTENANCE OF THE ACCOUNTS
The Accounts will be maintained with the Indenture Trustee, the Owner
Trustee or the Trust Agent so long as, with respect to such entity, either (1)
the short-term unsecured debt obligations of the entity have the highest
available rating of the applicable rating agency for those obligations or (2)
the long-term unsecured debt rating of the entity is acceptable to each Rating
Agency and the related Account is maintained in a segregated trust account in
the corporate trust department of the related entity (the "Required Deposit
Ratings"). If any of the Indenture Trustee, the Owner Trustee or the Trust Agent
at any time does not qualify under either of these criteria, the Servicer shall,
with the assistance of the Indenture Trustee, the Owner Trustee or the Trust
Agent, as the case may be, cause the related Account to be moved to a depository
institution organized under the laws of the United States or any state thereof,
which meets the Required Deposit Ratings.
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ELIGIBLE INVESTMENTS
Upon receipt of directions from the Servicer, the Indenture Trustee,
the Owner Trustee or the Trust Agent, as applicable, shall invest funds on
deposit in the Accounts in one or more Eligible Investments maturing (1) no
later than the Business Day immediately preceding the Deposit Date immediately
succeeding the date of such investment, in the case of amounts on deposit in the
SUBI Collection Account, any lease account created pursuant to the SUBI
Supplement or any Payahead Account or (2) on the Business Day immediately
preceding the Distribution Date immediately succeeding the date of such
investment, in the case of amounts on deposit in the Note Distribution Account,
the Certificate Distribution Account or the Reserve Fund. Notwithstanding the
foregoing, investments on which the entity at which the related Account is
located is the obligor may mature on the related Deposit Date or Distribution
Date, as the case may be.
All income or other gain from the foregoing investments generally shall
be retained in the related Account with that income or gain in respect of funds
in the Note Distribution Account generally being treated as Interest Collections
received in respect of the related Collection Period. Any loss resulting from
such investments shall be charged to the related Account.
"Eligible Investments" will be any one or more of the following
instruments, obligations or securities, in each case subject to any further
criteria specified in the SUBI Supplement:
(a) 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;
(b) general obligations of or obligations guaranteed by (i)
the Federal National Mortgage Association or (ii) any state of the
United States, the District of Columbia or the Commonwealth of Puerto
Rico, then rated the highest available credit rating of the applicable
rating agency for such obligations;
(c) certificates of deposit issued by any depository
institution or trust company (including any trustee) incorporated under
the laws of the United States or of 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 are then rated the
highest available credit rating of each Rating Agency for such
obligations;
(d) certificates of deposit, demand or time deposits of,
bankers' acceptances issued by, or federal funds sold by any depository
institution or trust company (including any trustee) incorporated under
the laws of the United States or any state and subject to supervision
and examination by federal and/or state banking authorities and the
deposits of which are fully insured by the Federal Deposit Insurance
Corporation, so long as at the time of such investment or contractual
commitment providing for such investment either such depository
institution or trust company has the Required Deposit Ratings (or if
such investment will mature after more than one month, the long-term,
unsecured debt of the issuer has the highest available credit rating
from the applicable rating agency) or such trustee shall have received
a letter from the applicable rating agency to the effect that credit
such investment would not result in the qualification, downgrading or
withdrawal of the credit ratings then assigned to any rated securities
issued by the Trust;
(e) certificates of deposit issued by any bank, trust
company, savings bank or other savings institution and fully insured by
the Federal Deposit Insurance Corporation having the Required Deposit
Ratings (or, if such investment will mature after more than one month,
the long-term, unsecured debt of the issuer has the highest available
credit rating from the applicable rating agency);
(f) repurchase obligations held by the Owner Trustee that
are acceptable to
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the Owner Trustee with respect to any security described in clauses
(a), (b) or (g) 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 (d) above
(including the Owner Trustee); provided, however, that repurchase
obligations entered into with any particular depository institution
or trust company (including the Owner Trustee) will not be Eligible
Investments to the extent that the aggregate principal amount of
such repurchase obligations with such depository institution or
trust company held by the Owner Trustee on behalf of the Trust or of
all of the Trust assets shall exceed 10% of either the related
Aggregate Net Investment Value or the aggregate unpaid principal
balance or face amount, as the case may be, of all Eligible
Investments so held thereby;
(g) interests in any open-end or closed-end management type
investment company or investment trust (i) registered under the
Investment Company Act of 1940, as amended (the "Investment Company
Act"), the portfolio of which is limited to the obligations of, or
guaranteed by, the United States and to agreements to repurchase such
obligations, which agreements, with respect to principal and interest,
are at least 100% collateralized by such obligations marked to market
on a daily basis and the investment company or investment trust shall
take delivery of such obligations either directly or through an
independent custodian designated in accordance with the Investment
Company Act and (ii) acceptable to the applicable rating agency (as
approved in writing by such rating agency) as collateral for securities
having ratings equivalent to the ratings of the Rated Securities on the
Closing Date;
(h) securities bearing interest or sold at a discount issued
by any corporation incorporated under the laws of the United States or
any state thereof so long as at the time of such investment or
contractual commitment providing for such investment (i) the long-term,
unsecured debt of such corporation has the highest available credit
rating from the applicable rating agency, or (ii) the Owner Trustee
shall have received a letter from such rating agency to the effect that
such investment would not result in the qualification, downgrading or
withdrawal of the ratings then assigned to any rated securities issued
by the Trust or commercial paper, or other short-term debt earning the
Required Deposit Ratings;
(i) money market funds so long as such funds are rated Aaa
by Moody's (so long as Moody's is a rating agency), AAAm by Standard &
Poor's (so long as Standard & Poor's is a rating agency) and F1+ by
Fitch (so long as Fitch is a rating agency), including any such fund
for which the Owner Trustee or an Affiliate thereof serves as an
investment advisor, administrator, shareholder servicing agent and/or
custodian or subcustodian, and notwithstanding that (i) such Person
charges and collects fees and expenses from such funds for services
rendered, (ii) such Person charges and collects fees and expenses for
services rendered pursuant to the Agreement and (iii) services
performed for such funds and pursuant to the Agreement may converge at
any time. Each of HTC LP, HTD LP and the Servicer hereby specifically
authorizes the Owner Trustee or Origination Trustee or an Affiliate
thereof to charge and collect all fees and expenses from such funds for
services rendered to such funds, in addition to any fees and expenses
such Person may charge and collect for services rendered pursuant to
the Agreement; and
(j) such other investments acceptable to the applicable
rating agency (as approved in writing by such rating agency) as will
not result in the qualification, downgrading or withdrawal of the
ratings then assigned by such rating agency to any Rated Securities
issued by the Trust; provided that each of the foregoing investments
shall mature no later than the day specified in the SUBI Supplement,
and shall be required to be held to such maturity.
None of the foregoing will be considered an Eligible
Investment if:
(i) it constitutes a certificated security, bankers' acceptance,
commercial paper, negotiable certificate of deposit or other
obligation that constitutes "financial assets" within the
meaning of Section 8-102(a)(9)(c) of the UCC unless a security
entitlement with respect to such Eligible Investment has been
created, in favor of the Origination Trustee or the
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Owner Trustee, as appropriate, in accordance with Section
8-501(b) of the UCC and the related securities intermediary
has agreed not to comply with entitlement orders of any
secured party other than the Owner Trustee or the
Origination Trustee, as the case may be; or
(ii) it constitutes a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations,
unless, in accordance with applicable law, (A) a book-entry
registration thereof is made to an appropriate book-entry
account maintained with a Federal Reserve Bank by the
Origination Trustee or the Owner Trustee, as appropriate, or
by a custodian therefor, (B) a deposit advice or other written
confirmation of such book-entry registration is issued to such
trustee or custodian, (C) any such custodian makes entries in
its books and records identifying that such book-entry
security is held through the Federal Reserve System pursuant
to federal book-entry regulations and belongs to such trustee
and indicating that such custodian holds such Eligible
Investment solely as agent for the Owner Trustee or the
Origination Trustee, as appropriate, (D) the Owner Trustee or
Origination Trustee, as appropriate, makes entries in its
books and records establishing that it holds such security
solely in such capacity and (E) any additional or alternative
procedures as may hereafter become necessary to effect
complete transfer of ownership thereof to such trustee are
satisfied, consistent with changes in applicable law or
regulations or the interpretation thereof.
Notwithstanding anything to the contrary contained in this definition,
no Eligible Investment may be purchased at a premium and no Eligible Investment
shall be an interest-only instrument.
None of the foregoing will be an Eligible Investment with respect to
amounts on deposit in the Note Distribution Account or the Certificate
Distribution Account unless by its own terms it matures on or before the Deposit
Date preceding the next relevant Distribution Date and it includes a demand, put
or similar feature such that the Owner Trustee is able to cause such investment
to mature before such Deposit Date to the extent set forth in the Agreement.
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 (excluding any "+" signs associated with such rating), 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 by such Rating Agency to any Rated Securities issued by the Trust.
STATEMENTS TO NOTEHOLDERS
On each Distribution Date, the Indenture Trustee will include with each
distribution to each Noteholder as of the close of business on the related
Record Date a statement, setting forth with respect to such Distribution Date or
the related Collection Period, among other things, the following:
(1) the (a) Interest Collections and Loss Amounts and (b)
Principal Collections, allocable to the SUBI Interest
for such Collection Period;
(2) the amount being distributed to Noteholders generally
(the "Note Distribution Amount") and being
distributed to each class of Notes, and the portion
of the Note Distribution Amount allocable to interest
and to principal on each class of Notes;
(3) the amount of the Note Distribution Amount allocable to
any Class A-1 Interest Carryover Shortfall, any Class
A-2 Interest Carryover Shortfall, any Class A-3
Interest Carryover Shortfall, any Class A-4 Interest
Carryover Shortfall and any Class B Interest Carryover
Shortfall;
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(4) the amount, if any, of any unpaid Class A-1 Interest
Carryover Shortfall, unpaid Class A-2 Interest
Carryover Shortfall, unpaid Class A-3 Interest
Carryover Shortfall, unpaid Class A-4 Interest
Carryover Shortfall and unpaid Class B Interest
Carryover Shortfall, after giving effect to
distribution of the Note Distribution Amount;
(5) the Note Balance, the Class Note Balance for each class
of Notes and the Note Factor for each class of Notes,
in each case after giving effect to distribution of the
Note Distribution Amount;
(6) the Class Allocation Percentage for each class of Notes
and the amount, if any, of the reimbursement of Loss
Amounts included in distribution of the Note
Distribution Amount and the amount thereof allocated to
each class of Noteholders;
(7) the amount of the Note Distribution Amount allocable to
reimbursement of previous Note Principal Loss Amounts
of each class of Notes, in each case together with the
amount of accrued interest thereon included in such
distribution;
(8) the amount, if any, of the aggregate unreimbursed Note
Principal Loss Amounts of each class of Notes and the
amount, if any, of any accrued and unpaid interest on
such amounts, in each case after giving effect to
distribution of the Note Distribution Amount;
(9) the amount of any accrued and unpaid Class B Note
Principal Carryover Shortfall;
(10) the Investor Percentage of the Servicing Fee;
(11) the amount of any Required Amount included in the Note
Distribution Amount, the balance on deposit in the
Reserve Fund on such Distribution Date, after giving
effect to withdrawals therefrom and deposits thereto on
such Distribution Date, the change in such balance from
the immediately preceding Distribution Date and the
Reserve Fund Requirement;
(12) the Aggregate Net Investment Value as of the end of the
related Collection Period;
(13) the aggregate amount of Payments Ahead on deposit in
the SUBI Collection Account or otherwise retained by
the Servicer and the change in such amount from the
immediately preceding Distribution Date;
(14) the amounts of Advances made in respect of the related
Collection Period and the amount of unreimbursed
Advances on such Distribution Date and the change in
such amount from the immediately preceding Distribution
Date; and
(15) the weighted average Lease Rate of the Contracts in the
SUBI for the immediately preceding Collection Period,
and the charge-off rate and delinquency rate for each
of the three immediately preceding Collection Periods.
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Each amount set forth pursuant to clauses (2) through (10) above will
be expressed as a dollar amount per $1,000 of original principal balance of a
Class A Note or Class B Note, as applicable. Noteholders or Note Owners may
obtain copies of these statements by written request addressed to the Indenture
Trustee. In addition, within the prescribed period of time for tax reporting
purposes after the end of each calendar year during the term of the Agreement,
the Indenture Trustee will mail to each person who at any time during such
calendar year shall have been a Class A or Class B Noteholder or a Note Owner, a
statement containing the sum of the amounts described in clauses (2) through (9)
and (11) through (13) above for the purpose of preparing such person's federal
income tax return.
TERMINATION OF THE TRUST; REDEMPTION OF THE NOTES
The respective obligations and responsibilities of HTC LP, HTD LP, the
Indenture Trustee and the Owner Trustee created by the Agreement will terminate
upon the earliest to occur of:
(1) the disposition of the SUBI Interest, or its expiration or
termination by virtue of the maturity, sale or other
liquidation, as the case may be, of the last outstanding
Contract and Leased Vehicle evidenced by the SUBI, and the
distribution of all proceeds thereof (other than proceeds of any
residual value insurance policy), together with all amounts on
deposit in the Accounts and the Reserve Fund, in the manner to
be prescribed in the Agreement;
(2) the day following the Distribution Date on which the Notes have
been paid in full and after which there is no unreimbursed Note
Principal Loss Amount or Class B Note Principal Carryover
Shortfall (together with accrued interest thereon); and
(3) the purchase of the corpus of the Trust and the resulting
redemption of the Notes as described below.
In order to avoid excessive administrative expenses, the Servicer will
be permitted at its option to purchase all of the assets of the Trust on any
Distribution Date if, either before or after giving effect to any payment of
principal required to be made on such Distribution Date, the combined Note
Balance and Certificate Balance is less than or equal to 10% of the combined
Initial Note Balance and Initial Certificate Balance. The purchase price will be
equal to the greater of:
(1) the sum of the Class A Note Balance, the Class B Note Balance
and the Certificate Balance, in each case plus accrued and
unpaid interest thereon at the related Note Rate or Certificate
Rate, as applicable, plus certain other accrued and unpaid
amounts, if any, due to the Noteholders, the Certificateholders
or the Servicer, and
(2) 99.8% of the Aggregate Net Investment Value as of the last day
of the related Collection Period.
If the Servicer purchases the assets of the Trust, the Indenture
Trustee will furnish a redemption notice to each Noteholder not more than 30
days and not less than 15 days prior to the applicable Redemption Date.
Failure to give notice of redemption, or any defect in the notice, to
any Noteholder of any Note selected for redemption will not impair or affect the
validity of the redemption of any Note. The Notes will, on the Redemption Date,
become due and payable and no interest will accrue on the Notes for any period
after such Redemption Date.
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The final distribution to any Noteholder will be made only upon
surrender and cancellation of such Noteholder's Note at an office or agency of
the Indenture Trustee specified in the notice of termination. Any funds
remaining that are payable in such final distribution to a Noteholder, after the
Indenture Trustee has taken certain measures to locate such Noteholder and such
measures have failed, will be distributed to HTC LP and HTD LP.
BOOK-ENTRY REGISTRATION
A Note Owner may hold through DTC (in the United States), or Cedelbank
("Cedelbank") or the Euroclear system ("Euroclear") (in Europe), which in turn
hold through DTC, if they are participants in such systems, or indirectly
through organizations that are participants in such systems ("Participants").
All references herein to actions by Note Owners shall refer to actions taken by
DTC upon instructions from DTC Participants, and all references herein to
distributions, notices, reports and statements to Note Owners shall refer to
distributions, notices, reports and statements to Cede as the registered holder
of the Notes for distribution to Note Owners in accordance with DTC procedures.
As such, it is anticipated that the only Noteholder will be Cede as nominee of
DTC. Note Owners will not be recognized by the Trustee as Note Owners as such
term is used in the Agreement or Servicing Supplement, and Note Owners will only
be permitted to exercise their rights as such indirectly through DTC and DTC
Participants, as further described below.
Cede, as nominee for DTC, will hold the Notes. Cedelbank and Euroclear
will hold omnibus positions on behalf of their Participants through customers'
securities accounts in the Depositaries which in turn will hold such positions
in customers' securities accounts in DTC through Citibank, N.A. or The Chase
Manhattan Bank, the relevant depositaries (collectively, the "Depositaries") of
Cedelbank or Euroclear, respectively, and each a participating member of DTC.
Unless and until Definitive Notes are issued, it is anticipated that the only
Noteholder will be Cede, as the nominee of DTC. Note Owners will only be
permitted to exercise their rights indirectly through DTC.
Transfers between Participants in DTC ("DTC Participants") will occur
in accordance with DTC rules. Transfers between Participants in Cedelbank
("Cedelbank Participants") and Participants in Euroclear ("Euroclear
Participants") will occur in accordance with their respective rules and
operating procedures.
Cross-market transfers between persons holding directly or indirectly
through DTC, on the one hand, and directly or indirectly through Cedelbank
Participants or Euroclear Participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of Cedelbank or Euroclear by its Depositary.
However, each such cross-market transaction will require delivery of
instructions to Cedelbank or Euroclear by the counterparty in such system in
accordance with its rules and procedures and within its established deadlines
(European time). Cedelbank or Euroclear will, if the transaction meets its
settlement requirements, deliver instructions to its Depositary to take action
to effect final settlement on its behalf by delivering or receiving securities
in DTC, and making or receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Cedelbank Participants and
Euroclear Participants may not deliver instructions directly to the related
Depositaries.
Because of time-zone differences, credits of securities received in
Cedelbank or Euroclear as a result of a transaction with a DTC Participant will
be made during subsequent securities settlement processing and dated the
Business Day following the DTC settlement date. Such credits or any transactions
in such securities settled during such processing will be reported to the
relevant Cedelbank Participants or Euroclear Participants on such business day.
Cash received in Cedelbank or Euroclear as a result of sales of Notes by or
through a Cedelbank Participant or Euroclear Participant to a DTC Participant
will be received with value on the DTC settlement date but will be available in
the relevant
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Cedelbank or Euroclear cash account only as of the business day following
settlement in DTC. As used in this paragraph, "Business Day" means a Business
Day on which Cedelbank and Euroclear are also transacting settlements in
securities.
DTC is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York Banking
Law, a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the UCC in effect in the state of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). DTC holds securities that DTC
Participants deposit with DTC. DTC also facilitates the clearance and settlement
of securities transactions among DTC Participants through electronic
computerized book-entry changes in accounts of DTC Participants, thereby
eliminating the need for physical movement of securities certificates. DTC
Participants include (1) securities brokers and dealers (including the
underwriters), (2) banks, (3) trust companies, (4) clearing corporations and (5)
certain other organizations. Indirect access to the DTC system also is available
to banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a DTC Participant, either directly or indirectly
(the "Indirect DTC Participants"). The rules applicable to DTC and DTC
Participants are on file with the Securities and Exchange Commission (the
"Commission").
Note Owners that are not DTC Participants or Indirect DTC Participants
but that desire to purchase, sell or otherwise transfer ownership of, or an
interest in, Notes under the DTC System may do so only through DTC Participants
or Indirect DTC Participants. DTC Participants will receive a credit for the
Notes in DTC's records. The ownership interest of each Note Owner in turn will
be recorded on the DTC Participants' and Indirect DTC Participants' respective
records. Note Owners will not receive written confirmation from DTC of their
purchase, but Note Owners are expected to receive written confirmations
providing details of the transaction, as well as periodic statements of their
holdings, from the DTC Participant or Indirect DTC Participant through which the
Note Owner entered into the transaction. Transfers of ownership interests in the
Notes will be accomplished by entries made on the books of DTC Participants
acting on behalf of Note Owners.
To facilitate subsequent transfers, all Notes deposited by DTC
Participants with DTC will be registered in the name of Cede, as nominee of DTC.
The deposit of Notes with DTC and their registration in the name of Cede will
effect no change in beneficial ownership. DTC will have no knowledge of the
actual Note Owners and its records will reflect only the identity of the DTC
Participants to whose accounts such Notes are credited, which may or may not be
the Note Owners. DTC Participants and Indirect DTC Participants will remain
responsible for keeping account of their holdings on behalf of their customers.
While the Notes are held in book-entry form, Note Owners will not have access to
the list of Note Owners, which may impede the ability of Note Owners to
communicate with each other.
Conveyance of notices and other communications by DTC to DTC
Participants, by DTC Participants to Indirect DTC Participants and by DTC
Participants and Indirect DTC Participants to Note Owners will be governed by
arrangements among them, subject to any statutory or regulatory requirements as
may be in effect from time to time.
Under the rules, regulations and procedures creating and affecting DTC
and its operations, DTC is required to make book-entry transfers among DTC
participants on whose behalf it acts with respect to the Notes and is required
to receive and transmit distributions of principal of and interest on the Notes.
DTC Participants and Indirect DTC Participants with which Note Owners have
accounts for the Notes similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective Note Owners.
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The Trust will make principal and interest payments on the Notes to
DTC. DTC's practice is to credit DTC Participants' accounts on each Distribution
Date in accordance with their respective holdings shown on DTC's records unless
DTC has reason to believe that it will not receive payment on such Distribution
Date. Payments by DTC Participants and Indirect DTC Participants to Note Owners
will be governed by standing instructions and customary practices, as in the
case with securities held for the accounts of customers in bearer form or
registered in "street name", and will be the responsibility of such DTC
Participant and Indirect DTC Participant and not of DTC, the Indenture Trustee,
the Owner Trustee, the Origination Trustee, the Servicer, HTC LP or HTD LP,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal of and interest on the Notes to DTC will be
the responsibility of the Indenture Trustee. Disbursement of such payments to
DTC Participants will be the responsibility of DTC. Disbursement of such
payments to Note Owners will be the responsibility of DTC Participants and
Indirect DTC Participants. As a result, under the book-entry format, Note Owners
may experience some delay in their receipt of payments.
Because DTC can only act on behalf of DTC Participants, who in turn act
on behalf of Indirect DTC Participants and certain banks, the ability of a note
owner to pledge Notes to persons or entities that do not participate in the DTC
system, or otherwise take actions with respect to such Notes, may be limited due
to the lack of a physical note for such Notes.
DTC has advised HTC LP and HTD LP that it will take any action
permitted to be taken by a Noteholder only at the direction of one or more DTC
Participants to whose account with DTC the Notes are credited. Additionally, DTC
has advised HTC LP and HTD LP that it will take such actions with respect to
specified percentages of the Note Owners' interest only at the direction of and
on behalf of DTC Participants whose holdings include undivided interests that
satisfy such specified percentages. DTC may take conflicting actions with
respect to other undivided interests to the extent that such actions are taken
on behalf of DTC Participants whose holdings include such undivided interests.
Neither DTC nor Cede will consent or vote with respect to the Notes.
Under its usual procedures, DTC mails an "Omnibus Proxy" to the Indenture
Trustee as soon as possible after any applicable record date for such a consent
or vote. The Omnibus Proxy assigns Cede's consenting or voting rights to those
DTC Participants to whose accounts the Notes are credited on that record date
(identified in a listing attached to the Omnibus Proxy).
None of HTC LP, HTD LP, the Servicer, the Origination Trustee, the
Owner Trustee nor the Indenture Trustee will have any liability (a) for any
aspect of the records relating to or payments made on account of beneficial
ownership interests of the Notes held by Cede, as nominee of DTC, or (b) for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
Cedelbank is incorporated under the laws of Luxembourg as a
professional depository. Cedelbank holds securities for Cedelbank Participants
and facilitates the clearance and settlement of securities transactions between
Cedelbank Participants through electronic book-entry changes in accounts of
Cedelbank Participants, thereby eliminating the need for physical movement of
certificates. Transactions may be settled in Cedelbank in any of 34 currencies,
including United States dollars. Cedelbank provides to Cedelbank Participants,
among other things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities lending and
borrowing. Cedelbank interfaces with domestic markets in several countries. As a
professional depositary, Cedelbank is subject to regulation by the Luxembourg
Monetary Institute. Cedelbank Participants are recognized financial institutions
around the world, including (1) underwriters, (2) securities brokers and
dealers, (3) banks, (4) trust companies, (5) clearing corporations and (6)
certain other organizations. Indirect access to Cedelbank is also available to
others, such as banks, brokers,
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dealers and trust companies that clear through or maintain a custodial
relationship with a Cedelbank Participant, either directly or indirectly.
Euroclear was created in 1968 to hold securities for Euroclear
Participants and to clear and settle transactions between Euroclear Participants
through simultaneous electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and any risk from
lack of simultaneous transfers of securities and cash. Transactions may now be
settled in any of 34 currencies, including United States dollars. The Euroclear
System includes various other services, including securities lending and
borrowing, and interfaces with domestic markets in more than 25 countries
generally similar to the arrangements for cross-market transfers with DTC
described above. Euroclear is operated by the Brussels, Belgium office of Morgan
Guaranty Trust Company of New York (the "Euroclear Operator"), under contract
with Euroclear Clearance System S.C., a Belgian cooperative corporation (the
"Cooperative"). All operations are conducted by the Euroclear Operator, and all
Euroclear securities clearance accounts and Euroclear cash accounts are accounts
with the Euroclear Operator, not the Cooperative. The Cooperative Board
establishes policy for the Euroclear System. Euroclear Participants include (1)
banks (including central banks), (2) securities brokers and dealers and (3)
other professional financial intermediaries. Indirect access to the Euroclear
System is also available to other firms that clear through or maintain a
custodial relationship with a Euroclear Participant, either directly or
indirectly.
The Euroclear Operator is the Belgian branch of a New York banking
corporation which is a member bank of the Federal Reserve System. As such, it is
regulated and examined by (1) the Board of Governors of the Federal Reserve
System and (2) the New York State Banking Department, as well as (3) the Belgian
Banking Commission.
Securities clearance accounts and cash accounts with the Euroclear
Operator are governed by the Terms and Conditions Governing Use of Euroclear and
the related Operating Procedures of the Euroclear System and applicable Belgian
law (collectively, the "Terms and Conditions"). The Terms and Conditions govern
transfers of securities and cash within Euroclear, withdrawals of securities and
cash from Euroclear and receipts of payments with respect to securities in
Euroclear. Euroclear holds all securities on a fungible basis without
attributing specific certificates to specific securities clearance accounts. The
Euroclear Operator acts under the Terms and Conditions only on behalf of
Euroclear Participants, and has no record of or relationship with persons
holding through Euroclear Participants.
Distributions on Notes held through Cedelbank or Euroclear will be
credited to the cash accounts of Cedelbank Participants or Euroclear
Participants in accordance with the relevant system's rules and procedures, to
the extent received by its Depositary. Such distributions will be subject to tax
reporting and withholding in accordance with relevant United States tax laws and
regulations. For further information in this regard, see "The Material Federal
Income Tax Consequences -- Federal Income Tax Consequences to Foreign Investors"
herein and "Global Clearance, Settlement and Tax Documentation Procedures --
Certain U.S. Federal Income Tax Documentation Requirements" in Annex I hereto.
Cedelbank or the Euroclear Operator, as the case may be, will take any other
action permitted to be taken by a Noteholder on behalf of a Cedelbank
Participant or Euroclear Participant only in accordance with its relevant rules
and procedures and subject to the related Depositary's ability to effect such
actions on its behalf through DTC.
Although DTC, Cedelbank and Euroclear have agreed to the foregoing
procedures in order to facilitate transfers of Notes among Participants of DTC,
Cedelbank and Euroclear, they are under no obligation to perform or continue to
perform such procedures and such procedures may be discontinued at any time.
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ISSUES RELATED TO YEAR 2000 DATE CONVERSION. DTC management is aware
that some computer applications, systems, and the like for processing data ("DTC
Systems") that are dependent upon calendar dates, including dates before, on and
after January 1, 2000, may encounter "Year 2000 problems". DTC has informed its
Participants and other members of the financial community (the "Industry") that
it has developed and is implementing a program so that the DTC Systems, as the
same relate to the timely payment of distributions (including principal and
income payments) to (1) securityholders, (2) book-entry deliveries and (3)
settlement of trades within DTC ("DTC Services"), continue to function
appropriately. This program includes a technical assessment and a remediation
plan, each of which is complete. Additionally, DTC's plan includes a testing
phase, which is expected to be completed within appropriate time frames.
However, DTC's ability to properly perform its services also depends
upon other parties, including, but not limited to, issuers and their agents, as
well as third party vendors from whom DTC licenses software and hardware, and
third party vendors on whom DTC relies for information of the provision of
services, including telecommunication and electrical utility service providers,
among others. DTC has informed the Industry that it is contacting (and will
continue to contact) third party vendors from whom DTC acquires services to (1)
impress upon them the importance of such services being year 2000 compliant; and
(2) determine the extent of their efforts for Year 2000 remediation (and, as
appropriate, testing) of their services. In addition, DTC is in the process of
developing such contingency plans as it deems appropriate.
According to DTC, the foregoing information on DTC has been provided to
the Industry for informational purposes only and is not intended to serve as a
representation, warranty, or contract modification of any kind.
If the DTC Systems are not year 2000 compliant by the year 2000, DTC's
ability to provide DTC Services, including payments on the Notes, may be
materially and adversely affected. If this were to occur, Note Owners:
(1) could experience delays in payments due; or
(2) may not ultimately receive all interest and principal due to the
Note Owners.
DEFINITIVE NOTES
Definitive Notes will be issued to Note Owners rather than to DTC only
if:
(1) DTC is no longer willing or able to discharge its
responsibilities with respect to the Notes, and the Indenture
Trustee, HTC LP and HTD LP are unable to locate a qualified
successor;
(2) HTC LP and HTD LP, at their option, advise the Indenture Trustee
in writing that they elect to terminate the book-entry system
through DTC; or
(3) after an Indenture Event of Default, Note Owners representing in
the aggregate more than 50% of the voting interests of the
Notes, voting together as a single class, advise the Indenture
Trustee through DTC or its successor in writing that the
continuation of a book-entry system through DTC or its successor
is no longer in the Note Owners' best interest.
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Upon the occurrence of any of the events described above, DTC will be
required to notify the Indenture Trustee and all Note Owners, through
Participants, of the occurrence of any such event and the availability of
Definitive Notes through DTC. Upon DTC's surrender of the certificates
representing the related Notes and the receipt of instructions for
re-registration, the Trust will issue and the Indenture Trustee will
authenticate and deliver Definitive Notes to Note Owners, who upon receipt will
become Noteholders for all purposes of the Agreement.
Payments on the related Notes will thereafter be made by the Indenture
Trustee directly to holders of those Notes in accordance with the procedures set
forth in this prospectus and to be set forth in the Indenture. Interest payments
and any principal payments on the Definitive Notes on each Distribution Date
will be made to holders in whose names the Definitive Notes were registered at
the close of business on the Record Date with respect to such Distribution Date.
Payments will be made by check mailed to the addresses of such holders as they
appear on the note register (the "Note Register") or, under the circumstances to
be provided by the Indenture and the Agreement, by wire transfer to a bank or
depository institution located in the United States and having appropriate
facilities. The final payment on any Notes (whether Definitive Notes or global
certificates registered in the name of Cede representing the Notes), however,
will be made only upon presentation and surrender of the Definitive Notes or
global certificates at the office or agency specified in the notice of final
distribution to Noteholders.
Definitive Notes will be transferable and exchangeable at the offices
of the Indenture Trustee or the Note Registrar to be set forth in the Agreement.
No service charge will be imposed for any registration of transfer or exchange,
but the Indenture Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge imposed in connection therewith.
THE INDENTURE TRUSTEE
The Bank of New York will be the Indenture Trustee under the Indenture.
The Corporate Trust Office of the Indenture Trustee is located at 101 Barclay
Street, Floor 12E, New York, New York 10286. The Bank of New York is not
affiliated with AHFC, although it does act as a service provider to AHFC.
The Indenture Trustee may resign at any time by so notifying the Trust
upon 30 days' notice, in which event the Trust will be obligated to appoint a
successor Indenture Trustee. Noteholders representing in the aggregate more than
50% of the voting interests of the Notes, voting together as a single class, may
remove the Indenture Trustee by delivering notice of removal to the Indenture
Trustee and the Trust. The Trust may also remove the Indenture Trustee if the
Indenture Trustee ceases to be eligible to continue under the Indenture, becomes
legally unable to act or becomes insolvent. In such circumstances, the Trust
will be obligated to appoint a successor Indenture Trustee. Any resignation or
removal of the Indenture Trustee and appointment of a successor Indenture
Trustee will not become effective until acceptance of the appointment by such
successor Indenture Trustee.
The Indenture Trustee must:
(1) be a corporation organized under the laws of a state of the
United States, the District of Columbia or the Commonwealth of
Puerto Rico;
(2) be authorized to exercise corporate trust powers under those
laws;
(3) be subject to supervision or examination by federal or state
laws; and
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(4) have a combined capital and surplus of at least $50 million and
a time deposit rating no lower than Prime-1 by Moody's, [____]
by Fitch and A-1 by Standard & Poor's, or must be otherwise
acceptable to each Rating Agency.
A co-trustee or separate trustee need not meet these eligibility
requirements.
Noteholders representing in the aggregate more than 50% of the voting
interests of the Notes, voting together as a single class, generally will have
the power to direct any proceeding for any remedy available to the Indenture
Trustee under the Indenture, and the exercise of any trust or power conferred on
the Indenture Trustee by the Indenture (including actions by the Indenture
Trustee in its capacity as a party to, or a third-party beneficiary of, the SUBI
Trust Agreement or the Servicing Agreement). However, the Indenture Trustee will
not be required to follow such a direction if, after being advised by counsel:
(1) it concludes that the action is unlawful; or
(2) it in good faith determines that the proceedings directed:
(a) would be illegal;
(b) would subject it to personal liability; or
(c) would be unduly prejudicial to the rights of other
Noteholders.
A Noteholder may institute proceedings under the Indenture, but only if
(1) the holder previously has given to the Indenture Trustee written notice of
default, (2) Noteholders representing in the aggregate not less than 25% of the
voting interests of the Notes, voting together as a single class, have made
written request upon the Indenture Trustee to institute such proceeding in its
own name as Indenture Trustee and have offered to the Indenture Trustee
reasonable indemnity and the Indenture Trustee for 60 days has neglected or
refused to institute any such proceeding, and (3) the Indenture Trustee has not
received direction inconsistent with this written request during the 60-day
period by Noteholders representing in the aggregate not less than a majority of
the voting interests of the Notes, voting together as a single class. The
Indenture Trustee will be under no obligation:
(1) to exercise any of the rights or powers vested in it by the
Agreement or to make any investigation of matters arising
thereunder; or
(2) to institute, conduct or defend any litigation under the
Agreement or relating thereto at the request, order or direction
of any of the Noteholders, unless they have offered to the
Indenture Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or
thereby.
Noteholders will have no express right to institute a proceeding
directly under the SUBI Trust Agreement or the Servicing Agreement.
LIST OF NOTEHOLDERS
If Definitive Notes are issued, upon a written request of the Indenture
Trustee, the Trust will provide to the Indenture Trustee within 30 days after
receipt of such request a list of the names and addresses of all Noteholders. In
addition, three or more Noteholders, upon compliance by those Noteholders with
certain provisions of the Indenture, may request that the Indenture Trustee, as
Note
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Registrar, afford such Noteholders access during business hours to the
current list of Noteholders for purposes of communicating with other Noteholders
with respect to their rights under the Indenture. For further information
regarding communications with Noteholders, see "Description of the Notes --
Book-Entry Registration" and " -- Definitive Notes".
The Indenture will not provide for the holding of any annual or other
meetings of Noteholders.
SECURITY FOR THE NOTES
GENERAL
The Notes will be secured by the property of the Trust, which as more
fully described under "The Trust and the SUBI -- The SUBI", will primarily
consist of the SUBI Interest evidenced by the SUBI Certificates, including the
beneficial interest in the Contracts and Leased Vehicles and amounts on deposit
from time to time in the SUBI Collection Account and monies on deposit in the
Reserve Fund and the Note Distribution Account. The Indenture Trustee and the
Owner Trustee will be third-party beneficiaries of the SUBI Trust Agreement and
the Servicing Agreement. In no event will the Owner Trustee or the Indenture
Trustee be deemed to have a perfected security interest in the Leased Vehicles.
THE RESERVE FUND
GENERAL
On or prior to the Closing Date, HTC LP and HTD LP will establish a
trust account with and in the name of the Indenture Trustee for the benefit of
the Noteholders, HTC LP and HTD LP (the "Reserve Fund"). The Reserve Fund is
designed to provide additional funds for the benefit of the Noteholders in the
event that on any Distribution Date, Interest Collections allocable to the Notes
for the related Collection Period, are insufficient to pay, among other things,
the sum of:
(1) accrued interest and any overdue interest (with interest
thereon) at the applicable Note Rate on the Notes on such
Distribution Date;
(2) the Investor Percentage of any Loss Amount for the related
Collection Period; and
(3) any unreimbursed Note Principal Loss Amounts, together with
interest thereon at the applicable Note Rates;
In addition, monies on deposit in the Reserve Fund will be available to
make payments to the Certificateholders should Collections ultimately be
insufficient to pay interest and any overdue interest and principal on the
Certificate Balance.
HTC LP and HTD LP will create the Reserve Fund with an initial deposit
of $__________ (the "Initial Deposit"), which amount will equal _____% of 99.8%
of the Aggregate Net Investment Value as of the Cutoff Date. On each
Distribution Date, the funds in the Reserve Fund will be supplemented by certain
Interest Collections.
THE RESERVE FUND REQUIREMENT. HTC LP and HTD LP will create the Reserve
Fund on the Closing Date with the Initial Deposit. The "Reserve Fund
Requirement" for any Distribution Date will generally be equal to _____% of
99.8% of the Aggregate Net Investment Value as of the Cutoff Date.
Notwithstanding the foregoing, as described under "Additional Document
Provisions -- The Servicing Agreement -- Compliance with ERISA", in the event
that the ERISA Compliance Test is not satisfied
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on any Determination Date, all Excess Interest Collections for each
Distribution Date thereafter will be deposited in the Reserve Fund until the
Distribution Date following the Determination Date on which the ERISA
Compliance Test has been satisfied. As of any Distribution Date, the amount
of funds actually on deposit in the Reserve Fund may, in certain
circumstances, be less than the Reserve Fund Requirement.
"Current Contracts" will be all Contracts other than Charged-off,
Liquidated, Matured and Additional Loss Contracts. A "Liquidated Contract" will
be a Contract that has been the subject of a Prepayment in full or otherwise has
been paid in full. An "Additional Loss Contract" will be a Contract that has
been sold or otherwise disposed of by the Servicer, acting on behalf of the
Origination Trust, to pay an Additional Loss Amount.
HTC LP and HTD LP may, from time to time after the date of this
prospectus, request each Rating Agency to approve a change in the manner by
which the Reserve Fund is funded. If each Rating Agency confirms to the
Indenture Trustee that the use of any such new formula or change will not result
in a qualification, reduction or withdrawal of its then-current rating of any
class of Notes, and HTC LP's and HTD LP's counsel delivers an opinion if and to
the extent required, as described under "Additional Document Provisions
- --Amendment of Basic Documents", then such new formula or change will be
implemented and, to the extent necessary, the Agreement will be amended, without
the consent of any Noteholder or Note Owner.
WITHDRAWALS FROM THE RESERVE FUND. On each Distribution Date, the
Indenture Trustee shall withdraw from the Reserve Fund, to the extent available,
an amount equal to the Required Amount. The "Required Amount", as of any Deposit
Date, will equal the lesser of (1) the amount on deposit in the Reserve Fund on
the related Deposit Date after all deposits thereto and (2) the amount, if any,
by which the full amount distributable on the related Distribution Date pursuant
to clauses (1) through (4) and (10) through (18) in the first paragraph under
"Description of the Notes -- Distributions on the Notes -- Distributions of
Interest" exceeds the Investor Percentage of Interest Collections for the
related Collection Period.
Monies on deposit in the Reserve Fund on a Distribution Date in excess
of the Reserve Fund Requirement will be released to HTC LP and HTD LP. On each
Distribution Date, HTC LP and HTD LP may receive income on investment amounts
held in the Reserve Fund. Any income on investments received by HTC LP and HTD
LP shall be free of any claim of the Trust, the Indenture Trustee and the
Noteholders and shall not be available to the Indenture Trustee or the Trust for
the purpose of making deposits to the Reserve Fund or making payments to the
Noteholders, nor shall HTC LP nor HTD LP be required to refund any amount
properly received by them.
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THE CONTINGENT AND EXCESS LIABILITY INSURANCE POLICIES
As additional protection in the event that any lessee fails to maintain
the minimum levels of automobile liability insurance required by the Contracts,
AHFC maintains a primary contingent and excess automobile liability insurance
policy with a $1 million limit for each accident and no annual or aggregate
limit on the number of accidents covered. This insurance protects the
Origination Trust from claims for bodily injury and property damage suffered by
third persons caused by any vehicle owned by the Origination Trust and leased to
a lessee. The insurance policy is subject to a $1 million per accident
deductible payable by AHFC, with that deductible obligation supported by an
irrevocable letter of credit in favor of the insurer. This insurance responds
if, at the time of an accident, the insurance to be provided by the lessee in
accordance with the Contract is not collectible or has inadequate limits to
protect the Origination Trust. AHFC also maintains with other insurers
substantial amounts of excess insurance coverage for which the Origination Trust
is an additional named insured (together with the foregoing primary contingent
and excess automobile liability insurance policy, the "Contingent and Excess
Liability Insurance Policies"). The Contingent and Excess Liability Insurance
Policies provide insurance coverage of more than $10 million per occurrence.
If and to the extent that such insurance coverage were to be exhausted
and damages were to be assessed against the Origination Trust, claims could be
imposed against the Origination Trust Assets, including the SUBI Assets and
investors in the Notes could incur a loss on their investment. However, the
Origination Trust and the Origination Trustee will be additional named insureds
under the Contingent and Excess Liability Insurance Policies and payments made
thereunder will constitute SUBI Assets. To the extent that payments under the
Contingent and Excess Liability Insurance Policies are made to third party
claimants, they will reduce the Additional Loss Amounts that otherwise would be
required to be paid out of the SUBI Assets. See "Risk Factors -- Possible
Liability of the Trust due to a Lessee's Operation of a Leased Vehicle",
"Certain Legal Aspects of the Origination Trust and the SUBI -- The SUBI" and
"Certain Legal Aspects of the Contracts and the Leased Vehicles -- Vicarious
Tort Liability" for a discussion of related risks.
The Servicing Agreement will provide that, so long as any Notes are
outstanding, AHFC may not terminate or cause the termination of any Contingent
and Excess Liability Insurance Policies unless, among other things, (1)
replacement insurance policies are obtained providing a primary limit of $1
million per accident with no annual or aggregate limit on the number of
accidents covered, and additional excess limits providing a total of at least
$10 million of coverage per accident, and (2) each Rating Agency has delivered a
letter to the Owner Trustee (as the holder of the SUBI Certificates) and the
Indenture Trustee to the effect that the obtaining of any such replacement
insurance will not cause its then-current rating of any class of Notes to be
qualified, reduced or withdrawn. The foregoing obligations of AHFC will survive
any termination of AHFC as Servicer under the Servicing Agreement.
ADDITIONAL DOCUMENT PROVISIONS
THE INDENTURE
EVENTS OF DEFAULT
An "Indenture Event of Default" will be any of the following events:
(1) the Trust defaults in the payment of any interest or principal
on any note for a period of five Business Days after any such
payment is due;
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(2) the Trust defaults in the observance or performance in any
material respect of any other covenant or agreement made in the
Indenture, or any representation or warranty of the Trust made
in the Indenture was incorrect in any material respect as of the
time made, which default:
(a) materially and adversely affects the rights of the
Noteholders; and
(b) continues uncured for a period of 30 days after written
notice shall have been given to the Trust by the
Indenture Trustee or to the Trust and the Indenture
Trustee by the holders of at least a majority of the
voting interests of the Class A Notes; provided,
however, that once the Class A Note Balance has been
reduced to zero, such notice of an event of default may
be given by the holders of at least a majority of the
voting interests of the Class B Notes, or
(3) certain events relating to the insolvency or bankruptcy of the
Trust.
If an Indenture Event of Default relating to non-payment of the type
described in item (1) above occurs and is continuing, then the Indenture Trustee
or Noteholders representing at least a majority of the voting interests of the
Notes, voting together as a single class, may declare all the Notes to be
immediately due and payable, by a notice in writing to the Trust (and to the
Indenture Trustee if given by Noteholders), and upon any such declaration the
Notes will become immediately due and payable. If an Indenture Event of Default
relating to covenants, agreements, representations or warranties of the type
described in item (2) above occurs and is continuing, then the Indenture Trustee
or Noteholders representing at least a majority of the voting interests of the
Class A Notes (and, after the Class A Note Balance has been reduced to zero,
Noteholders representing at least a majority of the voting interests of the
Class B Notes) may declare all the Notes to be immediately due and payable, by a
notice in writing to the Trust (and to the Indenture Trustee if given by
Noteholders), and upon any such declaration the Notes will become immediately
due and payable. Upon an Indenture Event of Default relating to insolvency with
respect to the Trust, the Notes will become immediately due and payable
automatically without the giving of any notice.
At any time after such a declaration of acceleration of maturity has
been made and before a judgment or decree for payment of the money due has been
obtained by the Indenture Trustee, (1) if the Notes have been declared
immediately due and payable in connection with an Indenture Event of Default
relating to non-payment of the type described in item (1) above, Noteholders
representing 100% of the voting interests of the Notes, voting together as a
single class, or (2) if the Notes have been declared immediately due and payable
in connection with an Indenture Event of Default relating to covenants,
agreements, representations or warranties of the type described in item (2)
above, Noteholders representing at least a majority of the voting interests of
the Class A Notes (and, after the Class A Note Balance has been reduced to zero,
Noteholders representing at least a majority of the voting interests of the
Class B Notes), in either case by written notice to the Trust and the Indenture
Trustee, may rescind and annul this declaration and its consequences under
certain circumstances; provided that a declaration that the Notes are
immediately due and payable in connection with a default related to a covenant
or provision of the Indenture, which covenant or provision cannot be modified
without the waiver or consent of all the holders of the outstanding Notes, may
only be rescinded and annulled by Noteholders representing 100% of the voting
interests of the Notes, voting together as a single class.
After acceleration of the Notes, the Indenture Trustee may (1)
institute a proceeding to collect amounts due or foreclose on Trust property,
(2) exercise remedies as a secured party, (3) sell the SUBI Interest (in
accordance with the procedures described below) or (4) elect to have the Trust
maintain
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possession of the SUBI Interest and continue to apply collections as if there
had been no declaration of acceleration.
The Indenture Trustee will be under no obligation to exercise any of
the rights or powers under the Indenture at the request or direction of any of
the holders of the Notes, if the Noteholders shall not have offered to the
Indenture Trustee reasonable security or indemnity against the costs, expenses
and liabilities which might be incurred by the Indenture Trustee in complying
with such request or direction. Subject to the provisions for indemnification
and limitations contained in the Indenture, Noteholders representing in the
aggregate more than 50% of the voting interests of the Notes, voting together as
a single class, will have the right to direct the time, method and place of
conducting any proceeding or any remedy available to the Indenture Trustee, and
Noteholders representing in the aggregate more than 50% of the voting interests
of the outstanding Notes, voting together as a single class, may, in certain
cases, waive any default with respect thereto, except a default in the payment
of principal or interest or a default in respect of a covenant or provision of
the Indenture that cannot be modified without the waiver or consent of all the
holders of the outstanding Notes.
No holder of a Note will have the right to institute any proceeding
with respect to the Indenture, unless:
(1) the holder previously gave written notice of a continuing
Indenture Event of Default to the Indenture Trustee;
(2) Noteholders representing in the aggregate not less than 25% of
the voting interests of the Notes, voting together as a single
class, made written request to the Indenture Trustee to
institute such proceeding in its own name as Indenture Trustee;
(3) the holder or holders offered the Indenture Trustee reasonable
indemnity against the costs, expenses and liabilities to be
incurred in complying with this request;
(4) the Indenture Trustee has, for 60 days, failed to institute such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Indenture Trustee during the 60-day period by more
than 50% of the voting interests of the outstanding Notes,
voting together as a single class.
If an Indenture Event of Default occurs, the Indenture Trustee may,
and, upon receipt of written instructions from Noteholders representing in the
aggregate voting interests of not less than a majority of interest of the
outstanding Class A Notes, voting together as a single class, or more than 50%
of the voting interests of the outstanding Notes, voting together as a single
class, shall (subject to its election to maintain possession of the SUBI
Interest as described above) publish a notice stating that the Indenture Trustee
intends to sell or dispose of the SUBI Interest and the SUBI Certificates and
the other property of the Trust in a commercially reasonable manner. Following
such publication, unless otherwise prohibited by applicable law, the Indenture
Trustee will sell or otherwise dispose of the SUBI Interest, the SUBI
Certificates and such other property in a commercially reasonable manner and on
commercially reasonable terms; provided that such sale may only be made with the
consent of all the Noteholders if proceeds realized as a result of such sale
would be insufficient to discharge in full the amounts then due and unpaid upon
the Notes for principal and interest. The net sale or disposition proceeds of
the SUBI Interest, the SUBI Certificates and such other property will be
distributed to the Noteholders in the priority provided for herein, and the
principal portion of the Investor Percentage of such proceeds will be
distributed first, on a pro rata basis, to the Class A-1, Class A-2, Class A-3
and Class A-4 Noteholders based on their respective Class Note Balances until
the Class A-1, Class A-2, Class A-3 and Class A-4
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Notes have been paid in full, and second, to the Class B Noteholders. If such
proceeds, together with all amounts on deposit in the Accounts, the Reserve
Fund, and, in the case of the Class A-4 Notes, certain amounts otherwise
distributable in respect of the Class B Notes, are insufficient to pay the
Note Balance of a class of Notes, any unreimbursed Note Principal Loss Amount
in respect of such class of Notes and any accrued and unpaid interest thereon
in full, the related Noteholders will suffer a corresponding loss.
VOTING INTERESTS
The "voting interests" of the (1) Class A Notes will be allocated among
the Class A-1, Class A-2, Class A-3 and Class A-4 Noteholders or Note Owners, as
the case may be, in accordance with their respective Class A Note Balances, as
the context may require, and (2) Class B Notes will be allocated among the Class
B Noteholders in accordance with the Class B Note Balance represented thereby.
Notwithstanding the foregoing, in certain circumstances, any Class A Notes or
Class B Notes, as the case may be, held or beneficially owned by HTC LP, HTD LP,
AHFC or any of their respective affiliates shall be excluded from such
determination.
ANNUAL COMPLIANCE STATEMENT.
The Trust will be required to file annually with the Indenture Trustee
and each Rating Agency a written statement as to the fulfillment of its
obligations under the Indenture.
INDENTURE TRUSTEE'S ANNUAL REPORT.
The Indenture Trustee will be required to mail each year to all
Noteholders a brief report relating to its eligibility and qualification to
continue as Indenture Trustee, any amounts advanced by it under the Indenture,
the amount, interest rate and maturity date of indebtedness owing by the Trust
to the Indenture Trustee in its individual capacity, the property and funds
physically held by the Indenture Trustee as such and any action taken by it that
materially affects the Notes and that has not been previously reported.
SATISFACTION AND DISCHARGE OF INDENTURE.
The Indenture will be discharged with respect to the collateral
securing the Notes upon the delivery to the Indenture Trustee for cancellation
of all Notes or, with certain limitations, upon deposit with Indenture Trustee
of funds sufficient for the payment in full of all such Notes.
NO PETITION
The Indenture Trustee (or any co-trustee or separate trustee appointed
pursuant to the Indenture) will agree not to institute, or join in, any
bankruptcy or similar proceeding against the Trust, HFI, HTI, HTA LP, HTB LP,
HTC LP, HTD LP, HTA LLC, HTB LLC, HTC LLC and HTD LLC (collectively, the
"Transferor Affiliates"), the Origination Trust or the Origination Trustee until
one year and one day after the later of (a) payment of the Notes in full and (b)
final payment of all other financings involving interests in the Origination
Trust (including the transaction described herein and all other transactions
involving the UTI and each Other SUBI).
GOVERNING LAW
The Indenture will be governed by the laws of the state of New York.
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ADDITIONAL AGREEMENT PROVISIONS
Certain provisions of the Agreement are described under "Description of
the Notes". The following is a summary of additional provisions of the
Agreement.
NO PETITION
Each of HTC LP, HTD LP, the Indenture Trustee and the Owner Trustee
will agree not to institute, or join in, any bankruptcy or similar proceeding
against the Trust, the Origination Trustee, the Origination Trust, HFI, HTI, HTA
LP, HTB LP, HTC LP, HTD LP, HTA LLC, HTB LLC, HTC LLC and HTD LLC (collectively,
the "Transferor Affiliates"), the Origination Trust or the Origination Trustee
until one year and one day after the later of (a) payment of the Notes in full
and (b) final payment of all other financings involving interests in the
Origination Trust (including the transaction described herein and all other
transactions involving the UTI and each Other SUBI).
THE OWNER TRUSTEE
U.S. Bank will be the Owner Trustee under the Agreement. The Corporate
Trust Office of the Owner Trustee is located at One Illinois Center, 111 East
Wacker Drive, Suite 3000, Chicago, Illinois 60601. U.S. Bank is not affiliated
with AHFC or any of its affiliates.
The Owner Trustee may resign at any time, in which event HTC LP and HTD
LP will be obligated to appoint a successor Owner Trustee. HTC LP and HTD LP may
also remove the Owner Trustee if the Owner Trustee:
(1) ceases to be eligible to continue as such under the Agreement;
(2) becomes legally unable to act; or
(3) becomes insolvent.
If the Owner Trustee resigns, or if HTC LP or HTD LP elects to remove
the Owner Trustee under the circumstances described above, HTC LP and HTD LP
will be obligated to appoint a successor Owner Trustee. Any resignation or
removal of the Owner Trustee and appointment of a successor Owner Trustee will
not become effective until acceptance of the appointment by such successor Owner
Trustee.
GOVERNING LAW
The Agreement will be governed by the laws of the state of Delaware.
THE SUBI TRUST AGREEMENT
THE SUBI, THE OTHER SUBIS AND THE UTI
HTA LP and HTB LP are the grantors and, as holders of the 99%
beneficial interest and 1% beneficial interest in the UTI, respectively, initial
beneficiaries of the Origination Trust. In their capacities as grantors and
beneficiaries, the UTI Beneficiaries will from time to time assign, transfer,
grant and convey (or cause to be assigned, transferred, granted and conveyed) to
the Origination Trust or the Origination Trustee on behalf of the Origination
Trust, the Origination Trust Assets. HTA LP and HTB LP will hold the 99% UTI
Certificate and the 1% UTI Certificate, respectively, which represent a
beneficial interest in all Origination Trust Assets other than the SUBI Assets
and the Other SUBI Assets.
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The UTI Beneficiaries may in the future pledge the UTI Certificates as
security for obligations to third-party lenders and may in the future create
and sell or pledge Other SUBIs in connection with financings similar to the
transaction described herein. Each holder or pledgee of any UTI Interest and
any interest in any Other SUBI will be required to expressly disclaim any
interest in the Origination Trust Assets other than the UTI Assets or the
Other SUBI Assets, respectively, and to fully subordinate any claims to such
other Origination Trust Assets in the event that this disclaimer is not given
effect. Except under the limited circumstances described under "Certain Legal
Aspects of the Origination Trust and the SUBI -- The SUBI" and "Additional
Document Provisions -- The SUBI Trust Agreement -- The SUBI, the Other SUBIs
and the UTI", the SUBI Assets will not be available to make payments in
respect of, or pay expenses relating to, the UTI or any Other SUBIs, and the
Other SUBI Assets evidenced by any Other SUBIs will not be available to make
payments on, or pay expenses relating to, the SUBI, the UTI or any Other SUBI.
Each Other SUBI will be created pursuant to a supplement to the
Origination Trust Agreement (each, an "Other SUBI Supplement") which will amend
the Origination Trust Agreement only with respect to the Other SUBI to which it
relates. The SUBI Supplement will amend the Origination Trust Agreement only as
it relates to the SUBI and no Other SUBI Supplement will amend the Origination
Trust Agreement as it relates to the SUBI.
All Origination Trust Assets, including the SUBI Assets, will be owned
by the Origination Trustee on behalf of the beneficiaries of the Origination
Trust. The SUBI Assets will be segregated from the rest of the Origination Trust
Assets on the books and records of the Origination Trustee and the Servicer and
the holders of other beneficial interests in the Origination Trust (including
the UTI and any Other SUBIs) will have no rights to the SUBI Assets. Liabilities
of the Origination Trust shall be allocated to the SUBI Assets, the UTI Assets
or Other SUBI Assets, respectively, if incurred with respect thereto, or will be
allocated pro rata among all Origination Trust Assets if incurred with respect
to the Origination Trust Assets generally.
SPECIAL OBLIGATIONS OF HTA LP AND HTB LP AS UTI BENEFICIARIES AND
GRANTORS
The UTI Beneficiaries will be liable for all debts and obligations
arising with respect to the Origination Trust Assets allocated to the UTI or the
operation of the Origination Trust; provided, however, that their liability with
respect to any pledge of any interest in the UTI and any assignee or pledgee of
the SUBI or the SUBI Certificates or any Other SUBI or Other SUBI Certificate
shall be as set forth in the financing documents relating thereto. To the extent
the UTI Beneficiaries pay or suffer any liability or expense with respect to the
Origination Trust Assets or the operation of the Origination Trust, the UTI
Beneficiaries will be indemnified, defended and held harmless out of the
Origination Trust Assets against any such liability or expense (including
reasonable attorneys' fees and expenses).
ORIGINATION TRUSTEE DUTIES AND POWERS; FEES AND EXPENSES
Pursuant to the SUBI Trust Agreement, the Origination Trustee will be
required to, among other things, (1) apply for and maintain (or cause to be
applied for and maintained) all licenses, permits and authorizations necessary
and appropriate to carry out its duties as Origination Trustee, and (2) file (or
cause to be filed) applications for certificates of title as are necessary and
appropriate so as to cause the Origination Trust or the Origination Trustee on
behalf of the Origination Trust to be recorded as the holder of legal title of
record to the Leased Vehicles. In carrying out the foregoing duties, the
Origination Trustee will be required to exercise the same degree of care and
skill as a prudent person would exercise or use under the circumstances in the
conduct of such person's own affairs.
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The Origination Trustee may be replaced by the UTI Beneficiaries (1) if
the Origination Trustee ceases to be qualified in accordance with the terms of
the SUBI Trust Agreement, (2) if certain representations and warranties made by
the Origination Trustee in the SUBI Trust Agreement prove to have been
materially incorrect when made, (3) in events of bankruptcy or insolvency or (4)
at the discretion of the UTI Beneficiaries. Upon removal of the Origination
Trustee, the UTI Beneficiaries will appoint a successor Origination Trustee. Any
removal of the Origination Trustee will be ineffective until a successor trustee
has accepted its appointment. The Indenture Trustee, as pledgee of the SUBI
Certificates, will exercise its powers under the SUBI Trust Agreement to cause
the Origination Trustee to remove or replace the Trust Agent for a material
breach of its obligations if HTA LP, HTB LP or any Noteholder has given written
notice to the Origination Trustee and the Trust Agent of such breach and the
Trust Agent has not cured the breach in all material respects within 30 Business
Days thereafter.
The Origination Trustee will:
(1) make no representations as to the validity or sufficiency of:
(a) the SUBI, the SUBI Interest, the SUBI Certificates, the
Retained SUBI Interest or the Retained SUBI
Certificates, or
(b) any Contract, Leased Vehicle or related document;
(2) not be responsible for performing any of the duties of the UTI
Beneficiaries or the Servicer; and
(3) not be accountable for:
(a) the use or application by any owners of beneficial
interests in the Origination Trust Assets of any funds
paid in respect of the Origination Trust Assets, or
(b) the investment of any of such monies before such monies
are deposited into the accounts relating to:
(i) the SUBI,
(ii) the Other SUBIs, or
(iii) the UTI.
The Origination Trustee will not independently verify the Contracts or
the Leased Vehicles. The duties of the Origination Trustee will generally be
limited to:
(1) the acceptance of assignments of lease contracts;
(2) the titling of the related leased vehicles in the name of the
Origination Trust or the Origination Trustee on behalf of the
Trust;
(3) the creation of the SUBI, the Other SUBIs and the UTI;
(4) the maintenance of the SUBI Collection Account and accounts
relating to the Other SUBIs and the UTI; and
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(5) the receipt of the various certificates, reports or other
instruments required to be furnished to the Origination Trustee
under the SUBI Trust Agreement, in which case it will only be
required to examine them to determine whether they conform to
the requirements of the SUBI Trust Agreement.
The Origination Trustee is not obligated to:
(1) exercise any of the rights or powers vested in it by the SUBI
Trust Agreement or to make any investigation of matters arising
thereunder; or
(2) institute, conduct or defend any litigation thereunder or in
relation thereto at the request, order or direction of the UTI
Beneficiaries, the Servicer or by the holders of a majority
interest in the SUBI, unless such party or parties have offered
to the Origination Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred
therein or thereby.
The reasonable expenses of every such exercise of rights or powers or
examination shall be paid by the party or parties requesting such exercise or
examination or, if paid by the Origination Trustee, shall be a reimbursable
expense of the Origination Trustee.
The Origination Trustee may enter from time to time into one or more
agency agreements with such person or persons, including without limitation any
affiliate of the Origination Trustee (each, a "Trust Agent"), as are by
experience and expertise qualified to act in a trustee capacity and otherwise
acceptable to the UTI Beneficiaries. The Origination Trustee has engaged U.S.
Bank as the initial Trust Agent. Pursuant to the SUBI Trust Agreement, the Trust
Agent shall perform each and every obligation of the Origination Trustee under
the SUBI Trust Agreement.
The Origination Trustee shall be paid reasonable compensation and
reimbursement of all reasonable expenses (including reasonable attorneys' fees)
out of Origination Trust Assets. However, with regard to the SUBI Assets
allocable to the SUBI Interest, this requirement is subject to the provisions
regarding Capped Origination Trust Administrative Expenses described under
"Description of the Notes -- Distributions on the Notes -- Distributions of
Interest".
INDEMNITY OF ORIGINATION TRUSTEE AND TRUST AGENTS
The Origination Trustee and each Trust Agent will be indemnified and
held harmless out of and to the extent of the Origination Trust Assets with
respect to any loss, liability or expense, including reasonable attorneys' fees
and expenses (collectively, "Indemnified Amounts"), arising out of or incurred
in connection with:
(1) any of the Origination Trust Assets (including without
limitation any Indemnified Amount relating to lease contracts or
leased vehicles of the Origination Trust, consumer fraud, any
consumer leasing act violations, misrepresentations, deceptive
and unfair trade practices and any other claims arising in
connection with any lease, personal injury or property damage
claims arising from any such leased vehicle or any claim with
respect to any tax arising with respect to any Origination Trust
Asset); or
(2) the Origination Trustee's or the Trust Agent's acceptance or
performance of the obligations and duties contained in the SUBI
Trust Agreement or any agency agreement.
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Notwithstanding the foregoing, neither the Origination Trustee nor any
Trust Agent will be indemnified or held harmless out of the Origination Trust
Assets as to any Indemnified Amounts:
(1) for which the Servicer shall be liable pursuant to the Servicing
Agreement (unless such Indemnified Amount is an expense for
which the Servicer would be entitled to reimbursement from the
Origination Trust Assets pursuant to the Servicing Agreement or
the Servicer shall not have paid such Indemnified Amount upon
the final determination of its liability therefor);
(2) incurred by reason of the Origination Trustee's or such Trust
Agent's willful misfeasance, bad faith or negligence; or
(3) incurred by reason of the Origination Trustee's or Trust Agent's
breach of its respective representations and warranties pursuant
to the SUBI Trust Agreement or the Servicing Agreement.
Such indemnities may result in Additional Loss Amounts to the extent
payable in respect of the SUBI Assets or allocated to the SUBI.
TERMINATION
The Origination Trust and the respective obligations and
responsibilities of the UTI Beneficiaries and the Origination Trustee shall
terminate upon the later to occur of:
(1) the payment to the UTI Beneficiaries and each permitted
purchaser, assignee and pledgee of any of the UTI Beneficiaries' interests in
the Origination Trust (including the Indenture Trustee, with respect to the SUBI
Interest) of all amounts and obligations required to be paid to them, and the
expiration or termination of all financings secured by the Origination Trust
Assets by their respective terms; and
(2) the maturity or liquidation and the disposition of all
Origination Trust Assets and the disposition to or upon the order of the UTI
Beneficiaries or any permitted purchaser, assignee or pledgee of all net
proceeds thereof.
NO PETITION
Each of the parties to the SUBI Trust Agreement will agree not to
institute, or join in, any bankruptcy or similar proceeding against the Trust,
HFI, HTI, HTA LP, HTB LP, HTC LP, HTD LP, HTA LLC, HTB LLC, HTC LLC and HTD LLC
(collectively, the "Transferor Affiliates"), the Origination Trust or the
Origination Trustee until one year and one day after the later of (a) payment of
the Notes in full and (b) final payment of all other financings involving
interests in the Origination Trust (including the transaction described herein
and all other transactions involving the UTI and each Other SUBI). Each pledgee
or assignee of any UTI or other SUBI must give a similar non-petition covenant.
OWNER TRUSTEE AND INDENTURE TRUSTEE AS THIRD-PARTY BENEFICIARIES
As the holder of the SUBI Interest, the Owner Trustee and, as the
pledgee of the SUBI Interest, the Indenture Trustee will be third-party
beneficiaries of the SUBI Trust Agreement. Therefore, the Owner Trustee or the
Indenture Trustee may, and, upon the direction of Noteholders representing in
the aggregate more than 50% of the voting interests of the outstanding Notes,
voting together as a single
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class, the Indenture Trustee will exercise any right conferred by the SUBI
Trust Agreement upon a holder or pledgee of any interest in the SUBI.
GOVERNING LAW
The SUBI Trust Agreement will be governed by the laws of the state of
Delaware.
THE SERVICING AGREEMENT
GENERAL
Pursuant to the Servicing Agreement, the Servicer will perform on
behalf of the Origination Trust all of the obligations of the lessor under the
Contracts, including, but not limited to:
(1) collecting and processing payments;
(2) responding to inquiries of the lessees;
(3) investigating delinquencies;
(4) sending payment statements and reporting tax information to the
lessees;
(5) collecting and remitting certain sales and use and other taxes
to state and local governments and agencies;
(6) advancing certain licensing fees, payments of fines for
citations and costs of disposition of Leased Vehicles related to
Charged-off Contracts, Matured Contracts and Additional Loss
Contracts and policing the Contracts;
(7) commencing legal proceedings to enforce the Contracts on behalf
of the Origination Trust;
(8) administering the Contracts, including accounting for
collections; and
(9) furnishing monthly and annual statements to the Origination
Trustee with respect to distributions and generating federal
income tax information.
The Origination Trustee will furnish the Servicer with all powers of
attorney and other documents necessary or appropriate to enable the Servicer to
perform its servicing and administrative duties under the Servicing Agreement.
The Indenture Trustee and the Owner Trustee will be third-party beneficiaries of
the Servicing Agreement.
CUSTODY OF CONTRACT DOCUMENTS AND CERTIFICATES OF TITLE
To assure uniform quality in servicing the Contracts and AHFC's own
portfolio of motor vehicle lease contracts and to reduce administrative costs,
the Origination Trustee will appoint AHFC, as Servicer, to be its agent, bailee
and custodian of the (1) Contracts, (2) certificates of title relating to the
Leased Vehicles and (3) insurance policies and other documents relating to the
Contracts, the related lessees and the Leased Vehicles. These documents will not
be physically segregated from other motor vehicle lease contracts, certificates
of title and insurance policies and other documents relating to such lease
contracts and leased vehicles of AHFC, or those which AHFC services for others,
including those leased vehicles constituting Origination Trust Assets that are
not evidenced by the SUBI. The accounting
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records and computer systems of AHFC will reflect the interests of the
holders of interest in the SUBI in the Contracts and the Leased Vehicles and
"protective" UCC financing statements reflecting certain interests in the
Contracts and rights in the Contracts will be filed, as more fully described
under "Certain Legal Aspects of the Contracts and the Leased Vehicles --
Back-up Security Interests". The Servicer will be responsible for filing:
(1) all periodic sales and use tax or property (real or personal)
tax reports;
(2) periodic renewals of licenses and permits;
(3) periodic renewals of any qualification to act as a business
trust; and
(4) other periodic governmental filings, registration or approvals
arising with respect to or required of the Origination Trustee
or the Origination Trust.
COLLECTIONS
The Servicer will service, administer and collect all amounts due on or
in respect of the Contracts. The Servicer will make commercially reasonable
efforts to collect these amounts and, in a manner consistent with its
obligations under the Servicing Agreement, will service the Contracts generally
in accordance with the customary and usual procedures used by servicers for
motor vehicle lease contracts.
Consistent with its usual procedures, the Servicer may, in its
discretion, defer a payment of a Monthly Payment due under any Contract or
extend the Maturity Date of any Contract; provided that the Servicer may not
(i) grant more than [six] deferrals under any individual Contract, (ii)
extend the Maturity Date of any Contract by more than [six] months after its
original Maturity Date or (iii) extend the Maturity Date of any Contract such
that its new Maturity Date is later than the first day of the month preceding
the month of the Final Scheduled Maturity Date for the Class B Notes. The
Servicing Agreement will provide that in the event that the Servicer defers
or extends a Contract in contravention of the foregoing, the Servicer will
deposit into the SUBI Collection Account an amount equal to the Reallocation
Payment in respect of such Contract on the Deposit Date relating to the
Collection Period in which such deferral or extension was granted (or on the
Deposit Date relating to the Collection Period in which the Servicer
discovers or is notified that an improper deferral or extension was granted),
at which time such Contract and the related Leased Vehicle will no longer
constitute SUBI Assets as they will be reallocated as UTI Assets or, in some
cases, will be transferred to the Servicer. The Servicing Agreement will
additionally require the Servicer to make an Advance on each Contract which
has been deferred to the extent that the deferral would reduce the amount of
payments on the Contract relative to the originally scheduled Monthly
Payments. The amount of any Extension Fee the Servicer receives in connection
with the extension of a Contract will not be deposited into the SUBI
Collection Account.
NOTIFICATION OF LIENS AND CLAIMS
The Servicer will be required to notify HTC LP and HTD LP (in the event
that AHFC is not acting as the Servicer), the Indenture Trustee, HTA LP, HTB LP,
holders of the related Notes and the Origination Trustee immediately of all
liens or claims of whatever kind made by a third party that would materially
adversely affect the interests of, among others, HTC LP, HTD LP, the Origination
Trust or any SUBI Asset (with respect to, among other things, any Contract or
Leased Vehicle). Following the Servicer's discovery of any such lien or claim
against any Leased Vehicle (other than any Administrative Lien), it will take
whatever actions it deems reasonably necessary to remove the lien or claim. See
"Certain Legal Aspects of the Origination Trust and the SUBI -- Structural
Considerations".
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ADVANCES
On each Deposit Date, the Servicer will be obligated to deposit into
the SUBI Collection Account an advance in an amount equal to the aggregate
Monthly Payments due but not received during the related Collection Period on
Contracts that are 31 days or more past due as of the end of the related
Collection Period or Contracts on which a deferral has been made (collectively,
an "Advance") as described under "Additional Document Provisions-- The Servicing
Agreement -- Collections".
Notwithstanding the foregoing, the Servicer will not be required to
make an Advance to the extent that such Advance would constitute a
Nonrecoverable Advance. A "Nonrecoverable Advance" will be any Advance that, in
the reasonable judgment of the Servicer, may not be ultimately recoverable by
the Servicer from Net Liquidation Proceeds or otherwise. In making Advances, the
Servicer will assist in maintaining a regular flow of scheduled principal and
interest payments on the Contracts, rather than to guarantee or insure against
losses. Accordingly, all Advances shall be reimbursable to the Servicer, without
interest, if and when a payment relating to a Contract with respect to which an
Advance has previously been made is subsequently received. In addition, the
Servicer will be reimbursed for all Nonrecoverable Advances from collections on
the Contracts and Leased Vehicles.
SECURITY DEPOSITS
The Origination Trust's rights related to the Contracts will include
all rights under the Contracts to the refundable security deposits paid by the
lessees at the time the Contracts are originated (the "Security Deposits"). As
part of its general servicing obligations, the Servicer will retain possession
of each Security Deposit remitted by the lessees and will apply the proceeds of
these Security Deposits in accordance with the terms of the Contracts, its
customary and usual servicing procedures and applicable law. However, in the
event that any Contract becomes a Charged-off Contract or the related Leased
Vehicle is repossessed, the related Security Deposit will, to the extent
provided by applicable law and such Contract, constitute Liquidation Proceeds.
On the Deposit Date related to the Collection Period in which the Security
Deposit becomes Liquidation Proceeds, the Servicer will deposit such amounts in
the SUBI Collection Account. The Origination Trust may not have an interest in
the Security Deposits that is enforceable against third parties until such time
as they are deposited into the SUBI Collection Account. The Servicer will not be
required to segregate Security Deposits from its own funds (except for Security
Deposits paid in connection with Contracts originating in the state of New York,
which Security Deposits must be segregated). Any income earned from any
investment on the Security Deposits by the Servicer shall be for the account of
the Servicer as additional servicing compensation (except for income earned on
Security Deposits paid in connection with Contracts originating in the state of
New York, which income, if any, must be reserved for the party which initally
paid the Security Deposit).
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MONITORING LESSEES' INSURANCE ON LEASED VEHICLES
In the Servicing Agreement, the Servicer will agree to take steps to
ensure that each lessee shall have, and shall maintain in full force and effect
during the term of the related Contract, automotive liability insurance in
amounts at least equal to the amount prescribed by applicable state law. AHFC
uses a third party service provider (PDP Group, Inc. of Hunt Valley, Maryland)
to verify that each lessee's insurance coverage complies with applicable legal
requirements. See "American Honda Finance Corporation-Insurance." Coverage
documentation is obtained shortly after each lease inception and then monitored
throughout the life of the lease to confirm that the lessees renew insurance
policies upon the scheduled expiration. If a lessee fails to obtain or maintain
the required insurance, the related lease contract will be in default. AHFC's
practice in such a circumstance is to repossess the related leased vehicle
rather than to obtain insurance on behalf of and at the expense of the related
lessee.
In the event that automobile physical damage (comprehensive and
collision) coverage was not obtained or maintained by a lessee, and insurance
proceeds for the damage or loss of a leased vehicle are not collectible, the
Servicing Agreement will require the Servicer to promptly pay into the SUBI
Collection Account all amounts as would otherwise have been recoverable as
Insurance Proceeds. This obligation will survive any termination of AHFC as
Servicer under the Servicing Agreement.
REALIZATION UPON CHARGED-OFF CONTRACTS
The Servicer will use commercially reasonable efforts to repossess and
liquidate the Leased Vehicle relating to a Contract that comes into and
continues in default and for which the Servicer is unable to arrange for
satisfactory collection of delinquent payments (a "Defaulted Vehicle"). This
liquidation may occur through repossession of the Defaulted Vehicle and
disposition at a public or private sale, or the Servicer may take any other
action permitted by applicable law. The Servicer may (1) enforce all rights
under any such Contract, (2) sell the Defaulted Vehicle in accordance with the
Contract and (3) commence and prosecute any proceedings in connection with the
Contract. In connection with any such repossession, the Servicer will follow its
customary practices and procedures as it shall deem necessary and advisable, and
in any event shall act in compliance with all applicable laws. The Servicer will
be required to repair the Leased Vehicle only if it reasonably determines that
such expenditure is likely to enhance Net Liquidation Proceeds. The Servicer
will be responsible for all costs and expenses it incurs in connection with the
sale or other disposition of Leased Vehicles related to Charged-off Contracts
and other Contracts as to which a lessee has defaulted and the related Leased
Vehicles, but it will be entitled to reimbursement to the extent that these
costs constitute Repossession Expenses or other Liquidation Expenses or
Insurance Expenses. Proceeds from the sale or other disposition of repossessed
Defaulted Vehicles will constitute Repossession Proceeds and will be deposited
into the SUBI Collection Account. The Servicer will be entitled to reimbursement
of all related Repossession Expenses from amounts on deposit in the SUBI
Collection Account upon presentation to the Indenture Trustee of an officer's
certificate of the Servicer (or may net such amounts prior to the deposit in the
SUBI Collection Account) and Principal Collections in respect of a Collection
Period will include all Net Repossession Proceeds collected during that
Collection Period.
"Insurance Expenses" are any Insurance Proceeds (1) applied to the
repair of the related Leased Vehicle, (2) released to the related lessee in
accordance with applicable law or the customary servicing procedures of the
Servicer or (3) representing other related expenses incurred by the Servicer not
otherwise included in Liquidation Expenses and recoverable by the Servicer under
the Servicing Agreement.
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MATURED LEASED VEHICLE INVENTORY
Upon the scheduled maturity of a Contract, the related lessee has the
option to acquire the related Leased Vehicle for an amount equal to its Residual
Value plus any applicable taxes and all other incidental charges which may be
due under that Contract. If the lessee chooses not to exercise this option but
instead returns the Leased Vehicle, the originating Dealer will have the option
to purchase such vehicle for the same price. If the Leased Vehicle is returned
to the Servicer, the Leased Vehicle will be placed in Matured Leased Vehicle
Inventory, and the Servicer will use commercially reasonable efforts sell or
otherwise dispose of the Leased Vehicle. See "American Honda Finance Corporation
- -- Methods of Vehicle Disposal".
Principal Collections in respect of a Collection Period will include
all Net Matured Leased Vehicle Proceeds collected during such Collection Period.
The related Matured Leased Vehicle Proceeds will be deposited into the SUBI
Collection Account; provided, however, that the related Matured Leased Vehicle
Expenses may be netted against Matured Lease Vehicle Proceeds prior to deposit
in the SUBI Collection Account if an officer's certificate is provided by the
Servicer. The Servicer will also be entitled to reimbursement of certain
payments made and expenses and charges it incurred in the ordinary course of
servicing the Contracts (including payments the Servicer makes on behalf of the
related lessees in connection with the payment of taxes, vehicle registration,
clearance of parking tickets and similar items) from Collections with respect to
the related Contracts from separate payment thereof by the related lessees or
from amounts realized upon the final disposition of the related Leased Vehicle.
To the extent these amounts are not reimbursed prior to or at the final
disposition of such Leased Vehicle but remain unpaid by the related lessee,
these unreimbursed amounts, together with any unpaid Monthly Payments under the
related Contract, will be treated as Matured Leased Vehicle Expenses or
Liquidation Expenses and will reduce Net Matured Leased Vehicle Proceeds or Net
Liquidation Proceeds, as the case may be.
RECORDS, SERVICER DETERMINATIONS AND REPORTS
The Servicer will retain or cause to be retained all data (including,
without limitation, computerized records, operating software and related
documentation) relating directly to or maintained in connection with the
servicing of the Contracts. Upon the occurrence and continuance of a Servicer
Termination Event and termination of the Servicer's obligations under the
Servicer Agreement, the Servicer will use commercially reasonable efforts to
effect the orderly and efficient transfer of the servicing of the Contracts to a
successor servicer.
The Servicer will perform selected monitoring and reporting functions
on behalf of HTC LP, HTD LP, the Indenture Trustee, the Owner Trustee, the
Origination Trustee and the Noteholders, including:
(1) the preparation and delivery to the Indenture Trustee, the
Origination Trustee and each Rating Agency of a monthly
certificate, on or before each Determination Date, setting forth
all information necessary to make all distributions required in
respect of the related Collection Period; and
(2) the preparation and delivery of monthly statements setting forth
information described under "Description of the Notes --
Statements to Noteholders", and an annual officer's certificate
specifying the occurrence and status of any Servicer Termination
Event.
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EVIDENCE AS TO COMPLIANCE
The Servicing Agreement will provide that a firm of independent
accountants will furnish to the Indenture Trustee within 120 days after March 31
of each year, beginning 120 days after March 31, 2000, a statement as to
compliance by the Servicer during the preceding twelve months ended March 31 (or
since the Closing Date in the case of the first statement) with specified
standards relating to:
(1) the servicing of the Contracts;
(2) the Servicer's accounting records and computer files with
respect thereto; and
(3) certain other matters.
The Servicing Agreement will also provide for delivery to the Indenture
Trustee, within 120 days of March 31 of each year, beginning 120 days after
March 31, 2000, of a certificate signed by an officer of the Servicer stating
that the Servicer has fulfilled its obligations under the Agreement throughout
the preceding twelve months ended March 31 (or since the Closing Date in the
case of the first such certificate) or, if there has been a default in the
fulfillment of any such obligation, describing each such default.
Note Owners or Noteholders may obtain copies of such statements and
certificates by written request addressed to the Indenture Trustee at its
Corporate Trust Office.
COMPLIANCE WITH ERISA
If the credit rating of AHFC becomes less than investment grade, then,
on a quarterly basis, AHFC shall provide the Indenture Trustee and each Rating
Agency with an officer's certificate stating that none of AHFC and its
affiliates for purposes of ERISA:
(1) maintains an ERISA plan which, as of its last valuation date,
had any unfunded current liability;
(2) anticipates that the value of the assets of any ERISA plan it
maintains would not be sufficient to cover any current
liability; and
(3) contemplates benefit improvements with respect to any plans then
maintained or the establishment of any new ERISA plans, either
of which would cause it to maintain an ERISA plan with unfunded
current liability (the "ERISA Compliance Test").
In the event that AHFC does not timely make the foregoing
certifications, all Excess Interest Collections in respect of each Distribution
Date, after giving effect to all allocation and applications or payments
required to be made therefrom on such Distribution Date, will be deposited into
the Reserve Fund until the ERISA Compliance Test is satisfied. On the
Distribution Date following the date on which such failure is cured, monies on
deposit in the Reserve Fund in excess of the Reserve Fund Requirement shall be
distributed to HTC LP and HTD LP.
SERVICING COMPENSATION
The Servicer will be entitled to compensation for the performance of
its servicing obligations under the Servicing Agreement. The Servicer will be
entitled to receive on each Distribution Date, a monthly fee (the "Servicing
Fee") for the related Collection Period equal to one-twelfth of the product of
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1.00% and the Aggregate Net Investment Value as of the first day of such
Collection Period (or, in the case of the first Distribution Date, as of the
Cutoff Date); the portion of the Servicing Fee allocable to the SUBI Interest
will be 99.8%. The Servicing Fee will be calculated and paid based upon a
360-day year consisting of twelve 30-day months.
The Servicer will also be entitled to additional servicing compensation
in the form of late fees and other administrative fees or similar charges paid
with respect to the Contracts and earnings from the investment of Security
Deposits to the extent lawful and as provided in the Contracts. See "Additional
Document Provisions -- The Servicing Agreement -- Security Deposits". The
Servicer will be entitled to retain any extension fees paid in connection with
an extended Contract ("Extension Fees") and also will be entitled to retain any
other payments (whether or not part of the fixed monthly payment) payable to the
lessor representing a late payment fee or an allocation to the related lessee of
insurance premiums, sales, personal property or excise taxes or any other
similar charge (collectively, the "Administrative Charge"). The Servicer will
pay all expenses it incurs in connection with its servicing activities under the
Servicing Agreement, including the payment of Uncapped Administrative Expenses
allocable to the SUBI Interest, and will not be entitled to reimbursement of
these expenses except to the extent any of these expenses constitute Insurance
Expenses or Liquidation Expenses in respect of a Contract or Leased Vehicle or
Reimbursable Servicer Expenses, or to the extent that Uncapped Administrative
Expenses are reimbursed out of Interest Collections.
"Reimbursable Servicer Expenses" are amounts advanced by the Servicer
to pay costs or expenses associated with a proceeding in connection with
defending or asserting the interest of the Origination Trust, the Origination
Trustee, on behalf of the Trust, or a UTI Beneficiary in any Origination Trust
Asset, including the Contracts or the Leased Vehicles, and the amounts paid by
the Servicer to the Origination Trustee or any Co-Trustee or Trust Agent as
compensation or reimbursement pursuant to the SUBI Trust Agreement.
The Servicing Fee will compensate the Servicer for performing the
functions of a third party servicer of the Contracts as an agent for the
Origination Trustee under the Servicing Agreement, including collecting and
processing payments, responding to inquiries of lessees on the Contracts,
investigating delinquencies, sending payment statements and reporting tax
information to lessees, paying costs of sale or other disposition of Leased
Vehicles relating to defaulted Contracts and Leased Vehicles included in Matured
Leased Vehicle Inventory, policing the SUBI Assets, administering the Contracts,
making Advances, accounting for collections, furnishing monthly and annual
statements to the Indenture Trustee with respect to distributions and generating
federal and state income tax information.
SERVICER PURCHASE OPTION
In order to avoid excessive administrative expenses, the Servicer will
have an option in certain circumstances to purchase all of the assets of the
Trust as described under "Description of the Notes -- Termination of the Trust;
Redemption of the Notes".
SERVICER RESIGNATION AND TERMINATION; SUCCESSOR SERVICERS
The Servicer may not resign from its obligations and duties under the
Servicing Agreement unless it determines that its duties thereunder, by reason
of a change in applicable law or regulations, would cause it to be in violation
of such law or regulations in a manner that would result in a material adverse
effect on the Servicer or its financial condition. No such resignation will
become effective until the date on which the Servicer becomes unable to act as
Servicer, unless a successor servicer has assumed the Servicer's obligations
under the Servicing Agreement. The Servicer may not assign the Servicing
Agreement or any of its rights, powers, duties or obligations thereunder except
as otherwise provided
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therein or except in connection with a consolidation, merger, conveyance,
transfer or lease made in compliance with the Servicing Agreement. The
Contracts are not so unique such that it would be extremely difficult to
appoint a successor servicer to service the Contracts. However, the
resignation or removal of the Servicer and the appointment of a successor
servicer could cause a temporary disruption in the servicing of the Contracts
and thus a temporary disruption in distributions due under the Notes.
The rights and obligations of the Servicer under the Servicing
Agreement may be terminated following the occurrence and continuance of a
Servicer Termination Event. See "Additional Document Provisions -- The Servicing
Agreement -- Rights Upon Servicer Termination Event".
INDEMNIFICATION BY THE SERVICER
Subject to certain exceptions, the Servicer will indemnify the
Origination Trustee (and any co-trustees), any Trust Agent and their respective
agents for any and all liabilities, losses, damages and expenses that may be
incurred by them as a result of any act or omission by the Servicer in
connection with the performance of its duties under the Servicing Agreement,
provided that any such loss, liability, claim, damage or expense arose out of
the Servicer's negligence, willful misconduct or bad faith in the performance of
its duties under the Servicing Agreement.
SERVICER TERMINATION EVENTS
"Servicer Termination Events" under the Servicing Agreement with
respect to the SUBI Assets will consist of, among other things:
(1) any failure by the Servicer to deliver to the Indenture Trustee
for distribution to Noteholders any required payment, which
failure continues unremedied for five Business Days after
discovery of the failure by an officer of the Servicer or
receipt by the Servicer of written notice of the failure from
the Indenture Trustee, the Origination Trustee or a Noteholder
who does not receive such required payment;
(2) any failure by the Servicer duly to observe or perform in any
material respect any other of its covenants or agreements in the
Servicing Agreement which failure materially and adversely
affects the rights of holders of interests in the SUBI or the
Noteholders and which continues unremedied for 90 days after
written notice of the failure is given as described in clause
(1) above;
(3) failure by the Servicer to deliver to the Origination Trustee or
the Indenture Trustee any report required to be delivered to the
Origination Trustee or the Indenture Trustee pursuant to the
Servicing Agreement within ten Business Days after the date such
report is due;
(4) any representation, warranty or statement of the Servicer made
in the Servicing Agreement (except for certain representations
regarding the characteristics of the Contracts and regarding the
Servicer's satisfaction of certain provisions related to
certificates of title of the Leased Vehicles) or any
certificate, report or other writing delivered pursuant to the
Servicing Agreement shall prove to be incorrect in any material
respect as of the time when the same shall be made which has a
material adverse effect on a Noteholder and this material
adverse effect continues unremedied for 30 days after written
notice of this failure is given as described in clause (1)
above;
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(5) failure by the Servicer to maintain or pay when due the premium
for any Contingent and Excess Liability Insurance Policies and
such failure continues unremedied for 10 days after discovery by
the Servicer or written notice of the failure is given described
in clause (1) above; or
(6) a conservator, receiver or bankruptcy trustee is appointed for
the Servicer relating to the occurrence of the insolvency or
bankruptcy of the Servicer (each, a "Servicer Insolvency
Event").
Notwithstanding the foregoing, a delay in or failure of performance
referred to under clause (1) for a period of ten Business Days, under clause (2)
for a period of 180 days, under clause (3) for a period of 60 Business Days or
under clause (4) for a period of 90 days, shall not constitute a Servicer
Termination Event if the failure or delay was caused by act of God or other
similar occurrence beyond the Servicer's reasonable control. Upon the occurrence
of any such event, the Servicer shall not be relieved from using all
commercially reasonable efforts to perform its obligations in a timely manner in
accordance with the terms of the Servicing Agreement and the Servicer shall
provide to the Indenture Trustee, the Origination Trustee, HTC LP, HTD LP and
the Noteholders prompt notice of such failure or delay by it, together with a
description of its efforts to so perform its obligations.
RIGHTS UPON SERVICER TERMINATION EVENT
As long as a Servicer Termination Event remains unremedied, the
Origination Trustee, upon the direction of the Indenture Trustee or Noteholders
representing in the aggregate more than 50% of the voting interests of the
Notes, voting together as a single class, may terminate all of the rights and
obligations of the Servicer under the Servicing Agreement with respect to the
SUBI Assets. In the event of such a termination affecting the SUBI Assets, the
Noteholders representing in the aggregate more than 50% of the voting interests
of the Notes, voting together as a single class, will be empowered to appoint a
successor servicer pursuant to a servicing agreement containing substantially
the same provisions as the Servicing Agreement on the SUBI Assets. If a
successor servicer is not appointed prior to the Servicer's termination or
resignation, the Trust Agent will succeed to the rights, powers,
responsibilities, duties and liabilities of the Servicer under the Servicing
Agreement on the SUBI Assets (excluding certain specific obligations listed in
the Servicing Agreement). If the Trust Agent requests that the Origination Trust
appoint a different successor servicer, the Origination Trust will appoint or
petition a court of competent jurisdiction to appoint any established entity the
regular business of which includes the servicing of motor vehicle lease
contracts as a successor servicer with respect to the SUBI Assets.
Upon appointment of a successor servicer, the successor servicer will
assume all of the rights and obligations of the Servicer under the Servicing
Agreement; provided, however, that no successor servicer will have any
responsibilities for the purchase of additional contracts or leased vehicles by
the Origination Trust or for making Advances. Any compensation payable to a
successor servicer may not exceed that permitted the predecessor servicer unless
the holders of the UTI, the SUBI and any Other SUBIs, as the case may be, bear
these excess costs exclusively. If a bankruptcy trustee or similar official has
been appointed for the Servicer, and no Servicer Termination Event other than
such appointment has occurred, the trustee or official may have the power to
prevent the Origination Trustee, the Indenture Trustee or such Noteholders from
effecting a transfer of servicing. Notwithstanding the termination of the
Servicer's rights and powers in such event, the Servicer will remain obligated
to perform certain specific obligations listed in the Servicing Agreement and to
reimburse the Trust Agent for any losses incurred in performing certain such
obligations, and will be entitled to payment of selected amounts payable to it
for services rendered prior to this termination.
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The Indenture Trustee, acting on the direction of Noteholders
representing in the aggregate more than 50% of the voting interests of the
Notes, voting together as a single class, may direct the Origination Trustee to
waive any default by the Servicer in the performance of the Servicer's
obligations under the Servicing Agreement and its consequences with respect to
the SUBI Assets, other than a default in making any required deposits to or
payments from an Account in accordance with the Servicing Agreement or in
respect of a covenant or provision of the Servicing Agreement that cannot be
modified or amended without the consent of each Noteholder (in which event the
related waiver will require the approval of holders of all of the Notes). No
such waiver will impair the rights of the Noteholders with respect to subsequent
defaults.
NO PETITION
The Servicer will agree not to institute, or join in, any bankruptcy or
similar proceeding against either UTI Beneficiary, the Origination Trust, the
Origination Trustee, HTC LP, HTD LP or any other Transferor Affiliate until one
year and one day after final payment of all financings involving interests in
the Origination Trust.
TERMINATION
The Servicing Agreement shall terminate upon the earlier to occur of:
(1) the dissolution of the Origination Trust;
(2) the discharge of the Servicer in accordance with its terms; or
(3) the mutual written determination of the parties thereto.
INDENTURE TRUSTEE, OWNER TRUSTEE AND ORIGINATION TRUSTEE AS THIRD-PARTY
BENEFICIARIES
The Owner Trustee (as the holder of the SUBI Interest), the Indenture
Trustee (as the pledgee of the SUBI Interest) and the Origination Trustee (on
behalf of the Origination Trust) will be third-party beneficiaries of the
Servicing Agreement.
GOVERNING LAW
The Servicing Agreement will be governed by the laws of the state of
California.
AMENDMENT OF BASIC DOCUMENTS
The Indenture, the Agreement, the SUBI Supplement, the Servicing
Agreement and the other agreements and instruments relating to the transactions
discussed herein (collectively, the "Basic Documents") may be amended by the
respective parties thereto, without the consent of the Noteholders, to cure any
ambiguity, to correct or supplement any provision which may be inconsistent with
any other provision in the Basic Documents, to add, change or eliminate any
other provisions which are inconsistent, or to add or amend any provision in
connection with permitting transfers of the Notes provided that:
(1) any such action will not, in the good faith judgment of the
parties, materially and adversely affect the interests of any
Noteholder, any Certificateholder, the Indenture Trustee, the
Owner Trustee or the Origination Trustee; or
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(2) the Owner Trustee and Indenture Trustee shall have been
furnished with an opinion of counsel to the effect that the
amendment will not adversely and materially affect the legal
interest of any Noteholder.
The Basic Documents may also be amended from time to time by the
parties thereto (including with respect to changing the formula for determining
the Reserve Fund Requirement, changing the manner by which the Reserve Fund is
funded, changing the remittance schedule for collection deposits in the Note
Distribution Account, or changing the definition of "Eligible Investments") if:
(1) the Indenture Trustee has been furnished with confirmation
(written or oral) from each Rating Agency to the effect that
such amendment would not cause its then-current rating on any
class of Notes to be qualified, reduced or withdrawn; or
(2) the Indenture Trustee has received the consent of the holders of
Notes evidencing more than 50% of the voting interests thereof,
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 Indenture or of modifying in any manner
the rights of each class of Noteholders; provided, however,
that:
(a) any amendment eliminating the Reserve Fund or
reducing the Reserve Fund Requirement to less than
certain specified levels shall also require an
opinion of counsel to the effect that, after such
amendment, for federal income tax purposes the Notes
will properly be characterized as indebtedness that
is secured by the assets of the Trust; and the
amendment shall not, except as otherwise set forth
elsewhere in this section, increase or reduce in any
manner the amount of, or accelerate or delay the
timing of, collections of payments on the SUBI or the
SUBI Certificates or distributions that shall be
required to be made on any class of Notes or the
applicable Note Rate; and
(b) no amendment of any type shall reduce the percentage
of the aggregate voting interests of the Notes of any
class required to consent to any such amendment, in
each case without the consent of all Noteholders and
Note Owners.
CERTAIN LEGAL ASPECTS OF THE ORIGINATION TRUST AND THE SUBI
THE ORIGINATION TRUST
The Origination Trust was formed as a Delaware business trust in July
1997. The Origination Trust has made trust filings or obtained certificates of
authority to transact business in states where, in the Servicer's judgment, such
action may be required. Because the Origination Trust has been registered as a
business trust for Delaware and other state law purposes, in similar form as a
corporation, it may be eligible to be a debtor in its own right under the United
States Bankruptcy Code. See "Risk Factors --The Bankruptcy or Other Insolvency
of American Honda Finance Corporation, Honda Titling A L.P., Honda Titling B
L.P., Honda Titling C L.P. or Honda Titling D L.P. Could Delay or Prevent
Payments on the Notes". As such, the Origination Trust may be subject to
insolvency laws under the United States Bankruptcy Code or similar state laws
("Insolvency Laws"), and claims against the Origination Trust Assets could have
priority over the beneficial interest in those assets represented by the SUBI.
In addition, claims of a third party against the Origination Trust Assets,
including the SUBI Assets, to the extent such claims are not covered by
insurance, would take priority over the holders of beneficial interests in the
Origination Trust, such as the Indenture Trustee, as more fully described under
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"Security for the Notes -- The Contingent and Excess Liability Insurance
Policies" and "Certain Legal Aspects of the Contracts and the Leased Vehicles --
Vicarious Tort Liability".
QUALIFICATION OF HVT, INC. AS FIDUCIARY
State laws differ as to whether a corporate trustee that leases
vehicles in that state, such as HVT, Inc., must qualify as a fiduciary. The
consequences of the failure to be qualified as a fiduciary in a state where such
qualification is required differ by state, but could include penalties against
HVT, Inc. and its directors and officers ranging from fines to the inability of
HVT, Inc. to maintain an action in the courts of that state.
AHFC believes that HVT, Inc. does not exercise sufficient discretion in
the performance of its duties under the SUBI Trust Agreement or take such other
discretionary actions that it should be considered to be exercising fiduciary
powers within the meaning of any applicable state law. However, no assurance can
be given that AHFC's view will prevail. However, no state in which (1) this
issue is uncertain, HVT, Inc. has not taken the actions necessary to qualify as
a fiduciary and (2) the consequences of this failure would be material
represents a significant percentage of the value of the SUBI Assets. Therefore,
AHFC believes that the failure to be qualified as a fiduciary in any state where
such qualification may ultimately be required will not materially and adversely
affect the Noteholders. However, no assurance can be given in this regard.
STRUCTURAL CONSIDERATIONS
Unlike many structured financings in which the holders of the related
securities have a direct ownership interest or a perfected security interest in
the underlying assets being securitized, the Trust will not directly own the
SUBI Assets. Instead, the Origination Trust will own the Origination Trust
Assets, including the SUBI Assets, and the Origination Trustee will take actions
with respect thereto in the name of the Origination Trust on behalf of and as
directed by the beneficiaries of the Origination Trust (I.E., the holders of the
UTI Certificates, the SUBI Certificates or any Other SUBI Certificate). The
primary asset of the Trust will be the SUBI Certificates evidencing a 99.8%
beneficial interest in the SUBI Assets, and the Owner Trustee will take action
with respect thereto in the name of the Trust and on behalf of the Noteholders,
HTC LP and HTD LP. Beneficial interests in the Contracts and Leased Vehicles
represented by the SUBI Certificates, rather than direct legal ownership are
transferred under this structure in order to avoid the administrative difficulty
and expense of retitling the Leased Vehicles in the name of the transferee. The
Servicer and/or the Origination Trustee will segregate the SUBI Assets from the
other Origination Trust Assets on the books and records each maintains for these
assets. Except under the limited circumstances described below, neither the
Servicer nor any holders of other beneficial interests in the Origination Trust
will have rights in the SUBI Assets, and payments made on any Origination Trust
Assets other than the SUBI Assets will be unavailable to make payments on the
Notes or to cover expenses of the Origination Trust allocable to the SUBI
Assets.
ALLOCATION OF ORIGINATION TRUST LIABILITIES
Pursuant to the Origination Trust Agreement, the various liabilities of
the Origination Trust will be allocated to and charged against to the extent
incurred specifically with respect thereto, the SUBI Assets, the Other SUBI
Assets or the UTI Assets, respectively, or pro rata among the Origination Trust
Assets if incurred with respect to the Origination Trust Assets generally. The
Origination Trustee and the beneficiaries of the Origination Trust and their
respective assignees and pledgees will be bound by the foregoing allocation.
Thus, the Trust as a holder of the SUBI Interest will bear any liability to
third parties arising from a Contract or Leased Vehicle. If any such liability
arises from a contract or leased vehicle that is an Other SUBI Asset or a UTI
Asset, the SUBI Assets will not be subject to this
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liability unless such Other SUBI Assets or UTI Assets are insufficient to pay
the liability. However, to the extent that there are no other assets from
which to satisfy the liability, and the liability is owed to entities other
than the Origination Trustee or other beneficiaries of the Origination Trust,
the SUBI Assets may be used to satisfy the liabilities. Under these
circumstances, investors in the Notes could incur a loss on their investment.
BACK-UP SECURITY INTEREST IN CERTAIN SUBI ASSETS
The transfer of the SUBI Certificates by HTC LP and HTD LP to the Trust
is intended to constitute a sale of the SUBI Certificates and of the beneficial
interest in the SUBI Assets evidenced thereby, subject in each case to the
rights of HTC LP and HTD LP as the holders of the SUBI Certificates. It is
possible that a court could recharacterize (for accounting and general state law
purposes) the transactions contemplated by the Origination Trust Agreement and
SUBI Supplement as a financing secured by a pledge of the SUBI Certificates or
the SUBI Assets rather than as a sale. In such an event, absent prior perfection
of a security interest by the Owner Trustee or the Indenture Trustee in the SUBI
Assets, the holder of a perfected lien in one or more SUBI Assets would have
priority over the respective interests of the Indenture Trustee and Owner
Trustee in such SUBI Assets.
Certain actions have been taken to ensure that, if the transfer of the
SUBI Certificates were recharacterized as a transfer to secure a loan, the
Indenture Trustee would be deemed to have a perfected security interest in the
SUBI Certificates (and the related SUBI Assets) and in the Contracts and the
rights thereunder susceptible of perfection by the filing of a financing
statement under the UCC as in effect in the States of Delaware, Illinois and
California. The SUBI Certificates will constitute a "financial asset" under the
UCC and the Indenture Trustee will be deemed to have a perfected security
interest therein (and the SUBI Assets evidenced thereby) through its possession
of the SUBI Certificates. The Contracts will not be stamped to reflect the
Indenture Trustee's indirect interest therein. On or prior to the Closing Date,
however, "protective" UCC-1 financing statements will be filed in California,
Illinois and Delaware to perfect the Indenture Trustee's security interest. The
"Contract Rights" are all rights relating to the Contracts including the
documents evidencing the Contracts, and the proceeds thereof, Monthly Payments
received or due on or after the related Cutoff Date, Security Deposits (to the
extent applied to cover excess wear and tear charges or treated as Liquidation
Proceeds as described herein and as provided for in the Contracts), Prepayments,
Liquidation Proceeds and net Insurance Proceeds (to the extent constituting
proceeds of the related Contract rather than proceeds of the related Leased
Vehicle) received on or after the related Cutoff Date. However, no action will
be taken to perfect the lien that the Indenture Trustee would be deemed to have
in the Leased Vehicles in the event of such a recharacterization. Therefore, to
the extent that a third party imposes a valid lien against a Leased Vehicle,
this lienholder's interest will be superior to the unperfected beneficial
interest of the Indenture Trustee in the Leased Vehicle. Although the Servicing
Agreement will require the Servicer to contest all the liens and cause the
removal of any liens that may be imposed, investors in the Notes could incur a
loss on their investment if any of these liens are imposed against the Leased
Vehicles. See "Additional Document Provisions -- The Servicing Agreement --
Notification of Liens and Claims".
Additionally, any perfected security interest of the Indenture Trustee
in all or part of the property of the Trust could be subordinate to claims of
any trustee in bankruptcy or debtor-in-possession in the event of a bankruptcy
of HTC LP or HTD LP prior to any perfection of the transfer of the assets
transferred by HTC LP or HTD LP to the Trust pursuant to the Agreement. See
"Risk Factors --The Bankruptcy or Other Insolvency of American Honda Finance
Corporation, Honda Titling A L.P., Honda Titling B L.P., Honda Titling C L.P. or
Honda Titling D L.P. Could Delay or Prevent Payments on the Notes".
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THE SUBI
The SUBI will be issued pursuant to the SUBI Trust Agreement and will
evidence a beneficial interest in the SUBI Assets. The SUBI will not represent a
direct interest in the SUBI Assets, nor will it represent an interest in any
Origination Trust Assets other than the SUBI Assets. Under the allocation of
Origination Trust liabilities described under "Additional Document Provisions --
The SUBI Trust Agreement -- The SUBI, the Other SUBIs and the UTI", payments
made on or in respect of such other Origination Trust Assets will be unavailable
to make payments on the Notes or to cover expenses of the Origination Trust
allocable to the SUBI Assets. The holders of interests in the SUBI (including
the Trust) will bear any liability to third parties arising from a Contract or
Leased Vehicle. If any such liability arises from a contract or leased vehicle
that is an Other SUBI Asset or a UTI Asset, the Origination Trust Assets
(including the SUBI Assets) will not be subject to this liability unless the
Other SUBI Assets or UTI Assets are insufficient to pay the liability. In such
event, because there will be no other assets from which to satisfy this
liability, to the extent that it is owed to entities other than the Origination
Trustee and the beneficiaries of the Origination Trust, the other Origination
Trust Assets, including the SUBI Assets, will be available to satisfy such
liabilities.
Under these circumstances, investors in the Notes could incur a loss on their
investment.
Similarly, to the extent that a third-party claim that otherwise would
be allocable to an Other SUBI or UTI is satisfied out of the SUBI Assets rather
than Other SUBI Assets or UTI Assets, and the claim exceeds the value of the
portfolio to which it should be allocated, the Origination Trustee will be
unable to reallocate the remaining Origination Trust Assets so that each
portfolio will bear the expense of the claim as nearly as possible if the claim
has been properly allocated. In such circumstances, investors in the Notes could
incur a loss on their investment.
Because the Owner Trustee and the Indenture Trustee will not own
directly or have a direct security interest in the SUBI Assets, including the
Leased Vehicles, and since their respective interests generally will be an
indirect beneficial ownership interest and a security interest in the indirect
beneficial ownership interest, perfected liens of third-party creditors of the
Origination Trust in one or more of SUBI Assets will take priority over the
interests of the Owner Trustee and the Indenture Trustee in those SUBI Assets.
Therefore, a general creditor of the Origination Trust may obtain a lien on one
or more such SUBI Assets regardless of whether the creditor's claim would be
allocated to such SUBI Assets under the terms of the Origination Trust
Agreement. Potentially material examples of such liens could include:
(1) tax liens arising against HTC LP, HTD LP or the Trust;
(2) liens arising under various federal and state criminal statutes;
(3) certain liens in favor of the Pension Benefit Guaranty
Corporation (the "PBGC");
(4) judgment liens arising from successful claims under federal and
state consumer protection laws and Lemon Laws against leases and
leased vehicles included in the Origination Trust Assets; and
(5) judgment liens arising from successful claims against the
Origination Trust arising from the operation of the leased
vehicles constituting Origination Trust Assets.
See "Risk Factors -- If ERISA Liens Are Placed on the Assets of the
Honda Lease Trust, You Could Suffer a Loss On Your Investment" and "--Possible
Liability of the Trust due to a Lessee's
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Operation of a Leased Vehicle" and "Certain Legal Aspects of the Contracts
and the Leased Vehicles -- Vicarious Tort Liability" and " -- Consumer
Protection Laws" for a further discussion of these risks.
The Origination Trust Agreement provides that, to the extent that such
a third-party claim is satisfied out of one or more SUBI Assets rather than
Other SUBI Assets or UTI Assets, as the case may be, the Origination Trustee
will reallocate the remaining Origination Trust Assets (I.E., the Other SUBI
Assets and the UTI Assets) so that each portfolio will bear the expense of the
claim as nearly as possible as if the claim had been allocated as provided in
the Origination Trust Agreement as set forth under "Additional Document
Provisions -- The SUBI Trust Agreement -- The SUBI, the Other SUBIs and the
UTI".
The UTI Beneficiaries may pledge the UTI Assets as security for
obligations to third-party lenders, and may create and sell or pledge Other
SUBIs in connection with other financings. Each holder or pledgee of the UTI or
any Other SUBI will be required to expressly disclaim any interest in the SUBI
Assets, and to fully subordinate any claims to the SUBI Assets in the event that
this disclaimer is not given effect.
The Owner Trustee will generally be deemed to own the SUBI Certificates
on behalf of the Trust and, through such ownership, to have an indirect
beneficial ownership interest in the Contracts and the Leased Vehicles. If a
court of competent jurisdiction were to recharacterize the sale to the Owner
Trustee of the SUBI Certificates and the SUBI Interest evidenced thereby, the
Owner Trustee (or, during the term of the Indenture, the Indenture Trustee)
could instead be deemed to have a perfected security interest in the SUBI
Certificates, but in no event would the Trust or the Indenture Trustee be deemed
to have a perfected security interest in the Leased Vehicles.
INSOLVENCY RELATED MATTERS
Although no assurance can be given, HTC LP and HTD LP believe that in
the unlikely event of a bankruptcy of AHFC, the SUBI Assets would not be treated
as part of AHFC's bankruptcy estate and that, even if they were so treated, the
subordination by holders and pledgees of the UTI, UTI Certificates other SUBIs
and Other SUBI Certificates should be enforceable. In addition, steps have been
taken to structure the transactions contemplated hereby that are intended to
make it unlikely that the voluntary or involuntary application for relief by
AHFC under any Insolvency Laws will result in consolidation of the assets and
liabilities of the Origination Trust, HTA LP, HTB LP, HTC LP, HTD LP or the
Trust with those of AHFC. For HTA LP, HTB LP, HTC LP and HTD LP, these steps
include their creation as separate, special purpose limited partnerships of
which HTA LLC, HTB LLC, HTC LLC and HTD LLC, respectively, are the sole general
partners, pursuant to limited partnership agreements containing certain
limitations (including restrictions on the nature of their respective businesses
and on their ability to commence a voluntary case or proceeding under any
Insolvency Law without the affirmative vote of their respective independent
members and, in turn all of the directors of their respective independent
members, including each independent director). With respect to HTI and HFI,
these steps include their creation as separate, special purpose subsidiaries of
AHFC pursuant to certificates of incorporation containing certain limitations
(including the requirement that each must have at all times at least two
independent directors and restrictions on the nature of their respective
businesses and on their ability to commence a voluntary case or proceeding under
any Insolvency Law without the affirmative vote of a majority of their
respective directors, including each independent director).
However, delays in payments on the Notes and possible reductions in the
amount of such payments could occur if:
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- a court were to conclude that the assets and liabilities of the
Origination Trust, HTA LP, HTB LP, HTC LP, HTD LP or the Trust
should be consolidated with those of AHFC in the event of the
application of applicable Insolvency Laws to AHFC, or
- a filing were to be made under any Insolvency Law by or against
the Origination Trust, HTA LP, HTB LP, HTC LP, HTD LP or the
Trust, or
- an attempt were to be made to litigate any of the foregoing
issues.
If a court were to conclude that the transfer of the SUBI Certificates
from HTC LP and HTD LP to the Trust was not a true sale, or that HTC LP, HTD LP
and the Trust should be treated as the same entity as AHFC for bankruptcy
purposes, any of the following could delay or prevent payments on the Notes:
- the automatic stay, which prevents secured creditors from
exercising remedies against a debtor in bankruptcy without
permission from the court and provisions of the United States
Bankruptcy Code that permit substitution of collateral in
certain circumstances,
- certain tax or government liens on AHFC's property (that arose
prior to the transfer of a Contract to the Trust) having a prior
claim on collections before the collections are used to make
payments on the Notes, or
- the Trust not having a perfected security interest in the Leased
Vehicles securing the Contracts or any cash collections held by
AHFC at the time that AHFC becomes the subject of a bankruptcy
proceeding.
In an insolvency proceeding of AHFC, (1) Reallocation Payments made by
AHFC on certain Contracts as to which an uncured breach of certain
representations and warranties or servicing covenants has occurred, (2) payments
made by AHFC on certain insurance policies required to be obtained and
maintained by lessees pursuant to the Contracts, (3) unreimbursed Advances made
by AHFC, as Servicer, pursuant to the Servicing Agreement, and (4) payments made
by AHFC to HTC LP and HTD LP may be recoverable by AHFC as debtor-in-possession
or by a creditor or a trustee in bankruptcy of AHFC as a preferential transfer
from AHFC if those payments were made within one year prior to the filing of a
bankruptcy case in respect of AHFC. In addition, the insolvency of AHFC could
result in the replacement of AHFC as Servicer, which could in turn result in a
temporary interruption of payments on the Notes and Servicer Termination Event
under the Servicing Agreement.
On the Closing Date, O'Melveny & Myers LLP, special counsel to AHFC,
HTA LP, HTB LP, HTC LP and HTD LP, will render an opinion based on a reasoned
analysis of analogous case law (although there is no precedent based on directly
similar facts) that, subject to particular facts, assumptions and qualifications
specified therein, under present reported decisional authority and statutes
applicable to federal bankruptcy cases, if AHFC were to become a debtor in a
case under the United States Bankruptcy Code, it would not be a proper exercise
by a federal bankruptcy court of its equitable jurisdiction to disregard the
separate legal forms so as to substantively consolidate the assets and
liabilities of HTA LP, HTB LP, HTC LP, HTD LP or the Origination Trust with
those of AHFC. In addition, on the Closing Date, O'Melveny & Myers LLP will
render an opinion to the effect that: (1) the transfer of the 99% interest and
the 1% interest in the SUBI Assets from HTA LP and HTB LP, respectively, to HTC
LP and HTD LP, respectively, constitutes a sale of such 99% interest and the 1%
interest and the related SUBI Assets; and (2) the transfer of the SUBI
Certificates by HTC LP and HTD LP to the Trust constitutes a sale of the SUBI
Certificates and the SUBI Assets evidenced thereby, subject in each case to the
rights of HTC LP and HTD LP as the holders of the SUBI Certificates and
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the rights of the Indenture Trustee as pledgee of the SUBI Certificates, or
if such transfer does not constitute a sale, then the Agreement creates a
valid perfected security interest of the Owner Trustee in each of HTC LP's
and HTD LP's right, title and interest in the SUBI Certificates.
LEGAL PROCEEDINGS
None of HTA LP, HTB LP, HTC LP or HTD LP is a party to any legal
proceeding. AHFC and the Origination Trust are parties to, and are vigorously
defending, numerous legal proceedings, all of which AHFC and the Origination
Trust, as applicable believe constitute ordinary routine litigation incidental
to the business and activities conducted by AHFC and the Origination Trust. Some
of the actions naming AHFC and/or the Origination Trust are or purport to be
class action suits. In the opinion of management of AHFC, the amount of ultimate
liability on pending claims and actions as of the date of this prospectus should
not have a material adverse effect on its condition, financial or otherwise, or
on the Origination Trust, the Origination Trust Assets or the SUBI. However,
there can be no assurances in this regard.
CERTAIN LEGAL ASPECTS OF THE CONTRACTS AND THE LEASED VEHICLES
BACK-UP SECURITY INTERESTS
The Contracts are "chattel paper" as defined in the UCC. Pursuant to
the California UCC, a non-possessory security interest in or transfer of chattel
paper in favor of the Origination Trust, HTC LP and HTD LP may be perfected by
filing UCC-1 financing statement with the appropriate state authorities in the
jurisdiction in which the principal places of business of HTC LP and HTD LP are
located (I.E., the California Secretary of State). On or prior to the Closing
Date, "protective" UCC-1 financing statements will be filed in California,
Delaware and Illinois to effect this perfection. The Indenture Trustee's back-up
security interest in the Contracts could be subordinate to the interest of
certain other parties who take possession of the Contracts before the filings
described above have been completed. Specifically, the Indenture Trustee's
security interest in a Contract could be subordinate to the rights of a
purchaser of such Contract who takes possession of the Contract without
knowledge or actual notice of the Indenture Trustee's security interest. The
Contracts will not be stamped to reflect the foregoing back-up security
arrangements.
Various liens could be imposed upon all or part of the SUBI Assets
(including the Leased Vehicles) that, by operation of law, would take priority
over the Indenture Trustee's interest therein. Such liens could include:
(1) tax liens arising against HTC LP, HTD LP or the Trust;
(2) mechanics', repairmen's, garagemen's and motor vehicle accident
liens and certain liens for personal property taxes, in each
case arising with respect to a particular Leased Vehicle;
(3) liens arising under various state and federal criminal statutes;
and
(4) certain liens of the PBGC in respect of certain unfunded pension
liabilities of HTC LP, HTD LP and their affiliates.
Additionally, any perfected security interest of the Indenture Trustee
in all or part of the property of the Trust could also be subordinate to claims
of any trustee in bankruptcy or debtor-in-possession in
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the event of a bankruptcy of HTC LP or HTD LP prior to any perfection of the
transfer of the assets transferred by HTC LP or HTD LP to the Trust pursuant
to the Agreement.
VICARIOUS TORT LIABILITY
Although the Origination Trust will own the Leased Vehicles and the
Trust will have a beneficial interest therein evidenced by the SUBI, the related
lessees and their respective invitees will operate Leased Vehicles. State laws
differ as to whether anyone suffering injury to person or property involving a
leased vehicle may bring an action against the owner of the vehicle merely by
virtue of that ownership. To the extent that applicable state law permits such
an action, the Origination Trust and the Origination Trust Assets may be subject
to liability to such an injured party. However, the laws of many states either
(i) do not permit these types of suits, or (ii) the lessor's liability is capped
at the amount of any liability insurance that the lessee was required to, but
failed to, maintain (except for some states, such as New York, where liability
is joint and several).
For example, in California, where the largest concentration of
Contracts were originated, under the California Vehicle Code, the owner of a
motor vehicle subject to a lease is responsible for injuries to persons or
property resulting from the negligent or wrongful operation of the vehicle by
any person using the vehicle with the owner's permission. The owner's liability
for personal injuries is limited to $15,000 per person and $30,000 in total per
accident and the owner's liability for property damage is limited to $5,000 per
accident. However, recourse for any judgment arising out of the operation of the
vehicle must first be had against the operator's property if the operator is
within the jurisdiction of the court.
In contrast to California and many other states, under New York law,
the holder of title of a motor vehicle, including a titling trust as lessor, may
be considered an "owner" and thus may be held jointly and severally liable with
the lessee for the negligent use or operation of such motor vehicle. In New
York, there does not appear to be a limit on an owner's liability. Recently, in
TAUGHRIN V. RODRIGUEZ AND FORD MOTOR CREDIT COMPANY, 677 N.Y.S. 2d 861 (Oct. 2,
1998), the Supreme Court of New York ruled that a finance company acting as an
agent for a titling trust may be considered an "owner" of a motor vehicle and
thus subject to joint and several liability with the lessee for the negligent
use or operation of the leased motor vehicle for the duration of a lease. The
court's ruling in TAUGHRIN was in the context of the denial of a summary
judgment motion brought by defendant Ford Motor Credit Company to dismiss the
case. As a result of the rulings in New York, losses could arise if lawsuits are
brought against either the Origination Trust or AHFC, as agent of the
Origination Trust, in connection with the negligent use or operation of any
leased vehicles which are part of the Origination Trust.
The Origination Trust's insurance coverage is substantial and AHFC is a
named insured under the Origination Trust's applicable insurance policies.
However, in the event that all applicable insurance coverage were to be
exhausted (including the coverage provided by the Contingent and Excess
Liability Insurance Policies) and damages in respect of vicarious liability were
to be assessed against the Origination Trust, claims could be imposed against
the Origination Trust Assets, including the Leased Vehicles and in certain
circumstances with respect to a leased vehicle that is an Other SUBI Asset or a
UTI Asset. However, these claims would not take priority over any SUBI Assets to
the extent that, in certain limited circumstances, the Indenture Trustee has a
prior perfected security interest in the SUBI Assets (such as with respect to
the Contracts). If any of these claims were imposed against the Origination
Trust Assets, investors in the Notes could incur a loss on their investment. See
"Certain Legal Aspects of the Origination Trust and the SUBI -- Back-up Security
Interest in Certain SUBI Assets".
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REPOSSESSION OF LEASED VEHICLES
In the event that a default by a lessee has not been cured within a
certain period of time after notice, the Servicer will ordinarily retake
possession of the related leased vehicle. Some jurisdictions require that the
lessee be notified of the default and be given a time period within which to
cure the default prior to repossession. Generally, this right to cure may be
exercised on a limited number of occasions in any one-year period. In these
jurisdictions, if the lessee objects or raises a defense to repossession, the
Servicer must obtain an order from the appropriate state court, and must then
repossess the vehicle in accordance with that order. Other jurisdictions permit
repossession without notice (although in some states a course of conduct in
which the lessor has accepted late payments has been held to create a right of
the lessee to receive prior notice), but only if the repossession can be
accomplished peacefully. If a breach of the peace is unavoidable, the lessor
must seek a writ of possession in a state court action or pursue other judicial
action to repossess the leased vehicle.
After the Servicer has repossessed a Leased Vehicle, the Servicer may
provide the lessee with a period of time within which to cure the default under
the related Contract. If by the end of such period the default has not been
cured, the Servicer will attempt to sell the Leased Vehicle. The Net
Repossession Proceeds therefrom may be less than the remaining amounts due under
the Contract at the time of default by the lessee.
DEFICIENCY JUDGMENTS
The Servicer will generally apply the proceeds of sale of a leased
vehicle first to the expenses of resale and repossession and then to the
satisfaction of the amounts due under the related lease contract. While some
states impose prohibitions or limitations on deficiency judgments if the net
proceeds from resale of a leased vehicle do not cover the full amounts due under
the related lease contract, a deficiency judgment can be sought in those states
that do not directly prohibit or limit such judgments. However, in some states,
a lessee may be allowed an offsetting recovery for any amount not recovered at
resale because the terms of the resale were not commercially reasonable. In any
event, a deficiency judgment would be a personal judgment against the lessee for
the shortfall, and a defaulting lessee would be expected to have little capital
or sources of income available following repossession. Therefore, in many cases,
it may not be useful to seek a deficiency judgment. Even if a deficiency
judgment is obtained, it may be settled at a significant discount or may prove
impossible to collect all or any portion of a judgment.
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws impose requirements
upon lessors and servicers involved in consumer leasing. The federal Consumer
Leasing Act of 1976 and Regulation M, issued by the Board of Governors of the
Federal Reserve System, for example, require that a number of disclosures be
made at the time a vehicle is leased, including:
(1) the amount and type of all payments due at the time of
origination of the lease;
(2) a description of the lessee's liability at the end of the lease
term;
(3) the amount of any periodic payments and manner of their
calculation;
(4) the circumstances under which the lessee may terminate the lease
prior to the end of the lease term;
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(5) the capitalized cost of the vehicle; and
(6) a warning regarding possible charges for early termination.
A number of states have adopted Article 2A of the UCC which provides
protection to lessees through specified implied warranties and the right to
cancel a lease contract relating to defective goods. Additionally, certain
states such as California have enacted comprehensive vehicle leasing statutes
that, among other things, regulate the disclosures to be made at the time a
vehicle is leased. The various federal and state consumer protection laws would
apply to the Origination Trust as a "co-lessor" of the lease contract and may
also apply to the Trust as holder of the SUBI Certificates. The failure to
comply with these consumer protection laws may give rise to liabilities on the
part of the Servicer, the Origination Trust and the Origination Trustee,
including liabilities for statutory damages and attorneys' fees. In addition,
claims by the Servicer, the Origination Trust and the Origination Trustee may be
subject to set-off as a result of any noncompliance.
Courts have applied general equitable principles in litigation relating
to repossession and deficiency balances. These equitable principles may have the
effect of relieving a lessee from some or all of the legal consequences of a
default.
In several cases, consumers have asserted that the self-help remedies
of lessors violate the due process protection provided under the Fourteenth
Amendment to the Constitution of the United States. Courts have generally found
that repossession and resale by a lessor do not involve sufficient state action
to afford constitutional protection to consumers.
Many states have adopted laws (each, a "Lemon Law") providing redress
to consumers who purchase or lease a vehicle that remains out of conformance
with its manufacturer's warranty after a specified number of attempts to correct
a problem or after a specific time period. Should any Leased Vehicle become
subject to a Lemon Law, a lessee could compel the Origination Trust to terminate
the related Contract and refund all or a portion of payments that previously
have been paid with respect to that Contract. Although the Origination Trust may
be able to assert a claim against the manufacturer of any such defective Leased
Vehicle, there can be no assurance any such claim would be successful. To the
extent a lessee is able to compel the Origination Trust to terminate the related
Contract, the Contract will be deemed to be a Liquidated Contract and amounts
received thereafter on or in respect of such Contract will constitute
Liquidation Proceeds. As noted below, AHFC will represent and warrant to the
Owner Trustee and the Indenture Trustee as of the Cutoff Date that none of the
Leased Vehicles is out of compliance with any law, including a Lemon Law.
Nevertheless, there can be no assurance that one or more Leased Vehicles will
not become subject to return (and the related Contract terminated) in the future
under a Lemon Law.
The Servicer will make representations and warranties in the Servicing
Agreement that each Contract complies with all requirements of law in all
material respects. If any such representation and warranty proves to be
incorrect with respect to any Contract, has certain material adverse effects and
is not timely cured, AHFC will be required under the Servicing Agreement to
deposit an amount equal to the Reallocation Payment in respect of the Contract
into the SUBI Collection Account unless the breach is cured in all material
respects. See "Description of the Notes -- Reallocation Payments" and "The
Contracts -- Representations, Warranties and Covenants" for further information
regarding the foregoing representations and warranties and the Servicer's
obligations with respect thereto.
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OTHER LIMITATIONS
In addition to laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including applicable Insolvency Laws, may
interfere with or affect the ability of a lessor to enforce its rights under a
motor vehicle lease contract. For example, if a lessee commences bankruptcy
proceedings, the lessor's receipt of rental payments due under the lease
contract is likely to be delayed. In addition, a lessee who commences bankruptcy
proceedings might be able to assign the lease contract to another party even
though the lease prohibits assignment.
THE MATERIAL FEDERAL INCOME TAX CONSEQUENCES
FEDERAL TAXATION
GENERAL
Certain portions of the discussion set forth in this section (those
that specifically refer to Federal Tax Counsel) are statements of the opinion of
O'Melveny & Myers LLP, special federal income tax counsel ("Federal Tax
Counsel") to HTC LP and HTD LP, as to material federal income tax consequences
to holders of the Notes who are original owners and who hold the Notes as
capital assets under the Internal Revenue Code of 1986, as amended (the "Code").
This discussion does not purport to be complete or to deal with all aspects of
federal income taxation or any aspects of state or local taxation that may be
relevant to Noteholders or Note Owners in light of their particular
circumstances, nor to certain types of Noteholders or Note Owners subject to
special treatment under the federal income tax laws (for example, banks, life
insurance companies, tax-exempt organizations and broker-dealers). This
discussion is based upon present provisions of the Code, the Treasury
regulations promulgated thereunder and published rulings and court decisions in
effect as of the date hereof, all of which are subject to change, which change
may be retroactive. The parties do not intend to seek a ruling from the IRS on
any of the issues discussed below. Moreover, there can be no assurance that if
such a ruling were sought, the IRS would rule favorably. Taxpayers and preparers
of tax returns (including those filed by any partnership or other issuer) should
be aware that under applicable Treasury Regulations a provider of advice on
specific issues of law is not considered an income tax return preparer unless
the advice is (1) given with respect to events that have occurred at the time
the advice is rendered and is not given with respect to the consequences of
contemplated actions and (2) directly relevant to the determination of an entry
on a tax return. Accordingly, it is suggested that taxpayers consult their
respective tax advisors and tax return preparers regarding the preparation of
any item on a tax return, even where the anticipated tax treatment has been
discussed herein. It is suggested that prospective investors consult their own
tax advisors with regard to the federal income tax consequences of the purchase,
ownership or disposition of the Notes, as well as the tax consequences arising
under the laws of any state, foreign country or other taxing jurisdiction.
CHARACTERIZATION OF THE NOTES AS INDEBTEDNESS
HTC LP, HTD LP, the Owner Trustee, each Noteholder and each Note Owner
(by acquiring a beneficial interest in a Note) will express in the Agreement and
in the Indenture their intent that, for federal, state and local income and
franchise tax purposes, the Notes will be indebtedness, secured by the assets of
the Trust. HTC LP, HTD LP and the Owner Trustee, by entering into the Agreement
and the Indenture, and each Noteholder and each Note Owner, by acquiring a
beneficial interest in a Note, will agree to treat the Notes as indebtedness for
federal, state and local income and franchise tax purposes.
In general, the characterization of a transaction for federal income
tax purposes is based upon economic substance, and the substance of the
transaction in which the Notes are issued is consistent with
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the treatment of the Notes as debt for federal income tax purposes. The
determination of whether the economic substance of a property transfer is a
sale or a loan secured by the transferred property depends upon numerous
factors designed to determine whether the transferor has relinquished (and
the transferee has obtained) substantial incidents of ownership in the
property. The primary factors examined are whether the transferee has the
opportunity to gain if the property increases in value, and has the risk of
loss if the property decreases in value. Based upon its analysis of such
factors, Federal Tax Counsel is of the opinion that, for federal income tax
purposes, the characterization of the Notes will be governed by the substance
of the transaction and, accordingly, (1) the Trust will not be treated as an
association taxable as a corporation and (2) the Notes will properly be
characterized as indebtedness that is secured by the Trust assets. However,
the opinion of Federal Tax Counsel is not binding on the IRS and no assurance
can be given that such characterization will prevail. Contrary
characterizations that could be asserted by the IRS described are under
"-Possible Alternative Treatment of the Notes" below.
FEDERAL INCOME TAX CONSEQUENCES TO UNITED STATES NOTEHOLDERS
The discussion set forth below applies to "U.S. Holders." A "U.S.
Holder" is a Noteholder who is:
(1) a citizen or resident of the United States;
(2) a corporation, partnership or other entity organized in or under
the laws of the United States or any state or political
subdivision thereof (other than a partnership that is not
treated as a United States person under any applicable Treasury
regulations);
(3) an estate whose income is subject to United States federal
income tax, regardless of its source; or
(4) a trust whose administration is subject to the primary
supervision of a United States court and which has one or more
United States persons who have authority to control all
substantial decisions of the trust.
Notwithstanding the preceding sentence, to the extent provided in
regulations, certain trusts in existence on August 20, 1996 and treated as
United States persons prior to such date that elect to continue to be so treated
also shall be considered U.S.
Holders.
TAXATION OF INTEREST AND DISCOUNT INCOME
Assuming that the Notes are debt obligations for federal income tax
purposes, interest generally will be taxable as ordinary income for federal
income tax purposes when received by U.S. Holders utilizing the cash method of
accounting and when accrued by U.S. Holders utilizing the accrual method of
accounting. Interest received on the Notes may also constitute "investment
income" for purposes of certain limitations of the Code concerning the
deductibility of investment interest expense.
ORIGINAL ISSUE DISCOUNT. Under regulations issued with respect to the
original issue discount ("OID") provisions of the Code, the Notes will be deemed
to have been issued with OID in an amount equal to the excess of the "stated
redemption price at maturity" of the Class A-1, Class A-2, Class A-3, Class A-4
or Class B Notes, as the case may be (generally equal to their principal amount
as of the date of original issuance plus all interest other than "qualified
stated interest" payable prior to or at maturity), over their issue price
(determined as described below).
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Qualified stated interest generally means interest payable at a single
fixed rate or qualified variable rate provided that such interest payments are
unconditionally payable at intervals of one year or less during the entire term
of the Class A-1, Class A-2, Class A-3, Class A-4 or Class B Notes, as the case
may be. Under the OID provisions of the Code, interest will only be treated as
qualified stated interest if it is "unconditionally payable". Interest will be
treated as "unconditionally payable" only if Noteholders have reasonable
remedies to compel payment of interest deficiencies (E.G., default and
acceleration rights). Because Noteholders will be entitled to penalty payments
of interest on interest deficiencies, and Noteholders will have no default and
acceleration rights in the event of interest shortfalls, interest paid on the
Notes may not be treated by the IRS as qualified stated interest, and, in such
event, would be treated as OID. A U.S. Holder must include OID in gross income
(as ordinary interest income) over the term of the related note under a constant
yield method. In general, the U.S. Holder must include OID in income in advance
of the receipt of cash representing that income, regardless of that U.S.
Holder's method of accounting. The amount of OID on a note will be considered to
be zero if it is less than a DE MINIMIS amount determined under the Code.
The issue price of a note is the first price at which a substantial
amount of Notes are sold to the public (excluding bond houses, brokers,
underwriters or wholesalers). If less than a substantial amount of a particular
class of Notes is sold for cash on or prior to the Closing Date, the issue price
of such class will be treated as the fair market value of such class on the
Closing Date. The issue price of a note also includes the amount paid by a U.S.
Holder for accrued interest that relates to a period prior to the issue date of
the Note.
Under the DE MINIMIS rule, OID on a note will be considered to be zero
if such OID is less than 0.25% of the stated redemption price at maturity of the
note multiplied by the weighted average maturity of the Note. U.S. Holders
generally must report de minimis OID pro rata as principal payments are
received, and such income will be capital gain if the note is held as a capital
asset. However, accrual method holders may elect to accrue all DE MINIMIS OID as
well as market discount under a constant interest method.
A U.S. Holder of a note issued with OID must include in gross income,
for all days during its taxable year on which it holds such Note, the sum of the
"daily portions" of such original issue discount. The amount of OID a U.S.
Holder may include in income will be computed by allocating to each day during a
taxable year a pro rata portion of the original issue discount that accrued
during the relevant accrual period.
If a U.S. Holder purchases a note issued with OID at an "acquisition
premium" (I.E., at a price in excess of the adjusted issue price of the Note,
but less than or equal to the "stated redemption price at maturity"), the amount
of OID includible in the income of such U.S. Holder for each taxable year will
be reduced by that portion of the acquisition premium properly allocable to such
year.
Although the matter is not entirely clear, HTC LP and HTD LP currently
intend to report all stated interest on the Notes as qualified stated interest
and not as OID.
MARKET DISCOUNT. U.S. Holders should be aware that the Code's market
discount rules may affect the resale of a note. These rules generally provide
that, subject to a DE MINIMIS exception, if a holder acquires a note at a market
discount (I.E., at a price below its "adjusted issue price"), gain on the sale
or other disposition of a Note, and partial principal payments on the Notes,
will be treated as ordinary interest income to the extent of accrued market
discount. A U.S. Holder may elect to include market discount currently in gross
income in taxable years to which it is attributable, computed using either a
ratable accrual or a yield to maturity method. The market discount rules also
provide that a U.S. Holder who acquires a note at a market discount may be
required to defer a portion of any interest
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expense that otherwise may be deductible on any indebtedness incurred or
maintained to purchase or carry the Notes.
PREMIUM. A U.S. Holder who purchases a note for more than its stated
redemption price at maturity will be subject to the premium amortization rules
of the Code. Under those rules, the U.S. Holder may elect to amortize such
premium on a constant yield method. Amortizable premium reduces interest income
on the related Note. If the U.S. Holder does not make such an election, the
premium paid for the note generally will be included in the tax basis of the
note in determining the gain or loss on its disposition.
It is suggested that U.S. Holders consult their own tax advisors
regarding the impact of the original issue discount, market discount, and
premium amortization rules.
SALES OF NOTES
In general, a U.S. Holder will recognize gain or loss upon the sale,
exchange, redemption or other taxable disposition of a note measured by the
difference between (1) the amount of cash and the fair market value of any
property received (other than amounts attributable to, and taxable as, accrued
stated interest) and (2) the U.S. Holder's tax basis in the note (as increased
by any OID or market discount previously included in income by the holder and
decreased by any deductions previously allowed for amortizable bond premium and
by any payments, other than qualified stated interest payments, received with
respect to such Note). Subject to the market discount rules discussed above and
to the more than one-year holding period requirement for long-term capital gain
treatment, any such gain or loss generally will be long-term capital gain or
loss, provided that the note was held as a capital asset. The federal income tax
rates applicable to capital gains for taxpayers other than individuals, estates
and trusts are currently the same as those applicable to ordinary income;
however, the maximum ordinary income rate for individuals, estates and trusts is
generally 39.6%, whereas the maximum long-term capital gains rate for such
taxpayers is 20%. Moreover, capital losses generally may be used only to offset
capital gains.
FEDERAL INCOME TAX CONSEQUENCES TO FOREIGN INVESTORS
The following information describes the United States federal income
tax treatment of investors that are not U.S. Holders ("Foreign Investors") if
the Notes are treated as debt.
The Code and Treasury regulations generally subject interest paid to a
Foreign Investor that is not effectively connected with a trade or business
carried on by the Foreign Investor in the United States to a withholding tax at
a rate of 30% (unless such rate is changed by an applicable treaty). The
withholding tax, however, is eliminated with respect to certain "portfolio debt
investments" issued to Foreign Investors. Portfolio debt investments include
debt instruments issued in registered form for which the United States payor
receives a statement that the beneficial owner of the instrument is a Foreign
Investor. The Notes will be issued in registered form; therefore, if the
information required by the Code is furnished (as described below) and no other
exceptions to the withholding tax exemption are applicable, no withholding tax
will apply to interest payments on the Notes.
In order to avoid withholding tax on interest payments on the Notes
under the portfolio debt exemption, the withholding agent must receive from the
Note Owner an executed IRS Form W-8 (or a statement substantially similar in
form to IRS Form W-8) signed under penalty of perjury by the Note Owner stating
that the Note Owner is a Foreign Investor and providing such Note Owner's name
and address. The withholding agent must receive the statement in the calendar
year in which the interest payment is made, or in either of the two preceding
calendar years.
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A Note Owner that is a nonresident alien or foreign corporation will
not be subject to United States federal income tax on gain realized on the sale,
exchange or redemption of such Note, provided that (1) such gain is not
effectively connected with a trade or business carried on by the Note Owner in
the United States, (2) in the case of a Note Owner that is an individual, such
Note Owner is not present in the United States for 183 days or more during the
taxable year in which such sale, exchange or redemption occurs, and (3) in the
case of gain representing accrued interest, the conditions described in the
immediately preceding paragraph are satisfied.
BACKUP WITHHOLDING
A Note Owner may be subject to a backup withholding at the rate of 31%
with respect to interest paid on the Notes if the Note Owner, upon issuance:
(1) fails to supply the Trustee or his broker with such Note Owner's
taxpayer identification number;
(2) fails to report interest, dividends or other "reportable
payments" (as defined in the Code) properly; or
(3) fails to provide the Trustee or his broker with a certified
statement, signed under penalty of perjury, that such Note Owner
is not subject to backup withholding.
Information returns will be sent annually to the IRS and to each Note
Owner setting forth the amount of interest paid on the Notes and the amount of
tax withheld thereon.
NEW WITHHOLDING REGULATIONS
On October 6, 1997, the Treasury Department issued regulations (the
"New Regulations") which make certain modifications to the withholding, backup
withholding and information reporting rules described above. The New Regulations
attempt to unify certification requirements and modify reliance standards. The
New Regulations will generally be effective for payments made after December 31,
2000, subject to certain transition rules. Prospective investors should consult
their own tax advisors regarding the New Regulations.
POSSIBLE ALTERNATIVE TREATMENT OF THE NOTES
Although, as described above, it is the opinion of Federal Tax Counsel
that the Notes will properly be characterized as debt for federal income tax
purposes, such opinion will not be binding on the IRS and thus no assurance can
be given that such a characterization shall prevail. If the IRS were to contend
successfully that the Notes did not represent debt for federal income tax
purposes, certain adverse tax consequences to the Trust and the Noteholders
would result. For example, the Trust would likely be considered a
"publicly-traded partnership", and as a result treated for U.S. tax purposes as
an association taxed as a corporation. In addition, income to certain tax-exempt
entities (including pension funds) generally would be "unrelated business
taxable income", and income to foreign holders generally would be subject to
United States withholding tax and reporting requirements. While AHFC strongly
believes that any challenge by the IRS, if made, would be unsuccessful, there
can be no assurance of this result. Prospective investors are advised to consult
with their own tax advisors regarding the federal income tax consequences of the
purchase, ownership and disposition of the Notes.
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ERISA CONSIDERATIONS
Subject to the following discussion, pension, profit-sharing or other
employee benefit plans, as well as individual retirement accounts and Keogh
plans (each a "Benefit Plan") may acquire the Notes. Section 406 of ERISA and/or
Section 4975 of the Code prohibit(s) a Benefit Plan from engaging in certain
transactions with persons that are "parties in interest" under ERISA or
"disqualified persons" under the Code with respect to such Benefit Plan. A
violation of these "prohibited transaction" rules may result in an excise tax or
other penalties and liabilities under ERISA and the Code for such persons or the
fiduciaries of the Benefit Plan. In addition, Title I of ERISA also requires
fiduciaries of a Benefit Plan subject to ERISA to make investments that are
prudent, diversified and in accordance with the governing plan documents. Also,
similar restrictions may apply under state law to employee benefit plans not
subject to ERISA.
Certain transactions involving the Trust might be deemed to constitute
prohibited transactions under ERISA and the Code with respect to a Benefit Plan
that purchased Notes if assets of the Trust were deemed to be assets of the
Benefit Plan. Under a regulation issued by the United States Department of Labor
(the "Regulation"), the assets of the Trust would be treated as plan assets of a
Benefit Plan for the purposes of the Employee Retirement Income Security Act of
1974, as amended ("ERISA") and the Code only if the Benefit Plan acquired an
"equity interest" in the Trust and none of the exceptions to treatment as plan
assets contained in the Regulation was applicable. An equity interest is defined
under the Regulation as an interest other than an instrument which is treated as
indebtedness under applicable local law and which has no substantial equity
features. Although there is little guidance on the subject, the Transferor
believes that, at the time of their issuance, the Notes should be treated as
indebtedness of the Trust without substantial equity features for purposes of
the Regulation. This determination is based in part upon the traditional debt
features of the Notes, including the reasonable expectation of purchasers of
Notes that the Notes will be repaid when due, as well as the absence of
conversion rights, warrants and other typical equity features. The debt
treatment of the Notes for ERISA purposes could change if the Trust incurred
losses.
However, without regard to whether the Notes are treated as an equity
interest for purposes of the Regulation, the acquisition or holding of Notes by
or on behalf of a Benefit Plan could give rise to a prohibited transaction if
the Trust, the Indenture Trustee, the Owner Trustee, the Origination Trustee,
HTC LP, HTD LP or AHFC is or becomes a party in interest or a disqualified
person with respect to such Benefit Plan. Certain exemptions from substantial
portions of the prohibited transaction rules could be applicable to the purchase
and holding of Notes by a Benefit Plan depending on the type and circumstances
of the plan fiduciary making the decision to acquire such Notes. Included among
these exemptions are: Prohibited Transaction Class Exemption ("PTCE") 96-23,
regarding transactions effected by "in-house asset managers"; PTCE 95-60,
regarding investments by insurance company general accounts; PTCE 91-38,
regarding investments by bank collective investment funds; PTCE 90-1, regarding
investments by insurance company pooled separate accounts; and PTCE 84-14,
regarding transactions effected by "qualified professional asset managers". By
acquiring a Note, each purchaser will be deemed to represent that either (1) it
is not acquiring the Notes with the assets of a Benefit Plan; or (2) the
acquisition and holding of the Notes will not give rise to a nonexempt
prohibited transaction under Section 406(a) of ERISA or Section 4975 of the
Code.
Due to the complexities of these rules and the penalties imposed upon
persons involved in prohibited transactions, it is important that the fiduciary
of a Benefit Plan considering the purchase of Notes consult with its counsel
regarding whether the assets of the Trust would be considered plan assets, and
the applicability of the prohibited transaction provisions of ERISA and the Code
(and in the case of an employee benefit plan not subject to ERISA, any similar
state law) to such investment. Moreover, each Benefit Plan fiduciary should
determine whether, under the general fiduciary standards of
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investment prudence and diversification, an investment in the Notes is
appropriate for the Benefit Plan, taking into account the overall investment
policy of the Benefit Plan and the composition of the Benefit Plan's
investment portfolio.
UNDERWRITING
Under the terms and subject to the conditions contained in an
Underwriting Agreement dated [July __], 1999 (the "Underwriting Agreement"),
the underwriters named below (the "Underwriters"), for whom Credit Suisse
First Boston Corporation is acting as representative (the "Representative"),
have severally but not jointly agreed to purchase from HTC LP and HTD LP the
following respective principal amounts of Notes:
<TABLE>
<CAPTION>
Class A-1 Class A-2 Class A-3 Class A-4 Class B
Underwriter Notes Notes Notes Notes Notes
----------- -------------- ------------- ------------- ------------- ------------
<S> <C> <C> <C> <C> <C>
Credit Suisse First Boston Corporation...... $ $ $ $ $
............................................
............................................
............................................ -------------- ------------- ------------- ------------- ------------
Total.............................. $ $ $ $ $
-------------- ------------- ------------- ------------- ------------
-------------- ------------- ------------- ------------- ------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent that the Underwriters
will be obligated to purchase all the Notes if any are purchased. The
Underwriting Agreement provides that, in the event of a default by an
Underwriter, in specified circumstances the purchase commitments of the
non-defaulting Underwriter may be increased or the Underwriting Agreement may be
terminated.
The Representative has advised HTC LP and HTD LP that the Underwriters
propose to offer the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes,
the Class A-4 Notes and the Class B Notes to the public initially at the public
offering prices set forth on the cover page of this prospectus and to certain
dealers at these prices less the concessions and reallowance discounts set forth
below.
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<TABLE>
<CAPTION>
Class Selling Concession Reallowance Discount
- ----- ------------------ --------------------
<S> <C> <C>
Class A-1 Notes..................... % %
Class A-2 Notes..................... % %
Class A-3 Notes..................... % %
Class A-4 Notes..................... % %
Class B Notes....................... % %
</TABLE>
After the initial public offering, the Underwriters may change the
public offering price and selling concessions and reallowance discounts to
dealers.
HTC LP and HTD LP have jointly and severally agreed to indemnify the
Underwriters against certain liabilities, including civil liabilities under the
Securities Act of 1933, as amended (the "Securities Act"), or contribute to
payments which the Underwriters may be required to make on these liabilities.
The Underwriters may engage in (1) over-allotment, (2) stabilizing
transactions, (3) syndicate covering transactions and (4) penalty bids in
accordance with Regulation M under the Exchange Act. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases of the Notes in the open
market after the distribution has been completed in order to cover syndicate
short positions. Penalty bids permit the Underwriters to reclaim a selling
concession from a syndicate member when the Notes originally sold by such
syndicate member are purchased in a syndicate covering transactions and penalty
bids may cause the prices of the Notes to be higher than they would otherwise be
in the absence of such transactions. These transactions, if commenced, may be
discounted at any time.
It is expected that delivery of the Notes will be made against payment
therefor on or about the date specified in the last paragraph of the cover page
of this prospectus, which is the __ business day following the date hereof. Rule
15c6-1 of the Commission under the Exchange Act generally requires trades in the
secondary market to settle in three business days, unless the parties to any
such trade expressly agree otherwise. Accordingly, purchasers who wish to trade
Notes on the date hereof will be required, by virtue of the fact that the Notes
initially will settle __ business days after the date hereof, to specify an
alternate settlement cycle at the time of any such trade to prevent a failed
settlement. It is suggested that purchasers of Notes who wish to trade Notes on
the date hereof consult their own advisors.
Until the distribution of the Notes is complete, rules of the
Commission may limit the ability of the Underwriters and certain selling group
members to bid for and purchase the Notes. As an exception to these rules, the
Underwriters are permitted to engage in certain transactions that stabilize the
price of the Notes. Such transactions consist of bids or purchases for the
purpose of pegging, fixing or maintaining the price of the Notes.
None of HTC LP, HTD LP or any Underwriter makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the prices of the Notes. In addition, none of HTC
LP, HTD LP or any Underwriter makes any representation that the Underwriters
will engage in such transactions or that such transactions, once commenced, will
not be discontinued without notice.
There is currently no market for the Notes. The Underwriters expect,
but will not be obligated, to make a market in each class of Notes. There can be
no assurance that a secondary market for the Notes
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will develop or, if one does develop, that it will provide the related
Noteholders with liquidity of investment or will continue for the life of the
related Notes.
Certain of the Underwriters and their affiliates engage in transactions
with and perform services for AHFC and affiliates of AHFC in the ordinary course
of business and have engaged, and may in the future engage, in commercial
banking and investment banking transactions with AHFC and affiliates of AHFC.
Upon receipt of a request by an investor who has received an electronic
prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a prospectus,
HTC LP, HTD LP or the Underwriters will promptly deliver, or cause to be
delivered, without charge, a paper copy of the prospectus.
RATINGS OF THE NOTES
It is a condition of issuance that at least two nationally recognized
rating agencies (the "Rating Agencies") rate (1) the Class A-1 Notes in the
highest short-term rating category, (2) the Class A-2 Notes the Class A-3 Notes
and the Class A-4 Notes in the highest long-term rating category and (3) the
Class B Notes in a single A Category. The ratings of the Notes will be based
primarily upon (1) the value of the Contracts, (2) the Reserve Fund and (3) the
terms of the Notes and the Certificates. There is no assurance that any such
rating will not be lowered or withdrawn by the assigning Rating Agency if, in
its judgment, circumstances so warrant. In the event that a rating on any class
of Notes is qualified, reduced or withdrawn, no person or entity will be
obligated to provide any additional credit enhancement for such class of Notes.
The ratings of the Notes should be evaluated independently from similar
ratings on other types of securities. A rating is not a recommendation to buy,
sell or hold the related Notes, inasmuch as such rating does not comment as to
market price or suitability for a particular investor. The ratings of each class
of Notes addresses the likelihood of the payment of principal of and interest on
such Notes pursuant to their terms.
There can be no assurance as to whether any rating agency other than a
Rating Agency will rate the Notes, or, if one does, what rating will be assigned
by such other rating agency. A rating on any class of Notes by another rating
agency, if assigned at all, may be lower than the ratings assigned to such Notes
by the Rating Agencies.
LEGAL MATTERS
Certain legal matters relating to the Notes, including federal income
tax matters, will be passed upon for HTC LP and HTD LP by O'Melveny & Myers LLP,
Los Angeles, California. Stroock & Stroock & Lavan LLP, New York, New York will
act as counsel for the Underwriters.
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AVAILABLE INFORMATION
HTC LP and HTD LP, as originators of the Trust, HTA LP and HTB LP, as
originators of the Origination Trust, the Origination Trust, as issuer of the
SUBI, and the Trust, as issuer of the Notes and the Certificates, have filed
with the Commission a Registration Statement, of which this prospectus is a
part, under the Securities Act, with respect to the Notes being offered hereby.
This prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which have been omitted in accordance
with the rules and regulations of the Commission. For further information,
reference is made to the Registration Statement, which is available for
inspection without charge at the public reference facilities of the Commission
at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and the
regional offices of the Commission at Suite 1400, Citicorp Center, 500 West
Madison Street, Chicago, Illinois 60661-2511 and Suite 1300, Seven World Trade
Center, New York, New York 10048. Copies of this information can be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The Commission maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission at
http://www.sec.gov. The Servicer, on behalf of the Trust, will also file or
cause to be filed with the Commission such periodic reports as are required
under the Exchange Act, and the rules and regulations of the Commission
thereunder.
FORWARD LOOKING STATEMENTS
Information under the heading "American Honda Finance Corporation-Year
2000" contains various "forward looking statements", which represent AHFC's
expectations or beliefs concerning future events, including the following: (1)
the assessment of networks, personal computers and computerized systems and
validation phases on all computerized systems in connection with year 2000
issues by fiscal year end 1999; (2) expectations that the total costs associated
with required year 2000 issues will not have a material impact on AHFC's
condition, financial and otherwise, and (3) the completion of a contingency plan
by AHFC relating to year 2000 issues.
AHFC cautions that these statements are further qualified by important
factors that could cause actual results to differ materially from those in the
forward looking statements, including, without limitation: (1) the failure of
AHFC's plan to resolve timely year 2000 issues due to non-performance by outside
contractors, (2) the failure of third parties to remediate their year 2000
issues or other factors and (3) the failure of AHFC to develop an adequate
contingency plan relating to year 2000 issues. Results actually achieved thus
may differ materially from expected results included in these statements.
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INDEX OF TERMS
Set forth below is a list of the capitalized terms used in this
prospectus and the pages on which the definitions of such terms may be found.
<TABLE>
<CAPTION>
Term Page
- ---- ----
<S> <C>
ABS...........................................................................51
Accounts......................................................................67
Additional Loss Amounts.......................................................59
Additional Loss Contract......................................................84
Administrative Charge........................................................100
Administrative Lien...........................................................29
Advance.......................................................................96
Aggregate Net Investment Value................................................41
Agreement.....................................................................23
AHFC..........................................................................22
AHMC..........................................................................31
Allocation Percentage.........................................................60
banking organization..........................................................77
Basic Documents..............................................................103
Basic Servicing Agreement.....................................................23
Benefit Plan.................................................................119
Business Day..............................................................57, 77
Capped Contingent and Excess Liability Premiums...............................63
Capped Indenture Trustee Administrative Expenses..............................63
Capped Origination Trust Administrative Expenses..............................63
Capped Owner Trustee Administrative Expenses..................................63
Cede..........................................................................55
Cedelbank.....................................................................76
Cedelbank Participants........................................................76
Certificate Balance...........................................................58
Certificate Distribution Account..............................................70
Certificate Interest Carryover Shortfall......................................64
Certificate Principal Loss Amount.............................................63
Certificate Rate..............................................................57
Certificateholders............................................................57
Certificates..................................................................23
Charged-off Amount............................................................59
Charged-off Contract..........................................................59
chattel paper................................................................110
Class A Note Balance..........................................................58
Class A Noteholders...........................................................57
Class A Notes.................................................................23
Class A Percentage............................................................66
Class A-1 Interest Carryover Shortfall........................................63
Class A-1 Note Principal Loss Amount..........................................62
Class A-1 Note Rate...........................................................57
Class A-1 Noteholders.........................................................57
Class A-1 Notes...............................................................22
Class A-2 Interest Carryover Shortfall........................................64
Class A-2 Note Principal Loss Amount..........................................62
Class A-2 Note Rate...........................................................57
Class A-2 Noteholders.........................................................57
Class A-2 Notes...............................................................22
Class A-3 Interest Carryover Shortfall........................................64
Class A-3 Note Principal Loss Amount..........................................62
Class A-3 Note Rate...........................................................57
Class A-3 Noteholders.........................................................57
Class A-3 Notes...............................................................22
Class A-4 Interest Carryover Shortfall........................................64
Class A-4 Note Principal Loss Amount..........................................62
Class A-4 Note Rate...........................................................57
Class A-4 Noteholders.........................................................57
Class A-4 Notes...............................................................22
Class B Interest Carryover Shortfall..........................................64
Class B Note Principal Carryover Shortfall....................................64
Class B Note Principal Loss Amount............................................63
Class B Note Rate.............................................................57
Class B Noteholders...........................................................57
Class B Notes.................................................................23
Class B Percentage............................................................66
Class Note Balance............................................................57
clearing agency...............................................................77
clearing corporation..........................................................77
Closing Date..................................................................23
Code.........................................................................114
Collection Period.............................................................42
Collections...................................................................65
Commission....................................................................77
Contingent and Excess Liability Insurance Policies............................85
Contract Rights..............................................................106
Contracts.....................................................................25
Cooperative...................................................................79
Covered Loss Amounts..........................................................64
Current Contracts.............................................................84
Cutoff Date...................................................................25
daily portions...............................................................116
Dealer Agreements.............................................................22
Dealers.......................................................................22
Defaulted Vehicle.............................................................97
Definitive Notes..............................................................56
Deposit Date..................................................................67
Depositaries..................................................................76
Determination Date............................................................60
</TABLE>
124
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<TABLE>
<S> <C>
Discounted Contract...........................................................42
Discounted Principal Balance..................................................42
Distribution Date.............................................................57
DTC...........................................................................55
DTC Participants..............................................................76
DTC Services..................................................................80
DTC Systems...................................................................80
Early Termination Charge......................................................42
Eligible Investments..........................................................71
ERISA........................................................................119
ERISA Compliance Test.........................................................99
Euroclear.....................................................................76
Euroclear Operator............................................................79
Euroclear Participants........................................................76
Excess Interest Collections...................................................63
Exchange Act..................................................................77
Extension Fees...............................................................100
Federal Tax Counsel..........................................................114
Final Scheduled Distribution Date.............................................57
financial asset..............................................................106
Foreign Investors............................................................117
Global Securities............................................................I-1
HCFI..........................................................................30
HFI...........................................................................29
HTA LLC.......................................................................27
HTA LP........................................................................22
HTB LLC.......................................................................27
HTB LP........................................................................22
HTC LLC.......................................................................29
HTC LP........................................................................22
HTD LLC.......................................................................30
HTD LP........................................................................22
HTI...........................................................................27
Indemnified Amounts...........................................................92
Indenture.....................................................................22
Indenture Event of Default....................................................85
Indenture Trustee.............................................................22
Indirect DTC Participants.....................................................77
Industry......................................................................80
Initial Certificate Balance...................................................23
Initial Class A Note Balance..................................................22
Initial Class A-1 Note Balance................................................22
Initial Class A-2 Note Balance................................................22
Initial Class A-3 Note Balance................................................22
Initial Class A-4 Note Balance................................................22
Initial Class B Note Balance..................................................23
Initial Deposit...............................................................83
Initial Note Balance..........................................................23
Insolvency Laws..............................................................104
Insurance Expenses........................................................68, 97
Insurance Policy..............................................................28
Insurance Proceeds............................................................67
Interest Collections..........................................................65
Investment Company Act........................................................72
Investor Percentage...........................................................59
Lease Rate....................................................................41
Leased Vehicles...............................................................25
Lemon Law....................................................................113
Liquidated Contract...........................................................84
Liquidation Expenses..........................................................69
Liquidation Proceeds..........................................................67
Loss Amounts..................................................................64
Matured Contract..............................................................41
Matured Leased Vehicle Expenses...............................................68
Matured Leased Vehicle Inventory..............................................41
Matured Leased Vehicle Proceeds...............................................67
Maturity Date.................................................................43
MBPO Program..................................................................36
Monthly Payments..............................................................41
Monthly Remittance Conditions.................................................68
motor vehicles................................................................28
Net Insurance Proceeds........................................................65
Net Liquidation Proceeds......................................................65
Net Matured Leased Vehicle Proceeds...........................................65
Net Repossession Proceeds.....................................................65
New Regulations..............................................................118
Nonrecoverable Advance........................................................96
Note Balance..................................................................58
Note Distribution Account.....................................................70
Note Distribution Amount......................................................73
Note Factor...................................................................55
Note Principal Loss Amount....................................................64
Note Rates....................................................................57
Note Register.................................................................81
Noteholders...................................................................23
Notes.........................................................................23
OID..........................................................................115
Omnibus Proxy.................................................................78
Origination Trust.............................................................22
Origination Trust Agreement...................................................26
Origination Trust Assets......................................................28
Origination Trustee...........................................................24
Other SUBI Assets.............................................................26
Other SUBI Certificates.......................................................26
Other SUBI Supplement.........................................................90
Other SUBIs...................................................................22
Outstanding Principal Balance.................................................41
Owner Trustee.................................................................23
Participants..................................................................76
Payahead Account..............................................................70
Payahead Credit...............................................................68
PBGC.........................................................................107
Prepayment....................................................................67
Prepayment Assumption.........................................................51
Principal Allocation..........................................................64
Principal Collections.........................................................65
PTCE.........................................................................119
qualified stated interest....................................................115
Rating Agencies..............................................................122
Realized Value................................................................43
Reallocation Payment..........................................................48
Record Date...................................................................57
</TABLE>
125
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<TABLE>
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Registration Statement........................................................56
Regulation...................................................................119
Reimbursable Servicer Expenses...............................................100
Repossession Expenses.........................................................68
Repossession Proceeds.........................................................67
Representative...............................................................120
Required Amount...............................................................84
Required Deposit Ratings......................................................70
Reserve Fund..................................................................83
Reserve Fund Requirement......................................................83
Residual Value................................................................41
Residual Value Loss Amount....................................................60
Retained SUBI Certificates....................................................25
Retained SUBI Interest........................................................25
Schedule of Contracts and Leased Vehicles.....................................46
Securities Act...............................................................121
Security Deposits.............................................................96
Servicer......................................................................23
Servicer Insolvency Event....................................................102
Servicer Termination Events..................................................101
Servicing Agreement...........................................................23
Servicing Fee.................................................................99
Servicing Supplement..........................................................23
SUBI..........................................................................22
SUBI Assets...................................................................26
SUBI Certificates..........................................................22,25
SUBI Collection Account.......................................................67
SUBI Interest.................................................................22
SUBI Supplement...............................................................24
SUBI Trust Agreement..........................................................24
Terms and Conditions..........................................................79
Transferor Affiliates.................................................88, 89, 93
Transferors...................................................................22
Trust.........................................................................22
Trust Agent...............................................................23, 92
U.S. Bank.....................................................................23
U.S. Holder..................................................................115
U.S. Person..................................................................I-4
Uncapped Administrative Expenses..............................................64
Uncovered Loss Amounts........................................................64
Underwriters.................................................................120
Underwriting Agreement.......................................................120
UTI...........................................................................22
UTI Assets....................................................................26
UTI Beneficiaries.............................................................22
UTI Certificates..............................................................26
voting interests..............................................................88
</TABLE>
126
<PAGE>
ANNEX I
GLOBAL CLEARANCE, SETTLEMENT AND TAX DOCUMENTATION PROCEDURES
Except in certain limited circumstances, the globally offered Notes
(the "Global Securities") will be available only in book-entry form. Investors
in the Global Securities may hold such Global Securities through any of DTC,
Cedelbank or Euroclear. The Global Securities will be tradeable as home market
instruments in both the European and U.S. domestic markets. Initial settlement
and all secondary trades will settle in same-day funds.
Secondary market trading between investors holding Global Securities
through Cedelbank and Euroclear will be conducted in the ordinary way in
accordance with their normal rules and operating procedures and in accordance
with conventional eurobond practice (I.E., seven calendar day settlement).
Secondary market trading between investors holding Global Securities
through DTC will be conducted according to the rules and procedures applicable
to U.S. corporate debt obligations.
Secondary cross-market trading between Cedelbank or Euroclear and DTC
Participants holding Notes will be effected on a delivery-against-payment basis
through the respective Depositaries of Cedelbank and Euroclear (in such
capacity) and as DTC Participants.
Non-U.S. holders (as described below) of Global Securities will be
subject to U.S. withholding taxes unless such holders meet certain requirements
and deliver appropriate U.S. tax documents to the securities clearing
organizations or their participants.
INITIAL SETTLEMENT
All Global Securities will be held in book-entry form by DTC in the
name of Cede, as nominee of DTC. Investors' interests in the Global Securities
will be represented through financial institutions acting on their behalf as
direct and indirect Participants in DTC. As a result, Cedelbank and Euroclear
will hold positions on behalf of their participants through their respective
Depositaries, which in turn will hold such positions in accounts as DTC
Participants.
Investors electing to hold their Global Securities through DTC will
follow the settlement practices applicable to U.S. corporate debt obligations.
Investor securities custody accounts will be credited with their holdings
against payment in same-day funds on the settlement date.
Investors electing to hold their Global Securities through Cedelbank or
Euroclear accounts will follow the settlement procedures applicable to
conventional eurobonds, except that there will be no temporary global security
and no "lock-up" or restricted period. Global Securities will be credited to the
securities custody accounts on the settlement date against payment in the
same-day funds.
SECONDARY MARKET TRADING
Since the purchaser determines the place of delivery, it is important
to establish at the time of the trade where both the purchaser's and seller's
accounts are located to ensure that settlement can be made on the desired value
date.
TRADING BETWEEN DTC PARTICIPANTS. Secondary market trading between DTC
Participants will be settled using the procedures applicable to U.S. corporate
debt obligations in same-day funds.
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<PAGE>
TRADING BETWEEN CEDELBANK AND/OR EUROCLEAR PARTICIPANTS. Secondary
market trading between Cedelbank Participants or Euroclear Participants will be
settled using the procedures applicable to conventional eurobonds in same-day
funds.
TRADING BETWEEN DTC SELLER AND CEDELBANK OR EUROCLEAR PURCHASER. When
Global Securities are to be transferred from the account of a DTC Participant to
the account of a Cedelbank Participant or a Euroclear Participant, the purchaser
will send instructions to Cedelbank or Euroclear through a Cedelbank Participant
or Euroclear Participant at least one business day prior to settlement.
Cedelbank or Euroclear will instruct the respective Depositary, as the case may
be, to receive the Global Securities against payment. Payment will include
interest accrued on the Global Securities from and including the last coupon
payment date to and excluding the settlement date, on the basis of actual days
elapsed and a 360-day year. For transactions settling on the 31st of the month,
payment will include interest accrued to and excluding the first day of the
following month. Payment will then be made by the respective Depositary to the
DTC Participant's account against delivery of the Global Securities. After
settlement has been completed, the Global Securities will be credited to the
respective clearing system and by the clearing system, in accordance with its
usual procedures, to the Cedelbank Participant's or Euroclear Participant's
account. The Global Securities credit will appear the next day (European time)
and the cash debit will be back-valued to, and the interest on the Global
Securities will accrue from, the value date (which would be the preceding day
when settlement occurred in New York). If settlement is not completed on the
intended value date (I.E., the trade fails), the Cedelbank or Euroclear cash
debit will be valued instead as of the actual settlement date.
Cedelbank Participants and Euroclear Participants will need to make
available to the respective clearing systems the funds necessary to process
same-day funds settlement. The most direct means of doing so is to pre-position
funds for settlement, either from cash on hand or existing lines of credit, as
they would for any settlement occurring within Cedelbank or Euroclear. Under
this approach, they may take on credit exposure to Cedelbank or Euroclear until
the Global Securities are credited to their accounts one day later.
As an alternative, if Cedelbank or Euroclear has extended a line of
credit to them, Cedelbank Participants or Euroclear Participants can elect not
to pre-position funds and allow that credit line to be drawn upon the finance
settlement. Under this procedure, Cedelbank Participants or Euroclear
Participants purchasing Global Securities would incur overdraft charges for one
day, assuming they cleared the overdraft when the Global Securities were
credited to their accounts. However, interest on the Global Securities would
accrue from the value date. Therefore, in many cases the investment income on
the Global Securities earned during that one-day period may substantially reduce
or offset the amount of such overdraft charges, although this result will depend
on each Cedelbank Participant's or Euroclear Participant's particular cost of
funds.
Since the settlement is taking place during New York business hours,
DTC Participants can employ their usual procedures for sending Global Securities
to the respective Depositary for the benefit of Cedelbank Participants or
Euroclear Participants. The sale proceeds will be available to the DTC seller on
the settlement date. Thus, to the DTC Participant a cross-market transaction
will settle no differently than a trade between two DTC Participants.
TRADING BETWEEN CEDELBANK OR EUROCLEAR SELLER AND DTC PURCHASER. Due to
time zone differences in their favor, Cedelbank Participants and Euroclear
Participants may employ their customary procedures for transactions in which
Global Securities are to be transferred by the respective clearing systems,
through the respective Depositaries, to a DTC Participant. The seller will send
instructions to Cedelbank or Euroclear through a Cedelbank Participant or
Euroclear Participant at least one business day prior to settlement. In these
cases, Cedelbank or Euroclear will instruct the respective Depositaries, as
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<PAGE>
appropriate, to deliver the bonds to the DTC Participant's account against
payment. Payment will include interest accrued on the Global Securities from and
including the last coupon payment date to and excluding the settlement date on
the basis of actual days elapsed and a 360-day year. The payment will then be
reflected in the account of the Cedelbank Participant or Euroclear Participant
the following day, and receipt of the cash proceeds in the Cedelbank
Participant's or Euroclear Participant's account would be back-valued to the
value date (which would be the preceding day, when settlement occurred in New
York). Should the Cedelbank Participant or Euroclear Participant have a line of
credit with its respective clearing system and elect to be in debit in
anticipation of receipt of the sale proceeds in its account, the back-valuation
will extinguish any overdraft charges incurred over that one-day period. If
settlement is not completed on the intended value date (I.E., the trade fails),
receipt of the cash proceeds in the Cedelbank Participant's or Euroclear
Participant's account would instead be value as of the actual settlement date.
Finally, day traders that use Cedelbank or Euroclear and that purchase
Global Securities from DTC Participants for delivery to Cedelbank Participants
or Euroclear Participants should note that these trades would automatically fail
on the sale side unless affirmative action were taken. At least three techniques
should be readily available to eliminate this potential problem:
(a) borrowing through Cedelbank or Euroclear for one day
(until the purchase side of the day trade is reflected in their
Cedelbank or Euroclear accounts) in accordance with the clearing
system's customary procedures;
(b) borrowing the Global Securities in the U.S. from a DTC
Participant no later than one day prior to settlement, which would give
the Global Securities sufficient time to be reflected in their
Cedelbank or Euroclear account in order to settle the sale side of the
trade; or
(c) staggering the value dates for the buy and sell sides of
the trade so that the value date for the purchase from the DTC
Participant is at least one day prior to the value date for the sale to
the Cedelbank Participant or Euroclear Participant.
CERTAIN U.S. FEDERAL INCOME TAX DOCUMENTATION REQUIREMENTS
A beneficial owner of Global Securities holding through Cedelbank or
Euroclear (or through DTC if the holder has an address outside the U.S.) will be
subject to the 30% U.S. withholding tax that generally applies to payments of
interest (including original issue discount) on registered debt issued by U.S.
Persons, unless (1) each clearing system, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or business
in the chain of intermediaries between such beneficial owner and the U.S. entity
required to withhold tax complies with applicable certification requirements and
(2) such beneficial owner takes one of the following steps to obtain an
exemption or reduced tax rate:
EXEMPTION FOR NON-U.S. PERSONS (FORM W-8). Beneficial owners
of Global Securities that are non-U.S. Persons can obtain a complete
exemption from the withholding tax by filing a signed Form W-8
(Certificate of Foreign Status). If the information shown on Form W-8
or the Tax Certificate changes, a new Form W-8 or Tax Certificate, as
the case may be, must be filed within 30 days of such change.
EXEMPTION FOR NON-U.S. PERSON WITH EFFECTIVELY CONNECTED
INCOME (FORM 4224). A non-U.S. Person, including a non-U.S. corporation
or bank with a U.S. branch, for which the interest income is
effectively connected with its conduct of a trade or business in the
United States, can obtain an exemption from the withholding tax by
filing Form 4224 (Exemption from Withholding
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<PAGE>
of Tax on Income Effectively Connected with the Conduct of a Trade
or Business in the United States).
EXEMPTION OR REDUCED RATE FOR NON-U.S. PERSONS RESIDENT IN
TREATY COUNTRIES (FORM 1001). Non-U.S. Persons that are beneficial
owners of Global Securities residing in a country that has a tax treaty
with the United States can obtain an exemption or reduced tax rate
(depending on the treaty terms) by filing Form 1001 (Ownership,
Exemption or Reduced Rate Certificate). If the treaty provides only for
a reduced rate, withholding tax will be imposed at that rate unless the
filer alternatively files Form W-8. Form 1001 may be filed by the Note
Owner or his agent.
EXEMPTION FOR U.S. PERSONS (FORM W-9). U.S. Persons can obtain a
complete exemption from the withholding tax by filing Form W-9 (Payer's
Request for Taxpayer Identification Number and Certification).
U.S. FEDERAL INCOME TAX REPORTING PROCEDURE. The beneficial
owner of a Global Security or, in the case of a Form 1001 or a Form
4224 filer, his agent, files by submitting the appropriate form to the
person through whom it holds (the clearing agency, in the case of
persons holding directly on the books of the clearing agency). Form W-8
and form 1001 are effective for three calendar years and Form 4224 is
effective for one calendar year.
The term "U.S. Person" means (1) a citizen or resident of the United
States, (2) a corporation, partnership or other entity organized in or under the
laws of the United States or any state or political subdivision thereof (other
than a partnership that is not treated as a United States person under any
applicable Treasury regulations), (3) an estate whose income is subject to
United States federal income tax, regardless of its source or (4) a trust whose
administration is subject to the primary supervision of a United States court
and which has one or more United States persons who have authority to control
all substantial decisions of the trust. Notwithstanding the preceding sentence,
to the extent provided in regulations, certain trusts in existence on August 20,
1996 and treated as United States persons prior to such date that elect to
continue to be so treated also shall be considered U.S. Persons.
This summary does not deal with all aspects of U.S. Federal income tax
withholding that may be relevant to foreign holders of the Global Securities.
Investors are advised to consult their own tax advisors for specific tax advice
concerning their holding and disposing of the Global Securities.
<PAGE>
TABLE OF CONTENTS
PROSPECTUS
<TABLE>
<S> <C>
Summary of Terms......................................................... 7
Risk Factors............................................................. 13
Overview of the Transaction.............................................. 22
The Trust and the SUBI................................................... 23
The Origination Trust.................................................... 26
HTA LP and HTB LP........................................................ 27
Use of Proceeds.......................................................... 29
Honda Titling C L.P...................................................... 29
Honda Titling D L.P...................................................... 30
American Honda Finance Corporation....................................... 30
The Contracts............................................................ 41
Maturity, Prepayment and Yield Considerations............................ 48
Note Factors and Trading Information Reports to Noteholders.............. 55
Description of the Notes................................................. 56
Security for the Notes................................................... 83
Additional Document Provisions........................................... 85
Certain Legal Aspects of the Origination Trust and the SUBI.............. 104
Certain Legal Aspects of the Contracts and Leased Vehicles............... 110
The Material Federal Income Tax Consequences............................. 114
ERISA Considerations..................................................... 119
Underwriting............................................................. 120
Ratings of the Notes..................................................... 122
Legal Matters............................................................ 122
Available Information.................................................... 123
Forward Looking Statements............................................... 123
Index of Terms........................................................... 124
Global Clearance, Settlement and Tax Documentation Procedures............ I-1
</TABLE>
$________________
Honda Auto Lease Trust 1999-A
Auto Lease
Asset Backed Notes
Honda Titling C L.P. and Honda Titling D L.P.
(Transferors)
American Honda Finance Corporation
(Servicer)
$_____________ _____% Class A-1 Notes
$_____________ _____% Class A-2 Notes
$_____________ _____% Class A-3 Notes
$_____________ _____% Class A-4 Notes
$____________ ____% Class B-Notes
PROSPECTUS
Credit Suisse First Boston
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Expenses in connection with the offering of the Notes being registered
hereby are estimated as follows:
<TABLE>
<S> <C>
SEC registration fee....................................................... $278
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 17-108 of the Delaware Revised Uniform Limited Partnership Act
provides that, subject to such standards and restrictions, if any, as are set
forth in its partnership agreement, a limited partnership may and shall have the
power to, indemnify and hold harmless any partner or other person from and
against any and all claims and demands whatsoever.
Pursuant to the Agreement of Limited Partnership of Honda Titling C
L.P. ("HTC LP"), HTC LP will, to the fullest extent permitted by law, indemnify
its general partner, Honda Titling C LLC, and its directors, officers, agents
and employees acting within the scope of their authority (the "HTC LP
Indemnified Parties") from and against any loss, expense damage, liability or
injury suffered or sustained by them by reason of any acts, omissions or alleged
acts or omissions arising out of the activities of any of the HTC LP Indemnified
Parties on behalf of HTC LP or in furtherance of the interest of HTC LP,
provided that the acts, omissions, or alleged acts or omissions upon which such
actual or threatened action is based were not made or omitted fraudulently or in
bad faith or constituted willful misconduct or gross negligence by the HTC LP
Indemnified Parties.
Pursuant to the Agreement of Limited Partnership of Honda Titling D
L.P. ("HTD LP"), HTD LP will, to the fullest extent permitted by law, indemnify
its general partner, Honda Titling D LLC, and its directors, officers, agents
and employees acting within the scope of their authority (the "HTD LP
Indemnified Parties") from and against any loss, expense damage, liability or
injury suffered or sustained by them by reason of any acts, omissions or alleged
acts or omissions arising out of the activities of any of the HTD LP Indemnified
Parties on behalf of HTD LP or in furtherance of the interest of HTD LP,
provided that the acts, omissions, or alleged acts or omissions upon which such
actual or threatened action is based were not made or omitted fraudulently or in
bad faith or constituted willful misconduct or gross negligence by the HTD LP
Indemnified Parties.
Pursuant to the Agreement of Limited Partnership of Honda Titling A
L.P. ("HTA LP"), the Transferor will, to the fullest extent permitted by law,
indemnify its general partner, Honda Titling A LLC, and its directors, officers,
agents and employees acting within the scope of their authority (the
II-1
<PAGE>
"HTA LP Indemnified Parties") from and against any loss, expense damage,
liability or injury suffered or sustained by them by reason of any acts,
omissions or alleged acts or omissions arising out of the activities of any of
the HTA LP Indemnified Parties on behalf of HTA LP or in furtherance of the
interest of HTA LP, provided that the acts, omissions, or alleged acts or
omissions upon which such actual or threatened action is based were not made
or omitted fraudulently or in bad faith or constituted willful misconduct or
gross negligence by the HTA LP Indemnified Parties.
Pursuant to the Agreement of Limited Partnership of Honda Titling B
L.P. ("HTB LP"), the Transferor will, to the fullest extent permitted by law,
indemnify its general partner, Honda Titling B LLC, and its directors, officers,
agents and employees acting within the scope of their authority (the "HTB LP
Indemnified Parties") from and against any loss, expense damage, liability or
injury suffered or sustained by them by reason of any acts, omissions or alleged
acts or omissions arising out of the activities of any of the HTB LP Indemnified
Parties on behalf of HTB LP or in furtherance of the interest of HTB LP,
provided that the acts, omissions, or alleged acts or omissions upon which such
actual or threatened action is based were not made or omitted fraudulently or in
bad faith or constituted willful misconduct or gross negligence by the HTB LP
Indemnified Parties.
Reference is also made to the Underwriting Agreement among HTC LP, HTD
LP and Credit Suisse First Boston Corporation and the other underwriters named
therein (see Exhibit 1.1), which provides for indemnification by HTC LP and HTD
LP in certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Not applicable.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
a. Exhibits:
<TABLE>
<C> <S>
1.1 Form of Underwriting Agreement.**
3.1 Limited Partnership Agreement of Honda Titling C L.P. dated as of
February 1, 1999, between American Honda Finance Corporation and
Honda Titling C LLC.
3.2 Limited Liability Company Agreement of Honda Titling C LLC, dated
as of February 1, 1999, between American Honda Finance
Corporation and Honda Funding Inc.
3.3 Certificate of Incorporation of Honda Titling Inc.
3.4 Bylaws of Honda Titling Inc.
3.5 Limited Partnership Agreement of Honda Titling A L.P., dated as
of July 17, 1997, between Honda Titling A LLC and American Honda
Finance Corporation.
3.6 Limited Liability Company Agreement of Honda Titling A LLC.,
dated as of July 17, 1997, between American Honda Finance
Corporation and Honda Titling Inc.
3.7 Limited Partnership Agreement of Honda Titling B L.P., dated as
of July 17, 1997, between Honda Titling B LLC and American Honda
Finance Corporation.
3.8 Limited Liability Company Agreement of Honda Titling B LLC.,
dated as of July 17, 1997, between American Honda Finance
Corporation and Honda Titling Inc.
3.9 Certificate of Incorporation of Honda Funding Inc.
3.10 Bylaws of Honda Funding Inc.
3.11 Limited Partnership Agreement of Honda Titling D L.P. dated as of
June 8, 1999, between American Honda Finance Corporation and
Honda Titling C LLC.
3.12 Limited Liability Company Agreement of Honda Titling D LLC, dated
as of June 8, 1999, between American Honda Finance Corporation
and Honda Funding Inc.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
4.1 Form of Securitization Trust Agreement, among Honda Titling C
L.P., Honda Titling D L.P., U.S. Bank National Association, as
owner trustee, Wilmington Trust Company, as co-trustee and The
Bank of New York, as indenture trustee (including form of
certificates).
4.2 Form of Indenture, between Honda Auto Lease Trust 1999-A and The
Bank of New York, as Indenture
Trustee (including form of notes).
5.1 Opinion of O'Melveny & Myers LLP with respect to legality.**
8.1 Opinion of O'Melveny & Myers LLP with respect to tax matters.**
10.1 Second Amended and Restated Trust and Servicing Agreement, dated
as of April 1, 1998, among American Honda Finance Corporation,
Honda Titling A L.P., Honda Titling B L.P., HVT, Inc., Delaware
Trust Capital Management, Inc. and U.S. Bank National
Association.
10.2 Form of 1999-A SUBI Supplement to the Second Amended and Restated
Trust and Servicing Agreement, among American Honda Finance
Corporation, Honda Titling A L.P., Honda Titling B L.P., HVT,
Inc., Delaware Trust Capital Management Inc. and U.S. Bank
National Association.
10.3 Servicing Agreement, dated as of April 1, 1998, among Honda Lease
Trust, Honda Titling A L.P., Honda Titling B L.P., and American
Honda Finance Corporation.
10.4 Form of 1999-A Supplement to Servicing Agreement, among Honda
Lease Trust, Honda Titling A L.P., Honda Titling B L.P. and
American Honda Finance Corporation.
10.5 Form of 1999-A SUBI Certificates Purchase and Sale Agreement,
among Honda Titling A L.P., Honda Titling B L.P., Honda Titling C
L.P., and Honda Titling D L.P.
10.6 Form of Agreement of Definitions, among Honda Titling A L.P.,
Honda Titling B L.P., Honda Titling C L.P., Honda Titling D L.P.,
U.S. Bank National Association, American Honda Finance
Corporation, HVT, Inc., Delaware Trust Capital Management, Inc.,
Wilmington Trust Company, and The Bank of New York.
23.1 Consent of O'Melveny & Myers LLP (included as part of
Exhibit 5.1).**
23.2 Consent of O'Melveny & Myers LLP (included as part of
Exhibit 8.1).**
24.1 Power of Attorney.*
25.1 Form of T-1 of The Bank of New York.**
99.1 Audited financial statements for the fiscal year ended March 31,
1999 for the Honda Lease Trust. **
99.2 Audited financial statements for the fiscal year ended March 31,
1999 for the Honda Auto Lease Trust 1999-A. **
</TABLE>
- ---------------------------
* Previously filed.
** To be filed by amendment.
b. Financial Statement Schedules:
Not applicable.
ITEM 17. UNDERTAKINGS.
Each 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.
II-3
<PAGE>
(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-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA TITLING A L.P., a Delaware limited partnership
By: HONDA TITLING A LLC, a Delaware limited liability
company, its general partner
By: HONDA TITLING INC., a Delaware corporation, its
manager
By: /s/ Y. Kohama
------------------------------------------
Name: Y. Kohama
Title: President
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA TITLING B L.P., a Delaware limited
partnership
By: HONDA TITLING B LLC, a Delaware limited
liability company, its general partner
By: HONDA TITLING INC., a Delaware
corporation, its manager
By: /s/ Y. Kohama
----------------------------------------
Name: Y. Kohama
Title: President
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA TITLING C L.P., a Delaware limited
partnership
By: HONDA TITLING C LLC, a Delaware limited
liability company, its general partner
By: HONDA FUNDING INC., a Delaware
corporation, its manager
By: /s/ Y. Kohama
---------------------------------------
Name: Y. Kohama
Title: President
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA TITLING D L.P., a Delaware limited
partnership
By: HONDA TITLING D LLC, a Delaware limited
liability company, its general partner
By: HONDA FUNDING INC., a Delaware
corporation, its manager
By: /s/ Y. Kohama
----------------------------------------
Name: Y. Kohama
Title: President
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA AUTO LEASE TRUST 1999-A, a Delaware
business trust
By: HONDA TITLING C L.P., a Delaware limited
partnership, solely as originator of the
Honda Auto Lease Trust 1999-A
By: HONDA TITLING C LLC, a Delaware limited
liability company, its general partner
By: HONDA FUNDING INC., a Delaware corporation,
its manager
By: /s/ Y. Kohama
------------------------------------------
Name: Y. Kohama
Title: President
By: HONDA TITLING D L.P., a Delaware limited
partnership, solely as originator of the
Honda Auto Lease Trust 1999-A
By: HONDA TITLING D LLC, a Delaware limited
liability company, its general partner
By: HONDA FUNDING INC., a Delaware corporation,
its manager
By: /s/ Y. Kohama
------------------------------------------
Name: Y. Kohama
Title: President
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Torrance and the State of California, on the 10th day
of June 1999.
HONDA LEASE TRUST, a Delaware business trust
By: HONDA TITLING A L.P., a Delaware limited
partnership, solely as originator of the
Honda Lease Trust
By: HONDA TITLING A LLC, a Delaware limited
liability company, its general partner
By: HONDA TITLING INC., a Delaware
corporation,its manager
By: /s/ Y. Kohama
----------------------------------------
Name: Y. Kohama
Title: President
By: HONDA TITLING B L.P., a Delaware limited
partnership, solely as originator of the
Honda Lease Trust
By: HONDA TITLING B LLC, a Delaware limited
liability company, its general partner
By: HONDA TITLING INC., a Delaware
corporation, its manager
By: /s/ Y. Kohama
----------------------------------------
Name: Y. Kohama
Title: President
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 1 to the Registration Statement on Form S-1 has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Y. Kohama
- -----------------------
Y. Kohama Director and President June 10, 1999
of the Manager of the General Partner of Honda
Titling C L.P., Honda Titling D L.P., Honda
Titling A L.P. and Honda Titling B L.P.
(Principal Executive Officer)
/s/ John I. Weisickle*
- -----------------------
John I. Weisickle Director, Treasurer and June 10, 1999
Secretary of the Manager of the General Partner
of Honda Titling C L.P., Honda Titling D L.P.,
Honda Titling A L.P. and Honda Titling B L.P.
(Principal Financial and Accounting Officer)
/s/ S. Imai*
- -----------------------
S. Imai Director of the Manager of the General Partner June 10, 1999
of Honda Titling C L.P. , Honda Titling D L.P.,
Honda Titling A L.P. and Honda Titling B L.P.
/s/ Scott J. Nelson*
- -----------------------
Scott J. Nelson Director of the Manager of the General Partner June 10, 1999
of Honda Titling C L.P., Honda Titling D L.P.,
Honda Titling A L.P. and Honda Titling B L.P.
/s/ Scott J. Ulm*
- -----------------------
Scott J. Ulm Director of the Manager of the General Partner June 10, 1999
of Honda Titling C L.P., Honda Titling D L.P.,
Honda Titling A L.P. and Honda Titling B L.P.
</TABLE>
*By: /s/ Y. Kohama
- -----------------------
Y. Kohama
Attorney-in-Fact
II-11
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
<S> <C>
1.1 Form of Underwriting Agreement.**
3.1 Limited Partnership Agreement of Honda Titling C L.P., dated as of
February 1, 1999, between American Honda Finance Corporation and
Honda Titling C LLC.
3.2 Limited Liability Company Agreement of Honda Titling C LLC, dated
as of February 1, 1999, between American Honda Finance Corporation
and Honda Funding Inc.
3.3 Certificate of Incorporation of Honda Titling Inc.
3.4 Bylaws of Honda Titling Inc.
3.5 Limited Partnership Agreement of Honda Titling A L.P., dated as of
July 17, 1997, between Honda Titling A LLC and American Honda
Finance Corporation.
3.6 Limited Liability Company Agreement of Honda Titling A LLC., dated
as of July 17, 1997, between American Honda Finance Corporation
and Honda Titling Inc.
3.7 Limited Partnership Agreement of Honda Titling B L.P., dated as of
July 17, 1997, between Honda Titling B LLC and American Honda
Finance Corporation.
3.8 Limited Liability Company Agreement of Honda Titling B LLC, dated
as of July 17, 1997, between American Honda Finance Corporation
and Honda Titling Inc.
3.9 Certificate of Incorporation of Honda Funding Inc.
3.10 Bylaws of Honda Funding Inc.
3.11 Limited Partnership Agreement of Honda Titling D L.P., dated as of
June 8, 1999, between American Honda Finance Corporation and Honda
Titling D LLC.
3.12 Limited Liability Company Agreement of Honda Titling D LLC, dated
as of June 8, 1999, between American Honda Finance Corporation and
Honda Funding Inc.
4.1 Form of Securitization Trust Agreement, among Honda Titling C
L.P., U.S. Bank National Association, as owner trustee and The
Bank of New York, as indenture trustee (including form of
certificates).
4.2 Form of Indenture, between the Honda Auto Lease Trust 1999-A and
The Bank of New York, as Indenture Trustee (including form of
notes).
5.1 Opinion of O'Melveny & Myers LLP with respect to legality.**
6.1 Audited financial statements for the fiscal year ended March 31,
1999 for the Honda Lease Trust. **
6.2 Audited financial statements for the fiscal year ended March 31,
1999 for the Honda Auto Lease Trust 1999-A. **
8.1 Opinion of O'Melveny & Myers LLP with respect to tax matters.**
10.1 Second Amended and Restated Trust and Servicing Agreement, dated
as of April 1, 1998, among American Honda Finance Corporation,
Honda Titling A L.P., Honda Titling B L.P., HVT, Inc., Delaware
Trust Capital Management, Inc. and U.S. Bank National Association.
10.2 Form of 1999-A SUBI Supplement to the Second Amended and Restated
Trust and Servicing Agreement, among American Honda Finance
Corporation, Honda Titling A L.P., Honda Titling B L.P., HVT,
Inc., Delaware Trust Capital Management, Inc. and U.S. Bank
National Association.
10.3 Servicing Agreement, dated as of April 1, 1998, among Honda Lease
Trust, Honda Titling A L.P., Honda Titling B L.P., and American
Honda Finance Corporation.
10.4 Form of 1999-A Supplement to Servicing Agreement, among Honda
Lease Trust, Honda
</TABLE>
<PAGE>
<TABLE>
<S> <C>
Titling A L.P., Honda Titling B L.P. and American Honda Finance Corporation.
10.5 Form of 1999-A SUBI Certificates Purchase and Sale Agreement,
among Honda Titling A L.P., Honda Titling B L.P., Honda Titling C
L.P. and Honda Titling D L.P.
10.6 Form of Agreement of Definitions, among Honda Titling A L.P.,
Honda Titling B L.P., Honda Titling C L.P., Honda Titling D L.P.,
U.S. Bank National Association, American Honda Finance
Corporation, HVT, Inc., Delaware Trust Capital Management, Inc.,
Wilmington Trust Company, and The Bank of New York.
23.1 Consent of O'Melveny & Myers LLP (included as part of
Exhibit 5.1).**
23.2 Consent of O'Melveny & Myers LLP (included as part of
Exhibit 8.1).**
24.1 Power of Attorney.*
25.1 Form of T-1 of The Bank of New York.**
</TABLE>
- -------------
* Previously filed.
** To be filed by amendment.
<PAGE>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
HONDA TITLING C L.P.
LIMITED PARTNERSHIP AGREEMENT
Between
HONDA TITLING C LLC,
as General Partner
and
AMERICAN HONDA FINANCE CORPORATION,
as Limited Partner
Dated as of February 1, 1999
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitional Provisions. . . . . . . . . . . . . . . . 5
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02. Purpose. . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03. Registered Office. . . . . . . . . . . . . . . . . . . . . . 6
Section 2.04. Registered Agent.. . . . . . . . . . . . . . . . . . . . . . 7
Section 2.05. Certificate of Limited Partnership and Other Filings.. . . . 7
Section 2.06. Partners' Addresses. . . . . . . . . . . . . . . . . . . . . 7
Section 2.07. Authorization to Enter into Certain Agreements.. . . . . . . 7
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions. . . . . . . . . . . . . . . . 7
Section 3.02. Additional Capital Contributions.. . . . . . . . . . . . . . 8
Section 3.03. Withdrawal of Capital. . . . . . . . . . . . . . . . . . . . 8
Section 3.04. Partnership Interests and Capital Accounts.. . . . . . . . . 8
Section 3.05. Limitation of Limited Partners' Liability. . . . . . . . . . 8
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners. . 10
Section 4.02. Partnership Interests on Admission of Additional Partners. . 10
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner.. . . . . . . . . . . . . . . . 10
Section 5.02. Specific Powers of General Partner.. . . . . . . . . . . . . 11
Section 5.03. Powers Requiring Concurrence of Limited Partners.. . . . . . 11
Section 5.04. Duties of General Partner. . . . . . . . . . . . . . . . . . 11
Section 5.05. Compensation of General Partner and Expenses.. . . . . . . . 12
Section 5.06. Scope of Responsibility. . . . . . . . . . . . . . . . . . . 12
Section 5.07. Contracts With Affiliates. . . . . . . . . . . . . . . . . . 12
Section 5.08. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 12
Section 5.09. Limited Partners' Rights.. . . . . . . . . . . . . . . . . . 13
Section 5.10. Partnership Property.. . . . . . . . . . . . . . . . . . . . 13
Section 5.11. Duties of the General Partner and Certain Other Persons. . . 13
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements.. . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 6.02. Fiscal Year. . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 7.02. Maintenance of Partners' Capital Accounts. . . . . . . . . . 14
Section 7.03. Net Income and Net Loss; Cash Flow.. . . . . . . . . . . . . 15
Section 7.04. Special Tax Allocations. . . . . . . . . . . . . . . . . . . 15
Section 7.05. Curative Allocations.. . . . . . . . . . . . . . . . . . . . 15
Section 7.06. Other Allocation Rules.. . . . . . . . . . . . . . . . . . . 15
Section 7.07. Allocation of Built-In Gains.. . . . . . . . . . . . . . . . 16
Section 7.08. Distribution of Cash Flow and Other Amounts. . . . . . . . . 16
Section 7.09. Restricted Distributions.. . . . . . . . . . . . . . . . . . 16
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal. . . . . . . . . . . . . . . . . . . . . . . . 17
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy. . . . . 17
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests.. . . . . . . . . . . . 17
Section 9.02. Dealing with General Partner.. . . . . . . . . . . . . . . . 17
Section 9.03. Compliance With Federal and State Law. . . . . . . . . . . . 17
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership.. . . . . . . . . . . . 18
Section 10.02. Distribution after Dissolution. . . . . . . . . . . . . . . 18
Section 10.03. Dissolution If No General Partner Remaining.. . . . . . . . 19
Section 10.04. Reserves. . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.05. Statement.. . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 10.06. Distribution Limited to Partnership Assets. . . . . . . . . 19
Section 10.07. Termination.. . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney.. . . . . . . . . . . . . . . . . . . . . 19
Section 11.02. Governing Law and Arbitration.. . . . . . . . . . . . . . . 20
Section 11.03. Successors and Assigns. . . . . . . . . . . . . . . . . . . 21
Section 11.04. Counterparts; Integration.. . . . . . . . . . . . . . . . . 21
Section 11.05. No Partition. . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.06. Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.07. Severability. . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.08. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 11.09. Amendment; Waiver.. . . . . . . . . . . . . . . . . . . . . 21
Section 11.10. Further Assurances. . . . . . . . . . . . . . . . . . . . . 21
EXHIBITS
Exhibit A - Gross Asset Value of Initial Capital Contributions. . . . . .A-1
Exhibit B - Initial Partnership Interests . . . . . . . . . . . . . . . .B-1
Exhibit C - Certificate of Limited Partnership of Honda Titling C L.P.. .C-1
Exhibit D - Form of General/Limited Partnership
Certificate of Honda Titling C L.P. . . . . . . . . . . . . .D-1
</TABLE>
iii
<PAGE>
This Limited Partnership Agreement is entered into as of February 1,
1999, between Honda Titling C LLC, a Delaware limited liability company, as
general partner (together with any additional or successor general partners
admitted to the Partnership pursuant to this Agreement, the "General Partner"),
and American Honda Finance Corporation, a California corporation, as limited
partner (together with any additional or successor limited partners admitted to
the Partnership pursuant to this Agreement, the "Limited Partner").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Agreement, the
terms set forth below shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6 Del.
C. Sections 17-101, ET SEQ.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership
as an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Partnership Agreement, as the same may be
amended, modified or supplemented from time to time.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors.
"BANKRUPTCY" means the occurrence of any of the events specified in
Section 17-402(a)(4) or (5) of the Act as in effect on the date hereof.
<PAGE>
"BUILT-IN GAIN" means the difference between the initial Gross Asset
Value of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount of
money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived
from the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except that:
(a) the initial Gross Asset Value of an asset contributed by
a Partner to the Partnership shall be the fair market value thereof, as
determined by the General Partner and set forth in Exhibit A hereto;
(b) upon the occurrence of any of the following events, the
Gross Asset Value of the Partnership assets shall be adjusted to equal
their respective current gross fair market values, as determined by the
General Partner, as of the date of such event: (i) the acquisition of
additional interests in the Partnership by any new or existing Partner
in exchange for more than a DE MINIMIS Capital Contribution, (ii) the
distribution by the Partnership to a Partner of more than a DE MINIMIS
amount of cash or other Partnership Property as consideration for an
interest in the Partnership and (iii) the liquidation of the Partnership
within the meaning of the Regulations; provided, however, that any
adjustments pursuant to clauses (i) and (ii) shall be made only if the
General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(c) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be adjusted to equal the gross fair
market value of such asset on the date of distribution as determined by
the General Partner; and
(d) the Gross Asset Value of any Partnership asset shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such asset pursuant to Code Section 734(b) or 743(b), but only
to the extent that such adjustment is taken into account
2
<PAGE>
in determining Capital Accounts pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations, Section 7.01 of this
Agreement and clause (d) of the definition of the terms "Net Income"
and "Net Losses"; provided, however, that the Gross Asset Value of an
asset shall not be adjusted pursuant to this subparagraph to the
extent that the General Partner determines that an adjustment pursuant
to clause (b) is necessary or appropriate in connection with a
transaction that otherwise would result in an adjustment pursuant to
this subparagraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"INDEPENDENT MEMBER" shall have the meaning ascribed to such term in
that certain Limited Liability Company Agreement of Honda Titling C LLC, dated
as of or about the date hereof, between AHFC and Honda Funding Inc.
"IRS" means the Internal Revenue Service and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the Preamble to
this Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a) any income of the Partnership that is exempt from federal
income tax and is not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such
taxable income or loss;
(b) any expenditures of the Partnership that can be neither
deducted nor capitalized (and any expenditures treated as such pursuant
to the Regulations) and that are not otherwise taken into account in
computing Net Income or Net Losses pursuant to this definition shall be
added to such taxable income or loss;
(c) in the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (b) of the definition of the term
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss upon the disposition of such asset for purposes
of computing Net Income or Net Losses;
(d) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property so disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(e) any depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss
with respect to any asset the Gross Asset Value of which differs from
its adjusted basis for federal income tax purposes at the beginning of
the related taxation period shall be in an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation,
3
<PAGE>
amortization or other cost recovery deduction for such year or other
period bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization or other
cost recovery deduction for such period is zero, the depreciation,
amortization and other cost recovery deduction with respect to such
asset shall be determined with reference to such beginning Gross Asset
Value using any reasonable method;
(f) to the extent an adjustment to the adjusted tax basis
of any Partnership asset pursuant to Code Section 734(b) or 743(b) is
required to be taken into account pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations in determining Capital
Accounts other than with respect to a complete liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Net Income or Net Losses; and
(g) notwithstanding the foregoing, any items that are
specifically allocated pursuant to Section 7.05 or 7.06 shall not be
taken into account in computing Net Income or Net Losses.
"PARTNER" means a General Partner or a Limited Partner.
"PARTNERSHIP" means Honda Titling C L.P., a Delaware limited
partnership.
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership
of the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of
the Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Trust (including any interest in the UTI or any SUBI that the Partnership may
own from time to time) and in the Securitization Trust and all monies due
thereon and paid thereon or in respect thereof; (iii) the right to realize upon
any property that may be deemed to secure any interest described in clause (ii);
and (iv) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, joint stock
company, association, joint venture, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PLEDGE" shall have the meaning set forth in Section 9.01.
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"REGULATIONS" means any regulations promulgated by the IRS under the
Code, as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in Section
7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"SECURITIES" shall have the meaning set forth in Section 2.02(a).
"SECURITIZATION" means (i) a financing transaction of any sort
undertaken by a beneficiary (or a special purpose affiliate thereof) under the
Trust that is secured, directly or indirectly, by assets of the Trust or a UTI,
a SUBI or any interest therein, and any financing undertaken in connection with
the issuance and assignment of a UTI or a SUBI and the related certificate
evidencing such UTI or SUBI, as the case may be; (ii) any sale by a beneficiary
(or a special purpose affiliate thereof) under the Trust of an interest in a UTI
or a SUBI; or (iii) any other asset securitization, secured loan or similar
transaction involving assets of the Trust or any beneficial interest therein or
in the Trust.
"SECURITIZATION TRUST" means Honda Vehicle Lease Trust 1999-A and its
successors.
"SUBI" shall have the meaning set forth in Section 2.02(b).
"TRANSFER" shall have the meaning set forth in Section 9.01.
"TRUST" means Honda Lease Trust, a Delaware business trust.
"TRUST AGREEMENT" means the trust agreement dated as of July 17, 1997 by
and among Honda Titling A L.P., Honda Titling B L.P., American Honda Finance
Corporation, HVT, Inc., Delaware Trust Capital Management, Inc. and U.S. Bank
National Association, as amended or supplemented from time to time.
"TRUST INTERESTS" shall have the meaning set forth in Section 2.02(b).
"UTI" shall have the meaning set forth in Section 2.02(b).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to this Agreement include all Exhibits hereto, (iii) references
to words such as "herein" and "hereof" shall refer to this Agreement as a whole
and not to any particular part, Article or Section herein, (iv) references to an
Article or Section such as "Article One" or "Section 1.01" shall refer to the
applicable Article or Section of this Agreement, (v) the term "include" and all
variations thereof shall mean "include without limitation", (vi) the term "or"
shall include "and/or" and (vii) the term "proceeds" shall have the meaning
ascribed to such term in the Uniform Commercial Code, as adopted by and in
effect in the State of Delaware.
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(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to time.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under such generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. NAME. The name of the limited partnership formed hereby
is Honda Titling C L.P. (the "Partnership").
Section 2.02. PURPOSE. The Partnership is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of the Securitization
Trust formed pursuant to the Trust Agreement which Securitization
Trust shall be formed for the purpose of acquiring interests in the
Trust, which Securitization Trust may issue Securities (the
"Securities") secured by or representing beneficial interests in the
assets of the Trust.
(b) to acquire, lease, own, hold, sell, transfer, convey,
dispose of, pledge, assign, borrow money against, finance, refinance
or otherwise deal with and exercise rights of ownership with respect
to, publicly or privately and whether with unrelated third parties or
with affiliated entities, certificates representing beneficial
interests in the Trust created with respect to the Trust ("Trust
Interests") including undivided trust interests ("UTIs") and any
special units of beneficial interests created with respect to the
Trust ("SUBIs"), and Securities and related Partnership property; and
(c) to loan or otherwise invest funds received as a result
of the Partnership's interest in any Trust Interests or Securities and
any other income, as determined by the General Partners from time to
time;
(d) to open, maintain and close bank, brokerage and other
accounts and to pay the fees and charges applicable to transactions
related thereto;
(e) to bring and defend actions and proceedings at law or
in equity or before any court or governmental, administrative or other
regulatory agency, body or commission;
(f) to issue partnership interests as provided for herein;
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(g) to borrow money other than pursuant to clause (b)
above, but only to the extent that such borrowing is permitted by the
terms of the transactions contemplated by clauses (a) and (b) above;
and
(h) to engage in any lawful act or activity and to exercise
any powers permitted to limited partnerships organized under the Act
that are incidental to and necessary or convenient for the
accomplishment of the foregoing purposes, including, without
limitation, any of the powers that may be exercised by the General
Partner on behalf of the Partnership.
Section 2.03. REGISTERED OFFICE. The registered office of the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
Section 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
Section 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS.
The General Partner has filed a certificate of limited partnership of the
Partnership (the "Partnership Certificate") substantially in the form attached
hereto as Exhibit C in the office of the Delaware Secretary of State and shall
file or cause the Partnership Certificate to be filed in such other offices as
may be required by law from time to time. From time to time as required by law,
the General Partner shall execute and acknowledge, and shall cause to be filed
and recorded, appropriate amendments to the Partnership Certificate and any
other filings required of or appropriate with respect to the Partnership. In
particular, but without limitation, in the event that the General Partner deems
it necessary for the Partnership to exist in or qualify to do business under the
laws of one or more jurisdictions in addition to the State of Delaware, the
General Partner shall take such actions as may be necessary to register the
Partnership or to qualify it to do business in each such jurisdiction; provided
that in any such event the Partnership shall at all times continue to be a
limited partnership formed under and governed by the provisions of the Act and
this Agreement.
Section 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of
the General Partner and the Limited Partner are (i) in the case of the General
Partner, Honda Titling C LLC, 700 Van Ness Avenue, Torrance, California 90501,
Attention: General Partner, (ii) in the case of the Limited Partner, American
Honda Finance Corporation, 700 Van Ness Avenue, Torrance, California 90501,
Attention: President; or (iii) such other address as shall be designated by any
of the foregoing in a written notice to the other parties hereto.
Section 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of
the Partnership and the General Partner, on behalf of the Partnership, may, and
is hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the documents relating to the Trust or the
Securitization Trust, and any other documents or agreements contemplated thereby
or specifically described therein, and any and all documents and agreements
deemed necessary or desirable by the General Partner, including, without
limitation, any such documents and agreements with respect to financings secured
by or representing a sale of Trust Interests (including any UTI or SUBI), all
without any further act, vote or approval of any Partner,
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notwithstanding any other provision of this Agreement, the Act or other
applicable law, rule or regulation. Such authorization shall not be deemed a
restriction on the powers of the General Partner to enter into other
agreements on behalf of the Partnership.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General
Partner and the Limited Partner has contributed cash and/or marketable
securities as its initial Capital Contribution.
Section 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any
General Partner, no Partner shall be required to make additional Capital
Contributions to the Partnership.
(b) Notwithstanding any provision herein to the contrary, in the
event any additional Capital Contributions are made by one or both Partners,
the Partnership Interest of each Partner for purposes of all subsequent Cash
Flow distributions shall be recalculated to reflect any such additional
Capital Contributions until such additional Capital Contributions have been
recovered by the contributors thereof through distributions pursuant to this
Agreement.
(c) Each Partner's Capital Account shall be increased by an
amount equal to the additional Capital Contributions by such Partner pursuant
to Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
Section 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in
this Agreement, no Partner shall be entitled to demand or receive a return of
any portion of its Capital Contributions from the Partnership without the
consent of the General Partner.
Section 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all
purposes of this Agreement, the "Capital Account" of a Partner as of any date
shall mean the value of the Capital Contribution of such Partner as set forth on
Exhibit A, as the same may be amended from time to time, properly adjusted to
reflect the allocations and distributions provided for in Article Seven and any
additional Capital Contributions of such Partner.
Section 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability
whatsoever, whether to the Partnership, to any of the Partners or to any
creditor of the Partnership, for the debts of the Partnership or any of its
losses beyond the amount contributed by such Limited Partner to the capital
of the Partnership; provided, however, that a Limited Partner shall be
obligated to return distributions wrongfully distributed to it as required by
the Act or other applicable law.
(b) No Limited Partner, in its capacity as a limited partner of
the Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
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(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing or
assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to bring
or pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
(A) the dissolution and winding up of the Partnership
or continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the winding
up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or
other transfer of all or all or substantially all of the assets
of the Partnership;
(C) the incurrence of indebtedness by the Partnership
other than in the ordinary course of its business;
(D) a change in the nature of the Partnership
business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential
conflict of interest between the Partnership and a General
Partner or a Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the Partnership
not otherwise enumerated in this subsection, but which this
Agreement, or any other agreement, states in writing may be
subject to the approval or disapproval of Limited Partners; or
(J) any other matter required by law or regulation, or
deemed advisable by the General Partner, to be submitted to a
vote of Limited Partners;
(vii) winding up the Partnership; or
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(viii) taking any of the actions described in Section 17-303(b)
of the Act or in this Agreement, or exercising any right or power
permitted a limited partner under the Act, which action or exercise is
not specifically enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. AUTHORITY OF GENERAL PARTNER TO ADMIT ADDITIONAL
PARTNERS. The Partners agree that the General Partner may admit Additional
Limited Partners to the Partnership, subject to and in accordance with the
provisions of Section 4.02, Section 5.03 and Article Nine. Additional General
Partners may be admitted to the Partnership, subject to and in accordance with
the provisions of Section 4.02, Section 5.03 and Article Nine, but only if and
to the extent that the General Partner would be permitted to transfer its
Partnership Interest under Section 4.02, Section 5.03 and Article Nine.
Section 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL
PARTNERS. The Partnership Interest of each Additional General Partner or
Additional Limited Partner shall be the percentage that the cash amount or
initial Gross Asset Value of capital contributed to the Partnership by such
Additional General Partner or Additional Limited Partner bears to the total
capital of the Partnership immediately following such contribution. Upon
admission of such Additional General Partner or Additional Limited Partner to
the Partnership, the Partnership Interests of the existing Partners shall be
reduced PRO RATA by the amount of such Additional Limited Partner's Partnership
Interest; provided, however, that no Additional General Partner or Additional
Limited Partner may be admitted if such addition would reduce the Partnership
Interest of (i) AHFC, in its capacity as a Limited Partner, below 20% or
(ii) Honda Titling C LLC, in its capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all
decisions regarding the business of the Partnership. No Limited Partner
shall participate in the management or control of the Partnership's business,
nor shall it have the power to act for or bind the Partnership, such powers
being vested solely and exclusively in the General Partner, except as
otherwise specifically provided herein. It is understood and agreed that the
General Partner shall have all of the rights and powers of a general partner
provided under the Act and by this Agreement, and as otherwise provided by
law, and any action taken by the General Partner shall constitute the act of
and serve to bind the Partnership. Persons dealing with the Partnership are
entitled to rely conclusively on the power and authority of the General
Partner as set forth in this Agreement.
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(b) Notwithstanding the foregoing, without the affirmative vote of
100% of the constituent members of the General Partner, the General Partner
will not take, or acquiesce in, and only the General Partner (and not any
Limited Partner) shall have any right to take, any action to cause the
Partnership to (i) merge or consolidate with or into any Person, (ii) act
other than the Partnership's own name and through the General Partner, (iii)
dissolve or liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (iv) consent to the institution of
bankruptcy or insolvency proceedings against it, (v) file a petition seeking,
or consent to, reorganization or relief under any applicable federal or state
law relating to bankruptcy, (vi) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of the
Partnership or all or a substantial part of its property, (vii) make any
assignment for the benefit of its creditors, (viii) admit in writing its
inability to pay its debts generally as they become due, (ix) institute or
join in any institution of any bankruptcy, insolvency, liquidation,
arrangement or reorganization proceeding or other proceedings under any
federal or state law, against any entity in which the Partnership holds an
ownership interest, or (x) take any corporate action or partnership action in
furtherance of the actions enumerated in clauses (i) through (ix) above;
provided, however, that the General Partner shall in no event consent to the
institution of bankruptcy or insolvency proceedings against the Partnership
so long as the Partnership is solvent. In the event of the insolvency of the
Partnership and with regard to any action contemplated by the preceding
sentence, the General Partner will not owe a fiduciary duty to any Limited
Partner (except as may be specifically required by applicable law), but the
General Partner's fiduciary duty with regard to such action shall be owed, to
the fullest extent permitted by applicable law, instead to the creditors of
the Partnership.
(c) The General Partner shall not, and shall not allow the
Partnership otherwise to (i) commingle any funds or other assets of the
Partnership with the funds or assets of any other Person (ii) perform the
obligations of another Person, (iii) guarantee the obligations of another
Person, (iv) pledge the assets of another Person, or (v) enter into
transactions with any Person except as specifically authorized and
contemplated in this Agreement, the Trust Agreement and the agreements
related to a Securitization. The Partnership shall (A) conduct business in
its own name and hold itself out as a separate entity, (B) maintain a
separate office location or, if the Partnership shares office space with
others, pay its fair allocable share of overhead costs and (C) observe all
organizational formalities. The bank accounts, financial and accounting
books, records and financial statements of the Partnership shall be
maintained separate from those of every other Person. All obligations and
indebtedness of any kind incurred by the Partnership shall be paid from the
assets of the Partnership and the Partnership's assets shall not be used to
pay any obligation or indebtedness of any other Person, other than certain
expenses, obligations or indebtedness of the Trust, Securitization Trust and
trustee of any of the foregoing with respect to transactions of or with
respect to such Trust or Securitization Trust.
(d) The General Partner is hereby authorized to delegate to one or
more other Persons any of its rights and powers to manage and control the
business and affairs of the Partnership, including to delegate to agents and
employees of the General Partner or the Partnership, and to delegate by a
management agreement or another agreement with, or otherwise to, other
Persons. Such delegation by the General Partner shall not cause the General
Partner to cease to be a general partner of the Partnership.
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Section 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section
5.03, the General Partner is hereby granted the right, power and authority to do
on behalf of the Partnership all things which, in its sole judgment, are
necessary, proper, desirable, convenient or incidental to carry out the duties
and responsibilities of the Partnership under this Agreement.
Section 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS.
Without the written consent of, or ratification by a specific act of, Partners
holding in the aggregate at least 66-2/3% of the Partnership Interests, the
General Partner shall have no authority to, and affirmatively represents and
undertakes that it will not, admit a Person as a Partner under this Agreement,
which in any event shall always be done in accordance with Article Nine.
Section 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall
devote such time to the business of the Partnership as it shall deem necessary
to manage and supervise the business and affairs of the Partnership in an
efficient manner. Subject to the foregoing, the General Partner shall manage
the administration of the Partnership, which administration shall include, but
not be limited to, (a) maintaining customary books and records; (b) preparing or
causing the preparation of the financial statements provided for in this
Agreement; (c) preparing and filing or causing the preparation and filing of
Partnership tax returns; (d) preparing communications from the Partnership to
Limited Partners; (e) filing documents required to be filed by the Partnership;
(f) causing the Partnership to make or revoke the appropriate tax elections
under the Code; (g) functioning as tax matters partner for federal, state and
local tax purposes; and (h) acting on behalf of the Partnership with respect to
(i) the Trust or the Securitization Trust, (ii) any lenders and (iii) any other
Person dealing with the Partnership or any Partnership Property.
Section 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The
General Partner shall receive no compensation for services to the Partnership as
General Partner; provided, however, that the General Partner shall be entitled
to charge to the Partnership any filing fees incurred in complying with any
requirement imposed on the Partnership by law, reasonable accountants' and
attorneys' fees and all other reasonable expenses arising out of the
administration of the Partnership including, but not limited to, those incurred
in any administrative or judicial proceeding in which the Partnership may become
involved, all of which shall be proper expenses of the Partnership.
Section 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner or
any of its Affiliates, or, any director, officer, shareholder, agent or employee
thereof shall be liable, responsible or accountable for damages or otherwise to
the Partnership or any Limited Partner for any action taken or omitted on behalf
of the Partnership within the scope of the authority conferred upon such Person
by this Agreement or by law, unless such action was taken or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence.
Section 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter
into one or more agreements with the General Partner or any Affiliate of the
General Partner to render services to the Partnership. Any service rendered to
the Partnership by the General Partner or any Affiliate thereof shall be on
terms that are fair and reasonable to the Partnership and are, in the aggregate,
no less favorable than those that could be obtained from unaffiliated third
parties for comparable quality.
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Section 5.08. INDEMNIFICATION. The Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, shareholders, agents and
employees acting within the scope of their authority (the "Indemnified Parties")
from and against all loss, expense, damage, liability or injury suffered or
sustained by them by reason of any acts, omissions or alleged acts or omissions
arising out of any of such Person's activities on behalf of the Partnership or
in furtherance of the interests of the Partnership, including, but not limited
to, any judgments, awards, fines, penalties, settlements, reasonable attorneys'
fees, and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim and including any payments made
by one or more Indemnified Parties, unless the acts, omissions or alleged acts
or omissions upon which such actual or threatened action, proceeding or claim is
based were made or omitted fraudulently or in bad faith or constituted willful
misconduct or gross negligence by one or more of such Indemnified Parties. Any
such indemnification shall only be made from the assets of the Partnership.
Reasonable expenses incurred by any Indemnified Party in connection with such an
action, proceeding or claim shall be paid or reimbursed by the Partnership in
advance of the final disposition of the action, proceeding or claim, upon
receipt by the Partnership of an undertaking by or on behalf of the Indemnified
Party to repay such amount if it shall be determined that the Indemnified Party
is not entitled to be indemnified as authorized in this Section.
Section 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth
in this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
Section 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be
owned by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership Property in the name of the
Partnership and not in the name of any Partner. Each Partner's interest in the
Partnership shall be personal property for all purposes.
Section 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS.
To the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. STATEMENTS. The General Partner shall send or cause to
be sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
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Section 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be
the fiscal year of the initial Limited Partner, which shall end on the last day
of March each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. TAX ELECTIONS. The General Partner shall elect to treat
the Partnership as a single member entity treated as an agent of the Limited
Partner and not as a separate corporation or partnership for federal and
applicable state tax purposes. The General Partner may also elect to make an
election for state tax purposes comparable to the federal tax election under
Section 761(a) of the Code for an exemption from the provisions of Subchapter K
of the Code for the Partnership.
Section 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate
Capital Account shall be established and maintained for each Partner throughout
the full term of the Partnership as follows:
(a) to each Partner's Capital Account there shall be credited
such Partner's initial Capital Contribution, as set forth and agreed to
on Exhibit A hereto, such additional Capital Contributions as such
Partner may make from time to time pursuant to Section 3.02(b), such
Partners' distributive share of Net Income, and any items in the nature
of income or gain that are specially allocated to such Partner pursuant
to Section 7.03 or 7.04 and the amount of any Partnership liabilities
that are assumed by such Partner or secured by any Partnership Property
distributed to such Partner;
(b) from each Partner's Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of Net
Losses, any items in the nature of deductions or losses that are
specially allocated to such Partner pursuant to Section 7.03 or 7.04 and
the amount of any liabilities of such Partner assumed by the Partnership
or secured by any property contributed by such Partner to the
Partnership;
(c) in the event any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account, if any, of the
transferor to the extent relevant to the transferred interest; and
(d) in determining the amount of any liability for purposes
of clauses (a) and (b) of this Section, Code Section 752 and any other
applicable provisions of the Code and Regulations shall be taken into
account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating
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to liabilities that are secured by contributed or distributed property or
that are assumed by the Partnership or the Partners), are computed in order
to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a
material effect on the amounts distributable to any Partner pursuant to
Section 10.02 upon the dissolution of the Partnership. The General Partner
shall make all (i) adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes in accordance with the Regulations, and (ii) appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
Section 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04,
7.05 and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to such Partner's Partnership
Interest during the particular year, after taking into account any variations in
the Partner's Partnership Interest during that year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner
for any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
Section 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the
extent necessary to satisfy the requirements set forth in Sections
1.704-1(b)(2)(ii)(d) and 1.704-2 of the Regulations for a qualified income
offset and partner minimum gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to
the adjusted tax basis of any Partnership asset is required under Code
Section 734(b) or 743(b) in connection with a distribution to a Partner in
complete liquidation of such Partner's interest in the Partnership and the
resultant redetermination pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or 1.704-1(b)(2)(iv)(m)(4) of the Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such gain or loss shall be
allocated pro rata to the remaining Partners in accordance with their
respective Partnership Interests in the event Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to which such distribution
was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4)
applies.
Section 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
by other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section.
Therefore, notwithstanding any other provision of this Article Seven, the
General Partner shall make special offsetting allocations of Partnership income,
gain, loss or deduction in whatever manner it determines appropriate so that,
after such offsetting allocations are made, each Partner's Capital Account
balance is, to the extent possible, equal to the Capital Account
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balance such Partner would have had if the Regulatory Allocations had not
been made and all Partnership items were allocated pursuant to Section 7.03.
In exercising discretion under this Section, the General Partner shall take
into account certain future Regulatory Allocations that, although not yet
made, are likely to offset other Regulatory Allocations previously made under
Section 7.04(a).
Section 7.06. OTHER ALLOCATION RULES. For purposes of determining
items of Partnership income, gain, loss or deduction or any other items
allocable to any fiscal year or other period, including upon the transfer of a
Partner's interest in the Partnership, such items shall be determined on a
daily, monthly or other basis, as determined by the General Partner, using any
method permissible under Code Section 706 and the Regulations thereunder. To
the extent permitted by the Regulations, the General Partner shall endeavor not
to treat distributions of Cash Flow as having been made from the proceeds of a
nonrecourse liability within the meaning of Section 1.752-2 of the Regulations.
Section 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
(c) Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
Section 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As
determined by the General Partner employing its reasonable business judgment, to
the extent Partnership Cash Flow is available for distribution at the close of
any fiscal one-month period, such distribution shall be made as soon as
reasonably possible following such period, in the manner provided in Section
7.03, as if such fiscal one-month period were a fiscal year. No such
distribution will be made if it would create a negative Capital Account balance
for a Limited Partner. The General Partner may also refuse to make a
distribution at the end of any fiscal one-month period if such distribution
would impair Reserves set up by the General Partner pursuant to Section 10.04.
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Section 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the
General Partner on behalf of the Partnership, shall not make a distribution to
any Partner if such distribution would violate Section 17-607 of the Act or
other applicable law. Notwithstanding Section 17-606 of the Act, no Limited
Partner shall, by virtue of becoming entitled to receive a distribution, have
the status of, or be entitled to the remedies available to, a creditor of the
Partnership with respect to such distribution.
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no
Partner shall have the right to withdraw from the Partnership.
Section 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or legal
representative or Person or Persons entitled to receive the interest of such
Limited Partner become a substitute Limited Partner, except in accordance with
Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the
General Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of ("Transfer"), or encumber or hypothecate ("Pledge"), all or
any part of its Partnership Interest to any Person. Any purported Transfer or
Pledge, shall be deemed null and void and shall not be recognized by the
Partnership or the other Partners.
Section 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
Section 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of
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such representation and warranty shall, and hereby agrees to, indemnify and
hold harmless all other Partners and the Partnership from all claims,
demands, suits, losses, judgments, liabilities and damages, including
reasonable attorneys' fees and disbursements, arising out of or in any way
connected with such act or omission.
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership
shall be dissolved and its affairs wound up upon the earliest to occur of:
(a) March 31, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event
that results in the General Partner ceasing to be a general partner of
the Partnership under the Act, unless within 90 days after the
occurrence of such event, a majority in interest of the remaining
Partners (or such greater percentage in interest as is required by the
Act) agrees in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such event, of one or
more additional general partners of the Partnership; or
(c) the entry of a decree of judicial dissolution pursuant to
Section 17-802 of the Act.
Section 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for
the payment) of such debts and liabilities of the Partnership (or
Reserves therefor), including any necessary expenses of liquidation,
except any debts, liabilities and loans that may be due to the Partners,
in the order of priority provided by law;
(b) to the payment (or the making of reasonable provision for
the payment) of any debts and liabilities that may be due to the
Partners and to the payment (or the making of reasonable provision for
the payment) of the unpaid principal balance of and the interest accrued
on loans, if any, made by the Partners to the Partnership; and
(c) each Partner's Capital Account shall be adjusted as
provided in Section 7.02 as if the Partnership Property had been sold
for its fair market value and the resulting gain or loss had been
allocated to the respective Partners, and the assets of the Partnership
shall be distributed thereafter to the Partners in proportion to their
respective non-negative Capital Accounts.
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All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the Partnership. If
any Limited Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all fiscal years,
including the fiscal year during which such liquidation occurs), such Limited
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
Section 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the
event of the dissolution of the Partnership pursuant to Section 10.01(b) because
no General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
Section 10.04. RESERVES. The General Partner or the liquidating
trustee, as the case may be, shall have the right to set up (either in
connection with the ongoing operations of the Partnership or in the course of
its liquidation) reasonable cash reserves for contingent, conditional or
unmatured liabilities or obligations of the Partnership, capital improvements or
for any other purpose necessary to accomplish the purposes of the Partnership
("Reserves"), and such Reserves shall be deducted from amounts available for
distribution pursuant to this Agreement.
Section 10.05. STATEMENT. Within a reasonable time following the
completion of the liquidation or distribution of the Partnership Property, the
General Partner or liquidating trustee shall supply to each of the Partners a
statement that shall set forth the assets and the liabilities of the Partnership
and each Partner's Capital Account as of the date of complete liquidation.
Section 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner
shall have any right to demand a distribution in a form other than that decided
upon by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
Section 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
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ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact to make, execute, sign, acknowledge, record and file, in its
name, place and stead and with full power of substitution, on behalf of it and
on behalf of the Partnership, the following:
(i) one or more Partnership Certificates, certificates of
doing business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may be
required to file under the laws of the State of Delaware or any other
jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the
Partnership Certificate or equivalent document and such other
instruments or documents as may be deemed necessary or desirable by the
General Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the instruments
described in subsections (a)(i) and (ii), provided such amendments or
restatements are either required by law or are consistent with this
Agreement or have been authorized by the affected Partners;
(iv) any and all amendments to or restatements of this
Agreement that have been duly adopted by the Partners pursuant to the
terms hereof; and
(v) any and all other instruments as may be deemed necessary
or desirable by the General Partner to carry out fully the provisions of
this Agreement in accordance with its terms.
(b) The grant of authority contained in subsection (a) is a special
Power of Attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power by attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
(c) Notwithstanding the provisions of subsection (a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
Section 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agree-
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ment and the rights and liabilities of the Partners shall be determined in
accordance with, the internal laws of the State of Delaware without regard to
any otherwise applicable principles of conflicts of laws. To the fullest
extent permitted by law, any controversy or claim arising out of or relating
to this Agreement or the breach thereof shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association to the
extent permitted by the Delaware Uniform Arbitration Act, 10 DEL. C. Section
5701, ET SEQ., and judgment upon the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
Section 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law
otherwise provided and subject to Article Nine, this Agreement shall be binding
on and inure to the benefit of each of the Partners, their legal
representatives, heirs, administrators, executors, successors, and assigns.
Section 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be
executed in several counterparts and all counterparts so executed shall
constitute one Agreement binding on all Partners, notwithstanding that all the
Partners are not signatory to the same counterpart. This Agreement, including
Exhibits, constitutes the entire agreement among the Partners pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings of the Partners in connection therewith. No covenant,
representation or condition not expressed in this Agreement shall be binding
upon the Partners hereto or shall affect or be effective to interpret, change or
restrict the provisions of this Agreement.
Section 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of
the Partners hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Partnership Property.
Section 11.06. CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
Section 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
Section 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
Section 11.09. AMENDMENT; WAIVER. No change, termination or waiver of
any of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66-2/3% of the Partnership Interests,
and such additional approvals, if any, as
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are required under each Securitization have been obtained; provided, however,
that 100% of the constituent members of the General Partner and 100% of the
directors of any Independent Member must consent to any amendment to any of
the provisions hereof.
Section 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested by any other party in order to effect the
purposes of this Agreement and to better assure and confirm unto the requesting
party its rights, powers and remedies hereunder.
22
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IN WITNESS WHEREOF, the initial Partners have executed this Agreement as
of the date first set forth above.
HONDA TITLING C LLC, as General
Partner
By: HONDA FUNDING INC.
By: /s/ Y. KOHAMA
--------------------------
Name: Y. Kohama
Title: President
AMERICAN HONDA FINANCE CORPORATION,
as Limited Partner
By: /s/ Y. KOHAMA
--------------------------
Name: Y. Kohama
Title: President
23
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EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $10
Limited Partner: $990
A-1
<PAGE>
EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE>
EXHIBIT C
CERTIFICATE OF LIMITED PARTNERSHIP
OF
HONDA TITLING C L.P.
This Certificate of Limited Partnership of Honda Titling C L.P. (the
"Partnership") is being executed and filed by the undersigned General Partner
(the "General Partner") to form a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (6 Del.C. Section 17-101 ET SEQ.).
ARTICLE ONE
The name of the limited partnership formed hereby is Honda Titling C
L.P.
ARTICLE TWO
The address of the registered office of the Partnership in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801. The name and address of the
registered agent for service of process on the Partnership in the State of
Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801.
ARTICLE THREE
The name and business address of the General Partner of the Partnership
is:
Honda Titling C LLC
700 Van Ness Avenue
Torrance, CA 90501
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this 1st
day of February 1999.
Honda Titling C LLC
---------------------------------
Y. Kohama
Authorized Signatory
C-1
<PAGE>
EXHIBIT D
Agreement of Limited Partnership
Honda Titling C L.P.
[GENERAL PARTNER/LIMITED PARTNER] UNIT CERTIFICATE
OF
HONDA TITLING C L.P.
(A DELAWARE LIMITED PARTNERSHIP)
No.__________ ___________ Units
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
PARTNERSHIP HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). THIS SECURITY MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) TO A PERSON
(1) WHOM THE SELLER REASONABLY BELIEVES IS AN ACCREDITED INVESTOR WITHIN THE
MEANING OF REGULATION D UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH RULE 144A, AND WHICH MAY BE IN EITHER CASE EFFECTED WITHOUT LOSS OF ANY
APPLICABLE INVESTMENT COMPANY ACT EXCEPTION [[INCLUDE CLAUSE (2) ONLY FOR
LIMITED PARTNER CERTIFICATE] AND (2) WHICH CONSTITUTES A "QUALIFIED PURCHASER"
AS DEFINED IN THE INVESTMENT COMPANY ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION.
<PAGE>
This certifies that ____________________ is the registered owner of ____
Units ("Units") of Honda Titling C L.P., a Delaware limited partnership (the
"Partnership"). The Units evidenced by this Certificate are [Limited/General]
Partner Units. The rights, preferences, and limitations of the Partners are set
forth in the Agreement of Limited Partnership of the Partnership, as amended
from time to time (the "Partnership Agreement"). Copies of the Partnership
Agreement and the Certificate of Limited Partnership are on file at the General
Partner's principal office at 700 Van Ness Avenue, Torrance, California, 90501,
Attn:__________. Capitalized terms not defined herein have the meanings given
to them in the Partnership Agreement.
HONDA TITLING C LLC
General Partner of
Honda Titling C L.P., a
Delaware limited partnership
Dated: By:
--------------- ----------------------------
Title:
-------------------------
BY ACCEPTANCE OF THIS CERTIFICATE FOR [GENERAL PARTNER/LIMITED PARTNER] UNITS,
AND AS A CONDITION TO BEING ENTITLED TO ANY RIGHTS IN OR BENEFITS WITH RESPECT
TO THE UNITS EVIDENCED HEREBY, A HOLDER IS DEEMED TO HAVE AGREED, WHETHER OR NOT
SUCH HOLDER IS ADMITTED TO THE PARTNERSHIP AS A SUBSTITUTED [GENERAL/LIMITED]
PARTNER WITH RESPECT TO THE INTEREST EVIDENCED HEREBY, TO COMPLY WITH AND BE
BOUND BY ALL TERMS AND CONDITIONS OF THE LIMITED PARTNERSHIP AGREEMENT, A COPY
OF WHICH HAS BEEN AVAILABLE FOR INSPECTION AND MAY BE OBTAINED UPON REQUEST
(FREE OF CHARGE) FROM THE PARTNERSHIP.
<PAGE>
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
HONDA TITLING C LLC
LIMITED LIABILITY COMPANY AGREEMENT
Between
AMERICAN HONDA FINANCE CORPORATION
and
HONDA FUNDING INC.
as Members
Dated as of February 1, 1999
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.. . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitional Provisions.. . . . . . . . . . . . . . . 3
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation.. . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02. Name and Office.. . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Duration. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.04. Registered Office and Registered Agent. . . . . . . . . . . 4
Section 2.05. Execution, Delivery and Filing of Certificate.. . . . . . . 4
ARTICLE THREE
PURPOSES
Section 3.01. Purposes. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.02. Power and Authority.. . . . . . . . . . . . . . . . . . . . 5
Section 3.03. Limitations on Powers.. . . . . . . . . . . . . . . . . . . 5
Section 3.04. Company Opportunity.. . . . . . . . . . . . . . . . . . . . 6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Initial Contributions of Members. . . . . . . 6
Section 4.02. Additional Capital Contributions. . . . . . . . . . . . . . 6
Section 4.03. Withdrawals.. . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.04. Borrowings. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.05. Additional Members. . . . . . . . . . . . . . . . . . . . . 7
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MANAGEMENT
Section 5.01. Powers of the Members.. . . . . . . . . . . . . . . . . . . 7
Section 5.02. Limitations on Powers of Members. . . . . . . . . . . . . . 8
Section 5.03. Self Dealing. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.04. Standard of Care; Liability.. . . . . . . . . . . . . . . . 8
Section 5.05. Compensation. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.06. Meetings of Members.. . . . . . . . . . . . . . . . . . . . 9
Section 5.07. Consent.. . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.08. Independent Member. . . . . . . . . . . . . . . . . . . . . 9
Section 5.09. Managers. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required.. . . . . . . . . . . . . . . . . . 10
Section 6.02. Voting on Bankruptcy or Insolvency. . . . . . . . . . . . . 10
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts. . . . . . . . . . . . . . . . . . . . . . 10
Section 7.02. Allocation of Profits and Losses. . . . . . . . . . . . . . 11
Section 7.03. Distributions.. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability. . . . . . . . . . . . . . . . . . 11
Section 8.02. Indemnification.. . . . . . . . . . . . . . . . . . . . . . 11
Section 8.03. Fiduciary Duty. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.02. Dissolution.. . . . . . . . . . . . . . . . . . . . . . . . 12
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ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets.. . . . . . . . . . . . . . . . . . . 12
Section 10.02. Termination.. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 10.03. Claims of the Members.. . . . . . . . . . . . . . . . . . . 13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests.. . . . . . . . . . . 13
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation.. . . . . . . . . . . . . . . . . 13
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment. . . . . . . . . . . . . . . . . . 13
Section 13.02. Books of Account; Reports.. . . . . . . . . . . . . . . . . 14
Section 13.03. Bank Accounts and Investment of Funds.. . . . . . . . . . . 14
Section 13.04. Accounting Decisions. . . . . . . . . . . . . . . . . . . . 14
Section 13.05. Federal Income Tax Elections. . . . . . . . . . . . . . . . 14
Section 13.06. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 14
Section 13.07. Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.08. Consent of Members. . . . . . . . . . . . . . . . . . . . . 15
Section 13.09. Further Execution.. . . . . . . . . . . . . . . . . . . . . 15
Section 13.10. Binding Effect. . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.11. Severability. . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.12. Captions. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.13. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.14. Delaware Law to Control.. . . . . . . . . . . . . . . . . . 16
</TABLE>
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<TABLE>
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Page
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<S> <C>
EXHIBITS
Exhibit A - Members; Capital Contributions; Membership Percentages. . . A-1
</TABLE>
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This Limited Liability Company Agreement of Honda Titling C LLC, a
Delaware limited liability company (the "Company"), dated as of February 1,
1999, is between American Honda Finance Corporation ("AHFC"), a California
corporation, and Honda Funding Inc., a Delaware corporation (the "Independent
Member" and, together with AHFC, the "Members"); and
WHEREAS, the Members desire to form a limited liability company under
and pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware and
by entering into this Agreement;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to form the Company in accordance with the Delaware
Limited Liability Company Act and subject to the terms and provisions of this
Agreement.
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act (6 DEL. C.
Section 18-101, ET SEQ.), as amended from time to time.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such Person. For purposes of this definition, a Person shall be deemed to be
"controlled by" another Person if such other person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Liability Company Agreement of the
Company, as it may be amended, restated or supplemented from time to time.
"CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.
"CAPITAL CONTRIBUTIONS" means the amount of all cash, money, and notes
payable on demand and the agreed upon value of other property or services
contributed by the Members to the Company.
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"CERTIFICATE" means the Certificate of Formation of the Company,
including any restatements thereof or amendments thereto, which are filed with
the Delaware Secretary of State.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning set forth in Section 3.01(b).
"COVERED PERSON" shall have the meaning set forth in Section 8.03.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"FISCAL YEAR" means the taxable year of the holder of the Majority
Interest.
"INDEPENDENT DIRECTOR" means an individual who is not (i) a director,
officer or employee of AHFC or any Affiliate of AHFC (other than any limited or
special purpose corporation or limited liability company similar to the
Company); (ii) a person related to any officer or director of AHFC or any
Affiliate of AHFC; (iii) a direct or indirect holder of more than 10% of any
voting securities of AHFC or any Affiliate of AHFC; or (iv) a person related to
a direct or indirect holder of more than 10% of any voting securities of AHFC or
any Affiliate of AHFC.
"INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.
"MAJORITY INTEREST" means the interest in the Company of AHFC.
"MAJORITY OF THE REMAINING MEMBERS" means those Members holding more
than 50% of the Membership Percentages and more than 50% of the Capital Account
balances of the Members.
"MANAGERS" means Honda Funding Inc. and such other persons or entities
that may be designated from time to time by the Members as managers of the
Company to perform such functions for the Company as may be determined from time
to time by the Members. A Manager shall be deemed to be a "manager" of the
Company within the meaning of Section 18-101 of the Act.
"MEMBERS" means the persons or entities designated as Members of the
Company in Exhibit A. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
successors in interest.
"MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in Exhibit A.
"ORIGINATION TRUST" means Honda Lease Trust, a Delaware business trust.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, limited
liability partnership, joint stock company, association, joint venture, estate
(including any beneficiaries), unincorporated organization or government or any
agency or potential subdivision thereof.
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"PROFITS" and "LOSSES" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits and Losses shall be added to such
taxable income or loss.
"RECEIVABLES" shall have the meaning set forth in Section 3.01(a).
"SECURITIES" shall have the meaning set forth in Section 3.01(d).
"SUBI" shall have the meaning set forth in Section 3.01(c).
"TRUST" shall have the meaning set forth in Section 3.01(c).
"TRUSTEE" shall have the meaning set forth in Section 6.01.
"UTI" shall have the meaning set forth in Section 3.01(c).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to this Agreement include all Exhibits hereto, (iii) references
to words such as "herein" and "hereof" shall refer to this Agreement as a whole
and not to any particular part, Article or Section herein, (iv) references to an
Article or Section such as "Article One" or "Section 1.01" shall refer to the
applicable Article or Section of this Agreement, (v) the term "include" and all
variations thereof shall mean "include without limitation", (vi) the term "or"
shall include "and/or" and (vii) the term "proceeds" shall have the meaning
ascribed to such term in the Uniform Commercial Code, as adopted by and in
effect in the State of Delaware.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. FORMATION. The parties hereto hereby form a limited
liability company pursuant to the provisions of the Act and this Agreement, and
agree that the rights, duties and
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liabilities of the Members and Managers shall be as provided in the Act,
except as otherwise provided in this Agreement. Pursuant to Section 18-201(d)
of the Act, this Agreement shall become effective as of the formation of the
Company.
Section 2.02. NAME AND OFFICE. The name of the Company shall be Honda
Titling C LLC, and its office shall be located at 700 Van Ness Avenue, Torrance,
California 90501, or such other place as the Members may determine from time to
time.
Section 2.03. DURATION. The term of the Company shall commence on the
date the Certificate is filed in the office of the Delaware Secretary of State
and shall continue until March 31, 2027, unless the Company is dissolved before
such date in accordance with the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Act.
Section 2.04. REGISTERED OFFICE AND REGISTERED AGENT. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and the
name of its initial registered agent at such address shall be The Corporation
Trust Company. The registered office and registered agent may be changed from
time to time in accordance with the Act. If the registered agent shall ever
resign, the Company shall promptly appoint a successor.
Section 2.05. EXECUTION, DELIVERY AND FILING OF CERTIFICATE. Y.
Kohama, or such person as designated by Y. Kohama, as an "authorized person"
within the meaning of the Act, shall execute, deliver and file the Certificate
with the Delaware Secretary of State.
ARTICLE THREE
PURPOSES
Section 3.01. PURPOSES. The purposes for which the Company is formed
are to, solely in its capacity as General Partner of Honda Titling C L.P.:
(a) acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with from time to time (i) motor
vehicle leases; (ii) installment obligations relating to motor vehicles;
(iii) motor vehicle retail installment sale or conditional sale
contracts; (iv) motor vehicle wholesale inventory loans or sales
contracts secured by, among other things, new or used motor vehicles;
(v) dealer rental car loans or sales contracts including dealer rental
car loans or sales contracts secured by, among other things, new or used
motor vehicles; (vi) receivables, including any right to payment from a
person or entity, whether constituting an account, chattel paper,
instrument or general intangible, arising out of or relating to the sale
of new or used motor vehicles or related products and supplies; (vii)
interests in any of the foregoing; and (viii) any proceeds or other
monies due under any of the foregoing, any related fees and charges,
security interests in the foregoing or other property securing payment
thereof and related agreements, instruments, documents and rights
(collectively, the "Receivables");
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(b) acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with Receivables, any collateral
securing the Receivables, all related insurance policies, related
agreements with Affiliates, agreements with motor vehicle dealers,
manufacturers and lessors and other originators or servicers of
Receivables and any proceeds or further rights associated therewith
(collectively, the "Collateral");
(c) sell, assign, pledge or otherwise transfer Receivables,
Collateral, Securities and notes or beneficial interests in any of the
foregoing, undivided trust interests ("UTIs") and special units of
beneficial interests ("SUBIs") of the Origination Trust to trusts or
other entities established by or on behalf of the Company or one of its
Affiliates (each, a "Trust") or to Affiliates of the Company;
(d) authorize, sell and deliver or participate in the
issuance of one or more series or classes of participation certificates,
bonds, notes or other evidences of interest or indebtedness
(collectively, "Securities"), in either case issued by Trusts;
(e) acquire Securities, UTIs or SUBIs or other property of a
Trust, including remainder interests in collateral or reserve accounts;
(f) issue, authorize, sell and deliver Securities, UTIs,
SUBIs or other instruments secured, Collateral collateralized by or
evidencing beneficial interests in Receivables or Securities;
(g) hold, and to enjoy all of the rights and privileges as a
holder or beneficial owner of, any Securities, Collateral, UTIs or
SUBIs;
(h) negotiate, authorize, execute, deliver or assume or
perform the obligations under any agreement, instrument or document
relating to the activities set forth in subsections (a) through (g)
above, including but not limited to any trust agreement, sale and
servicing agreement, pooling and servicing agreement, indenture,
reimbursement agreement, credit support agreement, receivables purchase
agreement, indemnification agreement, placement agreement, underwriting
agreement or any other documents or agreements contemplated thereby or
specifically described therein;
(i) on its own behalf or on behalf of Honda Titling C L.P.,
to bring and defend actions and proceedings at law or in equity or
before any court or governmental, administrative or other regulatory
agency, body or commission;
(j) on its own behalf or on behalf of Honda Titling C L.P.,
to open, maintain and close bank, brokerage and other accounts and to
pay fees and changes applicable to transactions related thereto;
(k) to issue membership interests as provided for herein; and
(l) engage in any activity and to exercise any powers
permitted to limited liability companies under the laws of the State of
Delaware that are related or incidental to the foregoing and necessary,
convenient or advisable to accomplish the foregoing.
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Section 3.02. POWER AND AUTHORITY. In its capacity as General Partner
of Honda Titling C L.P., the Company shall have the power and authority to take
any and all actions necessary, appropriate, proper, advisable, incidental or
convenient to accomplish or for the furtherance of the purposes set forth in
Section 3.01. The Company shall serve as a General Partner of Honda Titling C
L.P. The Company, and Honda Funding Inc. or Y. Kohama, on behalf of the
Company, shall enter into and perform the Limited Partnership Agreement of Honda
Titling C L.P. without any further act, vote or approval of any Member, Manager
or other person, notwithstanding any other provision of this Agreement, the Act
or other applicable law, rule or regulation.
Section 3.03. LIMITATIONS ON POWERS. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:
(a) engage in any business or activity other than as set
forth in this Agreement;
(b) without the unanimous affirmative vote of the Members,
(i) merge or consolidate with or into any other Person, (ii) act other
than in the Company's own name, (iii) dissolve or liquidate, in whole or
in part, or institute proceedings to be adjudicated bankrupt or
insolvent, (iv) consent to the institution of bankruptcy or insolvency
proceedings against it, (v) file a petition seeking or consent for
reorganization or relief under any applicable federal or state law
relating to bankruptcy, (vi) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or all or a substantial part of its property, (vii) make any
assignment for the benefit of creditors, (viii) admit in writing its
inability to pay its debts generally as they become due; (ix) institute
or join in any institution of, any bankruptcy, insolvency, liquidation,
reorganization or arrangement proceedings or other proceedings under any
federal or state bankruptcy or similar law, against any entity in which
the Company holds an ownership interest; or (x) take any limited
liability company action in furtherance of the actions set forth in
clauses (i) through (ix) above;
(c) without the unanimous affirmative vote of the Members,
take or cause to be taken any of the actions referred to in clauses (i)
through (vii) of subparagraph (b) above with respect to any entity of
which the Company is a partner or member or any entity of which such
partner or member is, in turn, a partner or member (each such entity
being referred to as a "Downstream Entity");
(d) without the unanimous affirmative vote of the Members,
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; or
(e) without the unanimous affirmative vote of the Members,
(i) amend, modify or terminate or cause to be amended, modified or
terminated, the organizational documents of any Downstream Entity,
(ii) cause any Downstream Entity to hold property other than in such
entity's own name, (iii) take any action or cause to be taken any action
with respect to the dissolution or winding up of any Downstream Entity,
except as
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permitted in such Downstream Entity's organizational documents, or
elect not to continue such Downstream Entity's business; or
(f) take or cause to be taken any action not otherwise
permitted under the organizational documents of any Downstream Entity.
Section 3.04. COMPANY OPPORTUNITY. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other business
activity, whether or not competitive with, similar to, or within the scope of
the activities conducted by or on behalf of, the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.
(a) Each of AHFC and the Independent Member shall be admitted as a
member of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
Exhibit A attached hereto.
(b) The Members shall make the Capital Contributions set forth next
to their names in Exhibit A upon the formation of the Company. No interest
shall accrue on any Capital Contribution made to the Company.
Section 4.02. ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not
be obligated to make additional Capital Contributions except with the consent of
all Members.
Section 4.03. WITHDRAWALS. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.
Section 4.04. BORROWINGS. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; provided, however, that
any such borrowing shall require the prior approval of a Majority Interest and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by a Majority Interest. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company which shall be repaid before any distributions to the
Members.
Section 4.05. ADDITIONAL MEMBERS. No additional Members shall be
admitted to the Company without the unanimous consent of the Members.
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ARTICLE FIVE
MANAGEMENT
Section 5.01. POWERS OF THE MEMBERS.
(a) The Company shall be managed by its Members. Subject to the
other provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things necessary or appropriate
for the accomplishment of the purposes of the Company, including, but not
limited to, (i) acquiring and selling, assigning and transferring installment
obligations, leases, retail installment sale or conditional sale contracts,
inventory loans, motor vehicle wholesale inventory sales contracts, dealer
rental car loans or sales contracts, promissory notes, security agreements and
receivables; (ii) disbursing Company funds for Company purposes; (iii) investing
and reinvesting Company funds; (iv) executing contracts, notes, mortgages and
other agreements and instruments; (v) employing attorneys, accountants, Managers
or other agents, which may include Affiliates of the Company; (vi) paying all
Company obligations; (vii) performing all ministerial acts and duties relating
to the payment of all indebtedness, taxes and assessments due or to become due
with regard to any property of the Company; (viii) purchasing and maintaining
insurance on behalf of the Company against any liability or expense asserted
against or incurred by or on behalf of the Company; (ix) transacting the
Company's business under an assumed name or name other than its name as set
forth in the Certificate; (x) appointing any Member or other person as agent for
service of process on the Company as required by the law of any jurisdiction in
which the Company transacts business; (xi) commencing, prosecuting or defending
any proceeding in the Company's name; and (xii) doing such other acts as may
facilitate the Company's exercise of its powers; provided, however, that all
such acts shall fall within the purposes of the Company set forth in Section
3.01.
(b) Notwithstanding anything in this Agreement to the contrary, the
Company shall at all times have at least one Independent Member, and no action
of the type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints the other Members as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice which
may be required by any rule or law and which may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or which may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of its
limited liability company interest in the Company; provided, however, that where
a Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
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(d) The Members shall not, and shall not allow the Company otherwise
to (i) commingle any funds or other assets of the Company with the funds or
assets of any other Person, (ii) perform the obligations of another Person,
(iii) guarantee the obligations of another Person, (iv) pledge the assets of
another Person or (v) enter into transactions with any Person except as
specifically authorized and contemplated in this Agreement and related
agreements. The Company shall (A) conduct business in its own name and hold
itself out as a separate entity, (B) maintain a separate office location or, if
the Company shares office space with others, pay its fair allocable share of
overhead costs and (C) observe all organizational formalities. The bank
accounts, financial and accounting books, records and financial statements of
the Company shall be maintained separate from those of every other Person. All
obligations and indebtedness of any kind incurred by the Company shall be paid
from the assets of the Company and the Company's assets shall not be used to pay
any obligation or indebtedness of any other Person, other than certain expenses,
obligations or indebtedness of the Origination Trust and any trustee of any of
the foregoing with respect to transactions of or with respect to such Trust or
as set forth in Section 3.01 herein.
(e) A copy of the Certificate or amendments to the Certificate will
be provided to each Member upon written request to the Company.
(f) Subject to the other provisions of this Article and Article Six,
the Members shall have full power to act for and to bind the Company to the
extent provided by Delaware law. Every contract, note, mortgage, lease, deed or
other instrument or agreement executed by any Member shall be conclusive
evidence that at the time of execution the Company was then in existence, that
this Agreement had not theretofore been terminated or amended in any manner and
that the execution and delivery of such instrument was duly authorized by the
Members. A Manager may bind the Company only to the extent authorized by the
Members.
Section 5.02. LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended, decision
made, obligation incurred or power exercised by any Member on behalf of the
Company without prior written notice to all Members outlining the proposed
action followed by the written consent of a Majority Interest with respect to:
(i) any mortgage, grant of security interest, pledge or encumbrance of any asset
of the Company; (ii) any merger of the Company with another entity; (iii) any
transaction involving an actual or potential conflict of interest between a
Member and the Company; (iv) any material change in the character of the
business and affairs of the Company; or (v) any act that would contravene in a
material respect any provision of this Agreement or the Act.
Section 5.03. SELF DEALING. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable
or affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (i) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as
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a Member, shall be disclosed to all other Members, (ii) such contract or
other act shall be approved by a Majority Interest unless the same is
specifically authorized herein and (iii) the Members shall not receive or
hold any property of the Company as collateral security in respect of any
claim against the Company.
Section 5.04. STANDARD OF CARE; LIABILITY. Each Member and its
respective directors, officers, stockholders and Affiliates shall discharge its
duties in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company as required by
this Agreement or the Act. A Member shall not be liable for monetary damages to
the Company for any breach of any such duties except for receipt of a financial
benefit to which the Member is not entitled, voting for or assenting to a
distribution to Members in violation of this Agreement or the Act, or a knowing
violation of the law.
Section 5.05. COMPENSATION. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by the Majority Interest.
Section 5.06. MEETINGS OF MEMBERS. All Members shall be entitled to
vote on any matter submitted to a vote of the Members. Unless a greater vote is
required by the Act or this Agreement, the affirmative vote of a Majority
Interest shall be required. Meetings of Members for the transaction of such
business as may properly come before the Members may be held at such place, on
such date and at such time as the Majority Interest shall determine. Special
meetings of Members for any proper purpose or purposes may be called at any time
by the holders of at least 25% of the Membership Percentages of all Members.
The Company shall deliver or mail written notice stating the date, time, place
and purposes of any meeting to each Member entitled to vote at the meeting.
Such notice shall be given not less than 10 nor more than 60 days before the
date of the meeting.
Section 5.07. CONSENT. Any action required or permitted to be taken at
an annual or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08. INDEPENDENT MEMBER. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be a special
purpose corporation formed pursuant to a charter or articles of incorporation
that (i) limits its business purposes and activities and (ii) requires the
unanimous consent of its entire board of directors (without any vacancies),
including the affirmative vote of all Independent Directors before such member
may approve, permit or take any action, or cause any action to be taken in
respect of the following actions with respect to any limited liability company
of which it is a member, to (a) institute proceedings to have itself adjudicated
bankrupt or insolvent, (b) consent to the institution of bankruptcy or
insolvency proceedings against it, (c) file a petition seeking, or consent to,
such member's or limited liability company's reorganization or relief under any
applicable federal or state law relating to bankruptcy, (d) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such member or limited liability company or all or a
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substantial part of its property, (e) make any assignment for the benefit of its
creditors, admit in writing its inability to pay its debts generally as they
become due, (f) institute, or join in any institution of, any bankruptcy,
insolvency, liquidation, reorganization or arrangement proceedings or other
proceedings under any federal or state bankruptcy or similar law, against any
entity in which such member or limited liability company holds an ownership
interest or (g) take any action in furtherance of the actions set forth in
clauses (a) through (f) above.
Section 5.09. MANAGERS. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Manager shall
be obligated personally for any such debt, obligation, or liability of
the Company solely by reason of being a Manager of the Company;
(b) no Manager shall be required to make any Capital
Contribution in the form of cash to the Company; and
(c) no Manager shall be (i) entitled to receive any Profits
or (ii) liable for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. UNANIMOUS VOTE REQUIRED. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (i) the prior written consent of
each trustee from time to time (each, a "Trustee") under any pooling and
servicing agreement, indenture, trust agreement or similar agreement between the
Company, a Trustee and a servicer, if any, pursuant to which the Company shall
issue certificates and/or notes and (ii) the affirmative vote of 100% of the
Members of the Company, including the Independent Member, institute proceedings
to be adjudicated a bankrupt or insolvent or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking, or
consent to, reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or all
or a substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as they
become due, or take any limited liability company action in furtherance of any
such action.
Section 6.02. VOTING ON BANKRUPTCY OR INSOLVENCY. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of 100% of the
Members, including each Independent Member, entitled to vote on such a proposal
shall be required for such a proposal to be adopted.
11
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ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. CAPITAL ACCOUNTS. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. ALLOCATION OF PROFITS AND LOSSES.
The Profits and Losses of the Company shall be determined as of the end
of each Fiscal Year of the Company and shall be allocated to AHFC. Honda
Funding Inc. will have no interest in the Profits and Losses.
Section 7.03. DISTRIBUTIONS.
(a) The Company shall distribute to AHFC such sums as the Majority
Interest determines to be available for distribution and not required to provide
for current or anticipated Company needs. All distributions shall be made to
AHFC.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities, plus (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution that
are superior to the rights of the Members receiving the distribution.
(c) The Company shall not be required to make a distribution to a
Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. EXCULPATION OF LIABILITY. Except as otherwise provided
by the Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of being
a Member of the Company.
Section 8.02. INDEMNIFICATION. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of each Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal (other than an action by or in the right of the
Company) by
12
<PAGE>
reason of the fact that such person is or was a Member, employee or agent of
the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding.
Section 8.03. FIDUCIARY DUTY. To the extent that, at law or in equity,
a Member, Manager, or agent of the Company or a director, officer, employee or
Affiliate of such person (each, a "Covered Person") has duties (including
fiduciary duties) and liabilities relating thereto to the Company or to any
other Covered Person, a Covered Person acting under this Agreement shall not be
liable to the Company or to any Member for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Members to replace such other
duties and liabilities of such Covered Person.
ARTICLE NINE
TERM OF COMPANY
Section 9.01. COMMENCEMENT. The term of the Company shall commence
upon the filing of the Certificate with the Delaware Secretary of State. The
bankruptcy of a Member or the occurrence of any other event under Section 18-304
of the Act shall not cause a Member to cease to be a Member of the Company and
upon the occurrence of such an event, the business of the Company shall continue
without dissolution.
Section 9.02. DISSOLUTION. The Company shall be dissolved and its
affairs wound up upon the occurrence of any of the following events: (i) the
sale or other disposition of substantially all of the assets of the Company;
(ii) the written consent thereto of all of the Members; (iii) the retirement,
expulsion or dissolution of a Member; provided, however, that the Company shall
not dissolve and be wound up if within 90 days after such event, all remaining
Members agree in writing to continue the business of the Company and to admit
one or more Members as necessary or desired; or (iv) the entry of a decree of
judicial dissolution pursuant to Section 18-802 of the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. APPLICATION OF ASSETS. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Interest. The assets of the Company
may be liquidated or distributed in kind, as determined by the Majority
Interest, and the same shall first be applied to the payment of, or to a
reasonable reserve for the payment of, the Company's liabilities (including such
provision for contingent, conditional or unmatured liabilities as the Majority
Interest shall deem appropriate) and then to
13
<PAGE>
AHFC. If the assets of the Company shall not be sufficient to pay all of the
liabilities of the Company, to the fullest extent permitted by the Act, no
assets of the Company may be sold or disposed of without the written consent
of all of the holders of outstanding securities issued by any trust formed in
respect of a transaction to which the Company is a party. To the extent that
Company assets cannot either be sold without undue loss or readily divided
for distribution in kind to the Members, then the Company may, as determined
by the Majority Interest, convey those assets to a trust or other suitable
holding entity established for the benefit of the Members in order to permit
the assets to be sold without undue loss and the proceeds thereof distributed
to the Members at a future date. The legal form of the holding entity, the
identity of the trustee or other fiduciary and the terms of its governing
instrument shall be determined by the Majority Interest.
Section 10.02. TERMINATION. The Company shall terminate when all the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to AHFC
in the manner provided for in this Article and the Certificate shall have been
cancelled in the manner required by the Act.
Section 10.03. CLAIMS OF THE MEMBERS. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. RESTRICTION ON TRANSFERS OF INTERESTS. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. INVESTMENT REPRESENTATION. The Members represent to
each other and to the Company that they are acquiring their respective interests
in the Company for their own accounts, and without a view to selling or pledging
them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. LIMITATIONS ON AMENDMENT. The Company shall not,
without the prior written consent of each nationally recognized rating agency
that has rated any securities issued
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<PAGE>
and outstanding pursuant to any pooling and servicing agreement, indenture,
trust agreement or other similar agreement entered into by the Company or any
Affiliate of the Company, amend, alter, change or repeal Article Three,
Section 5.08, Article Six or this Section. Subject to the foregoing
limitation, the Company reserves the right to amend, alter, change or repeal
any provision contained in this Agreement in the manner now or hereafter
prescribed by statute or applicable law, and all rights conferred upon
Members herein are granted subject to this reservation, provided that this
Agreement may not be amended without the affirmative vote of 100% of the
Members of the Company, including the Independent Members.
Section 13.02. BOOKS OF ACCOUNT; REPORTS.
(a) The Company shall keep true and complete books of account and
records of all Company transactions. The books of account and records shall be
kept at the principal office of the Company. The Company shall maintain at such
office (i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such Company records shall be available to any Member
or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
(b) The Company will use its best efforts to furnish, or cause to be
furnished, to Members the following items on the date indicated: (i) annually
by June 30, (A) an annual report consisting of an income statement for the prior
year and a balance sheet as of the year ended, and (B) Member information tax
returns (Schedule K-1), and (ii) as required, such other information concerning
the Company and the property of the Company as may be appropriate in order to
make full and fair disclosure to the Members of the current financial and
operating conditions of the Company.
Section 13.03. BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as the Majority
Interest may designate.
Section 13.04. ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.
Section 13.05. FEDERAL INCOME TAX ELECTIONS. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in such
manner, as the Majority Interest determines to be most favorable to the Members.
The Majority Interest may rely upon the advice of the accountants retained by
the Company as to the availability and effect of all such elections. The
Majority
15
<PAGE>
Interest shall elect to treat the Company as a single member entity formed as
an agent of AHFC and not as a separate corporation or partnership for federal
and applicable state income tax purposes
Section 13.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.
Section 13.07. NOTICES. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto, or
at such other address or telecopy number as such party may hereafter specify for
the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt thereof,
(ii) if given by mail, three business days after the time such communication is
deposited in the mails with first-class postage prepaid or (iii) if given by any
other means, when received at the address specified in this Section.
Section 13.08. CONSENT OF MEMBERS. Various provisions of this
Agreement require or permit the consent, agreement, approval or disapproval,
written or otherwise, of the Members or some specified proportion thereof. In
any such case, the Company may give all Members written notice that any Member
who does not indicate its disapproval by written notice to the Company within a
specified period of time (not less than 30 days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. FURTHER EXECUTION. Upon request of the Company from
time to time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Company or the Members which has been taken in accordance with the provisions of
this Agreement.
Section 13.10. BINDING EFFECT. This Agreement shall be binding upon
and shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other person not a party to this Agreement.
Section 13.11. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
16
<PAGE>
enforceability of the other provisions of this Agreement or of any security
or the rights of the holders thereof.
Section 13.12. CAPTIONS. All captions are for convenience only, do not
form a substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one instrument. The Company shall have custody of the
counterparts executed in the aggregate by all Members.
Section 13.14. DELAWARE LAW TO CONTROL. This Agreement shall be
governed by, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with, the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.
* * * * *
17
<PAGE>
IN WITNESS WHEREOF, the parties 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 Member
By: /s/ Y. KOHAMA
-------------------------
Name: Y. Kohama
Title: President
HONDA FUNDING INC., as Independent
Member
By: /s/ Y. KOHAMA
-------------------------
Name; Y. Kohama
Title: President
18
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Capital Membership
Member's Name and Address Contributions Percentages
--------------------------- ------------- -----------
<S> <C> <C>
American Honda Finance Corporation
700 Van Ness Avenue
Torrance, California 90501 $0 100%
-------------
-------------
Honda Funding Inc.
700 Van Ness Avenue
Torrance, California 90501 -0- 0%
------------- -------------
Total $0 100%
------------- -------------
------------- -------------
</TABLE>
A-1
<PAGE>
Exhibit 3.3
CERTIFICATE OF INCORPORATION
OF
HONDA TITLING INC.
----------------------------
ARTICLE ONE
NAME; REGISTERED AGENT; INCORPORATOR
Section 1.01 The name of the corporation (the "Corporation") is Honda
Titling, Inc.
Section 1.02 The name and address of the Corporation's registered office in
the State of Delaware is The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, New Castle County, Delaware 19801.
Section 1.03 The incorporator of the Corporation is Y. Kohoma, whose
mailing address is 700 Van Ness Avenue, Torrance, CA 90501.
ARTICLE TWO
PURPOSE OF CORPORATION
Section 2.01 Subject to Section 2.02, the purpose of the Corporation is to
engage any lawful act or activity for which a corporation may be organized under
the General Corporation Law of Delaware.
Section 2.02 Notwithstanding Section 2.01, the purpose of the Corporation
is limited to acting as an Independent Member (as such term is defined in
Section 2.03) of any limited liability company of which American Honda Finance
Corporation ("AHFC") is a member, and activities incident to and necessary or
convenient to accomplish such purpose.
Section 2.03 "Independent Member" means a member of a limited liability
company formed pursuant to the Delaware Limited Liability Company Act (6 DEL. C.
ss.18 - 101, ET SEQ.) that requires the unanimous consent of its entire board of
directors (without any vacancies or unfilled newly created directorships),
including the affirmative vote of at least two Independent Directors (as such
term is defined in Section 4.01) before such company may (i) dissolve or
liquidate, in whole or in part, or institute proceedings to have itself or any
limited liability company of which it is a member adjudicated bankrupt or
insolvent; (ii) consent to the institution of bankruptcy or insolvency
proceedings against it or any limited liability company of which it is a member;
(iii) file a petition seeking, or consent to, reorganization or relief under any
applicable federal or state law relating to bankruptcy; (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official as to such corporation or a substantial part of its property;
(v) make any assignment for the benefit of its creditors; (vi) admit
<PAGE>
in writing its inability to pay its debts generally as they become due; or (vii)
institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which such corporation holds an ownership interest; or (viii) take any corporate
action in furtherance of the actions set forth in clauses (i) through (vii) of
this paragraph.
ARTICLE THREE
CAPITAL STOCK
Section 3.01 The Corporation shall have one class of stock designated as
Common Stock, and the total number of shares of stock of that class that the
Corporation shall have authority to issue is 100,000 shares of no par stock. No
shareholder shall have any preemptive right to acquire additional shares of the
Corporation.
ARTICLE FOUR
INDEPENDENT DIRECTORS
Section 4.01 The Corporation shall at all times, except as noted hereafter,
have at least two directors (each, an "Independent Director") each of whom is
not (i) a director, officer or employee of any affiliate of AHFC (other than any
limited purpose or special purpose corporation or limited liability company
similar to the Corporation); (ii) a person related to any officer or director of
any affiliate of AHFC; (iii) a direct or indirect holder of more than 10% of any
voting securities of any affiliate of AHFC; or (iv) a person related to a direct
or indirect holder of more than 10% of any voting securities of any affiliate of
AHFC. In the event of the death, incapacity, resignation or removal of one or
more Independent Directors, such that the number of Independent Directors is
reduced below two, the board of directors of the Corporation (the "Board of
Directors") shall promptly appoint one or more Independent Directors such that
the Corporation has at least two Independent Directors. The Board of Directors
shall not vote on any matter unless and until at least two Independent Directors
have been duly appointed to serve on the Board of Directors.
ARTICLE FIVE
LIMITATIONS ON ACTIONS BY THE CORPORATION
Section 5.01 Notwithstanding any other provision of this certificate of
incorporation of the Corporation (the "Certificate") or any provision of law,
the Corporation shall not do any of the following:
(a) engage in any business or activity other than as set forth in
Article Two hereof;
(b) without the unanimous affirmative vote of the entire Board of
Directors (without any vacancies), which must include the affirmative vote
of at least two Independent Directors, (i) dissolve or liquidate, in whole
or in part, or institute
2
<PAGE>
proceedings to be adjudicated bankrupt or insolvent; (ii) consent to the
institution of bankruptcy or insolvency proceedings against it; (iii) file
a petition seeking or consent to reorganization or relief under any
applicable federal or state law relating to bankruptcy; (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or
other similar official as to the Corporation or a substantial part of its
property; (v) make any assignment for the benefit of creditors; (vi) admit
in writing its inability to pay its debts generally as they become due;
(vii) institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which the Corporation holds an ownership interest; or (viii) take any
corporate action in furtherance of the actions set forth in clauses (i)
through (vii) of this paragraph; provided, however, that no director may be
required by any shareholder of the Corporation to consent to the
institution of bankruptcy or insolvency proceedings against the Corporation
so long as it is solvent; or
(c) without the unanimous affirmative vote of the entire Board of
Directors (without any vacancies or unfilled newly created directorships),
which must include the affirmative vote of at least two Independent
Directors, take or cause to be taken any of the actions referred to in
clauses (i) through (vii) of subparagraph (b) above with respect to any
entity of which the Corporation is a partner or a member; or
(d) without the unanimous affirmative vote of the entire Board of
Directors (without any vacancies or unfilled newly created directorships),
merge or consolidate with any other corporation, company or entity, sell
all or substantially all of its assets or acquire all or substantially all
of the assets, capital stock or other ownership interest of any other
corporation, company or entity.
ARTICLE SIX
INTERNAL AFFAIRS
Section 6.01 The Corporation shall insure at all times that (i) it
maintains separate corporate records and books of account from those of AHFC,
and (ii) except as permitted by contract between the Corporation and AHFC with
respect to deposits in certain accounts of collections of trade receivables of
AHFC that were not sold to the Corporation pursuant to an agreement between
them, which will be promptly remitted to the owner thereof, none of the
Corporation's assets will be commingled with those of AHFC or any of its
affiliates.
ARTICLE SEVEN
AMENDMENTS
Section 7.01 The Corporation reserves the right at any time, and from time
to time, to amend, alter, change or repeal any provision contained in this
Certificate, and other provisions authorized by the laws of the State of
Delaware may be added in the manner now or hereafter prescribed by law; and all
rights, preferences and privileges of whatsoever nature conferred on any person
by this Certificate in its present form or as hereafter amended are granted
subject to
3
<PAGE>
the rights reserved in this Article. The Corporation shall not amend, alter,
change or repeal any provision of Article Two or Articles Four through Seven
(the "Restricted Articles"), as the case may be, and provided, further, that the
Corporation shall not amend, alter, change or repeal any Article so as to be
inconsistent with the Restricted Articles, except by unanimous vote of the Board
of Directors (before receipt of payment for stock) or the shareholders
(subsequent to receipt of payment for stock).
Section 7.02 The shareholders entitled to vote shall have the power to
adopt new bylaws or amend, alter, change or repeal existing bylaws. The Board of
Directors shall also have the power to adopt new bylaws, or amend, alter, change
or repeal existing bylaws, but such power shall not divest or otherwise limit
the power of the shareholders entitled to vote to adopt, amend, alter, change or
repeal any bylaws.
ARTICLE EIGHT
LIABILITY OF DIRECTORS FOR MONETARY DAMAGES
Section 8.01 A director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of
Delaware as the same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph shall not adversely
affect any right or protection of a director of the Corporation existing
hereunder, with respect to any act or omission occurring prior to such repeal or
modification.
ARTICLE NINE
MISCELLANEOUS
Section 9.01 Unless and except to the extent otherwise provided in the
bylaws of the Corporation, the election of directors of the Corporation need not
be by written ballot.
The undersigned incorporator hereby acknowledges that this Certificate is
his or her act and deed on this 17th day of July, 1997.
/s/ Y. KOHAMA
-----------------------------
Y. Kohama
Incorporator
4
<PAGE>
Exhibit 3.4
BYLAWS
OF
HONDA TITLING INC.
(a Delaware corporation)
ARTICLE ONE
OFFICES
Section 1.1. PRINCIPAL EXECUTIVE OFFICE. The principal executive office of
Honda Titling Inc. (the "Corporation") shall be at 700 Van Ness Avenue,
Torrance, CA 90501 or such other location that the board of directors (the
"Board of Directors" or the "Board") shall fix from time to time.
Section 1.2. OTHER OFFICES. The Corporation may also have offices at such
other places both within and without the State of Delaware as the Board of
Directors or the President may from time to time determine or the business of
the Corporation may require.
ARTICLE TWO
SHAREHOLDERS
Section 2.1. ANNUAL MEETINGS. An annual meeting of shareholders shall be
held for the election of directors at such date, time and place, either within
or without the State of Delaware, as may be designated by resolution of the
Board of Directors from time to time, but, in any event, such meeting shall be
held within 20 weeks of the close of the fiscal year of the Corporation. Any
other proper business may be transacted at the annual meeting.
Section 2.2. SPECIAL MEETINGS. Special meetings of shareholders for any
purpose or purposes may be called at any time by the Board of Directors, or by a
committee of the Board of Directors that has been duly designated by the Board
of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 2.3. NOTICE OF MEETINGS. Whenever shareholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of
<PAGE>
incorporation of the Corporation (the "Certificate of Incorporation") or these
Bylaws, the written notice of any meeting shall be given not less than ten nor
more than 60 days before the date of the meeting to each shareholder entitled to
vote at such meeting. If mailed, such notice shall be deemed to be given when
deposited in the United States mail, postage prepaid, directed to each
shareholder at his address as it appears on the records of the Corporation.
Section 2.4. ADJOURNMENTS. Any meeting of shareholders, annual or special,
may adjourn from time to time to reconvene at the same or some other place, and
notice need not be given of any such adjourned meeting if the time and place
thereof are announced at the meeting at which the adjournment is taken. At the
adjourned meeting the Corporation may transact any business which might have
been transacted at the original meeting. If the adjournment is for more than 30
days, or if after the adjournment a new record date is fixed for the adjourned
meeting, notice of the adjourned meeting shall be given to each shareholder of
record entitled to vote at the meeting.
Section 2.5. QUORUM. Except as otherwise provided by law, the Certificate
of Incorporation or these Bylaws, at each meeting of shareholders the presence
in person or by proxy of the holders of shares of stock having a majority of the
votes which could be cast by the holders of all outstanding shares of stock
entitled to vote at the meeting shall be necessary and sufficient to constitute
a quorum. In the absence of a quorum, the shareholders so present may, by
majority vote, adjourn the meeting from time to time in the manner provided in
Section 2.4 until a quorum shall attend. Shares of its own stock belonging to
the Corporation or to another corporation, if a majority of the shares entitled
to vote in the election of directors of such other corporation is held, directly
or indirectly, by the Corporation, shall neither be entitled to vote nor be
counted for quorum purposes; provided, however, that the foregoing shall not
limit the right of the Corporation to vote stock, including but not limited to
its own stock, held by it in a fiduciary capacity.
Section 2.6. ORGANIZATION. Meetings of shareholders shall be presided over
by the Chairman of the Board, if any, or in his absence by the Vice Chairman of
the Board, if any, or in his absence by the President, or in his absence by a
Vice President, or in the absence of the foregoing persons by a chairman
designated by the Board of Directors, or in the absence of such designation by a
chairman chosen at the meeting. The Secretary shall act as secretary of the
meeting, but in his absence the chairman of the meeting may appoint any person
to act as secretary of the meeting. The chairman of the meeting shall announce
at the meeting of shareholders the date and time of the opening and the closing
of the polls for each matter upon which the shareholders will vote.
Section 2.7. VOTING; PROXIES. Except as otherwise provided by the
Certificate of Incorporation, each shareholder entitled to vote at any meeting
of shareholders shall be entitled to one vote for each share of stock held by
him which has voting power upon the matter in question. Each shareholder
entitled to vote at a meeting of shareholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three years from its date, unless the proxy provides for a longer period.
A proxy shall be irrevocable if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A shareholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing an instrument in
writing revoking the
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proxy or by delivering a proxy in accordance with applicable law bearing a later
date to the Secretary of the Corporation. Voting at meetings of shareholders,
unless otherwise required by law, need not be conducted by inspectors of
election unless so determined by the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote thereon which are present in person or by proxy
at such meeting. At all meetings of shareholders for the election of directors a
plurality of the votes cast shall be sufficient to elect. All other elections
and questions shall, unless otherwise provided by law, the Certificate of
Incorporation or these Bylaws, be decided by the vote of the holders of shares
of stock having a majority of the votes which could be cast by the holders of
all shares of stock outstanding and entitled to vote thereon.
Section 2.8. FIXING DATE FOR DETERMINATION OF SHAREHOLDERS OF RECORD. In
order that the Corporation may determine the shareholders entitled to notice of
or to vote at any meeting of shareholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date, in the case of (i) determination of
shareholders entitled to vote at any meeting of shareholders or adjournment
thereof, shall, unless otherwise required by law, not be more than 60 nor less
than ten days before the date of such meeting; (ii) determination of
shareholders entitled to express consent to corporate action in writing without
a meeting, shall not be more than ten days from the date upon which the
resolution fixing the record date is adopted by the Board of Directors; and
(iii) any other action, shall not be more than 60 days prior to such other
action. If no record date is fixed, the record date for (i) determining
shareholders entitled to notice of or to vote at a meeting of shareholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) determining shareholders
entitled to express consent to corporate action in writing without a meeting
when no prior action of the Board of Directors is required by law, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in accordance with
applicable law, or, if prior action by the Board of Directors is required by
law, shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action; and (iii) determining
shareholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. A
determination of shareholders of record entitled to notice of or to vote at a
meeting of shareholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 2.9. LIST OF SHAREHOLDERS ENTITLED TO VOTE. The Secretary shall
prepare and make, at least ten days before every meeting of shareholders, a
complete list of the shareholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each shareholder and the number
of shares registered in the name of each shareholder. Such list shall be open to
the examination of any shareholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the
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meeting, or if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof and may be inspected by any shareholder who is
present. Upon the willful neglect or refusal of the directors to produce such a
list at any meeting for the election of directors, they shall be ineligible for
election to any office at such meeting. The stock ledger shall be the only
evidence as to who are the shareholders entitled to examine the stock ledger,
the list of shareholders or the books of the Corporation, or to vote in person
or by proxy at any meeting of shareholders.
Section 2.10. ACTION BY CONSENT OF SHAREHOLDERS. Unless otherwise
restricted by the Certificate of Incorporation, any action required or omitted
to be taken at any annual or special meeting of the shareholders may be taken
without a meeting, without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall be signed by the
holders of outstanding stock having not less than the minimum number of votes
that would be necessary to authorize or take such action at a meeting at which
all shares entitled to vote thereon were present and voted and shall be
delivered by hand or by certified or registered mail, return receipt requested,
to the Corporation by delivery to its registered office in the State of
Delaware, its principal place of business, or an officer or agent of the
Corporation having custody of the book in which proceedings of meetings of
shareholders are recorded. Every written consent shall bear the date of
signature of each shareholder who signs the consent and no written consent shall
be effective to take the corporate action referred to therein unless, within 60
days of the earliest dated consent delivered in the manner required by this
Section to the Corporation, written consents signed by a sufficient number of
holders to take action are delivered to the Corporation by delivery to its
registered office in the State of Delaware, its principal place of business or
an officer or agent of the Corporation having custody of the book in which
proceedings of meetings of shareholders are recorded. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those shareholders who have not consented in writing
and who, if the action had been taken at a meeting, would have been entitled to
notice of the meeting if the record date for such meeting had been the date that
written consents signed by a sufficient number of holders to take the action
were delivered to the Corporation as provided in this Section.
Section 2.11. CONDUCT OF MEETINGS. The Board of Directors may adopt by
resolution such rules and regulations for the conduct of the meeting of
shareholders as it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the Board of Directors, the
chairman of any meeting of shareholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts as, in
the judgment of such chairman, are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted by the Board of
Directors or prescribed by the chairman of the meeting, may include, without
limitation, the following: (i) the establishment of an agenda or order of
business for the meeting; (ii) rules and procedures for maintaining order at the
meeting and the safety of those present; (iii) limitations on attendance at or
participation in the meeting to shareholders of record of the Corporation, their
duly authorized and constituted proxies or such other persons as the chairman of
the meeting shall determine; (iv) restrictions on entry to the meeting after the
time fixed for the commencement thereof; and (v) limitations on the time
allotted to questions or comments by participants. Unless and to the extent
determined by the Board of Directors or the chairman of the meeting, meetings of
shareholders shall not be required to be held in accordance with the rules of
parliamentary procedure.
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ARTICLE THREE
BOARD OF DIRECTORS
Section 3.1. NUMBER; QUALIFICATIONS. The Board of Directors shall consist
of not less than five nor more than nine members, the number thereof to be
determined from time to time by resolution of the Board of Directors. Directors
need not be shareholders. The Board of Directors shall initially be comprised of
five directors.
Section 3.2. ELECTION; RESIGNATION; REMOVAL; VACANCIES. The Board of
Directors shall initially consist of the persons named as directors by the
incorporator of the Corporation, and each director so elected shall hold office
until the first annual meeting of shareholders or until his successor is elected
and qualified. At the first annual meeting of shareholders and at each annual
meeting thereafter, the shareholders shall elect directors, each of whom shall
hold office for a term of one year or until his successor is elected and
qualified. Any director may resign at any time upon written notice to the
Corporation. Any director, or the entire Board of Directors, may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote. Any newly created directorship or any vacancy occurring in the Board of
Directors for any cause may be filled by a majority of the remaining members of
the Board of Directors, even if such majority is less than a quorum, or by a
plurality of the votes cast at a meeting of shareholders, and each director so
elected shall hold office until the expiration of the term of office of the
director he has replaced or until his successor is elected and qualified.
Section 3.3. REGULAR MEETINGS. Regular meetings of the Board of Directors
may be held at such places within or without the State of Delaware and at such
times as the Board of Directors may from time to time determine, and if so
determined, notices thereof need not be given.
Section 3.4. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be held at any time or place within or without the State of Delaware
whenever called by the President, any Vice President, the Secretary or by any
member of the Board of Directors. Notice of a special meeting of the Board of
Directors shall be given by the person or persons calling the meeting at least
24 hours before the special meeting.
Section 3.5. TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors or of any committee designated by the Board of Directors may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 3.6. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the Board
of Directors, a majority of the whole Board of Directors shall constitute a
quorum for the transaction of business. Except in cases in which the Certificate
of Incorporation or these Bylaws otherwise provide, the vote of a majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
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Section 3.7. ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
their absence by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 3.8. INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted by
the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or such committee.
ARTICLE FOUR
COMMITTEES
Section 4.1. COMMITTEES. The Board of Directors may designate one or more
committees (each, a "Committee") to consist of one or more of the directors of
the Corporation. The Board may designate one or more directors as alternate
members of any Committee, who may replace any absent or disqualified members at
any meeting of the Committee. In the absence or disqualification of a member of
a Committee, the member or members present at any meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any Committee
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; but no such Committee shall have power or authority in reference to
the following matters: (i) approving or adopting, or recommending to the
shareholders, any action or matters expressly required by the Delaware General
Corporation Law to be submitted to shareholders for approval or (ii) adopting,
amending or repealing any Bylaw of the Corporation.
Section 4.2. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each Committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules,
each Committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article Three of these Bylaws.
ARTICLE FIVE
OFFICERS
Section 5.1. EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF OFFICE;
RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a President
and Secretary, and it may, if it so determines, choose a Chairman of the Board
and a Vice Chairman of the Board from among
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its members. The Board of Directors may also choose one or more Vice Presidents,
one or more Assistant Secretaries, a Treasurer and one or more Assistant
Treasurers. Each such officer shall hold his office until the earliest of his
death, resignation, retirement, disqualification or removal. Any officer may
resign at any time upon written notice to the Corporation. The Board of
Directors may remove any officer with or without cause at any time. Any number
of offices may be held by the same person. Any vacancy occurring in any office
of the Corporation by death, resignation, removal or otherwise may be filled for
the unexpired portion of the term by the Board of Directors at any regular or
special meeting.
Section 5.2. POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of the
Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed in a resolution by the Board of Directors and,
to the extent not so provided, as generally pertain to their respective offices,
subject to the control of the Board of Directors. The Board of Directors may
require any officer, agent or employee to give security for the faithful
performance of his duties.
ARTICLE SIX
STOCK
Section 6.1. CERTIFICATES. Every holder of stock shall be entitled to have
a certificate signed by or in the name of the Corporation by the Chairman or
Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the Corporation certifying the number of shares in
the Corporation owned by him. Any of or all the signatures on the certificate
may be by facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 6.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF NEW
CERTIFICATES. The Corporation may issue a new certificate of stock or
uncertificated shares in the place of any certificate theretofore issued by it
and alleged to have been lost, stolen or destroyed, and the Corporation may
require the owner or the legal representative of the owner of such certificate
to give the Corporation a bond sufficient to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss, theft or
destruction of such certificate or the issuance of such new certificate or
uncertificated shares.
ARTICLE SEVEN
INDEMNIFICATION
Section 7.1. RIGHT TO INDEMNIFICATION. The Corporation shall indemnify and
hold harmless, to the fullest extent permitted by applicable law, any person who
was or is made or is threatened to be made a party or is otherwise involved in
any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he or a
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person for whom he is the legal representative is or was a director, officer,
agent or employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by that person (collectively, "Expenses"). The
Corporation shall indemnify any such person in connection with a Proceeding (or
part thereof) initiated by such person only if the Proceeding (or part thereof)
was authorized by the Board of Directors.
Section 7.2. PREPAYMENT OF EXPENSES. The Corporation may, in its
discretion, pay the Expenses incurred in defending any Proceeding in advance of
its final disposition; provided, however, that the payment of Expenses incurred
by a director or officer in advance of the final disposition of the Proceeding
shall be made only upon receipt of an undertaking by the director or officer to
repay all amounts advanced should it be ultimately determined that the director
or officer is not entitled to be indemnified under this Article or otherwise.
Section 7.3. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person
by this Article shall not be exclusive of any other rights which such person may
have or hereafter acquire under the Certificate of Incorporation, these Bylaws,
any agreement, a vote of shareholders or disinterested directors, or otherwise,
both as to action in such person's official capacity and as to action in another
capacity while holding such office.
Section 7.4. OTHER INDEMNIFICATION. The Corporation's obligation, if any,
to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, limited liability company,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such person may collect as indemnification from such other
corporation, limited liability company, partnership, joint venture, trust,
enterprise or nonprofit enterprise.
Section 7.5. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE EIGHT
MISCELLANEOUS
Section 8.1. FISCAL YEAR. The fiscal year of the Corporation shall be April
1 through March 31.
Section 8.2. SEAL. The corporate seal shall have the name of the
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 8.3. WAIVER OF NOTICE OF MEETINGS OF SHAREHOLDERS, DIRECTORS AND
COMMITTEES. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the
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time stated therein, shall be deemed equivalent to notice. Attendance of a
person at a meeting shall constitute a waiver of notice of such meeting, except
when the person attends a meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Neither the business to be transacted at nor
the purpose of any regular or special meeting of the shareholders, directors or
a Committee need be specified in any written waiver of notice.
Section 8.4. INTERESTED DIRECTORS: QUORUM. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, limited liability company,
partnership, association or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board of
Directors or Committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
Committee, and the Board of Directors or Committee in good faith authorizes the
contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors be less than a
quorum; (ii) the material facts as to his relationship or interest and as to the
contract or transaction are disclosed or are known to the shareholders entitled
to vote thereon, and the contract or transaction is specifically approved in
good faith by vote of the shareholders; or (iii) the contract or transaction is
fair as to the Corporation as of the time it is authorized, approved or ratified
by the Board of Directors, a Committee or the shareholders. Common or interested
directors may be counted in determining the presence of a quorum at a meeting of
the Board of Directors or of a Committee which authorizes the contract or
transaction.
Section 8.5. FORM OF RECORDS. Any records maintained by the Corporation in
the regular course of its business, including its stock ledger, books of account
and minute books, may be kept on or be in the form of punch cards, magnetic
tape, photographs, microphotographs or any other information storage device,
provided that the records so kept can be converted into clearly legible form
within a reasonable time.
* * * * *
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Exhibit 3.5
EXECUTION COPY
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- --------------------------------------------------------------------------------
HONDA TITLING A L.P.
LIMITED PARTNERSHIP AGREEMENT
Between
HONDA TITLING A LLC,
as General Partner
and
AMERICAN HONDA FINANCE CORPORATION
as Limited Partner
Dated as of July 17, 1997
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions...................................................................................1
Section 1.02. Other Definitional Provisions.................................................................5
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name..........................................................................................6
Section 2.02. Purpose.......................................................................................6
Section 2.03. Registered Office.............................................................................6
Section 2.04. Registered Agent..............................................................................6
Section 2.05. Certificate of Limited Partnership and Other Filings..........................................7
Section 2.06. Partners' Addresses...........................................................................7
Section 2.07. Authorization to Enter into Certain Agreements................................................7
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions.................................................................7
Section 3.02. Additional Capital Contributions..............................................................7
Section 3.03. Withdrawal of Capital.........................................................................8
Section 3.04. Partnership Interests and Capital Accounts....................................................8
Section 3.05. Limitation of Limited Partners' Liability.....................................................8
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners.....................................9
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Section 4.02. Partnership Interests on Admission of Additional Partners....................................10
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner.................................................................10
Section 5.02. Specific Powers of General Partner...........................................................11
Section 5.03. Powers Requiring Concurrence of Limited Partners.............................................11
Section 5.04. Duties of General Partner....................................................................11
Section 5.05. Compensation of General Partner and Expenses.................................................11
Section 5.06. Scope of Responsibility......................................................................12
Section 5.07. Contracts With Affiliates....................................................................12
Section 5.08. Indemnification..............................................................................12
Section 5.09. Limited Partners' Rights.....................................................................12
Section 5.10. Partnership Property.........................................................................12
Section 5.11. Duties of the General Partner and Certain Other Persons......................................13
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements...................................................................................13
Section 6.02. Fiscal Year..................................................................................13
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections................................................................................13
Section 7.02. Maintenance of Partners' Capital Accounts....................................................13
Section 7.03. Net Income and Net Loss; Cash Flow...........................................................14
Section 7.04. Special Tax Allocations......................................................................14
Section 7.05. Curative Allocations.........................................................................15
Section 7.06. Other Allocation Rules.......................................................................15
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Section 7.07. Allocation of Built-In Gains.................................................................15
Section 7.08. Distribution of Cash Flow and Other Amounts..................................................16
Section 7.09. Restricted Distributions.....................................................................16
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY, DISSOLUTION
OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal................................................................................16
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy..........................................16
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests.........................................................16
Section 9.02. Dealing with General Partner.................................................................17
Section 9.03. Compliance With Federal and State Law........................................................17
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership..........................................................17
Section 10.02. Distribution after Dissolution...............................................................17
Section 10.03. Dissolution If No General Partner Remaining..................................................18
Section 10.04. Reserves.....................................................................................18
Section 10.05. Statement....................................................................................18
Section 10.06. Distribution Limited to Partnership Assets...................................................18
Section 10.07. Termination..................................................................................19
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ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney............................................................................19
Section 11.02. Governing Law and Arbitration................................................................20
Section 11.03. Successors and Assigns.......................................................................20
Section 11.04. Counterparts; Integration....................................................................20
Section 11.05. No Partition.................................................................................20
Section 11.06. Captions.....................................................................................20
Section 11.07. Severability.................................................................................20
Section 11.08. Notices......................................................................................21
Section 11.09. Amendment; Waiver............................................................................21
Section 11.10. Further Assurances...........................................................................21
EXHIBITS
Exhibit A Gross Asset Value of Initial Capital Contributions...........................................A-1
Exhibit B Initial Partnership Interests................................................................B-1
Exhibit C Certificate of Limited Partnership of Honda Titling A L.P....................................C-1
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This Limited Partnership Agreement is entered into as of July 17, 1997,
between Honda Titling A LLC, a Delaware limited liability company, as general
partner (together with any additional or successor general partners admitted to
the Partnership pursuant to this Agreement, the "General Partner"), and American
Honda Finance Corporation, a California corporation, as limited partner
(together with any additional or successor limited partners admitted to the
Partnership pursuant to this Agreement, the "Limited Partner").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Agreement, the terms
set forth below shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6 Del. C.
ss.ss. 17-101, ET seq.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership as
an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership as
an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Partnership Agreement, as the same may be
amended, modified or supplemented from time to time.
"AHFC" means American Honda Finance Corporation, a California corporation,
and its successors.
"BANKRUPTCY" means the occurrence of any of the events specified in Section
17-402(a)(4) or (5) of the Act as in effect on the date hereof.
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"BUILT-IN GAIN" means the difference between the initial Gross Asset Value
of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount of
money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived from
the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State of
Delaware.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to this
Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's adjusted
basis for federal income tax purposes, except that:
(a) the initial Gross Asset Value of an asset contributed by a Partner
to the Partnership shall be the fair market value thereof, as determined by the
General Partner and set forth in Exhibit A hereto;
(b) upon the occurrence of any of the following events, the Gross
Asset Value of the Partnership assets shall be adjusted to equal their
respective current gross fair market values, as determined by the General
Partner, as of the date of such event: (i) the acquisition of additional
interests in the Partnership by any new or existing Partner in exchange for more
than a DE MINIMIS Capital Contribution, (ii) the distribution by the Partnership
to a Partner of more than a DE MINIMIS amount of cash or other Partnership
Property as consideration for an interest in the Partnership and (iii) the
liquidation of the Partnership within the meaning of the Regulations; provided,
however, that any adjustments pursuant to clauses (i) and (ii) shall be made
only if the General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;
(c) the Gross Asset Value of any Partnership asset distributed to a
Partner shall be adjusted to equal the gross fair market value of such asset on
the date of distribution as determined by the General Partner; and
(d) the Gross Asset Value of any Partnership asset shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such asset
pursuant to Code Section 734(b) or 743(b), but only to the extent that such
adjustment is taken into account in determining Capital Accounts pursuant to
Section 1.704-l(b)(2)(iv)(m) of the Regulations, Section 7.01 of
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this Agreement and clause (d) of the definition of the terms "Net Income" and
"Net Losses"; provided, however, that the Gross Asset Value of an asset shall
not be adjusted pursuant to this subparagraph to the extent that the General
Partner determines that an adjustment pursuant to clause (b) is necessary or
appropriate in connection with a transaction that otherwise would result in an
adjustment pursuant to this subparagraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"IRS" means the Internal Revenue Service and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the Preamble to this
Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a) any income of the Partnership that is exempt from federal income
tax and is not otherwise taken into account in computing Net Income or Net
Losses pursuant to this definition shall be added to such taxable income or
loss;
(b) any expenditures of the Partnership that can be neither deducted
nor capitalized (and any expenditures treated as such pursuant to the
Regulations) and that are not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such taxable
income or loss;
(c) in the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (b) of the definition of the term "Gross Asset
Value," the amount of such adjustment shall be taken into account as gain or
loss upon the disposition of such asset for purposes of computing Net Income or
Net Losses;
(d) gain or loss resulting from any disposition of Partnership assets
with respect to which gain or loss is recognized for federal income tax purposes
shall be computed by reference to the Gross Asset Value of the property so
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(e) any depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss with respect to any
asset the Gross Asset Value of which differs from its adjusted basis for federal
income tax purposes at the beginning of the related taxation period shall be in
an amount that bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization or other cost recovery deduction
for such year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation, amortization or
other cost recovery deduction for such period is zero, the depreciation,
amortization and other cost recovery deduction with respect to such asset shall
be determined with reference to such beginning Gross Asset Value using any
reasonable method;
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(f) to the extent an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or 743(b) is required to be
taken into account pursuant to Section 1.704-l(b)(2)(iv)(m)(4) of the
Regulations in determining Capital Accounts other than with respect to a
complete liquidation of a Partner's interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of such asset and shall be taken into account for
purposes of computing Net Income or Net Losses; and
(g) notwithstanding the foregoing, any items that are specifically
allocated pursuant to Section 7.05 or 7.06 shall not be taken into account in
computing Net Income or Net Losses.
"PARTNER" means a General Partner or a Limited Partner.
"PARTNERSHIP" means Honda Titling A L.P., a Delaware limited partnership.
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership of
the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of the
Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Trust (including any interest in the UTI or any SUBI that the Partnership may
own from time to time) and any Securitization Trust and all monies due thereon
and paid thereon or in respect thereof; (iii) the right to realize upon any
property that may be deemed to secure any interest described in clause (ii); and
(iv) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, joint stock
company, association, joint venture, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PLEDGE" shall have the meaning set forth in Section 9.01.
"REGULATIONS" means any regulations promulgated by the IRS under the Code,
as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in Section
7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"SECURITIES" shall have the meaning set forth in Section 2.02(b).
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"SECURITIZATION" means (i) a financing transaction of any sort undertaken
by a beneficiary (or a special purpose affiliate thereof) under the Trust that
is secured, directly or indirectly, by assets of the Trust or a UTI, a SUBI or
any interest therein, and any financing undertaken in connection with the
issuance and assignment of a UTI or a SUBI and the related certificate
evidencing such UTI or SUBI, as the case may be; (ii) any sale by a beneficiary
(or a special purpose affiliate thereof) under the Trust of an interest in a UTI
or a SUBI; or (iii) any other asset securitization, secured loan or similar
transaction involving assets of the Trust or any beneficial interest therein or
in the Trust.
"SECURITIZATION TRUST" shall have the meaning set forth in Section 2.02(b).
"SUBI" shall have the meaning set forth in Section 2.02(a).
"TRANSFER" shall have the meaning set forth in Section 9.01.
"TRUST" means Honda Lease Trust, a Delaware business trust.
"TRUST AGREEMENT" means the trust agreement to be dated as of the date
specified therein among the Partnership, Honda Titling B L.P., AHFC and HVT,
Inc. and Delaware Trust Capital Management, Inc., as amended or supplemented
from time to time.
"TRUST INTERESTS" shall have the meaning set forth in Section 2.02(a).
"UTI" shall have the meaning set forth in Section 2.02(a).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in
this Agreement or in any such certificate or other document, and accounting
terms partly defined in this Agreement or in any such certificate or other
document to the extent not defined, shall have the respective meanings given to
them under generally accepted accounting principles in effect from time to time.
To the extent that the definitions of accounting terms in this Agreement or in
any such certificate or other document are inconsistent with the meanings of
such terms under such generally accepted accounting principles, the definitions
contained in this Agreement or in any such certificate or other document shall
control.
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ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. NAME. The name of the limited partnership formed hereby is
Honda Titling A L.P. (the "Partnership").
Section 2.02. PURPOSE. The Partnership is formed for the object and purpose
of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of the Trust formed pursuant to the
Trust Agreement, which Trust shall be formed (i) to take assignments of, and
serve as record holder of title to, various retail lease contracts, the related
leased vehicles and other related rights and assets as may be conveyed directly
or indirectly to the Trust, and (ii) to issue certificates representing
beneficial interests in the Trust ("Trust Interests"), including undivided trust
interests ("UTIs") and special units of beneficial interest ("SUBIs");
(b) to act as settlor or grantor of one or more additional trusts
(each, a "Securitization Trust") formed pursuant to a trust agreement or other
agreement for the purpose of acquiring Trust Interests, which Securitization
Trust may issue securities (the "Securities") secured by or representing
beneficial interests in the assets of such Securitization Trust;
(c) to acquire, own, hold, sell, transfer, convey, dispose of, pledge,
assign, borrow money against, finance, refinance or otherwise deal with,
publicly or privately and whether with unrelated third parties or with
affiliated entities, Trust Interests created with respect to the Trust and
Securities;
(d) to loan or otherwise invest funds received as a result of the
Partnership's interest in any Trust Interests or Securities and any other
income, as determined by the General Partner from time to time;
(e) to borrow money other than pursuant to clause (c) above, but only
to the extent that such borrowing is permitted by the terms of the transactions
contemplated by clauses (b) and (c) above; and
(f) to engage in any lawful act or activity and to exercise any powers
permitted to limited partnerships organized under the Act that are incidental to
and necessary or convenient for the accomplishment of the foregoing purposes,
including, without limitation, any of the powers that may be exercised by the
General Partner on behalf of the Partnership.
Section 2.03. REGISTERED OFFICE. The registered office of the Partnership
in the State of Delaware is The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, Delaware 19801.
Section 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
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Section 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS. The
General Partner has filed a certificate of limited partnership of the
Partnership (the "Partnership Certificate") substantially in the form attached
hereto as Exhibit C, in the office of the Delaware Secretary of State and shall
file or cause the Partnership Certificate to be filed in such other offices as
may be required by law from time to time. From time to time as required by law,
the General Partner shall execute and acknowledge, and shall cause to be filed
and recorded, appropriate amendments to the Partnership Certificate and any
other filings required of or appropriate with respect to the Partnership. In
particular, but without limitation, in the event that the General Partner deems
it necessary for the Partnership to exist in or qualify to do business under the
laws of one or more jurisdictions in addition to the State of Delaware, the
General Partner shall take such actions as may be necessary to register the
Partnership or to qualify it to do business in each such jurisdiction; provided
that in any such event the Partnership shall at all times continue to be a
limited partnership formed under and governed by the provisions of the Act and
this Agreement.
Section 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of the
General Partner and the Limited Partner are (i) in the case of the General
Partner, Honda Titling A LLC, 700 Van Ness Avenue, Torrance, California 90501,
Attention: General Partner, (ii) in the case of the Limited Partner, American
Honda Finance Corporation, 700 Van Ness Avenue, Torrance, California 90501,
Attention: President; or (iii) such other address as shall be designated by any
of the foregoing in a written notice to the other parties hereto.
Section 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of the
Partnership and the General Partner, on behalf of the Partnership, may, and is
hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the documents relating to the Trust or any
Securitization Trust, and any other documents or agreements contemplated thereby
or specifically described therein, and any and all documents and agreements
deemed necessary or desirable by the General Partner, including, without
limitation, any such documents and agreements with respect to financings secured
by or representing a sale of Trust Interests (including any UTI or SUBI), all
without any further act, vote or approval of any Partner, notwithstanding any
other provision of this Agreement, the Act or other applicable law, rule or
regulation. Such authorization shall not be deemed a restriction on the powers
of the General Partner to enter into other agreements on behalf of the
Partnership.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General Partner
and the Limited Partner has contributed cash and/or marketable securities as its
initial Capital Contribution.
Section 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any General
Partner, no Partner shall be required to make additional Capital Contributions
to the Partnership.
(b) Notwithstanding any provision herein to the contrary, in the event
any additional Capital Contributions are made by one or both Partners, the
Partnership Interest of
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each Partner for purposes of all subsequent Cash Flow distributions shall be
recalculated to reflect any such additional Capital Contributions until such
additional Capital Contributions have been recovered by the contributors thereof
through distributions pursuant to this Agreement.
(c) Each Partner's Capital Account shall be increased by an amount
equal to the additional Capital Contributions by such Partner pursuant to
Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
Section 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in this
Agreement, no Partner shall be entitled to demand or receive a return of any
portion of its Capital Contributions from the Partnership without the consent of
the General Partner.
Section 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all purposes
of this Agreement, the "Capital Account" of a Partner as of any date shall mean
the value of the Capital Contribution of such Partner as set forth on Exhibit A,
as the same may be amended from time to time, properly adjusted to reflect the
allocations and distributions provided for in Article Seven and any additional
Capital Contributions of such Partner.
Section 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability whatsoever,
whether to the Partnership, to any of the Partners or to any creditor of the
Partnership, for the debts of the Partnership or any of its losses beyond the
amount contributed by such Limited Partner to the capital of the Partnership;
provided, however, that a Limited Partner shall be obligated to return
distributions wrongfully distributed to it as required by the Act or other
applicable law.
(b) No Limited Partner, in its capacity as a limited partner of the
Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing or
assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to bring or
pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
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(A) the dissolution and winding up of the Partnership or
continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the winding
up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or other
transfer of all or substantially all of the assets of the
Partnership;
(C) the incurrence of indebtedness by the Partnership other
than in the ordinary course of its business;
(D) a change in the nature of the Partnership business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential conflict
of interest between the Partnership and a General Partner or a
Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the Partnership not
otherwise enumerated in this subsection, but which this
Agreement, or any other agreement, states in writing may be
subject to the approval or disapproval of Limited Partners; or
(J) any other matter required by law or regulation, or
deemed advisable by the General Partner, to be submitted to a
vote of Limited Partners;
(vii) winding up the Partnership; or
(viii) taking any of the actions described in Section 17-303(b) of the
Act or in this Agreement, or exercising any right or power permitted a
limited partner under the Act, which action or exercise is not specifically
enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. AUTHORITY OF GENERAL PARTNER TO ADMIT ADDITIONAL PARTNERS.
The Partners agree that the General Partner may admit Additional Limited
Partners to the Partnership, subject to and in accordance with the provisions of
Section 4.02, Section 5.03 and Article Nine. Additional General Partners may be
admitted to the Partnership, subject to and in accordance with the provisions of
Section 4.02, Section 5.03 and Article Nine, but only if and to the extent that
the General Partner would be permitted to transfer its Partnership Interest
under Section 4.02, Section 5.03 and Article Nine.
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Section 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL PARTNERS.
The Partnership Interest of each Additional General Partner or Additional
Limited Partner shall be the percentage that the cash amount or initial Gross
Asset Value of capital contributed to the Partnership by such Additional General
Partner or Additional Limited Partner bears to the total capital of the
Partnership immediately following such contribution. Upon admission of such
Additional General Partner or Additional Limited Partner to the Partnership, the
Partnership Interests of the existing Partners shall be reduced PRO RATA by the
amount of such Additional Limited Partner's Partnership Interest; provided,
however, that no Additional General Partner or Additional Limited Partner may be
admitted if such addition would reduce the Partnership Interest of (i) AHFC, in
its capacity as a Limited Partner, below 20% or (ii) Honda Titling A LLC, in its
capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership. No Limited Partner shall participate
in the management or control of the Partnership's business, nor shall it have
the power to act for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner, except as otherwise specifically
provided herein. It is understood and agreed that the General Partner shall have
all of the rights and powers of a general partner provided under the Act and by
this Agreement, and as otherwise provided by law, and any action taken by the
General Partner shall constitute the act of and serve to bind the Partnership.
Persons dealing with the Partnership are entitled to rely conclusively on the
power and authority of the General Partner as set forth in this Agreement.
(b) Notwithstanding the foregoing, without the affirmative vote of
100% of the constituent members of the General Partner, the General Partner will
not take, or acquiesce in, and only the General Partner (and not any Limited
Partner) shall have any right to take, any action to cause the Partnership to
(i) dissolve or liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy
or insolvency proceedings against it, (iii) file a petition seeking, or consent
to, reorganization or relief under any applicable federal or state law relating
to bankruptcy, (iv) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Partnership or
a substantial part of its property, (v) make any assignment for the benefit of
its creditors, (vi) admit in writing its inability to pay its debts generally as
they become due, (vii) institute or join in any institution of any bankruptcy,
insolvency, liquidation, arrangement or reorganization proceeding or other
proceedings under any federal or state law, against any entity in which the
Partnership holds an ownership interest, or (viii) take any corporate action or
partnership action in furtherance of the actions enumerated in clauses (i)
through (vi) above; provided, however, that the General Partner shall in no
event consent to the institution of bankruptcy or insolvency proceedings against
the Partnership so long as the Partnership is solvent. In the event of the
insolvency of the Partnership and with regard to any action contemplated by the
preceding sentence, the General Partner will not owe a fiduciary duty to any
Limited Partner (except as may be specifically required by applicable law), but
the General
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Partner's fiduciary duty with regard to such action shall be owed, to the
fullest extent permitted by applicable law, instead to the creditors of the
Partnership.
(c) The General Partner shall not, and shall not allow the Partnership
otherwise to, commingle any funds or other assets of the Partnership with the
funds or assets of any other Person. The financial and accounting books and
records of the Partnership shall be maintained separate from those of every
other Person. All obligations and indebtedness of any kind incurred by the
Partnership shall be paid from the assets of the Partnership and the
Partnership's assets shall not be used to pay any obligation or indebtedness of
any other Person, other than expenses, obligations or indebtedness of the Trust,
any Securitization Trust and any trustee of any of the foregoing with respect to
transactions of or with respect to such Trust or Securitization Trust.
(d) The General Partner is hereby authorized to delegate to one or
more other Persons any of its rights and powers to manage and control the
business and affairs of the Partnership, including to delegate to agents and
employees of the General Partner or the Partnership, and to delegate by a
management agreement or another agreement with, or otherwise to, other Persons.
Such delegation by the General Partner shall not cause the General Partner to
cease to be a general partner of the Partnership.
Section 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section 5.03,
the General Partner is hereby granted the right, power and authority to do on
behalf of the Partnership all things which, in its sole judgment, are necessary,
proper, desirable, convenient or incidental to carry out the duties and
responsibilities of the Partnership under this Agreement.
Section 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS. Without the
written consent of, or ratification by a specific act of, Partners holding in
the aggregate at least 66-2/3% of the Partnership Interests, the General Partner
shall have no authority to, and affirmatively represents and undertakes that it
will not, admit a Person as a Partner under this Agreement, which in any event
shall always be done in accordance with Article Nine.
Section 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall devote
such time to the business of the Partnership as it shall deem necessary to
manage and supervise the business and affairs of the Partnership in an efficient
manner. Subject to the foregoing, the General Partner shall manage the
administration of the Partnership, which administration shall include, but not
be limited to, (a) maintaining customary books and records; (b) preparing or
causing the preparation of the financial statements provided for in this
Agreement; (c) preparing and filing or causing the preparation and filing of
Partnership tax returns; (d) preparing communications from the Partnership to
Limited Partners; (e) filing documents required to be filed by the Partnership;
(f) causing the Partnership to make or revoke the appropriate tax elections
under the Code; (g) functioning as tax matters partner for federal, state and
local tax purposes; and (h) acting on behalf of the Partnership with respect to
(i) the Trust, (ii) any lenders and (iii) any other Person dealing with the
Partnership or any Partnership Property.
Section 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The General
Partner shall receive no compensation for services to the Partnership as General
Partner; provided, however, that the General Partner shall be entitled to charge
to the Partnership any filing fees
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incurred in complying with any requirement imposed on the Partnership by law,
reasonable accountants' and attorneys' fees and all other reasonable expenses
arising out of the administration of the Partnership including, but not limited
to, those incurred in any administrative or judicial proceeding in which the
Partnership may become involved, all of which shall be proper expenses of the
Partnership.
Section 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner, any
director, officer, shareholder, agent or employee of the General Partner or any
Affiliate of the General Partner shall be liable, responsible or accountable for
damages or otherwise to the Partnership or any Limited Partner for any action
taken or omitted on behalf of the Partnership within the scope of the authority
conferred upon such Person by this Agreement or by law, unless such action was
taken or omitted fraudulently or in bad faith or constituted willful misconduct
or gross negligence.
Section 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter into one
or more agreements with the General Partner or any Affiliate of the General
Partner to render services to the Partnership. Any service rendered to the
Partnership by the General Partner or any Affiliate thereof shall be on terms
that are fair and reasonable to the Partnership and are, in the aggregate, no
less favorable than those that could be obtained from unaffiliated third parties
for comparable quality.
Section 5.08. INDEMNIFICATION. The Partnership shall, to the fullest extent
permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, agents and employees acting
within the scope of their authority (the "Indemnified Parties") from and against
any loss, expense, damage, liability or injury suffered or sustained by them by
reason of any acts, omissions or alleged acts or omissions arising out of any of
such Person's activities on behalf of the Partnership or in furtherance of the
interests of the Partnership, 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 and including any payments made by one or more Indemnified
Parties, unless the acts, omissions or alleged acts or omissions upon which such
actual or threatened action, proceeding or claim is based were made or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence by one or more of such Indemnified Parties. Any such indemnification
shall only be made from the assets of the Partnership. Reasonable expenses
incurred by any Indemnified Party in connection with such an action, proceeding
or claim shall be paid or reimbursed by the Partnership in advance of the final
disposition of the action, proceeding or claim, upon receipt by the Partnership
of an undertaking by or on behalf of the Indemnified Party to repay such amount
if it shall be determined that the Indemnified Party is not entitled to be
indemnified as authorized in this Section.
Section 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth in
this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
Section 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be owned
by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership
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Property in the name of the Partnership and not in the name of any Partner. Each
Partner's interest in the Partnership shall be personal property for all
purposes.
Section 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS. To
the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. STATEMENTS. The General Partner shall send or cause to be
sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
Section 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be the
fiscal year of the initial Limited Partner, which shall end on the last day of
March each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. TAX ELECTIONS. The General Partner shall elect to treat the
Partnership as a single member entity treated as an agent of the Limited Partner
and not as a separate corporation or partnership for federal and applicable
state tax purposes. The General Partner may also elect to make an election for
state tax purposes comparable to the federal tax election under Section 761(a)
of the Code for an exemption from the provisions of Subchapter K of the Code for
the Partnership.
Section 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate Capital
Account shall be established and maintained for each Partner throughout the full
term of the Partnership as follows:
(a) to each Partner's Capital Account there shall be credited such
Partner's initial Capital Contribution, as set forth and agreed to on Exhibit A
hereto, such additional Capital Contributions as such Partner may make from time
to time pursuant to Section 3.02(b), such Partners' distributive share of Net
Income, and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Section 7.03 or 7.04 and the amount of any
Partnership liabilities that are assumed by such Partner or secured by any
Partnership Property distributed to such Partner;
(b) from each Partner's Capital Account there shall be subtracted the
amount of cash and the Gross Asset Value of any Partnership Property distributed
to such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Net Losses, any items in the nature of deductions or
losses that are specially allocated to such Partner pursuant to
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Section 7.03 or 7.04 and the amount of any liabilities of such Partner assumed
by the Partnership or secured by any property contributed by such Partner to the
Partnership;
(c) in the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account, if any, of the transferor to the extent relevant to the
transferred interest; and
(d) in determining the amount of any liability for purposes of clauses
(a) and (b) of this Section, Code Section 752 and any other applicable
provisions of the Code and Regulations shall be taken into account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Partnership or the Partners), are computed
in order to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a material
effect on the amounts distributable to any Partner pursuant to Section 10.02
upon the dissolution of the Partnership. The General Partner shall make all (i)
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes in accordance
with the Regulations, and (ii) appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-l(b).
Section 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04, 7.05
and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to such Partner's Partnership
Interest during the particular year, after taking into account any variations in
the Partner's Partnership Interest during that year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner for
any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
Section 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the extent
necessary to satisfy the requirements set forth in Sections 1.704-l(b)(2)(ii)(d)
and 1.704-2 of the Regulations for a qualified income offset and partner minimum
gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset is required under Code Section
734(b) or 743(b) in connection
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with a distribution to a Partner in complete liquidation of such Partner's
interest in the Partnership and the resultant redetermination pursuant to
Regulations Section 1.704-l(b)(2)(iv)(m)(2) or 1.704-l(b)(2)(iv)(m)(4) of the
Capital Accounts, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset)
or loss (if the adjustment decreases such basis), and such gain or loss shall be
allocated pro rata to the remaining Partners in accordance with their respective
Partnership Interests in the event Regulations Section 1.704-l(b)(2)(iv)(m)(2)
applies, or to the Partner to which such distribution was made in the event that
Regulations Section 1.704-l(b)(2)(iv)(m)(4) applies.
Section 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners that,
to the extent possible, all Regulatory Allocations shall be offset either by
other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section. Therefore,
notwithstanding any other provision of this Article Seven, the General Partner
shall make special offsetting allocations of Partnership income, gain, loss or
deduction in whatever manner it determines appropriate so that, after such
offsetting allocations are made, each Partner's Capital Account balance is, to
the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations had not been made and all Partnership
items were allocated pursuant to Section 7.03. In exercising discretion under
this Section, the General Partner shall take into account certain future
Regulatory Allocations that, although not yet made, are likely to offset other
Regulatory Allocations previously made under Section 7.04(a).
Section 7.06. OTHER ALLOCATION RULES. For purposes of determining items of
Partnership income, gain, loss or deduction or any other items allocable to any
fiscal year or other period, including upon the transfer of a Partner's interest
in the Partnership, such items shall be determined on a daily, monthly or other
basis, as determined by the General Partner, using any method permissible under
Code Section 706 and the Regulations thereunder. To the extent permitted by the
Regulations, the General Partner shall endeavor not to treat distributions of
Cash Flow as having been made from the proceeds of a nonrecourse liability
within the meaning of Section 1.752-2 of the Regulations.
Section 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
15
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(c) Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
Section 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As determined by
the General Partner employing its reasonable business judgment, to the extent
Partnership Cash Flow is available for distribution at the close of any fiscal
one-month period, such distribution shall be made as soon as reasonably possible
following such period, in the manner provided in Section 7.03, as if such fiscal
one-month period were a fiscal year. No such distribution will be made if it
would create a negative Capital Account balance for a Limited Partner. The
General Partner may also refuse to make a distribution at the end of any fiscal
one-month period if such distribution would impair Reserves set up by the
General Partner pursuant to Section 10.04.
Section 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the General
Partner on behalf of the Partnership, shall not make a distribution to any
Partner if such distribution would violate Section 17-607 of the Act or other
applicable law. Notwithstanding Section 17-606 of the Act, no Limited Partner
shall, by virtue of becoming entitled to receive a distribution, have the status
of, or be entitled to the remedies available to, a creditor of the Partnership
with respect to such distribution.
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no Partner
shall have the right to withdraw from the Partnership.
Section 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or legal
representative or Person or Persons entitled to receive the interest of such
Limited Partner become a substitute Limited Partner, except in accordance with
Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the General
Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of ("Transfer"), or encumber or hypothecate ("Pledge"), all or
any part of its Partnership Interest to any Person.
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Any purported Transfer or Pledge, shall be deemed null and void and shall not be
recognized by the Partnership or the other Partners.
Section 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
Section 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of such
representation and warranty shall, and hereby agrees to, indemnify and hold
harmless all other Partners and the Partnership from any claims, demand, suits,
losses, judgments, liabilities and damages, including reasonable attorneys' fees
and disbursements, arising out of or in any way connected with such act or
omission.
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership shall
be dissolved and its affairs wound up upon the earliest to occur of:
(a) March 31, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event that
results in the General Partner ceasing to be a general partner of the
Partnership under the Act, unless within 90 days after the occurrence of such
event, a majority in interest of the remaining Partners (or such greater
percentage in interest as is required by the Act) agrees in writing to continue
the business of the Partnership and to the appointment, effective as of the date
of such event, of one or more additional general partners of the Partnership; or
(c) the entry of a decree of judicial dissolution pursuant to Section
17-802 of the Act.
Section 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for the
payment) of such debts and liabilities of the Partnership (or Reserves
therefor), including any necessary expenses of liquidation, except any debts,
liabilities and loans that may be due to the Partners, in the order of priority
provided by law;
17
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(b) to the payment (or the making of reasonable provision for the
payment) of any debts and liabilities that may be due to the Partners and to the
payment (or the making of reasonable provision for the payment) of the unpaid
principal balance of and the interest accrued on loans, if any, made by the
Partners to the Partnership; and each Partner's Capital Account shall be
adjusted as provided in Section 7.02 as if the Partnership Property had been
sold for its fair market value and the resulting gain or loss had been allocated
to the respective Partners, and the assets of the Partnership shall be
distributed thereafter to the Partners in proportion to their respective
non-negative Capital Accounts.
All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the Partnership. If
any Limited Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all fiscal years,
including the fiscal year during which such liquidation occurs), such Limited
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
Section 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the event of
the dissolution of the Partnership pursuant to Section 10.01(b) because no
General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
Section 10.04. RESERVES. The General Partner or the liquidating trustee, as
the case may be, shall have the right to set up (either in connection with the
ongoing operations of the Partnership or in the course of its liquidation)
reasonable cash reserves for contingent, conditional or unmatured liabilities or
obligations of the Partnership, capital improvements or for any other purpose
necessary to accomplish the purposes of the Partnership ("Reserves"), and such
Reserves shall be deducted from amounts available for distribution pursuant to
this Agreement.
Section 10.05. STATEMENT. Within a reasonable time following the completion
of the liquidation or distribution of the Partnership Property, the General
Partner or liquidating trustee shall supply to each of the Partners a statement
that shall set forth the assets and the liabilities of the Partnership and each
Partner's Capital Account as of the date of complete liquidation.
Section 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner shall
have any right to demand a distribution in a form other than that decided upon
by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
18
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Section 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact, to make, execute, sign, acknowledge, record and file, in its
name, place and stead and with full power of substitution, on behalf of it and
on behalf of the Partnership, the following:
(i) one or more Partnership Certificates, certificates of doing
business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may
be required to file under the laws of the State of Delaware or any
other jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the Partnership
Certificate or equivalent document and such other instruments or
documents as may be deemed necessary or desirable by the General
Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the instruments
described in subsections (a)(i) and (ii), provided such amendments or
restatements are either required by law or are consistent with this
Agreement or have been authorized by the affected Partners;
(iv) any and all amendments to or restatements of this Agreement
that have been duly adopted by the Partners pursuant to the terms
hereof; and
(v) any and all other instruments as may be deemed necessary or
desirable by the General Partner to carry out fully the provisions of
this Agreement in accordance with its terms.
(b) The grant of authority contained in subsection (a) is a special
Power of Attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power by attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
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(c) Notwithstanding the provisions of subsection (a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
Section 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agreement and the rights and liabilities of the
Partners shall be determined in accordance with the internal laws of the State
of Delaware without regard to any otherwise applicable principles of conflicts
of laws. To the fullest extent permitted by law, any controversy or claim
arising out of or relating to this Agreement or the breach thereof shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association to the extent permitted by the Delaware Uniform Arbitration Act, 10
DEL. C. ss. 5701, eT Seq., and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Section 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law otherwise
provided and subject to Article Nine, this Agreement shall be binding on and
inure to the benefit of each of the Partners, their legal representatives,
heirs, administrators, executors, successors, and assigns.
Section 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be executed in
several counterparts and all counterparts so executed shall constitute one
Agreement binding on all Partners, notwithstanding that all the Partners are not
signatory to the same counterpart. This Agreement, including Exhibits,
constitutes the entire agreement among the Partners pertaining to the subject
matter hereof and supersedes all prior and contemporaneous agreements and
understandings of the Partners in connection therewith. No covenant,
representation or condition not expressed in this Agreement shall be binding
upon the Partners hereto or shall affect or be effective to interpret, change or
restrict the provisions of this Agreement.
Section 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of the
Partners hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Partnership Property.
Section 11.06. CAPTIONS. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope
or intent of this Agreement or any provision hereof.
Section 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
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Section 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
Section 11.09. AMENDMENT; WAIVER. No change, termination or waiver of any
of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66-2/3% of the Partnership Interests,
and such additional approvals, if any, have been obtained as are required under
each Securitization.
Section 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested in order to effect the purposes of this Agreement
and to better assure and confirm unto the requesting party its rights, powers
and remedies hereunder.
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IN WITNESS WHEREOF, the initial Partners have executed this Agreement as of
the date first set forth above.
HONDA TITLING A LLC
By: /s/ Y. Kohama
---------------------------------------
Name: Y. Kohama
AMERICAN HONDA FINANCE
CORPORATION, as Limited Partner
By: /s/ Y. Kohama
---------------------------------------
Name: Y. Kohama
Title: President
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EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $10
Limited Partner: $990
A-1
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EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE>
EXHIBIT C
CERTIFICATE OF LIMITED PARTNERSHIP
OF
HONDA TITLING A L.P.
This Certificate of Limited Partnership of Honda Titling A L.P. (the
"Partnership") is being executed and filed by the undersigned General Partner
(the "General Partner") to form a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (6 Del.C. ss.17-101 eT Seq.).
ARTICLE ONE
The name of the limited partnership formed hereby is Honda Titling A
L.P.
ARTICLE TWO
The address of the registered office of the Partnership in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801. The name and address of the
registered agent for service of process on the Partnership in the State of
Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801.
ARTICLE THREE
The name and business address of the General Partner of the Partnership
is:
Honda Titling A LLC
700 Van Ness Avenue
Torrance, CA 90501
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this ___
day of , ____________, 1997.
Honda Titling A LLC
---------------------------------------
Name:
C-1
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Exhibit 3.6
EXECUTION COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HONDA TITLING A LLC
LIMITED LIABILITY COMPANY AGREEMENT
Between
AMERICAN HONDA FINANCE CORPORATION
HONDA TITLING INC.
as Members
Dated as of July 17, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
<TABLE>
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.....................................................1
Section 1.02. Other Definitional Provisions...................................3
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation.......................................................3
Section 2.02. Name and Office.................................................3
Section 2.03. Duration........................................................3
Section 2.04. Registered Office and Registered Agent..........................4
Section 2.05. Execution, Delivery and Filing of Certificate...................4
ARTICLE THREE
PURPOSES
Section 3.01. Purposes........................................................4
Section 3.02. Power and Authority.............................................5
Section 3.03. Limitations on Powers...........................................5
Section 3.04. Company Opportunity.............................................6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Initial Contributions of Members..................6
Section 4.02. Additional Capital Contributions................................6
Section 4.03. Withdrawals.....................................................6
Section 4.04. Borrowings......................................................6
Section 4.05. Additional Members..............................................6
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members...........................................7
Section 5.02. Limitations on Powers of Members................................8
Section 5.03. Self Dealing....................................................8
Section 5.04. Standard of Care; Liability.....................................8
Section 5.05. Compensation....................................................8
Section 5.06. Meetings of Members.............................................9
Section 5.07. Consent.........................................................9
Section 5.08. Independent Member..............................................9
Section 5.09. Managers........................................................9
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ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required........................................10
Section 6.02. Voting on Bankruptcy or Insolvency.............................10
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts...............................................10
Section 7.02. Allocation of Profits and Losses...............................10
Section 7.03. Distributions..................................................10
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability.......................................11
Section 8.02. Indemnification................................................11
Section 8.03. Fiduciary Duty.................................................11
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement...................................................12
Section 9.02. Dissolution....................................................12
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets..........................................12
Section 10.02. Termination....................................................12
Section 10.03. Claims of the Members..........................................13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests..........................13
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation......................................13
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment.......................................13
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Section 13.02. Books of Account; Reports......................................13
Section 13.03. Bank Accounts and Investment of Funds..........................14
Section 13.04. Accounting Decisions...........................................14
Section 13.05. Federal Income Tax Elections...................................14
Section 13.06. Entire Agreement...............................................14
Section 13.07. Notices........................................................14
Section 13.08. Consent of Members.............................................15
Section 13.09. Further Execution..............................................15
Section 13.10. Binding Effect.................................................15
Section 13.11. Severability...................................................15
Section 13.12. Captions.......................................................15
Section 13.13. Counterparts...................................................15
Section 13.14. Delaware Law to Control........................................15
EXHIBITS
Exhibit A Members; Capital Contributions; Membership Percentages...............A-1
</TABLE>
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This Limited Liability Company Agreement of Honda Titling A LLC, a Delaware
limited liability company (the "Company"), dated as of July 17, 1997, is between
American Honda Finance Corporation ("AHFC"), a California corporation, and Honda
Titling Inc., a Delaware corporation (the "Independent Member" and, together
with AHFC, the "Members").
WHEREAS, the Members desire to form a limited liability company under and
pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware on
July _, 1997, and by entering into this Agreement;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to form the Company in accordance with the Delaware
Limited Liability Company Act and subject to the terms and provisions of this
Agreement.
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act (6 DEL. C.ss.18-101,
ET SEQ.), as amended from time to time.
"AFFILIATE" of any person means any other person that (i) directly or
indirectly controls, is controlled by or is under common control with such
person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such person. For purposes of this definition, a person shall be deemed to be
"controlled by" another person if such other person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such person or (ii) to direct or cause the
direction of the management and policies of such person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Liability Company Agreement of the Company
as it may be amended, restated or supplemented from time to time.
"CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.
"CAPITAL CONTRIBUTIONS" means the amount of all cash (whether in the form
of money, a note payable upon demand or a combination thereof) or the agreed
upon value of other property or services contributed by the Members to the
Company.
"CERTIFICATE" means the Certificate of Formation of the Company, including
any restatements or amendments, which are filed with the Delaware Secretary of
State.
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"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning set forth in Section 3.01(b).
"COVERED PERSON" shall have the meaning set forth in Section 8.03.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State of
Delaware.
"FISCAL YEAR" means the taxable year of the holder of the Majority
Interest.
"INDEPENDENT DIRECTOR" means an individual who is not (i) a director,
officer or employee of any Affiliate of AHFC (other than any limited or special
purpose corporation or limited liability company similar to the Company); (ii) a
person related to any officer or director of any Affiliate of AHFC; (iii) a
direct or indirect holder of more than 10% of any voting securities of any
Affiliate of AHFC; or (iv) a person related to a direct or indirect holder of
more than 10% of any voting securities of any Affiliate of AHFC.
"INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.
"MAJORITY INTEREST" means the interest in the Company of AHFC.
"MAJORITY OF THE REMAINING MEMBERS" means those Members holding more than
50% of the Membership Percentages and more than 50% of the Capital Account
balances of the Members.
"MANAGERS" means Honda Titling Inc. and such other persons or entities that
may be designated from time to time by the Members as managers of the Company to
perform such functions for the Company as may be determined from time to time by
the Members. A Manager shall be deemed to be a "manager" of the Company within
the meaning of Section 18-101 of the Act.
"MEMBERS" are the persons or entities designated as Members of the Company
in Exhibit A. Any reference to a Member shall, unless the context clearly
requires otherwise, include a reference to its predecessors and successors in
interest.
"MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in Exhibit A.
"ORIGINATION TRUST" means Honda Lease Trust, a Delaware business trust.
"PROFITS" and "LOSSES" mean the Company's taxable income or loss for each
Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits and Losses shall be added to such
taxable income or loss.
"RECEIVABLES" shall have the meaning set forth in Section 3.01(a).
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"SECURITIES" shall have the meaning set forth in Section 3.01(d).
"SUBI" shall have the meaning set forth in Section 3.01(c).
"TRUST" shall have the meaning set forth in Section 3.01(c).
"TRUSTEE" shall have the meaning set forth in Section 6.01.
"UTI" shall have the meaning set forth in Section 3.01(c).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles in effect from time to time. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under such generally accepted accounting principles, the definitions contained
in this Agreement or in any such certificate or other document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. FORMATION. The parties hereby form a limited liability
company pursuant to the provisions of the Act and this Agreement, and agree that
the rights, duties and liabilities of the Members and Managers shall be as
provided in the Act, except as otherwise provided in this Agreement. Pursuant to
Section 18-201(d) of the Act, this Agreement shall become effective as of the
formation of the Company.
Section 2.02. NAME AND OFFICE. The name of the Company shall be Honda
Titling A LLC, and its office shall be located at 700 Van Ness Avenue, Torrance,
California 90501, or such other place as the Members may determine from time to
time.
Section 2.03. DURATION. The term of the Company shall commence on the date
the Certificate is filed in the office of the Delaware Secretary of State and
shall continue until March 31, 2027, unless the Company is dissolved before such
date in accordance with the provisions of
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this Agreement. The existence of the Company as a separate legal entity shall
continue until cancellation of the Certificate in the manner required by the
Act.
Section 2.04. REGISTERED OFFICE AND REGISTERED AGENT. The Company's initial
registered office shall be at the office of its registered agent at Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and the name of its
initial registered agent at such address shall be The Corporation Trust Company.
The registered office and registered agent may be changed from time to time in
accordance with the Act. If the registered agent shall ever resign, the Company
shall promptly appoint a successor.
Section 2.05. EXECUTION, DELIVERY AND FILING OF CERTIFICATE. Y. Kohama, as
an "authorized person" within the meaning of the Act, shall execute, deliver and
file the Certificate with the Delaware Secretary of State.
ARTICLE THREE
PURPOSES
Section 3.01. PURPOSES. The purposes for which the Company is formed are:
(a) to acquire, own, hold, service, sell, assign, pledge, finance,
refinance and otherwise deal with from time to time (i) leases; (ii) installment
obligations; (iii) motor vehicle retail installment sale or conditional sale
contracts; (iv) motor vehicle wholesale inventory loans or sales contracts
secured by, among other things, new or used motor vehicles; (v) dealer rental
car loans or sales contracts including dealer rental car loans or sales
contracts secured by, among other things, new or used motor vehicles; (vi)
receivables, including any right to payment from a person or entity, whether
constituting an account, chattel paper, instrument or general intangible,
arising out of or relating to the sale of new or used motor vehicles or related
products and supplies; (vii) interests in any of the foregoing; and (viii) any
proceeds or other monies due under any of the foregoing, any related fees and
charges, security interests in the foregoing or other property securing payment
thereof and related agreements, instruments, documents and rights (collectively,
the "Receivables");
(b) to acquire, own, hold, service, sell, assign, pledge, finance,
refinance and otherwise deal with Receivables, any collateral securing the
Receivables, related insurance policies, related agreements with affiliates,
agreements with motor vehicle dealers, manufacturers and lessors and other
originators or services of Receivables and any proceeds or further rights
associated therewith (collectively, the "Collateral");
(c) to sell, assign, pledge or otherwise transfer Receivables, Collateral,
Securities and notes or beneficial interests in any of the foregoing, undivided
trust interests ("UTIs") and special units of beneficial interests ("SUBIs") to
trusts or other entities established by or on behalf of the Company or one of
its affiliates (each, a "Trust") or to Affiliates of the Company;
(d) to authorize, sell and deliver or participate in the issuance of one or
more series or classes of participation certificates, bonds, notes or other
evidences of interest or indebtedness (collectively, "Securities"), in either
case issued by a Trust;
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(e) to acquire Securities, UTIs or SUBIs or other property of a Trust,
including remainder interests in collateral or reserve accounts;
(f) to issue, authorize, sell and deliver Securities, UTIs, SUBIs or other
instruments secured, collateralized by or evidencing beneficial interests in
Receivables or Securities;
(g) to hold, and to enjoy all of the rights and privileges as a holder or
beneficial owner of, any Securities, Collateral, UTIs or SUBIs;
(h) to negotiate, authorize, execute, deliver or assume or perform the
obligations under any agreement, instrument or document relating to the
activities set forth in subsections (a) through (g) above, including but not
limited to any trust agreement, sale and servicing agreement, pooling and
servicing agreement, indenture, reimbursement agreement, credit support
agreement, receivables purchase agreement, indemnification agreement, placement
agreement or underwriting agreement; and
(i) to engage in any activity and to exercise any powers permitted to
limited liability companies under the laws of the State of Delaware that are
related or incidental to the foregoing and necessary, convenient or advisable to
accomplish the foregoing.
Section 3.02. POWER AND AUTHORITY. The Company shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
incidental or convenient to accomplish or for the furtherance of the purposes
set forth in Section 3.01. The Company may serve as a general partner of Honda
Titling A L.P. The Company, and Honda Titling Inc. or Y. Kohama, on behalf of
the Company, may enter into and perform the Limited Partnership Agreement of
Honda Titling A L.P. without any further act, vote or approval of any Member,
Manager or other person, notwithstanding any other provision of this Agreement,
the Act or other applicable law, rule or regulation.
Section 3.03. LIMITATIONS ON POWERS. Notwithstanding any other provision of
this Agreement and any provision of law, the Company shall not do any of the
following:
(a) engage in any business or activity other than as set forth in this
Agreement;
(b) without the unanimous affirmative vote of the Members, (i) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (ii) consent to the institution of bankruptcy or
insolvency proceedings against it, (iii) file a petition seeking or consent for
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (iv) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or a substantial
part of its property, (v) make any assignment for the benefit of creditors, (vi)
admit in writing its inability to pay its debts generally as they become due;
(vii) institute or join in any institution of any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state law, against any entity in which the Company holds an
ownership interest; or (viii) take any limited liability company action in
furtherance of the actions set forth in clauses (i) through (vii) above;
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(c) without the unanimous affirmative vote of the Members, take or cause to
be taken any of the actions referred to in clauses (i) through (vii) of
subparagraph (b) above with respect to any entity of which the Company is a
partner or member.
(d) without the unanimous affirmative vote of the Members, 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.
Section 3.04. COMPANY OPPORTUNITY. No Member need afford the Company or any
other Member the opportunity of investing or otherwise participating in any
other enterprise, regardless of whether such enterprises, but for this sentence,
would be deemed an opportunity of the Company. Nothing in this Agreement shall
prohibit any Member from engaging in any other business activity, whether or not
competitive with, similar to, or within the scope of the activities conducted by
or on behalf of the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.
(a) Each of AHFC and the Independent Member shall be admitted as a Member
of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
Exhibit A attached hereto.
(b) The Members shall make the Capital Contributions set forth next to
their names in Exhibit A upon the formation of the Company. No interest shall
accrue on any Capital Contribution made to the Company.
Section 4.02. ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not be
obligated to make additional Capital Contributions except upon the consent of
all Members.
Section 4.03. WITHDRAWALS. No Member shall be entitled to be repaid any
portion of its Capital Account or withdraw from the Company without the consent
of all Members or as otherwise provided in this Agreement.
Section 4.04. BORROWINGS. The Company may borrow sums to be used for any of
the business purposes described in Section 3.01; provided, however, that any
such borrowing shall require the prior approval of a Majority Interest and shall
not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by a Majority Interest. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company which shall be repaid before any distributions to the
Members.
Section 4.05. ADDITIONAL MEMBERS. No additional Members shall be admitted
to the Company without the unanimous consent of the Members.
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ARTICLE FIVE
MANAGEMENT
Section 5.01. POWERS OF THE MEMBERS.
(a) The Company shall be managed by its Members. Subject to the other
provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things appropriate for the
accomplishment of the purposes of the Company, including, but not limited to,
(i) acquiring and selling, assigning and transferring installment obligations,
leases, retail installment sale or conditional sale contracts, inventory loans,
motor vehicle wholesale inventory sales contracts, dealer rental car loans or
sales contracts, promissory notes, security agreements and receivables; (ii)
disbursing Company funds for Company purposes; (iii) investing and reinvesting
Company funds; (iv) executing contracts, notes, mortgages and other agreements
and instruments; (v) employing attorneys, accountants, Managers or other agents,
which may include Affiliates of the Company; (vi) paying all Company
obligations; (vii) performing all ministerial acts and duties relating to the
payment of all indebtedness, taxes and assessments due or to become due with
regard to any property of the Company; (viii) purchasing and maintaining
insurance on behalf of the Company against any liability or expense asserted
against or incurred by or on behalf of the Company; (ix) transacting the
Company's business under an assumed name or name other than its name as set
forth in the Certificate; (x) appointing any Member or other person as agent for
service of process on the Company as required by the law of any jurisdiction in
which the Company transacts business; (xi) commencing, prosecuting or defending
any proceeding in the Company's name; and (xii) doing such other acts as may
facilitate the Company's exercise of its powers; provided, however, that all
such acts shall fall within the purposes of the Company as set forth in Section
3.01.
(b) Notwithstanding anything in this Agreement to the contrary, the Company
shall at all times have at least one Independent Member, and no action of the
type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints the other Members as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice which
may be required by any rule or law and which may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or which may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of its
limited liability company interest in the Company; provided, however, that where
a Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
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(d) A copy of the Certificate or amendments to the Certificate will be
provided to each Member upon written request to the Company.
(e) Subject to the other provisions of this Article and Article Six, the
Members shall have full power to act for and to bind the Company to the extent
provided by Delaware law. Every contract, note, mortgage, lease, deed or other
instrument or agreement executed by any Member shall be conclusive evidence that
at the time of execution, the Company was then in existence, that this Agreement
had not theretofore been terminated or amended in any manner and that the
execution and delivery of such instrument was duly authorized by the Members. A
Manager may bind the Company only to the extent authorized by the Members.
Section 5.02. LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any other
provision of this Agreement, no act shall be taken, sum expended, decision made,
obligation incurred or power exercised by any Member on behalf of the Company,
without prior written notice to all Members outlining the proposed action
followed by the written consent of a Majority Interest with respect to: (i) any
mortgage, grant of security interest, pledge or encumbrance of any asset of the
Company; (ii) any merger of the Company with another entity; (iii) a transaction
involving an actual or potential conflict of interest between a Member and the
Company; (iv) any material change in the character of the business and affairs
of the Company; or (v) any act that would contravene in a material respect any
provision of this Agreement or the Act.
Section 5.03. SELF DEALING. Any Member and any Affiliate thereof may deal
with the Company, directly or indirectly, as vendor, purchaser, employee, agent
or otherwise. No contract or other act of the Company shall be voidable or
affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (i) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as a Member, shall be disclosed to all
other Members, (ii) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein, and (iii) the
Members shall not receive or hold any property of the Company as collateral
security in respect of any claim against the Company.
Section 5.04. STANDARD OF CARE; LIABILITY. Each Member and its respective
directors, officers, stockholders and Affiliates shall discharge its duties in
good faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner he reasonably believes to
be in the best interests of the Company as required by this Agreement or the
Act. A Member shall not be liable for monetary damages to the Company for any
breach of any such duties except for receipt of a financial benefit to which the
Member is not entitled, voting for or assenting to a distribution to Members in
violation of this Agreement or the Act, or a knowing violation of the law.
Section 5.05. COMPENSATION. The Company shall reimburse each Member for any
reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member
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may receive reasonable compensation for any services rendered to the Company
approved by the Majority Interest.
Section 5.06. MEETINGS OF MEMBERS. All Members shall be entitled to vote on
any matter submitted to a vote of the Members. Unless a greater vote is required
by the Act or this Agreement, the affirmative vote of a Majority Interest shall
be required. Meetings of Members for the transaction of such business as may
properly come before the Members may be held at such place, on such date and at
such time as the Majority Interest shall determine. Special meetings of Members
for any proper purpose or purposes may be called at any time by the holders of
at least 25% of the Membership Percentages of all Members. The Company shall
deliver or mail written notice stating the date, time, place and purposes of any
meeting to each Member entitled to vote at the meeting. Such notice shall be
given not less than 10 nor more than 60 days before the date of the meeting.
Section 5.07. CONSENT. Any action required or permitted to be taken at an
annual or special meeting of the Members may be taken without a meeting, if the
Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08. INDEPENDENT MEMBER. The Company shall at all times have at
least one Member (each, an "Independent Member") that shall be a special purpose
corporation formed pursuant to a charter or articles of incorporation that (i)
limits its business purposes and activities and (ii) requires the unanimous
consent of its entire board of directors (without any vacancies), including the
affirmative vote of all Independent Directors before such member may approve,
permit or take any action, or cause any action to be taken in respect of the
following actions with respect to any limited liability company of which it is a
member, to (a) institute proceedings to have itself adjudicated bankrupt or
insolvent, (b) consent to the institution of bankruptcy or insolvency
proceedings against it, (c) file a petition seeking, or consent to, such
member's or the limited liability company's reorganization or relief under any
applicable federal or state law relating to bankruptcy, (d) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such member or limited liability company or a substantial
part of its property, (e) make any assignment for the benefit of its creditors,
admit in writing its inability to pay its debts generally as they become due,
(f) institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which such member or limited liability company holds an ownership interest or
(g) take any action in furtherance of the actions set forth in clauses (a)
through (f) above.
Section 5.09. MANAGERS. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Manager shall be obligated personally for any
such debt, obligation, or liability of the Company solely by reason of being a
Manager of the Company;
(b) no Manager shall be required to make any Capital Contribution in the
form of cash to the Company; and
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(c) no Manager shall be (i) entitled to receive any Profits or (ii) liable
for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. UNANIMOUS VOTE REQUIRED. Notwithstanding any other provision
of this Agreement and any provision of law that otherwise so empowers the
Company, the Company shall not, without (i) the prior written consent of each
trustee from time to time (each, a "Trustee") under any pooling and servicing
agreement, indenture, trust agreement or similar agreement between the Company,
a Trustee and a servicer, if any, pursuant to which the Company shall issue
certificates and/or notes and (ii) the affirmative vote of 100% of the Members
of the Company, including all Independent Members, institute proceedings to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency proceedings against it, or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or a substantial
part of its property, or make any assignment for the benefit of creditors, or
admit in writing its inability to pay its debts generally as they become due, or
take any limited liability company action in furtherance of any such action.
Section 6.02. VOTING ON BANKRUPTCY OR INSOLVENCY. All Members, including
each Independent Member, shall be entitled to vote on any proposal of the type
described in Section 6.01. The affirmative vote of 100% of the Members,
including each Independent Member, entitled to vote on such a proposal shall be
required for such a proposal to be adopted.
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. CAPITAL ACCOUNTS. A capital account shall be maintained for
each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. ALLOCATION OF PROFITS AND LOSSES.
The Profits and Losses of the Company shall be determined as of the end of
each Fiscal Year of the Company and shall be allocated to AHFC. Honda Titling
Inc. will have no interest in the Profits and Losses.
Section 7.03. DISTRIBUTIONS.
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(a) The Company shall distribute to AHFC such sums as the Majority Interest
determines to be available for distribution and not required to provide for
current or anticipated Company needs. All distributions shall be made to AHFC.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities, plus (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution that
are superior to the rights of the Members receiving the distribution.
(c) The Company shall not be required to make a distribution to a Member on
account of its interest in the Company if such distribution would violate
Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. EXCULPATION OF LIABILITY. Except as otherwise provided by the
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member shall be obligated personally for any
such debt, obligation or liability of the Company solely by reason of being a
Member of the Company.
Section 8.02. INDEMNIFICATION. The Company hereby agrees to indemnify each
Member, Manager, employee or agent of the Company, and each director, officer,
employee or Affiliate of a Member, who was or is a party or is threatened to be
made a party to a threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and whether formal or
informal (other than an action by or in the right of the Company) by reason of
the fact that such person is or was a Member, employee or agent of the Company
against expenses (including reasonable attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with the action, suit or proceeding.
Section 8.03. FIDUCIARY DUTY. To the extent that, at law or in equity, a
Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company or
to any Member for its good faith reliance on the provisions of this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Members to replace such other duties and liabilities of such
Covered Person.
ARTICLE NINE
TERM OF COMPANY
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Section 9.01. COMMENCEMENT. The term of the Company shall commence upon the
filing of the Certificate with the Delaware Secretary of State. The bankruptcy
of a Member or the occurrence of any other event under Section 18-304 of the Act
shall not cause a Member to cease to be a Member of the Company and upon the
occurrence of such an event, the business of the Company shall continue without
dissolution.
Section 9.02. DISSOLUTION. The Company shall be dissolved and its affairs
wound up upon the occurrence of any of the following events: (i) the sale or
other disposition of substantially all of the assets of the Company; (ii) the
written consent thereto of all of the Members; (iii) the retirement, expulsion
or dissolution of a Member; provided, however, that the Company shall not
dissolve and be wound up if within 90 days after such event, all remaining
Members agree in writing to continue the business of the Company and to admit
one or more Members as necessary or desired; or (iv) the entry of a decree of
judicial dissolution pursuant to Section 18-802 of the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. APPLICATION OF ASSETS. Upon dissolution of the Company, the
Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Interest. Except when the Company
has rated obligations outstanding, the assets of the Company may be liquidated
or distributed in kind, as determined by the Majority Interest, and the same
shall first be applied to the payment of, or to a reasonable reserve for the
payment of, the Company's liabilities (including such provision for contingent,
conditional or unmatured liabilities as the Majority Interest shall deem
appropriate) and then to AHFC. If the Company has rated obligations outstanding,
the Company will not liquidate any assets which are subject to a security
interest in favor of the holders of such rated obligations without the consent
of such holders. If the assets of the Company shall not be sufficient to pay all
of the liabilities of the Company, to the fullest extent permitted by the Act,
no assets of the Company may be sold or disposed of without the written consent
of all of the holders of outstanding securities issued by any trust formed in
respect of a transaction to which the Company is a party. To the extent that
Company assets cannot either be sold without undue loss or readily divided for
distribution in kind to the Members, then the Company may, as determined by the
Majority Interest, convey those assets to a trust or other suitable holding
entity established for the benefit of the Members in order to permit the assets
to be sold without undue loss and the proceeds thereof distributed to the
Members at a future date. The legal form of the holding entity, the identity of
the trustee or other fiduciary and the terms of its governing instrument shall
be determined by the Majority Interest.
Section 10.02. TERMINATION. The Company shall terminate when all the assets
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Members in the
manner provided for in this Article and the Certificate shall have been
cancelled in the manner required by the Act.
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Section 10.03. CLAIMS OF THE MEMBERS. The Members and former Members shall
look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. RESTRICTION ON TRANSFERS OF INTERESTS. No Member may assign,
pledge or otherwise transfer its interest in the Company in whole or part. Any
attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. INVESTMENT REPRESENTATION. The Members represent to each
other and to the Company that they are acquiring their respective interests in
the Company for their own accounts, and without a view to selling or pledging
them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. LIMITATIONS ON AMENDMENT. The Company shall not, without the
prior written consent of each nationally recognized rating agency that has rated
any securities issued and outstanding pursuant to any pooling and servicing
agreement, indenture, trust agreement or other similar agreement entered into by
the Company or any Affiliate of the Company, amend, alter, change or repeal
Article Three, Section 5.08, Article Six or this Section. Subject to the
foregoing limitation, the Company reserves the right to amend, alter, change or
repeal any provision contained in this Agreement in the manner now or hereafter
prescribed by statute or applicable law, and all rights conferred upon Members
herein are granted subject to this reservation.
Section 13.02. BOOKS OF ACCOUNT; REPORTS.
(a) The Company shall keep true and complete books of account and records
of all Company transactions. The books of account and records shall be kept at
the principal office of the Company. The Company shall maintain at such office
(i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such
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Company records shall be available to any Member or its designated
representative during ordinary business hours at the reasonable request and
expense of such Member.
(b) The Company will use its best efforts to furnish, or cause to be
furnished, to Members the following items on the date indicated: (i) annually by
June 30, (A) an annual report consisting of an income statement for the prior
year and a balance sheet as of the year ended, and (B) Member information tax
returns (Schedule K-1), and (ii) as required, such other information concerning
the Company and the property of the Company as may be appropriate in order to
make full and fair disclosure to the Members of the current financial and
operating conditions of the Company.
Section 13.03. BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as the Majority
Interest may designate.
Section 13.04. ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.
Section 13.05. FEDERAL INCOME TAX ELECTIONS. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in such
manner, as the Majority Interest determines to be most favorable to the Members.
The Majority Interest may rely upon the advice of the accountants retained by
the Company as to the availability and effect of all such elections. The
Majority Interest shall elect to treat the Company as a single member entity
formed as an agent of AHFC and not as a separate corporation or partnership for
federal and applicable state income tax purposes
Section 13.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.
Section 13.07. NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto, or
at such other address or telecopy number as such party may hereafter specify for
the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt thereof,
(ii) if given
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by mail, three business days after the time such communication is deposited in
the mails with first-class postage prepaid or (iii) if given by any other means,
when received at the address specified in this Section.
Section 13.08. CONSENT OF MEMBERS. Various provisions of this Agreement
require or permit the consent, agreement, approval or disapproval, written or
otherwise, of the Members or some specified proportion thereof. In any such
case, the Company may give all Members written notice that any Member who does
not indicate its disapproval by written notice to the Company within a specified
period of time (not less than 30 days after mailing of the notice) shall be
deemed to have given its consent or approval to the action or event or to have
made the agreement referred to in the notice. In such event, any Member who does
not indicate its disapproval by written notice to the Company within the time
specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. FURTHER EXECUTION. Upon request of the Company from time to
time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Company or the Members which has been taken in accordance with the provisions of
this Agreement.
Section 13.10. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other person not a party to this Agreement.
Section 13.11. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any security or
the rights of the holders thereof.
Section 13.12. CAPTIONS. All captions are for convenience only, do not form
a substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument. The Company shall have custody of the counterparts
executed in the aggregate by all Members.
Section 13.14. DELAWARE LAW TO CONTROL. This Agreement shall be governed
by, and all questions with respect to the construction of this Agreement and the
rights and liabilities of the parties hereto shall be determined in accordance
with, the internal laws of the State of Delaware, without regard to any
otherwise applicable principles of conflicts of laws.
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IN WITNESS WHEREOF, the parties 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 Member
By: /s/ Y. Kohama
------------------------------------
Name: Y. Kohama
Title: President
HONDA TITLING INC., as Independent Member
By: /s/ Y. Kohama
------------------------------------
Name: Y. Kohama
Title: President
S-1
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Capital Membership
Member's Name and Address Contributions Percentages
- ------------------------- ------------- -----------
<S> <C> <C>
American Honda Finance Corporation
700 Van Ness Avenue
Torrance, California 90501 $ 0 100%
Honda Titling Inc.
700 Van Ness Avenue
Torrance, California 90501 -0- 0%
--- ---
Total $ 0 100%
--- ---
--- ---
</TABLE>
A-1
<PAGE>
EXECUTION COPY
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
HONDA TITLING B L.P.
LIMITED PARTNERSHIP AGREEMENT
Between
HONDA TITLING B LLC,
as General Partner
and
AMERICAN HONDA FINANCE CORPORATION,
as Limited Partner
Dated as of July 17, 1997
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.....................................................1
Section 1.02. Other Definitional Provisions...................................5
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name............................................................6
Section 2.02. Purpose.........................................................6
Section 2.03. Registered Office...............................................6
Section 2.04. Registered Agent................................................6
Section 2.05. Certificate of Limited Partnership and Other Filings............7
Section 2.06. Partners' Addresses.............................................7
Section 2.07. Authorization to Enter into Certain Agreements..................7
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions...................................7
Section 3.02. Additional Capital Contributions................................7
Section 3.03. Withdrawal of Capital...........................................8
Section 3.04. Partnership Interests and Capital Accounts......................8
Section 3.05. Limitation of Limited Partners' Liability.......................8
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners.......9
Section 4.02. Partnership Interests on Admission of Additional Partners......10
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner...................................10
Section 5.02. Specific Powers of General Partner.............................11
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TABLE OF CONTENTS
(CONTINUED)
<TABLE>
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<S> <C>
Section 5.03. Powers Requiring Concurrence of Limited Partners...............11
Section 5.04. Duties of General Partner......................................11
Section 5.05. Compensation of General Partner and Expenses...................12
Section 5.06. Scope of Responsibility........................................12
Section 5.07. Contracts With Affiliates......................................12
Section 5.08. Indemnification................................................12
Section 5.09. Limited Partners' Rights.......................................12
Section 5.10. Partnership Property...........................................13
Section 5.11. Duties of the General Partner and Certain Other Persons........13
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements.....................................................13
Section 6.02. Fiscal Year....................................................13
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections..................................................13
Section 7.02. Maintenance of Partners' Capital Accounts......................13
Section 7.03. Net Income and Net Loss; Cash Flow.............................14
Section 7.04. Special Tax Allocations........................................15
Section 7.05. Curative Allocations...........................................15
Section 7.06. Other Allocation Rules.........................................15
Section 7.07. Allocation of Built-In Gains...................................15
Section 7.08. Distribution of Cash Flow and Other Amounts....................16
Section 7.09. Restricted Distributions.......................................16
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY, DISSOLUTION
OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal..................................................16
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy............16
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(CONTINUED)
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<S> <C>
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests...........................17
Section 9.02. Dealing with General Partner...................................17
Section 9.03. Compliance With Federal and State Law..........................17
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership............................17
Section 10.02. Distribution after Dissolution.................................18
Section 10.03. Dissolution If No General Partner Remaining....................18
Section 10.04. Reserves.......................................................18
Section 10.05. Statement......................................................19
Section 10.06. Distribution Limited to Partnership Assets.....................19
Section 10.07. Termination....................................................19
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney..............................................19
Section 11.02. Governing Law and Arbitration..................................20
Section 11.03. Successors and Assigns.........................................20
Section 11.04. Counterparts; Integration......................................20
Section 11.05. No Partition...................................................20
Section 11.06. Captions.......................................................21
Section 11.07. Severability...................................................21
Section 11.08. Notices........................................................21
Section 11.09. Amendment; Waiver..............................................21
Section 11.10. Further Assurances.............................................21
</TABLE>
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<PAGE>
This Limited Partnership Agreement is entered into as of July 17, 1997,
between Honda Titling B LLC, a Delaware limited liability company, as general
partner (together with any additional or successor general partners admitted to
the Partnership pursuant to this Agreement, the "General Partner"), and American
Honda Finance Corporation, a California corporation, as limited partner
(together with any additional or successor limited partners admitted to the
Partnership pursuant to this Agreement, the "Limited Partner").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Agreement, the
terms set forth below shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6 Del.
C. Sections 17-101, ET SEQ.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership
as an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Partnership Agreement, as the same may be
amended, modified or supplemented from time to time.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors.
"BANKRUPTCY" means the occurrence of any of the events specified in
Section 17-402(a)(4) or (5) of the Act as in effect on the date hereof.
<PAGE>
"BUILT-IN GAIN" means the difference between the initial Gross Asset
Value of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount of
money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived
from the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except that:
(a) the initial Gross Asset Value of an asset contributed by
a Partner to the Partnership shall be the fair market value thereof, as
determined by the General Partner and set forth in Exhibit A hereto;
(b) upon the occurrence of any of the following events, the
Gross Asset Value of the Partnership assets shall be adjusted to equal
their respective current gross fair market values, as determined by the
General Partner, as of the date of such event: (i) the acquisition of
additional interests in the Partnership by any new or existing Partner
in exchange for more than a DE MINIMIS Capital Contribution, (ii) the
distribution by the Partnership to a Partner of more than a DE MINIMIS
amount of cash or other Partnership Property as consideration for an
interest in the Partnership and (iii) the liquidation of the Partnership
within the meaning of the Regulations; provided, however, that any
adjustments pursuant to clauses (i) and (ii) shall be made only if the
General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(c) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be adjusted to equal the gross fair
market value of such asset on the date of distribution as determined by
the General Partner; and
(d) the Gross Asset Value of any Partnership asset shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such asset pursuant to Code Section 734(b) or 743(b), but only
to the extent that such adjustment is taken into account
2
<PAGE>
in determining Capital Accounts pursuant to Section
1.70-1(b)(2)(iv)(m) of the Regulations, Section 7.01 of this Agreement
and clause (d) of the definition of the terms "Net Income" and "Net
Losses"; provided, however, that the Gross Asset Value of an asset
shall not be adjusted pursuant to this subparagraph to the extent that
the General Partner determines that an adjustment pursuant to clause
(b) is necessary or appropriate in connection with a transaction that
otherwise would result in an adjustment pursuant to this subparagraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"IRS" means the Internal Revenue Service and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the Preamble to
this Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a) any income of the Partnership that is exempt from federal
income tax and is not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such
taxable income or loss;
(b) any expenditures of the Partnership that can be neither
deducted nor capitalized (and any expenditures treated as such pursuant
to the Regulations) and that are not otherwise taken into account in
computing Net Income or Net Losses pursuant to this definition shall be
added to such taxable income or loss;
(c) in the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (b) of the definition of the term
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss upon the disposition of such asset for purposes
of computing Net Income or Net Losses;
(d) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property so disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(e) any depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss
with respect to any asset the Gross Asset Value of which differs from
its adjusted basis for federal income tax purposes at the beginning of
the related taxation period shall be in an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation, amortization or other cost recovery deduction for such
year or other period bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such period is zero,
the
3
<PAGE>
depreciation, amortization and other cost recovery deduction with
respect to such asset shall be determined with reference to such
beginning Gross Asset Value using any reasonable method;
(f) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or 743(b) is
required to be taken into account pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations in determining Capital
Accounts other than with respect to a complete liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Net Income or Net Losses; and
(g) notwithstanding the foregoing, any items that are
specifically allocated pursuant to Section 7.05 or 7.06 shall not be
taken into account in computing Net Income or Net Losses.
"TRUST" means Honda Lease Trust, a Delaware business trust.
"TRUST AGREEMENT" means the trust agreement, dated as of the date
specified therein, among the Partnership, Honda Titling A L.P., AHFC, HVT, Inc.
and Delaware Trust Capital Management, Inc., as amended or supplemented from
time to time.
"TRUST INTERESTS" shall have the meaning set forth in Section 2.02(a).
"PARTNER" means a General Partner or a Limited Partner.
"PARTNERSHIP" means Honda Titling B L.P., a Delaware limited
partnership.
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership
of the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of
the Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Trust (including any interest in the UTI or any SUBI that the Partnership may
own from time to time) and any Securitization Trust and all monies due thereon
and paid thereon or in respect thereof; (iii) the right to realize upon any
property that may be deemed to secure any interest described in clause (ii); and
(iv) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, joint stock
company, association, joint venture, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
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"PLEDGE" shall have the meaning set forth in Section 9.01.
"REGULATIONS" means any regulations promulgated by the IRS under the
Code, as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in Section
7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"SECURITIES" shall have the meaning set forth in Section 2.02(b).
"SECURITIZATION" means (i) a financing transaction of any sort
undertaken by a beneficiary (or a special purpose affiliate thereof) under the
Trust that is secured, directly or indirectly, by assets of the Trust or a UTI,
a SUBI or any interest therein, and any financing undertaken in connection with
the issuance and assignment of a UTI or a SUBI and the related certificate
evidencing such UTI or SUBI, as the case may be; (ii) any sale by a beneficiary
(or a special purpose affiliate thereof) under the Trust of an interest in a UTI
or a SUBI; or (iii) any other asset securitization, secured loan or similar
transaction involving assets of the Trust or any beneficial interest therein or
in the Trust.
"SECURITIZATION TRUST" shall have the meaning set forth in Section
2.02(b).
"SUBI" shall have the meaning set forth in Section 2.02(a).
"TRANSFER" shall have the meaning set forth in Section 9.01.
"UTI" shall have the meaning set forth in Section 2.02(a).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
5
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ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. NAME. The name of the limited partnership formed hereby
is Honda Titling B L.P. (the "Partnership").
Section 2.02. PURPOSE. The Partnership is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of the Trust formed pursuant to the
Trust Agreement, which Trust shall be formed (i) to take assignments of, and
serve as record holder of title to, various retail lease contracts, the related
leased vehicles and other related rights and assets as may be conveyed directly
or indirectly to the Trust, and (ii) to issue certificates representing
beneficial interests in the Trust ("Trust Interests"), including undivided trust
interests ("UTIs") and special units of beneficial interest ("SUBIs");
(b) to act as settlor or grantor of one or more additional trusts
(each, a "Securitization Trust") formed pursuant to a trust agreement or other
agreement for the purpose of acquiring Trust Interests, which Securitization
Trust may issue securities (the "Securities") secured by or representing
beneficial interests in the assets of such Securitization Trust;
(c) to acquire, own, hold, sell, transfer, convey, dispose of,
pledge, assign, borrow money against, finance, refinance or otherwise deal with,
publicly or privately and whether with unrelated third parties or with
affiliated entities, Trust Interests created with respect to the Trust and
Securities;
(d) to loan or otherwise invest funds received as a result of the
Partnership's interest in any Trust Interests or Securities and any other
income, as determined by the General Partner from time to time;
(e) to borrow money other than pursuant to clause (c) above, but only
to the extent that such borrowing is permitted by the terms of the transactions
contemplated by clauses (b) and (c) above; and
(f) to engage in any lawful act or activity and to exercise any
powers permitted to limited partnerships organized under the Act that are
incidental to and necessary or convenient for the accomplishment of the
foregoing purposes, including, without limitation, any of the powers that may be
exercised by the General Partner on behalf of the Partnership.
Section 2.03. REGISTERED OFFICE. The registered office of the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
Section 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
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Section 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS.
The General Partner has filed a certificate of limited partnership of the
Partnership (the "Partnership Certificate") substantially in the form attached
hereto as Exhibit C, in the office of the Delaware Secretary of State and shall
file or cause the Partnership Certificate to be filed in such other offices as
may be required by law from time to time. From time to time as required by law,
the General Partner shall execute and acknowledge, and shall cause to be filed
and recorded, appropriate amendments to the Partnership Certificate and any
other filings required of or appropriate with respect to the Partnership. In
particular, but without limitation, in the event that the General Partner deems
it necessary for the Partnership to exist in or qualify to do business under the
laws of one or more jurisdictions in addition to the State of Delaware, the
General Partner shall take such actions as may be necessary to register the
Partnership or to qualify it to do business in each such jurisdiction; provided
that in any such event the Partnership shall at all times continue to be a
limited partnership formed under and governed by the provisions of the Act and
this Agreement.
Section 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of
the General Partner and the Limited Partner are (i) in the case of the General
Partner, Honda Titling B LLC, 700 Van Ness Avenue, Torrance, California 90501,
Attention: General Partner; (ii) in the case of the Limited Partner, American
Honda Finance Corporation, 700 Van Ness Avenue, Torrance, California 90501,
Attention: President; or (iii) such other address as shall be designated by any
of the foregoing in a written notice to the other parties hereto.
Section 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of
the Partnership and the General Partner, on behalf of the Partnership, may, and
is hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the documents relating to the Trust or any
Securitization Trust, and any other documents or agreements contemplated thereby
or specifically described therein, and any and all documents and agreements
deemed necessary or desirable by the General Partner, including, without
limitation, any such documents and agreements with respect to financings secured
by or representing a sale of Trust Interests (including any UTI or SUBI), all
without any further act, vote or approval of any Partner, notwithstanding any
other provision of this Agreement, the Act or other applicable law, rule or
regulation. Such authorization shall not be deemed a restriction on the powers
of the General Partner to enter into other agreements on behalf of the
Partnership.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General
Partner and the Limited Partner has contributed cash and/or marketable
securities as its initial Capital Contribution.
Section 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any General
Partner, no Partner shall be required to make additional Capital Contributions
to the Partnership.
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(b) Notwithstanding any provision herein to the contrary, in the
event any additional Capital Contributions are made by one or both Partners, the
Partnership Interest of each Partner for purposes of all subsequent Cash Flow
distributions shall be recalculated to reflect any such additional Capital
Contributions until such additional Capital Contributions have been recovered by
the contributors thereof through distributions pursuant to this Agreement.
(c) Each Partner's Capital Account shall be increased by an amount
equal to the additional Capital Contributions by such Partner pursuant to
Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
Section 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in
this Agreement, no Partner shall be entitled to demand or receive a return of
any portion of its Capital Contributions from the Partnership without the
consent of the General Partner.
Section 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all
purposes of this Agreement, the "Capital Account" of a Partner as of any date
shall mean the value of the Capital Contribution of such Partner as set forth on
Exhibit A, as the same may be amended from time to time, properly adjusted to
reflect the allocations and distributions provided for in Article Seven and any
additional Capital Contributions of such Partner.
Section 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability whatsoever,
whether to the Partnership, to any of the Partners or to any creditor of the
Partnership, for the debts of the Partnership or any of its losses beyond the
amount contributed by such Limited Partner to the capital of the Partnership;
provided, however, that a Limited Partner shall be obligated to return
distributions wrongfully distributed to it as required by the Act or other
applicable law.
(b) No Limited Partner, in its capacity as a limited partner of the
Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing or
assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to bring
or pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
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(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
(A) the dissolution and winding up of the Partnership
or continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the winding
up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or
other transfer of all or substantially all of the assets of the
Partnership;
(C) the incurrence of indebtedness by the Partnership
other than in the ordinary course of its business;
(D) a change in the nature of the Partnership
business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential
conflict of interest between the Partnership and a General
Partner or a Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the Partnership
not otherwise enumerated in this subsection, but which this
Agreement, or any other agreement, states in writing may be
subject to the approval or disapproval of Limited Partners; or
(J) any other matter required by law or regulation, or
deemed advisable by the General Partner, to be submitted to a
vote of Limited Partners;
(vii) winding up the Partnership; or
(viii) taking any of the actions described in Section 17-303(b)
of the Act or in this Agreement, or exercising any right or power
permitted a limited partner under the Act, which action or exercise is
not specifically enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. AUTHORITY OF GENERAL PARTNER TO ADMIT ADDITIONAL
PARTNERS. The Partners agree that the General Partner may admit Additional
Limited Partners to the Partnership, subject to and in accordance with the
provisions of Section 4.02, Section 5.03 and Article Nine. Additional General
Partners may be admitted to the Partnership, subject to and in accordance with
the provisions of Section 4.02, Section 5.03 and Article Nine, but only if and
to the extent
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that the General Partner would be permitted to transfer its Partnership
Interest under Section 4.02, Section 5.03 and Article Nine.
Section 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL
PARTNERS. The Partnership Interest of each Additional General Partner or
Additional Limited Partner shall be the percentage that the cash amount or
initial Gross Asset Value of capital contributed to the Partnership by such
Additional General Partner or Additional Limited Partner bears to the total
capital of the Partnership immediately following such contribution. Upon
admission of such Additional General Partner or Additional Limited Partner to
the Partnership, the Partnership Interests of the existing Partners shall be
reduced PRO RATA by the amount of such Additional Limited Partner's Partnership
Interest; provided, however, that no Additional General Partner or Additional
Limited Partner may be admitted if such addition would reduce the Partnership
Interest of (i) AHFC, in its capacity as a Limited Partner, below 20% or (ii)
Honda Titling B LLC, in its capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership. No Limited Partner shall participate
in the management or control of the Partnership's business, nor shall it have
the power to act for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner, except as otherwise specifically
provided herein. It is understood and agreed that the General Partner shall
have all of the rights and powers of a general partner provided under the Act
and by this Agreement, and as otherwise provided by law, and any action taken by
the General Partner shall constitute the act of and serve to bind the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the General Partner as set forth in
this Agreement.
(b) Notwithstanding the foregoing, without the affirmative vote of
100% of the constituent members of the General Partner, the General Partner will
not take, or acquiesce in, and only the General Partner (and not any Limited
Partner) shall have any right to take, any action to cause the Partnership to
(i) dissolve or liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy
or insolvency proceedings against it, (iii) file a petition seeking, or consent
to, reorganization or relief under any applicable federal or state law relating
to bankruptcy, (iv) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Partnership or
a substantial part of its property, (v) make any assignment for the benefit of
its creditors, (vi) admit in writing its inability to pay its debts generally as
they become due, (vii) institute or join in any institution of any bankruptcy,
insolvency, liquidation arrangement or reorganization proceeding or other
proceedings under any federal or state law, against any entity in which the
Partnership holds an ownership interest, or (viii) take any corporate action or
partnership action in furtherance of the actions enumerated in clauses (i)
through (vi) above;
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provided, however, that the General Partner shall in no event consent to the
institution of bankruptcy or insolvency proceedings against the Partnership
so long as the Partnership is solvent. In the event of the insolvency of the
Partnership and with regard to any action contemplated by the preceding
sentence, the General Partner will not owe a fiduciary duty to any Limited
Partner (except as may be specifically required by applicable law), but the
General Partner's fiduciary duty with regard to such action shall be owed, to
the fullest extent permitted by applicable law, instead to the creditors of
the Partnership.
(c) The General Partner shall not, and shall not allow the
Partnership otherwise to, commingle any funds or other assets of the Partnership
with the funds or assets of any other Person. The financial and accounting
books and records of the Partnership shall be maintained separate from those of
every other Person. All obligations and indebtedness of any kind incurred by
the Partnership shall be paid from the assets of the Partnership and the
Partnership's assets shall not be used to pay any obligation or indebtedness of
any other Person, other than expenses, obligations or indebtedness of the Trust,
any Securitization Trust and any trustee of any of the foregoing with respect to
transactions of or with respect to such Trust or Securitization Trust.
(d) The General Partner is hereby authorized to delegate to one or
more other Persons any of its rights and powers to manage and control the
business and affairs of the Partnership, including to delegate to agents and
employees of the General Partner or the Partnership, and to delegate by a
management agreement or another agreement with, or otherwise to, other Persons.
Such delegation by the General Partner shall not cause the General Partner to
cease to be a general partner of the Partnership.
Section 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section
5.03, the General Partner is hereby granted the right, power and authority to do
on behalf of the Partnership all things which, in its sole judgment, are
necessary, proper, desirable, convenient or incidental to carry out the duties
and responsibilities of the Partnership under this Agreement.
Section 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS.
Without the written consent of, or ratification by a specific act of, Partners
holding in the aggregate at least 66-2/3% of the Partnership Interests, the
General Partner shall have no authority to, and affirmatively represents and
undertakes that it will not, admit a Person as a Partner under this Agreement,
which in any event shall always be done in accordance with Article Nine.
Section 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall
devote such time to the business of the Partnership as it shall deem necessary
to manage and supervise the business and affairs of the Partnership in an
efficient manner. Subject to the foregoing, the General Partner shall manage
the administration of the Partnership, which administration shall include, but
not be limited to, (a) maintaining customary books and records; (b) preparing or
causing the preparation of the financial statements provided for in this
Agreement; (c) preparing and filing or causing the preparation and filing of
Partnership tax returns; (d) preparing communications from the Partnership to
Limited Partners; (e) filing documents required to be filed by the Partnership;
(f) causing the Partnership to make or revoke the appropriate tax elections
under the Code; (g) functioning as tax matters partner for federal, state and
local tax purposes; and (h) acting on behalf of the Partnership with respect to
(i) the Trust, (ii) any lenders and (iii) any other Person dealing with the
Partnership or any Partnership Property.
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Section 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The
General Partner shall receive no compensation for services to the Partnership as
General Partner; provided, however, that the General Partner shall be entitled
to charge to the Partnership any filing fees incurred in complying with any
requirement imposed on the Partnership by law, reasonable accountants' and
attorneys' fees and all other reasonable expenses arising out of the
administration of the Partnership including, but not limited to, those incurred
in any administrative or judicial proceeding in which the Partnership may become
involved, all of which shall be proper expenses of the Partnership.
Section 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner,
any director, officer, shareholder, agent or employee of the General Partner or
any Affiliate of the General Partner shall be liable, responsible or accountable
for damages or otherwise to the Partnership or any Limited Partner for any
action taken or omitted on behalf of the Partnership within the scope of the
authority conferred upon such Person by this Agreement or by law, unless such
action was taken or omitted fraudulently or in bad faith or constituted willful
misconduct or gross negligence.
Section 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter
into one or more agreements with the General Partner or any Affiliate of the
General Partner to render services to the Partnership. Any service rendered to
the Partnership by the General Partner or any Affiliate thereof shall be on
terms that are fair and reasonable to the Partnership and are, in the aggregate,
no less favorable than those that could be obtained from unaffiliated third
parties for comparable quality.
Section 5.08. INDEMNIFICATION. The Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, agents and employees acting
within the scope of their authority (the "Indemnified Parties") from and against
any loss, expense, damage, liability or injury suffered or sustained by them by
reason of any acts, omissions or alleged acts or omissions arising out of any of
such Person's activities on behalf of the Partnership or in furtherance of the
interests of the Partnership, 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 and including any payments made by one or more Indemnified
Parties, unless the acts, omissions or alleged acts or omissions upon which such
actual or threatened action, proceeding or claim is based were made or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence by one or more of such Indemnified Parties. Any such indemnification
shall only be made from the assets of the Partnership. Reasonable expenses
incurred by any Indemnified Party in connection with such an action, proceeding
or claim shall be paid or reimbursed by the Partnership in advance of the final
disposition of the action, proceeding or claim, upon receipt by the Partnership
of an undertaking by or on behalf of the Indemnified Party to repay such amount
if it shall be determined that the Indemnified Party is not entitled to be
indemnified as authorized in this Section.
Section 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth
in this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
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Section 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be
owned by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership Property in the name of the
Partnership and not in the name of any Partner. Each Partner's interest in the
Partnership shall be personal property for all purposes.
Section 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS.
To the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. STATEMENTS. The General Partner shall send or cause to
be sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
Section 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be
the fiscal year of the initial Limited Partner, which shall end on the last day
of March each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. TAX ELECTIONS. The General Partner shall elect to treat
the Partnership as a single member entity treated as an agent of the Limited
Partner and not as a separate corporation or partnership for federal and
applicable state tax purposes. The General Partner may also elect to make an
election for state tax purposes comparable to the federal tax election under
Section 761(a) of the Code for an exemption from the provisions of Subchapter K
of the Code for the Partnership.
Section 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate
Capital Account shall be established and maintained for each Partner throughout
the full term of the Partnership as follows:
(a) to each Partner's Capital Account there shall be credited such
Partner's initial Capital Contribution, as set forth and agreed to on Exhibit A
hereto, such additional Capital Contributions as such Partner may make from time
to time pursuant to Section 3.02(b), such Partners' distributive share of Net
Income, and any items in the nature of income or gain that are specially
allocated to such Partner pursuant to Section 7.03 or 7.04 and the amount of any
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Partnership liabilities that are assumed by such Partner or secured by any
Partnership Property distributed to such Partner;
(b) from each Partner's Capital Account there shall be subtracted the
amount of cash and the Gross Asset Value of any Partnership Property distributed
to such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Net Losses, any items in the nature of deductions or
losses that are specially allocated to such Partner pursuant to Section 7.03 or
7.04 and the amount of any liabilities of such Partner assumed by the
Partnership or secured by any property contributed by such Partner to the
Partnership;
(c) in the event any interest in the Partnership is transferred in
accordance with the terms of this Agreement, the transferee shall succeed to the
Capital Account, if any, of the transferor to the extent relevant to the
transferred interest; and
(d) in determining the amount of any liability for purposes of
clauses (a) and (b) of this Section, Code Section 752 and any other applicable
provisions of the Code and Regulations shall be taken into account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-l(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities that are secured by contributed or distributed
property or that are assumed by the Partnership or the Partners), are computed
in order to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a material
effect on the amounts distributable to any Partner pursuant to Section 10.02
upon the dissolution of the Partnership. The General Partner shall make all (i)
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes in accordance
with the Regulations, and (ii) appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-l(b).
Section 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04,
7.05 and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to such Partner's Partnership
Interest during the particular year, after taking into account any variations in
the Partner's Partnership Interest during that year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner
for any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
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Section 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the extent
necessary to satisfy the requirements set forth in Sections 1.704-l(b)(2)(ii)(d)
and 1.704-2 of the Regulations for a qualified income offset and partner minimum
gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset is required under Code Section
734(b) or 743(b) in connection with a distribution to a Partner in complete
liquidation of such Partner's interest in the Partnership and the resultant
redetermination pursuant to Regulations Section 1.704-l(b)(2)(iv)(m)(2) or
1.704-l(b)(2)(iv)(m)(4) of the Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be allocated pro rata to the remaining
Partners in accordance with their respective Partnership Interests in the event
Regulations Section 1.704-l(b)(2)(iv)(m)(2) applies, or to the Partner to which
such distribution was made in the event that Regulations Section
1.704-l(b)(2)(iv)(m)(4) applies.
Section 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
by other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section.
Therefore, notwithstanding any other provision of this Article Seven, the
General Partner shall make special offsetting allocations of Partnership income,
gain, loss or deduction in whatever manner it determines appropriate so that,
after such offsetting allocations are made, each Partner's Capital Account
balance is, to the extent possible, equal to the Capital Account balance such
Partner would have had if the Regulatory Allocations had not been made and all
Partnership items were allocated pursuant to Section 7.03. In exercising
discretion under this Section, the General Partner shall take into account
certain future Regulatory Allocations that, although not yet made, are likely to
offset other Regulatory Allocations previously made under Section 7.04(a).
Section 7.06. OTHER ALLOCATION RULES. For purposes of determining
items of Partnership income, gain, loss or deduction or any other items
allocable to any fiscal year or other period, including upon the transfer of a
Partner's interest in the Partnership, such items shall be determined on a
daily, monthly or other basis, as determined by the General Partner, using any
method permissible under Code Section 706 and the Regulations thereunder. To
the extent permitted by the Regulations, the General Partner shall endeavor not
to treat distributions of Cash Flow as having been made from the proceeds of a
nonrecourse liability within the meaning of Section 1.752-2 of the Regulations.
Section 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
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(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
(c) Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
Section 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As
determined by the General Partner employing its reasonable business judgment, to
the extent Partnership Cash Flow is available for distribution at the close of
any fiscal one-month period, such distribution shall be made as soon as
reasonably possible following such period, in the manner provided in Section
7.03, as if such fiscal one-month period were a fiscal year. No such
distribution will be made if it would create a negative Capital Account balance
for a Limited Partner. The General Partner may also refuse to make a
distribution at the end of any fiscal one-month period if such distribution
would impair Reserves set up by the General Partner pursuant to Section 10.04.
Section 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the
General Partner on behalf of the Partnership, shall not make a distribution to
any Partner if such distribution would violate Section 17-607 of the Act or
other applicable law. Notwithstanding Section 17-606 of the Act, no Limited
Partner shall, by virtue of becoming entitled to receive a distribution, have
the status of, or be entitled to the remedies available to, a creditor of the
Partnership with respect to such distribution.
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no
Partner shall have the right to withdraw from the Partnership.
Section 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or
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legal representative or Person or Persons entitled to receive the interest of
such Limited Partner become a substitute Limited Partner, except in
accordance with Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the
General Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of ("Transfer"), or encumber or hypothecate ("Pledge"), all or
any part of its Partnership Interest to any Person. Any purported Transfer or
Pledge, shall be deemed null and void and shall not be recognized by the
Partnership or the other Partners.
Section 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
Section 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of such
representation and warranty shall, and hereby agrees to, indemnify and hold
harmless all other Partners and the Partnership from any claims, demand, suits,
losses, judgments, liabilities and damages, including reasonable attorneys' fees
and disbursements, arising out of or in any way connected with such act or
omission.
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership
shall be dissolved and its affairs wound up upon the earliest to occur of:
(a) March 31, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event that
results in the General Partner ceasing to be a general partner of the
Partnership under the Act, unless within 90 days after the occurrence of such
event, a majority in interest of the remaining Partners (or such greater
percentage in interest as is required by the Act) agrees in writing to continue
the business of the Partnership and to the appointment, effective as of the date
of such event, of one or more additional general partners of the Partnership; or
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(c) the entry of a decree of judicial dissolution pursuant to Section
17-802 of the Act.
Section 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for the
payment) of such debts and liabilities of the Partnership (or Reserves
therefor), including any necessary expenses of liquidation, except any debts,
liabilities and loans that may be due to the Partners, in the order of priority
provided by law;
(b) to the payment (or the making of reasonable provision for the
payment) of any debts and liabilities that may be due to the Partners and to the
payment (or the making of reasonable provision for the payment) of the unpaid
principal balance of and the interest accrued on loans, if any, made by the
Partners to the Partnership; and
(c) each Partner's Capital Account shall be adjusted as provided in
Section 7.02 as if the Partnership Property had been sold for its fair market
value and the resulting gain or loss had been allocated to the respective
Partners, and the assets of the Partnership shall be distributed thereafter to
the Partners in proportion to their respective non-negative Capital Accounts.
All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the Partnership. If
any Limited Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all fiscal years,
including the fiscal year during which such liquidation occurs), such Limited
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
Section 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the
event of the dissolution of the Partnership pursuant to Section 10.01(b) because
no General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
Section 10.04. RESERVES. The General Partner or the liquidating
trustee, as the case may be, shall have the right to set up (either in
connection with the ongoing operations of the Partnership or in the course of
its liquidation) reasonable cash reserves for contingent, conditional or
unmatured liabilities or obligations of the Partnership, capital improvements or
for
18
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any other purpose necessary to accomplish the purposes of the Partnership
("Reserves"), and such Reserves shall be deducted from amounts available for
distribution pursuant to this Agreement.
Section 10.05. STATEMENT. Within a reasonable time following the
completion of the liquidation or distribution of the Partnership Property, the
General Partner or liquidating trustee shall supply to each of the Partners a
statement that shall set forth the assets and the liabilities of the Partnership
and each Partner's Capital Account as of the date of complete liquidation.
Section 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner
shall have any right to demand a distribution in a form other than that decided
upon by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
Section 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact, to make, execute, sign, acknowledge, record and file, in its
name, place and stead and with full power of substitution, on behalf of it and
on behalf of the Partnership, the following:
(i) one or more Partnership Certificates, certificates of
doing business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may be
required to file under the laws of the State of Delaware or any other
jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the
Partnership Certificate or equivalent document and such other
instruments or documents as may be deemed necessary or desirable by the
General Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the instruments
described in subsections (a)(i) and (ii), provided such amendments or
restatements are either required by law or are consistent with this
Agreement or have been authorized by the affected Partners;
19
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(iv) any and all amendments to or restatements of this
Agreement that have been duly adopted by the Partners pursuant to the
terms hereof; and
(v) any and all other instruments as may be deemed necessary
or desirable by the General Partner to carry out fully the provisions of
this Agreement in accordance with its terms.
(b) The grant of authority contained in subsection (a) is a special
Power of Attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power by attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
(c) Notwithstanding the provisions of subsection (a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
Section 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agreement and the rights and liabilities of the
Partners shall be determined in accordance with the internal laws of the State
of Delaware without regard to any otherwise applicable principles of conflicts
of laws. To the fullest extent permitted by law, any controversy or claim
arising out of or relating to this Agreement or the breach thereof shall be
settled by arbitration in accordance with the Rules of the American Arbitration
Association to the extent permitted by the Delaware Uniform Arbitration Act, 10
DEL. C. Section 5701, ET SEQ., and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Section 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law
otherwise provided and subject to Article Nine, this Agreement shall be binding
on and inure to the benefit of each of the Partners, their legal
representatives, heirs, administrators, executors, successors, and assigns.
Section 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be
executed in several counterparts and all counterparts so executed shall
constitute one Agreement binding on all Partners, notwithstanding that all the
Partners are not signatory to the same counterpart. This Agreement, including
Exhibits, constitutes the entire agreement among the Partners pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings of the Partners in connection therewith. No covenant,
representation or condition not expressed in this Agreement shall be binding
upon the Partners hereto or shall affect or be effective to interpret, change or
restrict the provisions of this Agreement.
Section 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of
the Partners hereby irrevocably waives
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any and all rights that it may have to maintain any action for partition of
any of the Partnership Property.
Section 11.06. CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
Section 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
Section 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
Section 11.09. AMENDMENT; WAIVER. No change, termination or waiver of
any of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66-2/3% of the Partnership Interests,
and such additional approvals, if any, have been obtained as are required under
each Securitization.
Section 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested in order to effect the purposes of this Agreement
and to better assure and confirm unto the requesting party its rights, powers
and remedies hereunder.
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IN WITNESS WHEREOF, the initial Partners have executed this Agreement as
of the date first set forth above.
HONDA TITLING B LLC, as General Partner
By: /s/ Y. Kohama
------------------------------
Name: Y. Kohama
AMERICAN HONDA FINANCE CORPORATION, as
Limited Partner
By: /s/ Y. Kohama
------------------------------
Name: Y. Kohama
Title: President
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EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $10
Limited Partner: $990
A-1
<PAGE>
EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE>
EXHIBIT C
CERTIFICATE OF LIMITED PARTNERSHIP
OF
HONDA TITLING B L.P.
This Certificate of Limited Partnership of Honda Titling B L.P. (the
"Partnership") is being executed and filed by the undersigned General Partner
(the "General Partner") to form a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (6 Del.C. Section 17-101 ET SEQ.).
ARTICLE ONE
The name of the limited partnership formed hereby is Honda Titling B L.P.
ARTICLE TWO
The address of the registered office of the Partnership in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801. The name and address of the
registered agent for service of process on the Partnership in the State of
Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
ARTICLE THREE
The name and business address of the General Partner of the Partnership is:
Honda Titling B LLC
700 Van Ness Avenue
Torrance, CA 90501
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this ____
day of _____________, 1997.
Honda Titling B LLC
--------------------------------------
Name:
C-1
<PAGE>
Exhibit 3.8
EXECUTION COPY
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HONDA TITLING B LLC
LIMITED LIABILITY COMPANY AGREEMENT
Between
AMERICAN HONDA FINANCE CORPORATION
and
HONDA TITLING INC.
as Members
Dated as of July 17, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions......................................................1
Section 1.02. Other Definitional Provisions....................................3
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation........................................................3
Section 2.02. Name and Office..................................................3
Section 2.03. Duration.........................................................4
Section 2.04. Registered Office and Registered Agent...........................4
Section 2.05. Execution, Delivery and Filing of Certificate....................4
ARTICLE THREE
PURPOSES
Section 3.01. Purposes.........................................................4
Section 3.02. Power and Authority..............................................5
Section 3.03. Limitations on Powers............................................5
Section 3.04. Company Opportunity..............................................6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Initial Contributions of Members...................6
Section 4.02. Additional Capital Contributions.................................7
Section 4.03. Withdrawals......................................................7
Section 4.04. Borrowings.......................................................7
Section 4.05. Additional Members...............................................7
ARTICLE FIVE
MANAGEMENT
Section 5.01. Powers of the Members............................................7
Section 5.02. Limitations on Powers of Members.................................8
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Section 5.03. Self Dealing.....................................................9
Section 5.04. Standard of Care; Liability......................................9
Section 5.05. Compensation.....................................................9
Section 5.06. Meetings of Members..............................................9
Section 5.07. Consent..........................................................9
Section 5.08. Independent Member..............................................10
Section 5.09. Managers........................................................10
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required.........................................10
Section 6.02. Voting on Bankruptcy or Insolvency..............................11
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts................................................11
Section 7.02. Allocation of Profits and Losses................................11
Section 7.03. Distributions...................................................11
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability........................................12
Section 8.02. Indemnification.................................................12
Section 8.03. Fiduciary Duty..................................................12
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement....................................................12
Section 9.02. Dissolution.....................................................13
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets...........................................13
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Section 10.02. Termination.....................................................13
Section 10.03. Claims of the Members...........................................13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests...........................14
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation.......................................14
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment........................................14
Section 13.02. Books of Account; Reports.......................................14
Section 13.03. Bank Accounts and Investment of Funds...........................15
Section 13.04. Accounting Decisions............................................15
Section 13.05. Federal Income Tax Elections....................................15
Section 13.06. Entire Agreement................................................15
Section 13.07. Notices.........................................................15
Section 13.08. Consent of Members..............................................16
Section 13.09. Further Execution...............................................16
Section 13.10. Binding Effect..................................................16
Section 13.11. Severability....................................................16
Section 13.12. Captions........................................................16
Section 13.13. Counterparts....................................................16
Section 13.14. Delaware Law to Control.........................................16
EXHIBITS
Exhibit A Members; Capital Contributions; Membership Percentages.........A-1
</TABLE>
iii
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This Limited Liability Company Agreement of Honda Titling B LLC, a Delaware
limited liability company (the "Company"), dated as of July 17, 1997, is between
American Honda Finance Corporation ("AHFC"), a California corporation, and Honda
Titling Inc., a Delaware corporation (the "Independent Member" and, together
with AHFC, the "Members").
WHEREAS, the Members desire to form a limited liability company under and
pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware, and
by entering into this Agreement;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to form the Company in accordance with the Delaware
Limited Liability Company Act and subject to the terms and provisions of this
Agreement.
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the following terms
shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act (6 DEL. C.
ss.18-101, eT Seq.), as amended from time to time.
"AFFILIATE" of any person means any other person that (i) directly or
indirectly controls, is controlled by or is under common control with such
person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such person. For purposes of this definition, a person shall be deemed to be
"controlled by" another person if such other person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such person or (ii) to direct or cause the
direction of the management and policies of such person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Liability Company Agreement of the Company
as it may be amended, restated or supplemented from time to time.
"CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.
"CAPITAL CONTRIBUTIONS" means the amount of all cash (whether in the form
of money, a note payable upon demand or a combination thereof) or the agreed
upon value of other property or services contributed by the Members to the
Company.
"CERTIFICATE" means the Certificate of Formation of the Company, including
any restatements or amendments, which are filed with the Delaware Secretary of
State.
<PAGE>
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning set forth in Section 3.01(b).
"COVERED PERSON" shall have the meaning set forth in Section 8.03.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State of
Delaware.
"FISCAL YEAR" means the taxable year of the holder of the Majority
Interest.
"INDEPENDENT DIRECTOR" means an individual who is not (i) a director,
officer or employee of any Affiliate of AHFC (other than any limited or special
purpose corporation or limited liability company similar to the Company); (ii) a
person related to any officer or director of any Affiliate of AHFC; (iii) a
direct or indirect holder of more than 10% of any voting securities of any
Affiliate of AHFC; or (iv) a person related to a direct or indirect holder of
more than 10% of any voting securities of any Affiliate of AHFC.
"INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.
"MAJORITY INTEREST" means the interest in the Company of AHFC.
"MAJORITY OF THE REMAINING MEMBERS" means those Members holding more than
50% of the Membership Percentages and more than 50% of the Capital Account
balances of the Members.
"MANAGERS" means Honda Titling Inc. and such other persons or entities that
may be designated from time to time by the Members as managers of the Company to
perform such functions for the Company as may be determined from time to time by
the Members. A Manager shall be deemed to be a "manager" of the Company within
the meaning of Section 18-101 of the Act.
"MEMBERS" are the persons or entities designated as Members of the Company
in Exhibit A. Any reference to a Member shall, unless the context clearly
requires otherwise, include a reference to its predecessors and successors in
interest.
"MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in Exhibit A.
"ORIGINATION TRUST" means Honda Lease Trust, a Delaware business trust.
"PROFITS" and "LOSSES" mean the Company's taxable income or loss for each
Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits and Losses shall be added to such
taxable income or loss.
"RECEIVABLES" shall have the meaning set forth in Section 3.01(a).
"SECURITIES" shall have the meaning set forth in Section 3.01(d).
2
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"SUBI" shall have the meaning set forth in Section 3.01(c).
"TRUST" shall have the meaning set forth in Section 3.01(c).
"TRUSTEE" shall have the meaning set forth in Section 6.01.
"UTI" shall have the meaning set forth in Section 3.01(c).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to words such as "herein", "hereof" and the like shall refer to
this Agreement as a whole and not to any particular part, article or section
within this Agreement, (iii) references to a section such as "Section 1.01" and
the like shall refer to the applicable section of this Agreement, (iv) the term
"include" and all variations thereof shall mean "include without limitation" and
(v) the term "or" shall include "and/or".
(b) As used in this Agreement and in any certificate or other document made
or delivered pursuant hereto or thereto, accounting terms not defined in this
Agreement or in any such certificate or other document, and accounting terms
partly defined in this Agreement or in any such certificate or other document to
the extent not defined, shall have the respective meanings given to them under
generally accepted accounting principles in effect from time to time. To the
extent that the definitions of accounting terms in this Agreement or in any such
certificate or other document are inconsistent with the meanings of such terms
under such generally accepted accounting principles, the definitions contained
in this Agreement or in any such certificate or other document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. FORMATION. The parties hereby form a limited liability
company pursuant to the provisions of the Act and this Agreement, and agree that
the rights, duties and liabilities of the Members and Managers shall be as
provided in the Act, except as otherwise provided in this Agreement. Pursuant to
Section 18-201(d) of the Act, this Agreement shall become effective as of the
formation of the Company.
Section 2.02. NAME AND OFFICE. The name of the Company shall be Honda
Titling B LLC, and its office shall be located at 700 Van Ness Avenue, Torrance,
California 90501, or such other place as the Members may determine from time to
time.
3
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Section 2.03. DURATION. The term of the Company shall commence on the date
the Certificate is filed in the office of the Delaware Secretary of State and
shall continue until March 31, 2027, unless the Company is dissolved before such
date in accordance with the provisions of this Agreement. The existence of the
Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Act.
Section 2.04. REGISTERED OFFICE AND REGISTERED AGENT. The Company's initial
registered office shall be at the office of its registered agent at Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and the name of its
initial registered agent at such address shall be The Corporation Trust Company.
The registered office and registered agent may be changed from time to time in
accordance with the Act. If the registered agent shall ever resign, the Company
shall promptly appoint a successor.
Section 2.05. EXECUTION, DELIVERY AND FILING OF CERTIFICATE. Y. Kohama, as
an "authorized person" within the meaning of the Act, shall execute, deliver and
file the Certificate with the Delaware Secretary of State.
ARTICLE THREE
PURPOSES
Section 3.01. PURPOSES. The purposes for which the Company is formed are:
(a) to acquire, own, hold, service, sell, assign, pledge, finance,
refinance and otherwise deal with from time to time (i) leases; (ii) installment
obligations; (iii) motor vehicle retail installment sale or conditional sale
contracts; (iv) motor vehicle wholesale inventory loans or sales contracts
secured by, among other things, new or used motor vehicles; (v) dealer rental
car loans or sales contracts including dealer rental car loans or sales
contracts secured by, among other things, new or used motor vehicles; (vi)
receivables, including any right to payment from a person or entity, whether
constituting an account, chattel paper, instrument or general intangible,
arising out of or relating to the sale of new or used motor vehicles or related
products and supplies; (vii) interests in any of the foregoing; and (viii) any
proceeds or other monies due under any of the foregoing, any related fees and
charges, security interests in the foregoing or other property securing payment
thereof and related agreements, instruments, documents and rights (collectively,
the "Receivables");
(b) to acquire, own, hold, service, sell, assign, pledge, finance,
refinance and otherwise deal with Receivables, any collateral securing the
Receivables, related insurance policies, related agreements with affiliates,
agreements with motor vehicle dealers, manufacturers and lessors and other
originators or servicers of Receivables and any proceeds or further rights
associated therewith (collectively, the "Collateral");
4
<PAGE>
(c) to sell, assign, pledge or otherwise transfer Receivables, Collateral,
Securities and notes or beneficial interests in any of the foregoing, undivided
trust interests ("UTIs") and special units of beneficial interests ("SUBIs") to
trusts or other entities established by or on behalf of the Company or one of
its affiliates (each, a "Trust") or to Affiliates of the Company;
(d) to authorize, sell and deliver or participate in the issuance of one or
more series or classes of participation certificates, bonds, notes or other
evidences of interest or indebtedness (collectively, "Securities"), in either
case issued by Trusts;
(e) to acquire Securities, UTIs or SUBIs or other property of a Trust,
including remainder interests in collateral or reserve accounts;
(f) to issue, authorize, sell and deliver Securities, UTIs, SUBIs or other
instruments secured, Collateral collateralized by or evidencing beneficial
interests in Receivables or Securities;
(g) to hold, and to enjoy all of the rights and privileges as a holder or
beneficial owner of, any Securities, Collateral, UTIs or SUBIs;
(h) to negotiate, authorize, execute, deliver or assume or perform the
obligations under any agreement, instrument or document relating to the
activities set forth in subsections (a) through (g) above, including but not
limited to any trust agreement, sale and servicing agreement, pooling and
servicing agreement, indenture, reimbursement agreement, credit support
agreement, receivables purchase agreement, indemnification agreement, placement
agreement or underwriting agreement or any other documents or agreements
contemplated thereby or specifically described therein; and
(i) to engage in any activity and to exercise any powers permitted to
limited liability companies under the laws of the State of Delaware that are
related or incidental to the foregoing and necessary, convenient or advisable to
accomplish the foregoing.
Section 3.02. POWER AND AUTHORITY. The Company shall have the power and
authority to take any and all actions necessary, appropriate, proper, advisable,
incidental or convenient to accomplish or for the furtherance of the purposes
set forth in Section 3.01. The Company may serve as a general partner of Honda
Titling B L.P. The Company, and Honda Titling Inc. or Y. Kohama, on behalf of
the Company, may enter into and perform the Limited Partnership Agreement of
Honda Titling B L.P. without any further act, vote or approval of any Member,
Manager or other person, notwithstanding any other provision of this Agreement,
the Act or other applicable law, rule or regulation.
Section 3.03. LIMITATIONS ON POWERS. Notwithstanding any other provision of
this Agreement and any provision of law, the Company shall not do any of the
following:
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<PAGE>
(a) engage in any business or activity other than as set forth in this
Agreement;
(b) without the unanimous affirmative vote of the Members, (i)
dissolve or liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy
or insolvency proceedings against it, (iii) file a petition seeking or consent
for reorganization or relief under any applicable federal or state law relating
to bankruptcy, (iv) consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or a
substantial part of its property, (v) make any assignment for the benefit of
creditors, (vi) admit in writing its inability to pay its debts generally as
they become due; (vii) institute or join in any institution of, any bankruptcy,
insolvency, liquidation, reorganization or arrangement proceedings or other
proceedings under any federal or state bankruptcy or similar law, against any
entity in which the Company holds an ownership interest; or (viii) take any
limited liability company action in furtherance of the actions set forth in
clauses (i) through (vii) above;
(c) without the unanimous affirmative vote of the Members, take or
cause to be taken any of the actions referred to in clauses (i) through (vii) of
subparagraph (b) above with respect to any entity of which the Company is a
partner or member; or
(d) without the unanimous affirmative vote of the Members, 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.
Section 3.04. COMPANY OPPORTUNITY. No Member need afford the Company or any
other Member the opportunity of investing or otherwise participating in any
other enterprise, regardless of whether such enterprises, but for this sentence,
would be deemed an opportunity of the Company. Nothing in this Agreement shall
prohibit any Member from engaging in any other business activity, whether or not
competitive with, similar to, or within the scope of the activities conducted by
or on behalf of the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.
(a) Each of AHFC and the Independent Member shall be admitted as a member
of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
Exhibit A attached hereto.
6
<PAGE>
(b) The Members shall make the Capital Contributions set forth next to
their names in Exhibit A upon the formation of the Company. No interest shall
accrue on any Capital Contribution made to the Company.
Section 4.02. ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not be
obligated to make additional Capital Contributions except upon the consent of
all Members.
Section 4.03. WITHDRAWALS. No Member shall be entitled to be repaid any
portion of its Capital Account or withdraw from the Company without the consent
of all Members or as otherwise provided in this Agreement.
Section 4.04. BORROWINGS. The Company may borrow sums to be used for any of
the business purposes described in Section 3.01; provided, however, that any
such borrowing shall require the prior approval of a Majority Interest and shall
not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by a Majority Interest. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company which shall be repaid before any distributions to the
Members.
Section 4.05. ADDITIONAL MEMBERS. No additional Members shall be admitted
to the Company without the unanimous consent of the Members.
ARTICLE FIVE
MANAGEMENT
Section 5.01. POWERS OF THE MEMBERS.
(a) The Company shall be managed by its Members. Subject to the other
provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things appropriate for the
accomplishment of the purposes of the Company, including, but not limited to,
(i) acquiring and selling, assigning and transferring installment obligations,
leases, retail installment sale or conditional sale contracts, inventory loans,
motor vehicle wholesale inventory sales contracts, dealer rental car loans or
sales contracts, promissory notes, security agreements and receivables; (ii)
disbursing Company funds for Company purposes; (iii) investing and reinvesting
Company funds; (iv) executing contracts, notes, mortgages and other agreements
and instruments; (v) employing attorneys, accountants, Managers or other agents,
which may include Affiliates of the Company; (vi) paying all Company
obligations; (vii) performing all ministerial acts and duties relating to the
payment of all indebtedness, taxes and assessments due or to become due with
regard to any property of the Company; (viii) purchasing and maintaining
insurance on behalf of the Company against any liability or expense asserted
against or incurred by or on behalf of the Company; (ix) transacting the
Company's business under an assumed name or name other than its name as set
forth in the Certificate; (x) appointing
7
<PAGE>
any Member or other person as agent for service of process on the Company as
required by the law of any jurisdiction in which the Company transacts business;
(xi) commencing, prosecuting or defending any proceeding in the Company's name;
and (xii) doing such other acts as may facilitate the Company's exercise of its
powers; provided, however, that all such acts shall fall within the purposes of
the Company as set forth in Section 3.01.
(b) Notwithstanding anything in this Agreement to the contrary, the Company
shall at all times have at least one Independent Member, and no action of the
type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints the other Members as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice which
may be required by any rule or law and which may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or which may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of its
limited liability company interest in the Company; provided, however, that where
a Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
(d) A copy of the Certificate or amendments to the Certificate will be
provided to each Member upon written request to the Company.
(e) Subject to the other provisions of this Article and Article Six, the
Members shall have full power to act for and to bind the Company to the extent
provided by Delaware law. Every contract, note, mortgage, lease, deed or other
instrument or agreement executed by any Member shall be conclusive evidence that
at the time of execution, the Company was then in existence, that this Agreement
had not theretofore been terminated or amended in any manner and that the
execution and delivery of such instrument was duly authorized by the Members. A
Manager may bind the Company only to the extent authorized by the Members.
Section 5.02. LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any other
provision of this Agreement, no act shall be taken, sum expended, decision made,
obligation incurred or power exercised by any Member on behalf of the Company,
without prior written notice to all Members outlining the proposed action
followed by the written consent of a Majority Interest with respect to: (i) any
mortgage, grant of security interest, pledge or encumbrance of any asset of the
Company; (ii) any merger of the Company with another entity; (iii) a transaction
involving an actual or potential conflict of interest between a Member and the
Company; (iv) any material change in the character of the business and affairs
of the Company; or (v) any act that would contravene in a material respect any
provision of this Agreement or the Act.
8
<PAGE>
Section 5.03. SELF DEALING. Any Member and any Affiliate thereof may deal
with the Company, directly or indirectly, as vendor, purchaser, employee, agent
or otherwise. No contract or other act of the Company shall be voidable or
affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (i) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as a Member, shall be disclosed to all
other Members, (ii) such contract or other act shall be approved by a Majority
Interest unless the same is specifically authorized herein and (iii) the Members
shall not receive or hold any property of the Company as collateral security in
respect of any claim against the Company.
Section 5.04. STANDARD OF CARE; LIABILITY. Each Member and its respective
directors, officers, stockholders and Affiliates shall discharge its duties in
good faith, with the care an ordinarily prudent person in a like position would
exercise under similar circumstances, and in a manner he reasonably believes to
be in the best interests of the Company as required by this Agreement or the
Act. A Member shall not be liable for monetary damages to the Company for any
breach of any such duties except for receipt of a financial benefit to which the
Member is not entitled, voting for or assenting to a distribution to Members in
violation of this Agreement or the Act, or a knowing violation of the law.
Section 5.05. COMPENSATION. The Company shall reimburse each Member for any
reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by the Majority Interest.
Section 5.06. MEETINGS OF MEMBERS. All Members shall be entitled to vote on
any matter submitted to a vote of the Members. Unless a greater vote is required
by the Act or this Agreement, the affirmative vote of a Majority Interest shall
be required. Meetings of Members for the transaction of such business as may
properly come before the Members may be held at such place, on such date and at
such time as the Majority Interest shall determine. Special meetings of Members
for any proper purpose or purposes may be called at any time by the holders of
at least 25% of the Membership Percentages of all Members. The Company shall
deliver or mail written notice stating the date, time, place and purposes of any
meeting to each Member entitled to vote at the meeting. Such notice shall be
given not less than 10 nor more than 60 days before the date of the meeting.
Section 5.07. CONSENT. Any action required or permitted to be taken at an
annual or special meeting of the Members may be taken without a meeting, if the
Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
9
<PAGE>
Section 5.08. INDEPENDENT MEMBER. The Company shall at all times have at
least one Member (each, an "Independent Member") that shall be a special purpose
corporation formed pursuant to a charter or articles of incorporation that (i)
limits its business purposes and activities and (ii) requires the unanimous
consent of its entire board of directors (without any vacancies), including the
affirmative vote of all Independent Directors before such member may approve,
permit or take any action, or cause any action to be taken in respect of the
following actions with respect to any limited liability company of which it is a
member, to (a) institute proceedings to have itself adjudicated bankrupt or
insolvent, (b) consent to the institution of bankruptcy or insolvency
proceedings against it, (c) file a petition seeking, or consent to, such
member's or limited liability company's reorganization or relief under any
applicable federal or state law relating to bankruptcy, (d) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such member or limited liability company or a substantial
part of its property, (e) make any assignment for the benefit of its creditors,
admit in writing its inability to pay its debts generally as they become due,
(f) institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which such member or limited liability company holds an ownership interest or
(g) take any action in furtherance of the actions set forth in clauses (a)
through (f) above.
Section 5.09. MANAGERS. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company, whether arising
in contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Manager shall be obligated personally for any
such debt, obligation, or liability of the Company solely by reason of being a
Manager of the Company;
(b) no Manager shall be required to make any Capital Contribution in the
form of cash to the Company; and
(c) no Manager shall be (i) entitled to receive any Profits or (ii) liable
for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. UNANIMOUS VOTE REQUIRED. Notwithstanding any other provision
of this Agreement and any provision of law that otherwise so empowers the
Company, the Company shall not, without (i) the prior written consent of each
trustee from time to time (each, a "Trustee") under any pooling and servicing
agreement, indenture, trust agreement or similar agreement between the Company,
a Trustee and a servicer, if any, pursuant to which the Company shall issue
certificates and/or notes and (ii) the affirmative vote of 100% of the Members
of the Company, including the Independent Member, institute proceedings to be
adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy
or insolvency
10
<PAGE>
proceedings against it, or file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Company or a substantial
part of its property, or make any assignment for the benefit of creditors, or
admit in writing its inability to pay its debts generally as they become due, or
take any limited liability company action in furtherance of any such action.
Section 6.02. VOTING ON BANKRUPTCY OR INSOLVENCY. All Members, including
each Independent Member, shall be entitled to vote on any proposal of the type
described in Section 6.01. The affirmative vote of 100% of the Members,
including each Independent Member, entitled to vote on such a proposal shall be
required for such a proposal to be adopted.
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. CAPITAL ACCOUNTS. A capital account shall be maintained for
each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. ALLOCATION OF PROFITS AND LOSSES.
The Profits and Losses of the Company shall be determined as of the end of
each Fiscal Year of the Company and shall be allocated to AHFC. Honda Titling
Inc. will have no interest in the Profits and Losses.
Section 7.03. DISTRIBUTIONS.
(a) The Company shall distribute to AHFC such sums as the Majority Interest
determines to be available for distribution and not required to provide for
current or anticipated Company needs. All distributions shall be made to AHFC.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities, plus (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution that
are superior to the rights of the Members receiving the distribution.
11
<PAGE>
(c) The Company shall not be required to make a distribution to a Member on
account of its interest in the Company if such distribution would violate
Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. EXCULPATION OF LIABILITY. Except as otherwise provided by the
Act, the debts, obligations and liabilities of the Company, whether arising in
contract, tort or otherwise, shall be solely the debts, obligations and
liabilities of the Company, and no Member shall be obligated personally for any
such debt, obligation or liability of the Company solely by reason of being a
Member of the Company.
Section 8.02. INDEMNIFICATION. The Company hereby agrees to indemnify each
Member, Manager, employee or agent of the Company, and each director, officer,
employee or Affiliate of a Member, who was or is a party or is threatened to be
made a party to a threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, and whether formal or
informal (other than an action by or in the right of the Company) by reason of
the fact that such person is or was a Member, employee or agent of the Company
against expenses (including reasonable attorneys' fees), judgments, penalties,
fines and amounts paid in settlement actually and reasonably incurred by such
person in connection with the action, suit or proceeding.
Section 8.03. FIDUCIARY DUTY. To the extent that, at law or in equity, a
Member, director, officer, employee or Affiliate of a Member, or a Manager
(each, a "Covered Person") has duties (including fiduciary duties) and
liabilities relating thereto to the Company or to any other Covered Person, a
Covered Person acting under this Agreement shall not be liable to the Company or
to any Member for its good faith reliance on the provisions of this Agreement.
The provisions of this Agreement, to the extent that they restrict the duties
and liabilities of a Covered Person otherwise existing at law or in equity, are
agreed by the Members to replace such other duties and liabilities of such
Covered Person.
ARTICLE NINE
TERM OF COMPANY
Section 9.01. COMMENCEMENT. The term of the Company shall commence upon the
filing of the Certificate with the Delaware Secretary of State. The bankruptcy
of a Member or the occurrence of any other event under Section 18-304 of the Act
shall not cause a Member to cease to be a Member of the Company and upon the
occurrence of such an event, the business of the Company shall continue without
dissolution.
12
<PAGE>
Section 9.02. DISSOLUTION. The Company shall be dissolved and its affairs
wound up upon the occurrence of any of the following events: (i) the sale or
other disposition of substantially all of the assets of the Company; (ii) the
written consent thereto of all of the Members; (iii) the retirement, expulsion
or dissolution of a Member; provided, however, that the Company shall not
dissolve and be wound up if within 90 days after such event, all remaining
Members agree in writing to continue the business of the Company and to admit
one or more Members as necessary or desired; or (iv) the entry of a decree of
judicial dissolution pursuant to Section 18-802 of the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. APPLICATION OF ASSETS. Upon dissolution of the Company, the
Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Interest. Except when the Company
has rated obligations outstanding, the assets of the Company may be liquidated
or distributed in kind, as determined by the Majority Interest, and the same
shall first be applied to the payment of, or to a reasonable reserve for the
payment of, the Company's liabilities (including such provision for contingent,
conditional or unmatured liabilities as the Majority Interest shall deem
appropriate) and then to AHFC. If the Company has rated obligations outstanding,
the Company will not liquidate any assets which are subject to a security
interest in favor of the holders of such rated obligations without the consent
of such holders. If the assets of the Company shall not be sufficient to pay all
of the liabilities of the Company, to the fullest extent permitted by the Act,
no assets of the Company may be sold or disposed of without the written consent
of all of the holders of outstanding securities issued by any trust formed in
respect of a transaction to which the Company is a party. To the extent that
Company assets cannot either be sold without undue loss or readily divided for
distribution in kind to the Members, then the Company may, as determined by the
Majority Interest, convey those assets to a trust or other suitable holding
entity established for the benefit of the Members in order to permit the assets
to be sold without undue loss and the proceeds thereof distributed to the
Members at a future date. The legal form of the holding entity, the identity of
the trustee or other fiduciary and the terms of its governing instrument shall
be determined by the Majority Interest.
Section 10.02. TERMINATION. The Company shall terminate when all the assets
of the Company, after payment of or due provision for all debts, liabilities and
obligations of the Company, shall have been distributed to the Members in the
manner provided for in this Article and the Certificate shall have been
cancelled in the manner required by the Act.
Section 10.03. CLAIMS OF THE MEMBERS. The Members and former Members shall
look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member.
13
<PAGE>
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. RESTRICTION ON TRANSFERS OF INTERESTS. No Member may assign,
pledge or otherwise transfer its interest in the Company in whole or part. Any
attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. INVESTMENT REPRESENTATION. The Members represent to each
other and to the Company that they are acquiring their respective interests in
the Company for their own accounts, and without a view to selling or pledging
them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. LIMITATIONS ON AMENDMENT. The Company shall not, without the
prior written consent of each nationally recognized rating agency that has rated
any securities issued and outstanding pursuant to any pooling and servicing
agreement, indenture, trust agreement or other similar agreement entered into by
the Company or any Affiliate of the Company, amend, alter, change or repeal
Article Three, Section 5.08, Article Six or this Section. Subject to the
foregoing limitation, the Company reserves the right to amend, alter, change or
repeal any provision contained in this Agreement in the manner now or hereafter
prescribed by statute or applicable law, and all rights conferred upon Members
herein are granted subject to this reservation.
Section 13.02. BOOKS OF ACCOUNT; REPORTS.
(a) The Company shall keep true and complete books of account and records
of all Company transactions. The books of account and records shall be kept at
the principal office of the Company. The Company shall maintain at such office
(i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such Company records shall be available to any Member
or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
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(b) The Company will use its best efforts to furnish, or cause to be
furnished, to Members the following items on the date indicated: (i) annually by
June 30, (A) an annual report consisting of an income statement for the prior
year and a balance sheet as of the year ended, and (B) Member information tax
returns (Schedule K-1), and (ii) as required, such other information concerning
the Company and the property of the Company as may be appropriate in order to
make full and fair disclosure to the Members of the current financial and
operating conditions of the Company.
Section 13.03. BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as the Majority
Interest may designate.
Section 13.04. ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.
Section 13.05. FEDERAL INCOME TAX ELECTIONS. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in such
manner, as the Majority Interest determines to be most favorable to the Members.
The Majority Interest may rely upon the advice of the accountants retained by
the Company as to the availability and effect of all such elections. The
Majority Interest shall elect to treat the Company as a single member entity
formed as an agent of AHFC and not as a separate corporation or partnership for
federal and applicable state income tax purposes
Section 13.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.
Section 13.07. NOTICES. Except as provided below, all communications and
notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto, or
at such other address or telecopy number as such party may hereafter specify for
the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt thereof,
(ii) if given by mail, three business days after the time such communication is
deposited in the mails with
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first-class postage prepaid or (iii) if given by any other means, when received
at the address specified in this Section.
Section 13.08. CONSENT OF MEMBERS. Various provisions of this Agreement
require or permit the consent, agreement, approval or disapproval, written or
otherwise, of the Members or some specified proportion thereof. In any such
case, the Company may give all Members written notice that any Member who does
not indicate its disapproval by written notice to the Company within a specified
period of time (not less than 30 days after mailing of the notice) shall be
deemed to have given its consent or approval to the action or event or to have
made the agreement referred to in the notice. In such event, any Member who does
not indicate its disapproval by written notice to the Company within the time
specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. FURTHER EXECUTION. Upon request of the Company from time to
time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Company or the Members which has been taken in accordance with the provisions of
this Agreement.
Section 13.10. BINDING EFFECT. This Agreement shall be binding upon and
shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other person not a party to this Agreement.
Section 13.11. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any security or
the rights of the holders thereof.
Section 13.12. CAPTIONS. All captions are for convenience only, do not form
a substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one instrument. The Company shall have custody of the counterparts
executed in the aggregate by all Members.
Section 13.14. DELAWARE LAW TO CONTROL. This Agreement shall be governed
by, and all questions with respect to the construction of this Agreement and the
rights and liabilities of the
16
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parties hereto shall be determined in accordance with, the internal laws of the
State of Delaware, without regard to any otherwise applicable principles of
conflicts of laws.
17
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IN WITNESS WHEREOF, the parties 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 Member
By: /s/ Y. Kohama
-------------------------------------
Name: Y. Kohama
Title: President
HONDA TITLING INC., as Independent Member
By: /s/ Y. Kohama
-------------------------------------
Name: Y. Kohama
Title: President
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EXHIBIT A
<TABLE>
<CAPTION>
Capital Membership
Member's Name and Address Contributions Percentages
- ------------------------- ------------- -----------
<S> <C> <C>
American Honda Finance Corporation
700 Van Ness Avenue
Torrance, California 90501 $ 0 100%
Honda Titling Inc.
700 Van Ness Avenue
Torrance, California 90501 -0- 0%
--- ---
Total $ 0 100%
--- ---
--- ---
</TABLE>
A-1
<PAGE>
CERTIFICATE OF INCORPORATION
OF
HONDA FUNDING INC.
- --------------------------------------------------------------------------------
ARTICLE ONE
NAME; REGISTERED AGENT; INCORPORATOR
Section 1.01. The name of the corporation is Honda Funding Inc.
(referred to herein as the "Corporation").
Section 1.02. The name and address of the Corporation's registered
office in the State of Delaware is The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, New Castle County, Delaware
19801.
Section 1.03. The incorporator of the Corporation is Y. Kohama, whose
mailing address is 700 Van Ness Avenue, Torrance, CA 90501.
ARTICLE TWO
PURPOSE OF CORPORATION
Section 2.01. Subject to Section 2.02, the purpose of the Corporation
is to engage in any lawful act or activity for which a corporation may be
organized under the General Corporation Law of Delaware.
Section 2.02. Notwithstanding Section 2.01, the purpose of the
Corporation is limited to acting as an Independent Member (as such term is
defined in Section 2.03) of any limited liability company of which American
Honda Finance Corporation ("AHFC") is a member, and activities incident to and
necessary or convenient to accomplish such purpose as set forth in such limited
liability company's limited liability company agreement.
Section 2.03. "Independent Member" means a member of a limited
liability company formed pursuant to the Delaware Limited Liability Company Act
(6 DEL. C. Section 18-101, ET SEQ.) that requires the unanimous consent of its
entire board of directors (without any vacancies), including the affirmative
vote of at least two Independent Directors (as such term is defined in
Section 5.01) before such company may (i) dissolve or liquidate, in whole or in
part, or institute proceedings to have itself or any limited liability company
of which it is a member adjudicated bankrupt or insolvent; (ii) consent to the
institution of bankruptcy or insolvency proceedings
<PAGE>
against it or any limited liability company of which it is a member; (iii)
file a petition seeking, or consent to, reorganization or relief under any
applicable federal or state law relating to bankruptcy; (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or
other similar official as to such corporation or all or a substantial part of
its property; (v) make any assignment for the benefit of its creditors; (vi)
admit in writing its inability to pay its debts generally as they become due;
(vii) institute, or join in any institution of, any bankruptcy, insolvency,
liquidation, reorganization or arrangement proceedings or other proceedings
under any federal or state bankruptcy or similar law, against any entity in
which such corporation holds an ownership interest; or (viii) take any
corporate action in furtherance of the actions set forth in clauses (i)
through (vii) of this paragraph.
ARTICLE THREE
CAPITAL STOCK
Section 3.01. The Corporation shall have one class of stock designated
as Common Stock, and the total number of shares of stock of that class that the
Corporation shall have authority to issue is 100,000 shares of no par stock. No
stockholder shall have any preemptive right to acquire additional shares of the
Corporation.
ARTICLE FOUR
Section 4.01. The duration of the Corporation is perpetual.
ARTICLE FIVE
INDEPENDENT DIRECTORS
Section 5.01. The Corporation shall at all times, except as noted
hereafter, have at least two directors (each, an "Independent Director") each of
whom is not (i) a director, officer or employee of AHFC or any affiliate of AHFC
(other than any limited purpose or special purpose corporation or limited
liability company similar to the Corporation); (ii) a person related to any
officer or director of AHFC or any affiliate of AHFC; (iii) a direct or indirect
holder of more than 10% of any voting securities of AHFC or any affiliate of
AHFC; or (iv) a person related to a direct or indirect holder of more than 10%
of any voting securities of AHFC or any affiliate of AHFC. In the event of the
death, incapacity, resignation or removal of one or more Independent Directors,
such that the number of Independent Directors is reduced below two, the board of
directors of the Corporation (the "Board of Directors") shall promptly appoint
one or more Independent Directors such that the Corporation has at least two
Independent Directors. The Board of Directors shall not vote on any matter
unless and until at least two Independent Directors have been duly appointed to
serve on the Board of Directors.
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ARTICLE SIX
LIMITATIONS ON ACTIONS BY THE CORPORATION
Section 6.01. Notwithstanding any other provision of this certificate
of incorporation of the Corporation (the "Certificate") or any provision of law,
the Corporation shall not do any of the following:
(a) engage in any business or activity other than as set
forth in Article Two; or
(b) without the unanimous affirmative vote of the entire
Board of Directors (without any vacancies), which must include the
affirmative vote of at least two Independent Directors, (i) dissolve or
liquidate, in whole or in part, or institute proceedings to be
adjudicated bankrupt or insolvent; (ii) consent to the institution of
bankruptcy or insolvency proceedings against it; (iii) file a petition
seeking or consent to reorganization or relief under any applicable
federal or state law relating to bankruptcy; (iv) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator
or other similar official as to the Corporation or all or a substantial
part of its property; (v) make any assignment for the benefit of
creditors; (vi) admit in writing its inability to pay its debts
generally as they become due; (vii) institute, or join in any
institution of, any bankruptcy, insolvency, liquidation, reorganization
or arrangement proceedings or other proceedings under any federal or
state bankruptcy or similar law, against any entity in which the
Corporation holds an ownership interest; or (viii) take any corporate
action in furtherance of the actions set forth in clauses (i) through
(vii) of this paragraph; provided, however, that no director may be
required by any stockholder of the Corporation to consent to the
institution of bankruptcy or insolvency proceedings against the
Corporation so long as it is solvent; or
(c) without the unanimous affirmative vote of the entire
Board of Directors (without any vacancies), which must include the
affirmative vote of at least two Independent Directors, take or cause to
be taken any of the actions referred to in clauses (i) through (vii) of
subparagraph (b) above with respect to any entity of which the
Corporation is a partner or a member or any entity of which such partner
or member is, in turn, a partner or member (each such entity being
referred to as a "Downstream Entity"); or
(d) without the unanimous affirmative vote of the entire
Board of Directors (without any vacancies), merge or consolidate with
any other corporation, company or entity, sell all or substantially all
of its assets or acquire all or substantially all of the assets, capital
stock or other ownership interest of any other corporation, company or
entity; or
(e) without the unanimous affirmative vote of the entire
Board of Directors (without any vacancies), which must include the
affirmative vote of at least two Independent Directors, (i) amend,
modify or terminate or cause to be amended, modified or terminated, the
organizational documents of any Downstream Entity, (ii) cause any
Downstream Entity to hold property other than in such entity's own name,
(iii) take any
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action or cause to be taken any action with respect to the dissolution
or winding up of any Downstream Entity, except as permitted in
such Downstream Entity's organizational documents, or elect not to
continue such Downstream Entity's business; or
(f) take or cause to be taken any action not otherwise
permitted under the organizational documents of any Downstream Entity.
ARTICLE SEVEN
INTERNAL AFFAIRS
Section 7.01. The Corporation shall insure at all times that (i) it
maintains separate corporate records and books of account from those of AHFC,
and (ii) except as permitted by contract between the Corporation and AHFC with
respect to deposits in certain accounts of collections of receivables of AHFC,
or any of its subsidiaries, that were not sold to the Corporation pursuant to an
agreement between them, which will be promptly remitted to the owner thereof,
none of the Corporation's assets will be commingled with those of AHFC or any of
its affiliates.
ARTICLE EIGHT
AMENDMENTS
Section 8.01. The Corporation reserves the right at any time, and from
time to time, to amend, alter, change or repeal any provision contained in this
Certificate, and other provisions authorized by the laws of the State of
Delaware may be added in the manner now or hereafter prescribed by law; and all
rights, preferences and privileges of whatsoever nature conferred on any person
by this Certificate in its present form or as hereafter amended are granted
subject to the rights reserved in this Article. The Corporation shall not
amend, alter, change or repeal any provision of Article Two or Articles Five
through Eight (the "Restricted Articles"), as the case may be; provided, that
the Corporation shall not amend, alter, change or repeal any Article so as to be
inconsistent with the Restricted Articles except by unanimous affirmative vote
of the Board of Directors (before receipt of payment for stock) or the
stockholders (subsequent to receipt of payment for stock).
Section 8.02. The stockholders entitled to vote shall have the power to
adopt new bylaws or amend, alter, change or repeal existing bylaws. The Board
of Directors shall also have the power to adopt new bylaws, or amend, alter,
change or repeal existing bylaws, but such power shall not divest or otherwise
limit the power of the stockholders entitled to vote to adopt, amend, alter,
change or repeal any bylaws.
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ARTICLE NINE
LIABILITY OF DIRECTORS FOR MONETARY DAMAGES
Section 9.01. A director of this Corporation shall not be liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except to the extent such exemption from liability or
limitation thereof is not permitted under the General Corporation Law of
Delaware as the same exists or may hereafter be amended.
Any repeal or modification of the foregoing paragraph shall not
adversely affect any right or protection of a director of the Corporation
existing hereunder with respect to any act or omission occurring prior to such
repeal or modification.
ARTICLE TEN
MISCELLANEOUS
Section 10.01. Unless and except to the extent otherwise provided in
the bylaws of the Corporation, the election of directors of the Corporation need
not be by written ballot.
* * * * *
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The undersigned incorporate hereby acknowledges that this Certificate of
Incorporation is his act and deed on this 1st day of February, 1999.
/s/ Y. KOHAMA
------------------------
Y. Kohama
Incorporator
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BYLAWS
HONDA FUNDING INC.,
a Delaware corporation
<PAGE>
ARTICLE ONE
OFFICES
Section 1.1. PRINCIPAL EXECUTIVE OFFICE. The principal executive
office of Honda Funding Inc. (the "Corporation") shall be at 700 Van Ness
Avenue, Torrance, CA 90501 or such other location that the board of directors
(the "Board of Directors" or the "Board") shall fix from time to time.
Section 1.2. OTHER OFFICES. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors or the President may from time to time determine or the business of
the Corporation may require.
ARTICLE TWO
STOCKHOLDERS
Section 2.1. ANNUAL MEETINGS. An annual meeting of stockholders shall
be held for the election of directors at such date, time and place, either
within or without the State of Delaware, as may be designated by resolution of
the Board of Directors from time to time, but, in any event, such meeting shall
be held within 20 weeks after the close of the fiscal year of the Corporation.
Any other proper business may be transacted at the annual meeting.
Section 2.2. SPECIAL MEETINGS. Special meetings of stockholders for
any purpose or purposes may be called at any time by the Board of Directors, or
by a committee of the Board of Directors that has been duly designated by the
Board of Directors and whose powers and authority, as expressly provided in a
resolution of the Board of Directors, include the power to call such meetings,
but such special meetings may not be called by any other person or persons.
Section 2.3. NOTICE OF MEETINGS. Whenever stockholders are required or
permitted to take any action at a meeting, a written notice of the meeting shall
be given that shall state the place, date and hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the meeting is
called. Unless otherwise provided by law, the certificate of incorporation of
the Corporation (the "Certificate of Incorporation") or these Bylaws, the
written notice of any meeting shall be given not less than ten nor more than 60
days before the date of the meeting to each stockholder entitled to vote at such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to each stockholder at his
address as it appears on the records of the Corporation.
Section 2.4. ADJOURNMENTS. Any meeting of stockholders, annual or
special, may adjourn from time to time to reconvene at the same or some other
place, and notice need not be given of any such adjourned meeting if the time
and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than 30 days, or if after the adjournment a new record date is fixed for
the adjourned
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meeting, notice of the adjourned meeting shall be given to each stockholder
of record entitled to vote at the meeting.
Section 2.5. QUORUM. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, at each meeting of stockholders
the presence in person or by proxy of the holders of shares of stock having a
majority of the votes which could be cast by the holders of all outstanding
shares of stock entitled to vote at the meeting shall be necessary and
sufficient to constitute a quorum. In the absence of a quorum, the stockholders
so present may, by majority vote, adjourn the meeting from time to time in the
manner provided in Section 2.4 until a quorum shall attend. Shares of its own
stock belonging to the Corporation or to another corporation, if a majority of
the shares entitled to vote in the election of directors of such other
corporation is held, directly or indirectly, by the Corporation, shall neither
be entitled to vote nor be counted for quorum purposes; provided, however, that
the foregoing shall not limit the right of the Corporation to vote stock,
including but not limited to its own stock, held by it in a fiduciary capacity.
Section 2.6. ORGANIZATION. Meetings of stockholders shall be presided
over by the Chairman of the Board, if any, or in his absence by the Vice
Chairman of the Board, if any, or in his absence by the President, or in his
absence by a Vice President, or in the absence of the foregoing persons by a
chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting. The chairman of the
meeting shall announce at the meeting of stockholders the date and time of the
opening and the closing of the polls for each matter upon which the stockholders
will vote.
Section 2.7. VOTING; PROXIES. Except as otherwise provided by the
Certificate of Incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
him which has voting power upon the matter in question. Each stockholder
entitled to vote at a meeting of stockholders or to express consent or dissent
to corporate action in writing without a meeting may authorize another person or
persons to act for him by proxy, but no such proxy shall be voted or acted upon
after three years from its date, unless the proxy provides for a longer period.
A proxy shall be irrevocable if it states that it is irrevocable and if, and
only as long as, it is coupled with an interest sufficient in law to support an
irrevocable power. A stockholder may revoke any proxy which is not irrevocable
by attending the meeting and voting in person or by filing an instrument in
writing revoking the proxy or by delivering a proxy in accordance with
applicable law bearing a later date to the Secretary of the Corporation. Voting
at meetings of stockholders, unless otherwise required by law, need not be
conducted by inspectors of election unless so determined by the holders of
shares of stock having a majority of the votes which could be cast by the
holders of all outstanding shares of stock entitled to vote thereon which are
present in person or by proxy at such meeting. At all meetings of stockholders
for the election of directors a plurality of the votes cast shall be sufficient
to elect. All other elections and questions shall, unless otherwise provided by
law, the Certificate of Incorporation or these Bylaws, be decided by the vote of
the holders of shares of stock having a majority of the votes which could be
cast by the holders of all shares of stock outstanding and entitled to vote
thereon.
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Section 2.8. FIXING DATE FOR DETERMINATION OF STOCKHOLDERS OF RECORD.
In order that the Corporation may determine the stockholders entitled to notice
of or to vote at any meeting of stockholders or any adjournment thereof, or to
express consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect of any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors and which record date, in the case of (i) determination of
stockholders entitled to vote at any meeting of stockholders or adjournment
thereof, shall, unless otherwise required by law, not be more than 60 nor less
than ten days before the date of such meeting; (ii) determination of
stockholders entitled to express consent to corporate action in writing without
a meeting, shall not be more than ten days from the date upon which the
resolution fixing the record date is adopted by the Board of Directors; and
(iii) any other action, shall not be more than 60 days prior to such other
action. If no record date is fixed, the record date for (i) determining
stockholders entitled to notice of or to vote at a meeting of stockholders shall
be at the close of business on the day next preceding the day on which notice is
given, or, if notice is waived, at the close of business on the day next
preceding the day on which the meeting is held; (ii) determining stockholders
entitled to express consent to corporate action in writing without a meeting
when no prior action of the Board of Directors is required by law, shall be the
first date on which a signed written consent setting forth the action taken or
proposed to be taken is delivered to the Corporation in accordance with
applicable law, or, if prior action by the Board of Directors is required by
law, shall be at the close of business on the day on which the Board of
Directors adopts the resolution taking such prior action; and (iii) determining
stockholders for any other purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating thereto. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the Board of Directors may fix a new record date for the adjourned
meeting.
Section 2.9. LIST OF STOCKHOLDERS ENTITLED TO VOTE. The Secretary
shall prepare and make, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open
to the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present. Upon the
willful neglect or refusal of the directors to produce such a list at any
meeting for the election of directors, they shall be ineligible for election to
any office at such meeting. The stock ledger shall be the only evidence as to
who are the stockholders entitled to examine the stock ledger, the list of
stockholders or the books of the Corporation, or to vote in person or by proxy
at any meeting of stockholders.
Section 2.10. ACTION BY CONSENT OF STOCKHOLDERS. Unless otherwise
restricted by the Certificate of Incorporation, any action required or omitted
to be taken at any annual or special meeting of the stockholders may be taken
without a meeting, without prior notice and without a
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vote, if a consent or consents in writing, setting forth the action so taken,
shall be signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon were present
and voted and shall be delivered by hand or by certified or registered mail,
return receipt requested, to the Corporation by delivery to its registered
office in the State of Delaware, its principal place of business, or an
officer or agent of the Corporation having custody of the book in which
proceedings of meetings of stockholders are recorded. Every written consent
shall bear the date of signature of each stockholder who signs the consent
and no written consent shall be effective to take the corporate action
referred to therein unless, within 60 days of the earliest dated consent
delivered in the manner required by this Section to the Corporation, written
consents signed by a sufficient number of holders to take action are
delivered to the Corporation by delivery to its registered office in the
State of Delaware, its principal place of business or an officer or agent of
the Corporation having custody of the book in which proceedings of meetings
of stockholders are recorded. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent shall be
given to those stockholders who have not consented in writing and who, if the
action had been taken at a meeting, would have been entitled to notice of the
meeting if the record date for such meeting had been the date that written
consents signed by a sufficient number of holders to take the action were
delivered to the Corporation as provided in this Section.
Section 2.11. CONDUCT OF MEETINGS. The Board of Directors may adopt by
resolution such rules and regulations for the conduct of the meeting of
stockholders as it shall deem appropriate. Except to the extent inconsistent
with such rules and regulations as adopted by the Board of Directors, the
chairman of any meeting of stockholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts as, in
the judgment of such chairman, are appropriate for the proper conduct of the
meeting. Such rules, regulations or procedures, whether adopted by the Board of
Directors or prescribed by the chairman of the meeting, may include, without
limitation, the following: (i) the establishment of an agenda or order of
business for the meeting; (ii) rules and procedures for maintaining order at the
meeting and the safety of those present; (iii) limitations on attendance at or
participation in the meeting to stockholders of record of the Corporation, their
duly authorized and constituted proxies or such other persons as the chairman of
the meeting shall determine; (iv) restrictions on entry to the meeting after the
time fixed for the commencement thereof; and (v) limitations on the time
allotted to questions or comments by participants. Unless and to the extent
determined by the Board of Directors or the chairman of the meeting, meetings of
stockholders shall not be required to be held in accordance with the rules of
parliamentary procedure.
ARTICLE THREE
BOARD OF DIRECTORS
Section 3.1. NUMBER; QUALIFICATIONS. The Board of Directors shall
consist of not less than five nor more than nine members, the number thereof to
be determined from time to time by resolution of the Board of Directors.
Directors need not be stockholders. The Board of Directors shall initially be
comprised of five directors.
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Section 3.2. ELECTION; RESIGNATION; REMOVAL; VACANCIES. The Board of
Directors shall initially consist of the persons named as directors by the
incorporator of the Corporation, and each director so elected shall hold office
until the first annual meeting of stockholders or until his successor is elected
and qualified. At the first annual meeting of stockholders and at each annual
meeting thereafter, the stockholders shall elect directors, each of whom shall
hold office for a term of one year or until his successor is elected and
qualified. Any director may resign at any time upon written notice to the
Corporation. Any director, or the entire Board of Directors, may be removed,
with or without cause, by the holders of a majority of the shares then entitled
to vote. Any newly created directorship or any vacancy occurring in the Board
of Directors for any cause may be filled by a majority of the remaining members
of the Board of Directors, even if such majority is less than a quorum, or by a
plurality of the votes cast at a meeting of stockholders, and each director so
elected shall hold office until the expiration of the term of office of the
director he has replaced or until his successor is elected and qualified.
Section 3.3. REGULAR MEETINGS. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board of Directors may from time to time determine, and if
so determined, notices thereof need not be given.
Section 3.4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the President, any Vice President, the Secretary or
by any member of the Board of Directors. Notice of a special meeting of the
Board of Directors shall be given by the person or persons calling the meeting
at least 24 hours before the special meeting.
Section 3.5. TELEPHONIC MEETINGS PERMITTED. Members of the Board of
Directors or of any committee designated by the Board of Directors may
participate in a meeting thereof by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting pursuant to this
Section shall constitute presence in person at such meeting.
Section 3.6. QUORUM; VOTE REQUIRED FOR ACTION. At all meetings of the
Board of Directors, a majority of the whole Board of Directors shall constitute
a quorum for the transaction of business. Except in cases in which the
Certificate of Incorporation or these Bylaws otherwise provide, the vote of a
majority of the directors present at a meeting at which a quorum is present
shall be the act of the Board of Directors.
Section 3.7. ORGANIZATION. Meetings of the Board of Directors shall be
presided over by the Chairman of the Board, if any, or in his absence by the
Vice Chairman of the Board, if any, or in his absence by the President, or in
their absence by a chairman chosen at the meeting. The Secretary shall act as
secretary of the meeting, but in his absence the chairman of the meeting may
appoint any person to act as secretary of the meeting.
Section 3.8. INFORMAL ACTION BY DIRECTORS. Unless otherwise restricted
by the Certificate of Incorporation or these Bylaws, any action required or
permitted to be taken at any meeting of the Board of Directors, or of any
committee thereof, may be taken without a meeting if all members of the Board of
Directors or such committee, as the case may be, consent thereto in
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writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors or such committee.
ARTICLE FOUR
COMMITTEES
Section 4.1. COMMITTEES. The Board of Directors may designate one or
more committees (each, a "Committee") to consist of one or more of the directors
of the Corporation. The Board may designate one or more directors as alternate
members of any Committee, who may replace any absent or disqualified members at
any meeting of the Committee. In the absence or disqualification of a member of
a Committee, the member or members present at any meeting and not disqualified
from voting, whether or not such member or members constitute a quorum, may
unanimously appoint another member of the Board of Directors to act at the
meeting in the place of any such absent or disqualified member. Any Committee
shall have and may exercise all the powers and authority of the Board of
Directors in the management of the business and affairs of the Corporation, and
may authorize the seal of the Corporation to be affixed to all papers which may
require it; but no such Committee shall have power or authority in reference to
the following matters: (i) approving or adopting, or recommending to the
stockholders, any action or matters expressly required by the Delaware General
Corporation Law to be submitted to stockholders for approval or (ii) adopting,
amending or repealing any Bylaw of the Corporation.
Section 4.2. COMMITTEE RULES. Unless the Board of Directors otherwise
provides, each Committee designated by the Board of Directors may make, alter
and repeal rules for the conduct of its business. In the absence of such rules,
each Committee shall conduct its business in the same manner as the Board of
Directors conducts its business pursuant to Article Three.
ARTICLE FIVE
OFFICERS
Section 5.1. EXECUTIVE OFFICERS; ELECTION; QUALIFICATIONS; TERM OF
OFFICE; RESIGNATION; REMOVAL; VACANCIES. The Board of Directors shall elect a
President and Secretary, and it may, if it so determines, choose a Chairman of
the Board and a Vice Chairman of the Board from among its members. The Board of
Directors may also choose one or more Vice Presidents, one or more Assistant
Secretaries, a Treasurer and one or more Assistant Treasurers. Each such
officer shall hold his office until the earliest of his death, resignation,
retirement, disqualification or removal. Any officer may resign at any time
upon written notice to the Corporation. The Board of Directors may remove any
officer with or without cause at any time. Any number of offices may be held by
the same person. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise may be filled for the unexpired portion
of the term by the Board of Directors at any regular or special meeting.
Section 5.2. POWERS AND DUTIES OF EXECUTIVE OFFICERS. The officers of
the Corporation shall have such powers and duties in the management of the
Corporation as may be prescribed in
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a resolution by the Board of Directors and, to the extent not so provided, as
generally pertain to their respective offices, subject to the control of the
Board of Directors. The Board of Directors may require any officer, agent or
employee to give security for the faithful performance of his duties.
ARTICLE SIX
STOCK
Section 6.1. CERTIFICATES. Every holder of stock shall be entitled to
have a certificate signed by or in the name of the Corporation by the Chairman
or Vice Chairman of the Board of Directors, if any, or the President or a Vice
President, and by the Treasurer or an Assistant Treasurer, or the Secretary or
an Assistant Secretary, of the Corporation certifying the number of shares in
the Corporation owned by him. Any of or all the signatures on the certificate
may be by facsimile. In case any officer, transfer agent or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
Section 6.2. LOST, STOLEN OR DESTROYED STOCK CERTIFICATES; ISSUANCE OF
NEW CERTIFICATES. The Corporation may issue a new certificate of stock or
uncertificated shares in the place of any certificate theretofore issued by it
and alleged to have been lost, stolen or destroyed, and the Corporation may
require the owner or the legal representative of the owner of such certificate
to give the Corporation a bond sufficient to indemnify the Corporation against
any claim that may be made against it on account of the alleged loss, theft or
destruction of such certificate or the issuance of such new certificate or
uncertificated shares.
ARTICLE SEVEN
INDEMNIFICATION
Section 7.1. RIGHT TO INDEMNIFICATION. The Corporation shall indemnify
and hold harmless, to the fullest extent permitted by applicable law, any person
who was or is made or is threatened to be made a party or is otherwise involved
in any action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he or a person for
whom he is the legal representative is or was a director, officer, agent or
employee of the Corporation or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, enterprise or nonprofit entity,
including service with respect to employee benefit plans, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by that person (collectively, "Expenses"). The
Corporation shall indemnify any such person in connection with a Proceeding (or
part thereof) initiated by such person only if the Proceeding (or part thereof)
was authorized by the Board of Directors.
Section 7.2. PREPAYMENT OF EXPENSES. The Corporation may, in its
discretion, pay the Expenses incurred in defending any Proceeding in advance of
its final disposition; provided,
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however, that the payment of Expenses incurred by a director or officer in
advance of the final disposition of the Proceeding shall be made only upon
receipt of an undertaking by the director or officer to repay all amounts
advanced should it be ultimately determined that the director or officer is
not entitled to be indemnified under this Article or otherwise.
Section 7.3. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article shall not be exclusive of any other rights which such
person may have or hereafter acquire under the Certificate of Incorporation,
these Bylaws, any agreement, a vote of stockholders or disinterested directors,
or otherwise, both as to action in such person's official capacity and as to
action in another capacity while holding such office.
Section 7.4. OTHER INDEMNIFICATION. The Corporation's obligation, if
any, to indemnify any person who was or is serving at its request as a director,
officer, employee or agent of another corporation, limited liability company,
partnership, joint venture, trust, enterprise or nonprofit entity shall be
reduced by any amount such person may collect as indemnification from such other
corporation, limited liability company, partnership, joint venture, trust,
enterprise or nonprofit enterprise.
Section 7.5. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
ARTICLE EIGHT
LIMITATIONS ON CERTAIN ACTIONS BY THE CORPORATION
Notwithstanding any other provision of these Bylaws, the
Certificate of Incorporation and any provision of law, the Corporation shall not
do any of the following without the affirmative vote of a majority of the
members of the board of directors of the Corporation (which must include the
affirmative vote of all duly appointed Independent Directors, as such term is
defined in the Certificate of Incorporation): (i) dissolve or liquidate, in
whole or in part, or institute proceedings to be adjudicated bankrupt or
insolvent, (ii) consent to the institution of bankruptcy or insolvency
proceedings against it, (iii) file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (iv) 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, (v) make a general assignment for the benefit
of creditors, (vi) admit in writing its inability to pay its debts generally as
they become due, or (vii) take any corporate action in furtherance of the
actions set forth in clauses (i) through (vi) of this section; provided,
however, that no director may be required by any stockholder of the Corporation
to consent to the institution of bankruptcy or insolvency proceedings against
the Corporation so long as the Corporation is solvent.
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ARTICLE NINE
MISCELLANEOUS
Section 9.1. FISCAL YEAR. The fiscal year of the Corporation shall be
April 1 through March 31.
Section 9.2. SEAL. The corporate seal shall have the name of the
Corporation inscribed thereon and shall be in such form as may be approved from
time to time by the Board of Directors.
Section 9.3. WAIVER OF NOTICE OF MEETINGS OF STOCKHOLDERS, DIRECTORS
AND COMMITTEES. Any written waiver of notice, signed by the person entitled to
notice, whether before or after the time stated therein, shall be deemed
equivalent to notice. Attendance of a person at a meeting shall constitute a
waiver of notice of such meeting, except when the person attends a meeting for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of any
regular or special meeting of the stockholders, directors or a Committee need be
specified in any written waiver of notice.
Section 9.4. INTERESTED DIRECTORS: QUORUM. No contract or transaction
between the Corporation and one or more of its directors or officers, or between
the Corporation and any other corporation, limited liability company,
partnership, association or other organization in which one or more of its
directors or officers are directors or officers, or have a financial interest,
shall be void or voidable solely for this reason, or solely because the director
or officer is present at or participates in the meeting of the Board of
Directors or Committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if (i) the
material facts as to his relationship or interest and as to the contract or
transaction are disclosed or are known to the Board of Directors or the
Committee, and the Board of Directors or Committee in good faith authorizes the
contract or transaction by the affirmative vote of a majority of the
disinterested directors, even though the disinterested directors may be less
than a quorum; (ii) the material facts as to his relationship or interest and as
to the contract or transaction are disclosed or are known to the stockholders
entitled to vote thereon, and the contract or transaction is specifically
approved in good faith by vote of the stockholders; or (iii) the contract or
transaction is fair as to the Corporation as of the time it is authorized,
approved or ratified by the Board of Directors, a Committee or the stockholders.
Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a Committee which authorizes
the contract or transaction.
Section 9.5. FORM OF RECORDS. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on or be in the form of punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time.
* * * * *
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HONDA TITLING D L.P.
LIMITED PARTNERSHIP AGREEMENT
Between
HONDA TITLING D LLC,
as General Partner
and
AMERICAN HONDA FINANCE CORPORATION,
as Limited Partner
Dated as of May __, 1999
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions................................................. 1
Section 1.02. Other Definitional Provisions............................... 5
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. Name........................................................ 6
Section 2.02. Purpose..................................................... 6
Section 2.03. Registered Office........................................... 6
Section 2.04. Registered Agent............................................ 7
Section 2.05. Certificate of Limited Partnership and Other Filings........ 7
Section 2.06. Partners' Addresses......................................... 7
Section 2.07. Authorization to Enter into Certain Agreements.............. 7
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. Initial Capital Contributions............................... 7
Section 3.02. Additional Capital Contributions............................ 8
Section 3.03. Withdrawal of Capital....................................... 8
Section 3.04. Partnership Interests and Capital Accounts.................. 8
Section 3.05. Limitation of Limited Partners' Liability................... 8
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. Authority of General Partner to Admit Additional Partners... 10
Section 4.02. Partnership Interests on Admission of Additional Partners... 10
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ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. Authority of General Partner................................ 10
Section 5.02. Specific Powers of General Partner.......................... 11
Section 5.03. Powers Requiring Concurrence of Limited Partners............ 11
Section 5.04. Duties of General Partner................................... 11
Section 5.05. Compensation of General Partner and Expenses................ 12
Section 5.06. Scope of Responsibility..................................... 12
Section 5.07. Contracts With Affiliates................................... 12
Section 5.08. Indemnification............................................. 12
Section 5.09. Limited Partners' Rights.................................... 13
Section 5.10. Partnership Property........................................ 13
Section 5.11. Duties of the General Partner and Certain Other Persons..... 13
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. Statements.................................................. 13
Section 6.02. Fiscal Year................................................. 13
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. Tax Elections............................................... 13
Section 7.02. Maintenance of Partners' Capital Accounts................... 14
Section 7.03. Net Income and Net Loss; Cash Flow.......................... 15
Section 7.04. Special Tax Allocations..................................... 15
Section 7.05. Curative Allocations........................................ 15
Section 7.06. Other Allocation Rules...................................... 15
Section 7.07. Allocation of Built-In Gains................................ 16
Section 7.08. Distribution of Cash Flow and Other Amounts................. 16
Section 7.09. Restricted Distributions.................................... 16
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. No Withdrawal............................................... 17
Section 8.02. Death, Legal Incapacity, Dissolution and Bankruptcy......... 17
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ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. No Transfer of Partnership Interests........................ 17
Section 9.02. Dealing with General Partner................................ 17
Section 9.03. Compliance With Federal and State Law....................... 17
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. Term and Dissolution of Partnership........................ 18
Section 10.02. Distribution after Dissolution............................. 18
Section 10.03. Dissolution If No General Partner Remaining................ 19
Section 10.04. Reserves................................................... 19
Section 10.05. Statement.................................................. 19
Section 10.06. Distribution Limited to Partnership Assets................. 19
Section 10.07. Termination................................................ 19
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. Power of Attorney.......................................... 19
Section 11.02. Governing Law and Arbitration.............................. 20
Section 11.03. Successors and Assigns..................................... 21
Section 11.04. Counterparts; Integration.................................. 21
Section 11.05. No Partition............................................... 21
Section 11.06. Captions................................................... 21
Section 11.07. Severability............................................... 21
Section 11.08. Notices.................................................... 21
Section 11.09. Amendment; Waiver.......................................... 21
Section 11.10. Further Assurances......................................... 21
EXHIBITS
Exhibit A - Gross Asset Value of Initial Capital Contributions...........A-1
Exhibit B - Initial Partnership Interests................................B-1
Exhibit C - Certificate of Limited Partnership of Honda Titling D L.P....C-1
Exhibit D - Form of General/Limited Partnership
Certificate of Honda Titling D L.P...........................D-1
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This Limited Partnership Agreement is entered into as of May__, 1999,
between Honda Titling D LLC, a Delaware limited liability company, as general
partner (together with any additional or successor general partners admitted to
the Partnership pursuant to this Agreement, the "General Partner"), and American
Honda Finance Corporation, a California corporation, as limited partner
(together with any additional or successor limited partners admitted to the
Partnership pursuant to this Agreement, the "Limited Partner").
In consideration of the mutual agreements herein contained, and of other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. For the purposes of this Agreement, the
terms set forth below shall have the following meanings:
"ACT" means the Delaware Revised Uniform Limited Partnership Act (6 Del.
C. Sections 17-101, ET SEQ.), as amended from time to time.
"ADDITIONAL GENERAL PARTNER" means a Person admitted to the Partnership
as an additional general partner pursuant to Article Four.
"ADDITIONAL LIMITED PARTNER" means a Person admitted to the Partnership
as an additional limited partner pursuant to Article Four.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with any responsibility
for administering, any employee benefit plan) or (ii) is an officer, director or
partner of such Person. For purposes of this definition, a Person shall be
deemed to be "controlled by" another Person if such other Person possesses,
directly or indirectly, the power (i) to vote 5% or more of the securities (on a
fully diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Partnership Agreement, as the same may be
amended, modified or supplemented from time to time.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors.
"BANKRUPTCY" means the occurrence of any of the events specified in
Section 17-402(a)(4) or (5) of the Act as in effect on the date hereof.
<PAGE>
"BUILT-IN GAIN" means the difference between the initial Gross Asset
Value of any property contributed to the Partnership and its adjusted basis for
federal income tax purposes immediately prior to contribution.
"CAPITAL ACCOUNT" shall have the meaning set forth in Section 3.04.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, the amount of
money and/or the initial Gross Asset Value of any property other than money
contributed by such Partner from time to time to the capital of the Partnership
or incurred by such Partner as start-up expenses with respect to the
Partnership.
"CASH FLOW" means, for any fiscal period, gross cash revenues derived
from the operation of the Partnership's business and from the sale, exchange or
disposition of Partnership property, less any expenses and any Reserves
established by the General Partner or a liquidating trustee during such period.
"CODE" means the Internal Revenue Code of 1986, as amended.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"GENERAL PARTNER" shall have the meaning set forth in the preamble to
this Agreement.
"GROSS ASSET VALUE" means, with respect to any asset, such asset's
adjusted basis for federal income tax purposes, except that:
(a) the initial Gross Asset Value of an asset contributed by
a Partner to the Partnership shall be the fair market value thereof, as
determined by the General Partner and set forth in Exhibit A hereto;
(b) upon the occurrence of any of the following events, the
Gross Asset Value of the Partnership assets shall be adjusted to equal
their respective current gross fair market values, as determined by the
General Partner, as of the date of such event: (i) the acquisition of
additional interests in the Partnership by any new or existing Partner
in exchange for more than a DE MINIMIS Capital Contribution, (ii) the
distribution by the Partnership to a Partner of more than a DE MINIMIS
amount of cash or other Partnership Property as consideration for an
interest in the Partnership and (iii) the liquidation of the Partnership
within the meaning of the Regulations; provided, however, that any
adjustments pursuant to clauses (i) and (ii) shall be made only if the
General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of
the Partners in the Partnership;
(c) the Gross Asset Value of any Partnership asset
distributed to a Partner shall be adjusted to equal the gross fair
market value of such asset on the date of distribution as determined by
the General Partner; and
(d) the Gross Asset Value of any Partnership asset shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such asset pursuant to Code Section 734(b) or 743(b), but only
to the extent that such adjustment is taken into account
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in determining Capital Accounts pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations, Section 7.01 of this
Agreement and clause (d) of the definition of the terms "Net Income"
and "Net Losses"; provided, however, that the Gross Asset Value of an
asset shall not be adjusted pursuant to this subparagraph to the
extent that the General Partner determines that an adjustment pursuant
to clause (b) is necessary or appropriate in connection with a
transaction that otherwise would result in an adjustment pursuant to
this subparagraph.
"INDEMNIFIED PARTIES" shall have the meaning set forth in Section 5.08.
"INDEPENDENT MEMBER" shall have the meaning ascribed to such term in
that certain Limited Liability Company Agreement of Honda Titling D LLC, dated
as of or about the date hereof, between AHFC and Honda Funding Inc.
"IRS" means the Internal Revenue Service and its successors.
"LIMITED PARTNER" shall have the meaning set forth in the Preamble to
this Agreement.
"NET INCOME" or "NET LOSSES" means, for a fiscal year or other fiscal
period, an amount equal to the Partnership's taxable income or loss for such
year or period, determined in accordance with Code Section 703(a) (for purposes
of this definition, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in
taxable income or loss), with the following adjustments:
(a) any income of the Partnership that is exempt from federal
income tax and is not otherwise taken into account in computing Net
Income or Net Losses pursuant to this definition shall be added to such
taxable income or loss;
(b) any expenditures of the Partnership that can be neither
deducted nor capitalized (and any expenditures treated as such pursuant
to the Regulations) and that are not otherwise taken into account in
computing Net Income or Net Losses pursuant to this definition shall be
added to such taxable income or loss;
(c) in the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (b) of the definition of the term
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss upon the disposition of such asset for purposes
of computing Net Income or Net Losses;
(d) gain or loss resulting from any disposition of
Partnership assets with respect to which gain or loss is recognized for
federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property so disposed of, notwithstanding that the
adjusted tax basis of such property differs from its Gross Asset Value;
(e) any depreciation, amortization and other cost recovery
deductions taken into account in computing such taxable income or loss
with respect to any asset the Gross Asset Value of which differs from
its adjusted basis for federal income tax purposes at the beginning of
the related taxation period shall be in an amount that bears the same
ratio to such beginning Gross Asset Value as the federal income tax
depreciation,
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amortization or other cost recovery deduction for such year or other
period bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization or other
cost recovery deduction for such period is zero, the depreciation,
amortization and other cost recovery deduction with respect to such
asset shall be determined with reference to such beginning Gross Asset
Value using any reasonable method;
(f) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or 743(b) is
required to be taken into account pursuant to Section
1.704-1(b)(2)(iv)(m)(4) of the Regulations in determining Capital
Accounts other than with respect to a complete liquidation of a
Partner's interest in the Partnership, the amount of such adjustment
shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of
the asset) from the disposition of such asset and shall be taken into
account for purposes of computing Net Income or Net Losses; and
(g) notwithstanding the foregoing, any items that are
specifically allocated pursuant to Section 7.05 or 7.06 shall not be
taken into account in computing Net Income or Net Losses.
"PARTNER" means a General Partner or a Limited Partner.
"PARTNERSHIP" means Honda Titling D L.P., a Delaware limited
partnership.
"PARTNERSHIP CERTIFICATE" means the certificate of limited partnership
of the Partnership.
"PARTNERSHIP INTEREST" means, with respect to each Partner, the stated
percentage interest of such Partner in each item of Partnership income, gain,
loss, deduction or credit as set forth in Exhibit B, as the same may be modified
from time to time to reflect any changes therein that occur pursuant to this
Agreement.
"PARTNERSHIP PROPERTY" means all real, personal and other property of
the Partnership, whether tangible or intangible, and includes (i) cash and
marketable securities; (ii) the beneficial interests of the Partnership in the
Trust (including any interest in the UTI or any SUBI that the Partnership may
own from time to time) and in the Securitization Trust and all monies due
thereon and paid thereon or in respect thereof; (iii) the right to realize upon
any property that may be deemed to secure any interest described in clause (ii);
and (iv) all proceeds of the foregoing.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, joint stock
company, association, joint venture, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PLEDGE" shall have the meaning set forth in Section 9.01.
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"REGULATIONS" means any regulations promulgated by the IRS under the
Code, as the same may be amended from time to time, including any corresponding
provisions of succeeding regulations.
"REGULATORY ALLOCATION" shall have the meaning set forth in Section
7.04(a).
"RESERVES" shall have the meaning set forth in Section 10.04.
"SECURITIES" shall have the meaning set forth in Section 2.02(a).
"SECURITIZATION" means (i) a financing transaction of any sort
undertaken by a beneficiary (or a special purpose affiliate thereof) under the
Trust that is secured, directly or indirectly, by assets of the Trust or a UTI,
a SUBI or any interest therein, and any financing undertaken in connection with
the issuance and assignment of a UTI or a SUBI and the related certificate
evidencing such UTI or SUBI, as the case may be; (ii) any sale by a beneficiary
(or a special purpose affiliate thereof) under the Trust of an interest in a UTI
or a SUBI; or (iii) any other asset securitization, secured loan or similar
transaction involving assets of the Trust or any beneficial interest therein or
in the Trust.
"SECURITIZATION TRUST" means Honda Auto Lease Trust 1999-A and its
successors.
"SUBI" shall have the meaning set forth in Section 2.02(b).
"TRANSFER" shall have the meaning set forth in Section 9.01.
"TRUST" means Honda Lease Trust, a Delaware business trust.
"TRUST AGREEMENT" means the trust agreement dated as of July 17, 1997 by
and among Honda Titling A L.P., Honda Titling B L.P., American Honda Finance
Corporation, HVT, Inc., Delaware Trust Capital Management, Inc. and U.S. Bank
National Association, as amended or supplemented from time to time.
"TRUST INTERESTS" shall have the meaning set forth in Section 2.02(b).
"UTI" shall have the meaning set forth in Section 2.02(b).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to this Agreement include all Exhibits hereto, (iii) references
to words such as "herein" and "hereof" shall refer to this Agreement as a whole
and not to any particular part, Article or Section herein, (iv) references to an
Article or Section such as "Article One" or "Section 1.01" shall refer to the
applicable Article or Section of this Agreement, (v) the term "include" and all
variations thereof shall mean "include without limitation", (vi) the term "or"
shall include "and/or" and (vii) the term "proceeds" shall have the meaning
ascribed to such term in the Uniform Commercial Code, as adopted by and in
effect in the State of Delaware.
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(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
NAME, PURPOSE AND PARTNERS
Section 2.01. NAME. The name of the limited partnership formed hereby
is Honda Titling D L.P. (the "Partnership").
Section 2.02. PURPOSE. The Partnership is formed for the object and
purpose of, and the nature of the business to be conducted and promoted by the
Partnership is limited to, the following activities only:
(a) to act as settlor or grantor of the Securitization Trust
formed pursuant to the Trust Agreement which Securitization Trust shall
be formed for the purpose of acquiring interests in the Trust, which
Securitization Trust may issue Securities (the "Securities") secured by
or representing beneficial interests in the assets of the Trust.
(b) to acquire, lease, own, hold, sell, transfer, convey,
dispose of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with and exercise rights of ownership with respect to,
publicly or privately and whether with unrelated third parties or with
affiliated entities, certificates representing beneficial interests in
the Trust created with respect to the Trust ("Trust Interests")
including undivided trust interests ("UTIs") and any special units of
beneficial interests created with respect to the Trust ("SUBIs"), and
Securities and related Partnership property; and
(c) to loan or otherwise invest funds received as a result of
the Partnership's interest in any Trust Interests or Securities and any
other income, as determined by the General Partners from time to time;
(d) to open, maintain and close bank, brokerage and other
accounts and to pay the fees and charges applicable to transactions
related thereto;
(e) to bring and defend actions and proceedings at law or in
equity or before any court or governmental, administrative or other
regulatory agency, body or commission;
(f) to issue partnership interests as provided for herein;
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(g) to borrow money other than pursuant to clause (b) above,
but only to the extent that such borrowing is permitted by the terms of
the transactions contemplated by clauses (a) and (b) above; and
(h) to engage in any lawful act or activity and to exercise
any powers permitted to limited partnerships organized under the Act
that are incidental to and necessary or convenient for the
accomplishment of the foregoing purposes, including, without limitation,
any of the powers that may be exercised by the General Partner on behalf
of the Partnership.
Section 2.03. REGISTERED OFFICE. The registered office of the
Partnership in the State of Delaware is The Corporation Trust Company,
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801.
Section 2.04. REGISTERED AGENT. The name and address of the registered
agent of the Partnership for service of process on the Partnership in the State
of Delaware is The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801.
Section 2.05. CERTIFICATE OF LIMITED PARTNERSHIP AND OTHER FILINGS.
The General Partner has filed a certificate of limited partnership of the
Partnership (the "Partnership Certificate") substantially in the form attached
hereto as Exhibit C in the office of the Delaware Secretary of State and shall
file or cause the Partnership Certificate to be filed in such other offices as
may be required by law from time to time. From time to time as required by law,
the General Partner shall execute and acknowledge, and shall cause to be filed
and recorded, appropriate amendments to the Partnership Certificate and any
other filings required of or appropriate with respect to the Partnership. In
particular, but without limitation, in the event that the General Partner deems
it necessary for the Partnership to exist in or qualify to do business under the
laws of one or more jurisdictions in addition to the State of Delaware, the
General Partner shall take such actions as may be necessary to register the
Partnership or to qualify it to do business in each such jurisdiction; provided
that in any such event the Partnership shall at all times continue to be a
limited partnership formed under and governed by the provisions of the Act and
this Agreement.
Section 2.06. PARTNERS' ADDRESSES. The names and mailing addresses of
the General Partner and the Limited Partner are (i) in the case of the General
Partner, Honda Titling D LLC, 700 Van Ness Avenue, Torrance, California 90501,
Attention: General Partner, (ii) in the case of the Limited Partner, American
Honda Finance Corporation, 700 Van Ness Avenue, Torrance, California 90501,
Attention: President; or (iii) such other address as shall be designated by any
of the foregoing in a written notice to the other parties hereto.
Section 2.07. AUTHORIZATION TO ENTER INTO CERTAIN AGREEMENTS. Each of
the Partnership and the General Partner, on behalf of the Partnership, may, and
is hereby authorized to, enter into and perform any and all obligations of the
Partnership under each of the documents relating to the Trust or the
Securitization Trust, and any other documents or agreements contemplated thereby
or specifically described therein, and any and all documents and agreements
deemed necessary or desirable by the General Partner, including, without
limitation, any such documents and agreements with respect to financings secured
by or representing a sale of Trust Interests (including any UTI or SUBI), all
without any further act, vote or approval of any Partner,
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notwithstanding any other provision of this Agreement, the Act or other
applicable law, rule or regulation. Such authorization shall not be deemed a
restriction on the powers of the General Partner to enter into other
agreements on behalf of the Partnership.
ARTICLE THREE
CAPITAL ACCOUNTS; LIMITATION OF LIMITED PARTNERS' LIABILITY
Section 3.01. INITIAL CAPITAL CONTRIBUTIONS. Each of the General
Partner and the Limited Partner has contributed cash and/or marketable
securities as its initial Capital Contribution.
Section 3.02. ADDITIONAL CAPITAL CONTRIBUTIONS.
(a) Except as provided in Section 10.02 with respect to any General
Partner, no Partner shall be required to make additional Capital Contributions
to the Partnership.
(b) Notwithstanding any provision herein to the contrary, in the
event any additional Capital Contributions are made by one or both Partners, the
Partnership Interest of each Partner for purposes of all subsequent Cash Flow
distributions shall be recalculated to reflect any such additional Capital
Contributions until such additional Capital Contributions have been recovered by
the contributors thereof through distributions pursuant to this Agreement.
(c) Each Partner's Capital Account shall be increased by an amount
equal to the additional Capital Contributions by such Partner pursuant to
Section 3.02(b) and shall be reduced by all distributions to that Partner
pursuant to this Agreement.
Section 3.03. WITHDRAWAL OF CAPITAL. Except as otherwise provided in
this Agreement, no Partner shall be entitled to demand or receive a return of
any portion of its Capital Contributions from the Partnership without the
consent of the General Partner.
Section 3.04. PARTNERSHIP INTERESTS AND CAPITAL ACCOUNTS. For all
purposes of this Agreement, the "Capital Account" of a Partner as of any date
shall mean the value of the Capital Contribution of such Partner as set forth on
Exhibit A, as the same may be amended from time to time, properly adjusted to
reflect the allocations and distributions provided for in Article Seven and any
additional Capital Contributions of such Partner.
Section 3.05. LIMITATION OF LIMITED PARTNERS' LIABILITY.
(a) No Limited Partner shall have any personal liability whatsoever,
whether to the Partnership, to any of the Partners or to any creditor of the
Partnership, for the debts of the Partnership or any of its losses beyond the
amount contributed by such Limited Partner to the capital of the Partnership;
provided, however, that a Limited Partner shall be obligated to return
distributions wrongfully distributed to it as required by the Act or other
applicable law.
(b) No Limited Partner, in its capacity as a limited partner of the
Partnership, shall control the Partnership's business or be deemed to be
participating in the control of the business of the Partnership within the
meaning of the Act by doing one or more of the following:
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(i) being a contractor for or an agent or employee of the
Partnership or the General Partner or being an officer, director or
shareholder of the General Partner;
(ii) consulting with and advising the General Partner with
respect to the business of the Partnership;
(iii) acting as surety for the Partnership or guaranteeing or
assuming one or more obligations of the Partnership, acting as an
endorser of the Partnership's obligations or providing collateral for
any borrowings of the Partnership;
(iv) taking any action required or permitted by law to bring
or pursue a derivative action in the right of the Partnership;
(v) requesting or attending a meeting of Partners;
(vi) proposing, approving or disapproving, by voting or
otherwise, one or more of the following matters:
(A) the dissolution and winding up of the Partnership
or continuation of the business of the Partnership upon the
occurrence of any event that would otherwise require the winding
up and termination of its affairs;
(B) the sale, exchange, lease, mortgage, pledge or
other transfer of all or all or substantially all of the assets
of the Partnership;
(C) the incurrence of indebtedness by the Partnership
other than in the ordinary course of its business;
(D) a change in the nature of the Partnership
business;
(E) the admission or removal of a General Partner;
(F) the admission or removal of a Limited Partner;
(G) a transaction involving an actual or potential
conflict of interest between the Partnership and a General
Partner or a Limited Partner;
(H) an amendment to this Agreement or the Partnership
Certificate;
(I) matters related to the business of the Partnership
not otherwise enumerated in this subsection, but which this
Agreement, or any other agreement, states in writing may be
subject to the approval or disapproval of Limited Partners; or
(J) any other matter required by law or regulation, or
deemed advisable by the General Partner, to be submitted to a
vote of Limited Partners;
(vii) winding up the Partnership; or
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(viii) taking any of the actions described in Section 17-303(b)
of the Act or in this Agreement, or exercising any right or power
permitted a limited partner under the Act, which action or exercise is
not specifically enumerated in this Section.
ARTICLE FOUR
ADMISSION OF ADDITIONAL PARTNERS
Section 4.01. AUTHORITY OF GENERAL PARTNER TO ADMIT ADDITIONAL
PARTNERS. The Partners agree that the General Partner may admit Additional
Limited Partners to the Partnership, subject to and in accordance with the
provisions of Section 4.02, Section 5.03 and Article Nine. Additional General
Partners may be admitted to the Partnership, subject to and in accordance with
the provisions of Section 4.02, Section 5.03 and Article Nine, but only if and
to the extent that the General Partner would be permitted to transfer its
Partnership Interest under Section 4.02, Section 5.03 and Article Nine.
Section 4.02. PARTNERSHIP INTERESTS ON ADMISSION OF ADDITIONAL
PARTNERS. The Partnership Interest of each Additional General Partner or
Additional Limited Partner shall be the percentage that the cash amount or
initial Gross Asset Value of capital contributed to the Partnership by such
Additional General Partner or Additional Limited Partner bears to the total
capital of the Partnership immediately following such contribution. Upon
admission of such Additional General Partner or Additional Limited Partner to
the Partnership, the Partnership Interests of the existing Partners shall be
reduced PRO RATA by the amount of such Additional Limited Partner's Partnership
Interest; provided, however, that no Additional General Partner or Additional
Limited Partner may be admitted if such addition would reduce the Partnership
Interest of (i) AHFC, in its capacity as a Limited Partner, below 20% or
(ii) Honda Titling D LLC, in its capacity as a General Partner, below 1%.
ARTICLE FIVE
MANAGEMENT OF THE PARTNERSHIP
Section 5.01. AUTHORITY OF GENERAL PARTNER.
(a) The General Partner shall have sole and exclusive authority to
manage the operations and affairs of the Partnership and to make all decisions
regarding the business of the Partnership. No Limited Partner shall participate
in the management or control of the Partnership's business, nor shall it have
the power to act for or bind the Partnership, such powers being vested solely
and exclusively in the General Partner, except as otherwise specifically
provided herein. It is understood and agreed that the General Partner shall
have all of the rights and powers of a general partner provided under the Act
and by this Agreement, and as otherwise provided by law, and any action taken by
the General Partner shall constitute the act of and serve to bind the
Partnership. Persons dealing with the Partnership are entitled to rely
conclusively on the power and authority of the General Partner as set forth in
this Agreement.
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(b) Notwithstanding the foregoing, without the affirmative vote of
100% of the constituent members of the General Partner, the General Partner will
not take, or acquiesce in, and only the General Partner (and not any Limited
Partner) shall have any right to take, any action to cause the Partnership to
(i) merge or consolidate with or into any Person, (ii) act other than the
Partnership's own name and through the General Partner, (iii) dissolve or
liquidate, in whole or in part, or institute proceedings to be adjudicated
bankrupt or insolvent, (iv) consent to the institution of bankruptcy or
insolvency proceedings against it, (v) file a petition seeking, or consent to,
reorganization or relief under any applicable federal or state law relating to
bankruptcy, (vi) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator or other similar official of the Partnership or all or a
substantial part of its property, (vii) make any assignment for the benefit of
its creditors, (viii) admit in writing its inability to pay its debts generally
as they become due, (ix) institute or join in any institution of any bankruptcy,
insolvency, liquidation, arrangement or reorganization proceeding or other
proceedings under any federal or state law, against any entity in which the
Partnership holds an ownership interest, or (x) take any corporate action or
partnership action in furtherance of the actions enumerated in clauses (i)
through (ix) above; provided, however, that the General Partner shall in no
event consent to the institution of bankruptcy or insolvency proceedings against
the Partnership so long as the Partnership is solvent. In the event of the
insolvency of the Partnership and with regard to any action contemplated by the
preceding sentence, the General Partner will not owe a fiduciary duty to any
Limited Partner (except as may be specifically required by applicable law), but
the General Partner's fiduciary duty with regard to such action shall be owed,
to the fullest extent permitted by applicable law, instead to the creditors of
the Partnership.
(c) The General Partner shall not, and shall not allow the
Partnership otherwise to (i) commingle any funds or other assets of the
Partnership with the funds or assets of any other Person (ii) perform the
obligations of another Person, (iii) guarantee the obligations of another
Person, (iv) pledge the assets of another Person, or (v) enter into transactions
with any Person except as specifically authorized and contemplated in this
Agreement, the Trust Agreement and the agreements related to a Securitization.
The Partnership shall (A) conduct business in its own name and hold itself out
as a separate entity, (B) maintain a separate office location or, if the
Partnership shares office space with others, pay its fair allocable share of
overhead costs and (C) observe all organizational formalities. The bank
accounts, financial and accounting books, records and financial statements of
the Partnership shall be maintained separate from those of every other Person.
All obligations and indebtedness of any kind incurred by the Partnership shall
be paid from the assets of the Partnership and the Partnership's assets shall
not be used to pay any obligation or indebtedness of any other Person, other
than certain expenses, obligations or indebtedness of the Trust, Securitization
Trust and trustee of any of the foregoing with respect to transactions of or
with respect to such Trust or Securitization Trust.
(d) The General Partner is hereby authorized to delegate to one or
more other Persons any of its rights and powers to manage and control the
business and affairs of the Partnership, including to delegate to agents and
employees of the General Partner or the Partnership, and to delegate by a
management agreement or another agreement with, or otherwise to, other Persons.
Such delegation by the General Partner shall not cause the General Partner to
cease to be a general partner of the Partnership.
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Section 5.02. SPECIFIC POWERS OF GENERAL PARTNER. Subject to Section
5.03, the General Partner is hereby granted the right, power and authority to do
on behalf of the Partnership all things which, in its sole judgment, are
necessary, proper, desirable, convenient or incidental to carry out the duties
and responsibilities of the Partnership under this Agreement.
Section 5.03. POWERS REQUIRING CONCURRENCE OF LIMITED PARTNERS.
Without the written consent of, or ratification by a specific act of, Partners
holding in the aggregate at least 66-2/3% of the Partnership Interests, the
General Partner shall have no authority to, and affirmatively represents and
undertakes that it will not, admit a Person as a Partner under this Agreement,
which in any event shall always be done in accordance with Article Nine.
Section 5.04. DUTIES OF GENERAL PARTNER. The General Partner shall
devote such time to the business of the Partnership as it shall deem necessary
to manage and supervise the business and affairs of the Partnership in an
efficient manner. Subject to the foregoing, the General Partner shall manage
the administration of the Partnership, which administration shall include, but
not be limited to, (a) maintaining customary books and records; (b) preparing or
causing the preparation of the financial statements provided for in this
Agreement; (c) preparing and filing or causing the preparation and filing of
Partnership tax returns; (d) preparing communications from the Partnership to
Limited Partners; (e) filing documents required to be filed by the Partnership;
(f) causing the Partnership to make or revoke the appropriate tax elections
under the Code; (g) functioning as tax matters partner for federal, state and
local tax purposes; and (h) acting on behalf of the Partnership with respect to
(i) the Trust or the Securitization Trust, (ii) any lenders and (iii) any other
Person dealing with the Partnership or any Partnership Property.
Section 5.05. COMPENSATION OF GENERAL PARTNER AND EXPENSES. The
General Partner shall receive no compensation for services to the Partnership as
General Partner; provided, however, that the General Partner shall be entitled
to charge to the Partnership any filing fees incurred in complying with any
requirement imposed on the Partnership by law, reasonable accountants' and
attorneys' fees and all other reasonable expenses arising out of the
administration of the Partnership including, but not limited to, those incurred
in any administrative or judicial proceeding in which the Partnership may become
involved, all of which shall be proper expenses of the Partnership.
Section 5.06. SCOPE OF RESPONSIBILITY. None of the General Partner or
any of its Affiliates, or, any director, officer, shareholder, agent or employee
thereof shall be liable, responsible or accountable for damages or otherwise to
the Partnership or any Limited Partner for any action taken or omitted on behalf
of the Partnership within the scope of the authority conferred upon such Person
by this Agreement or by law, unless such action was taken or omitted
fraudulently or in bad faith or constituted willful misconduct or gross
negligence.
Section 5.07. CONTRACTS WITH AFFILIATES. The Partnership may enter
into one or more agreements with the General Partner or any Affiliate of the
General Partner to render services to the Partnership. Any service rendered to
the Partnership by the General Partner or any Affiliate thereof shall be on
terms that are fair and reasonable to the Partnership and are, in the aggregate,
no less favorable than those that could be obtained from unaffiliated third
parties for comparable quality.
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Section 5.08. INDEMNIFICATION. The Partnership shall, to the fullest
extent permitted by law, indemnify and hold harmless the General Partner, its
Affiliates and their respective directors, officers, shareholders, agents and
employees acting within the scope of their authority (the "Indemnified Parties")
from and against all loss, expense, damage, liability or injury suffered or
sustained by them by reason of any acts, omissions or alleged acts or omissions
arising out of any of such Person's activities on behalf of the Partnership or
in furtherance of the interests of the Partnership, including, but not limited
to, any judgments, awards, fines, penalties, settlements, reasonable attorneys'
fees, and other costs or expenses incurred in connection with the defense of any
actual or threatened action, proceeding or claim and including any payments made
by one or more Indemnified Parties, unless the acts, omissions or alleged acts
or omissions upon which such actual or threatened action, proceeding or claim is
based were made or omitted fraudulently or in bad faith or constituted willful
misconduct or gross negligence by one or more of such Indemnified Parties. Any
such indemnification shall only be made from the assets of the Partnership.
Reasonable expenses incurred by any Indemnified Party in connection with such an
action, proceeding or claim shall be paid or reimbursed by the Partnership in
advance of the final disposition of the action, proceeding or claim, upon
receipt by the Partnership of an undertaking by or on behalf of the Indemnified
Party to repay such amount if it shall be determined that the Indemnified Party
is not entitled to be indemnified as authorized in this Section.
Section 5.09. LIMITED PARTNERS' RIGHTS. Except as otherwise set forth
in this Agreement, all Limited Partners shall have all rights and authority
accorded to them under the Act.
Section 5.10. PARTNERSHIP PROPERTY. All Partnership Property shall be
owned by the Partnership as an entity, and no Partner shall have any ownership
interest in any Partnership Property in its individual name or right. The
Partnership shall hold all of the Partnership Property in the name of the
Partnership and not in the name of any Partner. Each Partner's interest in the
Partnership shall be personal property for all purposes.
Section 5.11. DUTIES OF THE GENERAL PARTNER AND CERTAIN OTHER PERSONS.
To the extent that an Indemnified Party shall have fiduciary duties and
liabilities, arising at law or in equity, relating to the Partnership or the
Partners, such Indemnified Party shall not be liable to the Partnership or to
any Partner for any action taken or omitted in good faith reliance on the
provisions of this Agreement. The Partners hereby agree that the provisions of
this Agreement, to the extent that they restrict the fiduciary duties and
related liabilities of an Indemnified Party otherwise existing at law or in
equity, replace such other duties and liabilities of such Indemnified Party.
ARTICLE SIX
STATEMENTS AND FISCAL YEAR
Section 6.01. STATEMENTS. The General Partner shall send or cause to
be sent to each Limited Partner such statements as may be necessary for the
preparation of such Limited Partner's income tax returns.
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Section 6.02. FISCAL YEAR. The fiscal year of the Partnership shall be
the fiscal year of the initial Limited Partner, which shall end on the last day
of March each year.
ARTICLE SEVEN
FINANCIAL ALLOCATIONS AND DISTRIBUTIONS
Section 7.01. TAX ELECTIONS. The General Partner shall elect to treat
the Partnership as a single member entity treated as an agent of the Limited
Partner and not as a separate corporation or partnership for federal and
applicable state tax purposes. The General Partner may also elect to make an
election for state tax purposes comparable to the federal tax election under
Section 761(a) of the Code for an exemption from the provisions of Subchapter K
of the Code for the Partnership.
Section 7.02. MAINTENANCE OF PARTNERS' CAPITAL ACCOUNTS. A separate
Capital Account shall be established and maintained for each Partner throughout
the full term of the Partnership as follows:
(a) to each Partner's Capital Account there shall be credited
such Partner's initial Capital Contribution, as set forth and agreed to
on Exhibit A hereto, such additional Capital Contributions as such
Partner may make from time to time pursuant to Section 3.02(b), such
Partners' distributive share of Net Income, and any items in the nature
of income or gain that are specially allocated to such Partner pursuant
to Section 7.03 or 7.04 and the amount of any Partnership liabilities
that are assumed by such Partner or secured by any Partnership Property
distributed to such Partner;
(b) from each Partner's Capital Account there shall be
subtracted the amount of cash and the Gross Asset Value of any
Partnership Property distributed to such Partner pursuant to any
provision of this Agreement, such Partner's distributive share of Net
Losses, any items in the nature of deductions or losses that are
specially allocated to such Partner pursuant to Section 7.03 or 7.04 and
the amount of any liabilities of such Partner assumed by the Partnership
or secured by any property contributed by such Partner to the
Partnership;
(c) in the event any interest in the Partnership is
transferred in accordance with the terms of this Agreement, the
transferee shall succeed to the Capital Account, if any, of the
transferor to the extent relevant to the transferred interest; and
(d) in determining the amount of any liability for purposes
of clauses (a) and (b) of this Section, Code Section 752 and any other
applicable provisions of the Code and Regulations shall be taken into
account.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such general intent. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating
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to liabilities that are secured by contributed or distributed property or
that are assumed by the Partnership or the Partners), are computed in order
to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have a
material effect on the amounts distributable to any Partner pursuant to
Section 10.02 upon the dissolution of the Partnership. The General Partner
shall make all (i) adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes in accordance with the Regulations, and (ii) appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
Section 7.03. NET INCOME AND NET LOSS; CASH FLOW.
(a) NET INCOME AND NET LOSS. Except as provided in Sections 7.04,
7.05 and 7.06, the determination of each Partner's distributive share of any
Partnership Net Income and Net Loss with respect to any Partnership fiscal year
shall be made in accordance with and in proportion to such Partner's Partnership
Interest during the particular year, after taking into account any variations in
the Partner's Partnership Interest during that year.
(b) CASH FLOW. The distributive share of Cash Flow of any Partner
for any Partnership fiscal year shall be determined in accordance with and in
proportion to such Partner's Partnership Interest during such year.
Section 7.04. SPECIAL TAX ALLOCATIONS.
(a) GENERALLY. Special tax allocations shall be made to the extent
necessary to satisfy the requirements set forth in Sections 1.704-1(b)(2)(ii)(d)
and 1.704-2 of the Regulations for a qualified income offset and partner minimum
gain chargeback (the "Regulatory Allocations").
(b) SECTION 754 ADJUSTMENT. To the extent that an adjustment to the
adjusted tax basis of any Partnership asset is required under Code Section
734(b) or 743(b) in connection with a distribution to a Partner in complete
liquidation of such Partner's interest in the Partnership and the resultant
redetermination pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or
1.704-1(b)(2)(iv)(m)(4) of the Capital Accounts, the amount of such adjustment
to the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such gain or loss shall be allocated pro rata to the remaining
Partners in accordance with their respective Partnership Interests in the event
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partner to which
such distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
Section 7.05. CURATIVE ALLOCATIONS. It is the intent of the Partners
that, to the extent possible, all Regulatory Allocations shall be offset either
by other Regulatory Allocations or by special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this Section.
Therefore, notwithstanding any other provision of this Article Seven, the
General Partner shall make special offsetting allocations of Partnership income,
gain, loss or deduction in whatever manner it determines appropriate so that,
after such offsetting allocations are made,
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each Partner's Capital Account balance is, to the extent possible, equal to
the Capital Account balance such Partner would have had if the Regulatory
Allocations had not been made and all Partnership items were allocated
pursuant to Section 7.03. In exercising discretion under this Section, the
General Partner shall take into account certain future Regulatory Allocations
that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Section 7.04(a).
Section 7.06. OTHER ALLOCATION RULES. For purposes of determining
items of Partnership income, gain, loss or deduction or any other items
allocable to any fiscal year or other period, including upon the transfer of a
Partner's interest in the Partnership, such items shall be determined on a
daily, monthly or other basis, as determined by the General Partner, using any
method permissible under Code Section 706 and the Regulations thereunder. To
the extent permitted by the Regulations, the General Partner shall endeavor not
to treat distributions of Cash Flow as having been made from the proceeds of a
nonrecourse liability within the meaning of Section 1.752-2 of the Regulations.
Section 7.07. ALLOCATION OF BUILT-IN GAINS.
(a) In accordance with Code Section 704(c) and the Regulations
thereunder, income, gain, loss and deduction with respect to any Partnership
Property contributed by the Partners to the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any Built-in
Gains or variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and its initial Gross Asset Value.
(b) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to clause (ii) of the definition of the term Gross Asset
Value, subsequent allocations of income, gain, loss and deduction with respect
to such asset shall, solely for tax purposes, take into account any Built-in
Gains or variation between the adjusted basis of such asset for federal income
tax purposes and its Gross Asset Value in the manner set forth under Code
Section 704(c) and relevant Sections of the Regulations.
(c) Any elections or other decisions relating to such allocations
shall be made by the General Partner in any manner that reasonably reflects the
purpose and intention of this Agreement. Allocations of Built-in Gain pursuant
to this Section are solely for purposes of federal, state and local taxes and
shall not affect, or in any way be taken into account in computing, Net Income,
Net Losses, credits or debits to any Partner's Capital Account or the allocation
of items of income, gain, loss or deduction or distributions pursuant to this
Agreement.
Section 7.08. DISTRIBUTION OF CASH FLOW AND OTHER AMOUNTS. As
determined by the General Partner employing its reasonable business judgment, to
the extent Partnership Cash Flow is available for distribution at the close of
any fiscal one-month period, such distribution shall be made as soon as
reasonably possible following such period, in the manner provided in Section
7.03, as if such fiscal one-month period were a fiscal year. No such
distribution will be made if it would create a negative Capital Account balance
for a Limited Partner. The General Partner may also refuse to make a
distribution at the end of any fiscal one-month period if such distribution
would impair Reserves set up by the General Partner pursuant to Section 10.04.
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Section 7.09. RESTRICTED DISTRIBUTIONS. The Partnership, and the
General Partner on behalf of the Partnership, shall not make a distribution to
any Partner if such distribution would violate Section 17-607 of the Act or
other applicable law. Notwithstanding Section 17-606 of the Act, no Limited
Partner shall, by virtue of becoming entitled to receive a distribution, have
the status of, or be entitled to the remedies available to, a creditor of the
Partnership with respect to such distribution.
ARTICLE EIGHT
NO WITHDRAWAL OF PARTNER; DEATH, LEGAL INCAPACITY,
DISSOLUTION OR BANKRUPTCY OF LIMITED PARTNER
Section 8.01. NO WITHDRAWAL. Except as provided in Article Nine, no
Partner shall have the right to withdraw from the Partnership.
Section 8.02. DEATH, LEGAL INCAPACITY, DISSOLUTION AND BANKRUPTCY. The
death, legal incapacity, dissolution or bankruptcy of a Limited Partner shall
not, in and of itself, cause the dissolution of the Partnership, but the rights
of such Limited Partner to share in the profits and losses of the Partnership,
to receive distributions of Partnership funds and to assign its interest in the
Partnership pursuant to Article Nine shall, on the occurrence of any such event,
devolve upon its personal or legal representative or upon the Person or Persons
entitled to receive its property under the laws of its domicile, subject to the
terms and conditions of this Agreement, and the Partnership shall continue as a
limited partnership; in no event, however, shall such personal or legal
representative or Person or Persons entitled to receive the interest of such
Limited Partner become a substitute Limited Partner, except in accordance with
Article Nine.
ARTICLE NINE
NO TRANSFER OF PARTNERSHIP INTERESTS
Section 9.01. NO TRANSFER OF PARTNERSHIP INTERESTS. Neither the
General Partner nor the Limited Partner shall sell, transfer, assign, convey or
otherwise dispose of ("Transfer"), or encumber or hypothecate ("Pledge"), all or
any part of its Partnership Interest to any Person. Any purported Transfer or
Pledge, shall be deemed null and void and shall not be recognized by the
Partnership or the other Partners.
Section 9.02. DEALING WITH GENERAL PARTNER. In addition to any other
provision contained in this Article Nine, the Partnership, each Partner and any
other Person having business with the Partnership need deal only with General
Partners named in the Partnership Certificate and shall not be required to deal
with any other Person by reason of the death, legal incapacity, dissolution or
bankruptcy of a Partner, except as otherwise provided in this Agreement or
required by law.
Section 9.03. COMPLIANCE WITH FEDERAL AND STATE LAW. Each Partner
represents and warrants that it is purchasing its Partnership Interest as an
investment and not for distribution within the meaning of any applicable United
States federal and state securities laws and regulations. Any Partner who
commits any act or fails to take any act that results in a breach of
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such representation and warranty shall, and hereby agrees to, indemnify and
hold harmless all other Partners and the Partnership from all claims,
demands, suits, losses, judgments, liabilities and damages, including
reasonable attorneys' fees and disbursements, arising out of or in any way
connected with such act or omission.
ARTICLE TEN
TERM AND DISSOLUTION
Section 10.01. TERM AND DISSOLUTION OF PARTNERSHIP. The Partnership
shall be dissolved and its affairs wound up upon the earliest to occur of:
(a) March 31, 2097;
(b) the withdrawal or Bankruptcy of the General Partner, the
termination of the General Partner or the occurrence of any other event
that results in the General Partner ceasing to be a general partner of
the Partnership under the Act, unless within 90 days after the
occurrence of such event, a majority in interest of the remaining
Partners (or such greater percentage in interest as is required by the
Act) agrees in writing to continue the business of the Partnership and
to the appointment, effective as of the date of such event, of one or
more additional general partners of the Partnership; or
(c) the entry of a decree of judicial dissolution pursuant to
Section 17-802 of the Act.
Section 10.02. DISTRIBUTION AFTER DISSOLUTION. Upon dissolution, the
Partnership shall continue solely for the purpose of winding up its affairs in
an orderly manner, liquidating its assets and satisfying the claims of creditors
and Partners. In so doing, a full accounting of the assets and liabilities of
the Partnership shall be taken and the Partnership assets shall be distributed
as promptly as possible as hereinafter provided:
(a) to the payment (or the making of reasonable provision for
the payment) of such debts and liabilities of the Partnership (or
Reserves therefor), including any necessary expenses of liquidation,
except any debts, liabilities and loans that may be due to the Partners,
in the order of priority provided by law;
(b) to the payment (or the making of reasonable provision for
the payment) of any debts and liabilities that may be due to the
Partners and to the payment (or the making of reasonable provision for
the payment) of the unpaid principal balance of and the interest accrued
on loans, if any, made by the Partners to the Partnership; and
(c) each Partner's Capital Account shall be adjusted as
provided in Section 7.02 as if the Partnership Property had been sold
for its fair market value and the resulting gain or loss had been
allocated to the respective Partners, and the assets of the Partnership
shall be distributed thereafter to the Partners in proportion to their
respective non-negative Capital Accounts.
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All of the assets of the Partnership may be distributed in kind upon dissolution
of the Partnership. Any General Partner with a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all fiscal years, including the fiscal year during which such liquidation
occurs) shall be required to repay such deficit promptly to the Partnership. If
any Limited Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all fiscal years,
including the fiscal year during which such liquidation occurs), such Limited
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any purpose
whatsoever.
Section 10.03. DISSOLUTION IF NO GENERAL PARTNER REMAINING. In the
event of the dissolution of the Partnership pursuant to Section 10.01(b) because
no General Partner remains, a liquidating trustee selected by a majority in
interest of the Limited Partners shall wind up the affairs of the Partnership.
Any such liquidating trustee shall have the full right and unlimited discretion
to determine the time, manner and terms of any sale or sales of Partnership
Property based on the activity and condition of the relevant market and general
financial and economic conditions. The Limited Partners shall continue to share
profits and losses during the period of liquidation in the same proportion as
before the dissolution.
Section 10.04. RESERVES. The General Partner or the liquidating
trustee, as the case may be, shall have the right to set up (either in
connection with the ongoing operations of the Partnership or in the course of
its liquidation) reasonable cash reserves for contingent, conditional or
unmatured liabilities or obligations of the Partnership, capital improvements or
for any other purpose necessary to accomplish the purposes of the Partnership
("Reserves"), and such Reserves shall be deducted from amounts available for
distribution pursuant to this Agreement.
Section 10.05. STATEMENT. Within a reasonable time following the
completion of the liquidation or distribution of the Partnership Property, the
General Partner or liquidating trustee shall supply to each of the Partners a
statement that shall set forth the assets and the liabilities of the Partnership
and each Partner's Capital Account as of the date of complete liquidation.
Section 10.06. DISTRIBUTION LIMITED TO PARTNERSHIP ASSETS. No Partner
shall have any right to demand a distribution in a form other than that decided
upon by the General Partner or the liquidating trustee, as the case may be, upon
dissolution and termination of the Partnership or to demand the return of its
Capital Contributions prior to dissolution and termination of the Partnership.
Section 10.07. TERMINATION. Upon completion of the distribution of all
Partnership assets and winding up of the Partnership's affairs, the Partnership
shall terminate and the General Partner or liquidating trustee shall have the
authority to execute and record a certificate of cancellation of the Partnership
Certificate or equivalent document as well as any and all other documents that
may be required by law to effect and evidence the dissolution and termination of
the Partnership.
19
<PAGE>
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01. POWER OF ATTORNEY.
(a) Each Limited Partner, by its execution hereof, hereby irrevocably
constitutes and appoints the General Partner its true and lawful
attorney-in-fact to make, execute, sign, acknowledge, record and file, in its
name, place and stead and with full power of substitution, on behalf of it and
on behalf of the Partnership, the following:
(i) one or more Partnership Certificates, certificates of
doing business under an assumed or fictitious name and any other
certificates or instruments that the Partnership or the Partners may be
required to file under the laws of the State of Delaware or any other
jurisdiction whose laws may be applicable;
(ii) one or more certificates of cancellation of the
Partnership Certificate or equivalent document and such other
instruments or documents as may be deemed necessary or desirable by the
General Partner upon the termination of the Partnership business;
(iii) any and all amendments or restatements of the instruments
described in subsections (a)(i) and (ii), provided such amendments or
restatements are either required by law or are consistent with this
Agreement or have been authorized by the affected Partners;
(iv) any and all amendments to or restatements of this
Agreement that have been duly adopted by the Partners pursuant to the
terms hereof; and
(v) any and all other instruments as may be deemed necessary
or desirable by the General Partner to carry out fully the provisions of
this Agreement in accordance with its terms.
(b) The grant of authority contained in subsection (a) is a special
Power of Attorney coupled with an interest, is irrevocable and shall survive the
dissolution or bankruptcy of the Limited Partner granting the power by attorney,
may be exercised by the General Partner on behalf of each Limited Partner by a
facsimile signature or by the General Partner's executing any instrument with a
single signature as attorney-in-fact for all of the Limited Partners, and shall
survive the delivery of an assignment by a Limited Partner of the whole or any
portion of its Partnership Interest.
(c) Notwithstanding the provisions of subsection (a), the General
Partner is not authorized to, and covenants and agrees that it will not, file
any Partnership Certificate or amendment to any Partnership Certificate that
requires an increased Capital Contribution by a Limited Partner unless such
Limited Partner has first authorized the filing of such Partnership Certificate
or amendment in writing.
Section 11.02. GOVERNING LAW AND ARBITRATION. It is the intent of the
Partners that this Agreement be governed by, and that all questions with respect
to the construction of this Agree-
20
<PAGE>
ment and the rights and liabilities of the Partners shall be determined in
accordance with, the internal laws of the State of Delaware without regard to
any otherwise applicable principles of conflicts of laws. To the fullest
extent permitted by law, any controversy or claim arising out of or relating
to this Agreement or the breach thereof shall be settled by arbitration in
accordance with the Rules of the American Arbitration Association to the
extent permitted by the Delaware Uniform Arbitration Act, 10 DEL. C. Section
5701, ET SEQ., and judgment upon the award rendered by the arbitrator(s) may
be entered in any court having jurisdiction thereof.
Section 11.03. SUCCESSORS AND ASSIGNS. Except as herein or by law
otherwise provided and subject to Article Nine, this Agreement shall be binding
on and inure to the benefit of each of the Partners, their legal
representatives, heirs, administrators, executors, successors, and assigns.
Section 11.04. COUNTERPARTS; INTEGRATION. This Agreement may be
executed in several counterparts and all counterparts so executed shall
constitute one Agreement binding on all Partners, notwithstanding that all the
Partners are not signatory to the same counterpart. This Agreement, including
Exhibits, constitutes the entire agreement among the Partners pertaining to the
subject matter hereof and supersedes all prior and contemporaneous agreements
and understandings of the Partners in connection therewith. No covenant,
representation or condition not expressed in this Agreement shall be binding
upon the Partners hereto or shall affect or be effective to interpret, change or
restrict the provisions of this Agreement.
Section 11.05. NO PARTITION. The Partners agree that the Partnership
Property is not and will not be suitable for partition. Accordingly, each of
the Partners hereby irrevocably waives any and all rights that it may have to
maintain any action for partition of any of the Partnership Property.
Section 11.06. CAPTIONS. Captions contained in this Agreement are
inserted only as a matter of convenience and in no way define, limit or extend
the scope or intent of this Agreement or any provision hereof.
Section 11.07. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of any Security or
the rights of the holders thereof.
Section 11.08. NOTICES. All notices under this Agreement shall be in
writing and shall be given to each Partner to whom addressed at the addresses
set forth in Section 2.06 or at such other address as any of the Partners may
hereafter specify in writing, and to the Partnership at such address as the
General Partner shall specify to the Partners. Notice shall be deemed effective
hereunder only when actually received by the party to whom notice is given.
Section 11.09. AMENDMENT; WAIVER. No change, termination or waiver of
any of the provisions hereof shall be binding unless agreed to in writing by
Partners holding in the aggregate at least 66-2/3% of the Partnership Interests,
and such additional approvals, if any, as
21
<PAGE>
are required under each Securitization have been obtained; provided, however,
that 100% of the constituent members of the General Partner and 100% of the
directors of any Independent Member must consent to any amendment to any of
the provisions hereof.
Section 11.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments,
as may be reasonably requested by any other party in order to effect the
purposes of this Agreement and to better assure and confirm unto the requesting
party its rights, powers and remedies hereunder.
22
<PAGE>
IN WITNESS WHEREOF, the initial Partners have executed this Agreement as
of the date first set forth above.
HONDA TITLING D LLC, as General Partner
By: HONDA FUNDING INC.
By: /s/ Y. KOHAMA
-------------------------------
Name: Y. Kohama
Title: President
AMERICAN HONDA FINANCE CORPORATION, as
Limited Partner
By: /s/ Y. KOHAMA
-------------------------------
Name: Y. Kohama
Title: President
23
<PAGE>
EXHIBIT A
GROSS ASSET VALUE OF INITIAL CAPITAL CONTRIBUTIONS
General Partner: $10
Limited Partner: $990
A-1
<PAGE>
EXHIBIT B
INITIAL PARTNERSHIP INTERESTS
General Partner: 1%
Limited Partner: 99%
B-1
<PAGE>
EXHIBIT C
CERTIFICATE OF LIMITED PARTNERSHIP
OF
HONDA TITLING D L.P.
This Certificate of Limited Partnership of Honda Titling D L.P. (the
"Partnership") is being executed and filed by the undersigned General Partner
(the "General Partner") to form a limited partnership under the Delaware Revised
Uniform Limited Partnership Act (6 Del.C. Section 17-101 ET SEQ.).
ARTICLE ONE
The name of the limited partnership formed hereby is Honda Titling D
L.P.
ARTICLE TWO
The address of the registered office of the Partnership in the State of
Delaware is c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, Delaware 19801. The name and address of the
registered agent for service of process on the Partnership in the State of
Delaware is The Corporation Trust Company, Corporation Trust Center, 1209 Orange
Street, Wilmington, Delaware 19801.
ARTICLE THREE
The name and business address of the General Partner of the Partnership
is:
Honda Titling D LLC
700 Van Ness Avenue
Torrance, CA 90501
IN WITNESS WHEREOF, the undersigned has hereunto set his hand this ___
day of January 1999.
Honda Titling D LLC
------------------------------
Y. Kohama
Authorized Signatory
C-1
<PAGE>
EXHIBIT D
Agreement of Limited Partnership
Honda Titling D L.P.
[GENERAL PARTNER/LIMITED PARTNER] UNIT CERTIFICATE
OF
HONDA TITLING D L.P.
(A DELAWARE LIMITED PARTNERSHIP)
No.________ _________Units
THIS SECURITY HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE
PARTNERSHIP HAS NOT BEEN REGISTERED UNDER THE UNITED STATES INVESTMENT COMPANY
ACT OF 1940, AS AMENDED (THE "INVESTMENT COMPANY ACT"). THIS SECURITY MAY NOT
BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, EXCEPT (A) TO A PERSON
(1) WHOM THE SELLER REASONABLY BELIEVES IS AN ACCREDITED INVESTOR WITHIN THE
MEANING OF REGULATION D UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT
OR A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE
SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER, IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A SO
LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A IN ACCORDANCE
WITH RULE 144A, AND WHICH MAY BE IN EITHER CASE EFFECTED WITHOUT LOSS OF ANY
APPLICABLE INVESTMENT COMPANY ACT EXCEPTION [[INCLUDE CLAUSE (2) ONLY FOR
LIMITED PARTNER CERTIFICATE] AND (2) WHICH CONSTITUTES A "QUALIFIED PURCHASER"
AS DEFINED IN THE INVESTMENT COMPANY ACT AND (B) IN ACCORDANCE WITH ALL
APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES AND ANY OTHER
APPLICABLE JURISDICTION.
<PAGE>
This certifies that ____________________ is the registered owner of ____
Units ("Units") of Honda Titling D L.P., a Delaware limited partnership (the
"Partnership"). The Units evidenced by this Certificate are [Limited/General]
Partner Units. The rights, preferences, and limitations of the Partners are set
forth in the Agreement of Limited Partnership of the Partnership, as amended
from time to time (the "Partnership Agreement"). Copies of the Partnership
Agreement and the Certificate of Limited Partnership are on file at the General
Partner's principal office at 700 Van Ness Avenue, Torrance, California, 90501,
Attn:__________. Capitalized terms not defined herein have the meanings given
to them in the Partnership Agreement.
HONDA TITLING D LLC
General Partner of
Honda Titling D L.P., a
Delaware limited partnership
Dated: By:
-------------------- ------------------------------
Title:
---------------------------
BY ACCEPTANCE OF THIS CERTIFICATE FOR [GENERAL PARTNER/LIMITED PARTNER] UNITS,
AND AS A CONDITION TO BEING ENTITLED TO ANY RIGHTS IN OR BENEFITS WITH RESPECT
TO THE UNITS EVIDENCED HEREBY, A HOLDER IS DEEMED TO HAVE AGREED, WHETHER OR NOT
SUCH HOLDER IS ADMITTED TO THE PARTNERSHIP AS A SUBSTITUTED [GENERAL/LIMITED]
PARTNER WITH RESPECT TO THE INTEREST EVIDENCED HEREBY, TO COMPLY WITH AND BE
BOUND BY ALL TERMS AND CONDITIONS OF THE LIMITED PARTNERSHIP AGREEMENT, A COPY
OF WHICH HAS BEEN AVAILABLE FOR INSPECTION AND MAY BE OBTAINED UPON REQUEST
(FREE OF CHARGE) FROM THE PARTNERSHIP.
<PAGE>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
HONDA TITLING D LLC
LIMITED LIABILITY COMPANY AGREEMENT
Between
AMERICAN HONDA FINANCE CORPORATION
and
HONDA FUNDING INC.
as Members
Dated as of May __, 1999
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1.02. Other Definitional Provisions. . . . . . . . . . . . . . . . 3
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. Formation. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02. Name and Office. . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.03. Duration.. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.04. Registered Office and Registered Agent.. . . . . . . . . . . 4
Section 2.05. Execution, Delivery and Filing of Certificate. . . . . . . . 4
ARTICLE THREE
PURPOSES
Section 3.01. Purposes.. . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.02. Power and Authority. . . . . . . . . . . . . . . . . . . . . 5
Section 3.03. Limitations on Powers. . . . . . . . . . . . . . . . . . . . 5
Section 3.04. Company Opportunity. . . . . . . . . . . . . . . . . . . . . 6
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. Admission and Initial Contributions of Members.. . . . . . . 6
Section 4.02. Additional Capital Contributions.. . . . . . . . . . . . . . 6
Section 4.03. Withdrawals. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.04. Borrowings.. . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 4.05. Additional Members.. . . . . . . . . . . . . . . . . . . . . 7
</TABLE>
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MANAGEMENT
Section 5.01. Powers of the Members. . . . . . . . . . . . . . . . . . . . 7
Section 5.02. Limitations on Powers of Members.. . . . . . . . . . . . . . 8
Section 5.03. Self Dealing.. . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.04. Standard of Care; Liability. . . . . . . . . . . . . . . . . 8
Section 5.05. Compensation.. . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.06. Meetings of Members. . . . . . . . . . . . . . . . . . . . . 9
Section 5.07. Consent. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.08. Independent Member.. . . . . . . . . . . . . . . . . . . . . 9
Section 5.09. Managers.. . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. Unanimous Vote Required. . . . . . . . . . . . . . . . . . . 10
Section 6.02. Voting on Bankruptcy or Insolvency.. . . . . . . . . . . . . 10
ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. Capital Accounts.. . . . . . . . . . . . . . . . . . . . . . 10
Section 7.02. Allocation of Profits and Losses.. . . . . . . . . . . . . . 11
Section 7.03. Distributions. . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. Exculpation of Liability.. . . . . . . . . . . . . . . . . . 11
Section 8.02. Indemnification. . . . . . . . . . . . . . . . . . . . . . . 11
Section 8.03. Fiduciary Duty.. . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE NINE
TERM OF COMPANY
Section 9.01. Commencement.. . . . . . . . . . . . . . . . . . . . . . . . 12
Section 9.02. Dissolution. . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
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ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. Application of Assets. . . . . . . . . . . . . . . . . . . . 12
Section 10.02. Termination. . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 10.03. Claims of the Members. . . . . . . . . . . . . . . . . . . . 13
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. Restriction on Transfers of Interests. . . . . . . . . . . . 13
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. Investment Representation. . . . . . . . . . . . . . . . . . 13
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. Limitations on Amendment.. . . . . . . . . . . . . . . . . . 13
Section 13.02. Books of Account; Reports. . . . . . . . . . . . . . . . . . 14
Section 13.03. Bank Accounts and Investment of Funds. . . . . . . . . . . . 14
Section 13.04. Accounting Decisions.. . . . . . . . . . . . . . . . . . . . 14
Section 13.05. Federal Income Tax Elections.. . . . . . . . . . . . . . . . 14
Section 13.06. Entire Agreement.. . . . . . . . . . . . . . . . . . . . . . 14
Section 13.07. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.08. Consent of Members.. . . . . . . . . . . . . . . . . . . . . 15
Section 13.09. Further Execution. . . . . . . . . . . . . . . . . . . . . . 15
Section 13.10. Binding Effect.. . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.11. Severability.. . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.12. Captions.. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.13. Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . 15
Section 13.14. Delaware Law to Control. . . . . . . . . . . . . . . . . . . 16
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EXHIBITS
Exhibit A - Members; Capital Contributions; Membership Percentages . . .A-1
</TABLE>
iv
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This Limited Liability Company Agreement of Honda Titling D LLC, a
Delaware limited liability company (the "Company"), dated as of May __, 1999, is
between American Honda Finance Corporation ("AHFC"), a California corporation,
and Honda Funding Inc., a Delaware corporation (the "Independent Member" and,
together with AHFC, the "Members"); and
WHEREAS, the Members desire to form a limited liability company under
and pursuant to the Delaware Limited Liability Company Act for the purposes set
forth in this Agreement by causing a Certificate of Formation of the Company to
be filed with the office of the Secretary of State of the State of Delaware and
by entering into this Agreement;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, agree to form the Company in accordance with the Delaware
Limited Liability Company Act and subject to the terms and provisions of this
Agreement.
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. As used in this Agreement, the following
terms shall have the following meanings:
"ACT" means the Delaware Limited Liability Company Act (6 DEL. C.
Section 18-101, ET SEQ.), as amended from time to time.
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer or director of
such Person. For purposes of this definition, a Person shall be deemed to be
"controlled by" another Person if such other person possesses, directly or
indirectly, the power (i) to vote 5% or more of the securities (on a fully
diluted basis) having ordinary voting power for the election of directors,
members or managing partners of such Person or (ii) to direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGREEMENT" means this Limited Liability Company Agreement of the
Company, as it may be amended, restated or supplemented from time to time.
"CAPITAL ACCOUNTS" shall have the meaning set forth in Section 7.01.
"CAPITAL CONTRIBUTIONS" means the amount of all cash, money, and notes
payable on demand and the agreed upon value of other property or services
contributed by the Members to the Company.
<PAGE>
"CERTIFICATE" means the Certificate of Formation of the Company,
including any restatements thereof or amendments thereto, which are filed with
the Delaware Secretary of State.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" shall have the meaning set forth in Section 3.01(b).
"COVERED PERSON" shall have the meaning set forth in Section 8.03.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"FISCAL YEAR" means the taxable year of the holder of the Majority
Interest.
"INDEPENDENT DIRECTOR" means an individual who is not (i) a director,
officer or employee of AHFC or any Affiliate of AHFC (other than any limited or
special purpose corporation or limited liability company similar to the
Company); (ii) a person related to any officer or director of AHFC or any
Affiliate of AHFC; (iii) a direct or indirect holder of more than 10% of any
voting securities of AHFC or any Affiliate of AHFC; or (iv) a person related to
a direct or indirect holder of more than 10% of any voting securities of AHFC or
any Affiliate of AHFC.
"INDEPENDENT MEMBER" shall have the meaning set forth in Section 5.08.
"MAJORITY INTEREST" means the interest in the Company of AHFC.
"MAJORITY OF THE REMAINING MEMBERS" means those Members holding more
than 50% of the Membership Percentages and more than 50% of the Capital Account
balances of the Members.
"MANAGERS" means Honda Funding Inc. and such other persons or entities
that may be designated from time to time by the Members as managers of the
Company to perform such functions for the Company as may be determined from time
to time by the Members. A Manager shall be deemed to be a "manager" of the
Company within the meaning of Section 18-101 of the Act.
"MEMBERS" means the persons or entities designated as Members of the
Company in Exhibit A. Any reference to a Member shall, unless the context
clearly requires otherwise, include a reference to its predecessors and
successors in interest.
"MEMBERSHIP PERCENTAGES" means the Members' respective limited liability
company interests in the Company as set forth in Exhibit A.
"ORIGINATION TRUST" means Honda Lease Trust, a Delaware business trust.
"PERSON" means any legal person, including any individual, partnership,
corporation, trust, bank, trust company, limited liability company, limited
liability partnership, joint stock company, association, joint venture, estate
(including any beneficiaries), unincorporated organization or government or any
agency or potential subdivision thereof.
2
<PAGE>
"PROFITS" and "LOSSES" mean the Company's taxable income or loss for
each Fiscal Year (or other period) determined in accordance with the accounting
methods followed by the Company for federal income tax purposes, except that any
income of the Company that is exempt from federal income tax and not otherwise
taken into account in computing Profits and Losses shall be added to such
taxable income or loss.
"RECEIVABLES" shall have the meaning set forth in Section 3.01(a).
"SECURITIES" shall have the meaning set forth in Section 3.01(d).
"SUBI" shall have the meaning set forth in Section 3.01(c).
"TRUST" shall have the meaning set forth in Section 3.01(c).
"TRUSTEE" shall have the meaning set forth in Section 6.01.
"UTI" shall have the meaning set forth in Section 3.01(c).
Section 1.02. OTHER DEFINITIONAL PROVISIONS.
(a) For all purposes of this Agreement, except as otherwise expressly
provided or unless the context otherwise requires, (i) terms used herein
include, as appropriate, all genders and the plural as well as the singular,
(ii) references to this Agreement include all Exhibits hereto, (iii) references
to words such as "herein" and "hereof" shall refer to this Agreement as a whole
and not to any particular part, Article or Section herein, (iv) references to an
Article or Section such as "Article One" or "Section 1.01" shall refer to the
applicable Article or Section of this Agreement, (v) the term "include" and all
variations thereof shall mean "include without limitation", (vi) the term "or"
shall include "and/or" and (vii) the term "proceeds" shall have the meaning
ascribed to such term in the Uniform Commercial Code, as adopted by and in
effect in the State of Delaware.
(b) As used in this Agreement and in any certificate or other
document made or delivered pursuant hereto or thereto, accounting terms not
defined in this Agreement or in any such certificate or other document, and
accounting terms partly defined in this Agreement or in any such certificate or
other document to the extent not defined, shall have the respective meanings
given to them under generally accepted accounting principles in effect from time
to time. To the extent that the definitions of accounting terms in this
Agreement or in any such certificate or other document are inconsistent with the
meanings of such terms under such generally accepted accounting principles, the
definitions contained in this Agreement or in any such certificate or other
document shall control.
ARTICLE TWO
ORGANIZATION OF COMPANY
Section 2.01. FORMATION. The parties hereto hereby form a limited
liability company pursuant to the provisions of the Act and this Agreement, and
agree that the rights, duties and
3
<PAGE>
liabilities of the Members and Managers shall be as provided in the Act,
except as otherwise provided in this Agreement. Pursuant to Section 18-201(d)
of the Act, this Agreement shall become effective as of the formation of the
Company.
Section 2.02. NAME AND OFFICE. The name of the Company shall be Honda
Titling D LLC, and its office shall be located at 700 Van Ness Avenue, Torrance,
California 90501, or such other place as the Members may determine from time to
time.
Section 2.03. DURATION. The term of the Company shall commence on the
date the Certificate is filed in the office of the Delaware Secretary of State
and shall continue until March 31, 2027, unless the Company is dissolved before
such date in accordance with the provisions of this Agreement. The existence of
the Company as a separate legal entity shall continue until cancellation of the
Certificate in the manner required by the Act.
Section 2.04. REGISTERED OFFICE AND REGISTERED AGENT. The Company's
initial registered office shall be at the office of its registered agent at
Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 and the
name of its initial registered agent at such address shall be The Corporation
Trust Company. The registered office and registered agent may be changed from
time to time in accordance with the Act. If the registered agent shall ever
resign, the Company shall promptly appoint a successor.
Section 2.05. EXECUTION, DELIVERY AND FILING OF CERTIFICATE. Y.
Kohama, or such person as designated by Y. Kohama, as an "authorized person"
within the meaning of the Act, shall execute, deliver and file the Certificate
with the Delaware Secretary of State.
ARTICLE THREE
PURPOSES
Section 3.01. PURPOSES. The purposes for which the Company is formed
are to, solely in its capacity as General Partner of Honda Titling D L.P.:
(a) acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with from time to time (i) motor
vehicle leases; (ii) installment obligations relating to motor vehicles;
(iii) motor vehicle retail installment sale or conditional sale
contracts; (iv) motor vehicle wholesale inventory loans or sales
contracts secured by, among other things, new or used motor vehicles;
(v) dealer rental car loans or sales contracts including dealer rental
car loans or sales contracts secured by, among other things, new or used
motor vehicles; (vi) receivables, including any right to payment from a
person or entity, whether constituting an account, chattel paper,
instrument or general intangible, arising out of or relating to the sale
of new or used motor vehicles or related products and supplies;
(vii) interests in any of the foregoing; and (viii) any proceeds or
other monies due under any of the foregoing, any related fees and
charges, security interests in the foregoing or other property securing
payment thereof and related agreements, instruments, documents and
rights (collectively, the "Receivables");
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(b) acquire, own, hold, service, sell, assign, pledge,
finance, refinance and otherwise deal with Receivables, any collateral
securing the Receivables, all related insurance policies, related
agreements with Affiliates, agreements with motor vehicle dealers,
manufacturers and lessors and other originators or servicers of
Receivables and any proceeds or further rights associated therewith
(collectively, the "Collateral");
(c) sell, assign, pledge or otherwise transfer Receivables,
Collateral, Securities and notes or beneficial interests in any of the
foregoing, undivided trust interests ("UTIs") and special units of
beneficial interests ("SUBIs") of the Origination Trust to trusts or
other entities established by or on behalf of the Company or one of its
Affiliates (each, a "Trust") or to Affiliates of the Company;
(d) authorize, sell and deliver or participate in the
issuance of one or more series or classes of participation certificates,
bonds, notes or other evidences of interest or indebtedness
(collectively, "Securities"), in either case issued by Trusts;
(e) acquire Securities, UTIs or SUBIs or other property of a
Trust, including remainder interests in collateral or reserve accounts;
(f) issue, authorize, sell and deliver Securities, UTIs,
SUBIs or other instruments secured, Collateral collateralized by or
evidencing beneficial interests in Receivables or Securities;
(g) hold, and to enjoy all of the rights and privileges as a
holder or beneficial owner of, any Securities, Collateral, UTIs or
SUBIs;
(h) negotiate, authorize, execute, deliver or assume or
perform the obligations under any agreement, instrument or document
relating to the activities set forth in subsections (a) through (g)
above, including but not limited to any trust agreement, sale and
servicing agreement, pooling and servicing agreement, indenture,
reimbursement agreement, credit support agreement, receivables purchase
agreement, indemnification agreement, placement agreement, underwriting
agreement or any other documents or agreements contemplated thereby or
specifically described therein;
(i) on its own behalf or on behalf of Honda Titling D L.P.,
to bring and defend actions and proceedings at law or in equity or
before any court or governmental, administrative or other regulatory
agency, body or commission;
(j) on its own behalf or on behalf of Honda Titling D L.P.,
to open, maintain and close bank, brokerage and other accounts and to
pay fees and changes applicable to transactions related thereto;
(k) to issue membership interests as provided for herein; and
(l) engage in any activity and to exercise any powers
permitted to limited liability companies under the laws of the State of
Delaware that are related or incidental to the foregoing and necessary,
convenient or advisable to accomplish the foregoing.
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Section 3.02. POWER AND AUTHORITY. In its capacity as General Partner
of Honda Titling D L.P., the Company shall have the power and authority to take
any and all actions necessary, appropriate, proper, advisable, incidental or
convenient to accomplish or for the furtherance of the purposes set forth in
Section 3.01. The Company shall serve as a General Partner of Honda Titling D
L.P. The Company, and Honda Funding Inc. or Y. Kohama, on behalf of the
Company, shall enter into and perform the Limited Partnership Agreement of Honda
Titling D L.P. without any further act, vote or approval of any Member, Manager
or other person, notwithstanding any other provision of this Agreement, the Act
or other applicable law, rule or regulation.
Section 3.03. LIMITATIONS ON POWERS. Notwithstanding any other
provision of this Agreement and any provision of law, the Company shall not do
any of the following:
(a) engage in any business or activity other than as set
forth in this Agreement;
(b) without the unanimous affirmative vote of the Members,
(i) merge or consolidate with or into any other Person, (ii) act other
than in the Company's own name, (iii) dissolve or liquidate, in whole or
in part, or institute proceedings to be adjudicated bankrupt or
insolvent, (iv) consent to the institution of bankruptcy or insolvency
proceedings against it, (v) file a petition seeking or consent for
reorganization or relief under any applicable federal or state law
relating to bankruptcy, (vi) consent to the appointment of a receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or all or a substantial part of its property, (vii) make any
assignment for the benefit of creditors, (viii) admit in writing its
inability to pay its debts generally as they become due; (ix) institute
or join in any institution of, any bankruptcy, insolvency, liquidation,
reorganization or arrangement proceedings or other proceedings under any
federal or state bankruptcy or similar law, against any entity in which
the Company holds an ownership interest; or (x) take any limited
liability company action in furtherance of the actions set forth in
clauses (i) through (ix) above;
(c) without the unanimous affirmative vote of the Members,
take or cause to be taken any of the actions referred to in clauses (i)
through (vii) of subparagraph (b) above with respect to any entity of
which the Company is a partner or member or any entity of which such
partner or member is, in turn, a partner or member (each such entity
being referred to as a "Downstream Entity");
(d) without the unanimous affirmative vote of the Members,
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; or
(e) without the unanimous affirmative vote of the Members,
(i) amend, modify or terminate or cause to be amended, modified or
terminated, the organizational documents of any Downstream Entity,
(ii) cause any Downstream Entity to hold property other than in such
entity's own name, (iii) take any action or cause to be taken any action
with respect to the dissolution or winding up of any Downstream Entity,
except as
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permitted in such Downstream Entity's organizational documents,
or elect not to continue such Downstream Entity's business; or
(f) take or cause to be taken any action not otherwise
permitted under the organizational documents of any Downstream Entity.
Section 3.04. COMPANY OPPORTUNITY. No Member need afford the Company
or any other Member the opportunity of investing or otherwise participating in
any other enterprise, regardless of whether such enterprises, but for this
sentence, would be deemed an opportunity of the Company. Nothing in this
Agreement shall prohibit any Member from engaging in any other business
activity, whether or not competitive with, similar to, or within the scope of
the activities conducted by or on behalf of, the Company.
ARTICLE FOUR
CAPITAL CONTRIBUTIONS; BORROWINGS
Section 4.01. ADMISSION AND INITIAL CONTRIBUTIONS OF MEMBERS.
(a) Each of AHFC and the Independent Member shall be admitted as a
member of the Company at the time such entity (i) executes this Agreement or a
counterpart signature page to this Agreement and (ii) is listed as a Member on
Exhibit A attached hereto.
(b) The Members shall make the Capital Contributions set forth next
to their names in Exhibit A upon the formation of the Company. No interest
shall accrue on any Capital Contribution made to the Company.
Section 4.02. ADDITIONAL CAPITAL CONTRIBUTIONS. The Members shall not
be obligated to make additional Capital Contributions except with the consent of
all Members.
Section 4.03. WITHDRAWALS. No Member shall be entitled to be repaid
any portion of its Capital Account or withdraw from the Company without the
consent of all Members or as otherwise provided in this Agreement.
Section 4.04. BORROWINGS. The Company may borrow sums to be used for
any of the business purposes described in Section 3.01; provided, however, that
any such borrowing shall require the prior approval of a Majority Interest and
shall not be prohibited by this Agreement, any applicable law, regulation or
agreement. Any Member may advance such sums to the Company as approved in
writing by a Majority Interest. Any amounts borrowed from a Member shall not
constitute a contribution to the capital of the Company but shall constitute a
debt of the Company which shall be repaid before any distributions to the
Members.
Section 4.05. ADDITIONAL MEMBERS. No additional Members shall be
admitted to the Company without the unanimous consent of the Members.
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ARTICLE FIVE
MANAGEMENT
Section 5.01. POWERS OF THE MEMBERS.
(a) The Company shall be managed by its Members. Subject to the
other provisions of this Article and Article Six, each Member shall have the
authority, on behalf of the Company, to do all things necessary or appropriate
for the accomplishment of the purposes of the Company, including, but not
limited to, (i) acquiring and selling, assigning and transferring installment
obligations, leases, retail installment sale or conditional sale contracts,
inventory loans, motor vehicle wholesale inventory sales contracts, dealer
rental car loans or sales contracts, promissory notes, security agreements and
receivables; (ii) disbursing Company funds for Company purposes; (iii) investing
and reinvesting Company funds; (iv) executing contracts, notes, mortgages and
other agreements and instruments; (v) employing attorneys, accountants, Managers
or other agents, which may include Affiliates of the Company; (vi) paying all
Company obligations; (vii) performing all ministerial acts and duties relating
to the payment of all indebtedness, taxes and assessments due or to become due
with regard to any property of the Company; (viii) purchasing and maintaining
insurance on behalf of the Company against any liability or expense asserted
against or incurred by or on behalf of the Company; (ix) transacting the
Company's business under an assumed name or name other than its name as set
forth in the Certificate; (x) appointing any Member or other person as agent for
service of process on the Company as required by the law of any jurisdiction in
which the Company transacts business; (xi) commencing, prosecuting or defending
any proceeding in the Company's name; and (xii) doing such other acts as may
facilitate the Company's exercise of its powers; provided, however, that all
such acts shall fall within the purposes of the Company set forth in Section
3.01.
(b) Notwithstanding anything in this Agreement to the contrary, the
Company shall at all times have at least one Independent Member, and no action
of the type described in Article Six shall occur without the consent of each
Independent Member.
(c) Each Member irrevocably appoints the other Members as its
attorney-in-fact on its behalf and in its stead to execute and swear to any
amendment to the Certificate and file any writing, and to give any notice which
may be required by any rule or law and which may be necessary or appropriate in
order to effect any action by or on behalf of the Company or the Members taken
as provided in this Agreement or which may be necessary or appropriate to
correct any errors or omissions. This power of attorney is coupled with an
interest and shall not be revoked by the act of any Member. This power of
attorney shall survive and not be affected by an assignment by any Member of its
limited liability company interest in the Company; provided, however, that where
a Member's entire limited liability company interest is assigned to an assignee
who becomes a substitute Member in its stead, such power shall survive for the
sole purpose of enabling such Member to effect such substitution. Each Member
shall provide seven days' prior written notice of actions to be taken as
attorney-in-fact on behalf of another Member and the acting Member shall be
authorized to take such actions unless the other Member objects in writing
during such notice period.
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(d) The Members shall not, and shall not allow the Company otherwise
to (i) commingle any funds or other assets of the Company with the funds or
assets of any other Person, (ii) perform the obligations of another Person,
(iii) guarantee the obligations of another Person, (iv) pledge the assets of
another Person or (v) enter into transactions with any Person except as
specifically authorized and contemplated in this Agreement and related
agreements. The Company shall (A) conduct business in its own name and hold
itself out as a separate entity, (B) maintain a separate office location or, if
the Company shares office space with others, pay its fair allocable share of
overhead costs and (C) observe all organizational formalities. The bank
accounts, financial and accounting books, records and financial statements of
the Company shall be maintained separate from those of every other Person. All
obligations and indebtedness of any kind incurred by the Company shall be paid
from the assets of the Company and the Company's assets shall not be used to pay
any obligation or indebtedness of any other Person, other than certain expenses,
obligations or indebtedness of the Origination Trust and any trustee of any of
the foregoing with respect to transactions of or with respect to such Trust or
as set forth in Section 3.01 herein.
(e) A copy of the Certificate or amendments to the Certificate will
be provided to each Member upon written request to the Company.
(f) Subject to the other provisions of this Article and Article Six,
the Members shall have full power to act for and to bind the Company to the
extent provided by Delaware law. Every contract, note, mortgage, lease, deed or
other instrument or agreement executed by any Member shall be conclusive
evidence that at the time of execution the Company was then in existence, that
this Agreement had not theretofore been terminated or amended in any manner and
that the execution and delivery of such instrument was duly authorized by the
Members. A Manager may bind the Company only to the extent authorized by the
Members.
Section 5.02. LIMITATIONS ON POWERS OF MEMBERS. Notwithstanding any
other provision of this Agreement, no act shall be taken, sum expended, decision
made, obligation incurred or power exercised by any Member on behalf of the
Company without prior written notice to all Members outlining the proposed
action followed by the written consent of a Majority Interest with respect to:
(i) any mortgage, grant of security interest, pledge or encumbrance of any asset
of the Company; (ii) any merger of the Company with another entity; (iii) any
transaction involving an actual or potential conflict of interest between a
Member and the Company; (iv) any material change in the character of the
business and affairs of the Company; or (v) any act that would contravene in a
material respect any provision of this Agreement or the Act.
Section 5.03. SELF DEALING. Any Member and any Affiliate thereof may
deal with the Company, directly or indirectly, as vendor, purchaser, employee,
agent or otherwise. No contract or other act of the Company shall be voidable
or affected in any manner by the fact that a Member or an Affiliate thereof is
directly or indirectly interested in such contract or other act apart from its
interest as a Member, nor shall any Member or an Affiliate thereof be
accountable to the Company or the other Members in respect of any profits
directly or indirectly realized by reason of such contract or other act, and
such interested Member shall be eligible to vote or take any other action as a
Member in respect of such contract or other act as it would be entitled were it
or its Affiliate not interested therein. Notwithstanding the foregoing, (i) any
direct or indirect interest of a Member or an Affiliate thereof in any contract
or other act, other than its interest as
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a Member, shall be disclosed to all other Members, (ii) such contract or
other act shall be approved by a Majority Interest unless the same is
specifically authorized herein and (iii) the Members shall not receive or
hold any property of the Company as collateral security in respect of any
claim against the Company.
Section 5.04. STANDARD OF CARE; LIABILITY. Each Member and its
respective directors, officers, stockholders and Affiliates shall discharge its
duties in good faith, with the care an ordinarily prudent person in a like
position would exercise under similar circumstances, and in a manner he
reasonably believes to be in the best interests of the Company as required by
this Agreement or the Act. A Member shall not be liable for monetary damages to
the Company for any breach of any such duties except for receipt of a financial
benefit to which the Member is not entitled, voting for or assenting to a
distribution to Members in violation of this Agreement or the Act, or a knowing
violation of the law.
Section 5.05. COMPENSATION. The Company shall reimburse each Member
for any reasonable out-of-pocket expenses incurred on behalf of the Company. In
addition, any Member may receive reasonable compensation for any services
rendered to the Company approved by the Majority Interest.
Section 5.06. MEETINGS OF MEMBERS. All Members shall be entitled to
vote on any matter submitted to a vote of the Members. Unless a greater vote is
required by the Act or this Agreement, the affirmative vote of a Majority
Interest shall be required. Meetings of Members for the transaction of such
business as may properly come before the Members may be held at such place, on
such date and at such time as the Majority Interest shall determine. Special
meetings of Members for any proper purpose or purposes may be called at any time
by the holders of at least 25% of the Membership Percentages of all Members.
The Company shall deliver or mail written notice stating the date, time, place
and purposes of any meeting to each Member entitled to vote at the meeting.
Such notice shall be given not less than 10 nor more than 60 days before the
date of the meeting.
Section 5.07. CONSENT. Any action required or permitted to be taken at
an annual or special meeting of the Members may be taken without a meeting, if
the Members unanimously consent, in writing, to take the proposed action. Every
written consent shall bear the date of consent in lieu of meeting and the
signature of each Member who signs the consent.
Section 5.08. INDEPENDENT MEMBER. The Company shall at all times have
at least one Member (each, an "Independent Member") that shall be a special
purpose corporation formed pursuant to a charter or articles of incorporation
that (i) limits its business purposes and activities and (ii) requires the
unanimous consent of its entire board of directors (without any vacancies),
including the affirmative vote of all Independent Directors before such member
may approve, permit or take any action, or cause any action to be taken in
respect of the following actions with respect to any limited liability company
of which it is a member, to (a) institute proceedings to have itself adjudicated
bankrupt or insolvent, (b) consent to the institution of bankruptcy or
insolvency proceedings against it, (c) file a petition seeking, or consent to,
such member's or limited liability company's reorganization or relief under any
applicable federal or state law relating to bankruptcy, (d) consent to the
appointment of a receiver, liquidator, assignee, trustee, sequestrator or other
similar official of such member or limited liability company or all or a
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substantial part of its property, (e) make any assignment for the benefit of its
creditors, admit in writing its inability to pay its debts generally as they
become due, (f) institute, or join in any institution of, any bankruptcy,
insolvency, liquidation, reorganization or arrangement proceedings or other
proceedings under any federal or state bankruptcy or similar law, against any
entity in which such member or limited liability company holds an ownership
interest or (g) take any action in furtherance of the actions set forth in
clauses (a) through (f) above.
Section 5.09. MANAGERS. Except as otherwise provided by the Act:
(a) the debts, obligations and liabilities of the Company,
whether arising in contract, tort or otherwise, shall be solely the
debts, obligations and liabilities of the Company, and no Manager shall
be obligated personally for any such debt, obligation, or liability of
the Company solely by reason of being a Manager of the Company;
(b) no Manager shall be required to make any Capital
Contribution in the form of cash to the Company; and
(c) no Manager shall be (i) entitled to receive any Profits
or (ii) liable for any Losses.
ARTICLE SIX
POWER TO INSTITUTE BANKRUPTCY OR INSOLVENCY PROCEEDINGS
Section 6.01. UNANIMOUS VOTE REQUIRED. Notwithstanding any other
provision of this Agreement and any provision of law that otherwise so empowers
the Company, the Company shall not, without (i) the prior written consent of
each trustee from time to time (each, a "Trustee") under any pooling and
servicing agreement, indenture, trust agreement or similar agreement between the
Company, a Trustee and a servicer, if any, pursuant to which the Company shall
issue certificates and/or notes and (ii) the affirmative vote of 100% of the
Members of the Company, including the Independent Member, institute proceedings
to be adjudicated a bankrupt or insolvent or consent to the institution of
bankruptcy or insolvency proceedings against it, or file a petition seeking, or
consent to, reorganization or relief under any applicable federal or state law
relating to bankruptcy, or consent to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator or other similar official of the Company or all
or a substantial part of its property, or make any assignment for the benefit of
creditors, or admit in writing its inability to pay its debts generally as they
become due, or take any limited liability company action in furtherance of any
such action.
Section 6.02. VOTING ON BANKRUPTCY OR INSOLVENCY. All Members,
including each Independent Member, shall be entitled to vote on any proposal of
the type described in Section 6.01. The affirmative vote of 100% of the
Members, including each Independent Member, entitled to vote on such a proposal
shall be required for such a proposal to be adopted.
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ARTICLE SEVEN
CAPITAL ACCOUNTS; PROFITS AND LOSSES; DISTRIBUTIONS
Section 7.01. CAPITAL ACCOUNTS. A capital account shall be maintained
for each Member (each, a "Capital Account"), to which contributions and Profits
shall be credited and against which distributions and Losses shall be charged.
Capital Accounts shall be maintained in accordance with the accounting
principles of Code Section 704 and the Treasury Regulations thereunder.
Section 7.02. ALLOCATION OF PROFITS AND LOSSES.
The Profits and Losses of the Company shall be determined as of the end
of each Fiscal Year of the Company and shall be allocated to AHFC. Honda
Funding Inc. will have no interest in the Profits and Losses.
Section 7.03. DISTRIBUTIONS.
(a) The Company shall distribute to AHFC such sums as the Majority
Interest determines to be available for distribution and not required to provide
for current or anticipated Company needs. All distributions shall be made to
AHFC.
(b) No distributions shall be declared and paid unless, after the
distribution is made, the Company would be able to pay its debts as they become
due in the usual course of business and the assets of the Company are in excess
of the sum of (i) the Company's liabilities, plus (ii) the amount that would be
needed to satisfy the preferential rights of other Members upon dissolution that
are superior to the rights of the Members receiving the distribution.
(c) The Company shall not be required to make a distribution to a
Member on account of its interest in the Company if such distribution would
violate Section 18-607 of the Act or other applicable law.
ARTICLE EIGHT
EXCULPATION OF LIABILITY; INDEMNIFICATION
Section 8.01. EXCULPATION OF LIABILITY. Except as otherwise provided
by the Act, the debts, obligations and liabilities of the Company, whether
arising in contract, tort or otherwise, shall be solely the debts, obligations
and liabilities of the Company, and no Member shall be obligated personally for
any such debt, obligation or liability of the Company solely by reason of being
a Member of the Company.
Section 8.02. INDEMNIFICATION. The Company hereby agrees to indemnify
each Member, Manager, employee or agent of the Company, and each director,
officer, employee or Affiliate of each Member, who was or is a party or is
threatened to be made a party to a threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or investigative, and
whether formal or informal (other than an action by or in the right of the
Company) by
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reason of the fact that such person is or was a Member, employee or
agent of the Company against expenses (including reasonable attorneys' fees),
judgments, penalties, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with the action, suit or
proceeding.
Section 8.03. FIDUCIARY DUTY. To the extent that, at law or in equity,
a Member, Manager, or agent of the Company or a director, officer, employee or
Affiliate of such person (each, a "Covered Person") has duties (including
fiduciary duties) and liabilities relating thereto to the Company or to any
other Covered Person, a Covered Person acting under this Agreement shall not be
liable to the Company or to any Member for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict the duties and liabilities of a Covered Person otherwise
existing at law or in equity, are agreed by the Members to replace such other
duties and liabilities of such Covered Person.
ARTICLE NINE
TERM OF COMPANY
Section 9.01. COMMENCEMENT. The term of the Company shall commence
upon the filing of the Certificate with the Delaware Secretary of State. The
bankruptcy of a Member or the occurrence of any other event under Section 18-304
of the Act shall not cause a Member to cease to be a Member of the Company and
upon the occurrence of such an event, the business of the Company shall continue
without dissolution.
Section 9.02. DISSOLUTION. The Company shall be dissolved and its
affairs wound up upon the occurrence of any of the following events: (i) the
sale or other disposition of substantially all of the assets of the Company;
(ii) the written consent thereto of all of the Members; (iii) the retirement,
expulsion or dissolution of a Member; provided, however, that the Company shall
not dissolve and be wound up if within 90 days after such event, all remaining
Members agree in writing to continue the business of the Company and to admit
one or more Members as necessary or desired; or (iv) the entry of a decree of
judicial dissolution pursuant to Section 18-802 of the Act.
ARTICLE TEN
APPLICATION OF ASSETS
Section 10.01. APPLICATION OF ASSETS. Upon dissolution of the Company,
the Company shall cease carrying on its business and affairs and shall commence
winding up of the Company's business and affairs and complete the winding up as
soon as practicable. The Company's affairs shall be concluded by a Member or
Members selected in writing by the Majority Interest. The assets of the Company
may be liquidated or distributed in kind, as determined by the Majority
Interest, and the same shall first be applied to the payment of, or to a
reasonable reserve for the payment of, the Company's liabilities (including such
provision for contingent, conditional or unmatured liabilities as the Majority
Interest shall deem appropriate) and then to
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AHFC. If the assets of the Company shall not be sufficient to pay all of the
liabilities of the Company, to the fullest extent permitted by the Act, no
assets of the Company may be sold or disposed of without the written consent
of all of the holders of outstanding securities issued by any trust formed in
respect of a transaction to which the Company is a party. To the extent that
Company assets cannot either be sold without undue loss or readily divided
for distribution in kind to the Members, then the Company may, as determined
by the Majority Interest, convey those assets to a trust or other suitable
holding entity established for the benefit of the Members in order to permit
the assets to be sold without undue loss and the proceeds thereof distributed
to the Members at a future date. The legal form of the holding entity, the
identity of the trustee or other fiduciary and the terms of its governing
instrument shall be determined by the Majority Interest.
Section 10.02. TERMINATION. The Company shall terminate when all the
assets of the Company, after payment of or due provision for all debts,
liabilities and obligations of the Company, shall have been distributed to AHFC
in the manner provided for in this Article and the Certificate shall have been
cancelled in the manner required by the Act.
Section 10.03. CLAIMS OF THE MEMBERS. The Members and former Members
shall look solely to the Company's assets for the return of their Capital
Contributions, and if the assets of the Company remaining after payment of or
due provision for all debts, liabilities and obligations of the Company are
insufficient to return such Capital Contributions, the Members and former
Members shall not have recourse against the Company or any other Member.
ARTICLE ELEVEN
RESTRICTION ON TRANSFERS OF INTERESTS
Section 11.01. RESTRICTION ON TRANSFERS OF INTERESTS. No Member may
assign, pledge or otherwise transfer its interest in the Company in whole or
part. Any attempt by a Member to transfer its interest shall be null and void.
ARTICLE TWELVE
INVESTMENT REPRESENTATION
Section 12.01. INVESTMENT REPRESENTATION. The Members represent to
each other and to the Company that they are acquiring their respective interests
in the Company for their own accounts, and without a view to selling or pledging
them.
ARTICLE THIRTEEN
MISCELLANEOUS PROVISIONS
Section 13.01. LIMITATIONS ON AMENDMENT. The Company shall not,
without the prior written consent of each nationally recognized rating agency
that has rated any securities issued
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and outstanding pursuant to any pooling and servicing agreement, indenture,
trust agreement or other similar agreement entered into by the Company or any
Affiliate of the Company, amend, alter, change or repeal Article Three,
Section 5.08, Article Six or this Section. Subject to the foregoing
limitation, the Company reserves the right to amend, alter, change or repeal
any provision contained in this Agreement in the manner now or hereafter
prescribed by statute or applicable law, and all rights conferred upon
Members herein are granted subject to this reservation, provided that this
Agreement may not be amended without the affirmative vote of 100% of the
Members of the Company, including the Independent Members.
Section 13.02. BOOKS OF ACCOUNT; REPORTS.
(a) The Company shall keep true and complete books of account and
records of all Company transactions. The books of account and records shall be
kept at the principal office of the Company. The Company shall maintain at such
office (i) a list of names and addresses of all Members; (ii) a copy of the
Certificate; (iii) copies of the Company's federal, state and local income tax
returns and reports for the three most recent years; (iv) copies of this
Agreement; and (v) copies of the financial statements of the Company for the
three most recent years. Such Company records shall be available to any Member
or its designated representative during ordinary business hours at the
reasonable request and expense of such Member.
(b) The Company will use its best efforts to furnish, or cause to be
furnished, to Members the following items on the date indicated: (i) annually
by June 30, (A) an annual report consisting of an income statement for the prior
year and a balance sheet as of the year ended, and (B) Member information tax
returns (Schedule K-1), and (ii) as required, such other information concerning
the Company and the property of the Company as may be appropriate in order to
make full and fair disclosure to the Members of the current financial and
operating conditions of the Company.
Section 13.03. BANK ACCOUNTS AND INVESTMENT OF FUNDS. All funds of the
Company shall be deposited in its name in such checking accounts, savings
accounts, time deposits or certificates of deposit or shall be invested in such
other manner, as shall be designated by the Majority Interest from time to time.
Withdrawals shall be made upon such signature or signatures as the Majority
Interest may designate.
Section 13.04. ACCOUNTING DECISIONS. All decisions as to accounting
matters, except as specifically provided to the contrary herein, shall be made
by the Majority Interest in accordance with generally accepted accounting
principles consistently applied. Such decisions shall be acceptable to the
accountants retained by the Company, and the Majority Interest may rely upon the
advice of the accountants as to whether such decisions are in accordance with
generally accepted accounting principles.
Section 13.05. FEDERAL INCOME TAX ELECTIONS. The Company shall, to the
extent permitted by applicable law and regulations and upon obtaining any
necessary approval of the Commissioner of Internal Revenue, elect to use such
methods of depreciation, and make all other federal income tax elections in such
manner, as the Majority Interest determines to be most favorable to the Members.
The Majority Interest may rely upon the advice of the accountants retained by
the Company as to the availability and effect of all such elections. The
Majority
15
<PAGE>
Interest shall elect to treat the Company as a single member entity formed as
an agent of AHFC and not as a separate corporation or partnership for federal
and applicable state income tax purposes
Section 13.06. ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and may be modified only as provided herein. No
representations or oral or implied agreements have been made by any party hereto
or its agent, and no party to this Agreement has relied upon any representation
or agreement not set forth herein. This Agreement supersedes any and all other
agreements, either oral or written, among the Company and its Members.
Section 13.07. NOTICES. Except as provided below, all communications
and notices provided for hereunder shall be in writing (including telecopy or
electronic facsimile transmission or similar writing) and shall be given to the
other party at its address or telecopy numbers set forth on Exhibit A hereto, or
at such other address or telecopy number as such party may hereafter specify for
the purposes of notice to the other party hereto. Each such notice or other
communication shall be effective (i) if given by telecopy, upon receipt thereof,
(ii) if given by mail, three business days after the time such communication is
deposited in the mails with first-class postage prepaid or (iii) if given by any
other means, when received at the address specified in this Section.
Section 13.08. CONSENT OF MEMBERS. Various provisions of this
Agreement require or permit the consent, agreement, approval or disapproval,
written or otherwise, of the Members or some specified proportion thereof. In
any such case, the Company may give all Members written notice that any Member
who does not indicate its disapproval by written notice to the Company within a
specified period of time (not less than 30 days after mailing of the notice)
shall be deemed to have given its consent or approval to the action or event or
to have made the agreement referred to in the notice. In such event, any Member
who does not indicate its disapproval by written notice to the Company within
the time specified shall be deemed to have given its written consent, approval,
disapproval or agreement.
Section 13.09. FURTHER EXECUTION. Upon request of the Company from
time to time, the Members shall execute and swear to or acknowledge any amended
Certificate and any other writing which may be required by any rule or law or
which may be appropriate to the effecting of any action by or on behalf of the
Company or the Members which has been taken in accordance with the provisions of
this Agreement.
Section 13.10. BINDING EFFECT. This Agreement shall be binding upon
and shall inure to the benefit of the parties, their successors and permitted
assigns. None of the provisions of this Agreement shall be construed as for the
benefit of or as enforceable by any creditor of the Company or the Members or
any other person not a party to this Agreement.
Section 13.11. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 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 this Agreement and shall in no way affect the validity or
16
<PAGE>
enforceability of the other provisions of this Agreement or of any security or
the rights of the holders thereof.
Section 13.12. CAPTIONS. All captions are for convenience only, do not
form a substantive part of this Agreement and shall not restrict or enlarge any
substantive provisions of this Agreement.
Section 13.13. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
shall constitute one instrument. The Company shall have custody of the
counterparts executed in the aggregate by all Members.
Section 13.14. DELAWARE LAW TO CONTROL. This Agreement shall be
governed by, and all questions with respect to the construction of this
Agreement and the rights and liabilities of the parties hereto shall be
determined in accordance with, the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.
* * * * *
17
<PAGE>
IN WITNESS WHEREOF, the parties 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 Member
By: /s/ Y. KOHAMA
---------------------------------
Name: Y. Kohama
Title: President
HONDA FUNDING INC., as Independent Member
By: /s/ Y. KOHAMA
---------------------------------
Name; Y. Kohama
Title: President
18
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
Capital Membership
Member's Name and Address Contributions Percentages
- ------------------------- ------------- ------------
<S> <C> <C>
American Honda Finance Corporation
700 Van Ness Avenue
Torrance, California 90501 $0 100%
-----------
-----------
Honda Funding Inc.
700 Van Ness Avenue
Torrance, California 90501 -0- 0%
----------- -----------
Total $0 100%
----------- -----------
----------- -----------
</TABLE>
A-1
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
HONDA TITLING C L.P.,
and
HONDA TITLING D L.P.,
as Transferors,
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee,
WILMINGTON TRUST COMPANY,
as Delaware Owner Trustee,
and
THE BANK OF NEW YORK,
as Indenture Trustee
HONDA AUTO LEASE TRUST 1999-A
AUTO LEASE ASSET-BACKED NOTES AND CERTIFICATES
----------------------------------
FORM OF
1999-A SECURITIZATION TRUST AGREEMENT
Dated as of [ ]
-------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . 4
Section 1.02 Interpretive Provisions . . . . . . . . . . . . . . . . 4
ARTICLE TWO
CREATION OF TRUST; ESTABLISHMENT OF SUBI SECURITIES ACCOUNT
Section 2.01 Creation of Trust; Establishment of SUBI
Securities Account. . . . . . . . . . . . . . . . . . . 5
Section 2.02 Office. . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 2.03 Appointment of Owner Trustees . . . . . . . . . . . . . 5
Section 2.04 Conveyance of the 1999-A SUBI Certificates. . . . . . . 6
Section 2.05 Purposes and Powers . . . . . . . . . . . . . . . . . . 7
Section 2.06 Acceptance by the 1999-A Owner Trustee. . . . . . . . . 8
Section 2.07 Title to Trust Property . . . . . . . . . . . . . . . . 8
Section 2.08 Situs of Trust. . . . . . . . . . . . . . . . . . . . . 8
Section 2.09 Tax Reporting . . . . . . . . . . . . . . . . . . . . . 8
Section 2.10 Transfer of Collections . . . . . . . . . . . . . . . . 9
ARTICLE THREE
ACCOUNTS; DISTRIBUTIONS; THE RESERVE FUND; STATEMENTS TO
SECURITYHOLDERS
Section 3.01 1999-A Note Distribution Account; 1999-A Certificate
Distribution Account. . . . . . . . . . . . . . . . . . 9
Section 3.02 Collections . . . . . . . . . . . . . . . . . . . . . . 9
Section 3.03 Distributions . . . . . . . . . . . . . . . . . . . . . 10
Section 3.04 The Reserve Fund. . . . . . . . . . . . . . . . . . . . 16
Section 3.05 Statements to Securityholders . . . . . . . . . . . . . 22
ARTICLE FOUR
CERTIFICATES
Section 4.01 The Certificates. . . . . . . . . . . . . . . . . . . . 25
Section 4.02 Authentication and Delivery of Certificates . . . . . . 25
Section 4.03 No Transfer of the Certificates.. . . . . . . . . . . . 25
Section 4.04 Mutilated, Destroyed, Lost or Stolen Certificates . . . 25
Section 4.05 Persons Deemed Owners . . . . . . . . . . . . . . . . . 26
-i-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE FIVE
THE TRANSFERORS
Section 5.01 Representations of the Transferors. . . . . . . . . . . 26
Section 5.04 Limitation on Liability of the Transferors and Others . 30
Section 5.05 The Transferors May Own Notes . . . . . . . . . . . . . 30
Section 5.06 No Transfer . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.07 Tax Matters Partner . . . . . . . . . . . . . . . . . . 30
ARTICLE SIX
THE 1999-A OWNER TRUSTEE
Section 6.01 Duties of 1999-A Owner Trustee. . . . . . . . . . . . . 31
Section 6.02 Certain Matters Affecting the 1999-A Owner Trustee. . . 32
Section 6.03 1999-A Owner Trustee Not Liable for Notes,
Certificates or Leases. . . . . . . . . . . . . . . . . 33
Section 6.04 1999-A Owner Trustee May Own Securities . . . . . . . . 34
Section 6.05 1999-A Owner Trustee's Fees and Expenses. . . . . . . . 34
Section 6.06 Eligibility Requirements for 1999-A Owner Trustee . . . 34
Section 6.07 Resignation or Removal of 1999-A Owner Trustee. . . . . 35
Section 6.08 Successor 1999-A Owner Trustee. . . . . . . . . . . . . 35
Section 6.09 Merger or Consolidation of 1999-A Owner Trustee . . . . 36
Section 6.10 Appointment of Co-Trustee or Separate
1999-A Owner Trustee. . . . . . . . . . . . . . . . . . 36
Section 6.11 Representations and Warranties of 1999-A
Owner Trustee . . . . . . . . . . . . . . . . . . . . . 37
Section 6.12 Tax Returns . . . . . . . . . . . . . . . . . . . . . . 38
Section 6.13 1999-A Owner Trustee May Enforce Claims Without
Possession of the Certificates. . . . . . . . . . . . . 38
Section 6.14 Suit for Enforcement. . . . . . . . . . . . . . . . . . 38
Section 6.15 Rights of 1999-A Indenture Trustee to
Direct 1999-A Owner Trustee . . . . . . . . . . . . . . 39
Section 6.16 No Petition . . . . . . . . . . . . . . . . . . . . . . 39
Section 6.17 Authority to Execute. . . . . . . . . . . . . . . . . . 39
Section 6.18 Management of the 1999-A Securitization Trust . . . . . 40
Section 6.19 Negative Pledge . . . . . . . . . . . . . . . . . . . . 40
ARTICLE SEVEN
TERMINATION
Section 7.01 Termination of the 1999-A Securitization Trust. . . . . 40
Section 7.02 Optional Purchase of 1999-A SUBI Certificates . . . . . 40
-ii-
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE EIGHT
TAX MATTERS
Section 8.01 Tax and Accounting Characterization . . . . . . . . . . 41
ARTICLE NINE
MISCELLANEOUS PROVISIONS
Section 9.01 Amendment . . . . . . . . . . . . . . . . . . . . . . . 42
Section 9.02 Protection of Title to 1999-A Securitization Trust. . . 43
Section 9.03 Limitations on Rights of Others . . . . . . . . . . . . 44
Section 9.04 Notices . . . . . . . . . . . . . . . . . . . . . . . . 44
Section 9.05 Severability of Provisions. . . . . . . . . . . . . . . 45
Section 9.06 Counterparts. . . . . . . . . . . . . . . . . . . . . . 45
Section 9.07 Successors and Assigns. . . . . . . . . . . . . . . . . 45
Section 9.08 No Recourse . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.09 Headings. . . . . . . . . . . . . . . . . . . . . . . . 45
Section 9.10 Governing Law . . . . . . . . . . . . . . . . . . . . . 45
Section 9.11 Certificates Nonassessable and Fully Paid . . . . . . . 46
-iii-
<PAGE>
EXHIBITS
Exhibit A - Form of Certificate . . . . . . . . . . . . . . . . . . A-1
Exhibit B - Form of Certificate of Trust. . . . . . . . . . . . . . B-1
i
<PAGE>
FORM OF 1999-A SECURITIZATION TRUST AGREEMENT
This 1999-A SECURITIZATION TRUST AGREEMENT, dated as of [ ] (as
it may be amended, supplemented or restated from time to time, the "1999-A
Securitization Trust Agreement"), is made with respect to the formation of
the HONDA AUTO LEASE TRUST 1999-A (the "1999-A Securitization Trust"), by and
among HONDA TITLING C L.P., a Delaware limited partnership ("HTC LP"), HONDA
TITLING D L.P., a Delaware limited partnership ("HTD LP" and, together with
HTC LP, the "Transferors"), U.S. BANK NATIONAL ASSOCIATION, a national
banking association ("U.S. Bank"), as owner trustee (in such capacity, the
"1999-A Owner Trustee"), WILMINGTON TRUST COMPANY, a Delaware corporation, as
Delaware owner trustee (in such capacity, the "Delaware Owner Trustee"), and
THE BANK OF NEW YORK, a national banking association, as indenture trustee
(in such capacity, the "1999-A Indenture Trustee").
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered into
that Second Amended and Restated Trust and Servicing Agreement, dated as of
April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending and
restating that certain Trust Agreement, dated July 17, 1997, among the same
parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things, taking
assignments and conveyances of, and holding in trust and dealing in, various
Trust Assets. Capitalized terms used and not defined in these Recitals have the
meanings given in the Agreement of Definitions described in Section 1.01 hereof.
B. The Origination Trust Agreement contemplates that certain of the
Trust Assets, other than those previously identified on the Origination Trust's
books and records as Other SUBI Assets and allocated to a separate SUBI
Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth constitute SUBI
Assets within such SUBI Sub-Trust, and that in connection with any such
allocation the Origination Trustee shall create a SUBI at the direction of the
UTI Beneficiaries and shall issue to, or to the order of, the UTI Beneficiaries
one or more SUBI Certificates evidencing such SUBI, and the related SUBI
Beneficiaries and their permitted assignees generally will be entitled to the
net cash flows arising from, but only from, such SUBI Assets.
C. Concurrently herewith, HTA LP and HTB LP, as Grantors and UTI
Beneficiaries, HTC LP and HTD LP, as Transferors, the Servicer, the Origination
Trustee, the Delaware Trustee and U.S. Bank, as Trust Agent and, for certain
limited purposes set forth therein, as 1999-A Owner Trustee, are entering into
that certain 1999-A SUBI Supplement to Second Amended and Restated Trust and
Servicing Agreement dated as of [ ] (as amended, supplemented or
restated from time to time, the "1999-A SUBI Supplement"), pursuant to which the
parties thereto have agreed to supplement the terms of the Origination Trust
Agreement to cause the Origination Trustee to (i) identify a portfolio of Trust
Assets (the "1999-A SUBI Assets") to be designated to a SUBI Portfolio (the
"1999-A SUBI Portfolio"), (ii)
<PAGE>
allocate such 1999-A SUBI Assets to a SUBI Sub-Trust (the "1999-A SUBI
Sub-Trust"), (iii) create the related 1999-A SUBI and (iv) create and issue to
or to the order of (a) HTA LP one certificate representing a 98.01% interest in
the 1999-A SUBI (the "HTA LP/HTC LP 1999-A SUBI Certificate") and one
certificate representing a 0.99% interest in the 1999-A SUBI (the "HTA LP/HTD LP
1999-A SUBI Certificate"), and (b) HTB LP one certificate representing a 0.99%
interest in the 1999-A SUBI (the "HTB LP/HTC LP 1999-A SUBI Certificate") and
one certificate representing a 0.01% interest in the 1999-A SUBI (the "HTB
LP/HTD LP 1999-A SUBI Certificate" and, together with the HTA LP/HTC LP 1999-A
SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI Certificate and the HTB LP/HTD
LP 1999-A SUBI Certificate, the "HTA LP/HTB LP 1999-A SUBI Certificates").
D. Pursuant to the 1999-A SUBI Supplement, the parties hereto and
thereto desire that, concurrently herewith, U.S. Bank, as securities
intermediary (as defined in Section 8-102 of the UCC) (in such capacity, the
"1999-A SUBI Securities Intermediary"), establish two securities accounts (as
defined in Section 8-501 of the UCC) as follows: (i) a securities account in
the name of and for the benefit of HTA LP (the "HTA LP 1999-A SUBI Securities
Account") pursuant to that certain HTA LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ], between HTA LP and the 1999-A
SUBI Securities Intermediary (the "HTA LP 1999-A SUBI Securities Account
Control Agreement"), into which the HTA LP/HTC LP 1999-A SUBI Certificate and
the HTA LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTA LP directs the 1999-A SUBI Securities Intermediary to debit
the HTA LP 1999-A SUBI Securities Account to reflect the transfer of the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization and (ii) a securities account in the
name of and for the benefit of HTB LP (the "HTB LP 1999-A SUBI Securities
Account") pursuant to that certain HTB LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ] between HTB LP and the 1999-A SUBI
Securities Intermediary (the "HTB LP 1999-A SUBI Securities Account Control
Agreement") into which the HTB LP/HTC LP 1999-A SUBI Certificate and the HTB
LP/HTD LP 1999-A SUBI Certificate will be transferred and held until such
time as HTB LP directs the SUBI Securities Intermediary to debit the HTB LP
1999-A SUBI Securities Account to reflect the transfer of the HTB LP/HTC LP
1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate
pursuant to a Securitization.
E. Concurrently herewith, the Origination Trustee, on behalf of the
Origination Trust, and the Servicer are entering into the 1999-A Servicing
Supplement (as amended, supplemented or restated from time to time, the "1999-A
Servicing Supplement") pursuant to which, among other things, the terms of the
Origination Trust Agreement and the Servicing Agreement, dated April 1, 1998, by
and among the UTI Beneficiaries, the Servicer and the Origination Trust will be
supplemented insofar as they apply solely to the servicing of the 1999-A SUBI
Sub-Trust created hereby to provide for further specific servicing obligations
that will benefit the SUBI Beneficiaries with respect to the 1999-A SUBI created
by the 1999-A SUBI Supplement.
F. Concurrently herewith, the UTI Beneficiaries, HTC LP and HTD
LP are entering into that certain 1999-A SUBI Certificates Purchase and Sale
Agreement, dated as of [ ] (the "1999-A SUBI Certificates Purchase
and Sale Agreement"), pursuant to which the UTI Beneficiaries will sell,
without recourse, to HTC LP and HTD LP, all of their respective right, title
and interest in and to the 1999-A SUBI and the HTA LP/HTB LP 1999-A SUBI
2
<PAGE>
Certificates, all monies due thereon and paid thereon in respect thereof and the
right to realize on any property that may be deemed to secure the 1999-A SUBI,
and all proceeds thereof. In connection therewith, and concurrently herewith
and therewith, (1) HTA LP will transfer (a) the HTA LP/HTC LP 1999-A SUBI
Certificate to HTC LP and (b) the HTA LP/HTD LP 1999-A SUBI Certificate to HTD
LP, and (2) HTB LP will transfer (a) the HTB LP/HTC LP 1999-A SUBI Certificate
to HTC LP and (b) the HTB LP/HTD LP 1999-A SUBI Certificate to HTD LP, all
consideration of the pro rata cash payment to the UTI Beneficiaries of an amount
equal to the Aggregate Net Investment Value of the 1999-A SUBI as of [ ]
(the "Cutoff Date"), based on their respective share of the 1999-A SUBI
less the cost and expenses of the Securitization and the value of any securities
issued in connection with the Securitization and retained by the HTC LP and HTD
LP.
G. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the
1999-A SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to
HTD LP representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD
LP 1999-A SUBI Certificate" and, together with the HTC LP 1999-A SUBI
Certificate, the "1999-A SUBI Certificates"), (iii) one certificate to HTC LP
representing a 0.198% beneficial interest in the 1999-A SUBI (the "HTC LP
Retained 1999-A SUBI Certificate") and (iv) one certificate to HTD LP
representing a 0.002% beneficial interest in the 1999-A SUBI (the "HTD LP
Retained 1999-A SUBI Certificate" and, together with the HTC LP Retained
1999-A SUBI Certificate, the "Retained 1999-A SUBI Certificates"). The
1999-A SUBI Certificates shall be exclusive of proceeds of the Residual Value
Insurance Policy or other residual value insurance policies relating to the
1999-A Contracts and 1999-A Leased Vehicles.
H. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTC LP (the "HTC LP 1999-A SUBI
Securities Account") pursuant to that certain HTC LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTC LP and the
1999-A SUBI Securities Intermediary (the "HTC LP 1999-A SUBI Securities
Account Control Agreement") into which the HTC LP 1999-A SUBI Certificate and
the HTC LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTC LP directs the 1999-A SUBI Securities
Intermediary to debit the HTC LP 1999-A SUBI Securities Account to reflect
the transfer of the HTC LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
I. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTD LP (the "HTD LP 1999-A SUBI
Securities Account") pursuant to that certain HTD LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTD LP and the
1999-A SUBI Securities Intermediary (the "HTD LP 1999-A SUBI Securities
Account Control Agreement") into which the HTD LP 1999-A SUBI Certificate and
the HTD LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTD LP directs the 1999-A SUBI Securities
Intermediary to debit the HTD LP 1999-A SUBI Securities Account to reflect
the transfer of the HTD LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
3
<PAGE>
J. Concurrently herewith, the 1999-A SUBI Securities Intermediary
establish a securities account (as defined in Section 8-501 of the UCC) in
the name of and for the benefit of the 1999-A Securitization Trust (the
"99.8% 1999-A SUBI Securities Account") pursuant to that certain 99.8% 1999-A
SUBI Securities Account Control Agreement dated as of [ ], between
the 1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, and
the 1999-A SUBI Securities Intermediary (the "99.8% 1999-A SUBI Securities
Account Control Agreement"), into which the HTC LP 1999-A SUBI Certificate
will be transferred from the HTC LP 1999-A SUBI Securities Account and the
HTD LP 1999-A SUBI Certificate will be transferred from the HTD LP 1999-A
SUBI Securities Account, respectively, and held until such time as the 1999-A
Owner Trustee directs the 1999-A SUBI Securities Intermediary to debit the
[99.8% 1999-A SUBI Securities Account to reflect the transfer of the HTC LP
1999-A SUBI Certificate and the HTD LP 1999-A SUBI Certificate to the 1999-A
Securitization Trust pursuant to the Securitization involving the 1999-A SUBI.]
K. The parties hereto desire to enter into this 1999-A
Securitization Trust Agreement to create the 1999-A Securitization Trust whereby
HTC LP and HTD LP will transfer the 1999-A SUBI Certificates to the 1999-A
Securitization Trust and in exchange therefor the 1999-A Securitization Trust
will pledge the 1999-A SUBI Certificates to the 1999-A Indenture Trustee in
connection with the Securitization pursuant to the Indenture and will issue the
Certificates and deliver the Notes representing interests in the 1999-A
Securitization Trust which will be secured by the 1999-A SUBI Certificates.
L. Concurrently herewith, the 1999-A Indenture Trustee and the
1999-A Owner Trustee are entering into that certain indenture, dated as of
[ ] (the "Indenture"), pursuant to which the 1999-A Indenture Trustee will
issue the Notes and the 1999-A Owner Trustee will grant a security interest in
all of the assets held by the 1999-A Securitization Trust, including the 1999-A
SUBI Certificates, to the 1999-A Indenture Trustee to secure the 1999-A Owner
Trustee's obligations under the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01 DEFINITIONS. For all purposes of this 1999-A Securitization
Trust Agreement, except as otherwise expressly provided or unless the context
otherwise requires, capitalized terms used and not otherwise defined herein
shall have the meanings ascribed thereto in the Agreement of Definitions (as it
may be amended, supplemented or restated from time to time, the "Agreement of
Definitions"), dated as of [ ] by and among the Origination Trustee,
the Delaware Trustee, HTA LP, HTB LP, HTC LP, HTD LP, the Servicer, the Delaware
Owner Trustee, the 1999-A Indenture Trustee and U.S. Bank, as trust agent and as
owner trustee; PROVIDED, HOWEVER, in the event of any conflict between a
definition set forth both herein and the Agreement of Definitions, the
definition set forth herein shall prevail.
Section 1.02 INTERPRETIVE PROVISIONS. For all purposes of this 1999-A
Securitization Trust Agreement, except as otherwise expressly provided or unless
the context otherwise requires, (i) terms used in this 1999-A Securitization
Trust Agreement include, as appropriate, all
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genders and the plural as well as the singular, (ii) references to this 1999-A
Securitization Trust Agreement include all Exhibits and Schedules hereto,
(iii) references to words such as "herein", "hereof" and the like shall refer to
this 1999-A Securitization Trust Agreement as a whole and not to any particular
part, Article or Section within this 1999-A Securitization Trust Agreement, (iv)
references to a section such as "Section 2.01" or an Article such as "Article
Two" shall refer to the applicable Section or Article of this 1999-A
Securitization Trust Agreement, (v) the term "include" and all variations
thereof shall mean "include without limitation", (vi) the term "or" shall mean
"and/or", (vii) the term "proceeds" shall have the meaning ascribed to such term
in the UCC, (viii) the phrase "Origination Trustee, acting on behalf of the
Origination Trust," or words of similar import, shall be deemed to refer to the
Origination Trustee, acting on behalf of the Honda Lease Trust and all
beneficiaries thereof, and (ix) the phrase "1999-A Owner Trustee, acting on
behalf of the 1999-A Securitization Trust," or words of similar import, shall be
deemed to refer to the 1999-A Owner Trustee, acting on behalf of the Honda Auto
Lease Trust 1999-A and all beneficiaries thereof.
ARTICLE TWO
CREATION OF TRUST; ESTABLISHMENT OF SUBI
SECURITIES ACCOUNT
Section 2.01 CREATION OF TRUST; ESTABLISHMENT OF SUBI SECURITIES ACCOUNT.
(a) CREATION OF TRUST. Upon the execution of this 1999-A Securitization
Trust Agreement by the parties hereto, there is hereby created the "Honda Auto
Lease Trust 1999-A". It is the intention of the parties hereto that the 1999-A
Securitization Trust constitute a business trust under the Business Trust
Statute and that this 1999-A Securitization Trust Agreement constitute the
governing instrument of such business trust.
(b) ESTABLISHMENT OF 99.8% 1999-A SUBI SECURITIES ACCOUNT.
(i) Pursuant to a separate agreement, dated as of [May 31,
1999,] between the 1999-A Securitization Trust and the 1999-A SUBI
Securities Intermediary, a securities account (as such term is defined in
Section 8-501(a) of the UCC) (the "99.8% 1999-A SUBI Securities Account")
will be established by and maintained with U.S. Bank, in its capacity as
the 1999-A SUBI Securities Intermediary, for the benefit of the 1999-A
Securitization Trust.
(ii) HTC LP and HTD LP shall direct the 1999-A SUBI Securities
Intermediary to credit to the 99.8% 1999-A SUBI Securities Account the
interests in the 1999-A SUBI Certificates transferred, assigned, or
otherwise conveyed by HTC LP and HTD LP as described in Section 2.04.
Section 2.02 OFFICE. The chief executive office and principal place of
business of the 1999-A Securitization Trust shall be in care of the 1999-A Owner
Trustee, initially at the Corporate Trust Office and thereafter at such other
address in the United States as the 1999-A Owner Trustee may designate by
written notice to the Certificateholders, the Noteholders, HTC LP, HTD LP and
the 1999-A Indenture Trustee.
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Section 2.03 APPOINTMENT OF OWNER TRUSTEES. HTC LP and HTD LP hereby
appoint the 1999-A Owner Trustee as trustee of the 1999-A Securitization
Trust and the Delaware Owner Trustee as the co-trustee of the 1999-A
Securitization Trust effective as of the date hereof, to have all the rights,
powers and duties set forth herein, and the 1999-A Owner Trustee and the
Delaware Owner Trustee hereby accept such appointment. The 1999-A Owner
Trustee and the Delaware Owner Trustee shall file the Certificate of Trust
with the Delaware Secretary of State.
Section 2.04 CONVEYANCE OF THE 1999-A SUBI CERTIFICATES.
(a) CONVEYANCE TO THE 1999-A OWNER TRUSTEE. In consideration of the
1999-A Securitization Trust's delivery to HTC LP and HTD LP of (i) executed and
authenticated Notes, in authorized denominations in the aggregate equal to the
Initial Class A-1 Note Balance, the Initial Class A-2 Note Balance, the Initial
Class A-3 Note Balance, the Initial Class A-4 Note Balance and the Initial Class
B Note Balance, and (ii) executed and authenticated Certificates, HTC LP and HTD
LP do hereby transfer, assign and otherwise convey to the 1999-A Owner Trustee,
in trust for the benefit of the Noteholders and the Certificateholders, to the
full extent of HTC LP's and HTD LP's interest therein, without recourse (subject
to HTC LP's and HTD LP's obligations herein):
(i) all right, title and interest of HTC LP in and to the HTC LP
1999-A SUBI Certificate, the rights in and benefits of the HTC LP 1999-A
SUBI Interest evidenced by the HTC LP 1999-A SUBI Certificate and all
monies due thereon and paid thereon or in respect thereof;
(ii) all right, title and interest of HTD LP in and to the HTD LP
1999-A SUBI Certificate and, the rights in and benefits of the HTD LP
1999-A SUBI Interest evidenced by the HTD LP 1999-A SUBI Certificate and
all monies due thereon and paid thereon or in respect thereof;
(iii) the right to realize upon any property that may be deemed to
secure the foregoing;
(iv) all rights accruing to the holder of the 1999-A SUBI
Certificates under the 1999-A SUBI Supplement, the Origination Trust
Agreement, the 1999-A Servicing Supplement and the Servicing Agreement; and
(v) all proceeds of the foregoing; PROVIDED, HOWEVER, that all
monies and payments due or payable under the Residual Value Insurance
Policy or any other residual value insurance policies applicable to the
1999-A Leased Vehicles or the 1999-A Contracts and the right to receive
such payments and monies are retained by the Origination Trust and are not
hereby transferred, assigned or otherwise conveyed to the 1999-A Owner
Trustee nor will they, under any circumstances, be subject to the Lien of
the 1999-A Securitization Trust or any claim by the 1999-A Owner Trustee.
(b) GRANT OF SECURITY INTEREST.
(i) Each of HTC LP and HTD LP hereby also grants to the 1999-A
Owner Trustee a security interest in all of its right, title and privileges
and interest in and to the
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foregoing (exclusive of the monies and payments referred to in Section
2.04(a)(v)), and the 1999-A Owner Trustee shall have all the rights, powers
and privileges thereto and therein of a secured party under the Delaware
UCC.
(ii) Pursuant to the Indenture, the 1999-A Owner Trustee shall
grant to the 1999-A Indenture Trustee a security interest in the 1999-A
SUBI Certificates and the related property set forth in Section 2.04(a).
(c) TERMINATION. The rights and powers granted herein to the 1999-A
Owner Trustee have been granted in order to perfect its security interests in
the assets referred to in Section 2.04(a), are powers coupled with an
interest and will not be affected either by the bankruptcy of any other
person or entity or by the lapse of time. The obligations of the 1999-A SUBI
Securities Intermediary hereunder shall continue in effect until the security
interests of the 1999-A Owner Trustee in the 99.8% 1999-A SUBI Securities
Account have been terminated pursuant to the terms of this 1999-A
Securitization Trust Agreement and the 1999-A Owner Trustee has notified the
1999-A SUBI Securities Intermediary of such termination in writing. Upon (i)
a termination of this 1999-A Securitization Trust Agreement pursuant to
Section 7.01(a)(i) or (iii), the 1999-A Owner Trustee is hereby authorized to
convey all interest in (x) the HTC LP 1999-A SUBI Certificate and the HTC LP
1999-A SUBI Interest evidenced thereby to HTC LP and (y) the HTD LP 1999-A
SUBI Certificate and the HTD LP 1999-A SUBI Interest evidenced thereby to HTD
LP, and (ii) a termination of this 1999-A Securitization Trust Agreement
pursuant to Section 7.01(a)(ii) or a repurchase of the 1999-A SUBI
Certificates and the Retained 1999-A SUBI Certificates by the Servicer
pursuant to Section 7.02, the 1999-A Owner Trustee is hereby authorized to
convey to the Servicer all interests in the 1999-A SUBI Certificates and the
1999-A SUBI Interest evidenced thereby. Upon a termination of this 1999-A
Securitization Trust Agreement pursuant to Section 7.01(a)(iv), the 1999-A
Owner Trustee is hereby authorized to convey all interests in the 1999-A SUBI
Certificates and the 1999-A SUBI Interest evidenced thereby, evidenced
thereby to the purchaser thereof. The 1999-A Owner Trustee shall not be
responsible for or have any liability with respect to any losses incurred in
connection with any such liquidation, other than as a result of its own
negligence or willful misfeasance.
Section 2.05 PURPOSES AND POWERS. The sole purpose of the 1999-A
Securitization Trust is to conserve the 1999-A Securitization Trust Estate and
collect and disburse the periodic income therefrom for the use and benefit of
the Certificateholders and the Noteholders and, in furtherance of such purpose,
to engage in the following ministerial activities:
(a) to acquire the 1999-A SUBI Certificates and the other property of the
1999-A Securitization Trust Estate from HTC LP and HTD LP in exchange for the
issuance and delivery of the Notes and the Certificates;
(b) to issue the Certificates pursuant to this 1999-A Securitization Trust
Agreement, to pledge the 1999-A SUBI Certificates to the 1999-A Indenture
Trustee in exchange for the executed and authenticated Notes and to deliver to,
or upon the order of, HTC LP and HTD LP the executed Notes and the Certificates;
(c) to pay interest on and principal of the Notes and the Certificates;
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(d) to assign, grant, transfer, pledge, mortgage and convey to the 1999-A
Indenture Trustee the 1999-A SUBI Certificates pursuant to the Indenture as
security for the Notes and to hold, manage and distribute to the
Certificateholders pursuant to the terms of this 1999-A Securitization Trust
Agreement any portion of the 1999-A Securitization Trust Estate released from
the Lien of, and remitted to the 1999-A Securitization Trust pursuant to, the
Indenture;
(e) to enter into and perform its obligations under the 1999-A
Securitization Documents to which the 1999-A Securitization Trust is a party;
(f) to engage in other transactions, including entering into agreements,
that are necessary, suitable or convenient to accomplish the foregoing or that
are incidental thereto or connected therewith; and
(g) subject to compliance with the 1999-A Securitization Documents, to
engage in such other activities as may be required in connection with conserving
the 1999-A Securitization Trust Estate and making distributions to the
Noteholders and the Certificateholders.
The 1999-A Securitization Trust shall not engage in any activity other than
in connection with the foregoing or other than as required or authorized by the
terms of this 1999-A Securitization Trust Agreement or the other 1999-A
Securitization Documents.
Section 2.06 ACCEPTANCE BY THE 1999-A OWNER TRUSTEE. The 1999-A Owner
Trustee hereby accepts on behalf of the 1999-A Securitization Trust all
consideration conveyed by HTC LP and HTD LP pursuant to Section 2.04(a) and
declares that the 1999-A Owner Trustee shall hold such consideration in trust as
herein set forth for the benefit of the Noteholders and the Certificateholders,
subject to the terms and provisions of this 1999-A Securitization Trust
Agreement and the Indenture. In accepting the 1999-A SUBI Certificates, the
1999-A Owner Trustee hereby releases all claims to the Trust Assets allocated to
the UTI Sub-Trust or any other Sub-Trust and, in the event that such release is
not given effect, to fully subordinate all claims it may be deemed to have
against the Trust Assets allocated thereto.
Section 2.07 TITLE TO TRUST PROPERTY. Legal title to the 1999-A
Securitization Trust Estate shall be vested at all times in the 1999-A
Securitization Trust as a separate legal entity, except where applicable law in
any jurisdiction requires title to any part of the 1999-A Securitization Trust
Estate to be vested in a trustee, in which case title shall be deemed to be
vested in the 1999-A Owner Trustee, a co-trustee or a separate trustee, as the
case may be.
Section 2.08 SITUS OF TRUST. The 1999-A Securitization Trust shall be
located and administered in the State of Delaware. All bank accounts maintained
by the 1999-A Owner Trustee on behalf of the 1999-A Securitization Trust shall
be located in California, Delaware, Illinois or New York. The 1999-A
Securitization Trust shall not have any employees in any state other than
Delaware; PROVIDED, HOWEVER, that nothing herein shall restrict or prohibit the
1999-A Owner Trustee from having employees within or without the State of
Delaware. Payments shall be received by the 1999-A Securitization Trust only in
California, Delaware, Illinois or New York and payments shall be made by the
1999-A Securitization Trust only from California, Delaware, Illinois or New
York.
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Section 2.09 TAX REPORTING. Unless otherwise required by appropriate tax
authorities, the 1999-A Securitization Trust shall not file or cause to be filed
annual or other income or franchise tax returns and shall not be required to
obtain any taxpayer identification number.
Section 2.10 TRANSFER OF COLLECTIONS. The parties hereto acknowledge
that the Origination Trustee, on behalf of the Origination Trust, has made a
complete transfer to the 1999-A Owner Trustee of the Collections in respect of
the 1999-A SUBI Assets contained in all accounts maintained by the Origination
Trustee (excluding proceeds of the Residual Value Insurance Policy or any other
residual value insurance policies, which are solely the property of the
Origination Trust) and, except as provided in this 1999-A Securitization Trust
Agreement, the 1999-A SUBI Supplement and the 1999-A Servicing Supplement,
neither the Origination Trustee nor the Servicer has any right to direct such
funds to a third party or to receive such funds (other than to receive such
funds pursuant to an investment thereof in Eligible Investments on which
Origination Trustee is the obligor).
ARTICLE THREE
ACCOUNTS; DISTRIBUTIONS; THE RESERVE FUND;
STATEMENTS TO SECURITYHOLDERS
Section 3.01 1999-A NOTE DISTRIBUTION ACCOUNT; 1999-A CERTIFICATE
DISTRIBUTION ACCOUNT.
(a) ESTABLISHMENT OF THE 1999-A NOTE DISTRIBUTION ACCOUNT. Pursuant to
Section 9.02(f) of the 1999-A Servicing Supplement, the Servicer, on behalf of
the 1999-A Owner Trustee, shall establish and maintain an Eligible Account with
and in the name of the 1999-A Indenture Trustee for the benefit of the
Noteholders, which account shall be designated the "1999-A Note Distribution
Account". If for any reason the 1999-A Note Distribution Account is no longer
an Eligible Account, the Servicer, with the assistance of the 1999-A Indenture
Trustee, shall promptly cause the 1999-A Note Distribution Account to be moved
to another institution or otherwise changed so that the 1999-A Note Distribution
Account becomes an Eligible Account. The 1999-A Owner Trustee hereby grants a
security interest in the 1999-A Note Distribution Account, all Eligible
Investments therein and all proceeds of the foregoing to the 1999-A Indenture
Trustee for the benefit of the Noteholders to secure the obligations of the
1999-A Owner Trustee under this 1999-A Securitization Trust Agreement to the
1999-A Indenture Trustee on behalf of the Noteholders.
(b) ESTABLISHMENT OF THE 1999-A CERTIFICATE DISTRIBUTION ACCOUNT.
Pursuant to Section 9.02(f) of the 1999-A Servicing Supplement, the Servicer, on
behalf of the 1999-A Owner Trustee, shall establish and maintain an Eligible
Account with and in the name of the 1999-A Owner Trustee for the benefit of the
Certificateholders, which account shall be designated the "1999-A Certificate
Distribution Account". If for any reason the 1999-A Certificate Distribution
Account is no longer an Eligible Account, the Servicer, with the assistance of
the 1999-A Owner Trustee, shall promptly cause the 1999-A Certificate
Distribution Account to be moved to another institution or otherwise changed so
that the 1999-A Certificate Distribution Account becomes an Eligible Account.
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Section 3.02 COLLECTIONS.
(a) Pursuant to Section 13.01(b) of the 1999-A SUBI Supplement and Section
9.02(h) of the 1999-A Servicing Supplement, on each Deposit Date the Servicer
shall cause the transfer of Collections in respect of the 1999-A SUBI Assets
from the 1999-A SUBI Collection Account to (i) HTC LP and HTD LP in respect of
the Retained 1999-A SUBI Certificates and (ii) either the 1999-A Note
Distribution Account or the 1999-A Certificate Distribution Account in respect
of the Notes and the Certificates (net of amounts that may be retained by the
Servicer pursuant to the 1999-A Securitization Documents). Such deposits shall
be made in immediately available funds, no later than 3:00 p.m., New York City
time, on the relevant Deposit Date.
(b) The 1999-A Indenture Trustee shall retain, subject to the provisions
of this 1999-A Securitization Trust Agreement and the other 1999-A
Securitization Documents, all collections on or in respect of the 1999-A SUBI
Interest transferred to the 1999-A Indenture Trustee, on behalf of the
Noteholders, in accordance with such provisions, in the 1999-A Note Distribution
Account or the Reserve Fund, as the case may be. The 1999-A Indenture Trustee
shall be deemed to have possession of such monies and collections for purposes
of Section 9-305 of the UCC of the jurisdiction in which such property is
located.
(c) The 1999-A Owner Trustee shall retain, subject to the provisions of
this 1999-A Securitization Trust Agreement and the other 1999-A Securitization
Documents, all collections on or in respect of the 1999-A SUBI Interest
transferred to the 1999-A Owner Trustee, on behalf of the Certificateholders, in
accordance with such provisions, in the 1999-A Certificate Distribution Account.
The 1999-A Owner Trustee shall be deemed to have possession of such monies and
collections for purposes of Section 9-305 of the UCC of the jurisdiction in
which such property is located.
(d) For so long as the depository institution or trust company meets
the requirements of Sections 3.01(a) and (b), as applicable, all amounts in
the 1999-A Note Distribution Account and the 1999-A Certificate Distribution
Account shall, to the extent permitted by applicable laws, rules and
regulations, be invested, as directed by the Servicer pursuant to Section
9.02(k) of the 1999-A Servicing Supplement, in Eligible Investments (or if
the Servicer fails to give directions with respect to the 1999-A Note
Distribution Account, as provided in Section 8.03(c) of the Indenture);
otherwise such amounts shall be retained in a mutual fund offered by the
Origination Trustee or an Affiliate of the Origination Trustee, the 1999-A
Indenture Trustee or an Affiliate of the 1999-A Indenture Trustee or the
1999-A Owner Trustee, each of which meets the requirements of clause (i) of
the definition of Eligible Investments. Earnings on investment of funds in
the 1999-A Note Distribution Account and the 1999-A Certificate Distribution
Account shall be retained in the 1999-A Note Distribution Account and the
1999-A Certificate Distribution Account, as the case may be, and treated as
Interest Collections and shall constitute part of the 1999-A Securitization
Trust Estate. Losses resulting from investment of funds in the 1999-A Note
Distribution Account and the 1999-A Certificate Distribution Account shall be
charged against the funds on deposit in the applicable account.
Section 3.03 DISTRIBUTIONS.
(a) On each Determination Date, pursuant to Section 9.02(g) of the 1999-A
Servicing Supplement, the Servicer shall calculate (i) amounts distributable to
the holders of the Retained 1999-A SUBI Certificates and (ii) the Class A-1
Distributable Amount, the Class A-2 Distributable Amount, the Class A-3
Distributable Amount, the Class A-4 Distributable Amount,
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the Class B Distributable Amount, the Certificate Distributable Amount and all
other amounts to be distributed on the related Distribution Date.
(b) On each Determination Date, the Servicer shall deliver to the 1999-A
Owner Trustee a Servicer's Certificate that sets forth, among other things, the
amount of Interest Collections and Principal Collections allocable to the 1999-A
SUBI Certificates, the Investor Percentage, the amount of Advances (including,
separately, any Nonrecoverable Advances), if any, to be made by or reimbursed to
the Servicer, the aggregate amount, if any, to be withdrawn from the Reserve
Fund and the 1999-A SUBI Servicing Fee and other servicing compensation payable
to the Servicer with respect to the preceding Collection Period and related
Distribution Date. On or prior to each Determination Date, the Servicer shall
also determine the Reserve Fund Requirement and any amounts to be distributed
from the Reserve Fund to the Noteholders and to the Certificateholders.
(c) INTEREST DISTRIBUTIONS. The right of the Class B Noteholders to
receive distributions of Interest Collections allocable to the 1999-A SUBI
Interest in respect of the Class B Notes shall be and are subordinated to the
rights of the Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3
Noteholders and the Class A-4 Noteholders to receive distributions of Interest
Collections allocable to the 1999-A SUBI Interest in respect of the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes to the
extent provided in this 1999-A Securitization Trust Agreement and the Indenture.
The right of the Certificateholders to receive distributions of Interest
Collections allocable to the 1999-A SUBI Interest in respect of the Certificates
shall be and are subordinated to the rights of both the Class A Noteholders and
the Class B Noteholders to receive distributions of Interest Collections
allocable to the 1999-A SUBI Interest in respect of both the Class A Notes and
the Class B Notes to the extent provided in this 1999-A Securitization Trust
Agreement and the Indenture. On each Distribution Date, the Servicer shall,
pursuant to the instructions of the 1999-A Owner Trustee, transfer from the
1999-A SUBI Collection Account and the Reserve Fund, the sum of (A) the product
of (i) the Investor Percentage with respect to Interest Collections, multiplied
by (ii) the Interest Collections for the related Collection Period, (B) under
the circumstances set forth in Section 3.03(f), from the Reserve Fund, the
Required Amount, if any, for such Distribution Date and (C) any amount of
Principal Collections that otherwise would be distributed to the Class B
Noteholders but is required to be applied to the payment of clauses (x) through
(xii) to Class A-4 Noteholders as described below in Section 3.03(f), in the
following amounts and otherwise in the following order of priority to the
following Persons:
(i) in the event of an Indenture Event of Default as a result of
the 1999-A Indenture Trustee having received written instructions from
holders of Class A Notes representing a majority of the Voting Interests
thereof, voting together as a single class, or holders of Class A Notes and
Class B Notes representing a majority of the Voting Interests thereof,
voting together as a single class, to sell or dispose of the 1999-A SUBI
Interest, to the 1999-A Indenture Trustee, reimbursement of the Investor
Percentage of Capped Indenture Trustee Administrative Expenses, and, to the
1999-A Owner Trustee, reimbursement of the Investor Percentage of Capped
Owner Trustee Administrative Expenses;
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(ii) to the 1999-A Note Distribution Account for the pro rata
payment to each Class of Class A Noteholders, interest at the related Note
Rate on the Class A-1 Note Balance, Class A-2 Note Balance, Class A-3 Note
Balance or Class A-4 Note Balance, as applicable, as of the immediately
preceding Distribution Date (after giving effect to any reduction in such
Note Balance on such immediately preceding Distribution Date) or, in the
case of the first Distribution Date, on the Initial Class A-1 Note Balance,
the Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance or
the Initial Class A-4 Note Balance, as applicable, together with any unpaid
Class A-1 Interest Carryover Shortfall, Class A-2 Interest Carryover
Shortfall, Class A-3 Interest Carryover Shortfall or Class A-4 Interest
Carryover Shortfall, as applicable;
(iii) to the 1999-A Note Distribution Account for payment to the
Class B Noteholders, interest at the Class B Note Rate on the Class B Note
Balance as of the immediately preceding Distribution Date (after giving
effect to any reduction in the Class B Note Balance on such immediately
preceding Distribution Date) or, in the case of the first Distribution
Date, on the Initial Class B Note Balance, together with any unpaid Class B
Interest Carryover Shortfall;
(iv) to the 1999-A Certificate Distribution Account for payment
to the Certificateholders, interest at the Certificate Rate on the
Certificate Balance as of the immediately preceding Distribution Date
(after giving effect to any reduction in the Certificate Balance on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, on the Initial Certificate Balance, together with any
unpaid Certificate Interest Carryover Shortfall;
(v) to the Servicer, reimbursement of the Investor Percentage of
Capped Contingent and Excess Liability Premiums;
(vi) to the Origination Trustee, reimbursement of the Investor
Percentage of Capped Origination Trust Administrative Expenses;
(vii) in circumstances other than as set forth in clause (i)
above, to the 1999-A Indenture Trustee, reimbursement of the Investor
Percentage of Capped Indenture Trustee Administrative Expenses, and, to the
1999-A Owner Trustee, reimbursement of the Investor Percentage of Capped
Owner Trustee Administrative Expenses;
(viii) to the Servicer, the Investor Percentage of (a) the 1999-A
SUBI Servicing Fee and (b) any unpaid 1999-A SUBI Servicing Fees payable in
respect of compensation to the Servicer with respect to one or more prior
Collection Periods;
(ix) to the Reserve Fund, until the amount on deposit therein
equals the Reserve Fund Requirement;
(x) to the 1999-A Note Distribution Account for payment to the
Class A Noteholders, (a) so long as the Note Balance of the Class B Notes
has not been reduced to zero, an amount equal to the Covered Loss Amount
for the related Distribution Date sequentially, commencing with the Class
A-1 Noteholders until the Note Balance of each such Class has been reduced
to zero, or (b) if the Note Balance of the Class B Notes has
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been reduced to zero, pro rata, based on the Class A-1, Class A-2, Class
A-3 or Class A-4 Allocation Percentage, as applicable, an amount equal to
the sum of the Covered Loss Amount and the Uncovered Loss Amount for the
related Distribution Date;
(xi) to the 1999-A Note Distribution Account for payment to each
Class of Class A Noteholders, pro rata, based upon the aggregate of the
amounts allocable to such Class pursuant to clause (x) above that were not
previously distributed pursuant to such clause or this clause (each such
amount, a "Class A-1 Note Principal Loss Amount", "Class A-2 Note Principal
Loss Amount", "Class A-3 Note Principal Loss Amount" or "Class A-4 Note
Principal Loss Amount", respectively);
(xii) to the 1999-A Note Distribution Account for payment to each
Class of Class A Noteholders, accrued and unpaid interest at the related
Note Rate on any unreimbursed Class A-1, Class A-2, Class A-3 and Class A-4
Note Principal Loss Amount, as applicable;
(xiii) to the 1999-A Note Distribution Account for payment to the
Class B Noteholders, (a) if the Certificate Balance has been reduced to
zero, an amount equal to the Uncovered Loss Amount for the related
Distribution Date plus (b) following the reduction of the Note Balance of
the Class A Notes to zero, the Covered Loss Amount for the related
Distribution Date, until the Note Balance of the Class B Notes is reduced
to zero;
(xiv) to the 1999-A Note Distribution Account for payment to the
Class B Noteholders, the aggregate of the amounts allocable pursuant to
clause (xiii) above that were not previously distributed pursuant to such
clause or this clause (each such amount, a "Class B Note Principal Loss
Amount"), together with any Class B Note Principal Carryover Shortfall;
(xv) to the 1999-A Note Distribution Account for payment to the
Class B Noteholders, accrued and unpaid interest at the Class B Note Rate
on any unreimbursed Class B Note Principal Loss Amount and any unreimbursed
Class B Note Principal Carryover Shortfall;
(xvi) to the 1999-A Certificate Distribution Account for payment
to the Certificateholders, (a) an amount equal to the Uncovered Loss Amount
for the related Distribution Date plus (b) following the reduction of the
Note Balance of the Class B Notes to zero, the Covered Loss Amount for the
related Distribution Date, until the Certificate Balance is reduced to
zero;
(xvii) to the 1999-A Certificate Distribution Account for payment
to the Certificateholders, the aggregate of the amounts allocable pursuant
to clause (xvi) above that were not previously distributed pursuant to such
clause or this clause (each such amount, a "Certificate Principal Loss
Amount"), together with any Certificate Principal Carryover Shortfall;
(xviii) to the 1999-A Certificate Distribution Account for payment
to the Certificateholders, accrued and unpaid interest at the Certificate
Rate on any
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unreimbursed Certificate Principal Loss Amount and any unreimbursed
Certificate Principal Carryover Shortfall; and
(xix) to the 1999-A Indenture Trustee, the 1999-A Owner Trustee
and the Origination Trustee, as applicable, the Investor Percentage of all
Uncapped Administrative Expenses.
The balance, if any, of the Interest Collections allocated to the Notes and
the Certificates for the related Collection Period, after giving effect to
the distributions in clauses (i) through (xix) above and net of any amount
required to maintain the 1999-A Note Distribution Account or the 1999-A
Certificate Distribution Account in good standing, will constitute "Excess
Interest Collections".
(d) EXCESS INTEREST COLLECTIONS. On each Distribution Date, the
Servicer, on behalf of the 1999-A Owner Trustee, shall distribute the entire
amount of Excess Interest Collections to HTC LP and HTD LP based upon their
respective percentage ownership of the Retained 1999-A SUBI Interest
PROVIDED, HOWEVER, in the event the ERISA Compliance Test, if applicable, is
not met on any Distribution Date, all Excess Interest Collections shall be
deposited into the Reserve Fund. Upon any such distributions to HTC LP and
HTD LP of Excess Interest Collections, neither the Noteholders nor the
Certificateholders will have any rights in or claims to such amounts.
(e) PRINCIPAL DISTRIBUTIONS. On each Distribution Date beginning with the
first Distribution Date and ending on the Distribution Date before the
Distribution Date on which the Class A-3 Notes have been paid in full, the
1999-A Owner Trustee shall distribute from the 1999-A SUBI Collection Account an
amount equal to the Investor Percentage of all Principal Collections collected
or received in respect of the related Collection Period allocable to the 1999-A
SUBI Interest to (i) the 1999-A Note Distribution Account for payment to the
Class A-1 Noteholders until the Class A-1 Notes have been paid in full, (ii) the
1999-A Note Distribution Account for payment to the Class A-2 Noteholders until
the Class A-2 Notes have been paid in full, (iii) the 1999-A Note Distribution
Account for payment to the Class A-3 Noteholders until the Class A-3 Notes have
been paid in full and (iv) the 1999-A Note Distribution Account for payment of
the Class A Percentage and the Class B Percentage of any remaining Principal
Collections to the Class A-4 Noteholders and Class B Noteholders, respectively.
On each Distribution Date from and after the Class A-3 Notes have been paid in
full, the 1999-A Owner Trustee shall distribute (i) to the 1999-A Note
Distribution Account for payment to the Class A-4 Noteholders, the Class A
Percentage of Principal Collections collected or received in respect of the
related Collection Period allocable to the 1999-A SUBI Interest and (ii) subject
to subsection (f) below, to the 1999-A Note Distribution Account for payment to
the Class B Noteholders, the Class B Percentage of such Principal Collections.
On each Distribution Date after the Class B Notes have been paid in full, the
1999-A Owner Trustee shall distribute to the 1999-A Certificate Distribution
Account for payment to the Certificateholders the Certificate Percentage of all
Principal Collections collected or received in respect of the related Collection
Period allocable to the 1999-A SUBI Interest. Distributions to the 1999-A Note
Distribution Account and the 1999-A Certificate Distribution Account, and
subsequently to the Noteholders and Certificateholders, for payment pursuant to
Sections 3.03(c)(x) through (xviii) shall constitute distributions of principal.
The aggregate amount of principal distributed to any Class of Noteholders or the
Certificateholders shall not exceed the Initial Note Balance or Initial
Certificate Balance, as the case may be, attributable to that Class of Notes or
the Certificates, as applicable. Uncovered
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Loss Amounts will be allocated (i) first, to the Certificateholders until the
Certificate Balance equals zero, (ii) then, to the Class B Noteholders until the
Note Balance of the Class B Notes has been reduced to zero and (iii) then, to
the Class A Noteholders, pro rata, based on the Class A-1, Class A-2, Class A-3
and Class A-4 Allocation Percentages.
(f) If and to the extent that the Collections available to make
distributions on a Distribution Date are insufficient to make (1) the
distributions pursuant to clauses (i) through (iv) and (x) through (xviii) of
Section 3.03(c), the Required Amount will be withdrawn from the Reserve Fund and
applied towards such shortfall as set forth in Section 3.03(c) or (2) the
distributions to the Class A-4 Noteholders pursuant to clauses (x) through (xii)
of Section 3.03(c), then amounts otherwise available for distribution to the
Class B Noteholders in respect of principal pursuant to subsection (e) above
will be applied toward such insufficiency.
If on any Distribution Date there remain any shortfalls in the amounts required
to be distributed pursuant to clauses (ii), (x), (xi) or (xii) of Section
3.03(c) to the Class A-1 Noteholders, the Class A-2 Noteholders, the Class A-3
Noteholders and the Class A-4 Noteholders, the amounts available will be
distributed pro rata to the Class A-1 Noteholders, the Class A-2 Noteholders,
the Class A-3 Noteholders and the Class A-4 Noteholders based on the Class A-1
Allocation Percentage, the Class A-2 Allocation Percentage, the Class A-3
Allocation Percentage and the Class A-4 Allocation Percentage, respectively.
Notwithstanding the foregoing, if on any Distribution Date, the sum of the (i)
Class A-4 Loss Amount, (ii) Class A-4 Note Principal Loss Amount and (iii) Class
A-4 Note Principal Interest Loss Amount (such sum, the "Class A-4 Aggregate Loss
Amount") would be equal to or greater than the Class B Note Balance, the Class B
Noteholders shall not be entitled to receive the Class B Interest Distributable
Amount or the Class B Interest Carryover Shortfall pursuant to clause (iii) of
Section 3.03(c) and such amounts shall instead be distributed, to the extent of
the shortfall in amounts available to pay the Class A-4 Aggregate Loss Amount,
to the Class A-4 Noteholders as set forth in clauses (x), (xi) and (xii) of
Section 3.03(c). For each such Distribution Date, all such Class B Interest
Distributable Amounts and Class B Interest Carryover Shortfall which are not
distributed to the Class B Noteholders shall be allocated to the Class B
Noteholders as Class B Loss Amounts to be paid as set forth in clauses (xiii),
(xiv) and (xv). If on any subsequent Distribution Date, the Class B Note
Balance exceeds the Class A-4 Aggregate Loss Amount, the Class B Noteholders
shall be entitled to distributions of the Class B Interest Distributable Amount
and the Class B Interest Carryover Shortfall as set forth in the clause (iii) of
Section 3.03(c).
(g) PAYMENTS TO SERVICER, 1999-A OWNER TRUSTEE, 1999-A INDENTURE TRUSTEE
AND ORIGINATION TRUSTEE. On each Distribution Date, the 1999-A Owner Trustee
shall pay to the Servicer the amounts allocated pursuant to clauses (v) and
(viii) of Section 3.03(c) above. On each Distribution Date, the 1999-A Owner
Trustee shall pay to the Origination Trustee the amounts allocated pursuant to
clauses (vi) and (xix) of Section 3.03(c) above. On each Distribution Date, the
1999-A Owner Trustee shall pay to the 1999-A Indenture Trustee the amounts
allocated pursuant to clauses (vii) and (xix) of Section 3.03(c) above. On each
Distribution Date, the 1999-A Owner Trustee will be entitled to withdraw from
the 1999-A SUBI Collection Account for its own benefit and use, the amounts
allocated pursuant to clauses (vii) and (xix) of Section 3.03(c) above, except
that if the Servicer previously has made Advances in respect of such amounts,
the 1999-A Owner Trustee shall instead pay such amounts to the Servicer up to
the amount of such Advances not previously reimbursed.
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Notwithstanding the foregoing, in accordance with the provisions of Section
2.06(f) of the Servicing Agreement and Section 9.02(b)(ii) of the 1999-A
Servicing Supplement, for so long as AHFC is the Servicer and each Monthly
Remittance Condition is satisfied, the Servicer will be entitled to make
deposits of Collections into the 1999-A SUBI Collection Account net of amounts
payable or reimbursable to the Servicer as compensation, in respect of Advances
or otherwise (including for amounts advanced by the Servicer for amounts
otherwise payable to the 1999-A Owner Trustee, the 1999-A Indenture Trustee, the
Origination Trustee or the Trust Agent), and net of amounts payable or
reimbursable (and actually so paid or reimbursed directly by the Servicer) in
respect of the Origination Trust. To the extent the Servicer makes deposits net
of any such amounts, the Servicer will cause each relevant Servicer's
Certificate to correctly and accurately account for such amounts in providing
all information with respect to allocations, applications and payments to be
made pursuant to this Section 3.03 of this 1999-A Securitization Trust Agreement
on the same basis as though such amounts were in fact deposited into the 1999-A
SUBI Collection Account. Moreover, the Servicer will, in each relevant
Servicer's Certificate, instruct the 1999-A Owner Trustee not to make any
distribution to the Servicer, the 1999-A Owner Trustee, the 1999-A Indenture
Trustee or the Origination Trustee to the extent that the Servicer has made any
deposit net of a corresponding amount. The 1999-A Owner Trustee will have no
obligation with respect to or liability for following any such instruction by
the Servicer.
(h) On the Final Scheduled Distribution Date of any Class of Notes or the
Certificates, an additional payment to the Noteholders of such Class or the
Certificateholders of such Class, as the case may be, shall be made as and to
the extent required by Section 3.04(f).
Section 3.04 THE RESERVE FUND.
(a) ESTABLISHMENT OF THE RESERVE FUND.
(i) In order to assure that sufficient amounts to make required
distributions to Noteholders will be available, HTC LP and HTD LP shall
establish and maintain with and in the name of the 1999-A Indenture Trustee
an Eligible Account to be known as the "Reserve Fund", which will include
the money and other property deposited and held therein pursuant to Section
3.03 and this Section 3.04. Funds in the Reserve Fund shall be the
property of HTC LP and HTD LP and not the property of the 1999-A
Securitization Trust. If for any reason the Reserve Fund is no longer an
Eligible Account, the Servicer shall, with the assistance of the 1999-A
Indenture Trustee, promptly cause the Reserve Fund to be moved to another
institution or otherwise changed so that the Reserve Fund becomes an
Eligible Account. The 1999-A Indenture Trustee shall retain, subject to
the provisions of this 1999-A Securitization Trust Agreement and the other
1999-A Securitization Documents, all collections on or in respect of the
1999-A SUBI Interest transferred to the 1999-A Indenture Trustee, on behalf
of the Noteholders, in accordance with such provisions, in the 1999-A Note
Distribution Account or the Reserve Fund, as the case may be. The 1999-A
Indenture Trustee shall be deemed to have possession of such monies and
collections for purposes of Section 9-305 of the UCC of the jurisdiction in
which such property is located.
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(ii) On each Distribution Date, the 1999-A Owner Trustee shall
withdraw from the 1999-A SUBI Collection Account and deposit into the
Reserve Fund the amount allocated pursuant to clause (ix) of Section
3.03(c).
(iii) On each Distribution Date, the 1999-A Owner Trustee shall
distribute to HTC LP and HTD LP, to the extent thereof, (A) any net
investment income from investment of funds in the Reserve Fund and (B) any
amounts in excess of the Reserve Fund Requirement on such date.
(iv) For so long as the Reserve Fund is an Eligible Account, all
amounts held in the Reserve Fund shall, to the extent permitted by
applicable laws, rules and regulations, be invested by the 1999-A Indenture
Trustee, as directed in writing by the Servicer pursuant to Section 9.02(k)
of the 1999-A Servicing Supplement, in Eligible Investments (or, if the
Servicer fails to give such directions, as provided in Section 8.03(c) of
the Indenture); otherwise, such amounts shall be maintained in cash.
Earnings on investment of funds in the Reserve Fund shall be paid to HTC LP
and HTD LP on each Distribution Date, and any losses and any investment
expenses shall be charged against the funds on deposit therein. The 1999-A
Indenture Trustee shall incur no liability for the selection of investments
or for losses thereon absent its own negligence or willful misfeasance.
The 1999-A Indenture Trustee shall have no liability in respect of losses
incurred as a result of the liquidation of any investment prior to its
stated maturity date or the failure of the Servicer to provide timely
written investment directions.
(b) INITIAL DEPOSIT; DISTRIBUTIONS. On or prior to the Closing Date, HTC
LP and HTD LP shall deposit an amount equal to the Reserve Fund Initial Deposit
into the Reserve Fund. On the Closing Date, HTC LP shall deposit $- and HTD LP
shall deposit $-. Amounts on deposit in the Reserve Fund shall be supplemented
from time to time by the deposit therein of other funds as and to the extent
described in this 1999-A Securitization Trust Agreement and the other 1999-A
Securitization Documents. On each Distribution Date, the amounts on deposit in
the Reserve Fund shall be available for distribution as provided in Section 3.03
and, on each Distribution Date, if the amount on deposit in the Reserve Fund
(after giving effect to all deposits thereto or withdrawals therefrom on such
Distribution Date) is greater than the Reserve Fund Requirement and Excess
Interest Collections are not required to be deposited into the Reserve Fund
pursuant to Section 3.03(d), the 1999-A Indenture Trustee will distribute any
remaining amounts to HTC LP and HTD LP in the same proportion as the HTC LP
Retained 1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI Certificate
represent, respectively. Upon such distribution to HTC LP and HTD LP, neither
the Noteholders nor the Certificateholders will have any further rights in or
claims to such amounts.
(c) GRANT OF SECURITY INTEREST. Each of HTC LP and HTD LP hereby grant to
the 1999-A Indenture Trustee for the benefit of the Noteholders to secure the
obligations to the Noteholders pursuant to this 1999-A Securitization Trust
Agreement a security interest of all of their right, title and interest in the
Reserve Fund Property (including the Reserve Fund Initial Deposit) and the
proceeds thereof, and the 1999-A Indenture Trustee shall have all of the rights
of a secured party under the UCC with respect thereto, provided that all income
from the investment of funds in the Reserve Fund and the right to receive such
income are retained by HTC LP and HTD LP, and are not transferred, assigned or
otherwise conveyed to the 1999-A Indenture Trustee
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hereunder. All deposits and withdrawals from the Reserve Fund shall be made
only upon the terms and conditions of the 1999-A Securitization Documents.
(d) TERMINATION. Upon termination of the 1999-A Securitization Trust
pursuant to Section 7.01, any amounts on deposit in the Reserve Fund shall be
available for payment of any remaining amounts due to the Noteholders and for
payment of any remaining amounts due to the 1999-A Indenture Trustee and the
1999-A Owner Trustee, and, after payment of such amounts due, shall be paid to
HTC LP and HTD LP.
(e) CLAIMS. Amounts properly received by either HTC LP or HTD LP pursuant
to this 1999-A Securitization Trust Agreement shall be free of any claim of the
1999-A Securitization Trust, the 1999-A Indenture Trustee, the 1999-A Owner
Trustee, the Noteholders or the Certificateholders and shall not be available to
the 1999-A Indenture Trustee, the 1999-A Owner Trustee or the 1999-A
Securitization Trust for the purpose of making deposits to the Reserve Fund or
making payments to the Noteholders or Certificateholders, nor shall either HTC
LP or HTD LP be required to refund any amount properly received by it.
(f) FINAL SCHEDULED DISTRIBUTION DATE. On the respective Final Scheduled
Distribution Date, to the extent that the Class A-1 Note Balance, the Class A-2
Note Balance, the Class A-3 Note Balance, the Class A-4 Note Balance or the
Class B Note Balance has not been reduced to zero, the 1999-A Indenture Trustee
shall withdraw funds from the Reserve Fund, if available, in an amount equal to
the lesser of (i) the Class A-1 Note Balance, the Class A-2 Note Balance, the
Class A-3 Note Balance, the Class A-4 Note Balance or the Class B Note Balance,
as applicable, and (ii) the amount in the Reserve Fund, and shall pay such funds
to the Noteholders of such Classes of Notes.
(g) RESERVE FUND SECURITIES INTERMEDIARY. The 1999-A Owner Trustee hereby
confirms that (i) the 1999-A Owner Trustee is acting, with respect to its duties
under this Section 3.04, as a "securities intermediary" as defined in Section
8-102 of the UCC (in such capacity, the "Reserve Fund Securities Intermediary"),
(ii) the Reserve Fund Securities Intermediary has established the Reserve Fund
as a "securities account" as such term is defined in Section 8-501(a) of the
UCC, (iii) the Reserve Fund Securities Intermediary shall, subject to the terms
of this 1999-A Securitization Trust Agreement, treat the 1999-A Owner Trustee as
entitled to exercise the rights that comprise any financial asset credited to
the Reserve Fund, and (iv) all securities or other property underlying any
financial assets credited to the Reserve Fund shall be registered in the name of
the Reserve Fund Securities Intermediary, endorsed to the Reserve Fund
Securities Intermediary or in blank or credited to another securities account
maintained in the name of the Reserve Fund Securities Intermediary for the
benefit of 1999-A Indenture Trustee and in no case will any financial asset
credited to the Reserve Fund be registered in the name of any other person,
payable to the order of any other person, or specially endorsed to any other
person, except to the extent the foregoing have been specially endorsed by the
Transferor to the 1999-A Owner Trustee. The 1999-A Owner Trustee shall incur no
liability relating to any investments made pursuant to this Section 3.04 absent
its own negligence or willful misfeasance.
(h) FINANCIAL ASSETS ELECTION. The 1999-A Owner Trustee hereby agrees
that the Reserve Fund and each item of property (whether investment property,
financial asset, security or
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instrument), other than cash, credited to the Reserve Fund shall be treated as a
"financial asset" within the meaning of Section 8-102(a)(9) of the UCC.
(i) ENTITLEMENT ORDERS. If at any time the Reserve Fund Securities
Intermediary shall receive an "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) issued by the 1999-A Indenture Trustee and relating to
the Reserve Fund, the Reserve Fund Securities Intermediary shall comply with
such entitlement order without further consent by any other person. The 1999-A
Indenture Trustee hereby agrees only to issue entitlement orders at the written
direction of the Servicer. The Reserve Fund Securities Intermediary shall have
no obligation to act, and shall be fully protected in refraining from acting, in
respect of the financial assets credited to the Reserve Fund in the absence of
such an entitlement order.
(j) SUBORDINATION OF LIEN; WAIVER OF SET-OFF. If the 1999-A Owner Trustee
has or subsequently obtains a security interest in the Reserve Fund or any
security entitlement credited thereto by agreement, operation of law or
otherwise, the 1999-A Owner Trustee hereby agrees that such security interest
shall be subordinated to the security interests of HTC LP and HTD LP. The
financial assets and other items deposited to the Reserve Fund will not be
subject to deduction, set-off, banker's lien, or any other right in favor of any
person other than HTC LP and HTD LP; PROVIDED, HOWEVER, that, notwithstanding
anything herein to the contrary, the 1999-A Owner Trustee shall have a lien
senior to that of HTC LP and HTD LP for any and all amounts required for the
payment of the purchase price of a financial asset, which purchase has been
placed but not yet cleared or settled. Any such deductions shall not be deemed
to refer to deductions for payment of the purchase price in securities
transactions not yet settled or cleared.
(k) CONFLICTING ORDERS. The 1999-A Owner Trustee, in such capacity, has
not entered into and, until termination of this 1999-A Securitization Trust
Agreement, will not enter into any agreement with any other person relating to
the Reserve Fund or any financial assets credited thereto pursuant to which it
has agreed or will agree to comply with entitlement orders (as defined in
Section 8-102(a)(8) of the UCC) of such person. No financial asset will be
registered in the name of the 1999-A Owner Trustee, in such capacity, payable to
its order or specially endorsed to it, except to the extent such financial asset
has been endorsed to the Reserve Fund Securities Intermediary or in blank.
(l) PAYMENTS FOLLOWING TERMINATION OF TRUST. On each related Final
Scheduled Distribution Date and upon termination of the 1999-A Securitization
Trust pursuant to Section 7.01, all amounts on deposit in the Reserve Fund shall
be available (i) for payment of any remaining amounts due on such date to
reimburse unreimbursed Advances or pay accrued and unpaid compensation payable
to the Servicer through such date, (ii) for payment to the Noteholders and (iii)
for payment of any remaining amounts due to the 1999-A Owner Trustee, the 1999-A
Indenture Trustee or the Origination Trustee. Upon termination of the 1999-A
Securitization Trust pursuant to Section 7.01, after payment of such amounts
due, any amounts remaining on deposit in the Reserve Fund shall be paid to HTC
LP and HTD LP. Upon termination of the 1999-A Securitization Trust, the 1999-A
Owner Trustee shall release from the lien of this 1999-A Securitization Trust
Agreement the Reserve Fund and any financial assets held therein, and shall
execute any requisite filing under the UCC as provided by HTC LP and HTD LP to
evidence such release and the release of any security interest of the 1999-A
Securitization Trust or the 1999-A Owner Trustee therein.
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(m) The Reserve Fund Securities Intermediary undertakes to perform such
duties and only such duties as are specifically set forth in this Section 3.04.
The Reserve Fund Securities Intermediary, in such capacity, shall not have any
duties or responsibilities except those expressly set forth in this Section 3.04
or be a trustee for or have any fiduciary obligation to any party hereto.
(n) The duties and obligations of the Reserve Fund Securities
Intermediary, in such capacity, shall be determined solely by the express
provisions of this Section 3.04, and the Reserve Fund Securities Intermediary
shall take such action with respect to this Section 3.04 as it shall be directed
hereunder, and the Reserve Fund Securities Intermediary, in such capacity, shall
not be liable except for the performance of such duties and obligations as are
specifically set forth in this Section 3.04 and as specifically directed by the
1999-A Indenture Trustee, and no implied covenants or obligations shall be read
into this Section 3.04 against the Reserve Fund Securities Intermediary, the
permissive right of the Reserve Fund Securities Intermediary to do things
enumerated in this Section 3.04 shall not be construed as a duty, and, in the
absence of bad faith, negligence or willful misfeasance on the part of the
Reserve Fund Securities Intermediary, the Reserve Fund Securities Intermediary
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 Reserve Fund Securities Intermediary conforming to the requirements of this
Section 3.04.
(o) The Reserve Fund Securities Intermediary, in such capacity, shall not
be liable for any error of judgment made in good faith by an officer or officers
of the Reserve Fund Securities Intermediary, acting as such, unless it shall be
determined that the Reserve Fund Securities Intermediary, or any such officer or
officers, was negligent in ascertaining the pertinent facts or otherwise acted
with negligence or willful misfeasance, and the Reserve Fund Securities
Intermediary shall not be liable with respect to any action taken or omitted to
be taken by it in good faith absent negligence or willful misfeasance in
accordance with any direction of the 1999-A Indenture Trustee given under this
1999-A Securitization Trust Agreement.
(p) None of the provisions of this 1999-A Securitization Trust Agreement
shall require the Reserve Fund Securities Intermediary to expend or risk its own
funds or otherwise to incur any liability, financial or otherwise, in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that it is
not assured of repayment of such funds or indemnity satisfactory to it against
such risk or liability.
(q) The Reserve Fund Securities Intermediary may conclusively rely and
shall be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, approval or other paper or document in good faith
believed by it to be genuine and to have been signed or presented by the proper
party or parties.
(r) Whenever, in the administration of the provisions of this Section 3.04
the Reserve Fund Securities Intermediary shall deem it necessary or desirable
that a matter be proved or established prior to taking or suffering any action
to be taken hereunder, the Reserve Fund Securities Intermediary shall be
entitled to receive from each of HTC LP and HTD LP an
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Officer's Certificate stating that the matter is established as fact and such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence, willful misfeasance or bad faith
on the part of the Reserve Fund Securities Intermediary, be deemed to be
conclusively proved and established, and such certificate, in the absence of
negligence or willful misfeasance on the part of the Reserve Fund Securities
Intermediary, shall be full warrant to the Reserve Fund Securities Intermediary
for any action taken, suffered or omitted by it under the provisions of this
Section 3.04 on the basis thereof.
(s) The Reserve Fund Securities Intermediary may consult with counsel and
the advice or any opinion of counsel shall be full and complete authorization
and protection in respect of any action taken or omitted by it hereunder in good
faith absent negligence or willful misfeasance and in accordance with such
advice or opinion of counsel.
(t) The Reserve Fund Securities Intermediary shall not be bound to make
any investigation into the facts or matters stated in any resolution, order,
certificate, statement, instrument, opinion, report, notice, request, consent,
entitlement order, approval or other paper or document.
(u) The Reserve Fund Securities Intermediary shall have no obligation to
invest or reinvest any cash held in the Reserve Fund in the absence of timely
and specific written investment direction from the Servicer. In no event shall
the Reserve Fund Securities Intermediary be liable for the selection of
investments or for investment losses incurred as a result of the liquidation of
any investment prior to its stated maturity or the failure of the Servicer to
provide timely written investment direction.
(v) The Reserve Fund Securities Intermediary may at any time resign by
giving 30 days prior written notice of resignation to the 1999-A Indenture
Trustee, HTC LP and HTD LP. Upon receiving such notice of resignation, the
1999-A Indenture Trustee shall promptly appoint a successor and, upon the
acceptance by the successor of such appointment, release the resigning Reserve
Fund Securities Intermediary from its obligations hereunder by written
instrument, a copy of which instrument shall be delivered to each of the 1999-A
Indenture Trustee, the resigning Reserve Fund Securities Intermediary and the
successor. If no successor shall have been so appointed and have accepted
appointment within 45 days after the giving of such notice of resignation, the
resigning Reserve Fund Securities Intermediary may petition any court of
competent jurisdiction for the appointment of a successor.
(w) Each of the parties (for itself and any person or entity claiming
through it) hereby releases, waives, discharges, exculpates and covenants not to
sue the Reserve Fund Securities Intermediary for any action taken or omitted
under this Section 3.04 except to the extent caused by the Reserve Fund
Securities Intermediary's negligence, willful misfeasance or bad faith.
Anything in this 1999-A Securitization Trust Agreement to the contrary
notwithstanding, in no event shall the Reserve Fund Securities Intermediary be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including lost profits), even if the Reserve Fund Securities
Intermediary has been advised of the likelihood of such loss or damage (unless
so advised prior to taking any such action) and regardless of the form of
action.
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(x) The Servicer, in its capacity as such, shall indemnify, defend and
hold harmless the Reserve Fund Securities Intermediary and its officers,
directors, employees, representatives and agents, from and against, and
reimburse the Reserve Fund Securities Intermediary for, any and all claims,
expenses, obligations, liabilities, losses, damages, injuries (to person,
property or natural resources), penalties, stamp or other similar taxes,
actions, suits, judgments, reasonable costs and expenses (including reasonable
attorneys' and agents' fees and expenses) directly or indirectly relating to or
arising from claims against the Reserve Fund Securities Intermediary by reason
of its participation in the transactions contemplated by this Section 3.04,
except to the extent caused by the Reserve Fund Securities Intermediary's
negligence, willful misfeasance or bad faith. The provisions of this Section
3.04 shall survive the termination of this 1999-A Securitization Trust Agreement
or the earlier resignation or removal of the Reserve Fund Securities
Intermediary.
Section 3.05 STATEMENTS TO SECURITYHOLDERS.
(a) On each Determination Date, commencing in July 1999, the Servicer will
prepare and forward to the Origination Trustee, the 1999-A Owner Trustee and the
1999-A Indenture Trustee, and the 1999-A Owner Trustee will make available to
each Securityholder on each Distribution Date, a statement setting forth with
respect to the related Distribution Date or the related Collection Period, among
other things, the following:
(i) the Investor Percentage for such Collection Period, stated
separately for (x) Interest Collections and Loss Amounts, and (y) Principal
Collections;
(ii) the total amount being distributed to Noteholders and to
Certificateholders in such distribution;
(iii) the total amount being distributed to each Class of
Noteholders and the Certificateholders in such distribution;
(iv) the total amount of interest being distributed to each Class
of Noteholders and the Certificateholders in such distribution;
(v) the total amount of principal being distributed to each
Class of Noteholders and Certificateholders in such distribution;
(vi) the amount, if any, of Class A-1 Interest Carryover
Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest
Carryover Shortfall, Class A-4 Interest Carryover Shortfall, Class B
Interest Carryover Shortfall and Certificate Interest Carryover Shortfall
included in such distribution;
(vii) the amount, if any, of the remaining unpaid Class A-1
Interest Carryover Shortfall, Class A-2 Interest Carryover Shortfall, Class
A-3 Interest Carryover Shortfall, Class A-4 Interest Carryover Shortfall,
Class B Interest Carryover Shortfall and Certificate Interest Carryover
Shortfall after giving effect to such distribution;
(viii) the Class A-1 Allocation Percentage, the Class A-2
Allocation Percentage, the Class A-3 Allocation Percentage, the Class A-4
Allocation Percentage, the Class B
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Allocation Percentage, the Certificate Allocation Percentage and the
amount, if any, of the reimbursement of Class A-1 Charged-off Amounts,
Class A-1 Residual Value Loss Amounts, Class A-1 Additional Loss Amounts,
Class A-2 Charged-off Amounts, Class A-2 Residual Value Loss Amounts, Class
A-2 Additional Loss Amounts, Class A-3 Charged-off Amounts, Class A-3
Residual Value Loss Amounts, Class A-3 Additional Loss Amounts, Class A-4
Charged-off Amounts, Class A-4 Residual Value Loss Amounts, Class A-4
Additional Loss Amounts, Class B Charged-off Amounts, Class B Residual
Value Loss Amounts, Class B Additional Loss Amounts, Certificate
Charged-off Amounts, Certificate Residual Value Loss Amounts and
Certificate Additional Loss Amounts being included in such distribution;
(ix) the amount, if any, of the reimbursement of Class A-1 Note
Principal Loss Amounts, Class A-2 Note Principal Loss Amounts, Class A-3
Note Principal Loss Amounts, Class A-4 Note Principal Loss Amounts, Class B
Note Principal Loss Amounts and Certificate Principal Loss Amounts included
in such distribution;
(x) the amount, if any, of the aggregate of unreimbursed Class
A-1 Note Principal Loss Amounts, Class A-2 Note Principal Loss Amounts,
Class A-3 Note Principal Loss Amounts, Class A-4 Note Principal Loss
Amounts, Class B Note Principal Loss Amounts and Certificate Principal Loss
Amounts after giving effect to such distribution;
(xi) the amount, if any, of accrued Class A-1 Note Principal Loss
Interest Amounts, Class A-2 Note Principal Loss Interest Amounts, Class A-3
Note Principal Loss Interest Amounts, Class A-4 Note Principal Loss
Interest Amounts, Class B Note Principal Loss Interest Amounts and
Certificate Principal Loss Interest Amounts included in such distribution;
(xii) the amount, if any, of accrued and unpaid Class A-1 Note
Principal Loss Interest Amounts, Class A-2 Note Principal Loss Interest
Amounts, Class A-3 Note Principal Loss Interest Amounts, Class A-4 Note
Principal Loss Interest Amounts, Class B Note Principal Loss Interest
Amounts and Certificate Principal Loss Interest Amounts after giving effect
to such distribution;
(xiii) the amount, if any, of accrued and unpaid Class B Note
Principal Carryover Shortfall and Certificate Principal Carryover Shortfall
after giving effect to such distribution;
(xiv) the Investor Percentage of the 1999-A SUBI Servicing Fee
allocable to the 1999-A SUBI Interest for such Distribution Date and any
unpaid such amounts with respect to prior Distribution Dates;
(xv) the Note Balance, the Class A-1 Note Balance, the Class A-2
Note Balance, the Class A-3 Note Balance, the Class A-4 Note Balance, the
Class B Note Balance, the Certificate Balance, the Class A-1 Note Factor,
the Class A-2 Note Factor, the Class A-3 Note Factor, the Class A-4 Note
Factor, the Class B Note Factor and the Certificate Factor, each after
giving effect to such distribution;
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(xvi) the Required Amount, if any, included in such distribution;
(xvii) the Aggregate Net Investment Value as of the end of such
Collection Period;
(xviii) the amount on deposit in the Reserve Fund on such
Distribution Date, after giving effect to such distributions, the change in
such balance from the immediately preceding Distribution Date and the
Reserve Fund Requirement;
(xix) the amount of Payments Ahead on deposit in the 1999-A SUBI
Collection Account and representing Monthly Payments due in one or more
immediately subsequent Collection Periods and the change in such balance
from the immediately preceding Distribution Date;
(xx) the amount of Advances made in respect of such Collection
Period, the amount of Outstanding Advances on such Distribution Date and
the changes in such amount from the immediately preceding Distribution
Date; and
(xxi) the weighted average Lease Rate of the 1999-A Contracts in
the 1999-A SUBI for the immediately preceding Collection Period and the
Charge-off Rate and Delinquency Rate for each of the three immediately
preceding Collection Periods.
Each amount set forth pursuant to subclauses (ii) through (xv) above shall be
expressed as a dollar amount per $1,000 of original principal balance of a Note
or a Certificate. Any Securityholder may obtain a copy of any such statement,
of any Servicer's Certificate required pursuant to Section 10.01 of the 1999-A
Servicing Supplement, any annual report of Independent Accountants required
pursuant to Section 3.02 of the Servicing Agreement and Section 10.02 of the
1999-A Servicing Supplement or any annual Officer's Certificate required
pursuant to Section 3.03 of the Servicing Agreement and Section 10.03(a) of the
1999-A Servicing Supplement, upon written request to the 1999-A Indenture
Trustee at the Corporate Trust Office of the 1999-A Indenture Trustee or to the
1999-A Owner Trustee at the Corporate Trust Office of the 1999-A Owner Trustee,
as the case may be.
(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 1999-A Indenture
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Noteholder a statement or statements which in the aggregate
contain the sum of the amounts set forth in clauses (ii) through (xiii) and (xv)
through (xix) of Section 3.05(a) for such calendar year or, if such Person shall
have been a Noteholder during a portion of such calendar year, for the
applicable portion of such year, for the purposes of such Noteholder's
preparation of federal income tax returns. In addition, the Servicer shall
furnish to the 1999-A Indenture Trustee for distribution to such Person at such
time any other information reasonably necessary under applicable law for the
preparation of such income tax returns.
(c) Within a reasonable period of time after the end of each calendar
year, but not later than the latest date permitted by law, the 1999-A Owner
Trustee shall mail to each Person who at any time during such calendar year
shall have been a Certificateholder a statement or statements which in the
aggregate contain the sum of the amounts set forth in clauses (ii) through
(xiii) and
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(xv) through (xix) of Section 3.05(a) for such calendar year or, if such Person
shall have been a Certificateholder 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 1999-A Owner Trustee for distribution to such
Person at such time any other information reasonably necessary under applicable
law for the preparation of such income tax returns.
ARTICLE FOUR
CERTIFICATES
Section 4.01 THE CERTIFICATES.
(a) Certificates shall be issued which shall be substantially in the form
of Exhibit A to this 1999-A Securitization Trust Agreement. The Certificates
shall be issuable in minimum denominations of $[_________] and integral
multiples of $[________] in excess thereof. The Certificates shall be executed
by the 1999-A Owner Trustee on behalf of the 1999-A Securitization Trust by
manual or facsimile signature of an officer or other signatory of the 1999-A
Owner Trustee. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when the signatures were affixed, authorized
to sign on behalf of the 1999-A Owner Trustee shall be a valid and binding
obligation of the 1999-A Securitization Trust, notwithstanding that such
individuals or any of them 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.
(b) No Certificate shall be entitled to any benefit under this 1999-A
Securitization Trust Agreement, or be valid for any purpose, unless there
appears on such Certificate a certificate of authentication substantially in the
form set forth in Exhibit A to this 1999-A Securitization Trust Agreement,
executed by the 1999-A Owner Trustee or an authentication agent appointed for
such purpose by the 1999-A Owner Trustee, by manual or facsimile signature.
Such certificate of authentication upon any Certificate shall be the sole
conclusive evidence that such Certificate has been duly authenticated and
delivered under this 1999-A Securitization Trust Agreement. The 1999-A Owner
Trustee is hereby authorized to appoint an authentication agent to execute any
or all such certificates of authentication on behalf of the 1999-A Owner
Trustee.
Section 4.02 AUTHENTICATION AND DELIVERY OF CERTIFICATES. In exchange
for, and simultaneously with the sale, assignment and transfer to the 1999-A
Owner Trustee of the 1999-A SUBI Interest (exclusive of all monies and
payments due or payable under the Residual Value Insurance Policy or other
residual value insurance policies relating to the 1999-A Contracts and
1999-A Leased Vehicles and the right to receive such amounts), the 1999-A
SUBI Certificates and the other assets of the 1999-A Securitization Trust,
HTC LP and HTD LP shall receive the Certificates and the Notes.
Section 4.03 NO TRANSFER OF THE CERTIFICATES. Subject to Section 5.03,
the Certificates shall be owned by HTC LP and HTD LP and may not be transferred,
as provided by Section 5.06.
Section 4.04 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES. If (i)
any mutilated Certificate is surrendered to the 1999-A Owner Trustee or the
1999-A Owner Trustee receives
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evidence to its satisfaction of the destruction, loss or theft of a Certificate
and (ii) there is delivered to the 1999-A Owner Trustee such security or
indemnity as may be required by the 1999-A Owner Trustee to save itself and the
1999-A Securitization Trust harmless, then, in the absence of notice that such
Certificate has been acquired by a bona fide purchaser, the 1999-A Owner Trustee
on behalf of the 1999-A Securitization Trust shall execute and the 1999-A Owner
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 Percentage Interest. In connection with the issuance of any new
Certificate under this Section 4.04, the 1999-A Owner Trustee may require the
payment by the Holder of a sum sufficient to cover any tax or governmental
charges that may be imposed in relation thereto. Any duplicate Certificate
issued pursuant to this Section 4.04 shall constitute complete and indefeasible
evidence of ownership in the 1999-A Securitization Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time, and any such lost, stolen or destroyed Certificate shall, upon
issuance of any such duplicate Certificate, be null, void and of no effect.
Section 4.05 PERSONS DEEMED OWNERS. The 1999-A Owner Trustee shall treat
both HTC LP and HTD LP as the owners of the Certificates for the purpose of
receiving distributions pursuant to Section 3.03 and for all other purposes
whatsoever.
ARTICLE FIVE
THE TRANSFERORS
Section 5.01 REPRESENTATIONS OF THE TRANSFERORS. Each of HTC LP and HTD
LP hereby make the following representations on which the 1999-A Owner Trustee
relies in accepting the 1999-A SUBI Interest and the 1999-A SUBI Certificates,
and executing and authenticating the Certificates and on which the 1999-A
Indenture Trustee relies in authenticating the Notes. The representations speak
as of the execution and delivery of this 1999-A Securitization Trust Agreement,
but shall survive the sale, transfer and assignment of the 1999-A SUBI Interest
and the 1999-A SUBI Certificates, to the 1999-A Owner Trustee and the pledge
thereof to the 1999-A Indenture Trustee pursuant to the Indenture.
(a) ORGANIZATION AND GOOD STANDING. Each of HTC LP and HTD LP is
a limited partnership validly organized and existing and in good standing
under the laws of the State of Delaware, 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
each of the HTC LP 1999-A SUBI Interest, the HTC LP 1999-A SUBI
Certificate, the HTD LP 1999-A SUBI Interest and HTD LP 1999-A SUBI
Certificate.
(b) DUE REGISTRATION. Each of HTC LP and HTD LP is duly
registered as a foreign limited partnership 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 requires
such qualifications, except where the failure to so qualify or to have
obtained such licenses and approvals would not have a material adverse
effect on the earnings or business affairs of either HTC LP or HTD LP.
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(c) POWER AND AUTHORITY. Each of HTC LP and HTD LP has the power
and authority to execute and deliver this 1999-A Securitization Trust
Agreement and to carry out its terms, each of HTC LP and HTD LP has the
power and authority to sell and assign the property to be sold and assigned
to and deposited with the 1999-A Owner Trustee as part of the 1999-A
Securitization Trust and has duly authorized such sale and assignment to
the 1999-A Owner Trustee by all necessary partnership action; and the
execution, delivery and performance of this 1999-A Securitization Trust
Agreement have been duly authorized by HTC LP and HTD LP by all necessary
partnership action.
(d) VALID SALE, BINDING OBLIGATIONS. This 1999-A Securitization
Trust Agreement (i) evidences a valid sale, transfer and assignment of the
HTC LP 1999-A SUBI Certificate and the HTC LP 1999-A SUBI Interest
evidenced thereby and the HTD LP 1999-A SUBI Certificate and the HTD LP
1999-A SUBI Interest evidenced thereby, exclusive of all monies and
payments due or payable under the Residual Value Insurance Policy or
other residual value insurance policies relating to the 1999-A Contracts
and 1999-A Leased Vehicles and the right to receive such amounts,
enforceable against creditors of and purchasers from HTC LP and HTD LP;
and (ii) constitutes a legal, valid and binding obligation of each of
HTC LP and HTD LP 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
each of HTC LP and HTD LP of this 1999-A Securitization Trust Agreement and
the consummation of the transactions contemplated by this 1999-A
Securitization Trust Agreement and the fulfillment of the terms of this
1999-A Securitization Trust Agreement do 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 certificates of
limited partnership or limited partnership agreements of each of HTC LP or
HTD LP, or conflict with or violate any of the material terms and
provisions of, or constitute (with or without notice or lapse of time) a
default under, any indenture, agreement or other instrument to which either
HTC LP or HTD LP are a party or by which they shall be bound; nor result in
the creation or imposition of any Lien upon any of the properties of HTC LP
or HTD LP pursuant to the terms of any such indenture, agreement or other
instrument (other than this 1999-A Securitization Trust Agreement); nor
violate any law or, to the best of HTC LP's and HTD LP's knowledge, any
order, rule or regulation applicable to HTC LP or HTD LP, as the case may
be, of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over HTC
LP or HTD LP, as the case may be, or their properties; in each case which
breach, default, conflict, lien or violation would have a material adverse
effect on the earnings or business affairs of HTC LP or HTD LP.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending or, to the best of HTC LP's and HTD LP's knowledge, threatened,
before any court, regulatory body, administrative agency or other
governmental instrumentality having jurisdiction over HTC LP or HTD LP or
its properties: (i) asserting the invalidity of this 1999-A Securitization
Trust Agreement, the Notes or the Certificates, (ii) seeking to prevent the
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issuance of the Notes or the Certificates or the consummation of any of the
transactions contemplated by this 1999-A Securitization Trust Agreement,
(iii) seeking any determination or ruling that could reasonably be expected
to materially and adversely affect the performance by HTC LP or HTD LP of
their obligations under, or the validity or enforceability of, this 1999-A
Securitization Trust Agreement, the Notes or the Certificates or (iv)
relating to HTC LP or HTD LP that could reasonably be expected to adversely
affect the federal income tax attributes of the Notes.
(g) TITLE TO THE 1999-A SUBI CERTIFICATES. Prior to the
transfer pursuant to this 1999-A Securitization Trust Agreement, each of
HTC LP and HTD LP, respectively, had good title to, and was the sole legal
and beneficial owner of, the HTC LP 1999-A SUBI Certificate and the HTD LP
1999-A SUBI Certificate, respectively, free and clear of Liens, except as
provided for in the Backup Security Agreement.
Section 5.02 LIABILITY OF THE TRANSFERORS; INDEMNITIES. HTC LP [and HTD
LP] agree to be, and shall be, liable without limitation for all liabilities
(including taxes), contracts, expenses, indemnity payments and other charges
of the 1999-A Securitization Trust.
Section 5.03 MERGER OR CONSOLIDATION OF, OR ASSUMPTION OF THE OBLIGATIONS
OF, THE TRANSFERORS; CERTAIN LIMITATIONS.
(a) Any Person (i) into which either HTC LP or HTD LP may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which either HTC LP or HTD LP shall be a party or (iii) which may succeed to
all or substantially all of the business of either HTC LP or HTD LP, shall be
the successor to HTC LP or HTD LP under this 1999-A Securitization Trust
Agreement without the execution or filing of any document or any further act on
the part of any of the parties to this 1999-A Securitization Trust Agreement,
except that if either HTC LP or HTD LP 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 either HTC LP or HTD LP either
generally or specifically as provided herein. HTC LP and HTD LP, as the case
may be, shall provide notice of any merger, consolidation or succession pursuant
to this Section 5.03 to each Rating Agency.
(b) (i) Subject to the limitations set forth in Sections 5.03(b)(ii) and
5.03(c) the purpose of each of HTC LP and HTD LP shall be to engage in any
lawful activity for which a limited partnership may be formed under the laws of
the State of Delaware other than the practice of a profession permitted to be
operated through a limited partnership under laws of the State of Delaware.
(ii) Notwithstanding Section 5.03(b)(i) above, the purpose of
each of HTC LP and HTD LP shall be limited to the following purposes and
activities incidental to and necessary or convenient to accomplish the
following purposes:
(A)to act as settlor or grantor of one or more
securitization trusts formed pursuant to a trust agreement or other
agreement for the purpose of acquiring
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interests in the Origination Trust, which securitization trust may
issue certificates of beneficial interest in the assets of such
securitization trust;
(B)to acquire, own, hold, sell, transfer, convey, dispose
of, pledge, assign, borrow money against, finance, refinance or
otherwise deal with, publicly or privately and whether with unrelated
third parties or with affiliated entities, beneficial interests in the
Origination Trust, including any undivided trust interests or special
units of beneficial interest created with respect to the Origination
Trust, and certificates of the securitization trust;
(C)to loan or otherwise invest funds received as a result of
HTC LP's or HTD LP's beneficial interest in the Origination Trust or
certificates in the securitization trust and any other income, as
determined by the general partner of HTC LP or HTD LP, as applicable,
from time to time;
(D)to borrow money other than pursuant to clause (C) above,
but only to the extent that any such borrowing is permitted by the
terms of the transactions contemplated by clauses (A) and (B) above;
and
(E)to engage in any lawful act or activity and to exercise
any powers permitted to limited partnerships organized under Delaware
law that are incidental to and necessary or convenient for the
accomplishment of the foregoing purposes.
(c) Notwithstanding any other provision of this Section 5.03 and any
provision of law, neither HTC LP nor HTD LP nor their general partners, on
behalf of HTC LP and HTD LP, shall do any of the following:
(i) engage in any business or activity other than as set forth
in Section 5.03(b);
(ii) without the affirmative vote of a majority of the members of
the Board of Directors of the manager of HTC LP's or HTD LP's general
partners (which must include the affirmative vote of all Independent
Directors of the manager of HTC LP's or HTD LP's general partner, as
required by the limited partnership agreement of HTC LP or HTD LP, as the
case may be), (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 HTC LP or HTD
LP, as applicable, (C) file a petition seeking or consent to reorganization
or relief under any applicable federal or state law relating to bankruptcy,
(D) consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of HTC LP or HTD LP or
all or substantially all of the property of HTC LP or HTD LP, as
applicable, (E) make a general assignment for the benefit of creditors, (F)
admit in writing HTC LP's or HTD LP's, as applicable, inability to pay its
debts generally as they become due, or (G) take any corporate action or
partnership action in furtherance of the actions set forth in clauses (A)
through (F) above; PROVIDED, HOWEVER, that no general partner shall in any
event consent to the institution of bankruptcy or insolvency proceedings
against the either HTC LP or HTD LP so long as HTC LP or HTD LP, as
applicable, is solvent; or
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(iii) without the affirmative vote of a majority of the members of
the Board of Directors of the manager of HTC LP's or HTD LP's general
partners (which must include the affirmative vote of all Independent
Directors of the manager of HTC LP's or HTD LP's general partners, as
required by the limited partnership agreement of HTC LP or HTD LP), merge
or consolidate with any other limited partnership, corporation, company or
entity or sell all or substantially all of the assets of HTC LP or HTD LP,
as applicable, or acquire all or substantially all of the assets or
partnerships interests or capital stock or other ownership interest of any
other limited partnership, corporation, company or entity (except for the
acquisition of beneficial interests in the Origination Trust and the sale,
transfer, conveyance, disposition, pledge, assignment, financing and
refinancing of, or otherwise dealing with, beneficial interests in the
Origination Trust in accordance with the terms of Section 5.03(b)(ii),
which shall not be otherwise restricted by this Section 5.03(c)).
Section 5.04 LIMITATION ON LIABILITY OF THE TRANSFERORS AND OTHERS. Each
of and any director, officer, employee or agent of HTC LP and HTD LP 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 with respect to any matters
arising under this 1999-A Securitization Trust Agreement.
Section 5.05 THE TRANSFERORS MAY OWN NOTES. Each of HTC LP and HTD LP
and each of their respective Affiliates may in its individual or any other
capacity become the owner or pledgee of Notes with the same rights as it would
have if it were not HTC LP or HTD LP or such an Affiliate thereof except as
otherwise specifically provided in the definition of the term "Noteholder".
Notes so owned by or pledged to HTC LP or HTD LP or such Affiliate shall have an
equal and proportionate benefit under the provisions of this 1999-A
Securitization Trust Agreement, without preference, priority or distinction as
among all of the Notes except as otherwise specifically provided in the
definition of the term "Noteholder". Each of HTC LP and HTD LP, as the case may
be, will give notice to each Rating Agency if it becomes aware that any of its
Affiliates shall at any time become the owner or pledgee of Notes.
Section 5.06 NO TRANSFER. On behalf of themselves and their successors
and assigns, HTC LP and HTD LP hereby covenant that they will not transfer,
pledge or assign to any Person the Certificates or any part of their right to
receive any Excess Interest Collections pursuant to Section 3.03(d) except as
expressly set forth in the 1999-A SUBI Supplement.
Section 5.07 TAX MATTERS PARTNER. If at any time the 1999-A
Securitization Trust is treated as a partnership for tax purposes, each of HTC
LP and HTD LP shall act as "Tax Matters Partner" (i) to represent the partners
before taxing authorities or courts of competent jurisdiction in any tax matters
affecting the 1999-A Securitization Trust as a tax partnership and (ii) to
execute any agreements or other documents relating to or affecting such tax
matters, including agreements or documents binding the partners with respect to
such tax matters or otherwise affecting their rights, including extending the
statute of limitations for assessment of tax deficiencies and adjusting the
1999-A Securitization Trust's federal, state or local tax returns. In the event
of such recharacterization, each of HTC LP and HTD LP shall provide written
notice of such recharacterization to the 1999-A Owner Trustee. Neither HTC LP
nor HTD LP shall be liable to the 1999-A Securitization Trust or to any
Noteholder for any action taken or omitted by
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HTC LP or HTD LP with regard to such tax matters or otherwise as a result of its
holding the position of Tax Matters Partner.
ARTICLE SIX
THE 1999-A OWNER TRUSTEE
Section 6.01 DUTIES OF 1999-A OWNER TRUSTEE.
(a) The 1999-A Owner Trustee (both prior to and after the occurrence of a
1999-A Servicer Termination Event under the Servicing Agreement and the 1999-A
Servicing Supplement) undertakes to perform such duties and only such duties as
are specifically set forth in this 1999-A Securitization Trust Agreement.
(b) The 1999-A Owner Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the 1999-A Owner Trustee that shall be specifically
required to be furnished pursuant to any provision of this 1999-A Securitization
Trust Agreement, shall examine them to determine whether they conform on their
face to the requirements of this 1999-A Securitization Trust Agreement.
(c) No provision of this 1999-A Securitization Trust Agreement shall be
construed to relieve the 1999-A Owner 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) the duties and obligations of the 1999-A Owner Trustee shall
be determined solely by the express provisions of this 1999-A
Securitization Trust Agreement, the 1999-A Owner Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this 1999-A Securitization Trust Agreement, no
implied covenants or obligations shall be read into this 1999-A
Securitization Trust Agreement against the 1999-A Owner Trustee, the
permissive right of the 1999-A Owner Trustee to do things enumerated in
this 1999-A Securitization Trust Agreement shall not be construed as a duty
and, in the absence of bad faith, negligence or willful misfeasance on the
part of the 1999-A Owner Trustee, the 1999-A Owner 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
1999-A Owner Trustee and conforming to the requirements of this 1999-A
Securitization Trust Agreement;
(ii) the 1999-A Owner 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 1999-A Owner Trustee was negligent in performing
its duties in accordance with the terms of this 1999-A Securitization Trust
Agreement; and
(iii) the 1999-A Owner Trustee shall not be personally liable with
respect to any action taken or suffered or omitted to be taken in good
faith absent negligence or willful misfeasance in accordance with the
direction of the 1999-A Indenture Trustee (and, after payment in full of
the Notes, HTC LP and HTD LP) relating to the time, method and place of
conducting any proceeding for any remedy available to the 1999-A Owner
Trustee or exercising any trust or power conferred upon the Owner Trustee,
under
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this 1999-A Securitization Trust Agreement, the Origination Trust Agreement
or the 1999-A SUBI Supplement.
(d) The 1999-A Owner 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 this 1999-A Securitization Trust Agreement or in the exercise
of any of its rights or powers if there shall be reasonable grounds for
believing that it is not assured of the repayment of such funds or indemnity
satisfactory to it against such risk or liability.
(e) All information obtained by the 1999-A Owner Trustee regarding the
Lessees and the 1999-A Contracts, whether upon the exercise of its rights under
this 1999-A Securitization Trust Agreement or any other 1999-A Securitization
Document, shall be maintained by the 1999-A Owner Trustee in confidence and
shall not be disclosed to any other Person, unless such disclosure is required
by any applicable law or regulation or pursuant to subpoena.
(f) Pursuant to Sections 8.01 and 8.02 of the 1999-A Servicing Supplement,
if the 1999-A Owner Trustee discovers that a representation or warranty with
respect to a 1999-A Contract was incorrect as of the time specified with respect
to such representation and warranty and such incorrectness materially and
adversely affects such 1999-A Contract, the 1999-A Owner Trustee shall give
prompt written notice to the Servicer and the Origination Trustee of such
incorrectness.
Section 6.02 CERTAIN MATTERS AFFECTING THE 1999-A OWNER TRUSTEE.
Except as otherwise provided in Section 6.01:
(i) the 1999-A Owner 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 in good faith to be genuine
and to have been signed or presented by the proper party or parties;
(ii) the 1999-A Owner 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 this
1999-A Securitization Trust Agreement in good faith absent negligence or
willful misfeasance and in accordance with such Opinion of Counsel;
(iii) the 1999-A Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this 1999-A
Securitization Trust Agreement or the Origination Trust Agreement, as
supplemented by the 1999-A SUBI Supplement, or to institute, conduct or
defend any litigation under or in relation to this 1999-A Securitization
Trust Agreement or the Origination Trust Agreement, as supplemented by the
1999-A SUBI Supplement, at the request, order or direction of the 1999-A
Indenture Trustee, HTC LP or HTD LP, unless the Certificateholders,
Noteholders, the 1999-A Indenture Trustee, HTC LP or HTD LP shall have
offered to the 1999-A Owner Trustee reasonable security or indemnity
against the costs, expenses and liabilities that may be incurred therein or
thereby;
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(iv) the 1999-A Owner Trustee shall not be personally liable for
any action taken, suffered or omitted by it in good faith absent negligence
or willful misfeasance and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this 1999-A
Securitization Trust Agreement; and
(v) the 1999-A Owner Trustee may execute any of the trusts or
powers under this 1999-A Securitization Trust Agreement or perform any
duties under this 1999-A Securitization Trust Agreement either directly or
by or through agents or attorneys or a custodian; PROVIDED, HOWEVER, that
the 1999-A Owner Trustee shall remain liable for performance of its duties
as set forth in Section 6.01.
Section 6.03 1999-A OWNER TRUSTEE NOT LIABLE FOR NOTES, CERTIFICATES OR
LEASES. The 1999-A Owner Trustee shall make no representations as to the
validity, enforceability or sufficiency of this 1999-A Securitization Trust
Agreement, the Indenture, the Notes, the Certificates (other than the execution
by the 1999-A Owner Trustee on behalf of the 1999-A Securitization Trust of this
1999-A Securitization Trust Agreement and the authentication of the
Certificates), the 1999-A SUBI Interest or the 1999-A SUBI Certificates. The
1999-A Owner Trustee shall at no time have any responsibility or liability (i)
for or with respect to the legality, validity and enforceability of the
Indenture, the Notes, the 1999-A SUBI Interest, the 1999-A SUBI Certificates,
any 1999-A Contract, any ownership interest in any 1999-A Leased Vehicle or the
maintenance of any such ownership interest, or (ii) for or with respect to the
efficacy of the 1999-A Securitization Trust or its ability to generate the
payments to be distributed to the Noteholders or the Certificateholders under
this 1999-A Securitization Trust Agreement, including the validity of (A) the
assignment of the 1999-A SUBI Interest and the 1999-A SUBI Certificates to the
1999-A Securitization Trust or (B) any intervening assignment; the existence,
condition, location and ownership of any 1999-A Contract or 1999-A Leased
Vehicle; the existence and enforceability of the physical damage or credit life
or credit disability insurance; the existence and contents of any 1999-A
Contract, any computer or other record of any 1999-A Contract or the
completeness of any 1999-A Contract; the performance or enforcement of any
Lease; the compliance by HTC LP or HTD LP with any covenant or the breach by HTC
LP or HTD LP of any warranty or representation made under this 1999-A
Securitization Trust Agreement or in any related document and the accuracy of
any such warranty or representation; the acts or omissions or the Servicer; or
any action or failure to act by the 1999-A Owner Trustee in good faith absent
negligence or willful misfeasance taken at the instruction of the Servicer;
PROVIDED, HOWEVER, that the foregoing shall not relieve the 1999-A Owner Trustee
of its obligation to perform its duties under this 1999-A Securitization Trust
Agreement. Except with respect to a claim based on the failure of the 1999-A
Owner Trustee to perform its duties under this 1999-A Securitization Trust
Agreement or based on the 1999-A Owner Trustee's willful misfeasance, bad faith
or negligence, no recourse shall be had for any claim based on any provision of
this 1999-A Securitization Trust Agreement, the Certificates, the 1999-A SUBI
Interest, the 1999-A SUBI Certificates or any assignment thereof against the
institution serving as 1999-A Owner Trustee in its individual capacity. The
1999-A Owner Trustee shall not have any personal obligation, liability or duty
whatsoever to any Certificateholder, any Noteholder, the 1999-A Indenture
Trustee, HTC LP, HTD LP or any other Person with respect to any such claim, and
any such claim shall be asserted solely against the 1999-A Securitization Trust
or any indemnitor who shall furnish indemnity as provided in this Securitization
Trust Agreement. The 1999-A Owner Trustee shall not be accountable for the use
or application by HTC LP or HTD
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LP of any of the Notes or the Certificates or the proceeds of the Notes or the
Certificates, or for the use application of any funds paid to the Servicer in
respect of the 1999-A SUBI Interest or the 1999-A SUBI Certificates.
Section 6.04 1999-A OWNER TRUSTEE MAY OWN SECURITIES. The 1999-A Owner
Trustee, in its individual or any other capacity, may become the owner or
pledgee of Notes or the owner of the Certificates with the same rights as it
would have if it were not 1999-A Owner Trustee.
Section 6.05 1999-A OWNER TRUSTEE'S FEES AND EXPENSES. The 1999-A Owner
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
this 1999-A Securitization Trust Agreement and in the exercise and performance
of any of the powers and duties of the 1999-A Owner Trustee under this 1999-A
Securitization Trust Agreement, and to payment or reimbursement upon its request
for all reasonable expenses, disbursements and advances incurred or made by the
1999-A Owner Trustee in its capacity as 1999-A Owner Trustee in accordance with
any of the provisions of this 1999-A Securitization Trust Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ), except any such expense,
disbursement or advance as may arise from its negligence, willful misfeasance or
bad faith or that is the responsibility of the 1999-A Indenture Trustee, the
Noteholders, the Certificateholders, HTC LP or HTD LP under this 1999-A
Securitization Trust Agreement or any Securitization Document. Such
compensation and reimbursement shall be paid as set forth in Sections 3.03(c)
and 3.03(g). Additionally, HTC LP or HTD LP, pursuant to Section 6.02(a)(iii),
may agree to indemnify the 1999-A Owner Trustee under certain circumstances and,
as set forth in this 1999-A Securitization Agreement, will be liable for any
unpaid compensation and reimbursement which is not otherwise paid pursuant to
this Section 6.05.
Section 6.06 ELIGIBILITY REQUIREMENTS FOR 1999-A OWNER TRUSTEE. The
1999-A Owner Trustee under this 1999-A Securitization Trust Agreement shall at
all times: (a) be a national banking association or corporation having its
corporate trust office in the same State as the location of the Corporate Trust
Office of the 1999-A Owner Trustee as specified in this 1999-A Securitization
Trust Agreement; (b) be organized and doing business under the laws of such
State or the United States; (c) be authorized under such laws to exercise
corporate trust powers; (d) have a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or state
authorities; and (e) have a long-term deposit rating no lower than Baa3 by
Moody's, so long as Moody's is a Rating Agency, [___] by Standard & Poor's, so
long as Standard & Poor's is a Rating Agency, [____] by Fitch, so long as Fitch
is a Rating Agency, or be otherwise acceptable to each Rating Agency, as
evidenced by a letter to such effect from each of them.
If the 1999-A Owner 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 6.06, 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. If at any time the 1999-A Owner Trustee shall cease to be eligible
in accordance with the provisions of this Section 6.06, the 1999-A Owner Trustee
shall resign immediately in the manner and with the effect specified in Section
6.07.
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Section 6.07 RESIGNATION OR REMOVAL OF 1999-A OWNER TRUSTEE.
(a) RESIGNATION. The 1999-A Owner Trustee may at any time resign and be
discharged from the trusts created by this 1999-A Securitization Trust Agreement
by giving written notice thereof to the Transferor. Upon receiving such notice
of resignation, HTC LP and HTD LP shall promptly appoint a successor 1999-A
Owner Trustee by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning 1999-A Owner Trustee and one copy to the
successor 1999-A Owner Trustee. If no successor 1999-A Owner Trustee shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning 1999-A Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor 1999-A
Owner Trustee.
(b) REMOVAL. If at any time the 1999-A Owner Trustee shall cease to be
eligible in accordance with the provisions of Section 6.06 and shall fail to
resign after written request therefor by HTC LP and HTD LP, or if at any time
the 1999-A Owner Trustee shall be legally unable to act, or shall be adjudged a
bankrupt or insolvent, or a receiver of the 1999-A Owner Trustee or of its
property shall be appointed, or any public officer shall take charge or control
of the 1999-A Owner Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then HTC LP and HTD LP may jointly
remove the 1999-A Owner Trustee. If HTC LP and HTD LP shall remove the 1999-A
Owner Trustee under the authority of the immediately preceding sentence, HTC LP
and HTD LP shall promptly appoint a successor 1999-A Owner Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
1999-A Owner Trustee so removed and one copy to the successor 1999-A Owner
Trustee, and payment of all fees owed to the outgoing 1999-A Owner Trustee.
(c) EFFECTIVE DATE OF RESIGNATION OR REMOVAL. Any resignation or removal
of the 1999-A Owner Trustee and appointment of a successor 1999-A Owner Trustee
pursuant to any of the provisions of this Section 6.07 shall not become
effective until acceptance of appointment by the successor 1999-A Owner Trustee
as provided in Section 6.08. The Servicer shall give the 1999-A Indenture
Trustee and each Rating Agency notice of any such resignation or removal of the
1999-A Owner Trustee and appointment and acceptance of a successor 1999-A Owner
Trustee.
Section 6.08 SUCCESSOR 1999-A OWNER TRUSTEE. Any successor 1999-A Owner
Trustee appointed as provided in Section 6.07 shall execute, acknowledge and
deliver to its predecessor 1999-A Owner Trustee, to HTC LP and to HTD LP, an
instrument accepting such appointment under this 1999-A Securitization Trust
Agreement, and thereupon the resignation or removal of the predecessor 1999-A
Owner Trustee shall become effective and such successor 1999-A Owner Trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor under this 1999-A
Securitization Trust Agreement, with like effect as if originally named as
1999-A Owner Trustee. The predecessor 1999-A Owner Trustee shall deliver to the
successor 1999-A Owner Trustee all documents and statements held by it under
this 1999-A Securitization Trust Agreement; and HTC LP, HTD LP and the
predecessor 1999-A Owner Trustee shall execute and deliver such instruments and
do such other things as may reasonably be required for fully and certainly
vesting and confirming in the successor 1999-A Owner Trustee all such rights,
powers, duties and obligations. No successor 1999-A Owner Trustee shall accept
appointment as provided in this Section 6.08 unless at the time of such
acceptance such successor 1999-A Owner Trustee
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shall be eligible under the provisions of Section 6.06. Upon acceptance by a
successor 1999-A Owner Trustee of its appointment as provided in this Section
6.08, the Servicer shall cause notice of the appointment of such successor
1999-A Owner Trustee under this 1999-A Securitization Trust Agreement to be
given by mail to the 1999-A Indenture Trustee and each Rating Agency. If the
Servicer fails to mail or cause to be mailed such notice within ten days after
acceptance of appointment by the successor 1999-A Owner Trustee, the successor
1999-A Owner Trustee shall cause such notice to be mailed at the expense of the
Servicer.
Section 6.09 MERGER OR CONSOLIDATION OF 1999-A OWNER TRUSTEE. Any
corporation (i) into which the 1999-A Owner Trustee may be merged or
consolidated, (ii) which may result from any merger, conversion or consolidation
to which the 1999-A Owner Trustee shall be a party, or (iii) which may succeed
to the corporate trust business of the 1999-A Owner Trustee, shall be the
successor of the 1999-A Owner Trustee hereunder, provided such corporation shall
be eligible pursuant to Section 6.06, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding, except that if the 1999-A Owner Trustee
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 1999-A Owner Trustee, either generally or particularly as provided herein.
Notice of any such event shall be given by the 1999-A Owner Trustee to each
Rating Agency.
Section 6.10 APPOINTMENT OF CO-TRUSTEE OR SEPARATE 1999-A OWNER TRUSTEE.
Notwithstanding any other provisions of this 1999-A Securitization Trust
Agreement, at any time, for the purpose of meeting any legal requirements of any
jurisdiction in which any part of the 1999-A Securitization Trust may at the
time be located, HTC LP, HTD LP and the 1999-A Owner Trustee acting jointly
shall have the power and shall execute and deliver all instruments to appoint
one or more Persons approved by the 1999-A Owner Trustee to act as co-trustee,
jointly with the 1999-A Owner Trustee, or separate trustee or separate trustees,
of all or any part of the 1999-A Securitization Trust, and to vest in such
Person, in such capacity and for the benefit of the Noteholders and the
Certificateholders, such title to the 1999-A Securitization Trust, or any part
thereof, and, subject to the other provisions of this Section 6.10, such powers,
duties, obligations, rights and trusts as the HTC LP, HTD LP and the 1999-A
Owner Trustee may consider necessary or desirable. If either HTC LP or HTD LP
shall not have joined in such appointment within 15 days after the receipt by it
of a request to do so, the 1999-A Owner Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee under this 1999-A
Securitization Trust Agreement shall be required to meet the terms of
eligibility as a successor 1999-A Owner Trustee pursuant to Section 6.06 and no
notice of a successor 1999-A Owner Trustee pursuant to Section 6.08 and no
notice to Certificateholders, Noteholders or the 1999-A Indenture Trustee of the
appointment of any co-trustee or separate trustee shall be required pursuant to
Section 6.08.
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 1999-A Owner Trustee shall be conferred upon and exercised or
performed by the 1999-A Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that
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such separate trustee or co-trustee is not authorized to act separately
without the 1999-A Owner Trustee joining in such act), except to the extent
that under any law of any jurisdiction in which any particular act or acts
are to be performed, the 1999-A Owner Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the
1999-A Securitization 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 1999-A Owner
Trustee;
(ii) no trustee under this 1999-A Securitization Trust Agreement
shall be personally liable by reason of any act or omission of any other
trustee under this 1999-A Securitization Trust Agreement; and
(iii) HTC LP, HTD LP and the 1999-A Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate trustee or
co-trustee.
Any notice, request or other writing given to the 1999-A Owner Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this 1999-A
Securitization Trust Agreement and the conditions of this Section 6.10. 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 1999-A Owner Trustee or separately, as may
be provided therein, subject to all the provisions of this 1999-A Securitization
Trust Agreement, specifically including every provision of this 1999-A
Securitization Trust Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the 1999-A Owner Trustee. Each such
instrument shall be filed with the 1999-A Owner Trustee and a copy thereof given
to HTC LP, HTD LP and the Servicer.
Any separate trustee or co-trustee may at any time appoint the 1999-A Owner
Trustee its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
1999-A Securitization Trust 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 1999-A Owner Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee. Notwithstanding
anything to the contrary in this 1999-A Securitization Trust Agreement, the
appointment of any separate trustee or co-trustee shall not relieve the 1999-A
Owner Trustee of its obligations and duties under this 1999-A Securitization
Trust Agreement.
Section 6.11 REPRESENTATIONS AND WARRANTIES OF 1999-A OWNER TRUSTEE. The
1999-A Owner Trustee makes the following representations and warranties upon
which HTC LP, HTD LP, the Noteholders and the Certificateholders may rely:
(i) ORGANIZATION AND GOOD STANDING. The 1999-A Owner Trustee is
a national banking association organized, existing and in good standing
under the laws of the United States.
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(ii) POWER AND AUTHORITY. The 1999-A Owner Trustee has full
power, authority and right to execute, deliver and perform this 1999-A
Securitization Trust Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this 1999-A
Securitization Trust Agreement.
(iii) DUE EXECUTION. This 1999-A Securitization Trust Agreement
has been duly executed and delivered by the 1999-A Owner Trustee.
(iv) ENFORCEABILITY. This 1999-A Securitization Trust Agreement
constitutes the legal, valid and binding obligation of the 1999-A Owner
Trustee, enforceable against it in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, reorganization or other similar laws affecting enforcement of
creditors' rights generally and by general principles of equity.
Section 6.12 TAX RETURNS. The Servicer shall, on behalf of the 1999-A
Securitization Trust, the 1999-A Owner Trustee, HTC LP and HTD LP, prepare or
shall cause to be prepared any required federal tax information returns (in a
manner consistent with the treatment of the Notes as indebtedness) and the
1999-A Owner Trustee shall file and distribute such forms as required by law
in accordance with the Servicer's instructions. The Servicer shall prepare
or cause to be prepared any federal and state income tax returns that may be
required with respect to the 1999-A Securitization Trust or the assets of the
1999-A Securitization Trust and shall deliver any such returns to the 1999-A
Owner Trustee for signature by HTC LP and HTD LP (or any other Person
authorized to sign such returns) at least five days prior to the date such
returns are required by law to be filed. The 1999-A Securitization Trust
shall not elect to be treated as an association under Treasury Regulations
Section 301.7701-3(a) for federal income tax purposes.
Section 6.13 1999-A OWNER TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION
OF THE CERTIFICATES. All rights of action and claims under this 1999-A
Securitization Trust Agreement or the Certificates may be prosecuted and
enforced by the 1999-A Owner Trustee without the possession of the Certificates
or the production thereof in any proceeding relating thereto, and any such
proceeding instituted by the 1999-A Owner 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 1999-A Owner Trustee, its agents and counsel, be for the ratable benefit of
the Noteholders and the Certificateholders in respect of which such judgment has
been obtained.
Section 6.14 SUIT FOR ENFORCEMENT. If a 1999-A Servicer Termination
Event shall occur and be continuing, the 1999-A Indenture Trustee or the 1999-A
Owner Trustee, in its discretion may, subject to the provisions of Sections
6.01, 6.02 and Section 2.01(c) of the Servicing Agreement (with respect to the
Servicer), proceed to protect and enforce its rights and the rights of the
Noteholders and Certificateholders under this 1999-A Securitization Trust
Agreement, the Servicing Agreement and the 1999-A Servicing Supplement, as
applicable, by a suit, action or proceeding in equity or at law or otherwise,
whether for the specific performance of any covenant or agreement contained
herein or therein or in aid of the execution of any power granted herein or
therein or for the enforcement of any other legal, equitable or other remedy as
the 1999-A Indenture Trustee or the 1999-A Owner Trustee, being advised by
counsel, shall
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deem most effectual to protect and enforce any of the rights of the 1999-A
Indenture Trustee or the 1999-A Owner Trustee or the Noteholders and the
Certificateholders.
Section 6.15 RIGHTS OF 1999-A INDENTURE TRUSTEE TO DIRECT 1999-A OWNER
TRUSTEE. Until the Notes are paid in full, the 1999-A Indenture Trustee shall
have the right, and, thereafter, HTC LP and HTD LP shall jointly have the right,
to direct the time, method and place of conducting any proceeding for any remedy
available to the 1999-A Owner Trustee under this 1999-A Securitization Trust
Agreement, or exercising any trust or power conferred on the 1999-A Owner
Trustee by this 1999-A Securitization Trust Agreement; PROVIDED, HOWEVER, that
(a) subject to Sections 6.01 and 6.02, the 1999-A Owner Trustee shall have the
right to decline to follow any such direction if the 1999-A Owner Trustee being
advised by counsel determines that the action so directed may not lawfully be
taken, or if the 1999-A Owner Trustee in good faith shall, by a Responsible
Officer, determine that the proceedings so directed would be illegal or subject
it to personal liability, and (b) nothing in this 1999-A Securitization Trust
Agreement shall impair the right of the 1999-A Owner Trustee to take any action
deemed proper by the 1999-A Owner Trustee and which is not inconsistent with
such direction by the 1999-A Indenture Trustee or by HTC LP and HTD LP, as
applicable.
Section 6.16 NO PETITION. Each of the parties hereto covenants and
agrees that prior to the date which is one year and one day after the last date
upon which (a) each Class of Notes and the Certificates has been paid in full,
and (b) all obligations due under any other Securitization have been paid in
full, it will not institute against, or join any other Person in instituting
against, the 1999-A Securitization Trust, HTA LP, HTB LP, HTC LP, HTD LP, any
general partner or member (as applicable) of a UTI Beneficiary or of a
Transferor which is a partnership or a limited liability company, the
Origination Trustee, the Origination Trust, any Special Purpose Affiliate, any
UTI Beneficiary, any Beneficiary, and any general partner or member (as
applicable) of a Beneficiary or of a Special Purpose Affiliate partnership (or
any of their respective general partners) that is a partnership or a limited
liability company, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit the 1999-A Indenture
Trustee's or 1999-A Owner Trustee's right to file any claim in or otherwise take
actions with respect to any such proceeding instituted by any Person not under
such a constraint. This Section 6.16 shall survive the termination of this
1999-A Securitization Trust Agreement or the resignation or removal of the
1999-A Owner Trustee or the 1999-A Indenture Trustee under this 1999-A
Securitization Trust Agreement or the Indenture, respectively.
Section 6.17 AUTHORITY TO EXECUTE. Each of HTC LP and HTD LP hereby
authorizes and directs the 1999-A Owner Trustee (i) to execute and deliver on
behalf of the 1999-A Securitization Trust the Indenture, the Certificates and
any other document as HTC LP, HTD LP or the 1999-A Indenture Trustee may from
time to time direct, (ii) to execute and deliver all other documents
contemplated by the documents referred to in clause (i) above, and (iii) subject
to the terms of this 1999-A Securitization Trust Agreement, to take such other
actions in connection with the foregoing as HTC LP, HTD LP, the Servicer or the
1999-A Indenture Trustee may from time to time direct.
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Section 6.18 MANAGEMENT OF THE 1999-A SECURITIZATION TRUST. The business
and affairs of the 1999-A Securitization Trust shall be managed by the 1999-A
Owner Trustee at the direction of HTC LP, HTD LP, the Servicer and the 1999-A
Indenture Trustee.
Section 6.19 NEGATIVE PLEDGE. Except as expressly set forth herein with
respect to the pledge to the 1999-A Indenture Trustee of the 1999-A SUBI
Certificates and the 1999-A SUBI Assets evidenced thereby and the disposition of
the assets of the 1999-A Securitization Trust in connection with the termination
of the 1999-A Securitization Trust pursuant to Section 7.01, the 1999-A Owner
Trustee shall not sell, assign, pledge, convey or otherwise transfer to any
Person the 1999-A SUBI Certificates or any interest therein.
ARTICLE SEVEN
TERMINATION
Section 7.01 TERMINATION OF THE 1999-A SECURITIZATION TRUST.
(a) The 1999-A Securitization Trust and the respective obligations and
responsibilities of HTC LP, HTD LP, the 1999-A Indenture Trustee and the 1999-A
Owner Trustee shall terminate upon the earliest to occur of (i) the maturity,
sale or other liquidation, as the case may be, of the last outstanding 1999-A
Contract and 1999-A Leased Vehicle evidenced by the 1999-A SUBI Interest and the
distribution of all proceeds thereof (other than proceeds of any Residual Value
Insurance Policy) together with all amounts on deposit all 1999-A SUBI Accounts
and the Reserve Fund in the manner provided in Section 3.03, (ii) the purchase
as of any Distribution Date by the Servicer of the corpus of the 1999-A
Securitization Trust in the manner provided in Section 7.02, (iii) the day
following the Distribution Date upon which all Notes and Certificates have been
paid in full and after which there is no unreimbursed Class A-1 Note Principal
Loss Amount, Class A-2 Note Principal Loss Amount, Class A-3 Note Principal Loss
Amount, Class A-4 Note Principal Loss Amount, Class B Note Principal Loss
Amount, Class A-1 Note Principal Loss Interest Amount, Class A-2 Note Principal
Loss Interest Amount, Class A-3 Note Principal Loss Interest Amount, Class A-4
Note Principal Loss Interest Amount, Class B Note Principal Loss Interest
Amount, Class B Note Principal Carryover Shortfall, Class B Note Principal
Carryover Shortfall Interest Amount, Certificate Principal Loss Amount,
Certificate Principal Loss Interest Amount, Certificate Principal Carryover
Shortfall or Certificate Principal Carryover Shortfall Interest Amount or (iv)
the expiration, disposition or termination of the 1999-A SUBI Interest;
PROVIDED, HOWEVER, that in no event shall the trust created by this 1999-A
Securitization Trust Agreement continue beyond the expiration of 21 years from
the death of the last survivor of the descendants of Joseph P. Kennedy, the
ambassador to the Court of St. James, living on the date of the 1999-A
Securitization Trust Agreement. HTC LP and HTD LP shall promptly notify the
1999-A Owner Trustee and each Rating Agency of any prospective termination of
the 1999-A Securitization Trust.
(b) Upon the winding up of the 1999-A Securitization Trust and its
termination, the 1999-A Owner Trustee shall cause the Certificate of Trust to be
canceled by filing a certificate of cancellation with the Secretary of State of
the State of Delaware in accordance with Section 3810 of the Business Trust
Statute.
Section 7.02 OPTIONAL PURCHASE OF 1999-A SUBI CERTIFICATES.
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On each Distribution Date as of which the Investor Balance shall be less
than or equal to $* (10% of the sum of the Initial Note Balance and the
Initial Certificate Balance), either before or after giving effect to any
payment of principal required to be made on such Distribution Date, the
Servicer shall have the option to purchase the Securityholders' interest in
the corpus of the 1999-A Securitization Trust and to effect a termination of
the 1999-A Securitization Trust. To exercise such option, the Servicer shall
notify the 1999-A Indenture Trustee, the 1999-A Owner Trustee, HTC LP and HTD
LP, in writing, no later than the third Business Day of the month in which
such purchase is to be effected and shall deposit in the 1999-A SUBI
Collection Account an amount equal to the greater of (i) the Aggregate Net
Investment Value as of the last day of the related Collection Period, and
(ii) the sum of (A) the Adjusted Class A-1 Note Balance, the Adjusted Class
A-2 Note Balance, the Adjusted Class A-3 Note Balance, the Adjusted Class A-4
Note Balance, the Adjusted Class B Note Balance and the Adjusted Certificate
Balance, (B) the accrued and unpaid Class A-1 Interest Distributable Amount,
Class A-2 Interest Distributable Amount, Class A-3 Interest Distributable
Amount, Class A-4 Interest Distributable Amount, Class B Interest
Distributable Amount and Certificate Interest Distributable Amount, (C) any
accrued and unpaid Class A-1 Interest Carryover Shortfall, Class A-2 Interest
Carryover Shortfall, Class A-3 Interest Carryover Shortfall, Class A-4
Interest Carryover Shortfall, Class B Interest Carryover Shortfall and
Certificate Interest Carryover Shortfall, (D) any unpaid Class A-1 Note
Principal Loss Amount, Class A-2 Note Principal Loss Amount, Class A-3 Note
Principal Loss Amount, Class A-4 Note Principal Loss Amount, Class B Note
Principal Loss Amount, Class B Note Principal Carryover Shortfall,
Certificate Principal Loss Amount and Certificate Principal Carryover
Shortfall, and (E) any accrued and unpaid Class A-1 Note Principal Loss
Interest Amount, Class A-2 Note Principal Loss Interest Amount, Class A-3
Note Principal Loss Interest Amount, Class A-4 Note Principal Loss Interest
Amount, Class B Note Principal Loss Interest Amount, Class B Note Principal
Carryover Shortfall Interest Amount, Certificate Principal Loss Interest
Amount and Certificate Principal Carryover Shortfall Interest Amount, in each
case through the day preceding the final Distribution Date. On such
Distribution Date, upon receipt of such amount, the 1999-A Owner Trustee
shall distribute such amounts pursuant to the priorities set forth in Section
3.03, and any balance will be distributed to the Servicer. Thereupon the
Servicer shall succeed to all of the 1999-A Securitization Trust corpus.
ARTICLE EIGHT
TAX MATTERS
Section 8.01 TAX AND ACCOUNTING CHARACTERIZATION. It is the intent of
the parties hereto that the 1999-A Securitization Trust not constitute a
separate entity for federal income tax or state income or franchise tax
purposes. It is the intent of each of HTC LP and HTD LP and the Noteholders
that the Notes be treated as indebtedness of the each of HTC LP and HTD LP
secured by the assets of the 1999-A Securitization Trust for federal income tax
and state income and franchise tax purposes. The parties agree that, unless
otherwise required by appropriate tax authorities, the 1999-A Securitization
Trust shall not file or cause to be filed annual returns, reports or other forms
and will treat the 1999-A Securitization Trust consistent with the
characterization that the 1999-A Securitization Trust is not a separate entity
for tax purposes.
41
<PAGE>
ARTICLE NINE
MISCELLANEOUS PROVISIONS
Section 9.01 AMENDMENT.
(a) This 1999-A Securitization Trust Agreement and the 1999-A
Securitization Documents may be amended by the respective parties thereto,
without the consent of any of the Noteholders or the Certificateholders, to cure
any ambiguity, to correct or supplement any provisions herein or therein, to
add, change or eliminate any other provisions hereof or thereof with respect to
matters or questions arising hereunder or thereunder that shall not be
inconsistent with the provisions hereof or thereof, or to add or amend any
provision therein in connection with permitting transfers of the Certificates or
the Notes; PROVIDED, HOWEVER, that any such action shall not, in the good faith
judgment of the parties hereto or thereto, adversely affect in any material
respect the interests of the Noteholders, the Certificateholders, the 1999-A
Indenture Trustee, the 1999-A Owner Trustee or the Origination Trustee; and, as
a condition to the effectiveness of such amendment, the 1999-A Indenture Trustee
and the 1999-A Owner Trustee shall have received an Opinion of Counsel to the
effect that such action shall not adversely affect in any material respect the
interests of the Noteholders or the Certificateholders; and PROVIDED, FURTHER
that any amendment eliminating the Reserve Fund or reducing the Reserve Fund
Requirement shall also require HTC LP and HTD LP to deliver to the 1999-A Owner
Trustee an Opinion of Counsel to the effect that after such amendment, for
federal income tax purposes, the 1999-A Securitization Trust will not be treated
as an association taxable as a corporation and the Notes should properly be
characterized as indebtedness that is secured by the assets of the 1999-A
Securitization Trust.
(b) This 1999-A Securitization Trust Agreement and the 1999-A
Securitization Documents may also be amended from time to time by the respective
parties hereto or thereto including with respect to (i) changing the formula for
determining the Reserve Fund Requirement and changing the Reserve Fund Tests
which change could result in a decrease in the amount of the Reserve Fund
Requirement, (ii) changing the manner by which the Reserve Fund is funded, which
changes could include borrowings by HTC LP and HTD LP to fund all or a portion
of the Reserve Fund Initial Deposit (which borrowings would be payable from
assets or cash flow otherwise payable to HTC LP and HTD LP), (iii) changing the
remittance schedule for deposits in the 1999-A Note Distribution Account and the
1999-A Certificate Distribution Account, or (iv) changing the definition of
"Eligible Investments", if either (A) the 1999-A Indenture Trustee has been
furnished with confirmation (written or oral) for each Rating Agency to the
effect that such amendment would not cause its then-current rating of any Rated
Securities to be qualified, reduced or withdrawn, or (B) the 1999-A Indenture
Trustee has received the consent of the Noteholders holding Notes representing
more than 50% of the aggregate Voting Interests, acting as a single Class, and
the 1999-A Owner Trustee has received the consent of the Certificateholders
holding Certificates representing more than 50% of the aggregate Voting
Interests (which consent of any Noteholder or Certificateholder given pursuant
to this Section 9.01(b) or pursuant to any other provision of this 1999-A
Securitization Trust Agreement shall be conclusive and binding on such
Noteholder or Certificateholder and on all future Noteholders or
Certificateholders of such Note and of any or Note or 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 Note or Certificate); PROVIDED,
HOWEVER, that (1) any amendment eliminating the
42
<PAGE>
Reserve Fund or reducing the Reserve Fund Requirement to less than the lesser of
the Reserve Fund Initial Deposit and the sum of the Note Balance and the
Certificate Balance as of the related Distribution Date (after giving effect to
reductions in the Note Balance and Balance on such Distribution Date), shall
also require that the 1999-A Indenture Trustee and each Rating Agency receive
and Opinion of Counsel to the effect that, after such amendment, for federal
income tax purposes the Notes and Certificates will properly be characterized as
indebtedness that is secured by the assets of the 1999-A Securitization Trust;
and (2) no such amendment shall (x) except as otherwise provided in Section
9.01(a), increase or reduce in any manner the amount of, or accelerate or delay
the timing of, collections of payments on the 1999-A SUBI Interest, the 1999-A
SUBI Certificates, the Retained 1999-A SUBI Certificates, or distributions that
shall be required to be made on any Note or Certificate or the applicable Note
Rate or Certificate Rate or (y) reduce the aforesaid percentage of the aggregate
Voting Interest of the Notes or the aggregate Voting Interest of the
Certificates required to consent to any such amendment, without the consent of
all of the Noteholders and all of the Certificateholders holding Notes or
Certificates, as applicable, then outstanding.
(c) The 1999-A Owner Trustee shall provide each Rating Agency prior notice
of any proposed amendment hereto and copies of an Opinion of Counsel, if
relevant, whether or not such amendment requires the approval of the Rating
Agency. Any notice of any such amendment or modification as to which notice is
required to be given to any Rating Agency shall contain both the substance and
substantial form of the proposed amendment or modification.
(d) Promptly after the execution of any such amendment or consent, the
1999-A Owner Trustee and the 1999-A Indenture Trustee shall furnish written
notification of the substance of such amendment or consent to each
Certificateholder and Noteholder, as the case may be. It shall not be necessary
for the consent of Certificateholders or Noteholders pursuant to Section 9.01(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 or Noteholders of the execution thereof shall be subject to
such reasonable requirements as the 1999-A Owner Trustee may prescribe.
(e) Prior to the execution of any amendment to this 1999-A Securitization
Trust Agreement, the 1999-A Indenture Trustee and the 1999-A Owner Trustee shall
be entitled to receive and rely upon an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this 1999-A
Securitization Trust Agreement. The 1999-A Indenture Trustee and the 1999-A
Owner Trustee may, but shall not be obligated to, enter into any such amendment
which affects the 1999-A Indenture Trustee's or 1999-A Owner Trustee's, as the
case may be, own rights, duties or immunities under this 1999-A Securitization
Trust Agreement or otherwise.
Section 9.02 PROTECTION OF TITLE TO 1999-A SECURITIZATION TRUST.
(a) Each of HTC LP and HTD LP shall execute and file, or cause to be
executed and filed, such financing statements and 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 Noteholders, the 1999-A Owner Trustee and the 1999-A Indenture
43
<PAGE>
Trustee under this 1999-A Securitization Trust Agreement in the 1999-A SUBI
Interest, the 1999-A SUBI Certificates, the Reserve Fund Property and the
proceeds thereof. Each of HTC LP and HTD LP shall deliver (or cause to be
delivered) to the 1999-A Owner Trustee and the 1999-A Indenture Trustee
file-stamped copies of, or filing receipts for, any document filed as provided
above, as soon as available following such filing.
(b) Neither of HTC LP nor HTD LP shall change its name, identity or
partnership structure in any manner that would, could or might make any
financing statement or continuation statement filed by HTC LP or HTD LP in
accordance with Section 9.02(a) seriously misleading within the meaning of
Section 9-402(7) of the UCC unless it shall have given the 1999-A Owner Trustee
written notice thereof and shall have promptly filed appropriate amendments to
all previously filed financing statements or continuation statements.
(c) Each of HTC LP and HTD LP and shall give the 1999-A Owner Trustee
prior written notice of any relocation of its principal executive office if, as
a result of such relocation, the applicable provisions of the UCC would require
the filing of any amendment of any previously filed financing or continuation
statement or of any new financing statement and shall promptly make any such
filing.
(d) Each of HTC LP and HTD LP shall deliver to the 1999-A Owner Trustee
promptly after the execution and delivery of each amendment to this 1999-A
Securitization Trust Agreement, 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 1999-A Owner Trustee in the 1999-A SUBI Interest,
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.
Section 9.03 LIMITATIONS ON RIGHTS OF OTHERS. Except for Section 2.07,
the provisions of this 1999-A Securitization Trust Agreement are solely for the
benefit of the 1999-A Owner Trustee, HTC LP, HTD LP, the Certificateholders, the
Servicer, the 1999-A Indenture Trustee and the Noteholders, and nothing in this
1999-A Securitization Trust Agreement (other than Section 2.07), whether express
or implied, shall be construed to give to any other Person any legal or
equitable right, remedy or claim in the 1999-A Securitization Trust Estate or
under or in respect of this 1999-A Securitization Trust Agreement or any
covenants, conditions or provisions contained herein.
Section 9.04 NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be delivered or mailed by registered
or certified first-class United States mail, postage prepaid, hand delivery,
prepaid courier service, or by telecopier, and addressed in each case as
follows: (i) if to the 1999-A Indenture Trustee, at The Bank of New York,
101 Barclay Street, Floor 12E, New York, New York 10286 (telecopier no. (212)
815-5544), Attention: Corporate Trust Department; (ii) if to the 1999-A Owner
Trustee, at U.S. Bank National Association, 111 East Wacker Drive, Suite
3000, Chicago, Illinois 60601 (telecopier no. (312) 228-9401), Attention:
Honda Auto Lease Trust 1999-A, (iii) if to HTC LP, at 700 Van Ness Avenue,
Torrance, California 90501 (telecopier no. (310) 787-3910), Attention:
General Partner, (iv) if to HTD LP, at 700 Van Ness Avenue, Torrance,
California 90501 (telecopier no. (310)
44
<PAGE>
787-3910) Attention: General Partner, (v) if the Delaware Owner Trustee, at
Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
Wilmington, Delaware 19890 (telecopier no. (302) 651-1576), (vi) if to Moody's,
to 99 Church Street, New York, New York 10007 (telecopier no. (212) 553-0573),
Attention: ABS Monitoring Group; (vii) if to Standard & Poor's, to 25 Broadway,
New York, New York 10004, Attention: Asset Backed Surveillance Group
(telecopier no. (212) 208-0030) Attention: Asset Backed Surveillance Group;
(viii) if to Fitch, to One State Street Plaza, New York, New York 10004
(telecopier no. (212) 376-6979); or (ix) at such other address as shall be
designated by any of the foregoing in a written notice to the other parties
hereto. Delivery shall occur only upon receipt or reported tender of such
communication by an officer of the recipient entitled to receive such notices
located at the address of such recipient for notices hereunder.
Section 9.05 SEVERABILITY OF PROVISIONS. Any provision of this 1999-A
Securitization Trust Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
Section 9.06 COUNTERPARTS. This 1999-A Securitization Trust Agreement
may be executed by the parties hereto in separate counterparts, each of which
when so executed and delivered shall be an original, but all such counterparts
shall together constitute but one and the same instrument.
Section 9.07 SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, HTC LP, HTD
LP, the 1999-A Owner Trustee, the 1999-A Indenture Trustee, the
Certificateholders and the Noteholders and their respective successors and
permitted assigns, all to the extent herein provided. Any request, notice,
direction, consent, waiver or other instrument or action by HTC LP, HTD LP, the
Certificateholders and the Noteholders shall bind the successors and assigns of
HTC LP, HTD LP or such Certificateholders and Noteholders.
Section 9.08 NO RECOURSE. The Certificates entitle the holders thereof
to the rights and benefits set forth in this 1999-A Securitization Trust
Agreement and in the Certificates. The Certificates do not represent interests
in or obligations of the Servicer, HTC LP, HTD LP, the 1999-A Owner Trustee, the
1999-A Indenture Trustee or any Affiliate thereof (other than the 1999-A
Securitization Trust) and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this 1999-A
Securitization Trust Agreement, the Certificates or the 1999-A Securitization
Documents.
Section 9.09 HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 9.10 GOVERNING LAW. THIS 1999-A SECURITIZATION TRUST AGREEMENT
SHALL BE CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
DELAWARE, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF
LAW.
45
<PAGE>
Section 9.11 CERTIFICATES NONASSESSABLE AND FULLY PAID. Subject to
Section 2.07, the Certificateholders shall not be personally liable for
obligations of the 1999-A Securitization Trust. The interests represented by
the Certificates shall be nonassessable for any losses or expenses of the 1999-A
Securitization Trust or for any reason whatsoever, and, upon authentication
thereof pursuant to Sections 4.01 and 4.02, the Certificates shall be deemed
fully paid.
[Remainder of page intentionally left blank]
46
<PAGE>
IN WITNESS WHEREOF, the parties have caused this 1999-A Securitization
Trust Agreement to be duly executed by their respective officers as of the day
and year first above written by its duly authorized officer.
HONDA TITLING C L.P.
By: HONDA TITLING C LLC,
its General Partner
By: HONDA FUNDING INC.,
as Manager
By:
----------------------------------------
Name:
Title:
HONDA TITLING D L.P.
By: HONDA TITLING D LLC,
its General Partner
By: HONDA FUNDING INC.,
as Manager
By:
----------------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
By:
----------------------------------------
Name:
Title:
S-1
<PAGE>
WILMINGTON TRUST COMPANY, as Delaware Owner
Trustee
By:
----------------------------------------
Name:
Title:
THE BANK OF NEW YORK, as Indenture Trustee
By:
----------------------------------------
Name:
Title:
S-2
<PAGE>
EXHIBIT A
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 EXCEPT IN THE EVENT OF THE
DISSOLUTION, TERMINATION OR BANKRUPTCY OF [HONDA TITLING C L.P. /HONDA TITLING D
L.P.] WHEN IT IS HOLDER HEREOF AND ANY TRANSFER IN VIOLATION OF THIS PROVISION
SHALL BE NULL AND VOID.
HONDA AUTO LEASE TRUST 1999-A
FORM OF AUTO LEASE ASSET-BACKED CERTIFICATE
evidencing an undivided beneficial interest in the 1999-A Securitization Trust,
as defined below, the property of which includes, among other things, the 1999-A
SUBI Certificates (transferred pursuant to the 1999-A Securitization Trust
Agreement), collectively evidencing a 99.8% beneficial interest in the 1999-A
SUBI. The property of the 1999-A Securitization Trust has been pledged to the
1999-A Indenture Trustee pursuant to the Indenture to secure the payment of the
Notes issued thereunder.
This Certificate does not represent an interest in or obligation of Honda
Titling C L.P., Honda Titling D L.P., American Honda Finance Corporation, the
1999-A Owner Trustee, the 1999-A Indenture Trustee, or any of their respective
Affiliates, except to the extent described below.
THIS CERTIFIES THAT
[HONDA TITLING C L.P. ("HTC LP")/HONDA TITLING D L.P. ("HTC LP")] is the
registered owner of the undivided equity interest in the Honda Auto Lease
Trust 1999-A (the "1999-A Securitization Trust") formed by HTC LP and HTD LP.
The 1999-A Securitization Trust was created pursuant to the 1999-A
Securitization Trust Agreement dated as of [May 31, 1999] (the "1999-A
Securitization Trust Agreement"), among HTC LP, HTD LP, U.S. Bank National
Association ("U.S. Bank"), a national banking association, as owner trustee
(the "1999-A Owner Trustee"), Wilmington Trust Company, a Delaware
corporation, as Delaware owner trustee (the "Delaware Owner Trustee"),
and The Bank of New York, a national banking association, as indenture
trustee (the "1999-A Indenture Trustee"). A summary of certain of the
pertinent provisions of the 1999-A Securitization Trust Agreement is set
forth below. To the extent not otherwise defined herein capitalized terms
used herein without definitions have the respective meanings assigned to them
in the Agreement of Definitions, dated [May 31, 1999], by and among HVT,
Inc., Delaware Trust Capital Management, Inc, American Honda Finance
Corporation, U.S. Bank, the Delaware Owner Trustee, the 1999-A Indenture
Trustee, Honda Titling A L.P., Honda Titling B L.P., Honda Titling C L.P. and
Honda Titling D L.P.
This Certificate is issued under the 1999-A Securitization Trust Agreement
and designated as a "Honda Auto Lease Trust 1999-A Auto Lease Backed
Certificate" (a "Certificate"). This Certificate is issued under and is subject
to the terms, provisions and conditions of the 1999-A Securitization Trust
Agreement, to which 1999-A Securitization Trust Agreement the holder of this
Certificate by virtue of the acceptance hereof assents and by which such holder
is bound.
A-1
<PAGE>
The property of the 1999-A Securitization Trust includes, among other
things, (i) the HTC LP 1999-A SUBI Certificate evidencing a 98.802% interest in
the 1999-A SUBI Assets, (ii) the HTD LP 1999-A SUBI Certificate evidencing a
0.998% interest in the 1999-A SUBI Assets, (iii) the amounts on deposit from
time to time in the Reserve Fund and the security interest granted to the 1999-A
Indenture Trustee by HTC LP and HTD LP in the Reserve Fund Property solely for
the benefit of the Noteholders, (iv) the amounts on deposit from time to time in
the 1999-A SUBI Accounts, (v) rights as the third-party beneficiary of the
Servicing Agreement, the 1999-A Servicing Supplement, the Origination Trust
Agreement and the 1999-A SUBI Supplement and (v) all of the proceeds of the
foregoing. The rights of the 1999-A Securitization Trust in the foregoing
property have been pledged by the 1999-A Owner Trustee to the 1999-A Indenture
Trustee pursuant to the Indenture to secure the payment of the Notes.
Payments in respect of the 1999-A SUBI Certificates will be allocated
between the Notes and the Certificates and paid to, among other recipients, the
registered holder of this Certificate as provided in the 1999-A Securitization
Trust Agreement.
The holder of this Certificate acknowledges and agrees that its right to
receive payments in respect of this Certificate are subordinated to the rights
of the Noteholders as described in the 1999-A Securitization Trust Agreement and
the Indenture, as applicable.
By accepting this Certificate, the holder hereof waives any claim to any
proceeds or assets of the Origination Trust other than those from time to time
included within the 1999-A SUBI Interest as 1999-A SUBI Assets.
It is the intention of [HTC LP/HTD LP], as the holder of this Certificate,
that the Notes will be indebtedness for federal, state and local income and
franchise tax purposes and for purposes of any other tax imposed on or measured
by income. The 1999-A Owner Trustee and [HTC LP/ HTD LP], as the holder of this
Certificate, by acceptance of this Certificate, agree to treat the Notes, for
purposes of federal, state, and local income or franchise taxes and any other
tax imposed on or measured by income, as indebtedness and to report the
transactions contemplated by the 1999-A Securitization Trust Agreement on all
applicable tax returns in a matter consistent with such treatment.
The holder of this Certificate, by accepting this Certificate, covenants
and agrees that prior to the date which is one year and one day after the last
date upon which (a) each Class of Notes and the Certificates has been paid in
full, and (b) all obligations due under any other Securitization have been paid
in full, it will not institute against, or join any other Person in instituting
against, the 1999-A Securitization Trust, HTA LP, HTB LP, HTC LP, HTD LP, any
general partner or member (as applicable) of a UTI Beneficiary or of a
Transferor which is a partnership or a limited liability company, the
Origination Trustee, the Origination Trust, any Special Purpose Affiliate, any
UTI Beneficiary, any Beneficiary, and any general partner or member (as
applicable) of a Beneficiary or of a Special Purpose Affiliate partnership (or
any of their respective general partners) that is a partnership or a limited
liability company, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law.
A-2
<PAGE>
If, notwithstanding the statement of intentions and undertakings set forth
in Section 8.01 of the 1999-A Securitization Trust Agreement and herein, it
is finally determined that the Notes do not evidence indebtedness of HTC LP and
HTD LP for all income and franchise tax purposes, but rather represent equity
interests in the assets of the 1999-A Securitization Trust, then [HTC LP/HTD
LP], as holder hereof, agrees (i) to treat the Notes, together with this
Certificate, as representing an interest in a partnership for all tax purposes,
(ii) to treat all payments in respect of such Certificate (to the extent not a
return of capital) as a "guaranteed payment" thereon made pursuant to Section
707(c) of the Code, and (iii) to allocate losses to such Certificate only to the
extent required for the allocation of all other items of income, gain,
deduction, loss or credit with respect to the assets and operations of the
1999-A Securitization Trust to [HTC LP/HTD LP] to be respected for federal
income tax purposes.
This Certificate does not represent an obligation of, or an interest in,
HTC LP, HTD LP, the Servicer, the 1999-A Indenture Trustee, the 1999-A Owner
Trustee, the Origination Trust or any of their respective Affiliates, other than
the 1999-A Securitization Trust. This Certificate is limited in right of
payment to certain collections and recoveries respecting the 1999-A SUBI
Interest, the 1999-A SUBI Certificates and certain monies on deposit in the
Reserve Fund and in certain other accounts, in each case to the extent and as
more specifically set forth in the 1999-A Securitization Agreement. A copy of
the 1999-A Securitization Trust Agreement may be examined during normal business
hours at the Corporate Trust Office of the 1999-A Owner Trustee, and at such
other places in the United States, if any, designated by the 1999-A Owner
Trustee, by the Certificateholder upon request.
The 1999-A Securitization Trust 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 Certificateholder under
the 1999-A Securitization Trust Agreement at any time by HTC LP, HTD LP, the
Servicer, the 1999-A Indenture Trustee and the 1999-A Owner Trustee. In certain
limited circumstances, the 1999-A Securitization Trust Agreement may only be
amended with the consent of Holders of Notes evidencing more than 50% of the
aggregate Percentage Interests of all Notes, voting together as a single class.
As provided in the 1999-A Securitization Trust Agreement, this Certificate
shall be owned by [HTC LP/HTD LP] and may not be transferred.
The obligations and responsibilities created by the 1999-A Securitization
Trust Agreement and the 1999-A Securitization Trust created thereby shall
terminate upon the payment to Noteholders of all amounts required to be paid to
them pursuant to the 1999-A Securitization Trust Agreement and the disposition
of all property held as part of the 1999-A Securitization Trust. The Servicer
may at its option purchase the corpus of the 1999-A Securitization Trust at a
price specified in the 1999-A Securitization Trust Agreement, and such purchase
of the 1999-A SUBI, the Retained 1999-A SUBI Certificates and other property of
the 1999-A Securitization Trust will effect early retirement of this
Certificate; PROVIDED, HOWEVER, such right of purchase is exercisable only on
the Distribution Date following the last day of a Collection Period as of which
the sum of the Note Balance and the Certificate Balance shall be less than or
equal to ten percent (10%) of the sum of the Initial Note Balance and the
Initial Certificate Balance.
A-3
<PAGE>
Unless the certificate of authentication hereon shall have been executed by
an authorized officer of the 1999-A Owner Trustee, by manual signature, this
Certificate shall not entitle the Certificateholder hereof to any benefit under
the 1999-A Securitization Trust Agreement or be valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICTS OF LAW PROVISIONS, AND THE
OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.
A-4
<PAGE>
IN WITNESS WHEREOF, the 1999-A Owner Trustee on behalf of the 1999-A
Securitization Trust and not in its individual capacity has caused this
Certificate to be duly executed by its duly authorized officer.
HONDA AUTO LEASE TRUST 1999-A
BY: U.S. Bank National Association,
as 1999-A Owner Trustee
By:
-----------------------------------
Name:
Title:
1999-A OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned 1999-A
Securitization Trust Agreement.
U.S. Bank National Association,
as 1999-A Owner Trustee
By:
-----------------------------------
Name:
Title:
A-5
<PAGE>
EXHIBIT B
CERTIFICATE OF TRUST OF
HONDA AUTO LEASE TRUST 1999-A
B-1
<PAGE>
HONDA AUTO LEASE TRUST 1999-A
_____% Auto Lease Asset Backed Notes, Class A-1
_____% Auto Lease Asset Backed Notes, Class A-2
_____% Auto Lease Asset Backed Notes, Class A-3
_____% Auto Lease Asset Backed Notes, Class A-4
_____% Auto Lease Asset Backed Notes, Class B
FORM OF INDENTURE
Dated as of [ ]
THE BANK OF NEW YORK,
as 1999-A Indenture Trustee
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
ARTICLE ONE
DEFINITIONS
<S> <C> <C>
Section 1.01 Definitions . . . . . . . . . . . . . . . . . . . . . . . 5
Section 1.02 Interpretive Provisions . . . . . . . . . . . . . . . . . 6
ARTICLE TWO
THE NOTES
Section 2.01 Form Generally. . . . . . . . . . . . . . . . . . . . . . 6
Section 2.02 Denominations.. . . . . . . . . . . . . . . . . . . . . . 6
Section 2.03 Execution, Authentication, Delivery and Dating. . . . . . 7
Section 2.04 Registration of Notes . . . . . . . . . . . . . . . . . . 7
Section 2.05 Mutilated, Destroyed, Lost or Stolen Notes. . . . . . . . 9
Section 2.06 Persons Deemed Owners . . . . . . . . . . . . . . . . . . 9
Section 2.07 Payment of Interest and Principal; Principal and
Interest Rights Preserved . . . . . . . . . . . . . . . . 10
Section 2.08 Cancellation. . . . . . . . . . . . . . . . . . . . . . . 11
Section 2.09 Authentication and Delivery of Notes. . . . . . . . . . . 12
Section 2.10 Book-Entry Notes. . . . . . . . . . . . . . . . . . . . . 12
Section 2.11 Notices to the Clearing Agency. . . . . . . . . . . . . . 13
Section 2.12 Definitive Notes. . . . . . . . . . . . . . . . . . . . . 13
Section 2.13 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . 13
Section 2.14 Release of Collateral . . . . . . . . . . . . . . . . . . 13
ARTICLE THREE
COVENANTS AND REPRESENTATIONS
Section 3.01 Payment of Notes. . . . . . . . . . . . . . . . . . . . . 14
Section 3.02 Maintenance of Office or Agency . . . . . . . . . . . . . 14
Section 3.03 Money for Note Payments to be Held in Trust . . . . . . . 14
Section 3.04 Existence . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 3.05 Protection of Trust Estate. . . . . . . . . . . . . . . . 16
Section 3.06 Opinions as to Trust Estate . . . . . . . . . . . . . . . 17
Section 3.07 Performance of Obligations. . . . . . . . . . . . . . . . 17
Section 3.08 Negative Covenants. . . . . . . . . . . . . . . . . . . . 19
Section 3.09 Statements as to Compliance . . . . . . . . . . . . . . . 20
Section 3.10 Issuer May Consolidate, etc., Only on Certain Terms . . . 20
Section 3.11 Successor or Transferee . . . . . . . . . . . . . . . . . 22
Section 3.12 No Other Business . . . . . . . . . . . . . . . . . . . . 22
Section 3.13 No Borrowing. . . . . . . . . . . . . . . . . . . . . . . 22
Section 3.14 Servicer's Obligations. . . . . . . . . . . . . . . . . . 22
Section 3.15 Guarantees, Loans, Advances and Other Liabilities . . . . 22
Section 3.16 Capital Expenditures. . . . . . . . . . . . . . . . . . . 23
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<S> <C> <C>
Section 3.17 Removal of Administrator. . . . . . . . . . . . . . . . . 23
Section 3.18 Restricted Payments . . . . . . . . . . . . . . . . . . . 23
Section 3.19 Further Instruments and Acts. . . . . . . . . . . . . . . 23
Section 3.20 Compliance with Laws. . . . . . . . . . . . . . . . . . . 23
Section 3.21 Amendments of Servicing Agreement, 1999-A Servicing
Supplement and 1999-A Securitization Trust Agreement. . . 23
Section 3.22 Delivery of 1999-A SUBI Certificates. . . . . . . . . . . 24
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01 Satisfaction and Discharge of Indenture . . . . . . . . . 24
Section 4.02 Application of Trust Money. . . . . . . . . . . . . . . . 25
Section 4.03 Repayment of Monies Held by Paying Agent. . . . . . . . . 26
Section 4.04 Duration of Position of 1999-A Indenture Trustee for
Benefit of Noteholders. . . . . . . . . . . . . . . . . . 26
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 5.01 Events of Default . . . . . . . . . . . . . . . . . . . . 26
Section 5.02 Acceleration of Maturity; Rescission and Annulment. . . . 27
Section 5.03 Collection of Indebtedness and Suits for Enforcement
by 1999-A Indenture Trustee. . . . . . . . . . . . . . . 28
Section 5.04 Remedies; Priorities. . . . . . . . . . . . . . . . . . . 31
Section 5.05 Optional Preservation of Trust Estate . . . . . . . . . . 31
Section 5.06 Limitation on Suits . . . . . . . . . . . . . . . . . . . 32
Section 5.07 Unconditional Rights of Noteholders to Receive
Note Payments. . . . . . . . . . . . . . . . . . . . . . 33
Section 5.08 Restoration of Rights and Remedies. . . . . . . . . . . . 33
Section 5.09 Rights and Remedies Cumulative. . . . . . . . . . . . . . 33
Section 5.10 Delay or Omission Not Waiver. . . . . . . . . . . . . . . 33
Section 5.11 Control by Noteholders. . . . . . . . . . . . . . . . . . 33
Section 5.12 Waiver of Past Defaults . . . . . . . . . . . . . . . . . 34
Section 5.13 Undertaking for Costs . . . . . . . . . . . . . . . . . . 35
Section 5.14 Sale of Trust Estate. . . . . . . . . . . . . . . . . . . 35
Section 5.15 Action on Notes . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE SIX
THE 1999-A INDENTURE TRUSTEE
Section 6.01 Certain Duties and Responsibilities . . . . . . . . . . . 36
Section 6.02 Rights of 1999-A Indenture Trustee. . . . . . . . . . . . 37
Section 6.03 1999-A Indenture Trustee May Hold Notes . . . . . . . . . 38
Section 6.04 1999-A Indenture Trustee's Disclaimer . . . . . . . . . . 38
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Section 6.05 Notice of Unmatured Event of Default. . . . . . . . . . . 39
Section 6.06 Reports by 1999-A Indenture Trustee to Holders. . . . . . 39
Section 6.07 1999-A Indenture Trustee's Fees and Expenses. . . . . . . 39
Section 6.08 Replacement of 1999-A Indenture Trustee . . . . . . . . . 40
Section 6.09 Merger, Conversion, Consolidation or Succession to
Business of 1999-A Indenture Trustee. . . . . . . . . . . 41
Section 6.10 Co-Trustee or Separate Trustee. . . . . . . . . . . . . . 42
Section 6.11 Eligibility; Disqualification . . . . . . . . . . . . . . 43
Section 6.12 Preferential Collection of Claims against the Issuer. . . 43
Section 6.13 Money Held in Trust . . . . . . . . . . . . . . . . . . . 43
Section 6.14 Cessation of Eligibility. . . . . . . . . . . . . . . . . 44
Section 6.15 Authenticating Agent. . . . . . . . . . . . . . . . . . . 44
Section 6.16 Withholding Taxes . . . . . . . . . . . . . . . . . . . . 44
Section 6.17 No Petition . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.18 Representations and Warranties of 1999-A Indenture
Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 45
Section 6.19 Pennsylvania Motor Vehicle Sales Finance Act Licenses . . 45
ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 Issuer to Furnish 1999-A Indenture Trustee Names and
Addresses of Noteholders. . . . . . . . . . . . . . . . . 45
Section 7.02 Preservation of Information; Communications to
Noteholders . . . . . . . . . . . . . . . . . . . . . . . 46
Section 7.03 Reports by 1999-A Indenture Trustee; Responses to
Noteholder Inquiries. . . . . . . . . . . . . . . . . . . 46
Section 7.04 Reports by the Issuer . . . . . . . . . . . . . . . . . . 46
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 Collection of Monies. . . . . . . . . . . . . . . . . . . 47
Section 8.02 Trust Accounts. . . . . . . . . . . . . . . . . . . . . . 47
Section 8.03 General Provisions Regarding the 1999-A SUBI Accounts . . 48
Section 8.04 Release of Trust Estate . . . . . . . . . . . . . . . . . 50
Section 8.05 Opinion of Counsel. . . . . . . . . . . . . . . . . . . . 50
ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01 Supplemental Indentures Without Consent of Noteholders. . 50
Section 9.02 Supplemental Indentures With Consent of Noteholders . . . 52
Section 9.03 Execution of Supplemental Indentures. . . . . . . . . . . 53
Section 9.04 Effect of Supplemental Indentures . . . . . . . . . . . . 53
Section 9.05 Reference in Notes to Supplemental Indentures . . . . . . 54
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Section 9.06 Compliance With TIA . . . . . . . . . . . . . . . . . . . 54
ARTICLE TEN
OPTIONAL REDEMPTION OF NOTES
Section 10.01 General . . . . . . . . . . . . . . . . . . . . . . . . . 54
Section 10.02 Form of Redemption Notice . . . . . . . . . . . . . . . . 54
Section 10.03 Notes Payable on Redemption Date. . . . . . . . . . . . . 55
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 Compliance Certificates and Opinions. . . . . . . . . . . 55
Section 11.02 Form of Documents Delivered to 1999-A Indenture Trustee . 57
Section 11.03 Acts of Noteholders . . . . . . . . . . . . . . . . . . . 58
Section 11.04 Notices, etc., to 1999-A Indenture Trustee, Issuer and
Rating Agencies . . . . . . . . . . . . . . . . . . . . . 58
Section 11.06 Notices and Reports to Noteholders; Waiver. . . . . . . . 59
Section 11.07 Alternate Payment and Notice Provisions . . . . . . . . . 60
Section 11.08 Conflict with TIA . . . . . . . . . . . . . . . . . . . . 60
Section 11.09 Effect of Headings and Table of Contents. . . . . . . . . 60
Section 11.10 Successors and Assigns. . . . . . . . . . . . . . . . . . 60
Section 11.11 Separability. . . . . . . . . . . . . . . . . . . . . . . 60
Section 11.12 Benefits of Indenture . . . . . . . . . . . . . . . . . . 60
Section 11.13 Legal Holidays. . . . . . . . . . . . . . . . . . . . . . 60
Section 11.14 Governing Law . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.15 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.16 Recording of Indenture. . . . . . . . . . . . . . . . . . 61
Section 11.17 Trust Obligation. . . . . . . . . . . . . . . . . . . . . 61
Section 11.18 No Petition . . . . . . . . . . . . . . . . . . . . . . . 61
Section 11.19 Inspection. . . . . . . . . . . . . . . . . . . . . . . . 62
Section 11.20 Waiver of Stay, Extension Laws, Trial by Jury . . . . . . 62
Section 11.21 Maximum Interest Payable. . . . . . . . . . . . . . . . . 62
Section 11.22 Rules by 1999-A Indenture Trustee and Agents. . . . . . . 62
EXHIBIT A -FORM OF CLASS A NOTE . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B -FORM OF CLASS B NOTE . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
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<PAGE>
TRUST INDENTURE ACT
CROSS-REFERENCE CHART (1)
<TABLE>
<CAPTION>
TIA SECTION REFERENCE IN THE INDENTURE
- ----------- --------------------------
<S> <C>
310(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11(a)
310(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11(a)
310(a)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.10
310(a)(4) . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
310(a)(5) . . . . . . . . . . . . . . . . . . . . . . . . . 6.11(b)
310(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.11(a)
310(c). . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
311(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
311(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.12
311(c). . . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
312(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.01, 7.02(a)
312(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(b)
312(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.02(c)
313(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
313(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
313(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(a)
313(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 7.03(b)
314(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09, 7.04(a)
314(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.06
314(c)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01(a)
314(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 11.01(a)
314(c)(3) . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
314(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.09(b), 8.04
314(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01(a)
315(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b)
315(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.05
315(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(a)
315(d). . . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)
315(d)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(b), 6.01(c)(i)
315(d)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(ii)
315(d)(3) . . . . . . . . . . . . . . . . . . . . . . . . . 6.01(c)(iii)
315(e). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.13
316(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.11; 5.12
316(a)(1)(A). . . . . . . . . . . . . . . . . . . . . . . . 5.11
316(a)(1)(B). . . . . . . . . . . . . . . . . . . . . . . . 5.12
316(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . Not applicable
316(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.10
316(c). . . . . . . . . . . . . . . . . . . . . . . . . . . 5.06(b)
317(a)(1) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03(a), 5.03(b)
317(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 5.03(d)
317(b). . . . . . . . . . . . . . . . . . . . . . . . . . . 3.03
318(a). . . . . . . . . . . . . . . . . . . . . . . . . . . 11.08
</TABLE>
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(1) This Trust Indenture Act Cross-Reference Chart is not a part of this
Indenture.
<PAGE>
FORM OF INDENTURE
INDENTURE, dated as of [ ], between HONDA AUTO LEASE TRUST
1999-A, a Delaware business trust (the "Issuer"), and THE BANK OF NEW YORK, a
national banking association, solely as 1999-A Indenture Trustee and not in its
individual capacity (the "1999-A Indenture Trustee").
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered into
that Second Amended and Restated Trust and Servicing Agreement, dated as of
April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending and
restating that certain Trust Agreement, dated July 17, 1997, among the same
parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things, taking
assignments and conveyances of, and holding in trust and dealing in, various
Trust Assets. Capitalized terms used and not defined in these Recitals have the
meanings given in the Agreement of Definitions described in Section 11.01
hereof.
B. The Origination Trust Agreement contemplates that certain of the
Trust Assets, other than those previously identified on the Origination Trust's
books and records as Other SUBI Assets and allocated to a separate SUBI
Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth constitute SUBI
Assets within such SUBI Sub-Trust, and that in connection with any such
allocation the Origination Trustee shall create a SUBI at the direction of the
UTI Beneficiaries and shall issue to, or to the order of, the UTI Beneficiaries
one or more SUBI Certificates evidencing such SUBI, and the related SUBI
Beneficiaries and their permitted assignees generally will be entitled to the
net cash flows arising from, but only from, such SUBI Assets.
C. Concurrently herewith, HTA LP and HTB LP, as Grantors and UTI
Beneficiaries, HTC LP and HTD LP, as Transferors, the Servicer, the Origination
Trustee, the Delaware Trustee and U.S. Bank, as Trust Agent and, for certain
limited purposes set forth therein, as 1999-A Owner Trustee, are entering into
that certain 1999-A SUBI Supplement to Second Amended and Restated Trust and
Servicing Agreement dated as of [ ] (as amended, supplemented or
restated from time to time, the "1999-A SUBI Supplement"), pursuant to which the
parties thereto have agreed to supplement the terms of the Origination Trust
Agreement to cause the Origination Trustee to (i) identify a portfolio of Trust
Assets (the "1999-A SUBI Assets") to be designated to a SUBI Portfolio (the
"1999-A SUBI Portfolio") (ii) allocate such 1999-A SUBI Assets to a SUBI
Sub-Trust (the "1999-A SUBI Sub-Trust"), (iii) create the related 1999-A SUBI
and (iv) create and issue to or to the order of (a) HTA LP one certificate
representing a 98.01% interest in the 1999-A SUBI (the "HTA LP/HTC LP 1999-A
SUBI Certificate") and one certificate representing a 0.99% interest in the
1999-A SUBI (the
1
<PAGE>
"HTA LP/HTD LP 1999-A SUBI Certificate"), and (b) HTB LP one certificate
representing a 0.99% interest in the 1999-A SUBI (the "HTB LP/HTC LP 1999-A SUBI
Certificate") and one certificate representing a 0.01% interest in the 1999-A
SUBI (the "HTB LP/HTD LP 1999-A SUBI Certificate" and, together with the HTA
LP/HTC LP 1999-A SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI Certificate and
the HTB LP/HTD LP 1999-A SUBI Certificate, the "HTA LP/HTB LP 1999-A SUBI
Certificates").
D. Pursuant to the 1999-A SUBI Supplement, the parties hereto and
thereto desire that, concurrently herewith, U.S. Bank, as securities
intermediary (as defined in Section 8-102 of the UCC) (in such capacity, the
"1999-A SUBI Securities Intermediary"), establish two securities accounts (as
defined in Section 8-501 of the UCC) as follows: (i) a securities account in
the name of and for the benefit of HTA LP (the "HTA LP 1999-A SUBI Securities
Account") pursuant to that certain HTA LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ], between HTA LP and the 1999-A
SUBI Securities Intermediary (the "HTA LP 1999-A SUBI Securities Account
Control Agreement"), into which the HTA LP/HTC LP 1999-A SUBI Certificate and
the HTA LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTA LP directs the 1999-A SUBI Securities Intermediary to debit
the HTA LP 1999-A SUBI Securities Account to reflect the transfer of the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization and (ii) a securities account in the
name of and for the benefit of HTB LP (the "HTB LP 1999-A SUBI Securities
Account") pursuant to that certain HTB LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ] between HTB LP and the 1999-A
SUBI Securities Intermediary (the "HTB LP 1999-A SUBI Securities Account
Control Agreement") into which the HTB LP/HTC LP 1999-A SUBI Certificate and
the HTB LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTB LP directs the 1999-A SUBI Securities Intermediary to debit
the HTB LP 1999-A SUBI Securities Account to reflect the transfer of the HTB
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization.
E. Concurrently herewith, the Origination Trustee, on behalf of the
Origination Trust, and the Servicer are entering into the 1999-A Servicing
Supplement (as amended, supplemented or restated from time to time, the "1999-A
Servicing Supplement") pursuant to which, among other things, the terms of the
Origination Trust Agreement and the Servicing Agreement, dated April 1, 1998, by
and among the UTI Beneficiaries, the Servicer and the Origination Trust will be
supplemented insofar as they apply solely to the servicing of the 1999-A SUBI
Sub-Trust created hereby to provide for further specific servicing obligations
that will benefit the SUBI Beneficiaries with respect to the 1999-A SUBI created
by the 1999-A SUBI Supplement.
F. Concurrently herewith, the UTI Beneficiaries, HTC LP and HTD
LP are entering into that certain 1999-A SUBI Certificates Purchase and Sale
Agreement, dated as of [ ] (the "1999-A SUBI Certificates Purchase
and Sale Agreement"), pursuant to which the UTI Beneficiaries will sell,
without recourse, to HTC LP and HTD LP, all of their respective right, title
and interest in and to the 1999-A SUBI and the HTA LP/HTB LP 1999-A SUBI
Certificates, all monies due thereon and paid thereon in respect thereof and
the right to realize on any property that may be deemed to secure the 1999-A
SUBI, and all proceeds thereof. In
2
<PAGE>
connection therewith, and concurrently herewith and therewith, (1) HTA LP will
transfer (a) the HTA LP/HTC LP 1999-A SUBI Certificate to HTC LP and (b) the HTA
LP/HTD LP 1999-A SUBI Certificate to HTD LP, and (2) HTB LP will transfer (a)
the HTB LP/HTC LP 1999-A SUBI Certificate to HTC LP and (b) the HTB LP/HTD LP
1999-A SUBI Certificate to HTD LP, all consideration of the pro rata cash
payment to the UTI Beneficiaries of an amount equal to the Aggregate Net
Investment Value of the 1999-A SUBI as of [ ] (the "Cutoff Date"),
based on their respective share of the 1999-A SUBI less the cost and expenses of
the Securitization and the value of any securities issued in connection with the
Securitization and retained by the HTC LP and HTD LP.
G. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the
1999-A SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to
HTD LP representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD
LP 1999-A SUBI Certificate" and, together with the HTC LP 1999-A SUBI
Certificate, the "1999-A SUBI Certificates"), (iii) one certificate to HTC LP
representing a 0.198% beneficial interest in the 1999-A SUBI (the "HTC LP
Retained 1999-A SUBI Certificate") and (iv) one certificate to HTD LP
representing a 0.002% beneficial interest in the 1999-A SUBI (the "HTD LP
Retained 1999-A SUBI Certificate" and, together with the HTC LP Retained
1999-A SUBI Certificate, the "Retained 1999-A SUBI Certificates"). The
1999-A SUBI Certificates shall be exclusive of proceeds of the Residual Value
Insurance Policy or other residual value insurance policies relating to the
1999-A Contracts and 1999-A Leased Vehicles.
H. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTC LP (the "HTC LP 1999-A SUBI
Securities Account") pursuant to that certain HTC LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTC LP and the
1999-A SUBI Securities Intermediary (the "HTC LP 1999-A SUBI Securities
Account Control Agreement") into which the HTC LP 1999-A SUBI Certificate and
the HTC LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTC LP directs the 1999-A SUBI Securities
Intermediary to debit the HTC LP 1999-A SUBI Securities Account to reflect
the transfer of the HTC LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
I. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTD LP (the "HTD LP 1999-A SUBI
Securities Account") pursuant to that certain HTD LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTD LP and the
1999-A SUBI Securities Intermediary (the "HTD LP 1999-A SUBI Securities
Account Control Agreement") into which the HTD LP 1999-A SUBI Certificate and
the HTD LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTD LP directs the 1999-A SUBI Securities
Intermediary to debit the HTD LP 1999-A SUBI Securities Account to reflect
the transfer of the HTD LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
3
<PAGE>
J. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of the 1999-A Securitization Trust (the
"99.8% 1999-A SUBI Securities Account") pursuant to that certain 99.8% 1999-A
SUBI Securities Account Control Agreement dated as of [ ], between
the 1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, and
the 1999-A SUBI Securities Intermediary (the "99.8% 1999-A SUBI Securities
Account Control Agreement"), into which the HTC LP 1999-A SUBI Certificate
will be transferred from the HTC LP 1999-A SUBI Securities Account and the
HTD LP 1999-A SUBI Certificate will be transferred from the HTD LP 1999-A
SUBI Securities Account, respectively, and held until such time as the 1999-A
Owner Trustee directs the 1999-A SUBI Securities Intermediary to debit the
[99.8% 1999-A SUBI Securities Account to reflect the transfer of the HTC LP
1999-A SUBI Certificate and the HTD LP 1999-A SUBI Certificate to the 1999-A
Securitization Trust pursuant to the Securitization involving the 1999-A
SUBI].
K. Concurrently herewith, HTC LP, HTD LP, U.S. Bank, as owner
trustee (in such capacity, the "1999-A Owner Trustee"), The Bank of New York, as
indenture trustee ("1999-A Indenture Trustee") and Wilmington Trust Company, as
Delaware owner trustee (the "Delaware Owner Trustee"), are entering into that
certain securitization trust agreement, dated as of [ ] (the "1999-A
Securitization Trust Agreement") pursuant to which the securitization trust (the
"1999-A Securitization Trust") will be formed and pursuant to which HTC LP and
HTD LP will transfer to the 1999-A Securitization Trust the 1999-A SUBI
Certificates, the 1999-A Indenture Trustee will issue the Notes and the 1999-A
Securitization Trust will issue the Certificates and deliver the Notes to HTC LP
and HTD LP. The HTC LP Retained 1999-A SUBI Certificate and the HTD LP Retained
1999-A SUBI Certificate will be retained by HTC LP and HTD LP, respectively.
L. The parties hereto desire that, pursuant to this Indenture, the
1999-A Indenture Trustee will issue the Notes and the 1999-A Owner Trustee will
grant a security interest in all of the assets held by the 1999-A Securitization
Trust, including the 1999-A SUBI Certificates, to the 1999-A Indenture Trustee
to secure the 1999-A Owner Trustee's obligations under this Indenture.
M. The notes, to be known as _____% Auto Lease Asset Backed Notes,
Class A-1 (the "Class A-1 Notes"), _____% Auto Lease Asset Backed Notes, Class
A-2 (the "Class A-2 Notes"), _____% Auto Lease Asset Backed Notes, Class A-3
(the "Class A-3 Notes"), _____% Auto Lease Asset Backed Notes, Class A-4 (the
"Class A-4 Notes" and, together with the Class A-1 Notes, Class A-2 Notes and
Class A-3 Notes, the "Class A Notes") and _____% Auto Lease Asset Backed Notes,
Class B (the "Class B Notes" and, together with the Class A Notes, the "Notes"),
and the certificate of authentication for the Notes, are to be substantially in
the forms set forth in Exhibits A and B attached hereto, respectively, with such
variations as are permitted in this Indenture.
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GRANTING CLAUSE
The Issuer hereby Grants to the 1999-A Indenture Trustee on behalf of the
1999-A Securitization Trust at the Closing Date, on behalf of and for the
benefit of the Noteholders, without recourse, all of the Issuer's right, title
and interest, whether now existing or hereinafter acquired or arising in, to and
under (i) the 1999-A SUBI Certificates, the rights in and benefits of the 1999-A
SUBI Interest evidenced by the 1999-A SUBI Certificates and all monies due
thereon and paid thereon or in respect thereof; (ii) the right to realize upon
any property that may be deemed to secure the foregoing; (iii) all rights
accruing to any holder of a 1999-A SUBI Certificate as a third-party beneficiary
under the Origination Trust Agreement, the 1999-A SUBI Supplement, the Servicing
Agreement and the 1999-A Servicing Supplement; (iv) all rights of HTC LP, as
transferee under the 1999-A SUBI Certificates Purchase and Sale Agreement with
respect to the HTC LP 1999-A SUBI Certificate; (v) all rights of HTD LP, as
transferee under the 1999-A SUBI Certificates Purchase and Sale Agreement with
respect to the HTD LP 1999-A SUBI Certificate; (vi) all rights of the Issuer as
a third party beneficiary of the Administration Agreement, (vii) the 1999-A SUBI
Accounts (excluding the 1999-A Certificate Distribution Account); and (viii) all
payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel
paper, checks, deposit accounts, insurance proceeds (excluding proceeds from the
Residual Value Insurance Policy or other residual value insurance policies
received with respect to the 1999-A Leased Vehicles and 1999-A Contracts),
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property that at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and all other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction (subject to the
provisions with respect to payments of interest on, and principal of, the Notes
as set forth in the 1999-A Securitization Trust Agreement), and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The 1999-A Indenture Trustee, as 1999-A Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties as required in this Indenture to the best of its ability to the end that
the interests of the Noteholders may be adequately and effectively protected.
ARTICLE ONE
DEFINITIONS
Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise requires,
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed thereto in the Agreement of Definitions dated [May
31, 1999], by and among HVT, Inc., a Delaware corporation, as origination
trustee, Delaware Trust Capital Management, Inc., a Delaware corporation, as
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Delaware trustee, U.S. Bank National Association, a national banking
association, as trust agent and as owner trustee, American Honda Finance
Corporation, as servicer, Wilmington Trust Company, as Delaware owner trustee,
The Bank of New York, as indenture trustee, Honda Titling A L.P., a Delaware
limited partnership, Honda Titling B L.P., a Delaware limited partnership, Honda
Titling C L.P., a Delaware limited partnership, and Honda Titling D L.P., a
Delaware limited partnership; PROVIDED, HOWEVER, in the event of any conflict
between a definition set forth both herein and the Agreement of Definitions, the
definition set forth herein shall prevail.
Section 1.02 INTERPRETIVE PROVISIONS. For all purposes of this Indenture,
except as otherwise expressly provided or unless the context otherwise requires,
(i) terms used in this Indenture include, as appropriate, all genders and the
plural as well as the singular, (ii) references to this Indenture include all
Exhibits and Schedules hereto, (iii) references to words such as "herein",
"hereof" and the like shall refer to this Indenture as a whole and not to any
particular part, Article or Section within this Indenture, (iv) references to a
section such as "Section 12.01" or an Article such as "Article Twelve" shall
refer to the applicable Section or Article of this Indenture, (v) the term
"include" and all variations thereof shall mean "include without limitation",
(vi) the term "or" shall mean "and/or", (vii) the term "proceeds" shall have the
meaning ascribed to such term in the UCC, (viii) the phrase "Origination
Trustee, acting on behalf of the Origination Trust," or words of similar import,
shall be deemed to refer to the Origination Trustee, acting on behalf of the
Honda Lease Trust and all beneficiaries thereof, and (ix) the phrase "1999-A
Owner Trustee, acting on behalf of the 1999-A Securitization Trust," or words of
similar import, shall be deemed to refer to the 1999-A Owner Trustee, acting on
behalf of the Honda Auto Lease Trust 1999-A and all beneficiaries thereof.
ARTICLE TWO
THE NOTES
Section 2.01 FORM GENERALLY. The Class A-1 Notes, the Class A-2 Notes,
the Class A-3 Notes and the Class A-4 Notes, and the certificates of
authentication thereon, shall be in substantially the form set forth in
Exhibit A, and the Class B Notes, and the certificates of authentication
thereon, shall be in substantially the form set forth in Exhibit B, in each case
with such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture, and may have such letters,
numbers or other marks of identification and such legends or endorsements placed
thereon as may, consistently herewith, be determined by the officers executing
such Notes, as evidenced by their execution thereof. Any portion of the text of
any Note may be set forth on the reverse thereof, with an appropriate reference
thereto on the face of the Note.
The Notes shall be typed, printed, lithographed, engraved or produced by
any combination of these methods on steel engraved borders, or may be produced
in any other manner as may, consistently herewith, be determined by the
Responsible Officer of the 1999-A Owner Trustee executing such Notes on behalf
of the 1999-A Securitization Trust, as evidenced by their execution thereof.
Section 2.02 DENOMINATIONS.
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(a) Subject to Section 2.12 hereof, the Notes will be issued in book-entry
form.
(b) The 1999-A Indenture Trustee shall, upon Issuer Order, authenticate
and deliver for original issue the following aggregate principal amount of
Notes: (i) $[_______] of Class A-1 Notes, $[_______] of Class A-2 Notes,
(ii) $[_______] of Class A-3 Notes, (iii) $[_______] of Class A-4 Notes and
(iv) $[_______] of Class B Notes. The aggregate principal amount of Class A-1
Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes and Class B Notes
outstanding at any time may not exceed such respective amounts, except as
provided in Sections 2.04 and 2.05 hereof.
(c) The Notes shall be issuable on the Closing Date in minimum
denominations of $1,000 and integral multiples in excess thereof; PROVIDED,
HOWEVER, that on the Closing Date, one Class A-1 Note, one Class A-2 Note, one
Class A-3 Note, one Class A-4 Note and one Class B Note may be issued in a
denomination that includes any remaining portion of the Initial Class A-1 Note
Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note Balance,
the Initial Class A-4 Note Balance and the Initial Class B Note Balance,
respectively (each, a "Residual Note").
Section 2.03 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Notes
shall be executed on behalf of the Issuer by a Responsible Officer of the 1999-A
Owner Trustee, which signature may be manual or in facsimile. Notes bearing the
manual or facsimile signature of individuals who were at the time of execution
Responsible Officers of the 1999-A Owner Trustee shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of issuance of such Notes.
At any time and from time to time after the execution and delivery of this
Indenture and the collateral assignment to the 1999-A Indenture Trustee of the
portion of the 1999-A Securitization Trust Estate to be Granted to the 1999-A
Indenture Trustee on the Closing Date, the Issuer may deliver Notes executed by
the Issuer, and upon Issuer Order the 1999-A Indenture Trustee shall
authenticate and deliver such Notes as provided in this Indenture and not
otherwise.
Notes that are authenticated and delivered by the 1999-A Indenture Trustee
or the Authenticating Agent to or upon the order of the Issuer on the Closing
Date shall be dated as of the Closing Date. All other Notes that are
authenticated after the Closing Date for any other purpose hereunder shall be
dated the date of their authentication.
No Note shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose unless there appears on such Note a certificate of
authentication substantially in the form provided for in Exhibits A and B,
executed by the 1999-A Indenture Trustee or the Authenticating Agent by the
manual signature of one of its Responsible Officers, and such certificate upon
any Note shall be conclusive evidence, and the only evidence, that such Note has
been duly authenticated and delivered hereunder.
Section 2.04 REGISTRATION OF NOTES. (a) The Issuer shall cause to be
kept a register (the "Note Register") in which, subject to such reasonable
procedures as it may prescribe, the Issuer
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shall provide for the registration of Notes and the registration of transfers of
Notes. The 1999-A Indenture Trustee is hereby initially appointed "Note
Registrar" for the purposes of maintaining the Note Register and registering
Notes and transfers of Notes as herein provided, and the 1999-A Indenture
Trustee hereby accepts such appointment. Upon any registration of any Note
Registrar, the Issuer shall promptly appoint a successor or, if it elects not to
make such an appointment, assume the duties of Note Registrar.
If a Person other than the 1999-A Indenture Trustee is appointed by the
Issuer as Note Registrar, the Issuer will give the 1999-A Indenture Trustee
prompt written notice of the appointment of such Note Registrar and of the
location, and any change in the location, of the Note Register. Under such
circumstances, the 1999-A Indenture Trustee shall have the right to inspect the
Note Register at all reasonable times and to obtain copies thereof, and the
1999-A Indenture Trustee shall have the right to rely upon a certificate
executed on behalf of the Note Registrar by a Responsible Officer thereof as to
the names and addresses of the Noteholders and the principal amounts and number
of such Notes.
Upon surrender for registration of transfer of any Note at the office or
agency of the Issuer to be maintained as provided in Section 3.02, provided that
the requirements of Section 8-401 of the UCC are met, a Responsible Officer of
the Issuer, and the 1999-A Indenture Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount.
At the option of any Noteholder, Notes may be exchanged for other Notes of
the same Class in any authorized denominations, of a like aggregate principal
amount, upon surrender of the Notes to be exchanged at such office or agency.
Whenever any Notes are so surrendered for exchange, provided that the
requirements of Section 8-401 of the UCC are met, a Responsible Officer of the
Issuer, and the 1999-A Indenture Trustee shall authenticate and deliver, the
Notes that the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Issuer, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the 1999-A Indenture Trustee) be
duly endorsed, or be accompanied by a written instrument of transfer in form and
substance satisfactory to the Issuer and the 1999-A Indenture Trustee, duly
executed by the Noteholder thereof or its attorney-in-fact duly authorized in
writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Issuer may require payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Notes.
The preceding provisions of this Section 2.04 notwithstanding, the Issuer
shall not be required to make and the Note Registrar need not register transfers
or exchanges of Notes
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selected for redemption or of any Note for a period of 15 days preceding the due
date for any payment with respect to the Note.
Section 2.05 MUTILATED, DESTROYED, LOST OR STOLEN NOTES. If (a) any
mutilated Note is surrendered to the 1999-A Indenture Trustee, or the Issuer and
the 1999-A Indenture Trustee receive evidence to their reasonable satisfaction
of the mutilation, destruction, loss or theft of any Note, (b) there is
delivered to the Issuer and the 1999-A Indenture Trustee such security or
indemnity as may be required by them to save each of them harmless and (c) the
requirements of Section 8-405 of the UCC are met, then, in the absence of notice
to the Issuer, the Note Registrar or the 1999-A Indenture Trustee that such Note
has been acquired by a Protected Purchaser, the Issuer shall execute, and upon
receipt of an Issuer Request the 1999-A Indenture Trustee shall authenticate and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Note, a replacement Note of the same Class of the same tenor and
principal amount (expressed in terms of the principal amount on the date the
original Note was first issued and authenticated) bearing a number not
contemporaneously outstanding; PROVIDED, HOWEVER, that if any such destroyed,
lost or stolen Note, but not a mutilated Note, shall have become or within seven
days shall be due and payable, or shall have been called for redemption, the
Issuer may, instead of issuing a replacement Note, pay such destroyed, lost or
stolen Note when so due or payable or upon the Redemption Date without surrender
thereof. If, after the delivery of such replacement Note or payment of a
destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a Protected Purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the 1999-A Indenture Trustee shall be entitled to recover such replacement
Note (or such payment) from the Person to whom it was delivered or any Person
taking such replacement Note from such Person to whom such replacement Note was
delivered or any assignee of such Person, except a Protected Purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to
the extent of any loss, damage, cost or expense incurred by the Issuer or the
1999-A Indenture Trustee in connection therewith.
Upon the issuance of any replacement Note under this Section 2.05, the
Issuer or the 1999-A Indenture Trustee may require the payment by the Holder of
such Note of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other reasonable expenses (including
the fees and expenses of the 1999-A Indenture Trustee and the Note Registrar)
connected therewith.
Every replacement Note issued pursuant to this Section 2.05 in replacement
of any mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by any Person,
and shall be entitled to all the benefits of this Indenture equally and
proportionately with all other Notes duly issued hereunder.
The provisions of this Section 2.05 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
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Section 2.06 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Note, the 1999-A Owner Trustee, the Issuer, the
1999-A Indenture Trustee and any agent of the Issuer or the 1999-A Indenture
Trustee may treat the Person in whose name any Note is registered (as of the day
of determination) as the owner of such Note for the purpose of receiving
payments of the principal of and interest, if any, on such Note and for all
other purposes whatsoever, whether or not such Note is overdue, and neither the
Issuer nor the 1999-A Indenture Trustee nor any agent of the Issuer or the
1999-A Indenture Trustee shall be affected by notice to the contrary.
Section 2.07 PAYMENT OF INTEREST AND PRINCIPAL; PRINCIPAL AND INTEREST
RIGHTS PRESERVED.
(a) Each class of Notes shall accrue interest at the related Note Rate,
and such interest together with principal shall be payable on each Distribution
Date as specified therein, subject to Section 3.01. Any installment of interest
and principal, if any, payable on any Note that is punctually paid or duly
provided for by the Issuer on the applicable Distribution Date shall be paid to
the Person in whose name such Note is registered at the close of business on the
Record Date for such Distribution Date by (i) check mailed first-class, postage
prepaid, to such Person's address as it appears in the Note Register on such
Record Date, (ii) if DTC, its nominee or a Clearing Agency is such Person,
unless Definitive Notes have been issued pursuant to Section 2.12, by wire
transfer of immediately available funds to the account designated by DTC, its
nominee or such Clearing Agency, as applicable, or (iii) with respect to a
registered owner of a Class B Notes having an aggregate initial denomination of
$250,000 or more, upon written instructions received by the 1999-A Indenture
Trustee not later than five days prior to the related Record Date, by wire
transfer of immediately available funds to an account maintained by such Person
at a depositary institution in the United States having appropriate facilities
therefor; PROVIDED, HOWEVER, that the final payment of principal of and interest
payable with respect to any Class A Note or Class B Note on a Distribution Date,
a Redemption Date or the related Final Scheduled Distribution Date, as the case
may be (and except for the Redemption Price for any Note called for redemption
pursuant to Section 10.01), shall be payable as provided in subsection (b) of
this Section 2.07. Any funds represented by any checks returned undelivered
shall be held in accordance with Section 3.03.
Any payments on the Notes and checks for amounts that include principal of
a Note shall be paid to the Person entitled thereto at the address of such
Person as it appears on the Note Register as of the applicable Record Date or,
if such payment is to be paid by wire transfer, to the Person entitled thereto
at the wire transfer account as specified in clause (a)(ii) or (a)(iii) of this
Section 2.07, in either case without requiring that such Note be submitted for
notation of payment. Any reduction in the principal amount of a Note (or any
one or more Predecessor Notes) effected by any payments made on any Distribution
Date shall be binding upon all future Holders of such Note and of any Note
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not noted thereon.
(b) Principal of and interest on each Note shall be payable in accordance
with Section 3.03 of the 1999-A Securitization Trust Agreement, but no later
than the Class A-1 Final Distribution Date, Class A-2 Final Distribution Date,
Class A-3 Final Distribution Date, Class A-4 Final Distribution Date or Class B
Final Distribution Date, as applicable, unless such Note
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becomes due and payable at an earlier date by declaration of acceleration, call
for redemption or otherwise. The final payment of principal of and interest on
each Note (or the payment of the Redemption Price thereof in the case of a Note
called for redemption pursuant to Article Ten) shall be payable only upon
presentation and surrender thereof on or after the Final Scheduled Distribution
Date for the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4 Notes
or Class B Notes, as applicable, at the Corporate Trust Office of the 1999-A
Indenture Trustee or at the office of any Paying Agent. All principal payments
on each Class of Notes shall be made pro rata to the Noteholders of such Class
entitled thereto. The 1999-A Indenture Trustee shall notify the Person in whose
name a Note is registered at the close of business on the Record Date
immediately preceding the Distribution Date on which the Issuer expects that the
final payment of principal of and interest on such Note will be paid. Such
notice shall be mailed or transmitted by facsimile prior to the Final Scheduled
Distribution Date, shall specify that such final payment will be payable only
upon presentation and surrender of such Note and shall specify the place where
such Note may be presented and surrendered for such final payment. Notices in
connection with redemption of Notes shall be mailed to Noteholders as provided
in Section 10.02. In addition the 1999-A Indenture Trustee shall notify each
Rating Agency upon the final payment of principal of and interest on each Class
of Notes and upon the termination of the 1999-A Securitization Trust, in each
case pursuant to Section [__] of the Administration Agreement.
(c) No further interest will accrue with respect to any Note from and
after the final Distribution Date with respect thereto.
(d) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Rate in any lawful manner. The Issuer
may pay such defaulted interest to the Persons who are Noteholders on a
subsequent special record date, which date shall be at least five Business Days
prior to the payment date. The Issuer shall fix or cause to be fixed any such
special record date and related payment date, and, at least 15 days before any
such special record date, the Issuer shall mail to each Noteholder a notice that
states the special record date, the payment date and the amount of defaulted
interest to be paid.
(e) The rights of the Class B Noteholders shall be and hereby are
subordinated to the rights of the Class A-1 Noteholders, the
Class A-2 Noteholders, the Class A-3 Noteholders and the Class A-4 Noteholders
to the extent provided in Section 3.03 of the 1999-A Securitization Trust
Agreement and Section 5.04(b) of this Indenture.
(f) Subject to the foregoing provisions of this Section 2.07, each Note
delivered under this Indenture upon registration of transfer or in exchange for
or in lieu of any other Note shall carry the rights to unpaid principal and
interest, if any, that were carried by such other Note.
Section 2.08 CANCELLATION. All Notes surrendered for payment,
registration of transfer or exchange or redemption shall, if surrendered to any
Person other than the 1999-A Indenture Trustee, be delivered to the 1999-A
Indenture Trustee and shall be promptly cancelled by the 1999-A Indenture
Trustee. The Issuer may at any time deliver to the 1999-A Indenture Trustee for
cancellation any Note previously authenticated and delivered hereunder that the
Issuer may
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have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly cancelled by the 1999-A Indenture Trustee. No Notes shall be
authenticated in lieu of or in exchange for any Notes cancelled as provided in
this Section 2.08, except as expressly permitted by this Indenture. All
cancelled Notes held by the 1999-A Indenture Trustee shall be destroyed unless
the Issuer shall direct by an Issuer Order that they be returned to the Issuer.
Section 2.09 AUTHENTICATION AND DELIVERY OF NOTES. The aggregate
principal amount of Notes that may be authenticated and delivered under this
Indenture is limited to an amount equal to the Initial Note Balance, except for
Notes authenticated and delivered upon registration of transfer or in exchange
for, or in lieu of, other Notes pursuant to Sections 2.04 or 2.05.
Notes complying with the foregoing requirements may from time to time be
executed by the Issuer and delivered to the 1999-A Indenture Trustee for
authentication, and the same shall be authenticated and delivered by the 1999-A
Indenture Trustee upon Issuer Request.
Section 2.10 BOOK-ENTRY NOTES. Unless otherwise specified, the Notes
(except for any Residual Notes), upon original issuance, will be issued in the
form of one or more typewritten Notes representing the Book-Entry Notes, to be
delivered to the 1999-A Indenture Trustee, as agent for DTC, the initial
Clearing Agency, by, or on behalf of, the Issuer. The Notes delivered to DTC
evidencing the Book-Entry Notes shall initially be registered on the Note
Register in the name of Cede, and no Note Owner will receive a definitive Note
representing such Note Owner's interest in the Notes, except as provided in
Section 2.12. Subject to Section 2.12, unless and until definitive, fully
registered Notes (the "Definitive Notes") have been issued to such Note Owners
pursuant to Section 2.12:
(a) the provisions of this Section 2.10 shall be in full force and
effect;
(b) the Issuer, HTC LP, HTD LP, the Servicer, the Note Registrar and
the 1999-A Indenture Trustee may deal with the Clearing Agency for all
purposes of this Indenture (including the payment of principal of and
interest on the Notes and the giving of instructions or directions
hereunder) as the sole holder of the Notes, and shall have no obligation to
the Note Owners;
(c) to the extent that the provisions of this Section 2.10 conflict
with any other provisions of this Indenture, the provisions of this Section
2.10 shall control;
(d) the rights of Note Owners of the Notes shall be exercised only
through (or through procedures established by) the Clearing Agency and
shall be limited to those established by law and agreements between such
Note Owners and the Clearing Agency and/or the Clearing Agency Participants
and, unless and until Definitive Notes are issued pursuant to Section 2.12,
the Clearing Agency will make book-entry transfers among the Clearing
Agency Participants and receive and transmit distributions of principal of
and interest on the Notes to such Clearing Agency Participants; and
(e) whenever this Indenture requires or permits actions to be taken
based upon instructions or directions of Noteholders of the Notes
evidencing a specified aggregate
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Percentage Interest of the Outstanding Amount of the Notes, the Clearing
Agency shall be deemed to represent such percentage (if and to the extent
that it will act on behalf of Note Owners and/or Clearing Agency
Participants) only to the extent that it has received instructions to such
effect from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the beneficial
interest in such Notes and has delivered such instructions to the 1999-A
Indenture Trustee.
Section 2.11 NOTICES TO THE CLEARING AGENCY. Whenever notice or other
communication to any Noteholder is required under this Indenture, unless and
until Definitive Notes shall have been issued to the Note Owners pursuant to
Section 2.12, the 1999-A Indenture Trustee and the Servicer shall give all such
notices and communications specified herein to be given to any or all such
Noteholders to the Clearing Agency, and shall have no obligation to the Note
Owners.
Section 2.12 DEFINITIVE NOTES. If (i)(A) the Administrator advises the
1999-A Indenture Trustee in writing that the Clearing Agency is no longer
willing or able to properly discharge the Clearing Agency's responsibilities
with respect to the Notes and (B) neither the 1999-A Indenture Trustee nor the
Administrator is able to locate a qualified successor, (ii) the Administrator,
at its option, advises the 1999-A Indenture 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 or 1999-A Servicer Termination Event, Note
Owners representing beneficial interests in the Notes aggregating at least a
majority of the Outstanding Amount of such Notes, voting together as a single
Class, advise the Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best interests
of such Note Owners, then the Clearing Agency shall notify all Note Owners of
each related Class of Notes and the 1999-A Indenture Trustee of the occurrence
of any such event and of the availability of Definitive Notes to such Note
Owners requesting the same. Upon surrender to the 1999-A Indenture Trustee of
the Notes by the Clearing Agency, accompanied by registration instructions, the
Issuer shall issue, and the 1999-A Indenture Trustee shall authenticate, the
Definitive Notes and deliver such Definitive Notes in accordance with the
instructions of the Clearing Agency. None of the Issuer, HTC LP, HTD LP, the
Servicer, the Note Registrar or the 1999-A Indenture Trustee shall be liable for
any delay in delivery of such instructions and each such Person may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Notes, the 1999-A Indenture Trustee shall recognize
the holders of such Definitive Notes as Noteholders hereunder. The 1999-A
Indenture Trustee shall not be liable if the 1999-A Indenture Trustee or the
Issuer is unable to locate a qualified successor to DTC.
Section 2.13 TAX TREATMENT. The Issuer has entered into this Indenture,
and the Notes will be issued, with the intention that, for all purposes,
including federal, state and local income, single business and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
1999-A Securitization Trust Estate. The Issuer, by entering into this
Indenture, and each Noteholder, by its acceptance of a Note (and each Note
Owner, by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for all purposes, including for federal, state and
local income, single business and franchise tax purposes, as indebtedness of the
Issuer.
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Section 2.14 RELEASE OF COLLATERAL. Subject to Section 11.01 and the
terms of the other 1999-A Securitization Documents, the 1999-A Indenture Trustee
shall release property from the Lien of this Indenture only upon receipt of an
Issuer Order accompanied by an Officer's Certificate, an Opinion of Counsel and
Independent certificates in accordance with TIA Sections 314(c) and 314(d)(i) or
an Opinion of Counsel in lieu of such Independent certificates to the effect
that the TIA does not require any such Independent certificates.
ARTICLE THREE
COVENANTS AND REPRESENTATIONS
Section 3.01 PAYMENT OF NOTES. The Issuer will cause to be duly and
punctually paid the principal of and interest on the Notes in accordance with
the terms of the Notes, the 1999-A Securitization Trust Agreement, this
Indenture and the other 1999-A Securitization Documents. Without limiting the
foregoing, subject to the terms and conditions of the 1999-A Securitization
Documents, the Issuer will cause to be distributed all amounts on deposit in the
1999-A Note Distribution Account in accordance with Section 3.03 of the
Securitization Trust Agreement. Amounts properly withheld under the Code by any
Person from a payment to any Noteholder of interest and/or principal shall be
considered as having been paid by the Issuer to such Noteholder for all purposes
of this Indenture.
Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the 1999-A
Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer
will give prompt written notice to the 1999-A Indenture Trustee of the location,
and of any change in the location, of any such office or agency. If at any time
the Issuer shall fail to maintain any such office or agency or shall fail to
furnish the 1999-A Indenture Trustee with the address thereof, such surrenders,
notices and demands may be made or served at the Corporate Trust Office, and the
Issuer hereby appoints the 1999-A Indenture Trustee as its agent to receive all
such surrenders, notices and demands, provided that the 1999-A Indenture Trustee
shall not serve as an agent or office for the purpose of service of process on
behalf of the Issuer.
Section 3.03 MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST. As provided in
Sections 5.04 and 8.02, all payments of amounts due and payable with respect to
any Notes that are to be made from amounts withdrawn from the 1999-A SUBI
Accounts (excluding the 1999-A Certificate Distribution Account) and the Reserve
Fund pursuant to Section 8.02 shall be made on behalf of the Issuer by the
1999-A Indenture Trustee or by another Paying Agent, and no amounts so withdrawn
from any 1999-A SUBI Accounts (excluding the 1999-A Certificate Distribution
Account) and the Reserve Fund for payments of the Notes shall be paid over to
the Issuer except as provided in the 1999-A Securitization Documents.
On or before the Business Day immediately preceding each Distribution Date
and Redemption Date, the 1999-A Owner Trustee, on behalf of the Issuer, shall
deposit or cause to be deposited in the 1999-A Note Distribution Account an
aggregate sum sufficient to pay the amounts then becoming due under the Notes as
set forth in the 1999-A Securitization Trust
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Agreement, such sum to be held in trust for the benefit of the Persons entitled
thereto, and (unless the Paying Agent is the 1999-A Indenture Trustee) shall
promptly notify the 1999-A Indenture Trustee of its action or failure to act.
The Issuer will cause each Paying Agent other than the 1999-A Indenture
Trustee to execute and deliver to the 1999-A Indenture Trustee an instrument in
which such Paying Agent shall agree with the 1999-A Indenture Trustee (and if
the 1999-A Indenture Trustee acts as Paying Agent, it hereby so agrees), subject
to the provisions of this Section 3.03, that such Paying Agent will:
(a) hold all sums held by it for the payment of amounts due with
respect to the Notes in trust for the benefit of the Persons entitled
thereto until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and pay such sums to such Persons as herein provided;
(b) give the 1999-A Indenture Trustee notice of any default by the
Issuer (or any other obligor upon the Notes) of which the 1999-A Indenture
Trustee has actual knowledge in the making of any payment required to be
made with respect to the Notes;
(c) at any time during the continuance of any such default, upon the
written request of the 1999-A Indenture Trustee, forthwith pay to the
1999-A Indenture Trustee all sums so held in trust by such Paying Agent;
(d) immediately resign as a Paying Agent and forthwith pay to 1999-A
Indenture Trustee all sums held by it in trust for the payment of the Notes
if at any time it ceases to meet the standards required to be met by a
Paying Agent at the time of its appointment; and
(e) comply with all requirements of the Code with respect to the
withholding from any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Order direct
any Paying Agent to pay to the 1999-A Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the 1999-A Indenture Trustee upon
the same trusts as those upon which such sums were held by such Paying Agent;
and upon such payment by any Paying Agent to the 1999-A Indenture Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Subject to applicable laws with respect to escheat of funds, any money held
by the 1999-A Indenture Trustee or any Paying Agent in trust for the payment of
any amount due with respect to any Note and remaining unclaimed for two years
after such amount has become due and payable shall be discharged from such
trust, upon receipt of an Issuer Request, and shall be paid to the Issuer (or,
after termination of the Issuer, to HTC LP and HTD LP) and the Holder of
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such Note shall thereafter, as an unsecured general creditor, look only to the
Issuer (or, after termination of the Issuer, to HTC LP and HTD LP) for payment
thereof (but only to the extent of the amounts so paid to the Issuer (or, after
termination of the Issuer, to HTC LP and HTD LP)), and all liability of the
1999-A Indenture Trustee or such Paying Agent with respect to such trust money
shall thereupon cease; PROVIDED, HOWEVER, that the 1999-A Indenture Trustee or
such Paying Agent, before being required to make any such repayment, shall at
the expense and direction of the Issuer cause to be published once, in an
Authorized Newspaper, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than 30 days from the date of
such publication, any unclaimed balance of such money then remaining will be
repaid to or for the account of the Issuer or to HTC LP and HTD LP, as
applicable. The 1999-A Indenture Trustee shall also adopt and employ, at the
expense and direction of the Issuer, any other reasonable means of notification
of such payment by the 1999-A Indenture Trustee to the Issuer (or, after
termination of the Issuer, to HTC LP and HTD LP) (including mailing notice of
such payment to Holders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in moneys due and
payable but not claimed is determinable from records of the 1999-A Indenture
Trustee or any Paying Agent, at the last address of record for each such
Holder).
Section 3.04 EXISTENCE. The Issuer will keep in full force and effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor issuer hereunder is or
becomes, organized under the laws of any other State of the United States, in
which case the Issuer will keep in full force and effect its existence, rights
and franchises under the laws of such other jurisdiction) and the Issuer will
obtain and preserve its qualification to do business as a foreign corporation in
each jurisdiction in which such qualification is or shall be necessary to
protect the validity and enforceability of this Indenture, the Notes and each
instrument or agreement included in the 1999-A Securitization Trust Estate.
Section 3.05 PROTECTION OF TRUST ESTATE. The Issuer intends the security
interest Granted pursuant to this Indenture in favor of the 1999-A Indenture
Trustee on behalf of the Noteholders to be prior to all other Liens in respect
of the 1999-A Securitization Trust Estate, and the Issuer shall take all actions
necessary to obtain and maintain, for the benefit of the 1999-A Indenture
Trustee on behalf of the Noteholders, a first Lien on and a first priority,
perfected security interest in the 1999-A Securitization Trust Estate. The
Issuer will from time to time execute, deliver and file all financing
statements, continuation statements, instruments of further assurance and other
instruments (all as prepared by the Servicer and delivered to the Issuer)
reasonably required or necessary to maintain the Lien and security interest
created by this Indenture or to protect the 1999-A Securitization Trust Estate
generally, and will take such other action necessary or advisable to:
(i) Grant more effectively all or any portion of the 1999-A
Securitization Trust Estate;
(ii) maintain or preserve the Lien and security interest (and the
priority thereof) created by this Indenture or carry out more effectively
the purposes hereof;
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(iii) perfect, publish notice of, or protect the validity of, any
Grant made or to be made by this Indenture;
(iv) enforce any of the 1999-A Contracts (as set forth in the 1999-A
Servicing Supplement);
(v) preserve and defend title to the 1999-A Securitization Trust
Estate and the rights of the 1999-A Indenture Trustee and the Noteholders
in such 1999-A Securitization Trust Estate against the claims of all
persons and parties; and
(vi) pay all taxes or assessments levied or assessed upon the 1999-A
Securitization Trust Estate when due.
The Issuer hereby designates the 1999-A Indenture Trustee its agent and
attorney-in-fact to execute and file any financing statement, continuation
statement or other instrument required to be executed pursuant to this Section
3.05. It is understood that in no event will the Issuer be required to take any
action to cause any Lien notation on, or any other action with respect to, any
Certificate of Title for any 1999-A Leased Vehicle.
Section 3.06 OPINIONS AS TO TRUST ESTATE.
(a) Promptly after the execution and delivery of this Indenture, the
Issuer shall furnish to the 1999-A Indenture Trustee an Opinion of Counsel to
the effect that, in the opinion of such counsel, either (i) all financing
statements and continuation statements have been executed and filed that are
necessary to create and continue the 1999-A Indenture Trustee's first priority
perfected security interest in the Collateral for the benefit of the
Noteholders, and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (ii) no such action
shall be necessary to perfect such security interest.
(b) Within 90 days after the beginning of each calendar year beginning in
the year 2000, the Issuer shall furnish to the 1999-A Indenture Trustee an
Opinion of Counsel, dated as of a date during such 90-day period, to the effect
that, in the opinion of such counsel, either (i) all financing statements and
continuation statements have been executed and filed that are necessary to
create and continue the 1999-A Indenture Trustee's first priority perfected
security interest in the Collateral for the benefit of the Noteholders, and
reciting the details of such filings or referring to prior Opinions of Counsel
in which such details are given, or (ii) no such action shall be necessary to
perfect such security interest.
Section 3.07 PERFORMANCE OF OBLIGATIONS.
(a) The Issuer will not take any action that would release any Person from
any of such Person's material covenants or obligations under any instrument
included in the 1999-A Securitization Trust Estate, or that would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any such instrument, except as expressly
provided in the 1999-A Securitization Documents or any such instrument.
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(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the 1999-A Indenture Trustee in an Officer's Certificate of the
Issuer shall be deemed to be action taken by the Issuer. Initially, the Issuer
has contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer will, and will cause the Administrator to, punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the other 1999-A Securitization Documents and in the instruments and
agreements included in the 1999-A Securitization Trust Estate, including filing
or causing to be filed all UCC financing statements and continuation statements
required to be filed by the terms of this Indenture and the other 1999-A
Securitization Documents in accordance with and within the time periods provided
for herein and therein. Except as otherwise expressly provided therein, the
Issuer shall not waive, amend, modify, supplement or terminate any 1999-A
Securitization Document or any provision thereof without the consent of the
1999-A Indenture Trustee or Noteholders representing at least a majority of the
Outstanding Amount of the Notes, voting together as a single Class, or such
greater percentage as may be specified in the particular provision.
(d) If the Issuer shall have knowledge of the occurrence of (i) an Event
of Default or an Unmatured Event of Default or (ii) a 1999-A Servicer
Termination Event, the Issuer shall promptly provide written notice thereof to a
Responsible Officer of the 1999-A Indenture Trustee and to each Rating Agency
thereof specifying the action, if any, the Issuer is taking in respect of such
Event of Default, Unmatured Event of Default or 1999-A Servicer Termination
Event.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 4.01(b) of
the Servicing Agreement and Section 11.01 of the 1999-A Servicing Supplement,
the Required Related Holders shall appoint a successor Servicer, and such
successor Servicer shall accept its appointment by a written assumption in a
form acceptable to the 1999-A Indenture Trustee. If a successor Servicer has
not been appointed and accepted its appointment at the time the Servicer ceases
to act as Servicer, the 1999-A Indenture Trustee without further action shall
automatically be appointed the successor Servicer. The 1999-A Indenture Trustee
may resign as the successor Servicer by giving written notice of such
resignation to the Issuer and in such event will be released from such duties
and obligations, such release not to be effective until the date a new servicer
enters into a servicing agreement as provided below. Upon delivery of any such
notice to the Issuer, the Issuer shall obtain a new servicer as the successor
Servicer under the Servicing Agreement and the 1999-A Servicing Supplement. Any
successor Servicer other than the 1999-A Indenture Trustee shall (i) be an
established financial institution having a net worth of not less than
$50,000,000 whose regular business includes the servicing of motor vehicle
receivables and (ii) enter into a servicing agreement with the Issuer having
substantially the same provisions as the provisions of the Servicing Agreement
and the 1999-A Servicing Supplement applicable to the Servicer. If within
30 days after the delivery of the notice referred to above the 1999-A Indenture
Trustee shall not have obtained such a new servicer, the 1999-A Indenture
Trustee may appoint, or may petition a court of competent jurisdiction to
appoint, a successor Servicer. In connection with any such appointment, the
1999-A Indenture Trustee may make such
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arrangements for the compensation of such successor as it and such successor
shall agree, subject to the limitations set forth below and in the Servicing
Agreement, and, in accordance with Section 4.01(b) of the Servicing Agreement
and Section 11.01 of the 1999-A Servicing Supplement, the Issuer shall enter
into an agreement with such successor for the servicing of the 1999-A
Securitization Trust Estate (such agreement to be in form and substance
satisfactory to the 1999-A Indenture Trustee). If the 1999-A Indenture
Trustee shall succeed to the Servicer's duties as servicer of the 1999-A
Securitization Trust Estate as provided herein, it shall do so in its
individual capacity and not in its capacity as 1999-A Indenture Trustee and,
accordingly, the provisions of Article Six shall be inapplicable to the
1999-A Indenture Trustee in its duties as the successor to the Servicer and
the servicing of the 1999-A Securitization Trust Estate. If the 1999-A
Indenture Trustee shall become a successor to the Servicer under the
Servicing Agreement and the 1999-A Servicing Supplement, the 1999-A Indenture
Trustee shall be entitled to appoint as Servicer any one of its Affiliates,
provided that it shall be fully liable for the actions and omissions of such
Affiliate in such capacity as successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Servicing Agreement and the 1999-A Servicing Supplement, the Issuer shall
promptly notify the 1999-A Indenture Trustee. As soon as a successor Servicer
is appointed, the Issuer shall notify the 1999-A Indenture Trustee of such
appointment, specifying in such notice the name and address of such successor
Servicer.
Section 3.08 NEGATIVE COVENANTS. So long as any Notes are outstanding,
the Issuer shall not:
(a) engage in any activities other than financing, acquiring, owning,
leasing, selling (subject to the Lien of this Indenture), pledging and managing
the 1999-A Securitization Trust Estate in the manner contemplated by this
Indenture and the other 1999-A Securitization Documents;
(b) except as expressly permitted by the 1999-A Securitization
Documents, sell, transfer, exchange or otherwise dispose of any of the
properties or assets of the Issuer, including those included in the 1999-A
Securitization Trust Estate, except as directed to do so by the 1999-A
Indenture Trustee;
(c) claim any credit on, or make any deduction from, the principal or
interest payable in respect of the Notes (other than amounts properly
withheld from such payments under the Code or other applicable federal or
state law) or assert any claim against any present or former Noteholder by
reason of the payment of any taxes levied or assessed upon any part of the
1999-A Securitization Trust Estate;
(d) (i) permit the validity or effectiveness of this Indenture to be
impaired, or permit the Lien of this Indenture to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be released
from any covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby; (ii) permit any
Lien, charge, excise, claim, security interest, mortgage or other
encumbrance (other than the Lien of this Indenture) to be created on or
extend to or
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otherwise arise upon or burden the 1999-A Securitization Trust Estate or
any part thereof or any interest therein or the proceeds thereof (other
than tax Liens, mechanics' Liens and other Liens that arise by operation of
law, in each case on any of the 1999-A Leased Vehicles and arising solely
as a result of an action or omission of the related Lessee); or
(iii) permit the Lien of this Indenture not to constitute a valid first
priority (other than with respect to any such tax, mechanic's or other
Lien) security interest in the 1999-A Securitization Trust Estate;
(e) dissolve or liquidate in whole or in part; or
(f) merge or consolidate with any corporation (except as set forth in
Section 3.10).
Section 3.09 STATEMENTS AS TO COMPLIANCE.
(a) The Issuer will deliver to the 1999-A Indenture Trustee and each
Rating Agency, within 120 days after the end of each fiscal year of the Issuer
(commencing with the fiscal year 2000), an Officer's Certificate stating, as to
the Responsible Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year (or
since the Closing Date in the case of the first such statement) and of the
performance by the Issuer under this Indenture has been made under such
Responsible Officer's supervision; and
(ii) to the best of such Responsible Officer's knowledge, based on
such review, the Issuer has fulfilled all its obligations under this
Indenture throughout such year (or since the Closing Date in the case of
the first such statement), 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) [In lieu of the certificates and opinions that would be required by
Section 314(d)(1) of the TIA, the Issuer will deliver to the 1999-A Indenture
Trustee, within thirty days after June 30 and December 31 of each year,
commencing with December 31, 1999, an Officer's Certificate, stating that (i) a
review of all releases and reallocations of the 1999-A SUBI Assets during the
preceding semi-annual period has been made under the signing officer's
supervision; (ii) to the best of such officer's knowledge, all of such releases
and reallocations complied with all of the requirements of the relevant
provisions of the Indenture and were made in the ordinary course of the business
of the Issuer; (iii) all proceeds from the disposition of the related released
1999-A Leased Vehicles were used in the business of the Issuer to make payments
on the Notes or as otherwise permitted by this Indenture and the other 1999-A
Securitization Documents; and (iv) in such officer's opinion, such releases and
reallocations did not impair the security under the Indenture in contravention
of the provisions thereof.]
Section 3.10 ISSUER MAY CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
(a) The Issuer shall not consolidate or merge with or into any other
Person, unless:
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(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person organized and
existing under the laws of the United States or any State and shall
expressly assume, by an indenture supplemental hereto, executed and
delivered to the 1999-A Indenture Trustee, in form and substance
satisfactory to the 1999-A Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of this
Indenture and each other 1999-A Securitization Document on the part of
the Issuer to be performed or observed, all as provided herein;
(ii) immediately after giving effect to such transaction, no
Event of Default shall have occurred and be continuing;
(iii) each Rating Agency Condition shall have been satisfied with
respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel (and
shall have delivered copies thereof to the 1999-A Indenture Trustee) to
the effect that such transaction will not have any material adverse tax
consequence to the Issuer or any Noteholder;
(v) any action that is necessary to maintain the Lien and
security interest created by this Indenture shall have been taken; and
(vi) the Issuer shall have delivered to the 1999-A Indenture
Trustee an Officer's Certificate and an Opinion of Counsel (which shall
describe the actions taken as required by clause (v) above or that no
actions will be taken), each stating that such consolidation or merger
complies with this Section 3.10(a) and that all conditions precedent
provided for herein relating to such transaction have been complied with
(including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all of
its properties or assets, including those included in the 1999-A Securitization
Trust Estate, to any Person (except as expressly permitted by the 1999-A
Securitization Documents), unless:
the Person that acquires by conveyance or transfer the properties or assets
of the Issuer shall (A) be a United States citizen or a Person organized and
existing under the laws of the United States or any State, (B) expressly assume,
by an indenture supplemental hereto, executed and delivered to the 1999-A
Indenture Trustee, in form and substance satisfactory to the 1999-A Indenture
Trustee, the due and punctual payment of the principal of and interest on all
Notes and the performance or observance of every agreement and covenant of this
Indenture and each other 1999-A Securitization Document on the part of the
Issuer to be performed or observed, all as provided herein, (C) expressly agree
by means of such supplemental indenture that all right, title and interest so
conveyed or transferred shall be subject and subordinate to the rights of the
Noteholders, (D) unless otherwise provided in such supplemental indenture,
expressly agree to indemnify, defend and hold harmless the Issuer from and
against any loss, liability or expense arising under or related to this
Indenture and the Notes and (E) expressly agree by means of such
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supplemental indenture that such Person (or, if a group of Persons, then one
specified Person) shall make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection with the Notes;
immediately after giving effect to such transaction, no Event of Default
shall have occurred and be continuing;
each Rating Agency Condition shall have been satisfied with respect to such
transaction;
the Issuer shall have received an Opinion of Counsel (and shall have
delivered copies thereof to the 1999-A Indenture Trustee) to the effect that
such transaction will not have any material adverse federal tax consequence to
the Issuer or any Noteholder;
any action that is necessary to maintain the Lien and security interest
created by this Indenture shall have been taken; and
the Issuer shall have delivered to the 1999-A Indenture Trustee an
Officer's Certificate and an Opinion of Counsel (which shall describe the
actions taken as required by clause (v) above or that no actions will be taken),
each stating that such conveyance or transfer and such supplemental indenture
comply with this Section 3.10(b) and that all conditions precedent herein
provided for relating to such transaction have been complied with (including any
filing required by the Exchange Act).
Section 3.11 SUCCESSOR OR TRANSFEREE.
(a) Upon any consolidation or merger of the Issuer in accordance with
Section 3.10(a), the Person formed by or surviving such consolidation or merger
(if other than the Issuer) shall succeed to and be substituted for, and may
exercise every right and power of, the Issuer under this Indenture or the other
1999-A Securitization Documents with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all or substantially all of the
properties or assets of the Issuer pursuant to Section 3.10(b), the Issuer will
be released from every covenant and agreement of this Indenture to be observed
or performed on the part of the Issuer with respect to the Notes immediately
upon the delivery of written notice to the 1999-A Indenture Trustee stating that
the Issuer is to be so released.
Section 3.12 NO OTHER BUSINESS. The Issuer shall not engage in any
business other than financing, acquiring, purchasing, owning, leasing, selling
(subject to the Lien of the Indenture), pledging and managing the 1999-A
Securitization Trust Estate in the manner contemplated by this Indenture and the
other 1999-A Securitization Documents and activities incidental thereto.
Section 3.13 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for (i) the Notes and (ii) any other indebtedness permitted
by or arising under the other 1999-A Securitization Documents.
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Section 3.14 SERVICER'S OBLIGATIONS. The Issuer shall cause the Servicer
to comply with Article Two of the Servicing Agreement and Article Nine of the
1999-A Servicing Supplement.
Section 3.15 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except
as contemplated by the 1999-A Securitization Documents, the Issuer shall not
make any loan or advance or credit to, or guarantee (directly or indirectly or
by an instrument having the effect of assuring another's payment or performance
on any obligation or capability of so doing or otherwise), endorse or otherwise
become contingently liable, directly or indirectly, in connection with the
obligations, stocks or dividends of, or own, purchase, repurchase or acquire (or
agree contingently to do so) any stocks, obligations, assets or securities of,
or any other interest in, or make any capital contribution to, any other Person.
Section 3.16 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty) except as contemplated by the 1999-A
Securitization Documents.
Section 3.17 REMOVAL OF ADMINISTRATOR. The Issuer shall not remove the
Administrator without cause unless each Rating Agency Condition shall have been
satisfied in connection with such removal.
Section 3.18 RESTRICTED PAYMENTS. Except as expressly permitted by the
1999-A Securitization Documents, the Issuer shall not, directly or indirectly,
(i) pay any dividend or make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the 1999-A Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; PROVIDED,
HOWEVER, that the Issuer may make, or cause to be made, (a) distributions as
contemplated by, and to the extent funds are available for such purpose under,
the 1999-A Securitization Trust Agreement, and (b) payments to the 1999-A
Indenture Trustee [pursuant to Section 1.02(b)(ii) of the Administration
Agreement]. The Issuer will not, directly or indirectly, make payments to or
distributions from any 1999-A SUBI Accounts or the Reserve Fund except in
accordance with this Indenture and the other 1999-A Securitization Documents.
Section 3.19 FURTHER INSTRUMENTS AND ACTS. Upon request of the 1999-A
Indenture Trustee, the Issuer will execute and deliver such further instruments
and do such further acts as may be necessary or proper to carry out more
effectively the purpose of this Indenture.
Section 3.20 COMPLIANCE WITH LAWS. The Issuer shall comply with the
requirements of all applicable laws, the non-compliance with which would,
individually or in the aggregate, materially and adversely affect the ability of
the Issuer to perform its obligations under the Notes, this Indenture or any
other 1999-A Securitization Document.
Section 3.21 AMENDMENTS OF SERVICING AGREEMENT, 1999-A SERVICING
SUPPLEMENT AND 1999-A SECURITIZATION TRUST AGREEMENT. The Issuer shall not
agree to any amendment to Section 6.02 of the Servicing Agreement, Section 12.02
of the 1999-A Servicing Supplement or Section
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9.01 of the 1999-A Securitization Trust Agreement to eliminate the requirements
thereunder that the 1999-A Indenture Trustee or the Noteholders consent to
amendments thereto as provided therein.
Section 3.22 DELIVERY OF 1999-A SUBI CERTIFICATES. On the Closing Date,
the Issuer shall deliver or cause to be delivered to the 1999-A Indenture
Trustee as security, for the performance and payment of its obligations
hereunder, the 1999-A SUBI Certificates. [The 1999-A Indenture Trustee shall
take possession of the 1999-A SUBI Certificates in New York and shall at all
times during the effectiveness of this Indenture maintain custody of the 1999-A
SUBI Certificates in New York.]
ARTICLE FOUR
SATISFACTION AND DISCHARGE
Section 4.01 SATISFACTION AND DISCHARGE OF INDENTURE.
(a) This Indenture shall cease to be of further effect with respect to the
Notes except as to (i) rights of registration of transfer and exchange,
(ii) substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon,
(iv) Sections 3.03, 3.04, 3.05, 3.08, 3.10, 3.12, 3.13, 3.19 and 3.21, (v) the
rights, obligations and immunities of the 1999-A Indenture Trustee hereunder
(including the rights of the 1999-A Indenture Trustee under Section 6.07 and the
obligations of the 1999-A Indenture Trustee under Section 4.02) and (vi) the
rights of Noteholders as beneficiaries hereof with respect to the property so
deposited with the 1999-A Indenture Trustee payable to all or any of them, and
the 1999-A Indenture Trustee, on demand of and at the expense of the Issuer,
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to the Notes, when
(i) either
(A) all Notes theretofore authenticated and delivered (other
than (1) Notes that have been mutilated, destroyed, lost or stolen and
that have been replaced or paid as provided in Section 2.05, and
(2) Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Issuer and thereafter
repaid to the Issuer or discharged from such trust, as provided in
Section 3.03) have been delivered to the 1999-A Indenture Trustee for
cancellation; or
(B) all Notes not theretofore delivered to the 1999-A Indenture
Trustee for cancellation
(1) have become due and payable, or
(2) will become due and payable at the Class B Final
Distribution Date within one year, or
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(3) are to be called for redemption pursuant to Article Ten
within one year under arrangements satisfactory to the 1999-A
Indenture Trustee for the giving of notice of redemption by the
1999-A Indenture Trustee in the name, and at the expense, of the
Issuer,
and the Issuer, in the case of any of clauses (i)(B)(1), (i)(B)(2) or
(i)(B)(3) above, has irrevocably deposited or caused to be irrevocably
deposited with the 1999-A Indenture Trustee Cash or direct obligations of
or obligations guaranteed by the United States (which will mature prior to
the date such amounts are payable), in trust for such purposes, in an
amount sufficient to pay and discharge the entire indebtedness on such
Notes not theretofore delivered to the 1999-A Indenture Trustee for
cancellation, for principal and interest to the Class A-1 Final
Distribution Date, the Class A-2 Final Distribution Date, the Class A-3
Final Distribution Date, the Class A-4 Final Distribution Date or the Class
B Final Distribution Date, as applicable, or the applicable Redemption
Date, as the case may be, and in the case of Notes that were not paid at
the Class A-1 Final Distribution Date, the Class A-2 Final Distribution
Date, the Class A-3 Final Distribution Date, the Class A-4 Final
Distribution Date or the Class B Final Distribution Date, as applicable,
for all overdue principal and all interest payable on such Notes through
the next succeeding Distribution Date therefor, in each case without
reliance upon anticipated investment earnings on such Cash, and, if any
Notes are to be redeemed prior to the Class A-1 Final Distribution Date,
the Class A-2 Final Distribution Date, the Class A-3 Final Distribution
Date, the Class A-4 Final Distribution Date or the Class B Final
Distribution Date, as applicable, the Issuer has made irrevocable
arrangements satisfactory to the 1999-A Indenture Trustee for the giving of
notice of redemption by the 1999-A Indenture Trustee in the name, and at
the expense of, the Issuer;
(ii) the Issuer has paid or performed or caused to be paid or
performed all amounts and obligations that the Issuer may owe to or on
behalf of the 1999-A Indenture Trustee for the benefit of the Noteholders
under this Indenture or the Notes; and
(iii) the Issuer has delivered to the 1999-A Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by the TIA or
the 1999-A Indenture Trustee) an Independent certificate from a firm of
certified public accountants, each meeting the applicable requirements of
Section 11.01(a) and, subject to Section 11.02, each stating that all
conditions precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
(b) Notwithstanding the satisfaction and discharge of this Indenture, the
provisions of Articles Eight and Nine, the obligations of the 1999-A Indenture
Trustee to Noteholders and the Issuer under Section 3.03, of the Issuer to the
1999-A Indenture Trustee under Section 6.07, of the 1999-A Indenture Trustee to
Noteholders under Section 4.02, and of the 1999-A Indenture Trustee under
Section 6.17, and the provisions of this Indenture with respect to registration
of transfers of Notes, replacement of mutilated, destroyed, lost or stolen
Notes, and rights to receive payments of principal of and interest on the Notes,
shall survive the termination of this Indenture.
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Section 4.02 APPLICATION OF TRUST MONEY. All money deposited with the
1999-A Indenture Trustee pursuant to Section 4.01 shall be held in trust in a
segregated non-interest bearing account and applied by the 1999-A Indenture
Trustee, in accordance with the provisions of the Notes and this Indenture, to
the payment, either directly or through any Paying Agent, as the 1999-A
Indenture Trustee may determine, to the Noteholders of the Notes for the payment
or redemption of which such monies have been deposited with the 1999-A Indenture
Trustee, of all sums due and to become due thereon for principal and interest;
but such monies need not be segregated from other funds except to the extent
required herein or in the Servicing Agreement, in the 1999-A Servicing
Supplement or as required by law.
Section 4.03 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection
with the satisfaction and discharge of this Indenture with respect to the Notes,
all monies then held by any Paying Agent other than the 1999-A Indenture Trustee
under the provisions of this Indenture with respect to such Notes shall, upon
demand of the Issuer, be paid to the 1999-A Indenture Trustee to be held and
applied according to Section 3.03 and thereupon such Paying Agent shall be
released from all further liability with respect to such monies.
Section 4.04 DURATION OF POSITION OF 1999-A INDENTURE TRUSTEE FOR BENEFIT
OF NOTEHOLDERS. Notwithstanding (i) the earlier payment in full of all
principal and interest due to the Noteholders under the terms of the Notes of
each Class, (ii) the cancellation of such Notes pursuant to Section 3.01, and
(iii) the discharge of the 1999-A Indenture Trustee's duties hereunder with
respect to such Notes, the 1999-A Indenture Trustee shall continue to act in the
capacity as 1999-A Indenture Trustee hereunder for the benefit of the
Noteholders and the 1999-A Indenture Trustee, for the benefit of the
Noteholders, shall comply with its obligations under Sections 7.01, 9.01 and
9.02 of the 1999-A Servicing Supplement, as appropriate, until such time as all
distributions in respect of the Notes have been paid in full.
ARTICLE FIVE
DEFAULTS AND REMEDIES
Section 5.01 EVENTS OF DEFAULT. "Event of Default", wherever used
herein, means, with respect to the Notes, any one of the following events
(whatever the reason for such Event of Default, and whether it shall be
voluntary or involuntary, or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) default by the Issuer in the payment of any principal of or
interest on any Note for a period of five Business Days after any such
payment is due;
(b) default by the Issuer in the observance or performance in any
material respect of any of its covenants or agreements made in this
Indenture (other than a default specifically otherwise dealt with in this
Section 5.01), or any representation or warranty of the Issuer made in this
Indenture or in any certificate or other writing delivered pursuant hereto
or in connection herewith proving to have been incorrect in any material
respect as of the time when the same shall have been made, and such default
materially and adversely affects the right of the Noteholders and shall
continue uncured, or the
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circumstance or condition in respect of which such representation or
warranty was incorrect shall not have been eliminated or otherwise cured,
for a period of 30 days after there shall have been given, by registered or
certified mail, to the Issuer by the 1999-A Indenture Trustee or to the
Issuer and the 1999-A Indenture Trustee by Noteholders representing at
least a majority of the Outstanding Amount of the Class A Notes (and, after
the Class A Note Balance has been reduced to zero, by Noteholders
representing at least a majority of the Outstanding Amount of the Class B
Notes), a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that
such notice is a "Notice of Default" hereunder;
(c) the filing of a decree or order for relief by a court having
jurisdiction in the premises in respect of the Issuer or all or
substantially all of the 1999-A Securitization Trust Estate in an
involuntary case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator or similar
official of the Issuer or for all or substantially all of the 1999-A
Securitization Trust Estate, or ordering the winding-up or liquidation of
the Issuer's affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days;
(d) the commencement by the Issuer of a voluntary case under any
applicable federal or state bankruptcy, insolvency or other similar law now
or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent
by the Issuer to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar official
of the Issuer or for all or substantially all of the 1999-A Securitization
Trust Estate, or the making by the Issuer of any general assignment for the
benefit of creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by the Issuer
in furtherance of any of the foregoing.
The Issuer shall deliver to a Responsible Officer of the 1999-A Indenture
Trustee, within five days after the occurrence thereof, written notice in the
form of an Officer's Certificate of any event that with the giving of notice and
the lapse of time would become an Event of Default under clause (b) above, its
status and what action the Issuer is taking or proposes to take with respect
thereto.
Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
(a) If an Event of Default pursuant to Section 5.01(a) above should occur
and be continuing, then and in every such case the 1999-A Indenture Trustee or
Noteholders representing not less than a majority of the Outstanding Amount of
the Notes, voting together as a single Class, may declare all the Notes to be
immediately due and payable, by a notice in writing to the Issuer (and to the
1999-A Indenture Trustee if given by Noteholders), and upon any such declaration
the unpaid principal amount of such Notes, together with accrued and unpaid
interest thereon through the date of acceleration, shall become immediately due
and payable. If an Event of Default pursuant to Section 5.01(b) above should
occur and be continuing, then and in every such case the 1999-A Indenture
Trustee or Noteholders
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representing at least a majority of the Outstanding Amount of the Class A Notes
(and, after the Class A Note Balance has been reduced to zero, Noteholders
representing at least a majority of the Outstanding Amount of the Class B
Notes), may declare all the Notes to be immediately due and payable, by a notice
in writing to the Issuer (and to the 1999-A Indenture Trustee if given by
Noteholders), and upon any such declaration the unpaid principal amount of such
Notes, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable. If an Event of Default
pursuant to Section 5.01(c) or (d) above should occur and be continuing, then
and in every such case the Notes shall become immediately due and payable
automatically without the giving of any notice.
(b) At any time after such a declaration of acceleration of maturity
has been made and before a judgment or decree for payment of the money due
has been obtained by the 1999-A Indenture Trustee as hereinafter provided in
this Article, (1) if the Notes have been declared immediately due and payable
in connection with an Event of Default pursuant to Section 5.01(a),
Noteholders representing 100% of the Outstanding Amount of the Notes, voting
together as a single Class, or (2) if the Notes have been declared
immediately due and payable in connection with an Event of Default pursuant
to Section 5.01(b), Noteholders representing at least a majority of the
Outstanding Amount of the Class A Notes (and, after the Class A Note Balance
has been reduced to zero, by Noteholders representing at least a majority of
the Outstanding Amount of the Class B Notes), in either case by written
notice to the Issuer and the 1999-A Indenture Trustee, may rescind and annul
such declaration and its consequences if:
(i) (A) the Issuer has paid or deposited with the 1999-A Indenture
Trustee a sum sufficient to pay:
(1) all payments of principal of and interest on the Notes
and all other amounts that would then be due hereunder or upon
the Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(2) all sums paid or advanced by the 1999-A Indenture
Trustee hereunder and the reasonable compensation and reasonable
and documented expenses, disbursements and advances of the 1999-A
Indenture Trustee, its agents and counsel; and
(B) all Events of Default, other than the nonpayment of the
principal of the Notes that have become due solely by such
acceleration, have been cured or waived as provided in Section 5.12;
or
(ii) the 1999-A Indenture Trustee elects to act in accordance with the
provisions of Section 5.05 with respect to the Event of Default that gave
rise to such declaration.
(c) No such rescission shall affect any subsequent Event of Default or
impair any right consequent thereto.
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Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
1999-A INDENTURE TRUSTEE.
(a) The Issuer covenants that, if an Event of Default of the type
described in Section 5.01(a) shall occur and be continuing and notice shall have
been provided pursuant to Section 5.02(a) (and such Event of Default has not
since been annulled or rescinded pursuant to Section 5.02(b)), the Issuer will,
upon demand of the 1999-A Indenture Trustee in accordance with the provisions of
this Indenture, pay to the 1999-A Indenture Trustee, for the benefit of the
Noteholders, (i) the entire unpaid principal amount of all Notes; (ii) interest
on the entire unpaid principal amount of all Notes and interest on any principal
and accrued interest on such Notes that was not paid when due, at the applicable
Overdue Interest Rate but only to the extent that payments of interest at such
rate shall be legally enforceable; and (iii) in addition thereto, such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation and reasonable and documented expenses,
disbursements and advances of the 1999-A Indenture Trustee and its agents and
counsel.
(b) If the Issuer fails forthwith to pay such amounts upon such demand,
the 1999-A Indenture Trustee, in its own name and as 1999-A Indenture Trustee of
an express trust, may institute a Proceeding for the collection of the sums so
due and unpaid, and may prosecute such Proceeding to judgment or final decree,
and may enforce the same against the Issuer or any other obligor upon the Notes
and collect the monies adjudged or decreed to be payable in the manner provided
by law.
(c) If an Event of Default occurs and is continuing, the 1999-A Indenture
Trustee may, as more particularly provided in Section 5.04, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders by
such appropriate Proceedings as the 1999-A Indenture Trustee shall deem most
effective to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or enforce any other proper remedy.
(d) If there shall be pending, relative to the Issuer or any other obligor
upon the Notes or any Person having or claiming an ownership interest in the
1999-A Securitization Trust Estate, Proceedings under Title 11 of the United
States Bankruptcy Code or any other applicable federal or state bankruptcy,
insolvency or other similar law, or if a receiver, assignee or trustee in
bankruptcy or reorganization, or liquidator, sequestrator or similar official
shall have been appointed for or taken possession of the Issuer or its property
or such other obligor or Person, or any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the 1999-A Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the 1999-A Indenture Trustee shall have made any demand pursuant to the
provisions of this Section 5.03, shall be entitled and empowered, by
intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole amount of
principal and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to
have the claims of the 1999-A
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Indenture Trustee (including any claim for reasonable compensation to the
1999-A Indenture Trustee and each predecessor 1999-A Indenture Trustee, and
their respective agents and counsel, and for reimbursement of all
reasonable and documented expenses and liabilities incurred, and all
advances made, by the 1999-A Indenture Trustee and each predecessor 1999-A
Indenture Trustee, except as a result of such 1999-A Indenture Trustee's or
such predecessor 1999-A Indenture Trustee's negligence, willful misfeasance
or bad faith) and of the Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote on
behalf of the Noteholders in any election of a trustee, a standby trustee
or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to distribute all amounts received
with respect to the claims of the Noteholders and of the 1999-A Indenture
Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the 1999-A
Indenture Trustee or the Noteholders allowed in any Proceedings relative to
the Issuer, its creditors and its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the 1999-A Indenture Trustee and, if the 1999-A Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the 1999-A Indenture Trustee such amounts as shall be sufficient to cover
reasonable compensation and reasonable and documented expenses, disbursements
and advances of the 1999-A Indenture Trustee, each predecessor 1999-A Indenture
Trustee and their respective agents and counsel, and any other Capped Indenture
Trustee Administrative Expenses due the 1999-A Indenture Trustee and any other
Capped Owner Trustee Administrative Expenses due the 1999-A Owner Trustee.
(e) Nothing contained herein shall be deemed to authorize the 1999-A
Indenture Trustee to authorize or consent to or vote for or accept or adopt on
behalf of any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Holder thereof or to
authorize the 1999-A Indenture Trustee to vote in respect of the claim of any
Noteholder in any such Proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the 1999-A Indenture Trustee without
the possession of any of the Notes or the production thereof in any trial or
other Proceedings relative thereto, and any such action or Proceedings
instituted by the 1999-A Indenture Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment, subject to the
payment of reasonable and documented expenses, disbursements and compensation of
the 1999-A Indenture Trustee, each predecessor 1999-A Indenture Trustee and
their respective agents and counsel, shall be for the ratable benefit of the
Noteholders.
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(g) In any Proceedings brought by the 1999-A Indenture Trustee (including
any Proceedings involving the interpretation of any provision of this Indenture
to which the 1999-A Indenture Trustee shall be a party), the 1999-A Indenture
Trustee shall be held to represent all Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
Section 5.04 REMEDIES; PRIORITIES.
(a) If an Event of Default shall have occurred and be continuing, the
1999-A Indenture Trustee may do any one or more of the following (subject to
Sections 5.05 and 5.06):
(i) institute Proceedings in its own name as trustee of an express
trust for the collection of all amounts then payable on the Notes or under
this Indenture, whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and the 1999-A Securitization Trust
Estate monies adjudged due;
(ii) institute Proceedings from time to time for the complete or
partial foreclosure of this Indenture with respect to the 1999-A
Securitization Trust Estate;
(iii) exercise any remedies of a secured party under the UCC or
other applicable law and take any other appropriate action to protect and
enforce the rights and remedies of the 1999-A Indenture Trustee or the
Holders of the Notes hereunder;
(iv) subject to Section 5.14, sell the 1999-A Securitization Trust
Estate or any portion thereof or rights or interest therein at one or more
public or private Sales called and conducted in any manner permitted by
law; and
(v) as provided in Section 6.15 of the 1999-A Securitization Trust
Agreement, direct the 1999-A Owner Trustee with regard to appropriate
actions thereunder.
(b) Except as otherwise provided herein, any money collected by the 1999-A
Indenture Trustee pursuant to this Article Five shall be applied in the order
provided for Principal Collections and Interest Collections in the 1999-A
Securitization Trust Agreement at the date or dates fixed by the 1999-A
Indenture Trustee and, in case of the distribution of the entire amount due on
account of principal of and any interest on the Notes, upon presentation and
surrender thereof; PROVIDED that amounts received upon a Sale (as defined in
Section 5.14) of all or any portion of the 1999-A Securitization Trust Estate
and treated as Principal Collections will be distributed, first, to the Class
A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes, ratably,
without preference or priority of any kind, and, second, to the Class B Notes,
ratably, without preference or priority of any kind, according to such amounts
due and payable on such Notes; and PROVIDED FURTHER that the Servicer, on behalf
of the 1999-A Indenture Trustee, shall determine conclusively without liability
for such determination the amount of the proceeds of such Sale that are
allocable to Interest Collections and the amount of such proceeds that are
allocable to Principal Collections.
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Section 5.05 OPTIONAL PRESERVATION OF TRUST ESTATE. Notwithstanding
anything in this Indenture to the contrary (including Sections 5.11 and 5.14),
if the Notes have been declared due and payable following an Event of Default
and such declaration and its consequences shall not have been rescinded and
annulled, the 1999-A Indenture Trustee may, but need not, elect to maintain
possession of the 1999-A Securitization Trust Estate and apply all amounts
receivable with respect to the 1999-A Securitization Trust Estate to the payment
of principal of and interest on the Notes as and when such principal and
interest would have become due pursuant to the terms of the Notes and the 1999-A
Securitization Documents if there had not been a declaration of acceleration of
the Maturity of the Notes. It is the desire of the parties hereto and the
Noteholders that there be at all times sufficient funds for the payment of
principal of and interest on the Notes, and the 1999-A Indenture Trustee shall
take such desire into account when determining whether to maintain possession of
the 1999-A Securitization Trust Estate. In determining whether to maintain
possession of the 1999-A Securitization Trust Estate, the 1999-A Indenture
Trustee may, but need not, obtain and rely upon an opinion of an Independent
investment banking or accounting firm of national reputation as to the
feasibility of such proposed action and as to the sufficiency of the 1999-A
Securitization Trust Estate for such purpose.
Section 5.06 LIMITATION ON SUITS.
(a) No Noteholder shall have any right to institute any Proceeding,
judicial or otherwise, with respect to this Indenture, or for the appointment of
a receiver or trustee, or for any other remedy hereunder, unless:
(i) such Holder has previously given written notice to the 1999-A
Indenture Trustee of a continuing Event of Default;
(ii) Noteholders representing not less than 25% of the Outstanding
Amount of the Notes, voting together as a single Class, have made written
request to the 1999-A Indenture Trustee to institute such Proceedings in
respect of such Event of Default in its own name as 1999-A Indenture
Trustee hereunder;
(iii) such Holder or Holders have offered to the 1999-A Indenture
Trustee reasonable indemnity against the costs, expenses and liabilities to
be incurred in complying with such request;
(iv) the 1999-A Indenture Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to institute any
such Proceeding; and
(v) no direction inconsistent with such written request has been
given to the 1999-A Indenture Trustee during such 60-day period by
Noteholders representing a majority of the Outstanding Amount of the Notes,
voting together as a single Class;
it being understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing themselves of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Noteholders or to obtain or to seek to obtain
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priority or preference over any other Noteholders (other than the subordination
of the Class B Notes to the extent set forth in the 1999-A Securitization
Documents) or to enforce any right under this Indenture, except in the manner
herein provided.
(b) No Noteholder shall have any right to vote (except as provided in the
1999-A Securitization Documents) or in any manner otherwise control the
operation and management of the 1999-A Securitization Trust, or the obligations
of the parties to any of the 1999-A Securitization Documents, nor shall any
Noteholder be under any liability to any third person by reason of any action
taken pursuant to any provision of the 1999-A Securitization Documents.
However, in connection with any action as to which Noteholders are entitled to
vote or consent under the 1999-A Securitization Documents, the Issuer may set a
record date for purposes of determining the identity of Noteholders entitled to
vote or consent in accordance with TIA Section 316(c).
Section 5.07 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE NOTE
PAYMENTS. Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payments of the principal of and interest, if any, on such Note on or after the
respective due dates therefor as specified in such Note or in this Indenture
(or, in the case of redemption, on or after the Redemption Date) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the 1999-A Indenture
Trustee or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture or any other 1999-A Securitization Document and such
Proceeding has been discontinued or abandoned for any reason, or has been
determined adversely to the 1999-A Indenture Trustee or to such Noteholder, then
and in every such case the Issuer, the 1999-A Indenture Trustee and the
Noteholders shall, subject to any determination in such Proceeding, be restored
severally and respectively to their former positions hereunder, and thereafter
all rights and remedies of the 1999-A Indenture Trustee and the Noteholders
shall continue as though no such Proceeding had been instituted.
Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
expressly provided in Section 2.05, no right or remedy herein conferred upon or
reserved to the 1999-A Indenture Trustee or to the Noteholders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.10 DELAY OR OMISSION NOT WAIVER. No delay or omission of the
1999-A Indenture Trustee or of any Holder of any Note to exercise any right or
remedy accruing upon any Event of Default shall impair any such right or remedy
or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article Five or by law to the 1999-A
Indenture Trustee or to the Noteholders may be exercised from time to
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time, and as often as may be deemed expedient, by the 1999-A Indenture Trustee
or by the Noteholders, as the case may be.
Section 5.11 CONTROL BY NOTEHOLDERS. Subject to the provisions of
Sections 5.06, 6.02(d) and 6.02(e), Noteholders representing a majority of the
Outstanding Amount of the Notes, 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 1999-A Indenture Trustee with respect to the Notes
or with respect to exercising any trust power conferred on the 1999-A Indenture
Trustee, including the 1999-A Indenture Trustee's power to direct the action of
the 1999-A Owner Trustee pursuant to Section 6.15 of the 1999-A Securitization
Trust Agreement; PROVIDED that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture or any other 1999-A Securitization Document;
(b) subject to the terms of Section 5.14, any direction to the 1999-A
Indenture Trustee to sell or liquidate the 1999-A Securitization Trust
Estate shall be made by Noteholders representing not less than a majority
of the Outstanding Amount of the Notes, voting together as a single Class;
(c) if the conditions set forth in Section 5.05 have been satisfied
and the 1999-A Indenture Trustee elects to retain the 1999-A Securitization
Trust Estate pursuant thereto, then any direction to the 1999-A Indenture
Trustee by Noteholders representing less than a majority of the Outstanding
Amount of the Notes, voting together as a single Class, to sell or
liquidate the 1999-A Securitization Trust Estate shall be of no force or
effect; and
(d) the 1999-A Indenture Trustee may take any other action deemed
proper by the 1999-A Indenture Trustee, that is not inconsistent with such
direction.
Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the Maturity of the Notes as provided in Section 5.02,
Noteholders representing at least a majority of the Outstanding Amount of the
Notes, voting together as a single Class, may waive any past Unmatured Event of
Default or Event of Default hereunder and its consequences, except an Unmatured
Event of Default or Event of Default (i) in the payment of principal of or
interest due on any Note, which may only be waived by Noteholders representing
100% of the Outstanding Amount of the Notes, voting together as a single Class,
(ii) in respect of a covenant or provision hereof which under Section 9.02
cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected, which may only be waived by Noteholders representing
100% of the Outstanding Amount of the Notes, voting together as a single Class,
or (iii) of the type described in Section 5.01(b), which, so long as any Class A
Notes are outstanding, may only be waived by Noteholders representing a majority
of the Outstanding Amount of the Class A Notes, and, thereafter, may only be
waived by Noteholders representing a majority of the Outstanding Amount of the
Class B Notes. Upon any such waiver, the Issuer, the 1999-A Indenture Trustee
and the Noteholders shall be restored to their former positions and
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rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Unmatured Event of Default or Event of Default or impair any
right consequent thereto.
Upon any such waiver, such Unmatured Event of Default or Event of Default
shall cease to exist and be deemed to have been cured and not to have occurred,
and any Event of Default arising therefrom shall be deemed to have been cured
and not to have occurred, for every purpose of this Indenture, but no such
waiver shall extend to any subsequent or other Unmatured Event of Default or
Event of Default or impair any right consequent thereto.
Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of a Note by his acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the 1999-A Indenture Trustee for any action taken, suffered or omitted by it as
1999-A Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (i) any suit instituted by
the 1999-A Indenture Trustee, (ii) any suit instituted by any Noteholder, or
group of Noteholders, in each case holding in the aggregate Notes representing
more than 10% of the Outstanding Amount of the Notes, voting together as a
single Class, or (iii) any suit instituted by any Noteholder for the enforcement
of the payment of the principal of or interest on any Note on or after the
Maturity of such Note (or, in the case of redemption, on or after the Redemption
Date).
Section 5.14 SALE OF TRUST ESTATE.
(a) If an Event of Default shall have occurred and be continuing, the
1999-A Indenture Trustee may, and, subject to Section 5.14(b), upon receipt
of a notice from Noteholders representing a majority of the Outstanding
Amount of the Class A Notes or from Noteholders representing a majority of
the Outstanding Amount of the Notes (voting together as a single Class),
shall publish a notice in the Authorized Newspaper that the 1999-A Indenture
Trustee intends to sell, dispose of or otherwise liquidate (a "Sale") the
1999-A SUBI Interest, the 1999-A SUBI Certificates and the other property of
the 1999-A Securitization Trust Estate in a commercially reasonable manner.
Following such publication, the 1999-A Indenture Trustee shall, unless
otherwise prohibited by applicable law from any such action, sell, dispose
of, or otherwise liquidate the 1999-A SUBI Interest, the 1999-A SUBI
Certificates and the other property of the 1999-A Securitization Trust
Estate, in a commercially reasonable manner and on commercially reasonable
terms, which shall include the solicitation of competitive bids, and shall
proceed to consummate the Sale thereof as provided above with the highest
bidder. The Transferors and the Servicer shall be permitted to bid for the
1999-A Securitization Trust Estate. The 1999-A Indenture Trustee may obtain
a prior determination from the conservator, receiver or trustee in bankruptcy
of the Issuer that the terms and manner of any proposed Sale are commercially
reasonable. The power to effect any Sale of any portion of the 1999-A
Securitization Trust Estate pursuant to Section 5.04 and this Section 5.14
shall not be exhausted by any one or more Sales as to any portion of such
1999-A Securitization Trust Estate remaining unsold, but shall continue
unimpaired until the entire 1999-A Securitization Trust Estate shall
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have been sold or all amounts payable on the Notes and under this Indenture
shall have been paid. The 1999-A Indenture Trustee may from time to time
postpone any Sale by public announcement made at the time and place of such
Sale.
(b) Notwithstanding the foregoing, the 1999-A Indenture Trustee shall not
sell or otherwise dispose of the 1999-A Securitization Trust Estate following an
Event of Default (i) unless the anticipated proceeds of such Sale or other
disposition distributable to the Noteholders will be sufficient to discharge in
full the amounts then due and unpaid upon the Notes for principal and interest,
or (ii) if such proceeds will not be sufficient, unless the 1999-A Indenture
Trustee obtains the consent of the Holders of all Notes then Outstanding,
provided that without the consent or direction to the contrary by the Holders of
all Notes then Outstanding, at any Sale at which no other Person bids an amount
equal to or greater than the amount described in clause (i) above, the 1999-A
Indenture Trustee shall bid on behalf of the Noteholders an amount at least
equal to $1.00 more than the highest other bid.
(c) The 1999-A Indenture Trustee may bid for and acquire any portion of
the 1999-A Securitization Trust Estate in connection with a Sale thereof, and
may pay all or part of the purchase price by crediting against amounts owing on
the Notes or other amounts secured by this Indenture, all or part of the net
proceeds of such Sale after deducting reasonable and documented costs, charges
and expenses incurred by the 1999-A Indenture Trustee in connection with such
Sale, notwithstanding the provisions of any other Section hereof. The Notes
need not be produced in order to complete any such Sale. The 1999-A Indenture
Trustee may, subject to the provisions of this Indenture and the other 1999-A
Securitization Documents, hold, lease, operate, manage or otherwise deal with
any property so acquired in any manner permitted by law.
(d) The 1999-A Indenture Trustee shall execute and deliver an appropriate
instrument of conveyance transferring its interest in any portion of the 1999-A
Securitization Trust Estate in connection with a Sale thereof. In addition, the
1999-A Indenture Trustee is hereby irrevocably appointed the agent and
attorney-in-fact of the Issuer to transfer and convey its interest in any
portion of the 1999-A Securitization Trust Estate in connection with a Sale
thereof (including changing the designation of the secured party on any
financing or continuation statements), and to take all action necessary to
effect such Sale. No purchaser or transferee at such a Sale shall be bound to
ascertain the 1999-A Indenture Trustee's authority, inquire into the
satisfaction of any conditions precedent or see to the application of any
monies.
Section 5.15 ACTION ON NOTES. The 1999-A Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the Lien of this Indenture nor any
rights or remedies of the 1999-A Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the 1999-A Indenture Trustee against
the Issuer or by the levy of any execution under such judgment upon any portion
of the 1999-A Securitization Trust Estate or upon any of the assets of the
Issuer. Any money or property collected by the 1999-A Indenture Trustee shall
be applied in accordance with Section 5.04.
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ARTICLE SIX
THE 1999-A INDENTURE TRUSTEE
Section 6.01 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) If an Event of Default shall have occurred and be continuing, the
1999-A Indenture Trustee shall exercise the rights and powers vested in it by
this Indenture and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct of
such person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the 1999-A Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this Indenture and,
pursuant to clause (f) below, the other 1999-A Securitization Documents;
and
(ii) in the absence of bad faith on its part, or as otherwise required
by the TIA, the 1999-A Indenture Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates, opinions or reports furnished to the 1999-A
Indenture Trustee and conforming to the requirements of this Indenture;
PROVIDED, HOWEVER, the 1999-A Indenture Trustee shall examine the same to
determine whether they conform to the requirements of this Indenture.
(c) The 1999-A Indenture Trustee may not be relieved from liability for
its own negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this subsection shall not be construed to limit the effect of
Section 6.01(b);
(ii) the 1999-A Indenture Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer, unless it shall be
proved that the 1999-A Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the 1999-A Indenture Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with a direction received by it pursuant to Section 5.11.
(d) No provision of this Indenture shall require the 1999-A Indenture
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such risk
or liability is not reasonably assured to it.
(e) Whether or not expressly provided therein, every provision of this
Indenture relating to the conduct or affecting the liability of and affording
protection to the 1999-A Indenture Trustee shall be subject to the provisions of
this Section 6.01.
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(f) The 1999-A Indenture Trustee agrees to comply with all of the
provisions of and to perform all of the obligations under the Origination Trust
Agreement, the Servicing Agreement, the 1999-A SUBI Supplement, the 1999-A
Servicing Supplement, the Backup Security Agreement and each other 1999-A
Securitization Document required to be complied with or performed by the 1999-A
Indenture Trustee, whether or not the 1999-A Indenture Trustee is expressly a
party thereto.
Section 6.02 RIGHTS OF 1999-A INDENTURE TRUSTEE.
(a) Except as otherwise provided in the second succeeding sentence, the
1999-A Indenture Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The 1999-A Indenture
Trustee need not investigate any fact or matter stated in the document.
Notwithstanding the foregoing, the 1999-A Indenture Trustee, upon receipt of all
resolutions, certificates, statements, opinions, reports, documents, orders or
other instruments furnished to the 1999-A Indenture Trustee that shall be
specifically required to be furnished pursuant to any provision of this
Indenture, shall examine them to determine whether they comply as to form to the
requirements of this Indenture.
(b) Before the 1999-A Indenture Trustee acts or refrains from acting, it
may require an Officer's Certificate or an Opinion of Counsel. The 1999-A
Indenture Trustee shall not be liable for any action it takes or omits to take
in good faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The 1999-A Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the 1999-A Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The 1999-A Indenture Trustee shall not be liable for any action it
takes or omits to take in good faith that it believes to be authorized or within
its rights or powers, provided that the 1999-A Indenture Trustee's conduct does
not constitute willful misfeasance, negligence or bad faith.
(e) The 1999-A Indenture Trustee may consult with counsel, and the advice
or opinion of counsel with respect to legal matters relating to this Indenture
and the Notes shall be full and complete authorization and protection from
liability with respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
Section 6.03 1999-A INDENTURE TRUSTEE MAY HOLD NOTES. The 1999-A
Indenture Trustee in its individual or any other capacity may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not the 1999-A Indenture Trustee.
Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the
same with like rights. However, the 1999-A Indenture Trustee must comply with
Sections 6.11 and 6.12.
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Section 6.04 1999-A INDENTURE TRUSTEE'S DISCLAIMER. The recitals
contained herein and in the Notes, except the certificates of authentication on
the Notes, shall be taken as the statements of the Issuer, and the 1999-A
Indenture Trustee assumes no responsibility for their correctness. The 1999-A
Indenture Trustee makes no representations as to the validity or sufficiency of
this Indenture or of the Notes. The 1999-A Indenture Trustee shall not be
accountable for the use or application by the Issuer of Notes or the proceeds
thereof.
Section 6.05 NOTICE OF UNMATURED EVENT OF DEFAULT. If an Unmatured Event
of Default occurs and is continuing and if it is known to a Responsible Officer
of the 1999-A Indenture Trustee, the 1999-A Indenture Trustee shall mail to each
Noteholder notice of such Unmatured Event of Default within 90 days after it
occurs. Except in the case of an Unmatured Event of Default in payment of
principal of or interest on any Note, the 1999-A Indenture Trustee may withhold
the notice if and so long as a committee of its Responsible Officers of the
1999-A Indenture Trustee in good faith determines that withholding the notice is
in the interests of the Noteholders.
Section 6.06 REPORTS BY 1999-A INDENTURE TRUSTEE TO HOLDERS. The 1999-A
Indenture Trustee shall deliver or cause to be delivered to each Noteholder such
information as may be required to enable such Holder to prepare its federal and
state income tax returns.
Section 6.07 1999-A INDENTURE TRUSTEE'S FEES AND EXPENSES.
(a) The 1999-A Indenture Trustee shall be entitled to reasonable
compensation for all services rendered by it pursuant to the 1999-A
Securitization Documents and in the exercise and performance of any of the
powers and duties of the 1999-A Indenture Trustee under this Indenture, and
payment or reimbursement upon its request for all reasonable expenses,
disbursements and advances incurred or made by the 1999-A Indenture Trustee in
its capacity as 1999-A Indenture Trustee in accordance with any of the
provisions of this Indenture and the 1999-A Securitization Documents (including
the reasonable compensation and reasonable and documented expenses and
disbursements of its counsel and of all persons not regularly in its employ)
except any such expense, disbursement or advance as may arise from its
negligence, willful misfeasance or bad faith or that is the responsibility of
HTC LP, HTD LP or the Issuer under the 1999-A Securitization Documents. Such
compensation and reimbursement shall be paid as set forth in Section 3.03 of the
1999-A Securitization Trust Agreement. Additionally, HTC LP and HTD LP may
agree to indemnify the 1999-A Indenture Trustee under certain circumstances.
(b) The 1999-A Indenture Trustee shall not institute any Proceeding, or
make any filing, on account of the Issuer failing to perform its obligations
under this Section 6.07 that might result, with the giving of notice or the
passage of time or both, in the occurrence of any Event of Default specified in
Sections 5.01(c) or 5.01(d). Notwithstanding the failure of the Issuer to
perform any of its obligations under this Section 6.07, the 1999-A Indenture
Trustee shall continue to perform its obligations under this Indenture.
(c) Prior to the termination of this Indenture, the obligations of the
1999-A Indenture Trustee hereunder shall not be subject to any defense,
counterclaim or right of offset that the
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1999-A Indenture Trustee in its individual capacity has or may have against the
Issuer, HTC LP, HTD LP or the Servicer, whether in respect of this Indenture,
the Notes, the 1999-A Securitization Documents or otherwise, and the 1999-A
Indenture Trustee hereby waives all statutory and common law rights of setoff or
banker's lien against the Issuer or any of its assets that the 1999-A Indenture
Trustee may have in any capacity other than on behalf of the Noteholders,
including all rights under UCC Section 9-306(4)(d) as enacted in the State of
New York.
(d) The Issuer shall indemnify or shall cause the Servicer to indemnify
the 1999-A Indenture Trustee against any and all loss, liability or expense
(including attorneys' fees) incurred by it in connection with the administration
of this trust and the performance of its duties hereunder. The 1999-A Indenture
Trustee shall notify the Issuer and the Servicer promptly of any claim for which
it may seek indemnity. Failure by the 1999-A Indenture Trustee to so notify the
Issuer and the Servicer shall not relieve the Issuer or the Servicer of its
obligations hereunder. The Issuer shall defend or shall cause the Servicer to
defend any such claim, and the 1999-A Indenture Trustee may have separate
counsel and the Issuer shall pay or shall cause the Servicer to pay the fees and
expenses of such counsel. Neither the Issuer nor the Servicer need indemnify
against any loss, liability or expense incurred by the 1999-A Indenture Trustee
through the Indenture Trustee's own willful misconduct, negligence or bad faith.
Section 6.08 REPLACEMENT OF 1999-A INDENTURE TRUSTEE.
(a) No resignation or removal of the 1999-A Indenture Trustee and no
appointment of a successor 1999-A Indenture Trustee shall become effective until
the acceptance of appointment by a successor 1999-A Indenture Trustee pursuant
to this Section 6.08. The 1999-A Indenture Trustee may resign at any time by so
notifying the Issuer upon 30 days' notice. Noteholders representing a majority
of the Outstanding Amount of the Notes, voting together as a single Class, may
remove the 1999-A Indenture Trustee at any time and appoint a successor 1999-A
Indenture Trustee by so notifying the 1999-A Indenture Trustee. The Issuer
shall remove the 1999-A Indenture Trustee if:
(i) the 1999-A Indenture Trustee fails to comply with Section 6.11;
(ii) a court having jurisdiction in the premises in respect of the
1999-A Indenture Trustee in an involuntary case or Proceeding under federal
or state banking or bankruptcy laws, as now or hereafter constituted, or
any other applicable federal or state bankruptcy, insolvency or other
similar law, shall have entered a decree or order granting relief or
appointing a receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator (or similar official) for the 1999-A Indenture
Trustee or for any substantial part of the 1999-A Indenture Trustee's
property, or ordering the winding-up or liquidation of the 1999-A Indenture
Trustee's affairs, provided any such decree or order shall have continued
unstayed and in effect for a period of 30 consecutive days;
(iii) the 1999-A Indenture Trustee commences a voluntary case
under any federal or state banking or bankruptcy laws, as now or hereafter
constituted, or any other applicable federal or state bankruptcy,
insolvency or other similar law, or consents to the
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appointment of or taking possession by a receiver, liquidator, assignee,
custodian, trustee, conservator, sequestrator or other similar official for
the 1999-A Indenture Trustee or for any substantial part of the 1999-A
Indenture Trustee's property, or makes any assignment for the benefit of
creditors or fails generally to pay its debts as such debts become due or
takes any corporate action in furtherance of any of the foregoing; or
(iv) the 1999-A Indenture Trustee otherwise becomes incapable of
acting.
If the 1999-A Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the 1999-A Indenture Trustee for any reason (the 1999-A Indenture
Trustee in such event being referred to herein as the retiring 1999-A Indenture
Trustee), the Issuer shall promptly appoint a successor 1999-A Indenture
Trustee, which successor 1999-A Indenture Trustee shall not accept its
appointment unless at the time of such acceptance such successor 1999-A
Indenture Trustee shall be qualified and eligible under this Article Six.
A successor 1999-A Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring 1999-A Indenture Trustee and to the Issuer.
Thereupon the resignation or removal of the retiring 1999-A Indenture Trustee
shall become effective, and the successor 1999-A Indenture Trustee shall have
all the rights, powers and duties of the 1999-A Indenture Trustee under this
Indenture. The successor 1999-A Indenture Trustee shall mail a notice of its
succession to the Noteholders. The retiring 1999-A Indenture Trustee shall
promptly transfer all property held by it as 1999-A Indenture Trustee to the
successor 1999-A Indenture Trustee.
If a successor 1999-A Indenture Trustee does not take office within 60 days
after the retiring 1999-A Indenture Trustee resigns or is removed, the retiring
1999-A Indenture Trustee, the Issuer or Noteholders representing at least a
majority of the Outstanding Amount of the Notes, voting together as a single
Class, may petition any court of competent jurisdiction for the appointment of a
successor 1999-A Indenture Trustee.
If the 1999-A Indenture Trustee fails to comply with Section 6.11, any
Noteholder may petition any court of competent jurisdiction for the removal of
the 1999-A Indenture Trustee and the appointment of a successor 1999-A Indenture
Trustee.
Any resignation or removal of the 1999-A Indenture Trustee and appointment
of a successor 1999-A Indenture Trustee pursuant to the provisions of this
Section 6.08 shall not become effective until acceptance of appointment by the
successor 1999-A Indenture Trustee pursuant to this Section 6.08 and payment of
all reasonable and documented fees and expenses owed to the outgoing 1999-A
Indenture Trustee. Notwithstanding the replacement of the 1999-A Indenture
Trustee pursuant to this Section 6.08, the Issuer's and the Administrator's
obligations under Section 6.07 shall continue for the benefit of the retiring
1999-A Indenture Trustee.
Section 6.09 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS
OF 1999-A INDENTURE TRUSTEE. If the 1999-A Indenture Trustee consolidates or
merges with, or converts or transfers all or substantially all its corporate
trust business or assets to, another corporation or banking association, the
resulting, surviving or transferee corporation shall, without any further
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act, be the successor 1999-A Indenture Trustee; PROVIDED that such corporation
or banking association shall be otherwise qualified and eligible under
Section 6.11. The 1999-A Indenture Trustee shall deliver to each Rating Agency
prior written notice of any such transaction.
If at the time such successor or successors by merger, conversion or
consolidation to the 1999-A Indenture Trustee shall succeed to the trusts
created by this Indenture any of the Notes shall have been authenticated but not
delivered, any such successor to the 1999-A Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee and deliver such Notes
so authenticated; and if at that time any of the Notes shall not have been
authenticated, any successor to the 1999-A Indenture Trustee may authenticate
such Notes either in the name of any predecessor hereunder or in the name of the
successor to the 1999-A Indenture Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Notes or in
this Indenture provided that the certificate of the 1999-A Indenture Trustee
shall have.
Section 6.10 CO-TRUSTEE OR SEPARATE TRUSTEE.
(a) Notwithstanding any other provision of this Indenture, at any time,
for the purpose of meeting any legal requirement of any jurisdiction in which
any part of the 1999-A Securitization Trust Estate may at the time be located,
the 1999-A Indenture Trustee and the Administrator, acting jointly, shall have
the power and may execute and deliver all instruments to appoint one or more
Persons to act as a co-trustee or co-trustees, or separate trustee or separate
trustees, of all or any part of the 1999-A Securitization Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the Noteholders,
such title to the 1999-A Securitization Trust Estate or any part thereof, and,
subject to the other provisions of this Section 6.10, such powers, duties,
obligations, rights and trusts as the 1999-A Indenture Trustee may consider
necessary or desirable. If the Administrator shall not have joined in such
appointment within 15 days after its receipt of a request to do so, the 1999-A
Indenture Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.08.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:
(i) all rights, powers, duties and obligations conferred or imposed
upon the 1999-A Indenture Trustee shall be conferred or imposed upon and
exercised or performed by the 1999-A Indenture Trustee and such separate
trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the
1999-A Indenture Trustee joining in such act), except to the extent that
under any law of any jurisdiction in which any particular act or acts are
to be performed the 1999-A Indenture Trustee shall be incompetent or
unqualified to perform such act or acts, in which event such rights,
powers, duties and obligations (including the holding of title to the Trust
Estate 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 1999-A Indenture Trustee;
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(ii) no trustee hereunder shall be personally liable by reason of
any act or omission of any other trustee hereunder; and
(iii) the 1999-A Indenture Trustee and the Administrator may at
any time accept the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the 1999-A Indenture
Trustee shall be deemed to have been given to each of the then separate trustees
and co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article Six. 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
1999-A Indenture Trustee or separately, as may be provided therein, subject to
all the provisions of this Indenture, specifically including every provision of
this Indenture relating to the conduct of, affecting the liability of, or
affording protection to, the 1999-A Indenture Trustee. Every such instrument
shall be filed with the 1999-A Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
1999-A Indenture Trustee, its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in
respect of this Indenture on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the 1999-A Indenture Trustee, to the extent permitted by
law, without the appointment of a new or successor trustee.
Section 6.11 ELIGIBILITY; DISQUALIFICATION.
(a) The 1999-A Indenture Trustee shall at all times satisfy the
requirements of TIA Section 310(a). The 1999-A Indenture Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition, and the time deposits of the 1999-A
Indenture Trustee shall be rated at least A-1 by Standard & Poor's, [____] by
Fitch and Prime-1 by Moody's. The 1999-A Indenture Trustee shall comply with
TIA Section 310(b), including the optional provision permitted by the second
sentence of TIA Section 310(b)(9); PROVIDED, HOWEVER, that there shall be
excluded from the operation of TIA Section 310(b)(1) any indenture or indentures
under which other securities of the Issuer are outstanding if the requirements
for such exclusion set forth in TIA Section 310(b)(1) are met.
(b) Neither the Issuer nor any Affiliate thereof may serve as 1999-A
Indenture Trustee.
Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE ISSUER. The
1999-A Indenture Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). Any 1999-A Indenture
Trustee who has resigned or been removed shall be subject to TIA Section 311(a)
to the extent indicated therein.
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Section 6.13 MONEY HELD IN TRUST. Money held by the 1999-A Indenture
Trustee in trust hereunder need not be segregated from other funds except to the
extent required by this Indenture or by law. The 1999-A Indenture Trustee shall
be under no liability for interest on any money received by it hereunder except
as otherwise agreed with the Issuer and except to the extent of income or other
gain on investments that are obligations of the 1999-A Indenture Trustee and
income or other gain actually received by the 1999-A Indenture Trustee on
Eligible Investments with respect to the 1999-A Note Distribution Account.
Section 6.14 CESSATION OF ELIGIBILITY. If at any time the 1999-A
Indenture Trustee shall cease to be eligible in accordance with the provisions
of Section 6.11, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article Six.
Section 6.15 AUTHENTICATING AGENT. Upon the request of the Issuer, the
1999-A Indenture Trustee shall appoint an Authenticating Agent with power to act
on its behalf and subject to its direction in the authentication and delivery of
the Notes designated for such authentication by the Issuer and containing
provisions therein for such authentication (or with respect to which the Issuer
has made other arrangements, satisfactory to the 1999-A Indenture Trustee and
such Authenticating Agent, for notation on the Notes of the authority of an
Authenticating Agent appointed after the initial authentication and delivery of
such Notes) in connection with transfers and exchanges of Notes under Sections
2.04 and 2.05, as fully to all intents and purposes as though the Authenticating
Agent had been expressly authorized by those Sections to authenticate and
deliver Notes. For all purposes of this Indenture, the authentication and
delivery of Notes by the Authenticating Agent pursuant to this Section 6.15
shall be deemed to be the authentication and delivery of Notes by the 1999-A
Indenture Trustee. Such Authenticating Agent shall at all times be a Person
that meets the requirements of Section 6.08 for the 1999-A Indenture Trustee
hereunder.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of the Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.15, without the execution or filing of any further act on the part of
the parties hereto or the Authenticating Agent or such successor corporation.
Any Authenticating Agent may at any time resign by giving 30 days' written
notice of resignation to the 1999-A Indenture Trustee and the Issuer. The
1999-A Indenture Trustee may at any time terminate the agency of any
Authenticating Agent by giving written notice of termination to such
Authenticating Agent and the Issuer. Upon receiving such a notice of
resignation or upon such a termination, or if at any time any Authenticating
Agent shall cease to be eligible under this Section 6.15, the 1999-A Indenture
Trustee may promptly appoint a successor Authenticating Agent, shall give
written notice of such appointment to the Issuer and shall mail notice of such
appointment to all Noteholders as the names and addresses of such Holders appear
on the Note Register.
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The 1999-A Indenture Trustee agrees to pay to the Authenticating Agent from
time to time reasonable compensation for its services and the 1999-A Indenture
Trustee shall be entitled to be reimbursed for such payments, subject to Section
6.07. The provisions of Sections 2.09, 6.04 and 6.05 shall be applicable to any
Authenticating Agent.
Section 6.16 WITHHOLDING TAXES. Whenever it is acting as a Paying Agent
for the Notes, the 1999-A Indenture Trustee shall comply with all requirements
of the Code, and all regulations thereunder, with respect to the withholding
from any payments made on such Notes of any withholding taxes imposed thereon
and with respect to any reporting requirements in connection therewith.
Section 6.17 NO PETITION. The 1999-A Indenture Trustee covenants and
agrees that prior to the date which is one year and one day after the last date
upon which (a) each Class of Notes and the Certificates has been paid in full,
and (b) all obligations due under any other Securitization have been paid in
full, it will not institute against, or join any other Person in instituting
against, the Issuer, HTA LP, HTB LP, HTC LP, HTD LP, any general partner or
member (as applicable) of a UTI Beneficiary or of a Transferor which is a
partnership or a limited liability company, the Origination Trustee, the
Origination Trust, any Special Purpose Affiliate, any UTI Beneficiary, any
Beneficiary, and any general partner or member (as applicable) of a Beneficiary
or of a Special Purpose Affiliate partnership (or any of their respective
general partners) that is a partnership or a limited liability company, any
bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or
other proceedings under any federal or state bankruptcy or similar law. The
foregoing shall not limit the 1999-A Indenture Trustee's or 1999-A Owner
Trustee's right to file any claim in or otherwise take actions with respect to
any such proceeding instituted by any Person not under such a constraint. This
Section 6.17 shall survive the termination of this Indenture or the resignation
or removal of the 1999-A Owner Trustee or the 1999-A Indenture Trustee under the
1999-A Securitization Trust Agreement or this Indenture, respectively.
Section 6.18 REPRESENTATIONS AND WARRANTIES OF 1999-A INDENTURE TRUSTEE.
The 1999-A Indenture Trustee hereby makes the following representations and
warranties on which the Issuer and Noteholders shall rely:
(i) it is a national banking association duly organized, validly
existing and in good standing under the laws of its place of incorporation;
and
(ii) it has full power, authority and legal right to execute, deliver,
and perform this Indenture and has taken all necessary action to authorize
the execution, delivery and performance by it of this Indenture.
Section 6.19 PENNSYLVANIA MOTOR VEHICLE SALES FINANCE ACT LICENSES. The
1999-A Indenture Trustee shall use its best efforts to maintain the
effectiveness of all licenses required under the Pennsylvania Motor Vehicle
Sales Finance Act in connection with this Indenture and the transactions
contemplated hereby until the Lien and security interest of this Indenture shall
no longer be in effect in accordance with the terms hereof.
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ARTICLE SEVEN
NOTEHOLDERS' LISTS AND REPORTS
Section 7.01 ISSUER TO FURNISH 1999-A INDENTURE TRUSTEE NAMES AND
ADDRESSES OF NOTEHOLDERS. If Definitive Notes are issued, the Issuer will
furnish or cause to be furnished to the 1999-A Indenture Trustee (i) not more
than five days after the earlier of (a) each Record Date and (b) three months
after the last Record Date, a list, in such form as the 1999-A Indenture Trustee
may reasonably require, of the names and addresses of the Noteholders as of such
Record Date, and (ii) at such other times as the 1999-A Indenture Trustee may
request in writing, within 30 days after receipt by the Issuer of any such
request, a list of similar form and content as of a date not more than ten days
prior to the time such list is furnished; PROVIDED, HOWEVER, that so long as the
1999-A Indenture Trustee is the Note Registrar, no such list shall be required
to be furnished.
Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO NOTEHOLDERS.
(a) The 1999-A Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of Noteholders contained in
the most recent list furnished to the 1999-A Indenture Trustee as provided in
Section 7.01 and the names and addresses of Noteholders received by the 1999-A
Indenture Trustee in its capacity as Note Registrar. The 1999-A Indenture
Trustee may destroy any list furnished to it as provided in said Section 7.01
upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes.
(c) The Issuer, the 1999-A Indenture Trustee and the Note Registrar shall
have the protection of TIA Section 312(c).
(d) The 1999-A Indenture Trustee will provide to Noteholders the report to
Securityholders as set forth in Section 3.05 of the 1999-A Securitization Trust
Agreement and the reports, certificates, opinions and documents specified in
Section 3.05 of the 1999-A Securitization Trust Agreement upon written request
to the 1999-A Indenture Trustee.
Section 7.03 REPORTS BY 1999-A INDENTURE TRUSTEE; RESPONSES TO NOTEHOLDER
INQUIRIES.
(a) If required by TIA Section 313(a), within 60 days after each
December 15, beginning with December 15, 1999, the 1999-A Indenture Trustee
shall mail to each Noteholder as required by TIA Section 313(c) a brief report
dated as of such date that complies with TIA Section 313(a). The 1999-A
Indenture Trustee also shall comply with TIA Section 313(b).
(b) A copy of each such report at the time of its mailing to Noteholders
shall be filed by the 1999-A Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The Issuer will notify
the 1999-A Indenture Trustee when the Notes are listed on any stock exchange.
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(c) Copies of the above reports need not be mailed to Noteholders who have
previously requested that they not receive copies of such reports.
Section 7.04 REPORTS BY THE ISSUER.
(a) The Issuer shall:
(i) file with the 1999-A Indenture Trustee, within 15 days after
the Issuer is required to file the same with the Commission, copies of the
annual reports and of the information, documents and other reports (or
copies of such portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the Issuer may be
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the 1999-A Indenture Trustee and the Commission in
accordance with rules and regulations prescribed from time to time by the
Commission such additional information, documents and reports with respect
to compliance by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(iii) supply to the 1999-A Indenture Trustee (and the 1999-A
Indenture Trustee shall transmit by mail to all Noteholders described in
TIA Section 313(c)) such summaries of any information, documents and
reports required to be filed by the Issuer pursuant to clauses (i) and (ii)
of this Section 7.04(a) and by rules and regulations prescribed from time
to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on March 31 of each year.
ARTICLE EIGHT
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01 COLLECTION OF MONIES. Except as otherwise expressly
provided herein or in the 1999-A Securitization Documents, the 1999-A Indenture
Trustee may demand payment or delivery of, and shall receive and collect,
directly and without intervention or assistance of any fiscal agent or other
intermediary, all money and other property payable to or receivable by the
1999-A Indenture Trustee pursuant to this Indenture and the other 1999-A
Securitization Documents. The 1999-A Indenture Trustee shall hold all such
money and property received by it as part of the 1999-A Securitization Trust
Estate, and shall apply them as provided in this Indenture. Except as otherwise
expressly provided in this Indenture, if any default occurs in the making of any
payment or performance under any agreement or instrument that is part of the
1999-A Securitization Trust Estate, the 1999-A Indenture Trustee may take such
action as may be appropriate to enforce such payment or performance, including
the institution and prosecution of appropriate Proceedings. Any such action
shall be without prejudice to any right to claim an Unmatured Event of Default
or Event of Default under this Indenture and to proceed thereafter as provided
in Article Five.
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Section 8.02 Trust Accounts.
(a) On or prior to the Closing Date, in accordance with Section 3.04(a) of
the 1999-A Securitization Trust Agreement, HTC LP and HTD LP shall establish and
maintain with and in the name of the 1999-A Indenture Trustee an Eligible
Account which is designated as the "Reserve Fund". The Reserve Fund shall be
held for the benefit of HTC LP, HTD LP and the Noteholders, and shall bear a
designation clearly indicating that the funds on deposit therein are held for
the benefit of HTC LP, HTD LP and the Noteholders. The Reserve Fund shall be
under the sole dominion and control of the 1999-A Indenture Trustee.
(b) On or prior to the Closing Date, in accordance with Section 3.01(a) of
the 1999-A Securitization Trust Agreement, an Eligible Account shall be
established, which account shall be designated as the "1999-A Note Distribution
Account". The 1999-A Note Distribution Account shall be held for the benefit of
Noteholders, and shall bear a designation clearly indicating that the funds on
deposit therein are held for the benefit of the Noteholders. The 1999-A Note
Distribution Account shall be under the sole dominion and control of the 1999-A
Indenture Trustee.
(c) On each Distribution Date or Redemption Date, from the amounts on
deposit in the 1999-A Note Distribution Account, the 1999-A Indenture Trustee
shall duly and punctually distribute payments of principal of and interest on
the Notes in the order and priority set forth in Section 3.03 of the 1999-A
Securitization Trust Agreement, by check mailed to the Person whose name appears
as the registered holder of a Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on the related Record Date, except
that, with respect to Notes registered on the Record Date in the name of the
nominee of DTC (initially, such nominee to be Cede), payments will be made by
wire transfer in immediately available funds to the account designated by such
nominee. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable
Record Date without requiring that the Note be submitted for notation of
payment. Any reduction in the principal amount of any Note (or any one or more
Predecessor Notes) affected by any payments made on any Distribution Date or
Redemption Date shall be binding upon all future holders of any Note issued upon
the registration of transfer thereof or in exchange thereof or in lieu thereof,
whether or not noted thereon. Amounts properly withheld under the Code by any
Person from payment to any Noteholder of interest or principal shall be
considered to have been paid by the 1999-A Indenture Trustee to such Noteholder
for purposes of this Indenture. If funds are expected to be available, pursuant
to the notice delivered to the 1999-A Indenture Trustee, for payment in full of
the remaining unpaid principal amount of the Notes on a Distribution Date or
Redemption Date, then the 1999-A Indenture Trustee, in the name of and on behalf
of the Issuer, will notify each Person who was the registered holder of a Note
as of the Record Date preceding the most recent Distribution Date or Redemption
Date by notice mailed within thirty days of such Distribution Date or Redemption
Date and the amount then due and payable shall be payable only upon presentation
and surrender of the Note at the Corporate Trust Office of the 1999-A Indenture
Trustee or at the office of the 1999-A Indenture Trustee's agent appointed for
such purposes located in The City of New York.
Section 8.03 GENERAL PROVISIONS REGARDING THE 1999-A SUBI ACCOUNTS.
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(a) All monies deposited from time to time in the 1999-A SUBI Accounts
(excluding the 1999-A Certificate Distribution Account) and the Reserve Fund
pursuant to this Indenture, the 1999-A Securitization Trust Agreement, the
1999-A SUBI Supplement, or the 1999-A Servicing Supplement shall be held by the
1999-A Indenture Trustee as part of the Collateral and shall be applied for the
purposes set forth in the 1999-A Securitization Documents. Other than as
expressly provided for in this Indenture or the other 1999-A Securitization
Documents, neither the Issuer nor the Servicer shall have any claim upon or
rights in the 1999-A SUBI Accounts (excluding the 1999-A Certificate
Distribution Account) or the deposits therein or any right to cause the
withdrawal of funds therefrom. So long as no Event of Default shall have
occurred and be continuing, but subject to the remaining provisions of this
Section 8.03, all or a portion of the funds in the 1999-A SUBI Accounts
(excluding the 1999-A Certificate Distribution Account) and the Reserve Fund
shall be separately invested and reinvested by the 1999-A Indenture Trustee at
the Servicer's direction in one or more Eligible Investments. All income, gain
or loss from investment of monies deposited in the 1999-A SUBI Accounts shall be
credited or debited, as applicable, in accordance with Section 13.04 of the
1999-A SUBI Supplement.
(b) Absent negligence, willful misfeasance or bad faith on its part, the
1999-A Indenture Trustee shall not in any way be held liable by reason of any
insufficiency in any 1999-A SUBI Accounts or the Reserve Fund resulting from any
loss on any Eligible Investment included therein, except for losses attributable
to the 1999-A Indenture Trustee's failure to make payments on any such Eligible
Investments issued by the 1999-A Indenture Trustee in its commercial capacity as
principal obligor and not as trustee, in accordance with their terms.
(c) All investments of funds in any 1999-A SUBI Accounts (excluding the
1999-A Certificate Distribution Account) and the Reserve Fund and all sales of
Eligible Investments held in any such 1999-A SUBI Accounts (excluding the 1999-A
Certificate Distribution Account) and the Reserve Fund shall, except as
otherwise expressly provided in this Indenture, be made by the 1999-A Indenture
Trustee as directed by the Servicer. Such direction may specify specific
actions or may be a general, standing order authorizing the 1999-A Indenture
Trustee to act within certain general parameters or to act on written,
telegraphic or telephonic instructions of specified personnel or agents of the
Servicer.
If:
(i) the Servicer shall have failed to give investment directions to
the 1999-A Indenture Trustee by 11:00 a.m., New York City time, on any
Business Day authorizing the 1999-A Indenture Trustee to invest the funds
then in any 1999-A SUBI Account (excluding the 1999-A Certificate
Distribution Account) or the Reserve Fund;
(ii) an Event of Default shall have occurred but the Notes shall not
have been declared due and payable, or, if the Notes shall have been
declared due and payable following an Event of Default, amounts collected
or receivable from the related 1999-A Securitization Trust Estate are being
applied in accordance with Section 5.04; or
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(iii) an Event of Default shall have occurred, the Notes shall
have been declared due and payable, and amounts collected or receivable
from the related 1999-A Securitization Trust Estate are being applied in
accordance with Article Five,
the 1999-A Indenture Trustee shall invest and reinvest the funds then in each
such account in Cash or Cash equivalents maturing no later than the Business Day
immediately preceding the next succeeding Distribution Date.
(d) Upon the satisfaction and discharge of this Indenture in accordance
with Article Four, the 1999-A Indenture Trustee shall pay or transfer to the
Issuer all remaining money or Eligible Investments then in the 1999-A SUBI
Accounts (excluding the 1999-A SUBI Collection Account and the 1999-A
Certificate Distribution Account) and the Reserve Fund.
Section 8.04 RELEASE OF TRUST ESTATE.
(a) The 1999-A Indenture Trustee may, and when required by the provisions
of this Indenture or the 1999-A Securitization Documents shall, execute
instruments to release property from the Lien of this Indenture, or convey the
1999-A Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the 1999-A Indenture Trustee as
provided in this Article Eight shall be bound to ascertain the 1999-A Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The 1999-A Indenture Trustee shall, at such time as there are no Notes
Outstanding, release any remaining portion of the 1999-A Securitization Trust
Estate that secured the Notes from the Lien of this Indenture, and release to
the Issuer or any other Person entitled thereto any funds then on deposit in the
1999-A SUBI Accounts. The 1999-A Indenture Trustee shall release property from
the Lien of this Indenture pursuant to this Section 8.04(b) only upon receipt of
an Issuer Request accompanied by an Officer's Certificate, an Opinion of Counsel
and (if required by the TIA) a certificate or opinion of an Independent
appraiser in accordance with TIA Sections 314(c) and 314(d)(1), in each case
meeting any applicable requirements of Section 11.01.
Section 8.05 OPINION OF COUNSEL. The 1999-A Indenture Trustee shall
receive at least seven days' notice when requested by the Issuer to take any
action pursuant to Section 8.04(a), accompanied by copies of any instruments
involved, and the 1999-A Indenture Trustee may also require, as a condition to
such action, an Opinion of Counsel, in form and substance satisfactory to the
1999-A Indenture Trustee, stating the legal effect of any such action, outlining
the steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with in all material
respects or waived and such action will not materially and adversely impair the
security for the Notes or the rights of the Noteholders in contravention of the
provisions of this Indenture; PROVIDED, HOWEVER, that such Opinion of Counsel
shall not be required to express an opinion as to the fair value of the 1999-A
Securitization Trust Estate. Counsel rendering any such opinion may rely,
without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to 1999-A Indenture Trustee in
connection with any such action.
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ARTICLE NINE
SUPPLEMENTAL INDENTURES
Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
(a) The Issuer and the 1999-A Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may, without the consent of the
Noteholders but with prior notice to each Rating Agency, enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form and substance
satisfactory to the 1999-A Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any
time subject to the Lien of this Indenture, or to better assure, convey and
confirm unto the 1999-A Indenture Trustee any property subject or required
to be subjected to the Lien of this Indenture, or to subject to the Lien of
this Indenture additional property;
(ii) to evidence the succession, in compliance with the applicable
provisions hereof, of another Person to the Issuer, and the assumption by
any such successor of the covenants of the Issuer contained herein and in
the Notes;
(iii) to add to the covenants of the Issuer, for the benefit of
the Noteholders, or to surrender any right or power conferred herein upon
the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to
or with the 1999-A Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement any provision
herein or in any supplemental indenture that may be inconsistent with any
other provision herein or in any supplemental indenture or the other 1999-A
Securitization Documents or to make any other provisions with respect to
matters or questions arising under this Indenture or in any supplemental
indenture; PROVIDED that such action shall not have a material adverse
affect on the interests of the Noteholders;
(vi) to evidence and provide for the acceptance of the appointment
hereunder by a successor trustee with respect to the Notes and to add to or
change any of the provisions of this Indenture as shall be necessary to
facilitate the administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article Six; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to effect the qualification
of this Indenture under the TIA or under any similar federal statute
hereafter enacted and to add to this Indenture such other provisions as may
be expressly required by the TIA.
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The 1999-A Indenture Trustee is hereby authorized to join in the execution of
any such supplemental indenture and to make any further appropriate agreements
and stipulations that may be contained therein.
(b) The Issuer and the 1999-A Indenture Trustee, when authorized by an
Issuer Order, may, also without the consent of any of the Noteholders but with
prior notice to each Rating Agency, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Noteholders under this Indenture;
PROVIDED, HOWEVER, that such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the interests of any
Noteholder.
Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS. The
Issuer and the 1999-A Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to each Rating Agency and with the consent of
Noteholders representing not less than a majority of the Outstanding Amount of
the Notes, voting together as a single Class, by act of such Noteholders
delivered to the Issuer and the 1999-A Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Noteholders
under this Indenture; PROVIDED, HOWEVER, that no such supplemental indenture
shall, without the consent of the Holder of each Outstanding Note affected
thereby:
(i) change the date of payment of any installment of principal of
or interest on any Note, or reduce the principal amount thereof, the
Note Rate thereon or the Redemption Price with respect thereto, change
the provisions of this Indenture relating to the application of collections
on, or the proceeds of the sale of, the 1999-A Securitization Trust Estate
to payment of principal of or interest on the Notes, or change any place of
payment where, or the coin or currency in which, any Note or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of the provisions of this Indenture requiring the application
of funds available therefor, as provided in Article Five, to the payment of
any such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount, the Holders
whose consent is required for any such supplemental indenture, or the
Holders whose consent is required for any waiver of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the Outstanding Amount of the Holders
whose consent is required to direct the 1999-A Indenture Trustee to direct
the Issuer to sell or liquidate the 1999-A Securitization Trust Estate
pursuant to Sections 5.14 or amend the
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provisions of this Article that specify the percentage of the Outstanding
Amount of the Holders whose consent is required to amend the 1999-A
Securitization Documents;
(v) modify any provision of this Section 9.02 except to increase
any percentage specified herein or provide that certain additional
provisions of this Indenture or the 1999-A Securitization Documents cannot
be modified or waived without the consent of the Holder of each
Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Distribution Date (including the
calculation of any of the individual components of such calculation) or
affect the rights of the Holders of Notes to the benefit of any provisions
for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any Lien ranking prior to or on a
parity with the Lien of this Indenture with respect to any part of the
1999-A Securitization Trust Estate or, except as otherwise permitted or
contemplated herein, terminate the Lien of this Indenture on any property
at any time subject hereto or deprive the Holder of any Note of the
security provided by the Lien of this Indenture.
The 1999-A Indenture Trustee may in its discretion determine whether any Notes
would be affected by any supplemental indenture and any such determination shall
be conclusive upon the Holders of all Notes, whether theretofore or thereafter
authenticated and delivered hereunder. The 1999-A Indenture Trustee shall not be
liable for any such determination made in good faith.
It shall not be necessary for any act of Noteholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such act shall approve the substance thereof.
Promptly after the execution by the Issuer and the 1999-A Indenture Trustee
of any supplemental indenture pursuant to this Section 9.02, the 1999-A
Indenture Trustee shall mail to the Holders of the Notes to which such amendment
or supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the 1999-A Indenture
Trustee to mail such notice, or any defect therein, shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article Nine or the modifications thereby of the trusts
created by this Indenture, the 1999-A Indenture Trustee shall be entitled to
receive, and, subject to Sections 6.01 and 6.02, shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture and conforms
to the requirements of the TIA, to the extent applicable. The 1999-A Indenture
Trustee may, but shall not be obligated to, enter into any such supplemental
indenture that affects the 1999-A Indenture Trustee's own rights, duties or
immunities under this Indenture or otherwise.
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Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the 1999-A Indenture Trustee, the Issuer and the Noteholders
shall thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for all purposes.
Section 9.05 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article Nine may, and if required by the 1999-A Indenture
Trustee shall, bear a notation in form approved by the 1999-A Indenture Trustee
as to any matter provided for in such supplemental indenture. If the Issuer
shall so determine, new Notes so modified as to conform, in the opinion of the
1999-A Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
1999-A Indenture Trustee in exchange for Outstanding Notes.
Section 9.06 COMPLIANCE WITH TIA. Every amendment of this Indenture and
every supplemental indenture executed pursuant to this Article Nine shall
conform to the requirements of the TIA as then in effect so long as this
Indenture shall then be qualified under the TIA.
ARTICLE TEN
OPTIONAL REDEMPTION OF NOTES
Section 10.01 GENERAL. The Outstanding Notes are subject to redemption in
whole, but not in part, at the direction of the Servicer pursuant to
Section 7.02 of the 1999-A Securitization Trust Agreement on any Distribution
Date on which the Servicer exercises its option to purchase the corpus of the
1999-A Securitization Trust pursuant to said Section, for a redemption price
equal to the Redemption Price for such Notes; PROVIDED that the Issuer has
available funds sufficient to pay the Redemption Price. The Issuer shall
furnish notice of such election to the 1999-A Indenture Trustee not later than
the time required for the delivery by the Servicer of notice that it desires to
purchase the corpus of the 1999-A Securitization Trust pursuant to Section 7.02
of the 1999-A Securitization Trust Agreement. The Issuer shall deposit with the
1999-A Indenture Trustee in the 1999-A Note Distribution Account the Redemption
Price of the Notes to be redeemed as required pursuant to Section 7.02 of the
1999-A Securitization Trust Agreement, whereupon all such Notes shall be due and
payable on the Redemption Date upon the furnishing of a notice complying with
Section 10.02 to each Noteholder. The Issuer shall promptly notify each Rating
Agency of any prospective redemption of the Notes.
Section 10.02 FORM OF REDEMPTION NOTICE. Notice of redemption shall be
given by the Issuer or by the 1999-A Indenture Trustee pursuant to Section 11.05
in the name of and at the expense of the Issuer, not more than 30 days and not
less than 15 days prior to the applicable Redemption Date, to each Holder of
Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class
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A-4 Notes or Class B Notes, as applicable, such Holders being determined as of
the most recent Record Date.
All notices of redemption shall state:
(a) the Redemption Date for the Notes;
(b) the Redemption Price for the Notes;
(c) that on the Redemption Date the Redemption Price will become due and
payable upon each such Note and that interest thereon shall cease to
accrue from and after the Redemption Date; and
(d) the place where such Notes are to be surrendered for payment of the
Redemption Price (which shall be the office or agency of the Issuer to
be maintained as provided in Section 3.02).
Failure to give notice of redemption, or any defect therein, to any Holder
of any Note selected for redemption shall not impair or affect the validity of
the redemption of any other Note.
Section 10.03 NOTES PAYABLE ON REDEMPTION DATE. Notice of redemption
having been given as provided in Section 10.02, the Notes so to be redeemed
shall, on the applicable Redemption Date, become due and payable at the
Redemption Price and (unless the Issuer shall default in the payment of the
Redemption Price) no interest shall accrue on the Notes for any period after
such Redemption Date. Upon surrender of such Notes for redemption in accordance
with said notice, such Notes shall be paid by the Issuer at the Redemption
Price.
ARTICLE ELEVEN
MISCELLANEOUS
Section 11.01 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or request by the Issuer to the 1999-A Indenture
Trustee to take any action under any provision of this Indenture, the Issuer
shall furnish to the 1999-A Indenture Trustee (i) an Officer's Certificate
stating that all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with in all material respects
or waived, (ii) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent, if any, have been complied with in all
material respects or waived, and (iii) (if required by the TIA) an Independent
certificate from a firm of certified public accountants meeting the applicable
requirements of this Section 11.01, except that in the case of any such
application or request as to which the furnishing of such documents is
specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
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(i) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(ii) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is necessary
to enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with in all material
respects or waived; and
(iv) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or
securities with the 1999-A Indenture Trustee that is to be made the basis for
the release of any property or securities subject to the Lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.01(a) or
elsewhere in this Indenture, furnish to the 1999-A Indenture Trustee an
Officer's Certificate certifying or stating the opinion of each person signing
such certificate as to the fair value (within 90 days of such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited.
(ii) Whenever the Issuer is required to furnish to the 1999-A
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the matters described in clause (i)
above, the Issuer shall also deliver to the 1999-A Indenture Trustee an
Independent certificate as to the same matters, if the fair value to the
Issuer of the securities to be so deposited and of all other such
securities made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as set forth in
the certificates delivered pursuant to clause (i) above and this clause
(ii), is 10% or more of the Outstanding Amount, but such a certificate need
not be furnished with respect to any securities so deposited, if the fair
value thereof to the Issuer as set forth in the related Officer's
Certificate is the lesser of $25,000 or one percent of the then Outstanding
Amount of the Notes.
(iii) Other than with respect to any release described in clause
(A) or (B) of Section 11.01(b)(v), whenever any property or securities are
to be released from the Lien of this Indenture, the Issuer shall also
furnish to the 1999-A Indenture Trustee an Officer's Certificate certifying
or stating the opinion of each person signing such certificate as to the
fair value (within 90 days of such release) of the property or securities
proposed to be released and stating that in the opinion of such person the
proposed release will not impair the security under this Indenture in
contravention of the provisions hereof.
(iv) Whenever the Issuer is required to furnish to the 1999-A
Indenture Trustee an Officer's Certificate certifying or stating the
opinion of any signer thereof as to the
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matters described in clause (iii) above, the Issuer shall also furnish to
the 1999-A Indenture Trustee an Independent certificate as to the same
matters if the fair value of the property or securities and of all other
property, other than property described in clauses (A) or (B) of Section
11.01(b)(v), or securities released from the Lien of this Indenture since
the commencement of the then-current calendar year, as set forth in the
certificates required by clause (iii) above and this clause (iv), equals
10% or more of the Outstanding Amount, but such certificate need not be
furnished in the case of any release of property or securities if the fair
value thereof as set forth in the related Officer's Certificate is the
lesser of $25,000 or one percent of the then Outstanding Amount of the
Notes.
(v) Notwithstanding Section 2.10 or any other provision of this
Section 11.01, the Issuer may, without compliance with the requirements of
the other provisions of this Section 11.01, (A) collect, liquidate, sell or
otherwise dispose of the 1999-A SUBI Certificates as and to the extent
permitted or required by the 1999-A Securitization Documents and (B) make
cash payments out of the 1999-A SUBI Accounts (excluding the 1999-A
Certificate Distribution Account) and the Reserve Fund as and to the extent
permitted or required by the 1999-A Securitization Documents, so long as
the Issuer shall deliver to the 1999-A Indenture Trustee every six months,
commencing [__________ ___, 1999], an Officer's Certificate of the Issuer
stating that all the dispositions of Collateral described in clauses (A)
and (B) above that occurred during the preceding six calendar months were
in the ordinary course of the Issuer's business and that the proceeds
thereof were applied in accordance with the 1999-A Securitization
Documents.
Section 11.02 FORM OF DOCUMENTS DELIVERED TO 1999-A INDENTURE TRUSTEE. In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify or give an opinion
as to such matters in one or several documents.
Any certificate or opinion of an officer of the Issuer may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which such officer's certificate or opinion is
based are erroneous. Any such certificate or Opinion of Counsel may be based,
insofar as it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Issuer, or the Servicer, or
the Administrator stating that the information with respect to such factual
matters is in the possession of the Issuer, the Servicer or the Administrator,
unless such counsel knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to such matters
are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
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Wherever in this Indenture, in connection with any application or
certificate or report to the 1999-A Indenture Trustee, it is provided that the
Issuer shall deliver any document as a condition of the granting of such
application, or as evidence of the Issuer's compliance with any term hereof, it
is intended that the truth and accuracy, at the time of the granting of such
application or at the effective date of such certificate or report (as the case
may be), of the facts and opinions stated in such document shall in such case be
conditions precedent to the right of the Issuer to have such application granted
and to the sufficiency of such certificate or report.
Section 11.03 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture or any other 1999-A Securitization
Document to be given or taken by Noteholders may be embodied in and evidenced by
one or more instruments of substantially similar tenor signed by such
Noteholders in person or by agents duly appointed in writing; except as herein
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the 1999-A Indenture Trustee and,
where it is hereby or thereby expressly required, to the Issuer, the 1999-A
Owner Trustee or other applicable party. Such instrument or instruments (and
the action embodied therein and evidenced thereby) are herein sometimes referred
to as the "act" of the Noteholders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing appointing any such
agent shall be sufficient for any purpose of this Indenture or any other 1999-A
Securitization Document and (subject to Section 6.01) conclusive in favor of the
1999-A Indenture Trustee, the Issuer, the 1999-A Owner Trustee or other
applicable party if made in the manner provided in this Section 11.03.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by an officer of a corporation or a member of a partnership on
behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Notes shall bind the Holder of every Note
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the 1999-A
Indenture Trustee, the Issuer, the 1999-A Owner Trustee or other applicable
party in reliance thereon, whether or not notation of such action is made upon
such Notes.
(e) In the event of any vote to be taken by Noteholders or Note Owners, no
vote may be cast by the Holder or Note Owner of any Note issued to or held on
behalf of the Issuer or any Affiliate thereof, and the outstanding principal
balance of each such Note shall be deducted from
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the aggregate Percentage Interest before making any calculation of whether the
necessary percentage of such aggregate Percentage Interest has been met with
respect to any vote.
Section 11.04 NOTICES, ETC., TO 1999-A INDENTURE TRUSTEE, ISSUER AND
RATING AGENCIES. Any request, demand, authorization, direction, notice, consent,
waiver, act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver, act of Noteholders or other documents is to
be made upon, given or furnished to or filed with:
(a) the 1999-A Indenture Trustee by any Noteholder or by the Issuer
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing and mailed first-class, postage prepaid, or sent by
overnight courier or facsimile (followed by original) to or with the 1999-A
Indenture Trustee at its Corporate Trust Office, or
(b) the Issuer by the 1999-A Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if made, given, furnished
or filed in writing and mailed first-class, postage prepaid, or sent by
overnight courier or facsimile (followed by original) to the Issuer
addressed to: Honda Auto Lease Trust 1999-A, in care of The Bank of New
York, or at any other address previously furnished in writing to the 1999-A
Indenture Trustee by the Issuer or the Administrator. The Issuer shall
promptly transmit any notice received by it from the Noteholders to the
1999-A Indenture Trustee.
Notices required to be given to each Rating Agency by the Issuer, the
1999-A Indenture Trustee or the 1999-A Owner Trustee shall be in writing,
personally delivered, couriered or mailed by certified mail, return receipt
requested, to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007; (ii) in the case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc., 25 Broadway (15th Floor), New York, New York 10004, Attention of Asset
Backed Surveillance Department or (iii) in the case of Fitch, at the following
address: Fitch IBCA, Inc., One State Street Plaza, New York, New York 10004,
Attention ____________; or as to either of the foregoing, at such other address
as shall be designated by written notice to the other parties.
Section 11.05 Where this Indenture provides for notice to each Rating
Agency, failure to give such notice shall not affect any other rights or
obligations created hereunder, and shall not under any circumstance constitute
an Event of Default.
Section 11.06 NOTICES AND REPORTS TO NOTEHOLDERS; WAIVER. Where this
Indenture or any other 1999-A Securitization Document provides for notice to
Noteholders of any event or the mailing of any report to Noteholders, such
notice or report shall be sufficiently given (unless otherwise expressly
provided herein) if mailed first-class, postage prepaid, to each Noteholder
affected by such event or to whom such report is required to be mailed, at the
address of such Noteholder as it appears on the Note Register, not later than
the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice or the mailing of such report. In any case where notice
or report to Noteholders is mailed, neither the failure to mail such notice or
report, nor any defect in any notice or report so mailed to any particular
Noteholder, shall affect
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the sufficiency of such notice or report with respect to other Noteholders, and
any notice or report that is mailed in the manner provided herein shall be
conclusively presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Noteholders shall be filed with the 1999-A Indenture
Trustee, but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
If, by reason of the suspension of regular mail service as a result of a
strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the 1999-A Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
Section 11.07 ALTERNATE PAYMENT AND NOTICE PROVISIONS. Notwithstanding
any provision of this Indenture or any of the Notes to the contrary, the Issuer
may enter into any agreement with any Noteholder providing for a method of
payment, or notice by the 1999-A Indenture Trustee or any Paying Agent to such
Noteholder, that is different from the methods provided for in this Indenture or
the Notes for such payments or notices. The Issuer will furnish to the 1999-A
Indenture Trustee a copy of each such agreement and the 1999-A Indenture Trustee
will cause payments to be made and notices to be given in accordance with such
agreements.
Section 11.08 CONFLICT WITH TIA. If any provision hereof limits,
qualifies or conflicts with another provision hereof that is required to be
included in this Indenture by any of the provisions of the TIA, such required
provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any
person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
Section 11.09 EFFECT OF HEADINGS AND TABLE OF CONTENTS. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
Section 11.10 SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
permitted assigns, whether so expressed or not. All agreements of the 1999-A
Indenture Trustee in this Indenture shall bind its successors, co-trustees and
agents.
Section 11.11 SEPARABILITY. If any provision in this Indenture or in the
Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions of this Indenture and the Notes shall
not in any way be affected or impaired thereby.
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Section 11.12 BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Notes, expressed or implied, shall give to any Person, other than the parties
hereto and their successors hereunder and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in the 1999-A
Securitization Trust Estate, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
Section 11.13 LEGAL HOLIDAYS. In any case where any Distribution Date or
Redemption Date, or any date on which principal of or interest on any Note is
proposed to be paid shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date nominally due, and no interest shall accrue for
the period from and after any such nominal date.
Section 11.14 GOVERNING LAW. This Indenture and each note shall be
construed in accordance with the laws of the State of New York, without
reference to its conflict of law provisions, and the obligations, rights and
remedies of the parties hereunder shall be determined in accordance with such
laws.
Section 11.15 COUNTERPARTS. This instrument may be executed in any number
of counterparts, each of which when executed shall be deemed to be an original,
but all such counterparts shall together constitute but one and the same
instrument.
Section 11.16 RECORDING OF INDENTURE. This Indenture is subject to
recording in any appropriate public recording offices, such recording to be
effected by the Issuer and at its expense on direction by the 1999-A Indenture
Trustee accompanied by an Opinion of Counsel to the 1999-A Indenture Trustee
(which may be counsel to the 1999-A Indenture Trustee or any other counsel
reasonably acceptable to the 1999-A Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Noteholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the 1999-A Indenture Trustee under this Indenture.
Section 11.17 TRUST OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the 1999-A Owner
Trustee or the 1999-A Indenture Trustee on the Notes or under this Indenture or
any certificate or other writing delivered in connection herewith or therewith,
against (i) the 1999-A Indenture Trustee or the 1999-A Owner Trustee in its
individual capacity or of any successor or assign of the 1999-A Indenture
Trustee or the 1999-A Owner Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of any of the foregoing persons,
except as any such Person may have expressly agreed (it being understood that
the 1999-A Indenture Trustee and the 1999-A Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity. For all purposes
of this Indenture, in the performance of any duties or obligations of the Issuer
hereunder, the 1999-A Owner Trustee shall be subject to, and entitled to the
benefits of, the terms and provisions of Article Six of the 1999-A
Securitization Trust Agreement.
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Section 11.18 NO PETITION. Each of the parties hereto, each Noteholder,
by accepting a Note, and each Note Owner, by accepting a beneficial interest in
a Note, covenants and agrees that prior to the date which is one year and one
day after the last date upon which (a) each Class of Notes and the Certificates
has been paid in full, and (b) all obligations due under any other
Securitization have been paid in full, it will not institute against, or join
any other Person in instituting against, the Issuer, HTA LP, HTB LP, HTC LP, HTD
LP, any general partner or member (as applicable) of a UTI Beneficiary or of a
Transferor which is a partnership or a limited liability company, the
Origination Trustee, the Origination Trust, any Special Purpose Affiliate, any
UTI Beneficiary, any Beneficiary, and any general partner or member (as
applicable) of a Beneficiary or of a Special Purpose Affiliate partnership (or
any of their respective general partners) that is a partnership or a limited
liability company, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit the 1999-A Indenture
Trustee's or 1999-A Owner Trustee's right to file any claim in or otherwise take
actions with respect to any such proceeding instituted by any Person not under
such a constraint. This Section 11.18 shall survive the termination of this
Indenture or the resignation or removal of the 1999-A Owner Trustee or the
1999-A Indenture Trustee under the 1999-A Securitization Trust Agreement or this
Indenture, respectively.
Section 11.19 INSPECTION. The Issuer agrees that, on reasonable prior
notice, it will permit any representative of the 1999-A Indenture Trustee,
during the Issuer's normal business hours, to examine all of the books of
account, records, reports and other papers of the Issuer relating to the Notes,
to make copies and extracts therefrom, to cause such books to be audited by
Independent Accountants, and to discuss the Issuer's affairs, finances and
accounts with the Issuer's officers, employees and Independent Accountants, all
at such reasonable times and as often as may be reasonably requested. The
1999-A Indenture Trustee shall, and shall cause its representatives to, hold in
confidence all such information, except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing).
Section 11.20 WAIVER OF STAY, EXTENSION LAWS, TRIAL BY JURY. The Issuer
covenants (to the extent that it may lawfully do so) that it will not at any
time insist upon, or plead, or in any manner whatsoever claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants in or its performance
of this Indenture; and the Issuer (to the extent that it may lawfully do so)
hereby expressly waives all benefit or advantage of any such law, including any
right to trial by jury to which it may be entitled in any such proceeding; and
covenants that it will not hinder, delay or impede the execution of any power
granted herein to the 1999-A Indenture Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
Section 11.21 MAXIMUM INTEREST PAYABLE. Anything herein to the contrary
notwithstanding, the sum of all interest and all other amounts that would be
deemed interest under New York or other applicable law that may be paid to a
Noteholder pursuant to this Indenture shall not exceed the maximum lawful
interest rate permitted by such law from time to time. The Issuer and the
1999-A Indenture Trustee intend and agree that under no circumstances shall the
Issuer be required to pay interest on the Notes at a rate in excess of the
maximum interest rate permitted by applicable law from time to time, and if any
such interest is received by
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<PAGE>
the Noteholders in excess of that rate, the Issuer shall be entitled to an
immediate refund of any such excess interest by a credit to and payment toward
the unpaid principal of the Notes (such credit to be considered to have been
made at the time of the payment of the excess interest) with any excess interest
retained by the 1999-A Indenture Trustee or recovered from any Noteholder and
not so credited to be immediately paid to the Issuer by the 1999-A Indenture
Trustee.
Section 11.22 RULES BY 1999-A INDENTURE TRUSTEE AND AGENTS. The 1999-A
Indenture Trustee may make reasonable rules for any meeting of Noteholders.
Each of the Note Registrar, Paying Agent or any Authenticating Agent may make
reasonable rules and set reasonable requirements for its respective functions.
[Remainder of page intentionally left blank]
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<PAGE>
IN WITNESS WHEREOF, the Issuer and the 1999-A Indenture Trustee have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, all as of the day and year first above written.
HONDA AUTO LEASE TRUST 1999-A
By: U.S. Bank National Association, a national
banking corporation, not in its individual
capacity but solely as 1999-A Owner Trustee,
By:
Name:
Title:
THE BANK OF NEW YORK
a national banking association, not in its
individual capacity but solely as 1999-A Indenture
Trustee,
By:
Name:
Title:
<PAGE>
EXHIBIT A
FORM OF CLASS A NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.
REGISTERED $____________
No. R-___ CUSIP NO. _____________
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<PAGE>
THE PRINCIPAL OF THIS NOTE IS PAYABLE AS SET FORTH HEREIN. ACCORDINGLY, THE
OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE
AMOUNT SHOWN ON THE FACE HEREOF.
HONDA AUTO LEASE TRUST 1999-A
_____% AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS [A-1] [A-2] [A-3] [A-4]
TRANSFERS OF THE NOTES MUST GENERALLY BE ACCOMPANIED BY APPROPRIATE TAX
TRANSFER DOCUMENTATION AND ARE SUBJECT TO RESTRICTIONS AS PROVIDED IN THE
INDENTURE.
THE HOLDER, BY ACCEPTANCE OF THIS NOTE, SHALL BE DEEMED TO HAVE AGREED TO
TREAT THE NOTES AS DEBT SOLELY OF THE ISSUER FOR UNITED STATES FEDERAL AND
STATE INCOME TAX PURPOSES.
The Honda Auto Lease Trust 1999-A, a business trust organized and existing
under the laws of the State of Delaware (including any permitted successors and
assigns, the "Issuer"), for value received, hereby promises to pay to CEDE &
CO., or registered assigns, the principal sum of __________________ DOLLARS
($___________), in monthly installments on each Distribution Date, commencing on
[July 15, 1999], and to pay interest on the Class [A-1] [A-2] [A-3] [A-4] Note
Balance, each as and to the extent described below; PROVIDED, that the entire
Class [A-1] [A-2] [A-3] [A-4] Note Balance shall be due and payable on the
earlier of the Class [A-1] [A-2] [A-3] [A-4] Final Distribution Date and the
Redemption Date, if any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
1999-A Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: [June __], 1999
HONDA AUTO LEASE TRUST 1999-A
By: U.S. Bank National Association, a national
banking association, not in its individual
capacity, but solely as 1999-A Owner Trustee
under the 1999-A Securitization Trust
Agreement
By:
Name:
Title:
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<PAGE>
1999-A INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: [June __], 1999
THE BANK OF NEW YORK, a national banking
association, not in its individual capacity, but
solely as 1999-A Indenture Trustee
By:
Name:
Title:
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<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ____% Automobile Lease Asset Backed Notes, Class [A-1] [A-2]
[A-3] [A-4] (the "Class [A-1] [A-2] [A-3] [A-4] Notes" or the "Notes"), all
issued under an Indenture dated as of [May 31, 1999] (such Indenture, as it may
be amended, supplemented or restated, the "Indenture"), between the Issuer and
The Bank of New York, a national banking association, not in its individual
capacity but solely as 1999-A Indenture Trustee (the "1999-A Indenture
Trustee"), which term includes any successor 1999-A Indenture Trustee under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the 1999-A Indenture Trustee and the Noteholders and
the terms upon which the Notes are, and are to be, authenticated and delivered.
The Notes are subject to all terms of the Indenture and to all terms of that
certain 1999-A Securitization Trust Agreement dated as of [May 31,] 1999 (the
"1999-A Securitization Agreement"), by and among U.S. Bank National Association,
a national banking association ("U.S. Bank"), as owner trustee (in such
capacity, the "1999-A Owner Trustee"), Honda Titling C L.P., a Delaware limited
partnership, and Honda Titling D L.P., a Delaware limited partnership, as
transferors (the "Transferors"), Wilmington Trust Company, a Delaware
corporation, as Delaware owner trustee (the "Delaware Owner Trustee"), and the
1999-A Indenture Trustee. All capitalized terms used in this Note, whether
first used above or below, that are not otherwise defined herein shall have the
meanings assigned to them pursuant to the Agreement of Definitions dated [May
31, 1999] (the "Agreement of Definitions"), by and among HVT, Inc., a Delaware
corporation, as origination trustee, Delaware Trust Capital Management, Inc., a
Delaware corporation, as Delaware trustee, U.S. Bank National Association, a
national banking association, as trust agent and as owner trustee, American
Honda Finance Corporation, as servicer, Wilmington Trust Company, as Delaware
owner trustee, The Bank of New York, as indenture trustee, Honda Titling A L.P.,
a Delaware limited partnership, Honda Titling B L.P., a Delaware limited
partnership, Honda Titling C L.P., a Delaware limited partnership, and Honda
Titling D L.P., a Delaware limited partnership.
A copy of the Indenture is on file with the 1999-A Indenture Trustee at its
Corporate Trust Office and is available for inspection at such office.
Under the Indenture, there will be distributed on each Distribution Date
(I.E., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on [July 15], 1999,
to the Person in whose name this Class [A-1] [A-2] [A-3] [A-4] Note is
registered at the close of business on the last calendar day immediately
preceding the related Distribution Date or, if Definitive Notes are issued, the
last day of the immediately preceding calendar month, such Class [A-1] [A-2]
[A-3] [A-4] Noteholder's Percentage Interest multiplied by (i) the Class [A-1]
[A-2] [A-3] [A-4] Distributable Amount for such Distribution Date and (ii) the
amount of any repayment of any outstanding Class [A-1] [A-2] [A-3] [A-4]
Interest Carryover Shortfall, Class [A-1] [A-2] [A-3] [A-4] Loss Amounts, Class
[A-1] [A-2] [A-3] [A-4] Note Principal Loss Amounts and Class [A-1] [A-2] [A-3]
[A-4] Note Principal Loss Interest Amounts being made on such Distribution Date,
all to the extent and as more specifically set forth in the Indenture and the
1999-A Securitization Trust Agreement. Payments on or in respect of this Class
[A-1] [A-2] [A-3] [A-4] Note shall be payable by wire transfer to a United
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<PAGE>
States dollar account maintained by the Holder (or the payee designated by such
Holder) at a depository institution as reflected on the Note Register (and
pursuant to wiring instructions provided by such Holder).
This Class [A-1] [A-2] [A-3] [A-4] Note is subject to possible redemption
by the Servicer. Such redemption will only be permitted if, either before or
after giving effect to any payment of principal required on a given Distribution
Date, the sum of the Note Balance and the Certificate Balance is less than or
equal to 10% of the sum of the Initial Note Balance and the Initial Certificate
Balance.
Under the Indenture if an Event of Default related to the non-payment of
amounts due on the Notes shall occur and be continuing, the 1999-A Indenture
Trustee may, and at the direction of Noteholders representing a majority of the
Outstanding Amount of the Notes, voting together as a single Class, shall,
declare the principal of the Notes to be immediately due and payable in the
manner and with the effect provided in the Indenture. If an Event of Default
involving certain events of bankruptcy or insolvency of the Issuer shall occur
and be continuing the Class [A-1] [A-2] [A-3] [A-4] Notes shall be automatically
deemed to be immediately due and payable. If any other Event of Default under
the Indenture (not specifically listed in the previous two sentences) shall
occur and be continuing, the 1999-A Indenture Trustee may, and at the direction
of Noteholders representing a majority of the Outstanding Amount of the Class A
Notes, voting together as a single Class (and, after the Class A Note Balance
has been reduced to zero, Noteholders representing at least a majority of the
Outstanding Amount of the Class B Notes), shall, declare the principal of the
Notes to be immediately due and payable in the manner and with the effect
provided in the Indenture. If the Class [A-1] [A-2] [A-3] [A-4] Notes are
declared or deemed to be immediately due and payable, the Holders of the Class
[A-1] [A-2] [A-3] [A-4] Notes shall be entitled to receive the Class [A-1] [A-2]
[A-3] [A-4] Distributable Amount.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture. However, to the extent
provided in the Indenture and the 1999-A Securitization Trust Agreement, no
principal payments shall be made in respect of the Class A-2 Notes until the
Class A-1 Notes have been paid in full, no principal payments shall be made in
respect of the Class A-3 Notes until the Class A-2 Notes have been paid in full,
and no principal payments shall be made in respect of the Class A-4 Notes or the
Class B Notes until the Class A-3 Notes have been paid in full. The Class B
Notes are subordinated to the Class A Notes and the Certificates are
subordinated to the Notes to the extent described in the Indenture and the
1999-A Securitization Trust Agreement.
Subject to certain limitations set forth in the Indenture, the transfer of
this [A-1] [A-2] [A-3] [A-4] Note may be registered on the Note Register, upon
surrender of this Class [A-1] [A-2] [A-3] [A-4] Note for registration of
transfer at the Corporate Trust Office of the 1999-A Indenture Trustee, duly
endorsed by, or accompanied by a written instrument of transfer in form and
substance satisfactory to the Issuer and the 1999-A Indenture Trustee duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Class
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<PAGE>
[A-1] [A-2] [A-3] [A-4] Notes, in authorized denominations and in the same
aggregate principal amount and series, will be issued to the designated
transferee or transferees.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, HTC LP, HTD LP, the Servicer, the 1999-A Owner Trustee or the
1999-A Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) HTC
LP, HTD LP, the Servicer, the 1999-A Indenture Trustee or the 1999-A Owner
Trustee in its individual capacity, (ii) any owner of a beneficial interest in
the Issuer or (iii) any partner, owner, beneficiary, agent, officer, director,
employee or agent of HTC LP, HTD LP, the Servicer, the 1999-A Indenture Trustee
or the 1999-A Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Issuer, HTC LP, HTD LP, the Servicer, the 1999-A
Owner Trustee or the 1999-A Indenture Trustee or of any successor or assign of
HTC LP, HTD LP, the Servicer, the 1999-A Indenture Trustee or the 1999-A Owner
Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that 1999-A Indenture Trustee and 1999-A Owner
Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity.
The Class [A-1] [A-2] [A-3] [A-4] Notes are issuable only in registered
form in minimum denominations of $1,000.00 and integral multiples in excess
thereof, as provided in the Indenture.
It is the intent of HTC LP, HTD LP, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, and the Note Owners,
by acceptance of a beneficial interest in a Note, agree to treat, and to take no
action inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness solely of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial interest in
a Note, each Note Owner) waives any claim to any proceeds or assets of the
Origination Trustee and to all assets of the Origination Trust other than those
from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial interest in
a Note, each Note Owner) covenants and agrees that prior to the date which is
one year and one day after the last date upon which (a) each Class of Notes and
the Certificates has been paid in full, and (b) all obligations due under any
other Securitization have been paid in full, it will not institute against, or
join any other Person in instituting against, the Issuer, HTA LP, HTB LP, HTC
LP, HTD LP, any general partner or member (as applicable) of a UTI Beneficiary
or of a Transferor which is a partnership or a limited liability company, the
Origination Trustee, the Origination Trust, any Special Purpose Affiliate, any
UTI Beneficiary, any Beneficiary, and any general partner or
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<PAGE>
member (as applicable) of a Beneficiary or of a Special Purpose Affiliate
partnership (or any of their respective general partners) that is a partnership
or a limited liability company, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding or other proceedings under any federal or
state bankruptcy or similar law. The foregoing shall not limit the 1999-A
Indenture Trustee's or 1999-A Owner Trustee's right to file any claim in or
otherwise take actions with respect to any such proceeding instituted by any
Person not under such a constraint. This non-petition covenant shall survive
the termination of the Indenture or the resignation or removal of the 1999-A
Owner Trustee or the 1999-A Indenture Trustee under the 1999-A Securitization
Trust Agreement or this Indenture, respectively.
This Note and the Indenture shall be construed in accordance with the laws
of the State of [New York] without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
No reference herein to the Indenture or the 1999-A Securitization Trust
Agreement and no provision of this Note or of the Indenture or the 1999-A
Securitization Trust Agreement shall alter or impair the obligation of the
Issuer, which is absolute and unconditional to the extent permitted by
applicable law, to pay the principal of and interest on this Note at the times,
place and rate, and in the manner, herein and therein prescribed.
The Indenture permits, with certain exceptions as therein provided, the
amendment to, or waiver of, the provisions of the Indenture at any time by the
Issuer and the 1999-A Indenture Trustee with the consent of a majority of the
Noteholders. The Issuer and the 1999-A Indenture Trustee may also enter into
supplemental indentures, without obtaining the consent of the Holder hereof for
such purposes as provided in the Indenture.
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<PAGE>
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto
(name and address of assignee)
the [within] Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________ as attorney to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ ___________________________________________*
Signature Guaranteed:
____________________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the
requirements of the Note Registrar, which
requirements include membership or
participation in STAMP or such other
"signature guarantee program" as may be
determined by the Note Registrar in addition
to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act
of 1934, as amended.
_________________________
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the [within] Note in every
particular without alteration, enlargement or any change whatsoever.
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<PAGE>
EXHIBIT B
FORM OF CLASS B NOTES
Unless this Note is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Issuer or its
agent for registration of transfer, exchange or payment, and any Note issued is
registered in the name of Cede & Co. or in such other name as is requested by an
authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
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<PAGE>
TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co.,
has an interest herein.
THIS NOTE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A-1 NOTES, THE
CLASS A-2 NOTES, THE CLASS A-3 NOTES AND THE CLASS A-4 NOTES AS DESCRIBED IN THE
INDENTURE AND THE 1999-A SECURITIZATION DOCUMENTS REFERRED TO HEREIN.
REGISTERED $____________
No. R-___ CUSIP NO. _____________
HONDA AUTO LEASE TRUST 1999-A
_____% AUTOMOBILE LEASE ASSET BACKED NOTES, CLASS B
The Honda Auto Lease Trust 1999-A, a trust organized and existing under the
laws of the State of Delaware (including any successor, the "Issuer"), for value
received, hereby promises to pay to _______, or registered assigns, the
principal sum of __________________ DOLLARS ($___________), in monthly
installments on each Distribution Date, commencing on [July 15, 1999], and to
pay interest on the Class B Note Balance, each as and to the extent described
below; provided that the entire Class B Note Balance shall be due and payable on
the earlier of the Class B Final Distribution Date and the Redemption Date, if
any.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
1999-A Indenture Trustee by manual signature, this Note shall not be entitled to
any benefit under the Indenture referred to on the reverse hereof, or be valid
or obligatory for any purpose.
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<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Responsible Officer.
Dated: [June __], 1999
HONDA AUTO LEASE TRUST 1999-A
By: U.S. Bank National Association, a national
banking association, not in its individual
capacity but solely as 1999-A Owner Trustee
under the 1999-A Securitization Trust
Agreement
By:
Name:
Title:
74
<PAGE>
1999-A INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the
within-mentioned Indenture.
Dated: [June ___], 1999
THE BANK OF NEW YORK, a national banking
association, not in its individual capacity, but
solely as 1999-A Indenture Trustee
By:
Name:
-------------------------------------
Title:
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<PAGE>
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its ____% Automobile Lease Asset Backed Notes, Class B (herein
called the "Class B Notes" or the "Notes"), all issued under an Indenture dated
as of [May 31,] 1999 (such Indenture, as supplemented or amended, is herein
called the "Indenture"), between the Issuer and The Bank of New York, a national
banking association, not in its individual capacity but solely as 1999-A
Indenture Trustee (the "1999-A Indenture Trustee"), which term includes any
successor 1999-A Indenture Trustee under the Indenture, to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights and obligations thereunder of the Issuer, the 1999-A
Indenture Trustee and the Holders of the Notes and the terms upon which the
Notes are, and are to be, authenticated and delivered. The Notes are subject to
all terms of the Indenture and to all terms of that certain 1999-A
Securitization Trust Agreement dated as of [May 31,] 1999 (the "1999-A
Securitization Agreement"), by and among U.S. Bank National Association, a
national banking association ("U.S. Bank"), as owner trustee (in such capacity,
the "1999-A Owner Trustee"), Honda Titling C L.P., a Delaware limited
partnership, and Honda Titling D L.P., a Delaware limited partnership, as
transferors (the "Transferors"), Wilmington Trust Company, a Delaware
corporation, as Delaware owner trustee (the "Delaware Owner Trustee"), and the
1999-A Indenture Trustee. All capitalized terms used in this Note, whether
first used above or below, that are not otherwise defined herein shall have the
meanings assigned to them pursuant to the Agreement of Definitions dated [May
31, 1999] (the "Agreement of Definitions"), by and among HVT, Inc., a Delaware
corporation, as origination trustee, Delaware Trust Capital Management, Inc., a
Delaware corporation, as Delaware trustee, U.S. Bank National Association, a
national banking association, as trust agent and as owner trustee, American
Honda Finance Corporation, as servicer, Wilmington Trust Company, as Delaware
owner trustee, The Bank of New York, as indenture trustee, Honda Titling A L.P.,
a Delaware limited partnership, Honda Titling B L.P., a Delaware limited
partnership, Honda Titling C L.P., a Delaware limited partnership, and Honda
Titling D L.P., a Delaware limited partnership.
A copy of the Indenture is on file with the 1999-A Indenture Trustee at its
Corporate Trust Office and is available for inspection at such office.
Under the Indenture, there will be distributed on each Distribution Date
(I.E., the fifteenth day of each month or, if such fifteenth day is not a
Business Day, the next succeeding Business Day), commencing on [July 15, 1999],
to the Person in whose name this Class B Note is registered at the close of
business on the last calendar day immediately preceding the related Distribution
Date or, if Definitive Notes are issued, the last day of the immediately
preceding calendar month, such Class B Noteholder's Percentage Interest
multiplied by (i) the Class B Distributable Amount for such Distribution Date
and (ii) the amount of any repayment of any outstanding Class B Interest
Carryover Shortfall, Class B Loss Amounts, Class B Note Principal Loss Amounts
and Class B Note Principal Loss Interest Amounts being made on such Distribution
Date, all to the extent and as more specifically set forth in the Indenture and
the 1999-A Securitization Trust Agreement.
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The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class
A-4 Notes are and will be equally and ratably secured by the collateral pledged
as security therefor as provided in the Indenture. However, to the extent
provided in the Indenture and the 1999-A Securitization Trust Agreement, no
principal payments shall be made in respect of the Class A-2 Notes until the
Class A-1 Notes have been paid in full, no principal payments shall be made in
respect of the Class A-3 Notes until the Class A-2 Notes have been paid in full,
and no principal payments shall be made in respect of the Class A-4 Notes or the
Class B Notes until the Class A-3 Notes have been paid in full. The Class B
Notes are subordinated to the Class A Notes and the Certificates are
subordinated to the Notes to the extent described in the Indenture and the
1999-A Securitization Trust Agreement.
This Class B Note is subject to possible redemption by the Servicer. Such
redemption will only be permitted if, either before or after giving effect to
any payment of principal required on a given Distribution Date, the sum of the
Note Balance and the Certificate Balance is less than or equal to 10% of the sum
of the Initial Note Balance and the Initial Certificate Balance.
Under the Indenture if an Event of Default related to the non-payment of
amounts due on the Notes shall occur and be continuing, the 1999-A Indenture
Trustee may, and at the direction of Noteholders representing a majority of the
Outstanding Amount of the Notes, voting together as a single Class, shall,
declare the principal of the Notes to be immediately due and payable in the
manner and with the effect provided in the Indenture. If an Event of Default
involving certain events of bankruptcy or insolvency of the Issuer shall occur
and be continuing the Class B Notes shall be automatically deemed to be
immediately due and payable. If any other Event of Default under the Indenture
(not specifically listed in the previous two sentences) shall occur and be
continuing, the 1999-A Indenture Trustee may, and at the direction of
Noteholders representing a majority of the Outstanding Amount of the Class A
Notes, voting together as a single Class (and, after the Class A Note Balance
has been reduced to zero, Noteholders representing at least a majority of the
Outstanding Amount of the Class B Notes), shall, declare the principal of the
Notes to be immediately due and payable in the manner and with the effect
provided in the Indenture. If the Class B Notes are declared or deemed to be
immediately due and payable, the Holders of the Class B Notes shall be entitled
to receive the Class B Distributable Amount.
The Class B Notes are secured by the collateral pledged as security
therefor as provided in the Indenture. However, the Class B Notes are
subordinated to the Class A Notes to the extent described in the Indenture and
the 1999-A Securitization Trust Agreement. No principal payments shall be made
in respect of the Class B Notes until the Class A-3 Notes have been paid in
full.
Subject to certain limitations set forth in the Indenture, the transfer of
this Class B Note may be registered on the Note Register, upon surrender of this
Class B Note for registration of transfer at the Corporate Trust Office of the
1999-A Indenture Trustee, duly endorsed by, or accompanied by a written
instrument of transfer in form and substance satisfactory to the Issuer and the
1999-A Indenture Trustee duly executed by, the Holder hereof or his attorney
duly authorized in writing, and thereupon one or more new Class B Notes, in
authorized
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denominations and in the same aggregate principal amount and series, will be
issued to the designated transferee or transferees.
Each Holder or Note Owner, by acceptance of a Note, or, in the case of a
Note Owner, a beneficial interest in the Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, HTC LP, HTD LP, the Servicer, the 1999-A Owner Trustee or the
1999-A Indenture Trustee on the Notes or under the Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) HTC
LP, HTD LP, the Servicer, the 1999-A Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Issuer
or (iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of HTC LP, HTD LP, the Servicer, the 1999-A Indenture Trustee or the Owner
Trustee in its individual capacity, any holder of a beneficial interest in the
Issuer, HTC LP, HTD LP, the Servicer, the 1999-A Owner Trustee or the 1999-A
Indenture Trustee or of any successor or assign of HTC LP, HTD LP, the Servicer,
the 1999-A Indenture Trustee or the 1999-A Owner Trustee in its individual
capacity, except as any such Person may have expressly agreed (it being
understood that 1999-A Indenture Trustee and 1999-A Owner Trustee have no such
obligations in their individual capacity) and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or
failure to pay any installment or call owing to such entity.
It is the intent of HTC LP, HTD LP, the Servicer, the Noteholders and the
Note Owners that, for purposes of Federal and State income tax and any other tax
measured in whole or in part by income, the Notes will qualify as indebtedness
of the Issuer. The Noteholders, by acceptance of a Note, and the Note Owners, by
acceptance of a beneficial interest in a Note, agree to treat, and to take no
action inconsistent with the treatment of, the Notes for such tax purposes as
indebtedness of the Issuer.
By accepting a Note, each Holder (and by accepting a beneficial interest in
a Note, each Note Owner) waives any claim to any proceeds or assets of the
Origination Trustee and to all assets of the Origination Trust other than those
from time to time included within the 1999-A SUBI Portfolio as 1999-A SUBI
Assets and those proceeds or assets derived from or earned by such 1999-A SUBI
Assets.
By accepting a Note, each Holder (and by accepting a beneficial interest in
a Note, each Note Owner) covenants and agrees that prior to the date which is
one year and one day after the last date upon which (a) each Class of Notes and
the Certificates has been paid in full, and (b) all obligations due under any
other Securitization have been paid in full, it will not institute against, or
join any other Person in instituting against, the Issuer, HTA LP, HTB LP, HTC
LP, HTD LP, any general partner or member (as applicable) of a UTI Beneficiary
or of a Transferor which is a partnership or a limited liability company, the
Origination Trustee, the Origination Trust, any Special Purpose Affiliate, any
UTI Beneficiary, any Beneficiary, and any general partner or member (as
applicable) of a Beneficiary or of a Special Purpose Affiliate partnership (or
any of their respective general partners) that is a partnership or a limited
liability company, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceeding or other proceedings under any federal or state
bankruptcy or similar law. The foregoing shall not limit
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the 1999-A Indenture Trustee's or 1999-A Owner Trustee's right to file any claim
in or otherwise take actions with respect to any such proceeding instituted by
any Person not under such a constraint. This non-petition covenant shall
survive the termination of the Indenture or the resignation or removal of the
1999-A Owner Trustee or the 1999-A Indenture Trustee under the 1999-A
Securitization Trust Agreement or this Indenture, respectively.
This Note and the Indenture shall be construed in accordance with the laws
of the State of New York, without reference to its conflict of law provisions,
and the obligations, rights and remedies of the parties hereunder and thereunder
shall be determined in accordance with such laws.
The Indenture permits, with certain exceptions as therein provided, the
amendment to, or waiver of, the provisions of the Indenture at any time by the
Issuer and the 1999-A Indenture Trustee with the consent of a majority of the
Noteholders. The Issuer and the 1999-A Indenture Trustee may also enter into
supplemental indentures, without obtaining the consent of the Holder hereof for
such purposes as provided in the Indenture.
No reference herein to the Indenture or the 1999-A Securitization Trust
Agreement and no provision of this Note or of the Indenture or the 1999-A
Securitization Trust Agreement shall alter or impair the obligation of the
Issuer, which is absolute and unconditional, to pay the principal of and
interest on this Note at the times, place and rate, and in the coin or currency,
herein prescribed.
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ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee
FOR VALUE RECEIVED, the undersigned hereby sells,
assigns and transfers unto
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints ______________________, attorney, to transfer said Note on the
books kept for registration thereof, with full power of substitution in the
premises.
Dated: _____________ __________________________________________*
Signature Guaranteed:
______________________________________
Signatures must be guaranteed by an "eligible
guarantor institution" meeting the requirements of
the Note Registrar, which requirements include
membership or participation in STAMP or such other
"signature guarantee program" as may be determined
by the Note Registrar in addition to, or in
substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
_________________________
* NOTE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular without alteration, enlargement or any change whatsoever.
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Execution Copy
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
HONDA TITLING A L.P.
and
HONDA TITLING B L.P.,
as Grantor and UTI Beneficiaries
AMERICAN HONDA FINANCE CORPORATION,
as Servicer,
HVT, INC.,
as Trustee,
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as Delaware Trustee,
and, for certain limited purposed only,
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
-----------------------------
HONDA LEASE TRUST
SECOND AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
Dated as of April 1, 1998
-----------------------------
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions.........................................................1
Section 1.02. Interpretation.....................................................13
ARTICLE TWO
THE TRUST
Section 2.01. General............................................................14
Section 2.02. Offices............................................................14
Section 2.03. Purposes...........................................................14
Section 2.04. Conveyance of Trust Assets.........................................14
Section 2.05. Document Execution and Performance.................................15
ARTICLE THREE
BENEFICIAL INTERESTS IN THE TRUST
Section 3.01. Allocation of Trust Assets to UTI and SUBIs; Sub-Trusts............15
Section 3.02. SUBI Certificates..................................................16
Section 3.03. UTI Certificates...................................................17
Section 3.04. Transfer and Assignment of Certificates; Minimum Net Worth.........17
Section 3.05. Registration Transfer of Certificates; Validity....................18
Section 3.06. Related Beneficiaries..............................................19
Section 3.07. Filings............................................................19
Section 3.08. Allocation of Expenses and Indemnification.........................20
Section 3.09. Insurance Policies.................................................20
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ARTICLE FOUR
PAYMENTS; ACCOUNTS
Section 4.01. Payments from Trust Assets Only....................................21
Section 4.02. Accounts...........................................................21
Section 4.03. Default in UTI Pledge..............................................22
Section 4.04. SUBI Lease Accounts................................................22
ARTICLE FIVE
THE TRUSTEE.
Section 5.01. Duties and Powers of Trustee.......................................23
Section 5.02. Duty of Care.......................................................24
Section 5.03. Certain Matters Affecting the Trustee..............................26
Section 5.04. Trustee Not Liable for Certificates or Leases......................27
Section 5.05. Indemnification of Trustee.........................................28
Section 5.06. Right Not to Act...................................................28
Section 5.07. Qualification of Trustee...........................................28
Section 5.08. Resignation or Removal of Trustee..................................29
Section 5.09. Successor Trustee..................................................29
Section 5.10. Merger or Consolidation of Trustee.................................30
Section 5.11. Co-Trustees, Separate Trustees, Nominees and Trust Agents..........30
Section 5.12. Representations, Warranties and Covenants of Trustee...............32
Section 5.13. Trustee's Fees and Expenses........................................34
Section 5.14. Trustee Stock......................................................34
Section 5.15. Limitation of Liability of Trustee.................................35
ARTICLE SIX
THE SERVICER
Section 6.01. Duties and Powers of Servicer......................................36
Section 6.02. Liability of Servicer; Indemnities.................................37
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Section 6.03. Merger of Servicer; Appointment of Nominee.........................38
Section 6.04. Limitation on Liability of Servicer and Others.....................38
Section 6.05. Servicer Not to Resign; Delegation of Duties.......................39
Section 6.06. Servicing Compensation.............................................39
Section 6.07. Powers of Attorney.................................................39
Section 6.08. Protection of Title to Trust.......................................40
ARTICLE SEVEN
TERMINATION
Section 7.01. Dissolution of the Trust...........................................40
Section 7.02. Termination of Sub-Trusts..........................................41
Section 7.03. Beneficiary or Special Purpose Affiliate Bankruptcy................42
ARTICLE EIGHT
MISCELLANEOUS
Section 8.01. Amendment..........................................................42
Section 8.02. Governing Law......................................................43
Section 8.03. Notices............................................................43
Section 8.04. Securitization Holders.............................................43
Section 8.05. Severability of Provisions.........................................43
Section 8.06. Counterparts.......................................................44
Section 8.07. Successors and Assigns.............................................44
Section 8.08. No Petition........................................................44
Section 8.09. Table of Contents and Headings.....................................44
Section 8.10. Tax Reporting and Characterization.................................44
Section 8.11. Certificates Nonassessable and Fully Paid..........................45
Section 8.12. Effect of Agreement; Delaware Co-Trustee Agreement.................45
ARTICLES NINE AND TEN [Reserved].
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SECOND AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
This Second Amended and Restated Trust and Servicing Agreement, dated as
of April 1, 1998, is among Honda Titling A L.P. and Honda Titling B L.P., each a
Delaware limited partnership, as grantors (in such capacity, the "Grantors"),
and as initial beneficiaries (in such capacity, the "UTI Beneficiaries"),
American Honda Finance Corporation, a California corporation, as servicer (in
such capacity, the "Servicer"), HVT, Inc., a Delaware corporation, as trustee
(in such capacity, the "Trustee"), Delaware Trust Capital Management, Inc., a
Delaware banking corporation, as Delaware trustee (in such capacity, the
"Delaware Trustee"), and, for the limited purposes set forth herein, U.S. Bank
National Association, a national banking association ("U.S. Bank"), as trust
agent (in such capacity, the "Trust Agent").
WHEREAS, Honda Lease Trust is a Delaware business trust created pursuant
to (i) a trust agreement, dated as of July 17, 1997, among the Grantors, the UTI
Beneficiaries, the Servicer, the Trustee and the Delaware Trustee, as amended
and restated by an amended and restated trust and servicing agreement, dated as
of September 1, 1997 (the "Original Trust Agreement"), among the UTI
Beneficiaries, the Servicer, the Trustee and the Delaware Trustee and, for the
limited purposes set forth therein, the Trust Agent, and (ii) a certificate of
trust filed with the Secretary of State of the State of Delaware on July 18,
1997; and
WHEREAS, the parties hereto desire to amend and restate the Original
Trust Agreement in its entirety for the purpose of taking assignments and
conveyances of and holding in trust various assets described herein.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. Whenever used herein, unless the context
otherwise requires, the following words and phrases shall have the following
meanings:
"1% UTI BENEFICIARY" means the UTI Beneficiary to whom the UTI
Certificate representing the 1% ownership interest in the UTI is initially
issued, or any additional UTI Beneficiary to whom a UTI Certificate representing
a 1% ownership interest in the UTI is issued pursuant to Section 7.03.
"99% UTI BENEFICIARY" means the UTI Beneficiary to whom the UTI
Certificate representing the 99% ownership interest in the UTI is initially
issued, and its permitted successors (including the UTI Beneficiary of any UTI
Certificate evidencing a lesser remaining ownership interest in the UTI
following the transfer of a portion of such UTI Certificate to an additional 1%
UTI Beneficiary designated pursuant to Section 7.03).
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"ADJUSTED CAPITALIZED COST" means, with respect to any Lease and the
related Leased Vehicle, the Gross Capitalized Cost less the Capitalized Cost
Reduction, which amount is used in calculating the Monthly Payment.
"ADJUSTED LEASE BALANCE" means, with respect to any Lease and the
related Leased Vehicle as of any date, the Adjusted Capitalized Cost minus the
aggregate principal actually paid by or on behalf of the related Lessee on or
prior to such date; provided that the Lease Principal component of Payments
Ahead received but not yet applied shall not be considered to have been paid by
such Lessee.
"ADJUSTED RESIDUAL VALUE" means, with respect to any Extended Lease, the
value of the related Leased Vehicle at the Maturity Date as established or
assigned by the Servicer at the time of such extension.
"ADMINISTRATIVE LIEN" means a first lien upon any Certificate of Title
deemed necessary and useful by the Servicer or by the UTI Beneficiaries and the
Servicer solely to provide for delivery of title documentation to the Trustee or
its designee.
"ADMINISTRATIVE LIENHOLDER" means each Person (other than a
Beneficiary), identified as such from time to time to the Trustee by the
Servicer, in whose name an Administrative Lien will be recorded.
"ADMINISTRATIVE CHARGE" means, with respect to any Lease, any payment
(whether or not part of the fixed monthly payment) payable to the related Lessor
representing a late payment fee, an Extension Fee, an Excess Mileage Fee, an
allocation to the related Lessee of insurance premiums, sales, personal property
or excise taxes or any other similar charge.
"AFFECTED TRUST ASSETS" has the meaning set forth in Section 3.08(b).
"AFFILIATE" of any Person means any other Person that (i) directly or
indirectly controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any employee benefit plan) or (ii) is an officer, director,
member or partner of such Person. For purposes of this definition, a Person
shall be deemed to be "controlled by" another Person if such other Person
possesses, directly or indirectly, the power (i) to vote 5% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors, members or managing partners of such Person or (ii) to
direct or cause the direction of the management and policies of such Person,
whether by contract or otherwise.
"AGREEMENT" means this Second Amended and Restated Trust and Servicing
Agreement, as amended, supplemented or modified from time to time.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors and assigns.
"ASSIGNMENT AGREEMENT" an agreement between AHFC and the Trust pursuant
to which AHFC assigns to the Trust its rights under each Dealer Agreement
described therein.
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"BENEFICIARIES" means, collectively, the Related Beneficiaries of all
Sub-Trusts, and "BENEFICIARY" means any of the Beneficiaries.
"BOOK VALUE" means, with respect to any Lease and the related Leased
Vehicle as of any date, the Adjusted Capitalized Cost minus the aggregate Lease
Principal scheduled to have been received on or prior to such date.
"BOOKED RESIDUAL VALUE" means, with respect to any Lease, the value of
the related Leased Vehicle at the Maturity Date as established or assigned by
the Servicer at the time of origination of such Lease in accordance with its
customary practices for the purpose of determining the Monthly Payment.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or day on
which commercial banking institutions in Torrance, California, Wilmington,
Delaware, Chicago, Illinois, New York, New York or the city in which the Trust
Office is located are authorized or obligated by law, executive order or
government decree to be closed.
"CAPITAL CONTRIBUTION" means any capital contribution to the Trust made
by a Beneficiary, the Servicer or any of their respective Affiliates.
"CAPITALIZED COST REDUCTION" means, with respect to any Lease and the
related Leased Vehicle, the total amount of any rebate, cash payment, net
trade-in allowance and non-cash credits that reduced the Gross Capitalized Cost
at the time of origination of such Lease.
"CASH VALUE" means, with respect to any or all Trust Assets, as the
context may require, on any date, the sum of all cash and the aggregate Adjusted
Lease Balance of the Leases comprising such Trust Assets on such date.
"CERTIFICATE" means a UTI Certificate or a SUBI Certificate, as the
context may require.
"CERTIFICATE OF TITLE" means a certificate of title or other evidence of
ownership of a Leased Vehicle issued by the Registrar of Titles in the
jurisdiction in which the Leased Vehicle is registered.
"CERTIFICATE OF TRUST" means the certificate of trust for the Trust,
substantially in the form of Exhibit A, filed for the Trust with the office of
the Delaware Secretary of State pursuant to Section 3810 of the Delaware Act, as
supplemented, amended or restated from time to time.
"CERTIFICATE REGISTER" has the meaning set forth in Section 3.05.
"COLLECTION ACCOUNT" means, with respect to any Sub-Trust, the account
created, designated and maintained as such pursuant to Section 4.02.
"COLLECTION PERIOD" means with respect to (i) the UTI, each calendar
month, beginning with the month prior to the month in which the Effective Date
occurs, and (ii) a SUBI, "Collection Period" as defined in the related SUBI
Servicing Supplement.
"CO-TRUSTEE" has the meaning set forth in Section 5.11(a).
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"CO-TRUSTEE AGREEMENT" means any instrument or agreement pursuant to
which the Trustee and the UTI Beneficiaries appoint a Co-Trustee.
"CONTROL" has the meaning set forth in Section 8-106 of the UCC.
"DEALER" means a motor vehicle dealer that is a party to a Dealer
Agreement.
"DEALER AGREEMENT" means a lease plan agreement between a Dealer and
AHFC, which sets forth the respective rights and obligations of the parties with
respect to the origination of lease contracts by the Dealer.
"DELAWARE ACT" means the Delaware Business Trust Act, specifically, the
provisions of 12 Del. Code, Section 3801 ET SEQ. as amended.
"DELAWARE CO-TRUSTEE AGREEMENT" means the Co-Trustee Agreement, dated as
of September 1, 1997, among the UTI Beneficiaries, the Servicer, the Trustee and
the Delaware Trustee, as amended pursuant to Section 8.12.
"DELAWARE SECRETARY OF STATE" means the Secretary of State of the State
of Delaware.
"DELAWARE TRUSTEE" means the trustee meeting the requirements of Section
3807 of the Delaware Act, designated in the Certificate of Trust, and its
successors in such capacity as set forth in the Certificate of Trust.
"EFFECTIVE DATE" means April 1, 1998.
"ELIGIBLE INVESTMENTS" means, at any time with respect to a Sub-Trust,
any one or more of the following obligations, instruments or securities:
(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
or any State, provided that, if any related Rated Securities are
outstanding, such obligations are 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 or
of any State, provided that, if any related Rated Securities are
outstanding, 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 that 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 Trust Agent or, if there is
no Trust Agent, the Trustee) incorporated under the laws of the United
States or any State and subject to supervision
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and examination by banking authorities of one or more of such
jurisdictions, provided that, if any related Rated Securities are
outstanding, 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 or, if there
is a Trust Agent, by the Trust Agent, with respect to any obligation or
security described in clauses (i), (ii) or (vii) of this definition or
any other obligation or 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 obligations, instruments or securities as may
be directed by the Servicer, provided that, if any Rated Securities are
outstanding, such obligations, instruments or securities shall be
acceptable to each relevant Rating Agency, as evidenced by a letter from
such Rating Agency to the Trustee to the effect that investments of such
type will not result in a Ratings Effect;
provided, that except as provided in an applicable Supplement or Servicing
Agreement (including any related Servicing Supplement), each of the foregoing
obligations, instruments and securities shall mature no later than the Business
Day prior to the date on which such funds are required to be available for
application pursuant to any applicable Trust Document or Securitization Document
(other than in the case of the investment of monies in obligations, instruments
or securities of which the entity at which the applicable account is located is
the obliger, which may mature on such date), and shall be required to be held to
such maturity.
Notwithstanding the foregoing, (i) no Eligible Investment may be
purchased at a premium and (ii) no obligation or security may be a "Eligible
Investment" unless (a) the Trustee has Control over such obligation or security
and (b) at the time such obligation or security was delivered to the Trustee or
the Trustee became the related Entitlement Holder, the Trustee did not have
notice of any adverse claim with respect thereto within the meaning of Section
8-105 of the UCC.
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 (excluding any "+" signs associated with such rating) or
such lower credit rating (as approved in writing by each Rating Agency) as will
not result in a Ratings Effect.
"ELIGIBLE LEASE" means a Lease, except as otherwise set forth in the
related Supplement or Servicing Agreement, having the characteristics set forth
in a letter from the UTI Beneficiaries or a Related Beneficiary to the Trustee,
as amended from time to time.
"ENTITLEMENT HOLDER" has the meaning set forth in Section 8-102(a)(7) of
the UCC.
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"EXCESS MILEAGE FEE" means, with respect to any Lease or Leased Vehicle,
any applicable charge for excess mileage or excess wear and use.
"EXTENDED LEASE" means any Lease that has had its original Maturity Date
extended by the Servicer.
"EXTENSION FEE" means, with respect to any Extended Lease, any payment
required to be made by the Lessee in connection with the extension of such
Lease.
"FDIC" means the Federal Deposit Insurance Corporation, and its
successors;
"FNMA" means the Federal National Mortgage Association, and its
successors.
"GRANTOR" means Honda Titling A L.P. or Honda Titling B L.P., as
applicable, in its capacity as a grantor of the Trust.
"GROSS CAPITALIZED COST" means, with respect to any Lease and the
related Leased Vehicle, the amount agreed to by the Lessee at the time of
origination of such Lease as the value of the Leased Vehicle and any items that
are capitalized during the term of such Lease, including acquisition fees,
taxes, insurance, service agreements and any outstanding balance from a prior
motor vehicle loan or lease contract.
"HOLDER" means, with respect to any Certificate, the Person listed in
the Certificate Register as the registered owner thereof; provided, however,
that a Registered Pledgee shall be entitled to exercise any or all of the rights
or powers of the Holder of a Certificate hereunder, including receiving
distributions, providing notices or giving consents, to the extent that such
entitlement is set forth in the Holder's registration of pledge or the documents
relating to such pledge.
"INSURANCE COSTS" means, with respect to any Insurance Policy, the
premiums therefor, any deductibles and any coinsurance payments.
"INSURANCE POLICY" means any insurance policy, including any residual
value insurance policy, guaranteed automobile protection policy, comprehensive,
collision, public liability, physical damage, personal liability, contingent and
excess liability, credit, accident, health, credit life or unemployment
insurance or any self-insurance, to the extent that any such policy or
self-insurance covers or applies to the Trust, any Sub-Trust, any Lease, any
Leased Vehicle or the ability of a Lessee to make required payments with respect
to the related Lease or the related Leased Vehicle.
"INSURANCE PROCEEDS" means proceeds paid to the Servicer, the Trust or
the Trustee on behalf of the Trust under an Insurance Policy.
"ISSUER" means, with respect to any Securitization, the Person so
designated in the related Securitization Documents.
"LEASE" means any lease contract for a Leased Vehicle assigned to the
Trust or to the Trustee on behalf of the Trust.
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"LEASE AGREEMENT" means with respect to any Lease, the related Dealer
Agreement or Assignment Agreement.
"LEASE CHARGE" means, with respect to any Lease and any month, the
portion of the Monthly Payment equal to the product of (i) the Book Value as of
the end of the immediately preceding month (or, in the case of the first month,
as of the date of origination of such Lease) and (ii) 1/12 of the related Lease
Factor.
"LEASE FACTOR" means, with respect to any Lease, a per annum yield
determined by the Servicer at the time of origination of such Lease in
accordance with its customary practices.
"LEASE PRINCIPAL" means, with respect to any Lease, that portion of the
Monthly Payment that is not a Lease Charge.
"LEASED VEHICLE" means a new or used Honda or Acura automobile, sport
utility vehicle, minivan or light-duty truck, together with all accessories,
parts and additions constituting a part thereof, and all accessions thereto,
leased to a Lessee pursuant to a Lease.
"LESSEE" means each Person that is a lessee under a Lease, and including
any Person that executes a guarantee on behalf of a lessee.
"LESSOR" means each Person that is the lessor under a Lease or the
assignee thereof, including the Trust.
"LIABILITY" means any liability or expense, including any
indemnification obligation.
"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 property by operation of law.
"LIQUID TRUSTEE ASSETS" means the face value of any cash or cash
equivalents held by the Trustee for its own account, up to but not exceeding its
net worth as set forth on its financial books and records.
"LIQUIDATION PROCEEDS" means gross amounts received by the Servicer in
connection with the attempted realization of the full amounts due or to become
due under any Lease, whether from the sale or other disposition of the related
Leased Vehicle (irrespective of whether or not such proceeds exceed the related
Residual Value), the proceeds of repossession or any collection effort, the
proceeds of recourse or similar payments payable under the related Lease
Agreement, receipt of Insurance Proceeds, application of the related Security
Deposit or otherwise.
"LOSS" means any loss, liability, claim, damage or reasonable expense,
including reasonable fees and expenses of counsel and reasonable expenses of
litigation.
"MATURITY DATE" means, with respect to any Lease, the date on which such
Lease is scheduled to terminate as set forth in such Lease at its date of
origination or, in the case of an Extended Lease, the revised termination date.
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"MONTHLY PAYMENT" means, with respect to any Lease, the amount of each
fixed monthly payment payable to the Lessor in accordance with the terms
thereof, net of any portion of such fixed monthly payment that represents an
Administrative Charge.
"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"NOTICE PARTY" means, with respect to any notice, each notice party
specified in Section 8.03 at the address and in the manner provided for therein.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of any specified
Person (which, in the case of a (i) limited liability company, shall be any of
the foregoing officers of a member or (ii) partnership, shall be any of the
foregoing officers of the managing general partner or, if there is no managing
general partner, any general partner) and delivered to any other specified
Person.
"OPINION OF COUNSEL" means a written opinion of counsel who may, except
as otherwise expressly provided in the Trust Documents or applicable
Securitization Documents, be counsel for a Beneficiary, the Servicer or any of
their respective Affiliates (including, in each such case, in-house counsel),
which counsel, in the case of opinions delivered to the Trustee, shall be
reasonably satisfactory to the Trustee.
"ORIGINAL TRUST AGREEMENT" has the meaning set forth in the Recitals.
"OTHER SUBI" means, with respect to a SUBI, any SUBI other than such
SUBI.
"OTHER SUBI CERTIFICATE" means a SUBI Certificate relating to an Other
SUBI.
"PAYAHEAD ACCOUNT" means, with respect to any Sub-Trust, the account
created, designated and maintained as such pursuant to Section 4.02.
"PAYMENT AHEAD" means any payment of all or a part of one or more
Monthly Payments remitted by a Lessee with respect to a Lease in excess of the
Monthly Payment due with respect to such Lease, which amount the Lessee has
instructed the Servicer to apply to Monthly Payments due in one or more
subsequent Collection Periods.
"PAYMENT DATE" means, as to each Lease, the date each month on which
Monthly Payments are due under the terms of the Lease.
"PERSON" means any legal person, including any individual, corporation,
partnership, joint venture, association, limited liability company, joint stock
company, trust, bank, trust company, estate (including any beneficiaries
thereof), unincorporated organization or government or any agency or political
subdivision thereof.
"PROCEEDING" means any action at law or equity or any other judicial or
administrative proceeding, including any bankruptcy proceeding.
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"RATED SECURITIES" means, with respect to a Securitization, each class
or series of Securities that has been rated by one or more Rating Agencies at
the request of a Grantor, a Beneficiary or any of their respective Affiliates.
"RATING AGENCY" means each nationally recognized rating agency
identified in a related Supplement that issues a rating on Rated Securities at
the request of a Grantor, a Beneficiary or any of their respective Affiliates.
"RETINAS EFFECT" means, with respect to any Rated Securities, the
qualification, downgrading or withdrawal of the rating then assigned to such
Rated Securities by a related Rating Agency.
"REGISTERED PLEDGEE" means, with respect to any Certificate, the Person
listed in the Certificate Register as the registered pledgee of such
Certificate.
"REGISTRAR OF TITLES" means the applicable department, agency or
official in a State responsible for accepting applications and maintaining
records regarding Certificates of Title and liens thereon.
"RELATED BENEFICIALLY" means, with respect to (i) the UTI, the UTI
Beneficiaries, and (ii) a SUBI, the Person or Persons designated as the "Related
Beneficiary" in the related SUBI Supplement, in each case, together with the
Related Beneficiary's permitted successors and assigns.
"RELATED TRUST ASSETS" means, with respect to a Sub-Trust, the Leases,
Leased Vehicles and other Trust Assets held by the Trust as nominee holder of
legal title for the benefit of the Related Beneficiary and the Holders of the
related Certificates.
"REQUIRED DEPOSIT RATING" means, with respect to any entity and Trust
Account, that (i) the short-term unsecured debt obligations of such entity are
rated in the highest short-term rating category by each Rating Agency (excluding
any "+" signs associated with such rating) or (ii) such entity is a depository
institution or trust company having a long-term unsecured debt rating acceptable
to each Rating Agency and corporate trust powers and the Trust Account is
maintained in a segregated trust account in the corporate trust department of
the related entity.
"RESIDUAL VALUE" means, with respect to any Lease, its Booked Residual
Value or Adjusted Residual Value, as the case may be.
"RESIDUAL VALUE SURPLUS ACCOUNT" means, with respect to any Sub-Trust,
the account created, designated and maintained as such pursuant to Section 4.02.
"RESPONSIBLE OFFICER" means, when used with respect to the Trustee or
the Trust Agent, any officer in the corporate trust office of the Trust Agent
or, if there is no Trust Agent, the corporate trust office of the Trustee,
including any president, vice president, assistant vice president, trust
officer, secretary, assistant secretary or other officer customarily performing
functions similar to those performed by the individuals who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his or her knowledge of or familiarity with the particular subject.
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"SCHEDULE OF LEASES AND LEASED VEHICLES" means the microfiche,
microfilm, paper or computer list of Leases and the related Leased Vehicles that
are included as Trust Assets, as such list may be revised and supplemented from
time to time pursuant to Section 6.01, and which shall set forth the following
information with respect to each such Lease and Leased Vehicle in separate
columns:
<TABLE>
<S> <C>
Lease Number Residual Value
Date of Origination Security Deposit
Maturity Date Sub-Trust to which Lease is assigned
Monthly Payment Payment Date
Vehicle Identification Number Adjusted Capitalized Cost
Model Year Adjusted Lease Balance as of the
Make last day of the immediately
Model preceding month
Lessee Name Lessee Address
</TABLE>
"SECURITIZATION" means (i) a financing undertaken by a Beneficiary or a
Special Purpose Affiliate that is secured, directly or indirectly, by Trust
Assets or the UTI, a SUBI or any interest therein and any financing undertaken
in connection with the issuance, pledge or assignment of the UTI or a SUBI and
the related UTI Certificate or SUBI Certificate, as the case may be, (ii) any
sale by a Beneficiary or a Special Purpose Affiliate of an interest in the UTI
or a SUBI or (iii) any other asset securitization, secured loan or similar
transaction involving Trust Assets or any beneficial interest therein or in the
Trust.
"SECURITIZATION DOCUMENTS" means, with respect to a Securitization, each
indenture, trust agreement, pooling and servicing agreement, administration
agreement, servicing agreement, program operating lease and each other operative
document related to such Securitization.
"SECURITIZATION HOLDER" means any entity that becomes a Holder by being,
pursuant to the related Securitization Documents, the Holder (or Registered
Pledgee authorized to exercise certain rights of the Holder) of a Certificate
solely in a trust capacity in connection with the related Securitization.
"SECURITY" means, with respect to a Securitization, any security issued
by or on behalf of the related Issuer.
"SECURITY DEPOSIT" means, with respect to any Lease, the refundable
security deposit specified in such Lease.
"SERVICER" means AHFC (or any successor entity named as such in a
Servicing Agreement), and its successors and permitted assigns.
"SERVICER TERMINATION EVENT" means any servicer termination event (after
the expiration of any applicable notice or cure periods), as such term is
defined in any Servicing Agreement or any Securitization Document, of which the
Trustee has received notice from the related Holder pursuant to the terms of
such agreement or document.
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"SERVICING AGREEMENT" means any servicing agreement among the Trust, the
Servicer and one or more Beneficiaries, as amended, supplemented or modified
from time to time.
"SERVICING SUPPLEMENT" means either a UTI Servicing Supplement or a SUBI
Servicing Supplement, as the context may require.
"SPECIAL PURPOSE AFFILIATE" means a special purpose entity that is an
Affiliate of a Beneficiary and was created for the purpose of one or more
Securitizations.
"STANDARD & POOR'S" means Standard & Poor's, a division of The
McGraw-Hill Companies, Inc., and its successors.
"STATE" means any state of the United States, Puerto Rico or the
District of Columbia.
"SUB-TRUST" has the meaning set forth in Section 3.01(b).
"SUBI" has the meaning set forth in Section 3.01(a).
"SUBI ACCOUNT" means each Trust Account created with respect to a
particular SUBI.
"SUBI ASSETS" has the meaning set forth in Section 3.01(a).
"SUBI CERTIFICATE" has the meaning set forth in Section 3.02(a).
"SUBI COLLECTION ACCOUNT" means, with respect to a SUBI, the related
Collection Account created, designated and maintained as such pursuant to
Section 4.02.
"SUBI LEASE ACCOUNT" has the meaning set forth in Section 4.04.
"SUBI SERVICING SUPPLEMENT" means any supplement or amendment to the
Servicing Agreement entered into from time to time relating to a particular SUBI
or SUBI Certificate and the servicing of the related SUBI Assets.
"SUBI SUPPLEMENT" means any supplement or amendment to this Agreement
executed from time to time in connection with the creation and issuance of a
particular SUBI. Each SUBI Supplement shall amend this Agreement only with
respect to the particular SUBI to which it relates.
"SUBSIDIARY" means any corporation or other entity, with respect to
which capital stock or other ownership interests having ordinary voting power to
elect a majority of the board of directors, members or other Persons performing
similar functions, is at the time directly or indirectly owned by the Trust
Agent.
"SUPPLEMENT" means either a UTI Supplement or a SUBI Supplement.
"TAX" or "TAXES" means any and all taxes, including but not limited to,
net income, franchise, value added, ad valorem, gross income, gross receipts,
sales, use, property (personal and real, tangible and intangible), stamp taxes,
levies, imposts, duties, charges, assessments or withholdings of any nature
whatsoever, together with any and all penalties, fines, additions to tax
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<PAGE>
and interest imposed by any federal, state, local or foreign government or
political subdivision thereof.
"TRUST" means Honda Lease Trust and its successors.
"TRUST ACCOUNTS" has the meaning set forth in Section 4.02(a).
"TRUST AGENCY AGREEMENT" means an agency agreement entered into pursuant
to Section 5.11(d) between the Trustee and a Trust Agent pursuant to which the
Trustee appoints a Trust Agent.
"TRUST AGENT" means U.S. Bank, in its capacity as initial Trust Agent,
and any other Person with which the Trustee contracts to act as its agent with
respect to carrying out its duties pursuant to a Trust Agency Agreement.
"TRUST ASSETS" means (i) cash capital; (ii) the Leases; (iii) the Leased
Vehicles and all proceeds thereof, including (A) payments made in respect of the
Residual Values thereof, (B) proceeds of the sale or other disposition of the
Leased Vehicles to Lessees or others upon expiration or termination of the
Leases and (C) payments in respect of the Leased Vehicles under any Insurance
Policy; (iv) the Certificates of Title; (v) all rights (but not obligations) of
the Trust, AHFC and the related Lessors or Dealers with respect to the Leases
and the Leased Vehicles, including rights to (A) any incentive or other payments
made by any Person to fund a portion of the payments made related to a Lease or
a Leased Vehicle and (B) proceeds arising from any repurchase obligations
arising under any Lease Agreement; (vi) any Security Deposit related to a Lease
to the extent not payable to the Lessee pursuant to such Lease; (vii) all
Insurance Proceeds and Liquidation Proceeds; (viii) such other assets as may be
designated "Trust Assets" in a Supplement; and (ix) all proceeds of the items
described in clauses (i) through (viii).
"TRUST ASSET TRANSFER" means the allocation of Leases and Leased
Vehicles from previously unallocated Trust Assets to a particular SUBI after its
initial creation in connection with a Securitization pursuant to the related
Securitization Documents.
"TRUST DOCUMENTS" means this Agreement, any Co-Trustee Agreement, the
Certificate of Trust, any Supplement, any Servicing Agreement, any Servicing
Supplement, each Assignment Agreement and any Trust Agency Agreement.
"TRUST EXPENSES" means, for any period, all expenses of the Trust,
including fees and expenses of the Trustee, the Trust Agent, the Delaware
Trustee and any Co-Trustees, but excluding (i) compensation and expenses of the
Servicer, (ii) Insurance Costs (unless paid by the Trustee) and (iii) Taxes
related to Trust Assets (unless paid by the Trustee, and excluding Taxes payable
by the Trustee, the Trust Agent, the Delaware Trustee or any other Co-Trustee in
respect of income earned by such Persons), in each case incurred during or with
respect to such period.
"TRUST OFFICE" means the principal office of the Trust, which initially
shall be 700 Van Ness Avenue, Torrance, California 90501.
"TRUSTEE" means HVT, Inc;, a Delaware corporation, as trustee of the
Trust, and its successors.
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"TRUSTEE STOCK" means the issued and outstanding capital stock of the
Trustee as of the Effective Date, together with any additional capital stock of
the Trustee that may be issued from time to time thereafter.
"UCC" means the Uniform Commercial Code as in effect in the applicable
jurisdiction.
"UNITED STATES" means the United States of America, its territories and
possessions and areas subject to its jurisdiction.
"U.S. BANK" has the meaning set forth in the Preamble.
"UTI" has the meaning set forth in Section 3.01(a).
"UTI ACCOUNT" means each Trust Account created with respect to the UTI.
"UTI ASSETS" has the meaning set forth in Section 3.01(a).
"UTI BENEFICIARY" means either of the UTI Beneficiaries set forth in the
Preamble or any other UTI Beneficiary that becomes a party to this Agreement
pursuant to Section 7.03(b).
"UTI CERTIFICATES" has the meaning set forth in Section 3.03.
"UTI COLLECTION ACCOUNT" means, with respect to the UTI, the account
created, designated and maintained as such pursuant to Section 4.02.
"UTI PLEDGE" means a pledge of, and a grant of a security interest in,
the UTI, a UTI Certificate or any interest therein, in connection with a
Securitization.
"UTI PLEDGE DEFAULT NOTICE" means the Trustee has actual knowledge or
has received notice from the Servicer or the Registered Pledgee of a related UTI
Pledge to the effect that there is a default with respect to a Securitization
secured by the UTI Pledge.
"UTI SERVICING SUPPLEMENT" means any supplement or amendment to the
Servicing Agreement entered into from time to time relating to the UTI or a
particular UTI Certificate and the servicing of the related UTI Assets.
"UTI SUPPLEMENT" means any supplement or amendment to this Agreement
entered into from time to time in connection with the UTI or a UTI Pledge
pursuant to Section 3.03.
Section 1.02. INTERPRETATION. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) terms used in this Agreement include, as appropriate, all genders and the
plural as well as the singular, (ii) references to this Agreement include all
Exhibits hereto, (iii) references to words such as "herein," "hereof" and the
like shall refer to this Agreement as a whole and not to any particular part,
Article or Section within this Agreement, (iv) references to a section such as
"Section 1.01" or an article such as "Article Five" shall refer to the
applicable Section or Article of this Agreement, (v) the term "include" and all
variations thereof shall mean "include without limitation," (vi) the term "or"
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<PAGE>
shall include "and/or," (vii) the term "proceeds" shall have the meaning
ascribed to such term in the UCC and (viii) the phrase "Trustee on behalf of the
Trust," or words of similar import, shall, to the extent required to effectuate
the appointment of any Co-Trustee pursuant to Section 5.11, be deemed to refer
to the Trustee (or such Co-Trustee) on behalf of the Trust.
ARTICLE TWO
THE TRUST
Section 2.01. GENERAL. The Trust continued hereby shall be known as
"Honda Lease Trust," in which name the Trustee may conduct the business of the
Trust. The Trustee may engage, in the name of the Trust or in its own name on
behalf of the Trust, in the activities of the Trust, make and execute contracts
and other instruments on behalf of the Trust and sue and be sued. The parties
hereto intend that the Trust be a business trust under the Delaware Act and that
this Agreement shall constitute the governing instrument of the Trust. The
Trustee shall have all rights, powers and duties set forth herein and in the
Delaware Act with respect to accomplishing the purposes of the Trust.
Section 2.02. OFFICES. The principal office of the Trust, and such
additional offices as the Trustee may establish, shall be located at such place
or places, inside or outside of the State of Delaware, as the Trustee may
designate from time to time by written notice to each Beneficiary, each Holder,
each Registered Pledgee and the Servicer. Initially, the principal office shall
be in care of the Trustee at the Trust Office.
Section 2.03. PURPOSES. The purposes of the Trust are: (i) at the
direction of the UTI Beneficiaries, to take assignments and conveyances of, hold
in trust and release its ownership interest in, the Trust Assets as nominee
holder of legal title for the benefit of the Beneficiaries and the Holders, (ii)
to engage in any of the activities described or authorized in this Agreement,
any Supplement or in any amendment hereto or thereto and (iii) to engage in any
and all activities that are necessary or appropriate to accomplish the foregoing
or that are incidental thereto or connected therewith. The Trust shall not
engage in any activity other than the foregoing or other than as required or
authorized by applicable law or the Trust Documents.
Section 2.04. CONVEYANCE OF TRUST ASSETS.
(a) The UTI Beneficiaries may from time to time direct
Dealers pursuant to the related Lease Agreements to assign to the Trust or the
Trustee on behalf of the Trust, in trust, Eligible Leases, Leased Vehicles and
other Trust Assets. In connection therewith, the Leased Vehicles will be titled
in the name of the Trust or the Trustee on behalf of the Trust and the Trustee
will accept such designation and, subject to the other terms of this Agreement
(including each applicable Supplement), will permit the related Certificates of
Title to be issued in the name of the Trust or the Trustee on behalf of the
Trust. Legal title to all Trust Assets shall be vested in
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<PAGE>
the Trust or the Trustee on behalf of the Trust as a separate legal entity
except to the extent otherwise specifically provided herein or in any other
Trust Document or where applicable state law requires any Trust Asset to be
vested otherwise, in which case the Trustee will, at the direction of the UTI
Beneficiaries or the Servicer, cause legal title to be held as required
thereby.
(b) The Trustee hereby accepts and agrees to hold in trust
each Trust Asset conveyed to it hereunder, for the use and benefit of, and as
nominee holder of legal title for, the Beneficiaries and the Holders and their
respective successors and assigns as may be designated pursuant to the terms
hereof or as may otherwise succeed to the rights of a Beneficiary or Holder
hereunder.
Section 2.05. DOCUMENT EXECUTION AND PERFORMANCE. The Grantors and the
Beneficiaries hereby authorize and direct the Trustee, and the Trustee hereby
agrees, to: (i) at the request of the Servicer or the UTI Beneficiaries,
execute and deliver all agreements, instruments or documents necessary or
advisable to accept the designation as nominee holder of legal title to Leased
Vehicles and other Trust Assets as described herein and cause the related
Certificates of Title to be issued in the name of the Trust or the Trustee on
behalf of the Trust; (ii) take action that is required or authorized to be taken
by the Trustee pursuant to applicable law as specified in the Trust Documents;
(iii) exercise its rights and perform its duties as Trustee as specified in the
Trust Documents; (iv) at the direction of the Related Beneficiary and the
Servicer (and, with respect to Trust Assets that are the subject of a
Securitization, subject to any additional requirements imposed by the related
Securitization Documents), (A) release, discharge, sell, assign, transfer,
pledge, convey or otherwise dispose of any right, title or interest in and to
any portion of the Related Trust Assets, (B) amend or revoke the terms hereof
with respect to all or any portion of the Related Trust Assets and (C) enter
into any and all agreements or instruments affecting all or any portion of the
Related Trust Assets or affecting any other provision hereof; and (v) appoint
the Servicer as the attorney-in-fact for the Trust as contemplated hereby or by
any Servicing Agreement and direct the Servicer to perform such administrative
duties on behalf of the Trust as are set forth herein and therein.
ARTICLE THREE
BENEFICIAL INTERESTS IN THE TRUST
Section 3.01. ALLOCATION OF TRUST ASSETS TO UTI AND SUBIS; SUB-TRUSTS.
(a) Subject to Section 3.02, the Trustee shall, from time to
time, as directed in writing by the UTI Beneficiaries, establish one or more
"special units of beneficial interest" in the Trust (each, a "SUBI") and
allocate or cause to be allocated to each such SUBI on the books and records of
the Trust such Trust Assets (the "SUBI Assets") as shall be identified by the
UTI Beneficiaries. Each SUBI shall be established pursuant to a SUBI Supplement
and shall have the name and initial Related Beneficiary designated by the UTI
Beneficiaries. The Trustee shall hold the related SUBI Assets for the benefit
of the Holders from time to time of the related SUBI
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Certificates. All Trust Assets that have not been allocated from time to
time to a SUBI (collectively, the "UTI Assets") shall be identified on the
books and records of the Trust as being allocated to the beneficial interest
in the Trust constituting the "undivided trust interest" (the "UTI"). The
Trustee shall hold the UTI Assets for the benefit of the Holders from time to
time of the UTI Certificates.
(b) The UTI and each SUBI shall each constitute a separate
series of the Trust pursuant to Section 3806(b)(2) of the Delaware Act (each, a
"Sub-Trust"). The Servicer shall maintain separate records for each Sub-Trust,
and the Related Trust Assets shall be held and accounted for separately from the
Trust Assets allocated to all other Sub-Trusts. Subject to the right of the
Trustee to allocate certain liabilities, expenses, costs, charges and reserves
as may be provided in the Supplements, and in accordance with Section 3804(a) of
the Delaware Act or to the extent otherwise permitted by applicable law, all
debts, liabilities, obligations and expenses incurred, contracted for or
otherwise existing with respect to a Sub-Trust shall be enforceable against the
Related Trust Assets only, and not against the Trust Assets allocated to any
other Sub-Trust. Every note, bond, contract or other undertaking issued by or
on behalf of a Sub-Trust (including each related Certificate) shall include a
recitation limiting the obligation represented thereby to the related Sub-Trust,
and the Related Trust Assets. The Certificate of Trust shall include notice of
the limitation of liabilities of each Sub-Trust in accordance with Section
3804(a) of the Delaware Act. Except as otherwise provided for in this Agreement
or in a Supplement, all payments made on or in respect of the Trust Assets
allocated to each Sub-Trust shall be paid to or upon the order of the Holders of
the Certificates related to such Sub-Trust.
Section 3.02. SUBI CERTIFICATES.
(a) Upon allocation to a SUBI, the related SUBI Assets shall
no longer be UTI Assets unless and until specifically reallocated to the UTI
from the SUBI. Each SUBI shall constitute a beneficial interest solely in the
related SUBI Assets and shall be represented by one or more certificates (each,
a "SUBI Certificate") issued pursuant to a SUBI Supplement. The Trustee shall
deliver each SUBI Certificate to or upon the order of the UTI Beneficiaries.
Each SUBI Certificate and the interest in the SUBI evidenced thereby shall
constitute a "security" within the meaning of Section 8-102(15) of the UCC.
(b) Notwithstanding anything to the contrary contained in
this Section, if a UTI Pledge exists, the Trustee shall create a new SUBI and
issue to or upon the order of the UTI Beneficiaries a new SUBI and one or more
related SUBI Certificates only (i) upon receipt of an Officer's Certificate of
the UTI Beneficiaries, dated as of the date of issuance of the related SUBI
Certificates, to the effect that after giving effect to the creation of such
SUBI, the transfer to the Related Beneficiary (and, if applicable, a Special
Purpose Affiliate) of any SUBI Certificates in connection therewith and the
application by the Related Beneficiary (and, if applicable, a Special Purpose
Affiliate) of the net proceeds from any Securitization involving such SUBI and
SUBI Certificates, no event of default under any Securitization secured by a UTI
Pledge has occurred and is continuing, and (ii) provided that, as of the date of
issuance of such SUBI Certificates, the Trustee has not received a UTI Pledge
Default Notice.
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(c) Each SUBI Certificate shall contain (i) an express waiver
of any claim by the Holder thereof to any proceeds or assets of the Trustee and
to all Trust Assets other than those from time to time allocated to the related
SUBI as SUBI Assets and proceeds thereof, and (ii) an express subordination in
favor of the Holder of any Other SUBI Certificate or any UTI Certificate by the
Holder of such SUBI Certificate to any claim to any Other SUBI Assets or to any
UTI Assets, that, notwithstanding such disclaimer, may be determined to exist.
Section 3.03. UTI CERTIFICATES. The UTI shall constitute a beneficial
interest solely in the UTI Assets and shall initially be represented by two
trust certificates (the "UTI Certificates") registered in the names of Honda
Titling A L.P. and Honda Titling B L.P., respectively, representing a 99% and a
1% ownership interest in the UTI, respectively. The Trustee shall deliver to or
upon the order of each UTI Beneficiary its respective UTI Certificate.
Notwithstanding the foregoing and subject to Section 3.04(a), at the request of
any UTI Beneficiary (but only with the consent of the Registered Pledgee of any
UTI Pledge), the UTI may be represented by one or more additional certificates
that, in the aggregate, represent the entire UTI. Any such additional
certificates will be issued pursuant to a UTI Supplement, which may specify any
terms or conditions relevant to the issuance thereof. Each UTI Certificate and
the interest in the UTI evidenced thereby shall constitute a "security" within
the meaning of Section 8-102(15) of the UCC. Each UTI Certificate shall be
substantially in the form of Exhibit B hereto, with such appropriate insertions,
omissions, substitutions and other variations as are required by this Agreement,
and may have such letters, numbers or other marks of identification and legends
and endorsements consistent with this Agreement as may be directed by the UTI
Beneficiaries. Any portion of a UTI Certificate may be set forth on the reverse
thereof, in which case the following text shall be inserted on the face thereof,
in relative proximity to and prior to the signature of the Trustee executing
such UTI Certificate:
"Reference is hereby made to the further provisions of this UTI
Certificate set forth on the reverse hereof, which provisions
shall for all purposes have the same effect as if set forth at
this place."
Each UTI Certificate shall be printed, lithographed, typewritten, mimeographed,
photocopied or otherwise produced or may be produced in any other manner
consistent with this Agreement as may be determined by the UTI Beneficiaries.
Section 3.04. TRANSFER AND ASSIGNMENT OF CERTIFICATES; MINIMUM NET
WORTH.
(a) Except as provided in Section 7.03(b), neither the UTI
nor any UTI Certificate shall be transferred or assigned, and, to the fullest
extent permitted by applicable law, any such purported transfer or assignment
shall be deemed null, void and of no effect under this Agreement.
Notwithstanding the foregoing, the UTI or one or more UTI Certificates may be
pledged in connection with a Securitization and a security interest therein
granted, and may be transferred or assigned absolutely to or by the pledgee
thereof solely in connection with the exercise of remedies with respect to a
default under or with respect to such Securitization; provided, that any such
pledgee must (i) give a non-petition covenant substantially similar to that
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set forth in Section 8.08 and (ii) execute an agreement in favor of the
Holders from time to time of SUBI Certificates to release all claims to SUBI
Assets and, in the event that such release is not given effect, to
subordinate fully all claims that it may be deemed to have against any SUBI
Assets.
(b) No SUBI or SUBI Certificate shall be transferred or
assigned except to the extent specified in this Agreement or in any related
Supplement, and, to the fullest extent permitted by applicable law, any
purported transfer or assignment other than as so specified shall be deemed
null, void and of no effect under this Agreement. Notwithstanding the
foregoing, any SUBI Certificate and the interest in the SUBI evidenced thereby
may be (i) transferred, assigned or pledged to any Special Purpose Affiliate or
(ii) transferred, assigned or pledged by the Related Beneficiary or a Special
Purpose Affiliate to or in favor of a trustee for one or more securitization
trusts or other entities solely for the purpose of securing or otherwise
facilitating one or more Securitizations; provided that, in each case the
transferee, assignee or pledgee must (i) give a non-petition covenant
substantially similar to that set forth in Section 8.08 and (ii) execute an
agreement in favor of each Holder from time to time of any UTI Certificate and
any Other SUBI Certificate, to release all claims to the Trust Assets allocated
to the UTI and each Other SUBI and, in the event that such release is not given
effect, to subordinate fully all claims that it may be deemed to have against
the UTI Assets and all Other SUBI Assets.
(c) The UTI Beneficiaries shall at all times maintain a
minimum collective net worth (excluding the value of any UTI Certificates of
which they are Holders) equal to 10% of the net Capital Contributions made by
all of the UTI Beneficiaries to the UTI. Each Related Beneficiary and related
Special Purpose Affiliate shall maintain such minimum collective net worth or
interest in a SUBI as may be required by an applicable SUBI Supplement. For the
purposes of this paragraph, all Trust Assets that are conveyed as, or acquired
with the proceeds of, Capital Contributions to the Trust pursuant to Section
2.04(a) shall be deemed to be Capital Contributions to the UTI or the SUBI, as
applicable, to which such Trust Assets are allocated as of the date on which the
net worth calculation is made.
Section 3.05. REGISTRATION TRANSFER OF CERTIFICATES; VALIDITY.
(a) The Trustee shall keep or cause to be kept at the
corporate trust office of the Trustee (or the Trust Agent, if applicable)
sufficient books for the registration of transfer or pledge of the Certificates
(the "Certificate Register"), which shall at all times be open to inspection by
the Beneficiaries and the Holders. Subject to Sections 3.02(b) and 3.04 and any
other restrictions on transfer or pledge specified in a Certificate or a related
Supplement, upon presentation for such purpose, provided that the requirements
of Section 8-401 of the UCC have been met, the Trustee shall, under such
reasonable regulations as it may prescribe, register or cause to be registered
on the Certificate Register the transfer or pledge of such Certificate,
accompanied by a written instrument of transfer or pledge conforming to the
requirements specified in such Certificate or Supplement, presented for
registration of transfer or pledge by the Holder thereof in conformity with such
additional requirements as may be specified in such Certificate or Supplement.
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(b) A Certificate 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 Trust, shall be validly issued and entitled
to the benefits of this Agreement, notwithstanding that such individuals or any
of them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificate.
Section 3.06. RELATED BENEFICIARIES.
(a) Each Related Beneficiary shall have, with respect to the
applicable Sub-Trust, the rights and obligations of a Beneficiary or Related
Beneficiary specified herein, in any related Supplement and in any other
applicable Trust Documents. A Related Beneficiary may also be a Holder of one
or more Certificates related to any Sub-Trust, including the Sub-Trust with
respect to which it is the Related Beneficiary, and thereby acquire all of the
rights accorded to a Holder under this Agreement, any related Supplement and any
other applicable Trust Documents, subject to such restrictions on voting or
other rights as may be contained herein or therein.
(b) Subject to Article Five, the Related Beneficiary may
direct the Trustee to take action or refrain from taking action with respect to
Related Trust Assets except to the extent that such action or inaction would
conflict with any other provision of this Agreement, the other Trust Documents
or any related Securitization Documents. Such direction by a Related
Beneficiary shall be accompanied by an Officer's Certificate delivered to the
Trustee certifying that such direction is authorized by or not in conflict with
this Agreement, the other Trust Documents or any related Securitization
Documents. Such action may include, among other things, directing the Trustee
to deliver or distribute to or upon the order of the Related Beneficiary all or
any number of the related Leased Vehicles, Leases or other Related Trust Assets.
Section 3.07. FILINGS. The Grantors, the Beneficiaries and the Trustee
shall undertake all other and future actions and activities as may be deemed
reasonably necessary by the Servicer or a Related Beneficiary to perfect (or
evidence) and confirm the foregoing allocations of Trust Assets to the UTI and
any SUBIs, including filing or causing to be filed UCC financing statements and
executing and delivering any related filings, documents or writings under the
Trust Documents and any related Securitization Documents. Notwithstanding the
foregoing, except as otherwise provided in a Supplement or the related
Securitization Documents, in no event shall any Grantor, any Beneficiary or the
Trustee be required to take any action to perfect any (i) allocation of UTI
Assets in connection with a UTI Pledge or (ii) security interest that may be
deemed to be held by any party in any Leased Vehicle allocated to the UTI. Each
Grantor and each Beneficiary hereby revocably makes and appoints each of the
Trustee and the Servicer, and any of their respective officers, employees or
agents, as its true and lawful attorney-in-fact with power to sign on behalf of
the Grantors or the Beneficiaries any financing statements, continuation
statements, security agreements, mortgages, assignments, affidavits, letters of
authority, notices or similar documents necessary or appropriate to be executed
or filed pursuant to this Section.
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Section 3.08. ALLOCATION OF EXPENSES AND INDEMNIFICATION.
(a) Except as otherwise provided in a Supplement, the UTI
Beneficiaries shall be liable for all debts and obligations arising with respect
to the UTI Assets or the UTI; provided, however, that any liability of the UTI
Beneficiaries with respect to any Securitization shall be as set forth in the
related Securitization Documents. To the extent that a UTI Beneficiary (or its
general partner, if such UTI Beneficiary is a partnership) shall have paid or
suffered any Liability with respect to the UTI Assets or the UTI, to the extent
that such Liability was not caused by the willful misconduct or bad faith of
such UTI Beneficiary (or such general partner, if such UTI Beneficiary is a
partnership), such UTI Beneficiary shall be indemnified, defended and held
harmless out of the UTI Assets in accordance with Section 3.08(b) against any
such Liability (including reasonable attorneys' and other professionals' fees
and expenses).
(b) Notwithstanding any other provision of this Agreement or
any other Trust Document, (i) to the extent that a Liability shall be incurred
or suffered with respect to, or is attributable to, one or more Trust Assets
(the "Affected Trust Assets") allocated to one or more Sub-Trusts, such
Sub-Trust(s) shall, from and to the extent of monies from time to time on
deposit in the related Collection Accounts, bear in full such Liability pro rata
in the ratio of the aggregate Cash Value of the Affected Trust Assets in all
such Sub-Trusts and, in accordance with Section 3804(a) of the Delaware Act, all
other Sub-Trusts shall bear none of such Liability, but (ii) to the extent that
any such Liability is suffered with respect to all Trust Assets generally, the
UTI and all SUBIs shall from and to the extent of monies from time to time on
deposit in the related Collection Accounts, bear such Liability in proportion to
the ratio of the aggregate Cash Value of the Trust Assets in a particular
Sub-Trust to the aggregate Cash Value of all Trust Assets. In each case in
which more than one Sub-Trust is to bear any such Liability, the Trustee shall,
at the direction of the Servicer, transfer periodically from each of the
applicable Collection Accounts to the Person or Persons to whom due or such
related Trust Account as may be designated by the related Supplement, as the
case may be, the share of such Liability borne by each such Sub-Trust.
(c) If, notwithstanding the provisions of this Agreement and
Section 3804 of the Delaware Act, a third-party claim against Trust Assets is
satisfied out of the Trust Assets in proportions other than as provided in
Section 3.08(b), then, notwithstanding anything to the contrary contained
herein, the Servicer shall promptly identify and reallocate (or cause the
Trustee to identify and reallocate) the remaining Trust Assets among the UTI and
each SUBI such that each shall bear the expense of the third party claim as
nearly as possible as if such claim had been allocated as provided in Section
3.08(b).
Section 3.09. INSURANCE POLICIES.
(a) Except as otherwise provided in a Supplement, each
Related Beneficiary (or Special Purpose Affiliate, if applicable) shall cause to
be maintained, and no Beneficiary or Special Purpose Affiliate shall, without
the prior written consent of the Servicer and notice to the
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Trustee, cause the termination of, one or more contingent liability, excess
liability or umbrella Insurance Policies providing coverage against
third-party claims that may be raised against the Trust, the Trustee or the
Trust Agent with respect to each Leased Vehicle, including automotive
liability coverage in an amount at least equal to $5 million per claim (which
policy or policies may be a blanket insurance policy or policies covering the
Related Beneficiary or Special Purpose Affiliate, as applicable, and one or
more Affiliates).
(b) Each Related Beneficiary or Special Purpose Affiliate, as
applicable, shall cause each Insurance Policy required to be maintained by it
pursuant to this Section to name the Trust or the Trustee on behalf of the Trust
as an additional insured or loss payee.
ARTICLE FOUR
PAYMENTS; ACCOUNTS
Section 4.01. PAYMENTS FROM TRUST ASSETS ONLY.
(a) Except as otherwise provided in this Agreement and the
other Trust Documents, all payments, if any, to be made by the Trustee other
than amounts (i) owing by the Trustee arising from its willful misfeasance, bad
faith or negligence or (ii) advanced by the Servicer shall be made only from
available Trust Assets and only to the extent that the Trustee shall have
received income or proceeds therefrom to make such payments in accordance with
the terms hereof and thereof.
(b) Except as otherwise provided in this Agreement and the
other Trust Documents, all amounts payable to a Holder shall be paid or caused
to be paid by the Trustee or the Servicer, as the case may be, to or for the
account of such Holder in immediately available funds by wire transfer.
Section 4.02. ACCOUNTS.
(a) Except as otherwise provided in any Supplement or
Servicing Agreement, the Trustee will establish and maintain with respect to the
UTI and each SUBI a Collection Account, a Payahead Account and a Residual Value
Surplus Account. The Trustee shall establish and maintain with respect to the
UTI or any SUBI such other accounts as may be specified in an applicable
Supplement or any Servicing Agreement. Except as otherwise provided in an
applicable Supplement or Servicing Agreement, each of such accounts
(collectively, together with any SUBI Lease Accounts created pursuant to Section
4.04, the "Trust Accounts") shall be a segregated trust account and shall be
established and maintained with the Trustee or the Trust Agent in the name of
the Trustee so long as the Trustee or the Trust Agent, as applicable, has the
Required Deposit Rating. Except as otherwise provided in the Trust Documents
and the related
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Securitization Documents, none of the Grantors, the Servicer, the
Beneficiaries, any Special Purpose Affiliates or any Holders shall have any
right to withdraw funds from any Trust Account without the express written
consent of the Trustee; provided, however, that the Trustee, with the express
written consent of the Related Beneficiary or a Special Purpose Affiliate, as
applicable, shall so consent as to each Trust Account to the extent required
by an applicable Supplement. The Trustee may authorize the Related
Beneficiary or Special Purpose Affiliate, as applicable, or the Servicer, to
make deposits into and disbursements from any Trust Account in accordance
with the Trust Documents and any applicable Securitization Documents. Except
as otherwise provided in a Supplement or any applicable Securitization
Documents, all amounts that are held in the Trust Accounts shall be invested
by the Trustee at the direction of the Servicer in Eligible Investments until
distributed or otherwise applied in accordance with the Trust Documents and
any applicable Securitization Documents. Except as otherwise provided in an
applicable Supplement or Servicing Agreement, all earnings from the
investment of monies in a Trust Account shall be deposited upon receipt into
such Trust Account and any loss on such investment, together with all
investment expenses, shall be charged to such Trust Account. If the Trustee
or the Trust Agent, as applicable, at any time does not have the Required
Deposit Rating, the Servicer shall, with the assistance of the Trustee or the
Trust Agent, as necessary, cause the related Trust Account to be moved to a
depository institution or trust company that is organized under the laws of
the United States or any tate and has the Required Deposit Rating.
(b) Each SUBI Account shall relate solely to the related SUBI
and each UTI Account shall relate solely to the UTI, and any funds therein shall
not be commingled with any other monies, except as otherwise provided in or
contemplated by the Trust Documents and any applicable Securitization Documents.
The Trustee will account for all amounts received by the Trustee relating to
each Trust Account from the Related Trust Assets and proceeds relating thereto.
Section 4.03. DEFAULT IN UTI PLEDGE. In the event of a UTI Pledge
Default Notice, the Trustee shall (i) not create any new SUBI and (ii) direct
the Servicer to ensure that no additional Leases or Leased Vehicles are assigned
to the Trust (other than (A) as provided for in Section 4.04 or (B) those Leases
and Leased Vehicles the initial net investment value of which on the books of
the Trust does not exceed the sum of any capital contributions made to the
Grantors (and by the Grantors to the Trust) specifically to fund the acquisition
by the Trust of such Leases and Leased Vehicles for allocation to the UTI).
Section 4.04. SUBI LEASE ACCOUNTS. In the event that for any reason
(i)(a) one or more different Servicers shall be engaged to service one or more
Sub-Trusts or (b) circumstances with respect to any Securitization secured by a
UTI Pledge are such that either (1) the Trustee has given to the Servicer notice
that a Trust Asset Transfer into one or more SUBIs would cause a default to
occur in any Securitization secured by such UTI Pledge or (2) there has been a
UTI Pledge Default Notice and (ii) at such time the Trustee, acting pursuant to
a SUBI Supplement at the direction of the Related Beneficiary, would otherwise
be causing the Servicer to effect Trust Asset Transfers from the UTI into one or
more SUBIs, then: (A) the Trustee shall establish and maintain in its name for
each SUBI a separate "SUBI Lease Account," each of which shall be a
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Trust Account and a SUBI Account; (B) to the extent that the Trustee would,
but for clause (i) above, cause the transfer of funds from any SUBI
Collection Account to the UTI Collection Account in connection with any Trust
Asset Transfer, the Trustee shall instead cause the transfer of such funds
from such SUBI Collection Account to the related SUBI Lease Account; (C) the
Trustee shall direct the Servicer servicing the related SUBI to acquire on
behalf of the Trust, for the account of such SUBI rather than for the UTI,
Leases and Leased Vehicles; and (D) the Trustee shall apply any such funds in
any such SUBI Lease Account directly to reimburse the Servicer then servicing
such SUBI for any payments made by it to honor drafts of Dealers in respect
of such Leases and Leased Vehicles. In the event that Leases and Leased
Vehicles are being acquired by any Servicer(s) on behalf of the Trust both
with respect to the UTI and any SUBI simultaneously, the Trustee shall first
allocate all such Leases and Leased Vehicles to the SUBI until funds
available for such purpose in all SUBI Lease Accounts are exhausted and shall
then allocate all remaining Leases and Leased Vehicles to the UTI.
ARTICLE FIVE
THE TRUSTEE
Section 5.01. DUTIES AND POWERS OF TRUSTEE.
(a) The Trustee undertakes to perform such duties and engage
in such activities, and only such duties and activities, as are specified in
this Agreement and the other Trust Documents or as may be directed from time to
time by the Related Beneficiary in a manner not contrary to the terms hereof or
thereof, including in connection with (i) a Securitization, (ii) sales or
pledges of Leases, Leased Vehicles and other Trust Assets to the extent
permitted by any Securitization and (iii) activities ancillary thereto. The
Trustee shall have such powers as are necessary and appropriate to the conduct
of its duties as set forth in this Agreement and any Supplement.
(b) Except as otherwise provided in this Agreement and the
other Trust Documents, neither the Trust nor the Trustee shall (i) issue
interests in or securities of the Trust other than the UTI, the UTI
Certificates, one or more SUBIs and the related SUBI Certificates, (ii) borrow
money (except from the UTI Beneficiaries or their Affiliates in connection with
the acquisition of Leases and Leased Vehicles), (iii) make loans, (iv) invest in
or underwrite securities, (v) offer securities in exchange for Trust Assets
(other than Certificates), (vi) repurchase or otherwise reacquire any
Certificate (other than for purposes of cancellation) except as permitted by or
in connection with any Securitization or (vii) grant any security interest in or
Lien upon any Trust Assets.
(c) At the direction of the Servicer or the Related
Beneficiary, the Trustee shall undertake the following ministerial activities:
(i) apply for and maintain (or cause to be applied for and maintained) all
licenses, permits and authorizations necessary or appropriate to carry on its
duties as Trustee hereunder in each jurisdiction that the Servicer or the
Related Beneficiary, as
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applicable, deems appropriate; (ii) file (or cause to be filed) in each
jurisdiction that the Servicer or Related Beneficiary, as applicable, deems
appropriate (A) notice reports and other required filings and (B)
applications for certificates of title so as to cause the Trust or the
Trustee on behalf of the Trust to be recorded as the holder of legal title of
the Leased Vehicles (and execute and deliver to each Dealer a power of
attorney sufficient to allow such Dealer to so record the Trust or the
Trustee on behalf of the Trust as the holder of legal title to such Leased
Vehicles); (iii) to the extent that the Related Beneficiary or the Servicer,
as applicable, deems it necessary or useful to have an Administrative Lien
recorded on Certificates of Title, file (or cause to be filed) in each
jurisdiction that the Related Beneficiary or the Servicer, as applicable,
reasonably deems appropriate such applications as are necessary or
appropriate to record upon each Certificate of Title an Administrative Lien
in favor of an Administrative Lienholder; (iv) be the assignee of the
Dealer/initial lessor with respect to the Leases in the event that the Trust
cannot be such assignee; and (v) pay (or cause to be paid) all applicable
Taxes and fees properly due and owing in connection with the Trustee's
activities under this Agreement and the other Trust Documents to which it is
a party (other than Taxes in respect of income earned by the Trustee). The
Servicer or the Related Beneficiary, as applicable, shall pay, or make to the
Trustee an advance to pay, the costs or expenses of the foregoing, subject to
reimbursement to the extent provided in any applicable Servicing Agreement.
(d) The Trustee shall establish accounts and receive,
maintain, invest and disburse funds in accordance with Article Four and the
other Trust Documents.
(e) The Trustee, upon receipt of each resolution,
certificate, statement, opinion, report, document, order or other instrument
that shall be specifically required to be furnished to it pursuant to the Trust
Documents shall examine such item to determine whether it conforms to the
requirements of the Trust Documents.
(f) Neither the Servicer nor any Beneficiary shall take, or
direct the Trustee to take, any action that (i) is inconsistent with the
purposes of the Trust as set forth in Section 2.03 or (ii) would result in the
treatment of the Trust for federal income tax purposes as an association (or a
partnership) taxable as a corporation.
(g) The Trustee agrees to perform or cause to be performed
the obligations of the Trust, the Trustee and the Trustee on behalf of the Trust
set forth in the Servicing Agreement and the other Trust Documents upon the
terms and subject to the conditions specified therein.
Section 5.02. DUTY OF CARE.
(a) Except during the continuance of a Servicer Termination
Event, the Trustee need perform only those duties which are specifically set
forth in this Agreement and the other Trust Documents. During the continuance
of a Servicer Termination Event, the Trustee shall exercise such of the rights
and powers vested in it by this Agreement and the other Trust
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Documents and use the same degree of care and skill in their exercise as a
prudent person would exercise or use under the circumstances in the conduct
of such prudent person's own affairs. No provision of this 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 misconduct; provided, however, that the Trustee shall not be
personally liable:
(i) for any action taken, suffered or omitted by it or any
error of judgment, in each case made in good faith by any Responsible
Officer of the Trustee or the Trust Agent customarily performing
functions similar to those performed by such officers or to whom any
corporate trust matter is referred because of such individual's
knowledge of or familiarity with the particular subject, unless it shall
be proved that the Trustee or Trust Agent was negligent or acted with
bad faith or willful misconduct in performing its duties in accordance
with the terms of this Agreement; and
(ii) with respect to any action taken, suffered or omitted to
be taken in good faith in accordance with the express directions of (A)
to the extent relating to the UTI, a UTI Beneficiary or any Registered
Pledgee of a UTI Pledge (to the extent that such Registered Pledgee is
authorized to give such directions) or (B) to the extent relating to a
SUBI, the Holder or Registered Pledgee (to the extent such Registered
Pledgee is authorized to give such directions) of a SUBI Certificate in
connection with a Securitization relating to the exercise of any power
conferred upon the Trustee under this Agreement.
(b) Notwithstanding Section 5.02(a), 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 this Agreement or the other Trust
Documents, 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 herein or therein 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 hereunder or under any Servicing Agreement
except during such time, if any, as the Trustee shall be successor to, and be
vested with the rights, duties, powers and privileges of, the Servicer in
accordance with this Agreement or any other Trust Document.
(c) Except as otherwise authorized by the Trust Documents,
the Trustee shall take no action if the Trustee has been notified by a
Beneficiary, a Special Purpose Affiliate or a Holder, or has actual knowledge,
that such action would impair the beneficial interests in the Trust, impair the
value of any Trust Asset or adversely affect the rating of any related Rated
Securities.
(d) All information obtained by the Trustee regarding the
other parties hereto or any of their respective Affiliates, or regarding the
administration of the Trust, the Lessees, the
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Leased Vehicles or the Leases, whether upon the exercise of its rights under
this Agreement, any other Trust Document or otherwise, shall be maintained by
the Trustee in confidence and shall not be disclosed to any Person other than
to the Trust Agent, the Grantors, the UTI Beneficiaries, the Related
Beneficiary, the related Holders, the Servicer or any related Special Purpose
Affiliate unless such disclosure is required by applicable law or regulation
or pursuant to valid legal process, or unless such information is already
otherwise publicly available.
Section 5.03. CERTAIN MATTERS AFFECTING THE TRUSTEE. Except as
otherwise provided in this Agreement:
(a) 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, approval, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties; provided that it shall be obligated to examine each
such item specifically required to be furnished to it pursuant to the Trust
Documents to determine whether or not it conforms to the requirements of this
Agreement or the other Trust Documents, as applicable. In particular, whenever
any Trust Document provides that the Trustee shall receive or may rely on the
instructions or directions of a Beneficiary or a Holder, any written instruction
or direction purporting to bear the signature of any authorized signatory of
such Beneficiary or Holder reasonably believed by the Trustee to be genuine may
be deemed by the Trustee to have been signed or presented by the proper party.
(b) 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 hereunder in good faith and in
accordance with such Opinion of Counsel.
(c) Subject to Section 5.02(a), the Trustee shall be under no
obligation to exercise any of the discretionary rights or powers vested in it by
this Agreement or any other Trust Document, or to institute, conduct or defend
any litigation hereunder or in relation hereto or thereto, at the request, order
or direction of one or more Beneficiaries or Holders pursuant to this Agreement
or any other Trust Document, unless the Person or Persons making such request
shall have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities, including reasonable fees and reasonable
expenses of counsel, that may be incurred therein or thereby.
(d) The Trustee shall not be bound to make any investigation
into the facts or 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 one or more
Beneficiaries or Holders. Notwithstanding the foregoing, 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 it by the security afforded to it by the terms
of this Agreement or any other Trust Document,
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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 Person(s) requesting such examination
or, if paid by the Trustee, shall be reimbursed as a Trust Expense.
(e) The Trustee may execute any of the trusts or powers or
perform any duties under this Agreement or the other Trust Documents either
directly or by or through agents, attorneys, Trust Agents or custodians and
shall not be liable for the negligence or willful misconduct of such agents,
attorneys, Trust Agents or custodians appointed with due care.
(f) The Trustee shall make a copy of this Agreement available
for examination by Holders and Beneficiaries during normal business hours at its
principal office, or at such other places, if any, designated by the Trustee.
Section 5.04. TRUSTEE NOT LIABLE FOR CERTIFICATES OR LEASES. The
Trustee shall not have any obligation to perform any of the duties of either
Grantor or the Servicer unless explicitly set forth in this Agreement or any
other Trust Document to which the Trustee is a party. The Trustee shall not at
any time have any responsibility or liability for or with respect to (i) the
legality, validity and enforceability of any security interest in any Trust
Asset, (ii) the perfection or priority of any such security interest or the
maintenance of any such perfection and priority, (iii) the efficacy of the Trust
or its ability to generate the payments to be distributed to the Holders under
the Trust Documents, including the existence, condition, location and ownership
of any Trust Asset, (iv) the existence and enforceability of any Insurance
Policy, (v) the existence and contents of any Lease or any computer or other
record thereof, (vi) the validity of the assignment of any Trust Asset to the
Trust or the Trustee on behalf of the Trust or of any intervening assignment,
(vii) the completeness, performance or enforcement of any Lease, (viii) the
compliance by either Grantor or the Servicer with any covenant or the breach by
either Grantor, any Beneficiary or the Servicer of any warranty or
representation in any Trust 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, (ix) any investment of monies
at the direction of the Servicer or any loss resulting therefrom, (x) the acts
or omissions of any Dealer or other Person in connection with the origination of
any Lease, (xi) any action of the Servicer taken in the name of the Trustee or
(xii) 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 this Agreement and the other Trust
Documents to which it is a party. Except with respect to a claim based on the
Trustee's willful misconduct, bad faith or negligence, (i) no recourse shall be
had against the institution serving as Trustee in its individual capacity for
any claim based on any provision of this Agreement or any other Trust Document,
a Certificate or any Trust Asset or the assignment thereof and (ii) the Trustee
shall not have any personal obligation, liability or duty whatsoever to the
Holders or any other Person with respect to any such claim, and any such claim
shall be asserted solely against the Trust Assets or any indemnitor that shall
furnish indemnity as provided for in this Agreement or in the other Trust
Documents. The Trustee shall not be accountable for the use or application
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by a Holder or a Special Purpose Affiliate of any Certificate(s) or of the
proceeds thereof, or for the use or application of any funds properly paid to
the Servicer pursuant to any Trust Document.
Section 5.05. INDEMNIFICATION OF TRUSTEE. The Trustee shall be
indemnified and held harmless out of and to the extent of the Trust Assets with
respect to any Loss incurred by the Trustee arising out of or incurred in
connection with (i) any Trust Assets (including any Loss relating to Leases,
Leased Vehicles, consumer fraud, consumer leasing act violations,
misrepresentation, deceptive and unfair trade practices and any other claims
arising in connection with any Lease, personal injury or property damage claims
arising with respect to any Leased Vehicle or any claim with respect to any Tax
arising with respect to any Trust Asset) or (ii) the acceptance or performance
by the Trustee of the trusts and duties contained in this Agreement and the
other Trust Documents, with any allocation of such indemnification among the
Trust Assets to be made as provided for in Section 3.08 or in a Supplement,
provided, however, that the Trustee shall not be indemnified or held harmless
out of the Trust Assets as to any such Loss (i) for which the Servicer shall be
liable pursuant to Section 6.02 or a corresponding section of any Supplement
(unless either (A) such Loss is an expense for which the Servicer would be
entitled to reimbursement from Trust Assets pursuant to an applicable Servicing
Agreement or (B) the Servicer shall not have paid such Loss upon the final
determination of its liability therefor), (ii) incurred by reason of the
Trustee's willful misconduct, bad faith or negligence or (iii) incurred by
reason of the Trustee's breach of Section 5.07(a)(i) or 5.12 or its
representations and warranties pursuant to any Servicing Agreement. To the
extent that Trust Assets are employed to pay any Loss incurred by the Trustee
for which the Servicer is determined to be liable pursuant to Section 6.02 or a
corresponding section of any Supplement, the Trust shall be subrogated to all
rights of the Trustee to recover such Loss from the Servicer.
Section 5.06. RIGHT NOT TO ACT. Notwithstanding anything to the
contrary contained herein, the Trustee shall have the right to decline to act in
any particular manner otherwise provided for herein or in the other Trust
Documents if the Trustee, being advised in writing by counsel, determines in
good faith that such action may not lawfully be taken or would subject it to
personal liability or be unduly prejudicial to the rights of any Holder; and
provided further, that nothing in this Agreement shall impair the right of the
Trustee to take any action deemed proper by it that is not inconsistent with
such otherwise required acts.
Section 5.07. QUALIFICATION OF TRUSTEE.
(a) Except as otherwise provided in this Agreement, the
Trustee shall at all times be (i) a corporation organized under the laws of the
United States or any State (which corporation shall not be a Beneficiary or any
Affiliate thereof), (ii) qualified to do business in the States requested by the
Servicer and (iii) otherwise acceptable to each Rating Agency.
(b) In the event that the Trustee complies with Section
5.07(a) but has its principal place of business outside of the State of
Delaware, then there shall at all times be a co-trustee appointed to act as the
Delaware Trustee pursuant to Section 3807 of the Delaware Act.
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The Delaware Trustee shall serve as the Delaware Trustee for the sole purpose
of satisfying the requirement of Section 3807 of the Delaware Act that the
Trust have at least one trustee with a principal place of business in
Delaware. It is understood and agreed by the parties hereto and the Holders
that the Delaware Trustee shall have none of the duties or liabilities of the
Trustee. The duties of the Delaware Trustee shall be limited to (i)
accepting legal process served on the Trust in the State of Delaware and (ii)
the execution of any certificates required to be filed with the Delaware
Secretary of State which the Delaware Trustee is required to execute under
Section 3811 of the Delaware Act. To the extent that, at law or in equity,
the Delaware Trustee has duties (including fiduciary duties) and liabilities
relating thereto to the Trust or the Holders, it is hereby understood and
agreed by the parties hereto and the Holders that such duties and liabilities
are replaced by the duties and liabilities of the Delaware Trustee expressly
set forth in this Agreement.
Section 5.08. RESIGNATION OR REMOVAL OF TRUSTEE.
(a) The Trustee may not at any time resign without the
written consent of the UTI Beneficiaries, which consent shall not be
unreasonably withheld.
(b) If at any time the Trustee shall cease to be qualified in
accordance with Section 5.07, or if any representation or warranty made by the
Trustee pursuant to Section 5.12 shall prove to have been untrue in any material
respect when made, but the Trustee shall fail to resign after written request
therefor by the UTI Beneficiaries, or if at any time the Trustee shall be
legally unable to act, or shall be adjudged 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 UTI
Beneficiaries may remove the Trustee. The UTI Beneficiaries also may remove the
Trustee at their discretion. Upon removal of the Trustee, the UTI Beneficiaries
shall promptly appoint a successor Trustee by written instrument, in duplicate,
one copy of which shall be delivered to the Trustee so removed and one copy to
the successor Trustee, together with payment of all fees and expenses owed to
the outgoing Trustee.
(c) Any resignation or removal of the Trustee and appointment
of a successor Trustee pursuant to this Article shall not become effective until
acceptance of appointment by the successor Trustee.
Section 5.09. SUCCESSOR TRUSTEE. Any successor Trustee appointed as
provided in Section 5.08 shall execute, acknowledge and deliver to the
predecessor Trustee, the other parties hereto and each Beneficiary an instrument
accepting such appointment under this 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
this Agreement and the other Trust Documents to which the Trustee is a party,
with like effect as if originally named as Trustee. The predecessor Trustee
shall deliver to the successor Trustee all documents held by
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it under the Trust Documents, and the predecessor Trustee and the other
parties to the Trust Documents 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 Section 5.07. Upon acceptance of
appointment by a successor Trustee as provided in this Section, the successor
Trustee shall mail notice of its appointment under this Agreement to each
Notice Party. If a Beneficiary 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 such
Beneficiary.
Section 5.10. MERGER OR CONSOLIDATION OF TRUSTEE. The Trustee shall
not merge or consolidate with, or sell all or any substantial part of its assets
to, any other corporation, entity or Person without the express written consent
of the UTI Beneficiaries. Any such entity (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 the corporate trust business of the Trustee, and in each case which executes
an agreement of assumption to perform every obligation of the Trustee under this
Agreement, shall be the successor of the Trustee hereunder, provided such entity
shall be eligible pursuant to Section 5.07, without the execution or filing of
any instrument or any further act on the part of any of the parties hereto other
than the written consent of the UTI Beneficiaries. The successor Trustee shall
give notice to each Notice Party within ten days following any merger,
conversion, consolidation or other transaction described in this Section.
Section 5.11. CO-TRUSTEES, SEPARATE TRUSTEES, NOMINEES AND TRUST
AGENTS.
(a) Notwithstanding any other provision of this Agreement, at
any time, for the purpose of meeting any legal requirements of any jurisdiction
in which any Trust Asset may at the time be located or within which such Trust
Asset is to be acquired, the UTI Beneficiaries and the Trustee, acting jointly,
shall have the power to execute and deliver all instruments to appoint one or
more Persons (each, a "Co-Trustee") to act as co-trustee, jointly with the
Trustee, or as a separate trustee or nominee holder of legal title, of all or
any part of such Trust Asset, and to vest in such Person, in such capacity and
for the benefit of the Beneficiaries, the Holders and their permitted assigns,
such title to the Trust Assets, or any part thereof, and, subject to the other
provisions of this Section, such rights, powers, duties, obligations and trusts
as the UTI Beneficiaries and the Trustee may consider necessary or desirable.
No such Co-Trustee shall be required to meet the terms of eligibility as a
successor Trustee pursuant to Section 5.09, except that no such co-trustee,
separate trustee or nominee holder of legal title may be a Beneficiary or any
Affiliate thereof.
(b) Each Co-Trustee shall, to the extent permitted by law, be
appointed and act subject to the following provisions and conditions:
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(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 Co-Trustee jointly (it being
understood that any such 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 this Agreement or as
successor to the Servicer under this Agreement or any Servicing
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 Assets or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such Co-Trustee, but solely at the direction of the
Trustee;
(ii) no Co-Trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee or Co-Trustee; and
(iii) the UTI Beneficiaries and the Trustee acting jointly may
at any time accept the resignation of or remove any Co-Trustee.
(c) Any notice, request or other writing given to the Trustee
shall be deemed to have been given to each of the then Co-Trustees, as
effectively as if given to each of them. Every instrument appointing any
Co-Trustee hereunder shall refer to this Agreement and the conditions of this
Section. Each 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 provisions of this Agreement, specifically including every
provision 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 and each Related Beneficiary.
Any Co-Trustee may at any time, and shall, at the request of the
Trustee, appoint the Trustee, the Trust Agent or the Servicer its agent or
attorney-in-fact with full power and authority, to the extent not prohibited by
law, to do any lawful act under or in respect of this Agreement on its behalf
and in its name. If any Co-Trustee shall die, become incapable of acting,
resign or be removed, then all of its estates, properties, rights, remedies and
trusts relating to this Agreement and the Trust Assets 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 this Agreement, the appointment of any Co-Trustee shall not relieve
the Trustee of its obligations and duties under this Agreement.
(d) The Trustee may enter from time to time into one or more
Trust Agency Agreements with a Trust Agent that is by experience and expertise
qualified to act in a trustee capacity and otherwise acceptable to the UTI
Beneficiaries. The Trustee shall give notice of the appointment of each Trust
Agent (other than the initial Trust Agent) to each Notice Party. Except as
otherwise provided in the related Trust Agency Agreement, the Trust Agent shall
carry out each and every obligation of the Trustee hereunder and under each
other Trust Document to
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which the Trustee is a party, and the Trustee delegates to the Trust Agent
all power and authority delegable by the Trustee hereunder and thereunder in
order better to be able to carry out its duties as Trust Agent. Each Trust
Agency Agreement shall specify the duties, powers, liabilities, obligations
and compensation of the related Trust Agent to carry out on behalf of the
Trustee any or all of its obligations as Trustee arising under this Agreement
and the other Trust Documents to which the Trustee is a party and shall
contain a non-petition covenant substantially identical to that set forth in
Section 8.08; provided, however, that nothing contained in any Trust Agency
Agreement shall excuse, limit or otherwise affect any power, duty,
obligation, liability or compensation otherwise applicable to the Trustee
hereunder. Notwithstanding the foregoing or the provisions of any Trust
Agency Agreement, the Trustee shall replace any Trust Agent if (i) in the
judgment of the Related Beneficiary, the compensation or level of service of
such Trust Agent shall no longer be reasonably competitive with those of any
alternative agent reasonably proposed by the Related Beneficiary, (ii) the
Trust Agent has materially breached its obligations under the related Trust
Agency Agreement, the UTI Beneficiaries or any related Holder have given
written notice to the Trustee and the Trust Agent of such breach and the
Trust Agent has not cured such breach in all material respects within 30
Business Days thereafter or (iii) any Rating Agency shall require the
replacement of such Trust Agent. The Trustee hereby engages U.S. Bank as the
initial Trust Agent, the UTI Beneficiaries hereby consent to such appointment
and U.S. Bank hereby accepts such engagement, with all provisions of this
Section relating to Trust Agents, together with Section 8.08, constituting a
Trust Agency Agreement between U.S. Bank and the Trustee, subject to any
amendment or supplement thereto between such parties not inconsistent
herewith. So long as the Trustee is a Subsidiary of the Trust Agent, the
Trustee shall pay to the Trust Agent reasonable compensation for its services
and shall provide such reimbursement of expenses as are separately agreed to
by the Trustee and the Trust Agent.
The Trust Agent shall be entitled to all of the benefits, protections,
indemnities and rights of reliance set forth in this Agreement with regard to
the Trustee. The Trust Agent may resign hereunder upon giving 30 days' prior
written notice to each Notice Party. Notwithstanding the foregoing, unless
otherwise agreed to by the Trustee and the UTI Beneficiaries, such resignation
will be effective only upon the appointment of a successor Trust Agent in
accordance with the terms hereof.
Section 5.12. REPRESENTATIONS, WARRANTIES AND COVENANTS OF TRUSTEE.
The Trustee hereby makes the following representations, warranties and covenants
on which the other parties hereto, their respective permitted assignees and
pledgers, each Holder of a Certificate (and beneficial owner of any portion
thereof in connection with a Securitization) and each Beneficiary may rely:
(i) The Trustee is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is qualified to do business as a foreign corporation and is in good
standing in each State. The Trustee shall promptly take or cause to be
taken (at the expense of the Servicer as provided in Section 5.13) all
such actions and execute and file or cause to be executed and filed all
such instruments and documents, as may reasonably be required in order
for the Trustee to qualify to do business and be in good standing
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in each other State identified in writing from time to time by a
Beneficiary or the Servicer.
(ii) The Trustee has full power, authority and right to
execute, deliver and, assuming that the filings set forth on an
Officer's Certificate of the Servicer delivered on the Effective Date
are sufficient to allow the Trustee to act as a trustee with respect to
the Trust Assets, perform this Agreement in all material respects and
has taken all necessary action to authorize the execution, delivery and
performance by it of this Agreement.
(iii) This Agreement has been duly executed and delivered by
the Trustee, and is a legal, valid and binding instrument enforceable
against the Trustee in accordance with its terms.
(iv) Neither the execution and delivery of this Agreement or
the other Trust Documents to which the Trustee is a party nor the
consummation of the transactions herein or therein contemplated, nor
compliance with the provisions hereof or thereof, will conflict with or
result in a breach of, or constitute a default (with notice or passage
of time or both) under any provision of any judgment, decree or order
binding on the Trustee or the certificate of incorporation or bylaws of
the Trustee or any provision of any material indenture, contract,
agreement or other instrument to which the Trustee is a party or by
which it is bound.
(v) The Trustee has not engaged, is not currently engaged and
will not engage during the term of this Agreement in any activity other
than serving as Trustee and in such ancillary activities as are
necessary and proper in order to act as Trustee pursuant to this
Agreement and the other Trust Documents.
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Section 5.13. TRUSTEE'S FEES AND EXPENSES. Except as otherwise
provided in the other Trust Documents, the Servicer shall, subject to
reimbursement to the extent provided in any applicable Servicing Agreement (i)
pay the Trustee, the Delaware Trustee and any other Co-Trustee 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 services rendered by it
in the execution of the Trust and in the exercise and performance of any of the
powers and duties under this Agreement and the other Trust Documents to which it
is a party and (ii) reimburse the Trustee, the Delaware Trustee and any other
Co-Trustee for all reasonable expenses (including reasonable attorneys' fees)
for the costs of qualification, periodic maintenance of its corporate franchises
and qualifications, annual board of directors' meetings and all necessary
corporate filings, fees and State franchise and other taxes, excluding Taxes
payable in respect of income earned by the Trustee.
Section 5.14. TRUSTEE STOCK. U.S. Bank hereby makes the following
representations, warranties and covenants on which the other parties hereto,
their respective permitted assignees and pledgers and each Holder of a
Certificate (and beneficial owner of any portion thereof in connection with a
Securitization) and each Beneficiary may rely:
(i) All of the Trustee Stock is owned by U.S. Bank, free and
clear of any Lien or other restriction, agreement or commitment of any
kind (other than as provided for in this Agreement) that would in any
way restrict its ability freely to transfer, convey and assign the
Trustee Stock. All such Trustee Stock currently outstanding is (and any
Trustee Stock that may be issued in the future will be) validly issued,
fully paid and nonassessable and has not been (and will not be) issued
in violation of any preemptive, first refusal or other subscription
rights of any Person. There are no outstanding options, warrants,
conversion rights, subscription rights, preemptive rights, exchange
rights or other rights, agreements or commitments of any kind obligating
U.S. Bank to sell any Trustee Stock or to issue any additional Trustee
Stock to any Person. No additional Trustee Stock may be issued without
the express written consent of the UTI Beneficiaries.
(ii) For so long as U.S. Bank is acting as a Trust Agent
pursuant to this Agreement or any Trust Agency Agreement, but subject to
any applicable legal or regulatory requirements, it will retain
ownership of all of the Trustee Stock. If at any time (and for any
reason, including U.S. Bank's resignation or termination as Trust Agent
or the termination of the Trust) U.S. Bank either is no longer acting as
a Trust Agent or is no longer able, because of legal or regulatory
changes, to own the Trustee Stock or the Trustee would have to be
removed pursuant to Section 5.08(b) as a result of its being owned by
U.S. Bank, U.S. Bank will (A) notify the UTI Beneficiaries of such event
and (B) sell to the designee of the UTI Beneficiaries (which shall not
be a Beneficiary or an Affiliate thereof), at the option of the UTI
Beneficiaries, without recourse except with respect to the
representations, warranties and covenants contained herein, all of the
Trustee Stock for the sum of $10 plus all Liquid Trustee Assets. Such
designee shall have
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120 days from the date of receipt of such notice in which to exercise
such option and to consummate such acquisition, during which time U.S.
Bank shall not offer for sale or sell any Trustee Stock to any other
Person. If such designee does not consummate such acquisition within
such period, U.S. Bank may offer for sale or sell to any Person any or
all of the Trustee Stock or dissolve the Trustee; provided, however,
that if, upon or in connection with U.S. Bank no longer being a Trust
Agent, a successor Trust Agent shall be appointed by the Trustee, U.S.
Bank will next grant to such successor Trust Agent an option for it or
its designee to buy the Trustee Stock without recourse except with
respect to the representations, warranties and covenants contained
herein, for the sum specified above. Such successor Trust Agent or
its designee shall have 120 days from the date of receipt of such
offer in which to exercise such option and consummate such
acquisition, during which time no Trustee Stock may be offered for
sale or sold to any Person other than such successor Trust Agent or
its designee. Upon any timely exercise of the foregoing option to
acquire the Trustee Stock, U.S. Bank shall promptly tender all Trustee
Stock to such buyer at a time and place determined by the buyer duly
endorsed in blank or with duly endorsed stock powers attached, against
payment of the purchase price. U.S. Bank shall pay any transfer or
similar taxes arising from a transfer of the Trustee Stock as
contemplated herein; provided, however, that the UTI Beneficiaries
shall pay such amounts if the Trustee is removed at the discretion of
the UTI Beneficiaries and not for any other reason contained in
Section 5.08.
Section 5.15. LIMITATION OF LIABILITY OF TRUSTEE.
(a) Notwithstanding anything contained herein to the
contrary, in no event shall HVT, Inc., in its individual capacity, or any Trust
Agent appointed hereunder have any liability for the representations,
warranties, covenants, agreements or other obligations of the Trust hereunder
(other than any certificate of authentication), as to all of which recourse
shall be had solely to the Trust Assets.
(b) For all purposes of this Agreement, in the performance of
any duties or obligations of the Trust hereunder, the Trustee and the Trust
Agent shall be subject to, and entitled to the benefits of, the terms and
provisions of Article Five.
(c) Except as otherwise noted by the context, any reference
herein to actions taken or amounts received in trust by the Trustee shall be
deemed to mean the Trustee, acting on behalf of the Trust and all beneficiaries
thereof.
(d) The Trustee hereby acknowledges that AHFC owns all rights
to the name HVT, Inc.
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ARTICLE SIX
THE SERVICER
Section 6.01. DUTIES AND POWERS OF SERVICER. The Servicer is hereby
appointed and authorized to act as attorney-in-fact for the Trust, and in such
capacity shall manage, service, administer and make collections on the Trust
Assets with reasonable care, using that degree of skill and attention that it
exercises with respect to comparable assets that it services for itself or
others. The Trustee shall enter into any and all agreements as a Beneficiary
may, with the consent of the Servicer, direct in order to add, delete or amend
any or all of the obligations of the Servicer hereunder in respect of all or any
portion of the Related Trust Assets. The Servicer shall follow its customary
standards, policies and procedures, as the same may change from time to time,
and, unless otherwise indicated herein or in any Servicing Agreement, shall have
full power and authority, acting alone, to do any and all things in connection
with such managing, servicing, administrating and collecting that it may deem
necessary or desirable in the interest of the Trust. Without limiting the
generality of the foregoing, the Servicer is hereby authorized and empowered by
the Beneficiaries and the Trust (i) to execute and deliver, on behalf of the
Trust, any and all instruments, certificates or other documents necessary or
advisable to record and maintain title to the Leased Vehicles in the name of the
Trust or the Trustee on behalf of the Trust and to release interests of the
Trust, the Trustee and the Beneficiaries in any Leased Vehicle in connection
with the sale or other disposition of such Leased Vehicle as contemplated by
this Agreement and the other Trust Documents, (ii) to give all directions
permitted to be given by the Servicer pursuant to this Agreement and (iii) to
apply for and maintain the licenses, permits and authorizations and make the
filings described in Section 5.01(c). The Servicer also shall be responsible
for creating, maintaining and amending the Schedule of Leases and Leased
Vehicles. In connection with the creation of each SUBI, the Servicer shall
deliver to the Trustee a revised Schedule of Leases and Leased Vehicles as of
date not more than ten days prior to the date of such delivery. The Servicer is
hereby authorized, in its own name, in the name of the Trust or in the name of
the Trustee on behalf of the Trust, to commence, defend against or otherwise
participate in a Proceeding relating to or involving the protection or
enforcement of the interests of the Trust, the Trustee on behalf of the Trust, a
Beneficiary or a Holder in any Lease, Leased Vehicle or other Trust Asset. If
the Servicer shall commence, defend against or otherwise participate in a
Proceeding in its own name, or in the name of the Trust or the Trustee on behalf
of the Trust, each relevant Holder or Beneficiary shall thereupon be deemed to
have automatically assigned its interest in (including legal title to) the
applicable Lease, Leased Vehicle or other Trust Asset, as applicable, to the
Servicer to the extent necessary for purposes of such Proceeding. The Servicer
is authorized and empowered by the Trust 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. The
Trustee shall furnish the Servicer with all powers of attorney and other
documents and take any other steps which the Servicer may deem necessary or
appropriate to enable it to carry out its duties under this Agreement and the
other Trust Documents. If in any Proceeding it shall be held that the Servicer
may not enforce the rights of the Trust, the Trustee on behalf of the Trust, a
Holder or a Beneficiary in a Lease, Leased Vehicle or other Trust Asset on the
grounds that it is not the real party in interest or a holder entitled to
enforce the Lease or other relevant document or instrument, the Trustee shall on
behalf of the Trust, at the direction of the Servicer, take steps to
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enforce the interest of the Trust, the Trustee on behalf of the Trust, a
Holder or a Beneficiary in such Lease, Leased Vehicle or other Trust Asset,
including bringing suit in its name or the name of the Related Beneficiary or
related Holders. The Servicer shall advance the costs or expenses of any
such action to the Trustee, subject to reimbursement to the extent provided
in any applicable Servicing Agreement.
Section 6.02. LIABILITY OF SERVICER; INDEMNITIES.
(a) The Servicer shall be liable in accordance with this
Agreement and the other Trust Documents only to the extent of the obligations
specifically undertaken by the Servicer and shall have no other obligations or
liabilities hereunder or thereunder. Such obligations will include
indemnifying, defending and holding harmless the following parties:
(i) the Trust, the Trustee and the Trust Agent from and
against (A) any and all Loss arising out of or resulting from the use or
operation of any Leased Vehicle by the Servicer or any Affiliate thereof
and (B) any Taxes that may at any time be asserted against the Trust,
the Trustee or the Trust Agent with respect to the transactions
contemplated by this Agreement (other than Taxes based on income payable
to such Persons hereunder), including any sales, gross receipts, general
corporation, tangible personal property, privilege or license Taxes and
costs and expenses in defending against the same;
(ii) the Trust, the Trustee, the Trust Agent, the
Beneficiaries and the Holders from and against any and all Loss to the
extent that such Loss arose out of, or was imposed upon, such Persons
through the performance by the Servicer of its duties hereunder or under
any Servicing Agreement or by reason of its disregard of its obligations
and duties hereunder or thereunder; and
(iii) the Trustee and the Trust Agent from and against all Loss
arising out of or incurred in connection with their acceptance or
performance of the trusts and duties contained in this Agreement or any
other Trust Document, except to the extent that any such Loss (A) is due
to the willful misconduct, bad faith or negligence (except for good
faith errors in judgment) of the Trustee or the Trust Agent, (B) arises
from the material breach by the Trustee or the Trust Agent of any of its
obligations, representations or warranties in this Agreement or in any
Trust Agency Agreement or (C) arises out of or is incurred in connection
with the performance by the Trustee of the duties of successor Servicer
hereunder or under any Servicing Agreement.
(b) If the Servicer has made any indemnity payments pursuant
to this Section, (i) it shall be a condition of such payment that, to the extent
such amounts would constitute an expense for which the Servicer would be
entitled to seek reimbursement under the Servicing
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Agreement if incurred by the Servicer, the recipient thereof shall assign to
the Servicer all rights of such recipient to reimbursement for such amounts
from the Trust or the Trust Assets, and (ii) if the recipient thereafter
collects from the Trust, the Trust Assets or third parties any amounts with
respect to which the Servicer has made an indemnity payment to the recipient
hereunder, the recipient shall promptly repay such amounts collected to the
Servicer, without interest. Indemnification under this Section shall survive
(i) any transaction described in Section 6.03 and any acts, occurrences or
transactions related thereto whether arising before or after the date of such
transaction and (ii) the termination of this Agreement and the other Trust
Documents.
Section 6.03. MERGER OF SERVICER; APPOINTMENT OF NOMINEE. Any
corporation (i) into which the Servicer may be merged or consolidated, (ii)
resulting from any merger, conversion or consolidation to which the Servicer
shall be a party, (iii) succeeding to the business of the Servicer or (iv) more
than 50% of the voting stock of which is owned directly or indirectly by AHFC or
any Affiliate thereof and which is otherwise servicing motor vehicle leases or
retail installment sales contracts, which corporation in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Servicer, shall be the successor to the Servicer without the execution or filing
of any paper or any further act on the part of any of the parties to this
Agreement.
Section 6.04. LIMITATION ON LIABILITY OF SERVICER AND OTHERS.
(a) Except as otherwise provided in this Agreement and the
other Trust Documents, neither the Servicer nor any of its directors, officers,
employees or agents shall have any liability to the Trust, the Trustee or the
Trust Agent, or any Beneficiary, Special Purpose Affiliate, Holder or Registered
Pledgee, for any action taken or for refraining from the taking of any action
pursuant hereto or thereto or for errors in judgment. Notwithstanding the
foregoing, this provision shall not protect the Servicer or any such Person
against any Liability that would otherwise be imposed by reason of willful
misconduct, bad faith or negligence (except errors in judgment) in the
performance of duties or by reason of reckless disregard of obligations and
duties hereunder or thereunder. The Servicer and its directors, officers,
employees and agents 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 hereunder or thereunder and in so doing shall not
be acting in bad faith or with negligence, willful misfeasance or reckless
disregard.
(b) Except as otherwise provided in this Agreement and the
other Trust Documents, the Servicer shall not be under any obligation to appear
in, prosecute or defend any Proceeding that is not incidental to its duties to
service the Trust Assets in accordance herewith or therewith and that in its
opinion may involve it in any Liability. Notwithstanding the foregoing, the
Servicer may undertake any reasonable action that it may deem necessary or
desirable in respect of this Agreement and the other Trust Documents and the
rights and duties of the parties hereto or thereto and the interests of any
Beneficiary hereunder or thereunder. In such event, the reasonable legal
expenses and costs for such action and any Loss resulting therefrom shall be an
expense allocated to the Trust Assets relating to the UTI or the related SUBI,
as
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applicable, subject to reimbursement to the extent provided in any applicable
Servicing Agreement.
Section 6.05. SERVICER NOT TO RESIGN; DELEGATION OF DUTIES.
(a) Subject to Section 6.03, the Servicer shall not resign
from the obligations and duties imposed on it by this Agreement except upon a
determination that the performance of its duties under this 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 a successor servicer shall have assumed the responsibilities and
obligations of the Servicer. Neither the Trustee nor the Trust Agent will be
obligated to serve as successor servicer under this Agreement without its prior
written consent.
(b) Except as otherwise provided in this Agreement and the
other Trust Documents, the Servicer may not assign any of its rights, powers,
duties or obligations under this Agreement. Notwithstanding the foregoing, the
Servicer may make such an assignment in connection with a consolidation, merger,
conversion or other event that is made in compliance with Section 6.03.
(c) Except as otherwise provided in this Agreement and the
other Trust Documents, the duties and obligations of the Servicer under this
Agreement shall continue until this Agreement has been terminated as provided in
Section 7.01 and shall survive the exercise by the Trustee of any right or
remedy under, or the enforcement by the Trustee of any provision of this
Agreement or any other Trust Document.
Section 6.06. SERVICING COMPENSATION. The Servicer shall receive such
fees and reimbursement for expenses with respect to the Trust Assets relating to
the UTI or any SUBI as may be agreed to from time to time between the Servicer
and the Related Beneficiary.
Section 6.07. POWERS OF ATTORNEY. The Servicer is hereby designated by
each of the Trust and the Trustee as its true and lawful attorney-in-fact, with
full power and authority to perform any and all acts related to managing,
servicing, administering and collecting the Trust Assets and any and all acts
otherwise required or permitted to be performed by the Servicer under this
Agreement and the other Trust Documents. The Servicer is hereby authorized and
empowered to execute and deliver, on behalf and in the name of the Trustee or
the Trust, any and all instruments, certificates or other documents relating
thereto. The Servicer also has the right, power and authority to designate in
writing other Persons as true and lawful attorneys-in-fact for and on behalf of
the Trustee and the Trust to do anything that the Servicer has the power to do
under this Agreement and the other Trust Documents. Without limiting the
generality of the foregoing, the Servicer or any such Person designated by the
Servicer is hereby authorized and empowered by the Trustee and the Trust to
(i) apply for and maintain the licenses, permits and
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authorizations and make the filings described in Section 5.01(c) and (ii)
execute and deliver, on behalf of the Trustee and the Trust, applications for
or duplicates of Certificates of Title in the name of the Trust or the
Trustee on behalf of the Trust, applications for registrations of Leased
Vehicles or license plates, applications for transfers of Certificates of
Title or registrations for Leased Vehicles or license plates and any
instruments, certificates or other documents which the Servicer deems
necessary or advisable to record, hold or release title to or registration of
Leased Vehicles in the manner contemplated hereby.
Section 6.08. PROTECTION OF TITLE TO TRUST.
(a) The Servicer shall maintain accounts and records as to
legal title to the Trust Assets (including records as to which Trust Assets are
allocated to the UTI and each SUBI) accurately and in sufficient detail to
permit the reader thereof to know at any time the status of such legal title.
(b) The Servicer shall maintain its computer systems so that
its master computer records (including any back-up archives) that refer to any
Leased Vehicle indicate clearly that legal title to such Leased Vehicle is held
by the Trust or the Trustee on behalf of the Trust as nominee holder of legal
title for the Related Beneficiary or the related Holders. References to legal
title of a Leased Vehicle being held by the Trust or the Trustee on behalf of
the Trust as nominee holder of legal title for a Related Beneficiary or the
related Holders shall be deleted from or modified on such computer systems when,
and only when, legal title to such Leased Vehicle is no longer held by the Trust
or the Trustee on behalf of the Trust for the benefit of such Related
Beneficiary or the related Holders.
(c) If at any time the Servicer or a Related Beneficiary
proposes to sell, grant a security interest in or otherwise transfer any
interest in any Leased Vehicle to any prospective purchaser, lender or other
transferee, all computer tapes, records or print-outs (including any restored
from back-up archives) delivered by the Trustee to such prospective purchaser,
lender or other transferee that refers in any manner whatsoever to such Leased
Vehicle shall indicate clearly that legal title to such Leased Vehicle is held
in the name of the Trust or the Trustee on behalf of the Trust for the benefit
of the Related Beneficiary or the related Holders.
ARTICLE SEVEN
TERMINATION
Section 7.01. DISSOLUTION OF THE TRUST.
(a) Subject to Section 7.03(b), The Trust shall continue in
full force and effect until the payment to each Holder or its designee of all
amounts required to be paid to them
40
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pursuant to this Agreement and the related Certificates and the expiration or
termination of all Securitizations by their respective terms.
(b) Upon the occurrence of the events described in Section
7.01(a), after satisfaction of all obligations to creditors, if any, of the
Trust, the Trustee shall (i) distribute the Trust Assets to the Related
Beneficiaries or their respective designees in accordance with this Agreement
and the Supplements; (ii) together with the Related Beneficiaries, cause the
Certificates of Title to any Leased Vehicles so distributed to the Related
Beneficiaries to be issued in the name of, or at the direction of, such Related
Beneficiaries and the Related Beneficiaries to whom such Trust Assets are
distributed shall pay or cause to be paid all applicable titling and
registration fees and taxes; (iii) take such action as may be requested by a
Related Beneficiary in connection with the transfer of Related Trust Assets to
such Related Beneficiary or its designee, including the execution and delivery
of assignment forms appearing on the Certificates of Title or other instruments
to transfer and assign the related Leased Vehicles, and (iv) file or cause to be
filed a certificate of cancellation with the Delaware Secretary of State
pursuant to Section 3810(d) of the Delaware Act. Upon the filing described in
clause (iv), this Agreement shall terminate and the Trustee shall be discharged
from all duties and obligations hereunder.
Section 7.02. TERMINATION OF SUB-TRUSTS.
(a) Subject to Section 7.03, the Trust shall terminate with
respect to the Trust Assets allocated to a UTI or a SUBI, and not, except as
otherwise provided in a Supplement, as to any Trust Assets allocated to any
other Sub-Trust, upon the written direction by the Related Beneficiary to the
Trustee to revoke and terminate such Sub-Trust, following the satisfaction of
all obligations to creditors, if any, of such Sub-Trust, the payment to each
related Holder or its designee of all amounts required to be paid to it pursuant
to this Agreement and such Holder's UTI Certificate or related SUBI Certificate,
as applicable, and the expiration or termination of all related Securitizations
by their respective terms. Following such direction with respect to the UTI or
a SUBI and delivery of the related Certificates to the Trustee for cancellation,
the Trustee shall distribute to the Related Beneficiary or its designee all
Related Trust Assets and shall cause the Certificates of Title to the related
Leased Vehicles to be issued in the name of, or at the direction of, such
Related Beneficiary (which, in the case of a SUBI, may include reallocation of
the related SUBI Assets to the UTI). The Related Beneficiary to whom such Trust
Assets are distributed shall pay or cause to be paid all applicable titling and
registration fees and taxes.
(b) Upon the termination of the Trust with respect to a
Sub-Trust, the UTI or applicable SUBI shall be terminated and the UTI
Certificates or the applicable SUBI Certificates shall be returned to the
Trustee for cancellation. Such a termination shall not effect a termination of
any other Sub-Trusts that are in existence at the time of such termination.
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Section 7.03. BENEFICIARY OR SPECIAL PURPOSE AFFILIATE BANKRUPTCY.
(a) The bankruptcy, insolvency, dissolution or similar
occurrence of a Beneficiary or a Special Purpose Affiliate shall not, except as
otherwise provided in Section 7.03(b) or a Supplement, (i) cause the termination
of this Agreement with respect to the Trust as a whole, the UTI or any SUBI,
(ii) entitle the legal representatives of such Beneficiary or Special Purpose
Affiliate to claim an accounting or to take any action in any court for a
partition or winding up of the Trust as a whole or any Trust Assets other than
the Related Trust Assets or (iii) otherwise affect the rights, obligations or
liabilities of the parties hereto or any other Beneficiary or Special Purpose
Affiliate.
(b) Upon the bankruptcy, insolvency, dissolution or similar
occurrence of the 1% UTI Beneficiary, the Trust shall terminate automatically
with respect to the UTI and the UTI Assets, but not with respect to any SUBI or
SUBI Assets, unless, within 90 days of such bankruptcy, insolvency, dissolution
or similar occurrence, (i) the 99% UTI Beneficiary, in writing, (A) agrees that
the UTI shall not be dissolved and (B) designates an additional UTI Beneficiary
to serve as the 1% UTI Beneficiary, transfers to such additional UTI Beneficiary
a 1% ownership interest in the UTI and presents the UTI Certificate originally
evidencing the 99% ownership interest in the UTI to the Trustee for registration
of transfer to such additional UTI Beneficiary of a 1% ownership interest in the
UTI, (ii) the Trustee registers such transfer and issues new UTI Certificates to
such UTI Beneficiaries evidencing their respective interests and (iii) the
additional 1% UTI Beneficiary delivers to the Servicer, the Trustee and the 99%
UTI Beneficiary an agreement in form and substance satisfactory to such Persons.
In such event, the Trust shall not terminate with respect to the UTI or any UTI
Assets.
ARTICLE EIGHT
MISCELLANEOUS
Section 8.01. AMENDMENT. This Agreement, including the terms of the
UTI Certificates, may be amended or supplemented by written agreement among the
UTI Beneficiaries, the Servicer, the Trustee, the Delaware Trustee (if such
amendment affects its rights or obligations hereunder as Delaware Trustee) and
the Trust Agent (if such amendment affects its rights or obligations hereunder
as Trust Agent), with the consent of each Related Beneficiary and Holder
affected thereby; provided, however, that the consent of a Holder shall not be
required if (i) (A) the purpose of the amendment or supplement is to cure any
ambiguity, correct or supplement any provision that may be inconsistent with any
other provision, add any provision that provides additional rights to Holders or
ensure that the Trust, any Sub-Trust or one or more Beneficiaries are not
classified as an association (or partnership) taxable as a corporation for
federal income tax purposes or for state income or franchise tax purposes and
(B) the amendment or supplement will not, in the good faith judgment of the UTI
Beneficiaries and the Servicer, materially and adversely affect the interest of
any Holder or (ii) an Opinion of Counsel is delivered to the Trustee to the
effect that such amendment or supplement will not materially and adversely
affect
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the interest of any Holder. After the first Securitization, any such
amendment shall require such additional approvals, if any, as may be required
under the related Securitization Documents.
Section 8.02. GOVERNING LAW. This Agreement shall be created under and
governed by and construed under the internal laws of the State of Delaware,
without regard to any otherwise applicable principles of conflicts of laws.
Section 8.03. NOTICES. All demands, notices and communications under
this Agreement or any Supplement shall be in writing and shall be delivered or
mailed by registered or certified first class United States mail, postage
prepaid, return receipt requested, hand delivery, prepaid courier service or
facsimile transmission, and addressed in each case as follows: (i) if to Honda
Titling A L.P. as UTI Beneficiary, at 700 Van Ness Avenue, Torrance, CA 90501
(telecopier no. (310) 787-3910), Attention: General Partner; (ii) if to Honda
Titling B L.P. as UTI Beneficiary, at 700 Van Ness Avenue, Torrance, CA 90501
(telecopier no. (310) 787-3910), Attention: General Partner; (iii) if to the
Servicer, at 700 Van Ness Avenue, Torrance, CA 90501 (telecopier no. (310)
787-3910), Attention: President; (iv) if to the Trustee, in care of the Trust
Agent at 111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601 (telecopier
no. (312) 228-9401), Attention: HVT, Inc.; (v) if to the Delaware Trustee, at
Delaware Trust Capital Management, Three Beaver Valley Road, Wilmington,
Delaware 19803 (telecopier no. (302) 421-7387), Attention: Mary Kay Pupillo;
(vi) if to the Trust Agent, at 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601 (telecopier no. (312) 228-9401), Attention: Honda Lease Trust;
(vii) if to a Holder, at its address set forth in the related Certificate
Register; (viii) if to a Beneficiary (to the extent not duplicative of any of
clauses (i) through (vii) above, at its address set forth in the related SUBI
Supplement; (ix) if to Standard & Poor's and Standard & Poor's is a Rating
Agency, to 25 Broadway, New York, New York 10004, Attention: Asset Backed
Surveillance Group (telecopier no. (212) 208-0030); (x) if to Moody's and
Moody's is a Rating Agency, to 99 Church Street, New York, New York 10007,
Attention: ABS Monitoring Department (telecopier no. (212) 553-7820); or (xi)
with respect to any of the foregoing Persons, at such other address or
telecopier number as shall be designated by such Person in a written notice to
the other parties hereto. Delivery shall occur only upon actual receipt or
rejected tender of such communication by an officer of the recipient entitled to
receive such notices located at the address or telecopier number of such
recipient for notices hereunder. A copy of all notices to the Trustee shall be
delivered to the Trust Agent.
Section 8.04. SECURITIZATION HOLDERS. To the extent that any entity
becomes a Securitization Holder, (i) such Securitization Holder shall exercise
its rights as a Holder hereunder only as directed or authorized pursuant to the
related Securitization Documents and (ii) except with respect to a claim based
on such Securitization Holder's willful misconduct, bad faith or negligence, or
to the extent otherwise provided in such Securitization Documents, no recourse
shall be had against the institution serving as such Securitization Holder.
Section 8.05. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any Supplement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed
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<PAGE>
severable from the remaining covenants, agreements, provisions or terms of
this Agreement, as supplemented, and shall in no way affect the validity or
enforceability of the other covenants, agreements, provisions or terms of
this Agreement or any Supplement or of any Certificate or the rights of any
Holder.
Section 8.06. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original, but all of which counterparts shall together constitute but
one and the same instrument.
Section 8.07. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained in this Agreement shall be binding upon and inure to the benefit of
the parties hereto, the Beneficiaries, the Holders and their permitted
successors and assigns. Any request, notice, direction, consent, waiver or
other instrument or action by a party hereto, a Holder or a Beneficiary shall
bind the successors and assigns of such party, Holder or Beneficiary, as
applicable. The Trustee may not assign or delegate any of its rights or
obligations under this Agreement, except as provided herein, without the prior
written consent of the UTI Beneficiaries.
Section 8.08. NO PETITION. Each of the parties hereto covenants and
agrees that prior to the date which is one year and one day after the date upon
which all obligations under each Securitization have been paid in full, it will
not (and, to the fullest extent permitted by applicable law, the Trustee shall
not have the power to) institute against, or join any other Person in
instituting against any Grantor, the Trustee, the Trust, any Special Purpose
Affiliate, any Beneficiary, any general partner of a Beneficiary or of a Special
Purpose Affiliate that is a partnership or any member of a Beneficiary or
Special Purpose Affiliate (or any of their respective general partners) that is
a limited liability company, 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 complete or
partial termination of this Agreement, the resignation or removal of the Trustee
and the complete or partial resignation or removal of the Servicer.
Section 8.09. TABLE OF CONTENTS AND HEADINGS. The Table of Contents and
Article and Section headings are for convenience of reference only and shall not
define or limit any of the terms or provisions hereof.
Section 8.10. TAX REPORTING AND CHARACTERIZATION.
(a) Consistent with the treatment of the Trust and each
Sub-Trust for tax purposes as a mere nominee holder of legal title, unless
otherwise required by appropriate taxing authorities, neither the Trust nor any
Sub-Trust will file or cause to be filed any annual or other tax returns. In
the event that the Trust, any Sub-Trust or the Trustee on behalf of the Trust is
required to file any tax returns, the Servicer will prepare or cause to be
prepared such returns and will deliver such returns to the Trustee for
signature, unless applicable law requires one or more
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<PAGE>
Beneficiaries to sign such returns, in which case the Servicer will deliver
such returns to the related Beneficiaries for signature.
(b) The parties hereto (i) intend that neither the Trust nor
any Sub-Trust shall constitute a separate entity for federal income tax purposes
or for state income or franchise tax purposes and that each Beneficiary shall be
treated for such tax purposes as if it owned the Related Trust Assets directly,
rather than through the Trust and (ii) agree to treat the Related Trust Assets
accordingly for federal income or state income or franchise tax purposes.
However, in the event that the Trust or any Sub-Trust is characterized as a
separate entity for federal income tax purposes or for state income or franchise
tax purposes, the parties hereto intend that the Trust or such Sub-Trust shall
qualify as a partnership for such tax purposes that has elected out of
partnership status under Section 761 of the Internal Revenue Code (and analogous
state law tax provisions).
Section 8.11. CERTIFICATES NONASSESSABLE AND FULLY PAID. Except as
otherwise provided in a Supplement, the interests represented by the
Certificates shall be nonassessable for any losses or expenses of the Trust or
for any reason whatsoever, and, upon authentication thereof by the Trustee, each
Certificate shall be deemed fully paid.
Section 8.12. EFFECT OF AGREEMENT; DELAWARE CO-TRUSTEE AGREEMENT. As
of the Effective Date, the Original Trust Agreement is amended and restated in
its entirety. The UTI Beneficiaries, the Servicer, the Trustee and the Delaware
Trustee hereby agree that commencing on the Effective Date, all references in
the Delaware Co-Trustee Agreement to "Trust Agreement" shall be deemed to refer
to this Agreement and that the Delaware Co-Trustee Agreement, as so amended,
shall continue in full force and effect.
ARTICLES NINE AND TEN
[Reserved]
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IN WITNESS WHEREOF, the UTI Beneficiaries, the Servicer, the Trustee,
the Delaware Trustee, and, solely for the limited purposes set forth in Sections
5.03(e), 5.11(d), 5.14, 5.15, 8.01, 8.03 and 8.08, the Trust Agent, have caused
this Agreement to be duly executed by their respective of ricers as of the day
and year first above written.
HONDA TITLING A L.P.
As Grantor and UTI Beneficiary
By: HONDA TITLING A LLC,
as General Partner
By: /s/ Y. KOHAMA
------------------------
Name: Y. Kohama
Title: President
HONDA TITLING B L.P.,
as Grantor and UTI Beneficiary
By: HONDA TITLING B LLC,
as General Partner
By: /s/ Y. KOHAMA
------------------------
Name: Y. Kohama
Title: President
AMERICAN HONDA FINANCE CORPORATION,
as Servicer
By: /s/ John I. Weisickle
------------------------
Name: John I. Weisickle
Title: Vice President, Finance
HVT, INC.,
as Trustee
By: /s/ MELISSA A. ROSAL
------------------------
Name: Melissa A. Rosal
Title: Vice President
<PAGE>
DELAWARE TRUST CAPITAL MANAGEMENT,
INC., as Delaware Trustee
By: /s/ RICHARD N. SMITH
------------------------
Name: Richard N. Smith
Title: Vice President
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By: /s/ MELISSA A. ROSAL
------------------------
Name: Melissa A. Rosal
Title: Vice President
<PAGE>
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On April 1, 1998 before me, Katy Tamer, Notary Public
[insert date] [Here insert name and title of notary]
personally appeared Y. Kohama
/X/ personally known to me, or
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that he executed the same in his authorized capacity,
and that by his signature on the instrument the person, or the entities upon
behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ KATY TAMER [Seal]
<PAGE>
STATE OF CALIFORNIA )
) ss
COUNTY OF LOS ANGELES )
On April 1, 1998 before me, Katy Tamer, Notary Public
[insert date] [Here insert name and title of notary]
personally appeared John I. Weisickle
/X/ personally known to me, or
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that he executed the same in his authorized capacity,
and that by his signature on the instrument the person, or the entities upon
behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ KATY TAMER [Seal]
<PAGE>
STATE OF DELAWARE )
) ss
COUNTY OF NEW CASTLE )
On March 31, 1998 before me, Deborah K. Bowers, Notary Public for the
State of Delaware,
[insert date] [Here insert name and title of notary]
personally appeared Richard Smith, Vice President of Delaware Trust Capital
Management, Inc.,
/X/ personally known to me, or
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that he executed the same in his authorized capacity,
and that by his signature on the instrument the person, or the entities upon
behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ DEBORAH K. BOWERS [Seal]
<PAGE>
STATE OF ILLINOIS )
) ss
COUNTY OF COOK )
On March 31, 1998 before me, Debra Swire,
[insert date] [Here insert name and title of notary]
personally appeared Melissa Rosal,
/ / personally known to me, or
/ / proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument,
and acknowledged to me that she executed the same in her authorized capacity,
and that by her signature on the instrument the person, or the entities upon
behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
Signature /s/ DEBRA SWIRE [Seal]
<PAGE>
EXHIBIT A
CERTIFICATE OF TRUST OF HONDA LEASE TRUST
This Certificate of Trust of Honda Lease Trust (the "Trust"), dated as
of ___________, is being duly executed and filed by Delaware Trust Capital
Management, Inc., as Delaware trustee, and HVT, Inc., a Delaware corporation, as
trustee, to form a business trust under the Delaware Business Trust Act (12 DEL.
C. Section 3801 ET SEQ.).
(a) NAME. The name of the business trust formed hereby is Honda
Lease Trust.
(b) DELAWARE TRUSTEE. The name and business address of the trustee
of the Trust in the State of Delaware is Delaware Trust Capital Management,
Inc., ___________, Delaware.
(c) SERIES TRUST. The Trust shall be a series trust and the debts,
liabilities, obligations and expenses incurred, contracted for or otherwise
existing with respect to a particular series shall be enforceable against the
assets of such series only, and not against the assets of the Trust generally.
(d) EFFECTIVE DATE. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written.
DELAWARE TRUST CAPITAL MANAGEMENT,
INC., as Delaware Trustee
By:
---------------------------------
Name:
Title:
HVT, INC., as Trustee
By:
---------------------------------
Name:
Title:
A-1
<PAGE>
EXHIBIT B
THIS UTI CERTIFICATE MAY NOT BE TRANSFERRED OR
ASSIGNED EXCEPT UPON THE TERMS AND SUBJECT TO THE
CONDITIONS SPECIFIED HEREIN.
HONDA LEASE TRUST
UNDIVIDED TRUST INTEREST CERTIFICATE
evidencing a fractional undivided interest in the UTI Assets of Honda
Lease Trust, a business trust organized pursuant to the Delaware
Business Trust Act (the "Trust").
(This Certificate does not represent any interest in the SUBI Assets of
the Trust or an obligation of, or an interest in, Honda Titling A L.P.,
Honda Titling B L.P., American Honda Finance Corporation, HVT, Inc., or
any of their respective Affiliates.)
Percentage Interest: [99%][1%]
Number - U- ______
THIS CERTIFIES THAT __________________ is the registered owner of a
nonassessable, fully-paid, fractional undivided [99%] [1%] interest in the UTI
Assets of the Trust. The Trust was created pursuant to a trust agreement, dated
as of July 17, 1997, as amended, restated or supplemented from time to time (the
"Agreement"), among Honda Titling A L.P. and Honda Titling B L.P., each a
Delaware limited partnership, as grantors (the "Grantors") and initial
beneficiaries (the "UTI Beneficiaries"), American Honda Finance Corporation, a
California corporation, as servicer (the "Servicer"), HVT, Inc., a Delaware
corporation, as trustee (the "Trustee"), Delaware Trust Capital Management,
Inc., as Delaware trustee (the "Delaware Trustee"), and for the limited purposes
set forth therein, U.S. Bank National Association, a national banking
association, as trust agent (the "Trust Agent"). A summary of certain
provisions of the Agreement is set forth below. Capitalized terms used herein
that are not otherwise defined shall have the meanings ascribed thereto in the
Agreement.
This UTI Certificate is one of the duly authorized certificates issued
under the Agreement and designated as "Honda Lease Trust Undivided Trust
Interest Certificates" (the "UTI Certificates"). This UTI Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement, a
copy of which may be examined by the holder hereof during normal business hours
at the principal office of the Trustee or at such other place as may be
designated by the Trustee. By acceptance of this Certificate, the holder hereof
assents to the terms and conditions of the Agreement and agrees to be bound
thereby.
This UTI Certificate represents an ownership interest in the undivided
trust interest of the Trust (the "UTI"). The UTI constitutes an undivided
beneficial interest in all Trust Assets that have not been allocated from time
to time to a special unit of beneficial interest (a "SUBI") in the Trust
(collectively, the "UTI Assets"). The UTI does not evidence a direct interest
in the UTI Assets, nor does it represent a beneficial interest in any Trust
Assets other than the UTI Assets. The rights of the Holder of this UTI
Certificate with respect to the UTI Assets, including distributions in respect
thereof, are set forth in the Agreement.
B-1
<PAGE>
The Trust Assets consist generally of cash capital, Leases of Leased
Vehicles that have been assigned to the Trust or the Trustee on behalf of the
Trust, the related Leased Vehicles, such other assets as may from time to time
be designated as "Trust Assets" under the Agreement and all proceeds of the
foregoing.
Pursuant to the Agreement, the Trustee shall from time to time, at the
direction of the UTI Beneficiaries and subject to satisfaction of certain
conditions, establish one or more SUBIs and allocate or cause to be allocated to
each such SUBI on the books and records of the Trust such Trust Assets (the
"SUBI Assets") as shall have been identified to such SUBI by the UTI
Beneficiaries. Upon allocation to a SUBI, the related SUBI Assets shall no
longer be UTI Assets unless and until specifically reallocated to the UTI from
the SUBJ. Each SUBI shall be represented by one or more certificates (each, a
"SUBI Certificate") distributed to or upon the order of the UTI Beneficiaries.
The UTI and each SUBI shall each constitute a separate series of the
Trust pursuant to Section 3806(b)(2) of the Delaware Act for which separate and
distinct records shall be maintained.
The UTI Certificates are limited in right of payment to certain
collections and recoveries respecting the Trust Assets not allocated to any
SUBI, all to the extent and as more specifically set forth in the Agreement. By
accepting this UTI Certificate, the holder hereof expressly (i) waives any claim
to any proceeds or assets of the Trustee and to all Trust Assets other than UTI
Assets and proceeds thereof and (ii) subordinates in favor of the holder of each
SUBI Certificate any claim to any related SUBI Asset that, notwithstanding
clause (i) above, may be determined to exist.
The Agreement, including the terms of this UTI Certificate, may be
amended or supplemented by written agreement upon the terms and subject to the
conditions set forth in the Agreement. If approval by the holder of this UTI
Certificate is required for any amendment or supplement to the Agreement or this
UTI Certificate, any such approval shall be conclusive and binding on the holder
giving such approval and on all future holders hereof and of any UTI Certificate
issued upon the permitted transfer or exchange hereof, whether or not notation
of such consent is made upon this UTI Certificate or any UTI Certificate issued
upon any such permitted transfer or exchange.
Neither the UTI nor any UTI Certificate may be transferred or assigned,
except upon the terms and subject to the conditions set forth in the Agreement.
To the fullest extent permitted by applicable law, any purported transfer or
assignment of the UTI or any UTI Certificate not complying with such
requirements shall be deemed null, void and of no effect under the Agreement.
Without limitation of the foregoing, the UTI or one or more UTI Certificates may
be pledged in connection with a Securitization, and a security interest therein
granted, and may be transferred or assigned absolutely to or by the pledgee
thereof solely in connection with the exercise of remedies with respect to a
default under or with respect to such Securitization; provided, that any such
pledgee must (i) give a non-petition covenant as provided in the Agreement and
(ii) execute an agreement in favor of the holders from time to time of any SUBI
Certificates to release all claims to SUBI Assets and, in the event that such
release is not given effect, to subordinate fully all claims that it may be
deemed to have against any SUBI Assets.
B-2
<PAGE>
Any permitted transfer of this UTI Certificate is registrable upon
surrender of this UTI Certificate for registration of transfer at the corporate
trust office of the Trustee (or the Trust Agent, if applicable) accompanied by a
written instrument of transfer in form satisfactory to the Trustee, duly
executed by the registered holder hereof or such registered holder's attorney
duly authorized in writing, and thereupon one or more new UTI Certificates of a
like aggregate fractional undivided interest will be issued to the designated
permitted transferee.
Prior to due presentation of this UTI Certificate for registration of a
permitted transfer, the Trustee, the certificate registrar and any of their
respective agents may treat the Person in the name of which this UTI Certificate
is registered as the owner hereof for the purpose of receiving distributions and
for all other purposes, and, except as otherwise provided in the Agreement,
neither the Trustee, the certificate registrar nor any such agent shall be
affected by any notice to the contrary.
The Trust or the UTI may terminate upon the terms and subject to the
conditions set forth in the Agreement. The UTI Certificates will be cancelled
upon delivery to the Trustee following termination of the UTI.
Unless this UTI Certificate shall have been executed and authenticated
by an authorized officer of the Trustee, by manual signature, this UTI
Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, the Trustee, on behalf of the Trust and not in its
individual capacity, has caused this UTI Certificate to be duly executed.
Dated:
-----------------
HONDA LEASE TRUST
By: HVT, INC.,
as Trustee
By:
-----------------------------
Name:
Title:
This is one of the UTI Certificates referred
to in the within-mentioned Agreement.
HVT, INC.,
as Trustee
By:
-----------------------------
Name:
Title:
B-4
<PAGE>
- --------------------------------------------------------------------------------
HONDA TITLING A L.P.
and
HONDA TITLING B L.P.,
as Grantors and UTI Beneficiaries,
HONDA TITLING C L.P.
and
HONDA TITLING D L.P.,
as Transferors,
AMERICAN HONDA FINANCE CORPORATION,
as Servicer,
HVT, INC.,
as Origination Trustee of the Honda Lease Trust,
DELAWARE TRUST CAPITAL MANAGEMENT, INC.,
as Delaware Trustee of the Honda Lease Trust,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent and, for Certain Limited Purposes Only, as 1999-A Owner Trustee
FORM OF 1999-A SUBI SUPPLEMENT
TO
SECOND AMENDED AND RESTATED
TRUST AND SERVICING AGREEMENT
-----------------------------
Dated as of [ ]
-----------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
ARTICLE ELEVEN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
11.01 Definitions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
11.02 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE TWELVE CREATION AND TERMINATION OF TRUST INTERESTS . . . . . . . . . . . . . . 5
12.01 Initial Creation of the 1999-A SUBI Sub-Trust and 1999-A SUBI.. . . . . 5
12.02 Rights in Respect of 1999-A SUBI. . . . . . . . . . . . . . . . . . . . 7
12.03 Issuance and Form of SUBI Certificates. . . . . . . . . . . . . . . . . 8
12.04 Filings.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10
12.05 Termination of 1999-A SUBI. . . . . . . . . . . . . . . . . . . . . . .10
12.06 Representations and Warranties of Origination Trustee.. . . . . . . . .11
12.07 Resignation or Removal of Origination Trustee . . . . . . . . . . . . .11
ARTICLE THIRTEEN ACCOUNTS; CASH FLOWS; ELIGIBLE INVESTMENTS . . . . . . . . . . . . . .11
13.01 1999-A SUBI Collection Account. . . . . . . . . . . . . . . . . . . . .11
13.02 1999-A SUBI Lease Account.. . . . . . . . . . . . . . . . . . . . . . .12
13.03 1999-A Payahead Account.. . . . . . . . . . . . . . . . . . . . . . . .13
13.04 Investment Gains and Losses.. . . . . . . . . . . . . . . . . . . . . .13
13.05 Rebalancing After Third-Party Claim.. . . . . . . . . . . . . . . . . .14
ARTICLE FOURTEEN MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . .15
14.01 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
14.02 Effect of 1999-A SUBI Supplement on Origination Trust Agreement . . . .15
14.03 Amendment.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15
14.04 Notices.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
14.05 Severability of Provisions. . . . . . . . . . . . . . . . . . . . . . .17
14.06 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
</TABLE>
i
<PAGE>
EXHIBITS
<TABLE>
<S> <C> <C>
SCHEDULE I Schedule of 1999-A Contracts and 1999-A
Leased Vehicles as of the Cutoff Date. . . . . . . . . . . . . . . . . . . S-1
EXHIBIT A Form of HTA LP/HTB LP 1999-A SUBI Certificate. . . . . . . . . . . . . . . A-1
EXHIBIT B Form of 1999-A SUBI Certificate. . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of [HTC LP][HTD LP] Retained 1999-A SUBI Certificate. . . . . . . . . C-1
</TABLE>
ii
<PAGE>
FORM OF 1999-A SUBI SUPPLEMENT TO
SECOND AMENDED AND RESTATED TRUST
AND SERVICING AGREEMENT
1999-A SUBI SUPPLEMENT TO SECOND AMENDED AND RESTATED TRUST AND
SERVICING AGREEMENT ("1999-A SUBI Supplement"), dated and effective as of
[ ,] by and among Honda Titling A L.P. ("HTA LP"), a Delaware
limited partnership, and Honda Titling B L.P. ("HTB LP"), a Delaware limited
partnership (both as "Grantors" and "UTI Beneficiaries"), Honda Titling C
L.P. ("HTC LP"), a Delaware limited partnership, and Honda Titling D L.P.
("HTD LP"), a Delaware limited partnership (both as "Transferors"), American
Honda Finance Corporation, as servicer (in such capacity, the "Servicer"),
HVT, Inc., a Delaware corporation, as origination trustee of the Honda Lease
Trust (the "Origination Trustee"), Delaware Trust Capital Management, Inc.,
as Delaware trustee of the Honda Lease Trust (the "Delaware Trustee"), and
U.S. Bank National Association, a national banking association ("U.S. Bank"),
as trust agent (in such capacity, the "Trust Agent"), and for the limited
purposes of the provisions of Sections 13.01, 13.02, 13.03 and 13.04, and the
rights under 14.03, in its capacity as 1999-A Owner Trustee (as defined
below).
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered
into that Second Amended and Restated Trust and Servicing Agreement, dated as
of April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending
and restating that certain Trust Agreement, dated July 17, 1997, among the
same parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things,
taking assignments and conveyances of, and holding in trust and dealing in,
various Trust Assets. Capitalized terms used and not defined in these
Recitals have the meaning given in the Agreement of Definitions described in
Section 11.01 hereof.
B. The Origination Trust Agreement contemplates that certain of
the Trust Assets, other than those previously identified on the Origination
Trust's books and records as Other SUBI Assets and allocated to a separate
SUBI Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth
constitute SUBI Assets within such SUBI Sub-Trust, and that in connection
with any such allocation the Origination Trustee shall create a SUBI at the
direction of the UTI Beneficiaries and shall issue to, or to the order of,
the UTI Beneficiaries one or more SUBI Certificates evidencing such SUBI, and
the related SUBI Beneficiaries and their permitted assignees generally will
be entitled to the net cash flows arising from, but only from, such SUBI
Assets.
C. The parties hereto desire to supplement the terms of the
Origination Trust Agreement to cause the Origination Trustee to (i) identify
a portfolio of Trust Assets (the "1999-A SUBI Assets") to be designated to a
SUBI Portfolio (the "1999-A SUBI Portfolio") (ii)
1
<PAGE>
allocate such 1999-A SUBI Assets to a SUBI Sub-Trust (the "1999-A SUBI
Sub-Trust"), (iii) create the related 1999-A SUBI and (iv) create and issue
to or to the order of (a) HTA LP one certificate representing a 98.01%
interest in the 1999-A SUBI (the "HTA LP/HTC LP 1999-A SUBI Certificate") and
one certificate representing a 0.99% interest in the 1999-A SUBI (the "HTA
LP/HTD LP 1999-A SUBI Certificate"), and (b) HTB LP one certificate
representing a 0.99% interest in the 1999-A SUBI (the "HTB LP/HTC LP 1999-A
SUBI Certificate") and one certificate representing a 0.01% interest in the
1999-A SUBI (the "HTB LP/HTD LP 1999-A SUBI Certificate" and, together with
the HTA LP/HTC LP 1999-A SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI
Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate, the "HTA LP/HTB LP
1999-A SUBI Certificates").
D. The parties hereto desire to supplement the terms of the
Origination Trust Agreement relating to the establishment of the 1999-A SUBI
Collection Account.
E. The parties hereto desire that, concurrently herewith, U.S.
Bank, as securities intermediary (as defined in Section 8-102 of the UCC) (in
such capacity, the "1999-A SUBI Securities Intermediary"), establish two
securities accounts (as defined in Section 8-501 of the UCC) as follows: (i)
a securities account in the name of and for the benefit of HTA LP (the "HTA
LP 1999-A SUBI Securities Account") pursuant to that certain HTA LP 1999-A
SUBI Securities Account Control Agreement, dated as of [ ],
between HTA LP and the 1999-A SUBI Securities Intermediary (the "HTA LP
1999-A SUBI Securities Account Control Agreement"), into which the HTA LP/HTC
LP 1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI Certificate will
be transferred and held until such time as HTA LP directs the 1999-A SUBI
Securities Intermediary to debit the HTA LP 1999-A SUBI Securities Account to
reflect the transfer of the HTA LP/HTC LP 1999-A SUBI Certificate and the HTA
LP/HTD LP 1999-A SUBI Certificate pursuant to a Securitization and (ii) a
securities account in the name of and for the benefit of HTB LP (the "HTB LP
1999-A SUBI Securities Account") pursuant to that certain HTB LP 1999-A SUBI
Securities Account Control Agreement, dated as of [ ] between HTB
LP and the 1999-A SUBI Securities Intermediary (the "HTB LP 1999-A SUBI
Securities Account Control Agreement") into which the HTB LP/HTC LP 1999-A
SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate will be
transferred and held until such time as HTB LP directs the 1999-A SUBI
Securities Intermediary to debit the HTB LP 1999-A SUBI Securities Account to
reflect the transfer of the HTB LP/HTC LP 1999-A SUBI Certificate and the HTB
LP/HTD LP 1999-A SUBI Certificate pursuant to a Securitization.
F. Concurrently herewith, the Origination Trustee, on behalf of
the Origination Trust, and the Servicer are entering into the 1999-A
Servicing Supplement (as amended, supplemented or restated from time to time,
the "1999-A Servicing Supplement") pursuant to which, among other things, the
terms of the Origination Trust Agreement and the Servicing Agreement, dated
April 1, 1998, by and among the UTI Beneficiaries, the Servicer and the
Origination Trust will be supplemented insofar as they apply solely to the
servicing of the 1999-A SUBI Sub-Trust created hereby to provide for further
specific servicing obligations that will benefit the SUBI Beneficiaries with
respect to the 1999-A SUBI created hereby.
G. Concurrently herewith, the UTI Beneficiaries, HTC LP and HTD
LP are entering into that certain 1999-A SUBI Certificates Purchase and Sale
Agreement, dated as of [ ,
2
<PAGE>
1999] (the "1999-A SUBI Certificates Purchase and Sale Agreement"), pursuant
to which the UTI Beneficiaries will sell, without recourse, to HTC LP and HTD
LP, all of their respective right, title and interest in and to the 1999-A
SUBI and the HTA LP/HTB LP 1999-A SUBI Certificates, all monies due thereon
and paid thereon in respect thereof and the right to realize on any property
that may be deemed to secure the 1999-A SUBI, and all proceeds thereof. In
connection therewith, and concurrently herewith and therewith, (1) HTA LP
will transfer (a) the HTA LP/HTC LP 1999-A SUBI Certificate to HTC LP and (b)
the HTA LP/HTD LP 1999-A SUBI Certificate to HTD LP, and (2) HTB LP will
transfer (a) the HTB LP/HTC LP 1999-A SUBI Certificate to HTC LP and (b) the
HTB LP/HTD LP 1999-A SUBI Certificate to HTD LP, all consideration of the pro
rata cash payment to the UTI Beneficiaries of an amount equal to the
Aggregate Net Investment Value of the 1999-A SUBI as of [May 31, 1999] (the
"Cutoff Date"), based on their respective share of the 1999-A SUBI less the
cost and expenses of the Securitization and the value of any securities
issued in connection with the Securitization and retained by the HTC LP and
HTD LP.
H. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the
1999-A SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to
HTD LP representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD
LP 1999-A SUBI Certificate" and, together with the HTC LP 1999-A SUBI
Certificate, the "1999-A SUBI Certificates"), (iii) one certificate to HTC LP
representing a 0.198% beneficial interest in the 1999-A SUBI (the "HTC LP
Retained 1999-A SUBI Certificate") and (iv) one certificate to HTD LP
representing a 0.002% beneficial interest in the 1999-A SUBI (the "HTD LP
Retained 1999-A SUBI Certificate" and, together with the HTC LP Retained
1999-A SUBI Certificate, the "Retained 1999-A SUBI Certificates"). The
1999-A SUBI Certificates shall be exclusive of proceeds of the Residual Value
Insurance Policy or other residual value insurance policies relating to the
1999-A Contracts and 1999-A Leased Vehicles.
I. The parties hereto desire that, concurrently herewith, the
1999-A SUBI Securities Intermediary establish a securities account (as
defined in Section 8-501 of the UCC) in the name of and for the benefit of
HTC LP (the "HTC LP 1999-A SUBI Securities Account") pursuant to that certain
HTC LP 1999-A SUBI Securities Account Control Agreement dated as of
[ ], between HTC LP and the 1999-A SUBI Securities Intermediary
(the "HTC LP 1999-A SUBI Securities Account Control Agreement") into which
the HTC LP 1999-A SUBI Certificate and the HTC LP Retained 1999-A SUBI
Certificate will initially be transferred and held until such time as HTC LP
directs the 1999-A SUBI Securities Intermediary to debit the HTC LP 1999-A
SUBI Securities Account to reflect the transfer of the HTC LP 1999-A SUBI
Certificate pursuant to a Securitization involving the 1999-A SUBI.
J. The parties hereto desire that, concurrently herewith, the
1999-A SUBI Securities Intermediary establish a securities account (as
defined in Section 8-501 of the UCC) in the name of and for the benefit of
HTD LP (the "HTD LP 1999-A SUBI Securities Account") pursuant to that certain
HTD LP 1999-A SUBI Securities Account Control Agreement dated as of
[ ], between HTD LP and the 1999-A SUBI Securities Intermediary
(the "HTD LP 1999-A
3
<PAGE>
SUBI Securities Account Control Agreement") into which the HTD LP 1999-A SUBI
Certificate and the HTD LP Retained 1999-A SUBI Certificate will initially be
transferred and held until such time as HTD LP directs the 1999-A SUBI
Securities Intermediary to debit the HTD LP 1999-A SUBI Securities Account to
reflect the transfer of the HTD LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
K. The parties hereto desire that, concurrently herewith, the
1999-A SUBI Securities Intermediary establish a securities account (as
defined in Section 8-501 of the UCC) in the name of and for the benefit of
the 1999-A Securitization Trust (the "99.8% 1999-A SUBI Securities Account")
pursuant to that certain 99.8% 1999-A SUBI Securities Account Control
Agreement dated as of [ ], between the 1999-A Owner Trustee, on
behalf of the 1999-A Securitization Trust, and the 1999-A SUBI Securities
Intermediary, (the "99.8 % 1999-A SUBI Securities Account Control Agreement")
into which the HTC LP 1999-A SUBI Certificate will be transferred from the
HTC LP 1999-A SUBI Securities Account and the HTD LP 1999-A SUBI Certificate
will be transferred from the HTD LP 1999-A SUBI Securities Account,
respectively, and held until such time as the 1999-A Owner Trustee directs
the 1999-A SUBI Securities Intermediary to debit the [99.8% 1999-A SUBI
Securities Account to reflect the transfer of the HTC LP 1999-A SUBI
Certificate and the HTD LP 1999-A SUBI Certificate to the 1999-A
Securitization Trust pursuant to the Securitization involving the 1999-A SUBI].
L. Concurrently herewith, HTC LP, HTD LP, U.S. Bank, as owner
trustee (in such capacity, the "1999-A Owner Trustee"), The Bank of New York,
as indenture trustee ("1999-A Indenture Trustee") and Wilmington Trust
Company, as Delaware owner trustee (the "Delaware Owner Trustee"), are
entering into that certain securitization trust agreement, dated as of
[ ] (the "1999-A Securitization Trust Agreement") pursuant to
which the securitization trust (the "1999-A Securitization Trust") will be
formed and pursuant to which HTC LP and HTD LP will transfer to the 1999-A
Securitization Trust the 1999-A SUBI Certificates, the 1999-A Indenture
Trustee will issue the Notes and the 1999-A Securitization Trust will issue
the Certificates and deliver the Notes to HTC LP and HTD LP. The HTC LP
Retained 1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI
Certificate will be retained by HTC LP and HTD LP, respectively.
M. Concurrently herewith, the 1999-A Indenture Trustee and the
1999-A Owner Trustee are entering into that certain indenture, dated as of
[ ] (the "Indenture"), pursuant to which the 1999-A Indenture
Trustee will issue the Notes and the 1999-A Owner Trustee will grant a
security interest in all of the assets held by the 1999-A Securitization
Trust, including the 1999-A SUBI Certificates, to the 1999-A Indenture
Trustee to secure the 1999-A Owner Trustee's obligations under the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and in the Origination Trust Agreement, and other
good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged by each party hereto, the parties hereto agree to the
following supplemental obligations and provisions with regard to the 1999-A
SUBI Sub-Trust:
4
<PAGE>
ARTICLE ELEVEN
DEFINITIONS
11.01 DEFINITIONS. For all purposes of this 1999-A SUBI Supplement,
except as otherwise expressly provided or unless the context otherwise
requires, capitalized terms used and not otherwise defined herein shall have
the meanings ascribed thereto in the Agreement of Definitions dated
[ ], by and among HVT, Inc., a Delaware corporation, as
origination trustee, Delaware Trust Capital Management, Inc., a Delaware
corporation, as Delaware trustee, U.S. Bank National Association, a national
banking association, as trust agent and as owner trustee, American Honda
Finance Corporation, as servicer, Wilmington Trust Company, as Delaware owner
trustee, The Bank of New York, as indenture trustee, Honda Titling A L.P., a
Delaware limited partnership, Honda Titling B L.P., a Delaware limited
partnership, Honda Titling C L.P., a Delaware limited partnership, and Honda
Titling D L.P., a Delaware limited partnership. In the event of any conflict
between a definition set forth both in the Origination Trust Agreement and
the Agreement of Definitions, the definition set forth in the Agreement of
Definitions shall prevail. In the event of any conflict between a definition
set forth both herein and the Agreement of Definitions, the definitions set
forth herein shall prevail.
11.02 INTERPRETATION. For all purposes of this 1999-A SUBI
Supplement, except as otherwise expressly provided or unless the context
otherwise requires, (i) terms used in this 1999-A SUBI Supplement include, as
appropriate, all genders and the plural as well as the singular, (ii)
references to this 1999-A SUBI Supplement include all Exhibits and Schedules
hereto, (iii) references to words such as "herein", "hereof" and the like
shall refer to this 1999-A SUBI Supplement as a whole and not to any
particular part, Article or Section within this 1999-A SUBI Supplement, (iv)
references to a section such as "Section 12.01" or an Article such as
"Article Twelve" shall refer to the applicable Section or Article of this
1999-A SUBI Supplement, (v) the term "include" and all variations thereof
shall mean "include without limitation", (vi) the term "or" shall mean
"and/or", (vii) the term "proceeds" shall have the meaning ascribed to such
term in the UCC, (viii) the phrase "Origination Trustee, acting on behalf of
the Origination Trust," or words of similar import, shall be deemed to refer
to the Origination Trustee, acting on behalf of the Honda Lease Trust and all
beneficiaries thereof, and (ix) the phrase "1999-A Owner Trustee, acting on
behalf of the 1999-A Securitization Trust," or words of similar import, shall
be deemed to refer to the 1999-A Owner Trustee, acting on behalf of the Honda
Auto Lease Trust 1999-A and all beneficiaries thereof.
ARTICLE TWELVE
CREATION AND TERMINATION OF TRUST INTERESTS
12.01 INITIAL CREATION OF THE 1999-A SUBI SUB-TRUST AND 1999-A SUBI.
(a) Pursuant to Section 3.01(a) of the Origination Trust
Agreement, Trust Assets not already denominated as SUBI Assets with respect
to a different SUBI Sub-Trust may be identified and allocated as SUBI Assets
of a separate SUBI Sub-Trust at the direction of the UTI Beneficiaries. The
UTI Beneficiaries hereby direct the Origination Trustee to identify and
allocate or cause to be identified and allocated on the books and records of
the Origination Trust a separate portfolio of SUBI Assets (the "1999-A SUBI
Assets") consisting of the Leases and
5
<PAGE>
related Leased Vehicles listed as of the Cutoff Date on Schedule I hereto and
other related Trust Assets to be accounted for and held in trust
independently from all other Trust Assets within the Origination Trust,
including all Trust Assets already identified and allocated to any other SUBI
Sub-Trust, and from those remaining as assets of the UTI Sub-Trust.
The assets of the 1999-A SUBI Sub-Trust established hereby shall
consist of: (i) those Leases identified by contract number on Schedule I
hereto that are Eligible Leases as of the Cutoff Date, including the related
rights of the Origination Trust as lessor under such Leases, having an
Aggregate Net Investment Value as of the Cutoff Date of $-; (ii) the related
Leased Vehicles and all proceeds thereof, including each Certificate of Title
and the Booked Residual Value of each Leased Vehicle, whether realized
through the exercise by Lessees of purchase options under the Leases, the
proceeds of sale of the related Leased Vehicles to Dealers or third parties
or through payments received from any other Person (directly or indirectly),
including as proceeds of any related Insurance Policy (exclusive of any
residual value insurance policies or the proceeds thereof) (to the extent not
applied to making repairs to the related Leased Vehicle or otherwise paid to
the Lessees, a third Person or Governmental Authority by the Servicer as
required by law or pursuant to its normal servicing practices); (iii) all of
the Origination Trust's right, title, interest and obligations (except such
obligations that are specifically retained by the Origination Trust pursuant
to the terms of the Origination Trust Agreement) with respect to such Leases
or Leased Vehicles, including the right to enforce all Dealer repurchase
obligations arising under Dealer Agreements and to proceeds arising
therefrom; (iv) any other rights under or other proceeds of any Insurance
Policy relating to such Leases, Leased Vehicles or payments of the related
Lessee with respect thereto (exclusive of any residual value insurance
policies or the proceeds thereof) (to the extent not applied to making
repairs to the related Leased Vehicle or otherwise paid to the Lessee, a
third Person or Governmental Authority by the Servicer as required by law or
pursuant to its normal servicing practices); (v) any portion of any Security
Deposit actually and properly applied by the Servicer against amounts due
under the related Lease (to the extent not applied to making repairs to the
related Leased Vehicle or paid to the Lessee, a third Person or Governmental
Authority in accordance with the Servicer's normal servicing practices); (vi)
the 1999-A SUBI Collection Account, including all cash and Eligible
Investments therein and all income from the investment of funds therein and
(vii) all proceeds of any of the foregoing arising on or after the Cutoff
Date.
Based upon their identification and allocation by the Servicer
pursuant to the 1999-A Servicing Supplement, the Origination Trustee hereby
identifies and allocates as 1999-A SUBI Assets the portfolio of Leases and
Leased Vehicles more particularly described on Schedule I hereto, and the
related Trust Assets described above, each such 1999-A SUBI Asset to be
identified on the books and accounts of the Origination Trust as belonging to
the 1999-A SUBI Portfolio.
(b) Pursuant to Section 3.01(a) of the Origination Trust
Agreement, the Origination Trustee hereby creates the 1999-A SUBI Sub-Trust
and the 1999-A SUBI. The 1999-A SUBI shall represent a specific undivided
beneficial interest solely in the 1999-A SUBI Sub-Trust and the 1999-A SUBI
Assets.
6
<PAGE>
(c) As required by Section 3.04 of the Origination Trust
Agreement, the UTI Beneficiaries hereby certify to the Origination Trustee
that (i) as of the date of execution and delivery hereof, either there is no
pledgee of the UTI or each such pledgee of a UTI Pledge has received prior
notice of the creation of the 1999-A SUBI Sub-Trust and of the terms and
provisions of this 1999-A SUBI Supplement and of the related Securitization
and (ii) as of the date hereof, and after giving effect to: (A) the creation
of the 1999-A SUBI Sub-Trust pursuant to Section 12.01(b); (B) the issuance
of the HTA LP/HTB LP 1999-A SUBI Certificates pursuant to Section 12.03(a);
(C) the transfer to, or to the order of, HTC LP of, the HTA LP/HTC LP 1999-A
SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate; (D) the
transfer to, or to the order of, HTD LP of, the HTA LP/HTD LP 1999-A SUBI
Certificate and the HTB LP/HTD LP 199-A SUBI Certificate; (E) the exchange by
HTC LP and HTD LP of the HTA LP/HTB LP 1999-A SUBI Certificates for the
1999-A SUBI Certificates and the Retained 1999-A SUBI Certificates; (F) the
issuance of the 1999-A SUBI Certificates and the Retained 1999-A SUBI
Certificates pursuant to Section 12.03(d); (G) the transfer to, or to the
order of, HTC LP of, the HTC LP 1999-A SUBI Certificate and the HTC LP
Retained 1999-A SUBI Certificate; (H) the transfer to, or to the order of,
HTD LP of, the HTD LP 1999-A SUBI Certificate and the HTD LP Retained 1999-A
SUBI Certificate; (I) the HTA LP 1999-A SUBI Securities Account Control
Agreement, the HTB LP 1999-A SUBI Securities Account Control Agreement, the
HTC LP 1999-A SUBI Securities Account Control Agreement, the HTD LP 1999-A
SUBI Securities Account Control Agreement and the 99.8% 1999-A SUBI
Securities Account Control Agreement, specified in recitals E, I, J and K
herein; and (J) the application by the UTI Beneficiaries of any net proceeds
from any Securitization involving the 1999-A SUBI and/or the 1999-A SUBI
Certificates, there is and will be no default by the UTI Beneficiaries in
their respective capacities as UTI Beneficiaries with respect to any
Securitization or other agreement or obligation secured by a UTI Pledge.
(d) The parties hereto intend that, at any time during which the
1999-A SUBI Certificates or the Retained 1999-A SUBI Certificates are held or
beneficially owned by a single Person, or by two or more Persons that are
treated as a single Person for federal income tax purposes, the 1999-A SUBI
Sub-Trust shall not constitute a separate entity for federal income tax
purposes or for state income or franchise tax purposes. However, at any time
that the 1999-A SUBI Certificates or the Retained 1999-A SUBI Certificates
are held or beneficially owned by two or more Persons that are not treated as
a single Person for federal income tax purposes, the parties hereto intend
that the 1999-A SUBI Sub-Trust be characterized as a separate entity for
federal and state income tax purposes that shall qualify as a partnership for
such purposes. The 1999-A SUBI Sub-Trust shall not elect to be treated as an
association under Section 301.7701-3(a) of the regulations of the United
States Department of the Treasury for federal income tax purposes.
(e) Each Beneficiary of a 1999-A SUBI Certificate or a Retained
1999-A SUBI Certificate shall at all times maintain a minimum net worth
(excluding the value of the 1999-A SUBI Certificates or Retained 1999-A SUBI
Certificates held thereby) equal to 10% of the net Capital Contributions made
by all of the UTI Beneficiaries to the UTI; provided that such minimum net
worth requirement shall not apply to the 1999-A Securitization Trust, the
1999-A Owner Trustee or the 1999-A Indenture Trustee.
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12.02 RIGHTS IN RESPECT OF THE 1999-A SUBI.
Each holder of a 1999-A SUBI Certificate or a Retained 1999-A SUBI
Certificate (including the 1999-A Owner Trustee, on behalf of the 1999-A
Securitization Trust, after the transfer of the 1999-A SUBI Certificates by HTC
LP and HTD LP to the 1999-A Owner Trustee, on behalf of the 1999-A
Securitization Trust) and Registered Pledgee of a 1999-A SUBI Certificate
(including the 1999-A Indenture Trustee, on behalf of the Noteholders, as
pledgee of the 1999-A SUBI Certificates) is a third-party beneficiary of the
Origination Trust Agreement and this 1999-A SUBI Supplement, insofar as such
documents apply to the 1999-A SUBI and the Holder and Registered Pledgee of the
1999-A SUBI Certificates. Therefore, to that extent, references in the
Origination Trust Agreement to the ability of any "Holder of a SUBI
Certificate", "assignee of a SUBI Certificate", "Registered Pledgee of a SUBI
Certificate" or the like to take any action shall also be deemed to refer to
(i) the 1999-A Owner Trustee, as holder of the 1999-A SUBI Certificates, acting
at its own instigation or upon the instruction of Noteholders representing more
than 50% of the Voting Interests (or such other percentage as may be required or
permitted pursuant to the Indenture) during such time as any Note shall remain
outstanding, (ii) if no Notes remain outstanding, shall be deemed to refer to
the 1999-A Owner Trustee, acting at its own instigation or upon the instruction
of HTC LP or HTD LP, and (iii) HTC LP, as holder of the HTC LP Retained 1999-A
SUBI Certificate, or HTD LP, as holder of the HTD LP Retained 1999-A SUBI
Certificate.
12.03 ISSUANCE AND FORM OF SUBI CERTIFICATES.
(a) The 1999-A SUBI shall initially be represented by the HTA
LP/HTB LP 1999-A SUBI Certificates, each of which shall evidence a beneficial
interest in the assets of the 1999-A SUBI. The HTA LP/HTB LP 1999-A SUBI
Certificates shall collectively represent 100% of the beneficial interests in
the 1999-A SUBI and the assets of the 1999-A SUBI Sub-Trust. The Origination
Trustee is hereby instructed to issue the HTA LP/HTB LP 1999-A SUBI
Certificates, each substantially in the form of Exhibit A attached hereto,
with such letters, numbers or other marks of identification and such legends
and endorsements placed thereon as may, consistently herewith and with the
Origination Trust Agreement, be directed by the UTI Beneficiaries. The HTA
LP/HTB LP 1999-A SUBI Certificates may be printed, lithographed, typewritten,
mimeographed, photocopied or otherwise produced in any other manner as may,
consistently herewith and with the Origination Trust Agreement, be determined
by the UTI Beneficiaries. The Origination Trustee is hereby directed to
issue and register the HTA LP/HTB LP 1999-A SUBI Certificates in the name of
the 1999-A SUBI Securities Intermediary in such capacity, on behalf of and
for the benefit of the UTI Beneficiaries, and to deliver the HTA LP/HTB LP
1999-A SUBI Certificates on the Closing Date to the 1999-A SUBI Securities
Intermediary upon the order of the UTI Beneficiaries. On the Closing Date,
the UTI Beneficiaries shall direct the 1999-A SUBI Securities Intermediary in
writing to deliver (i) the HTA LP/HTC LP 1999-A SUBI Certificate and the HTA
LP/HTD LP 1999-A SUBI Certificate to the HTA LP 1999-A SUBI Securities
Account and (ii) the HTB LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD
LP 1999-A SUBI Certificate to the HTB LP 1999-A SUBI Securities Account. HTA
LP shall acquire beneficial and record ownership of the HTA LP/HTC LP 1999-A
SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI Certificate, and HTB LP
shall acquire
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beneficial and record ownership of the HTB LP/HTC LP 1999-A SUBI Certificate
and the HTB LP/HTD LP 1999-A SUBI Certificate.
(b) The HTA LP/HTC LP 1999-A SUBI Certificate and the HTA LP/HTD
LP 1999-A SUBI Certificate shall initially be held in the HTA LP 1999-A SUBI
Securities Account, and the HTB LP/HTC LP 1999-A SUBI Certificate and the HTB
LP/HTD LP 1999-A SUBI Certificate shall initially be held in the HTB LP
1999-A SUBI Securities Account.
(c) On the Closing Date, (i) HTA LP shall instruct the 1999-A SUBI
Securities Intermediary to transfer (A) the HTA LP/HTC LP 1999-A SUBI
Certificate from the HTA LP 1999-A SUBI Securities Account to the HTC LP
1999-A SUBI Securities Account for the benefit of HTC LP and (B) the HTA
LP/HTD LP 1999-A SUBI Certificate from the HTA LP 1999-A SUBI Securities
Account to the HTD LP 1999-A SUBI Securities Account for the benefit of HTC
LP, and (ii) HTB LP shall instruct the 1999-A SUBI Securities Intermediary to
transfer (A) the HTB LP/HTC LP 1999-A SUBI Certificate from the HTB LP 1999-A
SUBI Securities Account to the HTC LP 1999-A SUBI Securities Account for the
benefit of HTC LP and (B) the HTB LP/HTD LP 1999-A SUBI Certificate from the
HTB LP 1999-A SUBI Securities Account to the HTD LP 1999-A SUBI Securities
Account for the benefit of HTD LP.
(d) On the Closing Date, (i) HTC LP shall exchange the HTA LP/HTC
LP 1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate for
the HTC LP 1999-A SUBI Certificate and the HTC LP Retained 1999-A SUBI
Certificate, and (ii) HTD LP shall exchange the HTA LP/HTD LP 1999-A SUBI
Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate for the HTD LP
1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI Certificate. The
HTC LP 1999-A SUBI Certificate and the HTD LP 1999-A SUBI Certificate are
collectively referred to herein as the "1999-A SUBI Certificates"; the HTC LP
Retained 1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI
Certificate are collectively referred to herein as the "Retained 1999-A SUBI
Certificates". The 1999-A SUBI Certificates and the Retained 1999-A SUBI
Certificates shall collectively represent 100% of the beneficial interests in
the 1999-A SUBI and the assets of the 1999-A SUBI Sub-Trust. The HTA LP/HTB
LP 1999-A SUBI Certificates shall be cancelled upon being exchanged for the
1999-A SUBI Certificates and the Retained 1999-A SUBI Certificates. The
Origination Trustee is hereby instructed to issue the 1999-A SUBI
Certificates and Retained 1999-A SUBI Certificates substantially in the forms
of Exhibits B and C attached hereto, respectively, with such letters, numbers
or other marks of identification and such legends and endorsements placed
thereon as may, consistently herewith and with the Origination Trust
Agreement, be directed by HTC LP and HTD LP. HTC LP and HTD LP shall acquire
beneficial and record ownership of the 1999-A SUBI Certificates and the
Retained 1999-A SUBI Certificates and shall be required to retain beneficial
and record ownership of the Retained 1999-A SUBI Certificates until the
1999-A SUBI has been terminated. Any attempted transfer of the Retained
1999-A SUBI Certificates shall be null and void, except as permitted under
the 1999-A Securitization Documents.
(e) The 1999-A SUBI Certificates and the Retained 1999-A SUBI
Certificates may be printed, lithographed, typewritten, mimeographed,
photocopied or otherwise produced in any other manner as may, consistently
herewith and with the Origination Trust Agreement, be determined by HTC LP and
HTD LP. The Origination Trustee is hereby directed to issue and
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register each of the 1999-A SUBI Certificates and each of the Retained 1999-A
SUBI Certificates in the name of the 1999-A SUBI Securities Intermediary in
such capacity, on behalf of and for the benefit of HTC LP and HTD LP, and to
deliver such 1999-A SUBI Certificates and Retained 1999-A SUBI Certificates
to the 1999-A SUBI Securities Intermediary upon the order of HTC LP and HTD
LP.
(f) On the Closing Date, HTC LP shall direct the 1999-A SUBI
Securities Intermediary in writing to effect the transfer of the HTC LP
1999-A SUBI Certificate and the HTC LP Retained 1999-A SUBI Certificates to
the HTC LP 1999-A SUBI Securities Account, and HTD LP shall direct the 1999-A
SUBI Securities Intermediary in writing to effect the transfer of the HTD LP
1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI Certificates to
the HTD LP 1999-A SUBI Securities Account. Thereafter, HTC LP and HTD LP
shall jointly direct the 1999-A SUBI Securities Intermediary in writing to
effect the transfer of the 1999-A SUBI Certificates to the 99.8% 1999-A SUBI
Securities Account. HTC LP and HTD LP shall not transfer the Retained 1999-A
SUBI Certificates in connection with the transfer of the 1999-A SUBI
Certificates.
(g) The HTC LP 1999-A SUBI Certificate and the HTC LP Retained
1999-A SUBI Certificate shall initially be held in the HTC LP 1999-A SUBI
Securities Account and the HTD LP 1999-A SUBI Certificate and the HTD LP
Retained 1999-A SUBI Certificate shall be initially held in the HTD LP 1999-A
SUBI Securities Account.
(h) On the Closing Date, the 1999-A Indenture Trustee shall be, and
thereafter for so long as the lien of the Indenture is in place shall continue
to be, registered as the Registered Pledgee of the 1999-A SUBI Certificates held
by the 1999-A Securitization Trust and pledged as part of the 1999-A
Securitization Trust Estate to secure the 1999-A Owner Trustee's obligations
under the Indenture. As the Registered Pledgee, the 1999-A Indenture Trustee
shall be entitled to exercise any and all rights or powers of a Holder
hereunder, to the extent set forth in Sections 6.02 and 6.03 of the Indenture.
(i) Pursuant to Section 3.04 of the Origination Trust Agreement, the
1999-A SUBI Certificates may not be transferred or assigned except as provided
in connection with the termination of the 1999-A Securitization Trust pursuant
to Article Seven of the 1999-A Securitization Trust Agreement, subject to the
assignee or pledgee (x) giving a non-petition covenant substantially similar to
that set forth in Section 8.08 of the Origination Trust Agreement and (y)
executing an agreement between or among itself and each UTI Beneficiary and each
SUBI Beneficiary of each SUBI relating to another Sub-Trust, to release all
claims to the Trust Assets allocated to the UTI Sub-Trust or to such other SUBI
Sub-Trust and, in the event that such release is not given effect, to fully
subordinate all claims it may be deemed to have against the Trust Assets
allocated thereto (which agreement may be included in the 1999-A SUBI
Certificates themselves). Notwithstanding the foregoing, 1999-A SUBI
Certificates may, at any time, be transferred or assigned to HTA LP, HTB LP or
any of their respective Affiliates.
Neither the 1999-A SUBI Certificates nor the Retained 1999-A SUBI
Certificates shall be transferred or assigned except to a transferee or assignee
who is (i) the holder of a 1999-A SUBI Certificate or a Retained 1999-A SUBI
Certificate on the date of such transfer or (ii) HTA LP, HTB LP or any of their
respective Affiliates.
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12.04 FILINGS.
The Grantors, the UTI Beneficiaries (if different from the Grantors)
and the Origination Trustee, as directed by the Grantors or the UTI
Beneficiaries, will undertake all other and future actions and activities as may
be deemed reasonably necessary by the Grantors or the UTI Beneficiaries to
perfect (or evidence) and confirm the allocation of the 1999-A SUBI Assets to
the 1999-A SUBI Sub-Trust as provided herein, including filing or causing to be
filed UCC financing statements and executing and delivering all related filings,
documents or writings as may be deemed reasonably necessary by the Servicer
hereunder or under any other agreements or instruments relating to such
Securitization. The Grantors hereby irrevocably make and appoint each of the
Origination Trustee and the Servicer (in the case of the Servicer, only for so
long as the Servicer is acting in such capacity), and any of their respective
officers, employees or agents, as the true and lawful attorney-in-fact of the
Grantors (which appointment is coupled with an interest and is irrevocable) with
power to sign on behalf of the Grantors any financing statements, continuation
statements, security agreements, mortgages, assignments, affidavits, letters of
authority, notices or similar documents necessary or appropriate to be executed
or filed pursuant to this Section 12.04.
12.05 TERMINATION OF 1999-A SUBI.
In connection with any purchase by the Servicer of the corpus of
the 1999-A Securitization Trust pursuant to Section 7.02 of the 1999-A
Securitization Trust Agreement and the succession of the Servicer to all of
the interest in the 1999-A SUBI, the 1999-A SUBI Certificates and the
Retained 1999-A SUBI Certificates, should all of the interest in the 1999-A
SUBI thereafter be transferred to the UTI Beneficiaries, whether by sale or
otherwise, then, upon the direction of the UTI Beneficiaries, the 1999-A SUBI
shall be terminated, the 1999-A SUBI Certificates and the Retained 1999-A
SUBI Certificates shall be returned to the Origination Trustee and canceled
thereby, and the Origination Trustee, at the direction of the Servicer, shall
reallocate all 1999-A Contracts, 1999-A Leased Vehicles and related 1999-A
SUBI Assets to the UTI Sub-Trust.
12.06 REPRESENTATIONS AND WARRANTIES OF ORIGINATION TRUSTEE.
The Origination Trustee hereby makes the same representations and
warranties set forth in Section 5.12 of the Origination Trust Agreement as of
the date hereof, on which the Grantors and UTI Beneficiaries have relied in
executing this 1999-A SUBI Supplement and on which each of their permitted
assignees and pledgees, and each pledgee or holder of a 1999-A SUBI Certificate
or Retained 1999-A SUBI Certificate (and each Beneficiary of a 1999-A SUBI
Certificate or Retained 1999-A SUBI Certificate) may rely.
12.07 RESIGNATION OR REMOVAL OF ORIGINATION TRUSTEE.
No resignation or removal of the Origination Trustee pursuant to any
provision of the Origination Trust Agreement shall be effective unless and until
each Rating Agency has confirmed, in writing, that such resignation or removal
would not cause it to reduce, modify or
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withdraw its then current rating of any class of securities issued by the
1999-A Securitization Trust.
ARTICLE THIRTEEN
ACCOUNTS; CASH FLOWS; ELIGIBLE INVESTMENTS
13.01 1999-A SUBI COLLECTION ACCOUNT.
(a) Notwithstanding Section 4.02(a) of the Origination Trust
Agreement, the Servicer, on behalf of the Origination Trustee, shall establish
in the Origination Trustee's name, and maintain with respect to the 1999-A SUBI,
the 1999-A SUBI Collection Account for the benefit of (a) the Beneficiaries of
the 1999-A SUBI Certificates and the Retained 1999-A SUBI Certificates and
(b) to the extent provided below, the Origination Trustee, which account shall
constitute a SUBI Collection Account. The 1999-A SUBI Collection Account
initially shall be established with U.S. Bank National Association and at all
times shall be an Eligible Account. If the institution maintaining the 1999-A
SUBI Collection Account no longer meets the requirements stated in the
definition of Eligible Account, then the Servicer shall, with the Origination
Trustee's assistance as necessary, cause the 1999-A SUBI Collection Account to
be moved to a bank or trust company that satisfies those requirements. In
connection with any termination of the 1999-A Securitization Trust pursuant to
Article Seven of the 1999-A Securitization Trust Agreement, the Origination
Trustee may transfer the 1999-A SUBI Collection Account to the Trust Agent. The
1999-A SUBI Collection Account shall relate solely to the 1999-A SUBI and the
1999-A SUBI Sub-Trust, and funds therein shall not be commingled with any other
monies, except as otherwise provided for or contemplated in Section 4.02 of the
Origination Trust Agreement as supplemented by this 1999-A SUBI Supplement and
the 1999-A Servicing Supplement. All amounts held in the 1999-A SUBI Collection
Account shall be invested in Eligible Investments until distributed or otherwise
applied in accordance with Article Four of the Origination Trust Agreement or
Sections 13.01(b), 13.01(c), 13.02, 13.03 or 13.04 of this 1999-A SUBI
Supplement. The Origination Trustee shall be a beneficiary of the 1999-A SUBI
Collection Account only to the extent that amounts described in Sections 5.03(c)
and 5.05 of the Origination Trust Agreement are not paid or reimbursed to the
Origination Trustee pursuant to such sections from a SUBI Lease Account, or paid
directly by the Servicer pursuant to the terms of the 1999-A Securitization
Trust Agreement; any such amounts shall be withdrawn from the 1999-A SUBI
Collection Account only for such purposes and only to the extent set forth in
Section 3.03 of the 1999-A Securitization Trust Agreement, or as set forth in
this Section 13.01(a) if the 1999-A SUBI Collection Account has been transferred
to the Trust Agent.
(b) The Servicer shall deposit into the 1999-A SUBI Collection
Account all Collections received in respect of the 1999-A Contracts and 1999-A
Leased Vehicles (in each case exclusive of the proceeds of any residual value
insurance policies), except as otherwise specified herein or in the 1999-A
Servicing Supplement (in connection with any failure to satisfy the Monthly
Remittance Conditions). Amounts so deposited will be applied by the 1999-A
Owner Trustee, by the 1999-A Indenture Trustee or by the Servicer as specified
in the 1999-A Securitization Trust Agreement and the 1999-A Servicing
Supplement.
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(c) It is the intent of the parties hereto that the proceeds of
the Residual Value Insurance Policy (and any other residual value insurance
policies) applicable to the 1999-A Leased Vehicles and the 1999-A Contracts
will be payable by the Servicer (or the insurer under the Residual Value
Insurance Policy (and any other residual value insurance policies)) directly
to the Origination Trust and will not under any circumstances be subject to
the lien of the 1999-A Securitization Trust Agreement. If, notwithstanding
the foregoing, any such amounts are in fact deposited in any SUBI Account or
other account established by the Origination Trustee, the 1999-A Owner
Trustee or the 1999-A Indenture Trustee, then such amounts will be
distributed to the Origination Trust by the Origination Trustee, the 1999-A
Indenture Trustee, the 1999-A Owner Trustee, as the case may be, on the next
succeeding Distribution Date at the written direction of the Servicer.
(d) From and after the date, if any, on which the Monthly Remittance
Conditions cease to be satisfied, the Servicer will deposit all Principal
Collections and Interest Collections into the 1999-A SUBI Collection Account as
set forth in Section 9.02 of the 1999-A Servicing Supplement within two Business
Days of the Servicer's receipt thereof.
13.02 1999-A SUBI LEASE ACCOUNT.
Notwithstanding the provisions of Section 4.04 of the Origination
Trust Agreement, the Servicer shall be required to establish and maintain with
respect to the 1999-A SUBI the 1999-A SUBI Lease Account in the name of the
Origination Trustee, which account shall constitute a SUBI Lease Account, only
if the Monthly Remittance Conditions are no longer satisfied. Such account
shall be for the benefit of the Beneficiaries of the 1999-A SUBI Certificates
and the Retained 1999-A SUBI Certificates. Any such 1999-A SUBI Lease Account
initially shall be established with U.S. Bank, as Trust Agent, and at all times
shall be an Eligible Account. If the Trust Agent no longer meets the
requirements stated in the definition of Eligible Account, then the Servicer
shall, with the Origination Trustee's assistance as necessary, cause the 1999-A
SUBI Lease Account to be moved to a bank or trust company that satisfies those
requirements. The 1999-A SUBI Lease Account shall relate solely to the 1999-A
SUBI and the 1999-A SUBI Portfolio, and funds therein shall not be commingled
with any other monies, except as otherwise provided for or contemplated in the
Origination Trust Agreement as supplemented by this 1999-A SUBI Supplement or
the 1999-A Servicing Supplement. All amounts held in the 1999-A SUBI Lease
Account shall be invested in Eligible Investments until distributed or otherwise
applied in accordance with the Origination Trust Agreement, this 1999-A SUBI
Supplement, the 1999-A Servicing Supplement or the Servicing Agreement. All
transfers of funds into and out of the 1999-A SUBI Lease Account shall be made
in accordance with Section 4.04 of the Origination Trust Agreement.
13.03 1999-A PAYAHEAD ACCOUNT.
The Origination Trustee shall establish and the Trust Agent shall
maintain with respect to the 1999-A SUBI, a 1999-A Payahead Account in the name
of the Origination Trustee, for the benefit of the Holders of the 1999-A SUBI
Certificates and the Retained 1999-A SUBI Certificates, which account shall
constitute a Payahead Account, only if the Monthly Remittance Conditions are no
longer satisfied. Any such 1999-A Payahead Account initially shall be
established with U.S. Bank, as Trust Agent, and at all times shall be an
Eligible Account. If the
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Trust Agent no longer meets the requirements of an Eligible Account, the
Servicer shall, with the Origination Trustee's assistance as necessary, cause
the 1999-A Payahead Account to be moved to a bank or trust company that
satisfies these requirements. The 1999-A Payahead Account shall relate
solely to the 1999-A SUBI and the 1999-A SUBI Portfolio and funds therein
shall not be commingled with any other monies, except as otherwise provided
for or contemplated in the Origination Trust Agreement, this 1999-A SUBI
Supplement, the 1999-A Servicing Supplement or the Servicing Agreement. All
amounts held in the 1999-A Payahead Account shall be invested in Eligible
Investments until distributed or otherwise applied in accordance with the
Origination Trust Agreement, this 1999-A SUBI Supplement, the 1999-A
Servicing Supplement or the Servicing Agreement. All transfers of funds into
and out of the 1999-A Payahead Account shall be made in accordance with
Section 2.06 of the Servicing Agreement.
13.04 INVESTMENT GAINS AND LOSSES.
Except as otherwise provided herein, all or a portion of the funds
deposited into the 1999-A SUBI Accounts shall be separately invested by the
Origination Trustee, the 1999-A Owner Trustee or the 1999-A Indenture Trustee,
as applicable, from time to time at the written direction of the Servicer, in
any Eligible Investments. All income, gain or loss from investment of monies in
the 1999-A SUBI Lease Account shall be for the benefit of the Origination
Trustee on behalf of the Origination Trust and credited or debited, as the case
may be, from such account; provided that each such investment shall be made in
the name of the Origination Trustee on behalf of the Origination Trust, its
nominee or its Financial Intermediary. All income, gain or loss from investment
of monies in the 1999-A Note Distribution Account shall be for the benefit of
the Noteholders and credited or debited, as the case may be, from such account;
provided that each such investment shall be made in the name of the 1999-A
Indenture Trustee on behalf of the 1999-A Securitization Trust, its nominee or
its Financial Intermediary. All income, gain or loss from investment of monies
in the 1999-A Certificate Distribution Account shall be for the benefit of the
Certificateholders and credited or debited, as the case may be, from such
account; provided that each such investment shall be made in the name of the
1999-A Owner Trustee on behalf of the 1999-A Securitization Trust, its nominee
or its Financial Intermediary. All income, gain or loss from investment of
monies in the 1999-A SUBI Collection Account shall be for benefit of the
Servicer and credited or debited, as the case may be, from such account;
provided that each such investment shall be made in the name of the Origination
Trustee on behalf of the Origination Trust, its nominee or Financial
Intermediary. All income, gain or loss from investment of monies in the 1999-A
Payahead Account shall be for the benefit of the Origination Trustee on behalf
of the Origination Trust and credited or debited, as the case may be, from such
account; provided that each such investment shall be made in the name of the
Origination Trustee on behalf of the Origination Trust, its nominee or its
Financial Intermediary. If at any time the Servicer shall not have given the
Origination Trustee, the 1999-A Indenture Trustee or the 1999-A Owner Trustee,
as the case may be, a timely written investment directive with respect to the
1999-A SUBI Lease Account, the 1999-A Note Distribution Account, the 1999-A
Certificate Distribution Account, the 1999-A SUBI Collection Account or the
1999-A Payahead Account, the Origination Trustee, the 1999-A Indenture Trustee
or the 1999-A Owner Trustee, as the case may be, shall invest and reinvest any
monies in such account(s) in a mutual fund offered by the Origination Trustee or
an Affiliate of the Origination Trustee, the 1999-A Indenture Trustee or an
affiliate of the 1999-A Indenture
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Trustee or the 1999-A Owner Trustee or an Affiliate of the 1999-A Owner
Trustee, each of which meets the requirements of clause (i) of the definition
of Eligible Investments. Neither the 1999-A Owner Trustee nor the 1999-A
Indenture Trustee shall be liable for the selection of investments or for
investment losses incurred thereon in accordance with the instructions of the
Servicer or as otherwise specified in this Section 13.04. Neither the 1999-A
Owner Trustee nor the 1999-A Indenture Trustee shall have any liabilities in
respect of losses incurred as a result of the liquidation of any investment
prior to its stated maturity or the failure of the Servicer to provide timely
written investment directions.
13.05 REBALANCING AFTER THIRD-PARTY CLAIM.
To the extent that a third-party Claim against Trust Assets is
satisfied out of Trust Assets in proportions other than as provided in Section
3.08 of the Origination Trust Agreement, then, notwithstanding anything to the
contrary contained herein, the Origination Trustee, at the direction of the
Servicer, shall promptly identify and reallocate (or cause the Servicer to
identify and reallocate) the remaining Origination Trust Assets among the UTI
Sub-Trust and each of the SUBI Sub-Trusts, including the 1999-A SUBI Sub-Trust,
such that each shall bear the expense of such Claim as nearly as possible as if
the burden thereof had been allocated as provided in Section 3.08 of the
Origination Trust Agreement.
ARTICLE FOURTEEN
MISCELLANEOUS PROVISIONS
14.01 GOVERNING LAW.
This 1999-A SUBI Supplement shall be created under and governed by and
construed under the internal laws of the State of Delaware, without regard to
any otherwise applicable principles of conflicts of laws, and the obligations,
rights and remedies of the parties hereunder shall be determined in accordance
with such laws.
14.02 EFFECT OF 1999-A SUBI SUPPLEMENT ON ORIGINATION TRUST AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the
parties shall continue to be bound by all provisions of the Origination Trust
Agreement and (ii) the provisions set forth herein shall operate either as
additions to or modifications of the extant obligations of the parties under the
Origination Trust Agreement, as the context may require. In the event of any
conflict between the provisions of this 1999-A SUBI Supplement and the
Origination Trust Agreement with respect to the 1999-A SUBI, the provisions of
this 1999-A SUBI Supplement shall prevail.
(b) For purposes of determining the parties' obligations under this
1999-A SUBI Supplement with respect to the 1999-A SUBI, general references in
the Origination Trust Agreement to: (i) a SUBI Account shall be deemed to refer
more specifically to any 1999-A SUBI Account; (ii) a SUBI Asset shall be deemed
to refer more specifically to a 1999-A SUBI Asset; (iii) a SUBI Collection
Account shall be deemed to refer more specifically to the 1999-A SUBI Collection
Account; (iv) a SUBI Lease Account shall be deemed to refer more specifically to
the 1999-A SUBI Lease Account; (v) a Payahead Account shall be deemed to refer
more specifically to the 1999-A Payahead Account; (vi) a SUBI Sub-Trust or SUBI
Portfolio shall be
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deemed to refer more specifically to the 1999-A SUBI Sub-Trust or 1999-A SUBI
Portfolio, as the case may be; (vii) a SUBI Supplement shall be deemed to
refer more specifically to this 1999-A SUBI Supplement; and (viii) a SUBI
Servicing Supplement shall be deemed to refer more specifically to the 1999-A
Servicing Supplement.
14.03 AMENDMENT.
(a) The 1999-A SUBI Supplement and the Origination Trust Agreement
may be amended from time to time, to the extent such amendment applies to or
affects only the 1999-A SUBI or the Beneficiaries of the 1999-A SUBI
Certificates or the Retained 1999-A SUBI Certificates, by a writing signed by
the Origination Trustee, the UTI Beneficiaries, each 1999-A SUBI Beneficiary
and, to the extent that any such amendment affects any obligation or interest of
the Trust Agent, the Trust Agent, in each case only with the prior written
consent of the 1999-A Owner Trustee and upon prior written notice to each Rating
Agency that includes the substance of the proposed amendment. Any amendment of
the Origination Trust Agreement that applies to or affects the UTI or any Other
SUBI or any Beneficiary of the UTI or any Other SUBI in addition to this 1999-A
SUBI shall also be subject to the foregoing provisions of this Section 14.03.
(b) Notwithstanding the foregoing, this Section 14.03 does not modify
or supersede any provision in the Origination Trust Agreement. Without limiting
the foregoing, any amendment of the Origination Trust Agreement or any other
SUBI Supplement that neither applies to nor affects the 1999-A SUBI, the 1999-A
SUBI Sub-Trust or the Beneficiaries of the 1999-A SUBI Certificates or the
Retained 1999-A SUBI Certificates shall not require the consent of the 1999-A
Owner Trustee or the Beneficiaries of the 1999-A SUBI Certificates or the
Retained 1999-A SUBI Certificates.
14.04 NOTICES.
(a) The notice provisions of the Origination Trust Agreement shall
apply equally to this 1999-A SUBI Supplement; provided that any notice to HTC
LP, HTD LP, the 1999-A Securitization Trust, the 1999-A Owner Trustee or the
1999-A Indenture Trustee shall be addressed as follows:
IF TO HTC LP:
Honda Titling C L.P.
700 Van Ness Avenue
Torrance, California 90501
Attention: General Partner
16
<PAGE>
IF TO HTD LP:
Honda Titling D L.P.
700 Van Ness Avenue
Torrance, California 90501
Attention: General Partner
IF TO THE 1999-A SECURITIZATION TRUST:
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Honda Auto Lease Trust 1999-A
IF TO THE 1999-A INDENTURE TRUSTEE:
The Bank of New York
101 Barclay Street, Floor 12E
New York, New York 10286
Attention: Honda Auto Lease Trust 1999-A
IF TO THE 1999-A OWNER TRUSTEE:
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Honda Auto Lease Trust 1999-A
A copy of each notice or other writing required to be delivered to the
Origination Trustee pursuant to the Origination Trust Agreement or this 1999-A
SUBI Supplement shall be addressed and delivered as follows:
HVT, Inc.
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Honda Auto Lease Trust 1999-A
A copy of each notice or other writing required to be delivered to the
Origination Trustee pursuant to the Origination Trust Agreement shall also be
delivered to the 1999-A Owner Trustee insofar as it relates to the 1999-A
Securitization Trust.
17
<PAGE>
14.05 SEVERABILITY OF PROVISIONS.
If any one or more of the covenants, agreements, provisions or
terms of this 1999-A SUBI Supplement shall for any reason whatsoever be held
invalid, then such covenants, agreements, provisions or terms shall be deemed
severable from the remaining covenants, agreements, provisions or terms of
this 1999-A SUBI Supplement and shall in no way affect the validity or
enforceability of the other provisions of this 1999-A SUBI Supplement or of
the 1999-A SUBI Certificates or the Retained 1999-A SUBI Certificates or the
rights of the holders thereof. To the extent permitted by law, the parties
hereto waive any provision of law that renders any provision of this 1999-A
SUBI Supplement invalid or unenforceable in any respect.
14.06 COUNTERPARTS.
This 1999-A SUBI Supplement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to
be an original, but all of which counterparts shall together constitute but
one and the same instrument.
[Remainder of page intentionally left blank]
18
<PAGE>
IN WITNESS WHEREOF, HTA LP, HTB LP, HTC LP, HTD LP, the Servicer,
the Origination Trust, the Delaware Trustee and U.S. Bank, as Trust Agent
and, solely for the limited purposes set forth herein, as 1999-A Owner
Trustee, have caused this 1999-A SUBI Supplement to be duly executed by their
respective officers duly authorized as of the day and year first above
written.
HONDA TITLING A L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling A LLC, its general partner
By: Honda Titling Inc., as its manager
By: ______________________________
Name:
Title:
HONDA TITLING B L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling B LLC, its general partner
By: Honda Titling Inc., as its manager
By: ______________________________
Name:
Title:
HONDA TITLING C L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling C LLC, its general partner
By: Honda Funding Inc., as its manager
By: ______________________________
Name:
Title:
HONDA TITLING D L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling D LLC, its general partner
By: Honda Funding Inc., as its manager
By: ______________________________
Name:
Title:
<PAGE>
AMERICAN HONDA FINANCE CORPORATION, as Servicer
By: ______________________________
Name:
Title:
HVT, INC., as Origination Trustee of the Honda
Lease Trust
By: ______________________________
Name:
Title:
DELAWARE TRUST CAPITAL MANAGEMENT, INC., as
Delaware Trustee of the Honda Lease Trust
By: ______________________________
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent and, for Certain Limited
Purposes, as 1999-A Owner Trustee
By: ______________________________
Name:
Title:
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF LOS ANGELES )
On the _________ day of __________ 1999, before me, a notary public
in and for of the State of California, personally appeared _________________,
personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person whose name is subscribed to the within instrument
and acknowledged to me that he executed the same in the capacity or
capacities indicated in the within instrument, and that by his signature on
the instrument the person, or the entity upon behalf of which the person
acted, executed the instrument.
WITNESS my hand and official seal.
______________________________
Notary Public
<PAGE>
SCHEDULE I
SCHEDULE OF 1999-A CONTRACTS AND
1999-A LEASED VEHICLES AS OF THE CUTOFF DATE
(Omitted. On file with the Servicer, the Origination Trustee, the
1999-A Owner Trustee and the 1999-A Indenture Trustee.)
<PAGE>
EXHIBIT A
HONDA LEASE TRUST
FORM OF HTA LP/HTB LP 1999-A SUBI CERTIFICATE
Evidencing interests in specified 1999-A SUBI Assets within the
1999-A SUBI Sub-Trust (as defined below).
This Certificate does not represent any obligation of, or an
interest in, American Honda Finance Corporation, Honda Titling A L.P., Honda
Titling B L.P., Honda Titling Inc., HVT, Inc., Delaware Trust Capital
Management Inc., Honda Titling C L.P. Honda Funding Inc., or any of their
respective affiliates.
Number [1/2/3/4]
THIS CERTIFIES THAT U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITY
AS SECURITIES INTERMEDIARY, is the registered owner of a nonassessable,
fully-paid, [98.01%] [0.99%] [0.99%] [0.01%] beneficial interest in specified
assets of the 1999-A SUBI (the "1999-A SUBI") which in turn is comprised of
interests in the assets of the 1999-A SUBI Sub-Trust (the "1999-A Sub-Trust")
of the Honda Lease Trust, a Delaware business trust (the "Origination
Trust"), formed pursuant to the Second Amended and Restated Trust and
Servicing Agreement, dated as of April 1, 1998 (the "Origination Trust
Agreement"), by and among Honda Titling A L.P. and Honda Titling B L.P., as
Grantors and UTI Beneficiaries (in such capacities, the "Grantors" and the
"UTI Beneficiaries"), HVT, Inc., a Delaware corporation (the "Origination
Trustee"), Delaware Trust Capital Management, Inc., a Delaware corporation,
as Delaware trustee (the "Delaware Trustee"), American Honda Finance
Corporation, as servicer (the "Servicer"), and, for certain limited purposes
set forth therein, U.S. Bank National Association, a national banking
association ("U.S. Bank"), as trust agent (in such capacity, the "Trust
Agent"). A summary of certain of the provisions of the Origination Trust
Agreement and the 1999-A SUBI Supplement is set forth below. Capitalized
terms used and not otherwise defined herein have the meanings ascribed
thereto in the Agreement of Definitions dated [May 31, 1999], by and among
HVT, Inc., a Delaware corporation, as origination trustee, Delaware Trust
Capital Management, Inc., a Delaware corporation, as Delaware trustee, U.S.
Bank National Association, a national banking association, as trust agent and
as owner trustee, American Honda Finance Corporation, as servicer, Wilmington
Trust Company, as Delaware owner trustee, The Bank of New York, as indenture
trustee, Honda Titling A L.P., a Delaware limited partnership, Honda Titling
B L.P., a Delaware limited partnership, Honda Titling C L.P., a Delaware
limited partnership, and Honda Titling D L.P., a Delaware limited partnership.
This [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP]
1999-A SUBI Certificate, the [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP] 1999-A SUBI Certificate, the [HTA LP/HTC LP] [HTA LP/HTD LP]
[HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate and the
[HTA LP/HTC LP][HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI
Certificate are duly
A-1
<PAGE>
authorized SUBI Certificate issued under the 1999-A SUBI Supplement to the
Origination Trust Agreement (the "1999-A SUBI Supplement") dated as of
[May 31, 1999,] among the UTI Beneficiaries, the Transferors, the Origination
Trustee, the Servicer and U.S. Bank, as Trust Agent and, for certain limited
purposes as set forth therein, as 1999-A Owner Trustee. This [HTA LP/HTC LP]
[HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate is
subject to the terms, provisions and conditions of the Origination Trust
Agreement and the 1999-A SUBI Supplement, to which any Beneficiary of this
[HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI
Certificate or any interest herein by virtue of the acceptance hereof or of
any interest herein hereby assents and by which such SUBI Beneficiary is
bound.
Also issued or to be issued under the Origination Trust Agreement
are various other series of certificates evidencing undivided interests in
the 1999-A SUBI Sub-Trust and in other Sub-Trusts of the Origination Trust.
Prior to the date of initial issue of this [HTA LP/HTC LP] [HTA LP/HTD LP]
[HTB LP/HTC LP][HTB LP/HTD LP] 1999-A SUBI Certificate, the following
certificates have been issued: (i) UTI Certificate No. 1, representing 99%
of the beneficial interests in the UTI and (ii) UTI Certificate No. 2
representing 1% of the beneficial interests in the UTI. SUBI Certificates
representing 100% of the undivided interests in each other SUBI to be formed
will be issued in connection with the formation of each related SUBI
Sub-Trust. Concurrently herewith, on the date of initial issue of this
[HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI
Certificate, the Origination Trust is also issuing (a) SUBI Certificate No.
[1/2/3/4], representing [98.01%] [0.99%] [0.99%] [0.01%] of the beneficial
interests in the 1999-A SUBI, (b) SUBI Certificate No. [1/2/3/4],
representing [98.01%] [0.99%] [0.99%] [0.01%] of the beneficial interests in
the 1999-A SUBI and (c) SUBI Certificate No. [1/2/3/4], representing [98.01%]
[0.99%] [0.99%] [0.01%] of the beneficial interests in the 1999-A SUBI.
The property of the Origination Trust is identified in the
Origination Trust Agreement and the property of the 1999-A SUBI Sub-Trust is
identified in the 1999-A SUBI Supplement. Pursuant to the 1999-A SUBI
Supplement, the 1999-A SUBI Assets were identified and allocated on the
records of the Origination Trust as a separate SUBI Sub-Trust (the "1999-A
SUBI Sub-Trust"), and the beneficial interest in the 1999-A SUBI Sub-Trust
was designated as a separate SUBI known as the "1999-A SUBI". The assets of
the 1999-A SUBI Sub-Trust are currently represented by four SUBI
Certificates: (i) this 1999-A SUBI Certificate evidencing beneficial
interests in [98.01%] [0.99%] [0.99%] [0.01%]of the 1999-A SUBI Assets, (ii)
a 1999-A SUBI Certificate evidencing beneficial interests in [98.01%] [0.99%]
[0.99%] [0.01%] of the 1999-A SUBI Assets (iii) a 1999-A SUBI Certificate
evidencing beneficial interests in [98.01%] [0.99%][0.99%] [0.01%] of the
1999-A SUBI Assets, and (iv) a 1999-A SUBI Certificate evidencing beneficial
interests in [98.01%] [0.99%] [0.99%] [0.01%] of the 1999-A SUBI Assets. Any
holder of this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP]
1999-A SUBI Certificate, the [HTA LP/HTC LP] [HTA LP/HTD LP][HTB LP/HTC LP]
[HTB LP/HTD LP] 1999-A SUBI Certificate, the [HTA LP/HTC LP][HTA LP/HTD LP]
[HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate or the [HTA LP/HTC LP]
[HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate
shall be considered a 1999-A SUBI Beneficiary. The rights of the
Beneficiaries of this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD
A-2
<PAGE>
LP] 1999-A SUBI Certificate, the [HTA LP/HTC LP] [HTA LP/HTD LP]
[HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate, the [HTA LP/HTC LP]
[HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate or
the [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A
SUBI Certificate to certain of the proceeds of the 1999-A SUBI Assets are and
will be further set forth in the Origination Trust Agreement and the 1999-A
SUBI Supplement.
This [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP]
1999-A SUBI Certificate is limited in right of payment to certain collections
and recoveries respecting the 1999-A Contracts (and the related Lessors) and
the 1999-A Leased Vehicles allocated to the 1999-A SUBI Sub-Trust, all to the
extent and as more specifically set forth in the Origination Trust Agreement
and the 1999-A SUBI Supplement. Copies of the Origination Trust Agreement
and the 1999-A SUBI Supplement may be examined during normal business hours
at the principal office of the Origination Trustee, and at such other places,
if any, designated by the Origination Trustee, by each 1999-A SUBI
Beneficiary upon request.
By accepting this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP] 1999-A SUBI Certificate or any interest herein, the related
SUBI Beneficiary waives and releases any claim to any proceeds or assets of
the Origination Trustee and to all of the Trust Assets other than those from
time to time included within the 1999-A SUBI Sub-Trust and those proceeds or
assets derived from or earned by the 1999-A SUBI Assets. In addition, by
accepting this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP]
1999-A SUBI Certificate or any interest herein, the related SUBI
Beneficiary hereby expressly subordinates any claim or interest in or to any
proceeds or assets of the Origination Trustee and to all of the Trust Assets
other than those from time to time included within the 1999-A SUBI Sub-Trust
that may be determined to exist in favor of such SUBI Beneficiary
notwithstanding the foregoing disclaimer to the rights and interests of each
SUBI Beneficiary with respect to Trust Assets other than those included
within the 1999-A SUBI Sub-Trust.
The 1999-A SUBI Supplement and the Origination Trust Agreement may
be amended from time to time, to the extent such amendment applies to or
affects only the 1999-A SUBI and the 1999-A SUBI Portfolio, by a writing
signed by the Origination Trustee, the UTI Beneficiaries, each 1999-A SUBI
Beneficiary, and, to the extent that any such amendment affects any
obligation or interest of the Trust Agent, the Trust Agent, in each case only
with the prior written consent of the 1999-A Owner Trustee and upon prior
written notice to each Rating Agency that includes the substance of the
proposed amendment. Any amendment of the Origination Trust Agreement or of
any other SUBI Supplement that applies to or affects any UTI or Other SUBI
and the 1999-A SUBI or the 1999-A SUBI Portfolio shall also be subject to the
foregoing provisions. The foregoing does not apply to any amendment of the
Origination Trust Agreement or any other SUBI Supplement that neither applies
to nor affects the 1999-A SUBI or the 1999-A SUBI Portfolio, and such
amendments shall not require the consent of any 1999-A SUBI Beneficiary or
the 1999-A Owner Trustee. If approval of any 1999-A SUBI Beneficiary is
required, any such consent shall be conclusive and binding on such
Beneficiary and on all future Beneficiaries hereof whether or not notation of
such consent is made upon this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP] 1999-A SUBI Certificate.
A-3
<PAGE>
As provided in the Origination Trust Agreement and the 1999-A SUBI
Supplement, this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP]1999-A SUBI Certificate and the underlying interests
represented hereby may not be transferred or assigned, except in accordance
with the provisions thereof.
Prior to due presentation of this [HTA LP/HTC LP] [HTA LP/HTD LP]
[HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI Certificate for registration of a
permitted transfer, the Origination Trustee, the certificate registrar and
any of their respective agents may treat the person or entity in whose name
this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A
SUBI Certificate is registered as the owner hereof for the purpose of
receiving distributions and for all other purposes, and, except as provided
for in the Origination Trust Agreement, neither the Origination Trustee, the
certificate registrar nor any such agent shall be affected by any notice to
the contrary.
Unless this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP] 1999-A SUBI Certificate shall have been executed by an
authorized officer of the Origination Trustee, by manual signature, this
[HTA LP/HTC LP][HTA LP/HTD LP] [HTB LP/HTC LP] [HTB LP/HTD LP] 1999-A SUBI
Certificate shall not entitle the holder hereof to any benefit under the
Origination Trust Agreement or the 1999-A SUBI Supplement or be valid for any
purpose.
A-4
<PAGE>
IN WITNESS WHEREOF, the Origination Trustee and the Delaware
Trustee, on behalf of the Origination Trust and not in their individual
capacities, have caused this [HTA LP/HTC LP] [HTA LP/HTD LP] [HTB LP/HTC LP]
[HTB LP/HTD LP]1999-A SUBI Certificate to be duly executed.
Dated: [June ___], 1999
HONDA LEASE TRUST
By: HVT, INC., as Origination Trustee
By: ______________________________
Authorized Officer
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as Delaware Trustee
By: ______________________________
Authorized Officer
A-5
<PAGE>
EXHIBIT B
HONDA LEASE TRUST
FORM OF 1999-A SUBI CERTIFICATE
Evidencing interests in specified 1999-A SUBI Assets within the
1999-A SUBI Sub-Trust (as defined below).
This Certificate does not represent any obligation of, or an
interest in, American Honda Finance Corporation, Honda Titling A L.P., Honda
Titling B L.P., Honda Titling Inc., HVT, Inc., Delaware Trust Capital
Management Inc., Honda Titling C L.P., Honda Titling D L.P., Honda Funding
Inc., or any of their respective affiliates.
Number [5/6]
THIS CERTIFIES THAT U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITY
AS SECURITIES INTERMEDIARY, is the registered owner of a nonassessable,
fully-paid, [98.802%/.998%] beneficial interest in specified assets of the
1999-A SUBI (the "1999-A SUBI") which in turn is comprised of interests in
the assets of the 1999-A SUBI Sub-Trust (the "1999-A Sub-Trust") of the Honda
Lease Trust, a Delaware business trust (the "Origination Trust"), formed
pursuant to the Second Amended and Restated Trust and Servicing Agreement,
dated as of April 1, 1998 (the "Origination Trust Agreement"), by and among
Honda Titling A L.P. and Honda Titling B L.P., as Grantors and UTI
Beneficiaries (in such capacities, the "Grantors" and the "UTI
Beneficiaries"), HVT, Inc., a Delaware corporation (the "Origination
Trustee"), Delaware Trust Capital Management, Inc., a Delaware corporation,
as Delaware trustee (the "Delaware Trustee"), American Honda Finance
Corporation, as servicer (the "Servicer"), and, for certain limited purposes
set forth therein, U.S. Bank National Association, a national banking
association ("U.S. Bank"), as trust agent (in such capacity, the "Trust
Agent"). A summary of certain of the provisions of the Origination Trust
Agreement and the 1999-A SUBI Supplement is set forth below. Capitalized
terms used and not otherwise defined herein have the meanings ascribed
thereto in the Agreement of Definitions dated [May 31, 1999], by and among
HVT, Inc., a Delaware corporation, as origination trustee, Delaware Trust
Capital Management, Inc., a Delaware corporation, as Delaware trustee, U.S.
Bank National Association, a national banking association, as trust agent and
as owner trustee, American Honda Finance Corporation, as servicer, Wilmington
Trust Company, as Delaware owner trustee, The Bank of New York, as indenture
trustee, Honda Titling A L.P., a Delaware limited partnership, Honda Titling
B L.P., a Delaware limited partnership, Honda Titling C L.P., a Delaware
limited partnership, and Honda Titling D L.P., a Delaware limited partnership.
This [HTC LP][HTD LP] 1999-A SUBI Certificate, the [HTC LP][HTD LP]
1999-A SUBI certificate, the HTC LP Retained 1999-A SUBI Certificate and the
HTD LP Retained 1999-A SUBI Certificate are duly authorized SUBI Certificates
issued under the 1999-A SUBI Supplement to the Origination Trust Agreement
(the "1999-A SUBI Supplement") dated as of [May 31, 1999,] among the UTI
Beneficiaries, the Transferors, the Origination Trustee, the
B-1
<PAGE>
Servicer and U.S. Bank, as Trust Agent and, for certain limited purposes as
set forth therein, as 1999-A Owner Trustee. This [HTC LP][HTD LP] 1999-A SUBI
Certificate is subject to the terms, provisions and conditions of the
Origination Trust Agreement and the 1999-A SUBI Supplement, to which any
Beneficiary of this [HTC LP][HTD LP] 1999-A SUBI Certificate or any interest
herein by virtue of the acceptance hereof or of any interest herein hereby
assents and by which such SUBI Beneficiary is bound.
Also issued or to be issued under the Origination Trust Agreement
are various other series of certificates evidencing undivided interests in
the 1999-A SUBI Sub-Trust and in other Sub-Trusts of the Origination Trust.
Prior to the date of initial issue of this [HTC LP][HTD LP] 1999-A SUBI
Certificate, the following certificates have been issued: (i) UTI
Certificate No. 1, representing 99% of the beneficial interests in the UTI,
(ii) UTI Certificate No. 2 representing 1% of the beneficial interests in the
UTI, (iii) SUBI Certificate No. 1, representing [98.01%] [0.99%] [0.99%]
[0.01%] of the beneficial interests in the 1999-A SUBI, which Certificate has
been cancelled, (iv) SUBI Certificate No. 2, representing [98.01%] [0.99%]
[0.99%] [0.01%] of the beneficial interests in the 1999-A SUBI, which
Certificate has been cancelled, (v) SUBI Certificate No. 3 representing
[98.01%] [0.99%] [0.99%][0.01%] of the beneficial interests in the 1999-A
SUBI, which Certificate has been cancelled, and (vi) SUBI Certificate No. 4,
representing [98.01%] [0.99%][0.99%] [0.01%] of the beneficial interests in
the 1999-A SUBI, which Certificate has been cancelled. SUBI Certificates
representing 100% of the undivided interests in each other SUBI to be formed
will be issued in connection with the formation of each related SUBI
Sub-Trust. Concurrently herewith, on the date of initial issue of this
[HTC LP][HTD LP] 1999-A SUBI Certificate, the Origination Trust is also
issuing (a) SUBI Certificate No. [5/6/7/8], representing
[98.802%/.998%/.198%/.002%] of the beneficial interests in the 1999-A SUBI,
(b) SUBI Certificate No. [5/6/7/8], representing [98.802%/.998%/.198%/.002%]
of the beneficial interests in the 1999-A SUBI and (c) SUBI Certificate No.
[5/6/7/8], representing [98.802%/.998%/.198%/.002%] of the beneficial
interests in the 1999-A SUBI.
The property of the Origination Trust is identified in the
Origination Trust Agreement and the property of the 1999-A SUBI Sub-Trust is
identified in the 1999-A SUBI Supplement. Pursuant to the 1999-A SUBI
Supplement, the 1999-A SUBI Assets were identified and allocated on the
records of the Origination Trust as a separate SUBI Sub-Trust (the "1999-A
SUBI Sub-Trust"), and the beneficial interest in the 1999-A SUBI Sub-Trust
was designated as a separate SUBI known as the "1999-A SUBI". The assets of
the 1999-A SUBI Sub-Trust are currently represented by four SUBI
Certificates: (i) this 1999-A SUBI Certificate evidencing beneficial
interests in [98.802%/.998%] of the 1999-A SUBI Assets, (ii) a 1999-A SUBI
Certificate evidencing beneficial interests in [98.802%/.998%] of the 1999-A
SUBI Assets, (iii) a 1999-A SUBI Certificate evidencing beneficial interests
in .198% of the 1999-A SUBI Assets and (iv) a 1999-A SUBI Certificate
evidencing beneficial interests in .002% of the 1999-A SUBI Assets. Any
holder of this [HTC LP][HTD LP] 1999-A SUBI Certificate, the [HTC LP][HTD LP]
1999-A SUBI Certificate, the HTC LP Retained 1999-A SUBI Certificate or the
HTD LP Retained 1999-A SUBI Certificate shall be considered a 1999-A SUBI
Beneficiary. The rights of the Beneficiaries of this [HTC LP][HTD LP] 1999-A
SUBI Certificate, the [HTC LP][HTD LP] 1999-A SUBI Certificate, the HTC LP
Retained 1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI
Certificate to certain of the proceeds
B-2
<PAGE>
of the 1999-A SUBI Assets are and will be further set forth in the
Origination Trust Agreement and the 1999-A SUBI Supplement.
This [HTC LP][HTD LP] 1999-A SUBI Certificate is limited in right
of payment to certain collections and recoveries respecting the 1999-A
Contracts (and the related Lessors) and the 1999-A Leased Vehicles allocated
to the 1999-A SUBI Sub-Trust, all to the extent and as more specifically set
forth in the Origination Trust Agreement and the 1999-A SUBI Supplement.
Copies of the Origination Trust Agreement and the 1999-A SUBI Supplement may
be examined during normal business hours at the principal office of the
Origination Trustee, and at such other places, if any, designated by the
Origination Trustee, by each 1999-A SUBI Beneficiary upon request.
By accepting this [HTC LP][HTD LP] 1999-A SUBI Certificate or any
interest herein, the related SUBI Beneficiary waives and releases any claim
to any proceeds or assets of the Origination Trustee and to all of the Trust
Assets other than those from time to time included within the 1999-A SUBI
Sub-Trust and those proceeds or assets derived from or earned by the 1999-A
SUBI Assets. In addition, by accepting this [HTC LP][HTD LP] 1999-A SUBI
Certificate or any interest herein, the related SUBI Beneficiary hereby
expressly subordinates any claim or interest in or to any proceeds or assets
of the Origination Trustee and to all of the Trust Assets other than those
from time to time included within the 1999-A SUBI Sub-Trust that may be
determined to exist in favor of such SUBI Beneficiary notwithstanding the
foregoing disclaimer to the rights and interests of each SUBI Beneficiary
with respect to Trust Assets other than those included within the 1999-A SUBI
Sub-Trust.
The 1999-A SUBI Supplement and the Origination Trust Agreement may
be amended from time to time, to the extent such amendment applies to or
affects only the 1999-A SUBI and the 1999-A SUBI Portfolio, by a writing
signed by the Origination Trustee, the UTI Beneficiaries, each 1999-A SUBI
Beneficiary, and, to the extent that any such amendment affects any
obligation or interest of the Trust Agent, the Trust Agent, in each case only
with the prior written consent of the 1999-A Owner Trustee and upon prior
written notice to each Rating Agency that includes the substance of the
proposed amendment. Any amendment of the Origination Trust Agreement or of
any other SUBI Supplement that applies to or affects any UTI or Other SUBI
and the 1999-A SUBI or the 1999-A SUBI Portfolio shall also be subject to the
foregoing provisions. The foregoing does not apply to any amendment of the
Origination Trust Agreement or any other SUBI Supplement that neither applies
to nor affects the 1999-A SUBI or the 1999-A SUBI Portfolio, and such
amendments shall not require the consent of any 1999-A SUBI Beneficiary or
the 1999-A Owner Trustee. If approval of any 1999-A SUBI Beneficiary is
required, any such consent shall be conclusive and binding on such
Beneficiary and on all future Beneficiaries hereof whether or not notation of
such consent is made upon this [HTC LP][HTD LP] 1999-A SUBI Certificate.
As provided in the Origination Trust Agreement and the 1999-A SUBI
Supplement, this [HTC LP][HTD LP] 1999-A SUBI Certificate and the underlying
interests represented hereby may not be transferred or assigned, except in
accordance with the provisions thereof.
B-3
<PAGE>
Prior to due presentation of this [HTC LP][HTD LP] 1999-A SUBI
Certificate for registration of a permitted transfer, the Origination
Trustee, the certificate registrar and any of their respective agents may
treat the person or entity in whose name this [HTC LP][HTD LP] 1999-A SUBI
Certificate is registered as the owner hereof for the purpose of receiving
distributions and for all other purposes, and, except as provided for in the
Origination Trust Agreement, neither the Origination Trustee, the certificate
registrar nor any such agent shall be affected by any notice to the contrary.
Unless this 1999-A SUBI Certificate shall have been executed by an
authorized officer of the Origination Trustee, by manual signature, this
[HTC LP][HTD LP] 1999-A SUBI Certificate shall not entitle the holder hereof
to any benefit under the Origination Trust Agreement or the 1999-A SUBI
Supplement or be valid for any purpose.
B-4
<PAGE>
IN WITNESS WHEREOF, the Origination Trustee and the Delaware
Trustee, on behalf of the Origination Trust and not in their individual
capacities, have caused this [HTC LP][HTD LP] 1999-A SUBI Certificate to be
duly executed.
Dated: [June ___], 1999
HONDA LEASE TRUST
By: HVT, INC., as Origination Trustee
By: ______________________________
Authorized Officer
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as Delaware Trustee
By: ______________________________
Authorized Officer
B-5
<PAGE>
EXHIBIT C
HONDA LEASE TRUST
FORM OF [HTC LP][HTD LP] RETAINED 1999-A SUBI CERTIFICATE
Evidencing interests in specified 1999-A SUBI Assets within the
1999-A SUBI Sub-Trust (as defined below).
This Certificate does not represent any obligation of, or an
interest in, American Honda Finance Corporation, Honda Titling A L.P., Honda
Titling B L.P., Honda Titling Inc., HVT, Inc., Delaware Trust Capital
Management Inc., Honda Titling C L.P., Honda Titling D L.P., Honda Funding
Inc., or any of their respective affiliates.
Number [7/8]
THIS CERTIFIES THAT U.S. BANK NATIONAL ASSOCIATION, IN ITS CAPACITY
AS SECURITIES INTERMEDIARY, is the registered owner of a nonassessable,
fully-paid, [.198%] [.002%] beneficial interest in specified assets of the
1999-A SUBI (the "1999-A SUBI") which in turn is comprised of interests in
the assets of the 1999-A SUBI Sub-Trust (the "1999-A Sub-Trust") of the Honda
Lease Trust, a Delaware business trust (the "Origination Trust"), formed
pursuant to the Second Amended and Restated Trust and Servicing Agreement,
dated as of April 1, 1998 (the "Origination Trust Agreement"), by and among
Honda Titling A L.P. and Honda Titling B L.P., as Grantors and UTI
Beneficiaries (in such capacities, the "Grantors" and the "UTI
Beneficiaries"), HVT, Inc., a Delaware corporation (the "Origination
Trustee"), Delaware Trust Capital Management, Inc., a Delaware corporation,
as Delaware trustee (the "Delaware Trustee"), American Honda Finance
Corporation, as servicer (the "Servicer"), and, for certain limited purposes
set forth therein, U.S. Bank National Association, a national banking
association ("U.S. Bank"), as trust agent (in such capacity, the "Trust
Agent"). A summary of certain of the provisions of the Origination Trust
Agreement and the 1999-A SUBI Supplement is set forth below. Capitalized
terms used and not otherwise defined herein have the meanings ascribed
thereto in the Agreement of Definitions dated [May 31, 1999], by and among
HVT, Inc., a Delaware corporation, as origination trustee, Delaware Trust
Capital Management, Inc., a Delaware corporation, as Delaware trustee, U.S.
Bank National Association, a national banking association, as trust agent and
as owner trustee, American Honda Finance Corporation, as servicer, Wilmington
Trust Company, as Delaware owner trustee, The Bank of New York, as indenture
trustee, Honda Titling A L.P., a Delaware limited partnership, Honda Titling
B L.P., a Delaware limited partnership, Honda Titling C L.P., a Delaware
limited partnership, and Honda Titling D L.P., a Delaware limited partnership.
This [HTC LP][HTD LP] Retained 1999-A SUBI Certificate, the [HTC LP]
[HTD LP] Retained 1999-A SUBI Certificate, the HTC LP 1999-A SUBI Certificate
and the HTD LP 1999-A SUBI Certificate are duly authorized SUBI Certificates
issued under the 1999-A SUBI Supplement to the Origination Trust Agreement
(the "1999-A SUBI Supplement") dated as of [May 31, 1999,] among the UTI
Beneficiaries, the Transferors, the Origination Trustee, the
C-1
<PAGE>
Servicer and U.S. Bank, as Trust Agent and, for certain limited purposes
as set forth therein, as 1999-A Owner Trustee. This [HTC LP][HTD LP]
Retained 1999-A SUBI Certificate is subject to the terms, provisions and
conditions of the Origination Trust Agreement and the 1999-A SUBI Supplement,
to which any Beneficiary of this [HTC LP][HTD LP] Retained 1999-A SUBI
Certificate or any interest herein by virtue of the acceptance hereof or of
any interest herein hereby assents and by which such SUBI Beneficiary is
bound.
Also issued or to be issued under the Origination Trust Agreement
are various other series of certificates evidencing undivided interests in
the 1999-A SUBI Sub-Trust and in other Sub-Trusts of the Origination Trust.
Prior to the date of initial issue of this [HTC LP][HTD LP] Retained 1999-A
SUBI Certificate, the following certificates have been issued: (i) UTI
Certificate No. 1, representing 99% of the beneficial interests in the UTI,
(ii) UTI Certificate No. 2 representing 1% of the beneficial interests in the
UTI, (iii) SUBI Certificate No. 1, representing [98.01%] [0.99%] [0.99%]
[0.01%] of the beneficial interests in the 1999-A SUBI, which Certificate has
been cancelled, (iv) SUBI Certificate No. 2, representing [98.01%] [0.99%]
[0.99%] [0.01%] of the beneficial interests in the 1999-A SUBI, which
Certificate has been cancelled, (v) SUBI Certificate No. 3 representing
[98.01%] [0.99%] [0.99%][0.01%] of the beneficial interests in the 1999-A
SUBI, which Certificate has been cancelled, and (vi) SUBI Certificate No. 4,
representing [98.01%] [0.99%][0.99%] [0.01%] of the beneficial interest in
the 1999-A SUBI which Certificate has been cancelled. SUBI Certificates
representing 100% of the undivided interests in each other SUBI to be formed
will be issued in connection with the formation of each related SUBI
Sub-Trust. Concurrently herewith, on the date of initial issue of this
[HTC LP][HTD LP] Retained 1999-A SUBI Certificate, the Origination Trust is
also issuing (a) SUBI Certificate No. [5/6/7/8], representing
[98.802%/.998%/.198%/.002%] of the beneficial interests in the 1999-A SUBI,
(b) SUBI Certificate No. [5/6/7/8], representing [98.802%/.998%/.198%/.002%]
of the beneficial interests in the 1999-A SUBI and (c) SUBI Certificate No.
[5/6/7/8], representing [98.802%/.998%/.198%/.002%] of the beneficial
interests in the 1999-A SUBI.
The property of the Origination Trust is identified in the
Origination Trust Agreement and the property of the 1999-A SUBI Sub-Trust is
identified in the 1999-A SUBI Supplement. Pursuant to the 1999-A SUBI
Supplement, the 1999-A SUBI Assets were identified and allocated on the
records of the Origination Trust as a separate SUBI Sub-Trust (the "1999-A
SUBI Sub-Trust"), and the beneficial interest in the 1999-A SUBI Sub-Trust
was designated as a separate SUBI known as the "1999-A SUBI". The assets of
the 1999-A SUBI Sub-Trust are currently represented by four SUBI
Certificates: (i) this 1999-A SUBI Certificate evidencing beneficial
interests in [.198%/.002%] of the 1999-A SUBI Assets, (ii) a 1999-A SUBI
Certificate evidencing beneficial interests in [.198%/.002%] of the 1999-A
SUBI Assets, (iii) a SUBI Certificate evidencing beneficial interests in
98.802% of the 1999-A SUBI Assets and (iv) a SUBI Certificate evidencing
beneficial interests in .998% of the 1999-A SUBI Assets. Any holder of this
[HTC LP][HTD LP] Retained 1999-A SUBI Certificate, the [HTC LP][HTD LP]
Retained 1999-A SUBI Certificate, the HTC LP 1999-A SUBI Certificate or the
HTD LP 1999-A SUBI Certificate shall be considered a 1999-A SUBI Beneficiary.
The rights of the Beneficiaries of this [HTC LP][HTD LP] Retained 1999-A
SUBI Certificate, the [HTC LP][HTD LP] Retained 1999-A SUBI Certificate, the
HTC LP 1999-A SUBI Certificate and the
C-2
<PAGE>
HTD LP 1999-A SUBI Certificate to certain of the proceeds of the 1999-A SUBI
Assets are and will be further set forth in the Origination Trust Agreement
and the 1999-A SUBI Supplement.
This [HTC LP][HTD LP] Retained 1999-A SUBI Certificate is limited
in right of payment to certain collections and recoveries respecting the
1999-A Contracts (and the related Lessors) and the 1999-A Leased Vehicles
allocated to the 1999-A SUBI Sub-Trust, all to the extent and as more
specifically set forth in the Origination Trust Agreement and the 1999-A SUBI
Supplement. Copies of the Origination Trust Agreement and the 1999-A SUBI
Supplement may be examined during normal business hours at the principal
office of the Origination Trustee, and at such other places, if any,
designated by the Origination Trustee, by each 1999-A SUBI Beneficiary upon
request.
By accepting this [HTC LP][HTD LP] Retained 1999-A SUBI Certificate
or any interest herein, the related SUBI Beneficiary waives and releases any
claim to any proceeds or assets of the Origination Trustee and to all of the
Trust Assets other than those from time to time included within the 1999-A
SUBI Sub-Trust and those proceeds or assets derived from or earned by the
1999-A SUBI Assets. In addition, by accepting this [HTC LP][HTD LP] Retained
1999-A SUBI Certificate or any interest herein, the related SUBI Beneficiary
hereby expressly subordinates any claim or interest in or to any proceeds or
assets of the Origination Trustee and to all of the Trust Assets other than
those from time to time included within the 1999-A SUBI Sub-Trust that may be
determined to exist in favor of such SUBI Beneficiary notwithstanding the
foregoing disclaimer to the rights and interests of each SUBI Beneficiary
with respect to Trust Assets other than those included within the 1999-A SUBI
Sub-Trust.
The 1999-A SUBI Supplement and the Origination Trust Agreement may
be amended from time to time, to the extent such amendment applies to or
affects only the 1999-A SUBI and the 1999-A SUBI Portfolio, by a writing
signed by the Origination Trustee, the UTI Beneficiaries, each 1999-A SUBI
Beneficiary, and, to the extent that any such amendment affects any
obligation or interest of the Trust Agent, the Trust Agent, in each case only
with the prior written consent of the 1999-A Owner Trustee and upon prior
written notice to each Rating Agency that includes the substance of the
proposed amendment. Any amendment of the Origination Trust Agreement or of
any other SUBI Supplement that applies to or affects any UTI or Other SUBI
and the 1999-A SUBI or the 1999-A SUBI Portfolio shall also be subject to the
foregoing provisions. The foregoing does not apply to any amendment of the
Origination Trust Agreement or any other SUBI Supplement that neither applies
to nor affects the 1999-A SUBI or the 1999-A SUBI Portfolio, and such
amendments shall not require the consent of any 1999-A SUBI Beneficiary or
the 1999-A Owner Trustee. If approval of any 1999-A SUBI Beneficiary is
required, any such consent shall be conclusive and binding on such
Beneficiary and on all future Beneficiaries hereof whether or not notation of
such consent is made upon this [HTC LP][HTD LP] Retained 1999-A SUBI
Certificate.
As provided in the Origination Trust Agreement and the 1999-A SUBI
Supplement, this [HTC LP][HTD LP] Retained 1999-A SUBI Certificate and the
underlying interests represented hereby may not be transferred or assigned,
except in accordance with the provisions thereof.
C-3
<PAGE>
Prior to due presentation of this [HTC LP][HTD LP] Retained 1999-A
SUBI Certificate for registration of a permitted transfer, the Origination
Trustee, the certificate registrar and any of their respective agents may
treat the person or entity in whose name this [HTC LP][HTD LP] Retained
1999-A SUBI Certificate is registered as the owner hereof for the purpose of
receiving distributions and for all other purposes, and, except as provided
for in the Origination Trust Agreement, neither the Origination Trustee, the
certificate registrar nor any such agent shall be affected by any notice to
the contrary.
Unless this 1999-A SUBI Certificate shall have been executed by an
authorized officer of the Origination Trustee, by manual signature, this
[HTC LP][HTD LP] Retained 1999-A SUBI Certificate shall not entitle the
holder hereof to any benefit under the Origination Trust Agreement or the
1999-A SUBI Supplement or be valid for any purpose.
C-4
<PAGE>
IN WITNESS WHEREOF, the Origination Trustee and the Delaware
Trustee, on behalf of the Origination Trust and not in their individual
capacities, have caused this [HTC LP][HTD LP] Retained 1999-A SUBI
Certificate to be duly executed.
Dated: [May 31], 1999
HONDA LEASE TRUST
By: HVT, INC., as Origination Trustee
By: ______________________________
Authorized Officer
By: DELAWARE TRUST CAPITAL
MANAGEMENT, INC., as Delaware Trustee
By: ______________________________
Authorized Officer
C-5
<PAGE>
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
HONDA LEASE TRUST
HONDA TITLING A L.P.
and
HONDA TITLING B L.P.,
as UTI Beneficiaries
and
AMERICAN HONDA FINANCE CORPORATION,
as Servicer
________________________
SERVICING AGREEMENT
Dated as of April 1, 1998
________________________
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE ONE
DEFINITIONS
Section 1.01. Definitions........................................................1
Section 1.02. Interpretation.....................................................9
ARTICLE TWO
ADMINISTRATION AND SERVICING OF LEASES
Section 2.01. Duties of Servicer................................................10
Section 2.02. Records...........................................................11
Section 2.03. Certificates of Title.............................................12
Section 2.04. Initial Funding of Payments to Dealers............................13
Section 2.05. Servicer's Repurchase Obligations.................................13
Section 2.06. Collections; Accounts.............................................15
Section 2.07. Security Deposits.................................................21
Section 2.08. Servicing Compensation............................................21
Section 2.09. Servicer Advances and Servicer Reimbursement......................21
Section 2.10. Repossession and Sale of Leased Vehicles..........................22
Section 2.11. Servicer to Act on Behalf of Trustee..............................23
Section 2.12. Third Party Claims................................................24
Section 2.13. Fidelity Bond; Insurance..........................................24
Section 2.14. Servicer Not to Resign; Assignment................................25
Section 2.15. Merger............................................................26
Section 2.16. Limitation on Liability of Servicer...............................27
ARTICLE THREE
STATEMENTS AND REPORTS
Section 3.01. Reporting by the Servicer; Delivery of Certain Documentation......27
Section 3.02. Accountants' Reports..............................................28
Section 3.03. Annual Officer's Certificate......................................28
ARTICLE FOUR
SERVICER TERMINATION EVENTS
Section 4.01. Servicer Termination Events; Termination of Servicer..............28
Section 4.02. No Effect on Other Parties........................................31
</TABLE>
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<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE FIVE
SERVICER REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties....................................32
ARTICLE SIX
MISCELLANEOUS
Section 6.01. Termination of Agreement..........................................33
Section 6.02. Amendment.........................................................34
Section 6.03. Governing Law.....................................................34
Section 6.04. Relationship of this Agreement to Other Trust Documents...........34
Section 6.05. Notices...........................................................34
Section 6.06. Severability of Provisions........................................35
Section 6.07. Inspection and Audit Rights.......................................35
Section 6.08. Binding Effect....................................................35
Section 6.09. Table of Contents and Headings....................................35
Section 6.10. Counterparts......................................................35
Section 6.11. Further Assurances................................................36
Section 6.12. Third-Party Beneficiaries.........................................36
Section 6.13. No Waiver; Cumulative Remedies....................................36
Section 6.14. No Petition.......................................................36
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
SCHEDULES
Schedule I - Lease Document Locations .....................................SI-1
EXHIBITS
Exhibit A - Leased Vehicle Power of Attorney ...............................A-1
Exhibit B - Filings Power of Attorney ......................................B-1
</TABLE>
iii
<PAGE>
SERVICING AGREEMENT
This Servicing Agreement, dated as of April 1, 1998, is among Honda
Lease Trust, a Delaware business trust (the "Trust"), Honda Titling A L.P., a
Delaware limited partnership ("HTA LP"), and Honda Titling B L.P., a Delaware
limited partnership ("HTB LP"), as initial beneficiaries of the Trust (the "UTI
Beneficiaries"), and American Honda Finance Corporation, a California
corporation, as servicer (the "Servicer").
RECITALS
WHEREAS, HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, HVT, Inc., a Delaware corporation, as trustee of the Trust (the
"Trustee"), Delaware Trust Capital Management, Inc., as Delaware trustee (the
"Delaware Trustee") and, for certain limited purposes set forth therein, U.S.
Bank National Association, as trust agent (the "Trust Agent"), have entered into
the Second Amended and Restated Trust and Servicing Agreement, dated as of April
1, 1998 (as supplemented, amended or restated from time to time, the "Trust
Agreement"), pursuant to which the purposes of the Trust are, among other
things, to take assignments and conveyances of, and hold in trust and deal in,
various Trust Assets (as such term is defined in the Trust Agreement);
WHEREAS, the Trust will be comprised of a UTI and one or more SUBIs (as
such terms are defined in the Trust Agreement), each of which will constitute a
separate series of the Trust under Delaware law, and each of which will have
allocated to it certain specified Trust Assets;
WHEREAS, the parties desire to enter into this Agreement to provide for,
among other things, the servicing of the Trust Assets by the Servicer; and
WHEREAS, the parties acknowledge that, in connection with, among other
things, the creation of SUBIs, it may be necessary or desirable to enter into
supplemental agreements hereto, providing for specific servicing obligations in
connection therewith.
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, and of other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
Section 1.01. DEFINITIONS. Capitalized terms used herein that are not
otherwise defined shall have the meanings ascribed thereto in the Trust
Agreement. Whenever used in this Agreement, unless the context otherwise
requires, the following words and phrases shall have the following meanings:
"ACCOUNTANT" means a Person qualified to pass upon accounting questions,
whether or not such Person shall be an officer or employee of a Beneficiary, the
Servicer or any of their
<PAGE>
respective Affiliates (unless otherwise required to be Independent and such
status would invalidate qualification as Independent).
"ADDITIONAL LOSS AMOUNT" means, with respect to any Collection Period
and the UTI or any SUBI, all payments (including any payments in respect of
indemnification or reimbursement of the Trustee or any Trust Agent) with respect
to Liabilities to Persons other than the Trust, the Trustee, the Trust Agent,
the Servicer or any Holder against or with respect to the UTI or the related
SUBI, as applicable, paid during such Collection Period, including reasonable
fees and expenses of attorneys incurred in defending or settling such
Liabilities, all as allocated pursuant to Section 3.08(b) of the Trust
Agreement, and the amount of reserves for such future possible payments that the
Servicer, on behalf of the Trustee, deems advisable to retain in the related
Collection Account out of monies that would otherwise constitute Collections for
such Collection Period.
"ADVANCE" means any advance of all or a portion of a Monthly Payment
that the Servicer may be required to make pursuant to an applicable Servicing
Supplement.
"AGREEMENT" means this Servicing Agreement, as supplemented or amended
from time to time by a particular Servicing Supplement or all Servicing
Supplements, as the context may require.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors and assigns.
"BOARD OF DIRECTORS" means, with respect to any Person (which, in the
case of a partnership, shall be its managing general partner or, if there is no
managing general partner, any general partner), either its Board of Directors or
any duly authorized committee of such Board of Directors.
"BOARD RESOLUTION" means, with respect to any Person (which, in the case
of a partnership, shall be its managing general partner or, if there is no
managing general partner, any general partner thereof), a copy of a resolution
certified by its Secretary or an Assistant Secretary to have been duly adopted
by the Board of Directors of such Person and to be in full force and effect on
the date of such certification and delivered to the entity to which such
resolution is required to be delivered.
"CHARGED-OFF LEASE" means a Lease (i) with respect to which the related
Leased Vehicle has been repossessed and sold or otherwise disposed of or (ii)
which has been written off by the Servicer in accordance with its usual
standards for writing off lease contracts for leased vehicles other than with
respect to repossessions.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLECTION ACCOUNT BALANCE" means, with respect to each Collection
Account, as of any date, the balance on deposit in such Collection Account as of
the close of business on the immediately preceding day.
2
<PAGE>
"COLLECTIONS" means, with respect to any Collection Period and
Sub-Trust, all collections received on or with respect to the Leases and Leased
Vehicles allocated to such Sub-Trust in respect of such Collection Period,
including the following: (i) Monthly Payments (including amounts that previously
were Payments Ahead but which became due during such Collection Period),
Prepayments (other than Payments Ahead), Extension Fees, Excess Mileage Fees and
any other payments under a related Lease; (ii) Net Matured Leased Vehicle
Proceeds, Net Repossession Proceeds and all other Net Liquidation Proceeds;
(iii) any Net Insurance Proceeds not included in Net Liquidation Proceeds; and
(iv) Advances. Notwithstanding the foregoing, Collections shall not include and
shall be net of the following, which shall be retained in the related Collection
Account or paid to the appropriate Persons as directed by the Servicer: (A)
Administrative Charges other than Extension Fees and Excess Mileage Fees; (B)
Payments Ahead; (C) to the extent not otherwise covered in clauses (i) through
(iv) above, the amount of Advances, Liquidation Expenses (including Matured
Leased Vehicle Expenses) and Insurance Expenses to be reimbursed on the related
Deposit Date pursuant to Section 2.06(e)(v)(B); and (D) Additional Loss Amounts.
"CONTINGENT AND EXCESS LIABILITY INSURANCE POLICY" means that certain
policy numbered ISA H0097985-5, issued to the Servicer and the Trustee, on
behalf of the Trust, by Indemnity Insurance Company of North America (CIGNA) and
that certain policy numbered 9857829613 issued to the Servicer and the Trustee,
on behalf of the Trust, by Tokio Marine & Fire Ins. Co., LTD., plus all
contingent, excess or umbrella policies from time to time issued with the
Trustee or the Trust named as an additional insured or loss payee, in each case
to the extent applicable to any Lease or Leased Vehicle and, in each case, all
replacement or successor policies.
"DEFAULTED LEASE" means any Lease with respect to which (i) the Lessee
has failed to make all or part of one or more Monthly Payments and (ii) the
Servicer has determined that no satisfactory arrangements can be made for the
collection of the delinquent payments.
"DEFAULTED VEHICLE" means the Leased Vehicle related to a Defaulted
Lease.
"DEPOSIT DATE" means, with respect to a Collection Period and the UTI or
any SUBI, (i) if no Rated Securities related to such Sub-Trust are outstanding,
the related Distribution Date or (ii) if any Rated Securities related to such
Sub-Trust are outstanding, the Business Day immediately preceding such
Distribution Date.
"DISCOUNT RATE" means, with respect to any Lease, such rate as is so
specified in the related Servicing Supplement and, if no such rate is specified,
0% (i.e., there shall be no Discount Rate).
"DISCOUNTED LEASE" means a Lease with a Lease Rate of less than the
Specified Lease Rate.
"DISCOUNTED PRINCIPAL BALANCE" means, with respect to any Lease as of
any date, if such Lease (i) is a Discounted Lease, an amount equal to the
present value of the sum of (A) all remaining Monthly Payments, calculated
assuming that such Monthly Payments will be paid on a timely basis and (B) the
Residual Value, in each case calculated by discounting such sum by the Discount
Rate, and (ii) is not a Discounted Lease, its Adjusted Lease Balance.
3
<PAGE>
"DISPOSED MATURED LEASED VEHICLE" means, with respect to any Collection
Period, a Matured Leased Vehicle sold or otherwise disposed of from Matured
Leased Vehicle Inventory during such Collection Period.
"DISTRIBUTION ACCOUNT" means such account or accounts as may be
established pursuant to a Supplement, Servicing Supplement or related
Securitization Documents into which distributions to holders of Securities are
required to be deposited.
"DISTRIBUTION DATE" means, with respect to any Sub-Trust and Collection
Period, the day so designated in the related Supplement or Servicing Supplement,
and if no day is so designated, the 20th day of the immediately succeeding
Collection Period, or, if such day is not a Business Day, the immediately
succeeding Business Day.
"DRAFT ACCOUNT" means Account No. 3857-4448, denominated "Draft
Account-Controlled Distribution", located at Citibank, N.A., One Penn's Way, New
Castle, Delaware 19720, Account No. 323-077579, denominated "Draft Account/ACH
Dealer Funding", located at Chase Manhattan Bank, 270 Park Avenue, New York, New
York 10017, or any other such account identified as such from time to time by
the Servicer.
"EXCESS FUNDS" means, with respect to any Sub-Trust as of any date of
determination, (i) the amount so designated in a related Servicing Supplement,
or (ii) if no amount is so designated, the amount on deposit in the related
Collection Account in excess of the sum of (A) the Required Collection Account
Balance and (B) reasonable reserves for anticipated Liabilities or other
obligations required to be paid from such Collection Account pursuant to this
Agreement or any related Supplement or Servicing Supplement.
"FILINGS" has the meaning set forth in Section 2.11(b).
"FILINGS POWER OF ATTORNEY" means a power of attorney granted by the
Trustee on behalf of the Trust to the Servicer pursuant to Section 2.11(b),
substantially in the form of Exhibit B.
"FINAL SCHEDULED DISTRIBUTION DATE" means, with respect to any
Sub-Trust, any date so designated in the related Supplement or Servicing
Supplement, and, if no date is so designated, there will be no Final Scheduled
Distribution Date for such Sub-Trust.
"FORCE MAJEURE EVENT" means an act beyond the Servicer's reasonable
control, including an act of God, war, vandalism or sabotage; rioting,
accidents, fires, floods, earthquakes, hurricanes, strikes, labor disputes,
mechanical breakdowns, shortages or delays in obtaining suitable parts,
equipment, material, labor or transportation; acts of subcontractors;
interruption of utility services, acts of any unit of government or governmental
agency; or any similar or dissimilar cause.
"HTA LP" has the meaning set forth in the Preamble.
"HTB LP" has the meaning set forth in the Preamble.
"INDEPENDENT", when used with respect to any Accountant, means such an
Accountant, who may also be the Accountant who audits a Beneficiary, AHFC, the
Servicer or any of their
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respective Affiliates, who is Independent with respect to such entity as
contemplated by Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants. Whenever it is herein provided
that any Independent Accountant's opinion or certificate shall be furnished
to the Trust or the Trustee, the Accountant shall be acceptable to the
Trustee if such opinion or certificate shall state that the signer has read
this definition and that the signer is Independent within the meaning hereof.
"INSURANCE EXPENSES" means any Insurance Proceeds (i) applied to the
repair of the related Leased Vehicle, (ii) released to the related Lessee in
accordance with applicable law or the customary servicing procedures of the
Servicer or (iii) representing other related expenses incurred by the Servicer
not otherwise included in Liquidation Expenses and recoverable by the Servicer
under this Agreement.
"LEASE DOCUMENTS" means, with respect to each Lease, (i) the fully
executed Lease, (ii) documents evidencing or relating to any Insurance Policy
covering such Lease or the related Leased Vehicle or Lessee, (iii) a copy of the
application or application information of the related Lessee and all factory
invoices, financial statements and credit reports pertaining to such Lessee and
any Dealer purchase documentation, including any odometer statements required by
applicable law, (iv) the Certificate of Title (or application therefor if the
Certificate of Title has not yet been issued by the related Registrar of Titles)
or such other documents, if any, that the Servicer keeps on file in accordance
with its customary practices indicating that title to the related Leased Vehicle
is in the name of the Trust or the Trustee on behalf of the Trust and noting
thereon any Administrative Lien and (v) any and all other documents that the
Servicer keeps on file in accordance with its customary practices relating to
such Lease or the related Leased Vehicle or Lessee, including any written
agreements modifying such Lease (including any extension agreements).
"LEASE RATE" means, with respect to each Lease, the implicit rate,
calculated on the basis of an annual percentage rate, included in the
calculation of the Monthly Payment due with respect to such Lease.
"LEASE REPRESENTATION DATES" means, with respect to each Lease, the date
of origination of such Lease and the date such Lease is assigned to the Trust.
"LEASED VEHICLE POWER OF ATTORNEY" means a power of attorney granted by
the Trustee (or a Co-Trustee) on behalf of the Trust to the Servicer pursuant to
Section 2.10(b), substantially in the form of Exhibit A.
"LIQUIDATION EXPENSES" means reasonable out-of-pocket expenses incurred
by the Servicer in connection with the attempted realization of the full amounts
due or to become due under any Lease, including expenses of any collection
effort (whether or not resulting in a lawsuit against the Lessee under such
Lease) or other expenses incurred prior to repossession or return of the Leased
Vehicle, expenses incurred in connection with making claims under any related
Insurance Policy and expenses incurred in connection with making claims for any
Liquidation Expenses.
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"LONG-TERM MATURED LEASED VEHICLE INVENTORY" means, with respect to a
Collection Period, each Leased Vehicle included in Matured Leased Vehicle
Inventory as of the last day of such Collection Period that remained unsold and
not otherwise disposed of for at least two full Collection Periods.
"MATURED LEASE" means any Lease that has reached its Maturity Date and
as to which all Monthly Payments and other payments due from the Lessee
thereunder have been paid.
"MATURED LEASED VEHICLE" as of any date means any Leased Vehicle the
related Lease of which has reached its Maturity Date, which Leased Vehicle has
been returned to the Servicer.
"MATURED LEASED VEHICLE EXPENSES" means reasonable out-of-pocket
expenses incurred by the Servicer in connection with the sale or other
disposition of a Leased Vehicle included in Matured Leased Vehicle Inventory,
including expenses incurred in connection with making claims for any Matured
Leased Vehicle Expenses.
"MATURED LEASED VEHICLE INVENTORY" means, as of any date, all Matured
Leased Vehicles that have not yet been sold or otherwise disposed of by the
Servicer pursuant to this Agreement.
"MATURED LEASED VEHICLE PROCEEDS" means gross amounts received by the
Servicer or the Trustee, on behalf of the Trust, in each case in connection with
the sale or other disposition of a Leased Vehicle included in Matured Leased
Vehicle Inventory (including any Excess Mileage Fees, Residual Subvention
Payments or proceeds from the Residual Value Insurance Policy).
"MONTHLY RATE SUBVENTION PAYMENT" means, with respect to any Rate
Subvened Lease, the difference between the Monthly Payment that would be due
during the related Collection Period if the Lease Rate were the Subvened Rate
and the Monthly Payment that is actually due during the related Collection
Period.
"MONTHLY REMITTANCE CONDITIONS" has the meaning set forth in Section
2.06(f).
"NET INSURANCE PROCEEDS" means Insurance Proceeds net of related
Insurance Expenses.
"NET LIQUIDATION PROCEEDS" means Liquidation Proceeds net of related
Liquidation Expenses.
"NET MATURED LEASED VEHICLE PROCEEDS" means Matured Leased Vehicle
Proceeds less Matured Leased Vehicle Expenses.
"NET REPOSSESSION PROCEEDS" means Repossession Proceeds less
Repossession Expenses.
"OPERATING EXPENSES" means, for any period, the sum of all Servicing
Fees, Reimbursable Servicer Expenses and Trust Expenses incurred during or with
respect to such period.
"OTHER PROCEEDS" means monies arising from the sale, exchange, lease,
collection or other disposition of lease contracts, leased vehicles or other
receivables (other than the Leases and Leased Vehicles) that the Servicer is
servicing.
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"PAYAHEAD BALANCE" means, with respect to any Lease on any Business Day,
the sum of all Payments Ahead received by the Servicer with respect to such
Lease, reduced by the amount of such Payments Ahead that have been deposited
into the related Collection Account pursuant to Section 2.06(c)(iv)(B) and
2.06(e)(i).
"PAYAHEAD CREDIT" means, as of any Deposit Date, with respect to any
Lease as to which the related Lessee has failed to remit all or a portion of the
Monthly Payment for the related Collection Period, an amount equal to the lesser
of (i) the portion of the Monthly Payment not received and (ii) the Payahead
Balance.
"PAYMENT INFORMATION" has the meaning set forth in Section 2.06(c)(i).
"POOL BALANCE" means, as of any date with respect to a Sub-Trust, the
Adjusted Lease Balances of all related Leases at such date.
"PREPAYMENT" means payment to the Servicer of (i) 100% of the Adjusted
Lease Balance of a Lease (exclusive of any Lease referred to in the definition
of the term "Charged-Off Lease") prior to the Maturity Date thereof, including
any related payment of lease charge or interest, or (ii) payment of the
Repurchase Amount pursuant to Section 2.05(b) or 2.05(c).
"PRINCIPAL SERVICE FACILITY" means the principal servicing facility of
the Servicer, located, as of the date hereof, at 700 Van Ness Avenue, Torrance,
California 90501 or such other address as specified by the Servicer in writing
to the other parties hereto.
"RATE SUBVENED LEASE" means any Lease with respect to which Rate
Subvention Funds have been deposited to a Rate Subvention Account.
"RATE SUBVENTION ACCOUNT" means an account designated as such and
established by the Trustee with respect to the UTI or a SUBI pursuant to a
Supplement.
"RATE SUBVENTION FUNDS" means payments made by any Person to the Trust
designated as such to fund an increase to the Subvened Rate of the implicit rate
related to a Lease.
"REIMBURSABLE SERVICER EXPENSE" means an amount advanced by the Servicer
to pay costs or expenses associated with a Proceeding pursuant to Section
2.01(c) or 2.16(b) hereof or Section 6.04(b) of the Trust Agreement or to pay
fees or expenses of the Trustee and all Co-Trustees pursuant to Section 5.13 of
the Trust Agreement. Reimbursable Servicer Expenses do not include Insurance
Expenses or Liquidation Expenses for which the Servicer may seek reimbursement
as described in Section 2.09(c) hereof
"REPOSSESSION EXPENSES" means reasonable out-of-pocket expenses incurred
by the Servicer in connection with the sale or other disposition of a Leased
Vehicle that has been repossessed by the Servicer or has been returned to the
Servicer for sale or other disposition, other than for inclusion in Matured
Leased Vehicle Inventory, including reasonable expenses incurred in connection
with making claims for Repossession Expenses.
"REPOSSESSION PROCEEDS" means gross amounts received by the Servicer or
the Trustee (before reimbursement for Repossession Expenses) in connection with
the sale or other
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disposition of a Leased Vehicle that has been repossessed by the Servicer or
has been returned to the Servicer for sale or other disposition in connection
with a Prepayment of the related Lease.
"REPURCHASE AMOUNT" means, with respect to any Lease required to be
repurchased by the Servicer or reallocated to the UTI pursuant to Section
2.05(b) or 2.05(c), except as otherwise provided in Section 2.05(b), the
Discounted Principal Balance of such Lease as of the Deposit Date related to the
Collection Period in which the 60 day cure period ended, plus an amount equal to
the imputed interest, or lease charge, portion of any Monthly Payments with
respect thereto, at the related Lease Rate, that was delinquent as of the end of
such Collection Period.
"REQUIRED COLLECTION ACCOUNT BALANCE" means, with respect to each
Collection Account as of the last day of a Collection Period, an amount equal to
the related Sub-Trust's share of all accrued but unpaid Operating Expenses as of
such date.
"REQUIRED RELATED HOLDERS" means, with respect to (i) the UTI, the UTI
Beneficiaries, and (ii) any SUBI, the Holders of SUBI Certificates representing
beneficial ownership of 51% of the aggregate Cash Value of the related SUBI
Assets (excluding for the purpose of calculations with respect to SUBIs all SUBI
Certificates held by the UTI Beneficiaries, the Related Beneficiary, the
Servicer or any Affiliate thereof).
"REQUIRED SERVICER RATING" means, with respect to each Sub-Trust, the
rating or ratings so designated in the related Servicing Supplement.
"RESIDUAL SUBVENTION ACCOUNT" means an account designated as such and
established by the Trustee with respect to the UTI or a SUBI pursuant to a
Supplement.
"RESIDUAL SUBVENTION FUNDS" means payments made by any Person to the
Trust designated as such in order to fund a portion of the Residual Value of a
Leased Vehicle.
"RESIDUAL SUBVENTION PAYMENT" means, with respect to any Collection
Period, an amount equal to (i) with respect to each Disposed Matured Leased
Vehicle, the lesser of (A) the related Residual Subvention Funds and (B) the
amount, if any, by which the Residual Value exceeds Net Matured Leased Vehicle
Proceeds (calculated without including the Residual Subvention Payment); (ii)
with respect to Long-Term Matured Leased Vehicle Inventory with respect to which
such a transfer has not previously been made, the related Residual Subvention
Funds; and (iii) with respect to any other Leased Vehicle, the related Lease of
which has been terminated early, the related Residual Subvention Funds.
"RESIDUAL VALUE INSURANCE POLICY" means that certain Residual Value
Insurance Policy number 7180123 issued on November 1, 1993 by Agricultural
Excess & Surplus Insurance Company, in favor of AHFC and others, and all
replacement or successor policies related to Trust Assets.
"SERVICER" means AHFC, in its capacity as servicer under this Agreement,
and each Person succeeding to the duties of the Servicer hereunder (in whole or
with respect to one or more Sub-Trusts) pursuant to Section 2.15(b) or 4.01(b).
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"SERVICER ADVANCE" means any payment made by the Servicer (i) into a
Draft Account pursuant to Section 2.04(b) or (ii) to advance Reimbursable
Servicer Expenses pursuant to Section 2.09(a).
"SERVICER LETTER OF CREDIT" means an irrevocable letter of credit,
surety bond, insurance policy or deposit of cash or securities acceptable to
each Rating Agency or meeting such other requirements as may be set forth in a
Supplement or Servicing Supplement, providing that the Trustee may draw thereon
in the event that the Servicer fails to deposit collections into the applicable
Collection Account when required under this Agreement and the related Servicing
Supplement.
"SERVICER REIMBURSEMENT" shall have the meaning set forth in Section
2.06(e)(v)(B).
"SERVICER REPRESENTATION DATES" means, with respect to (i) the UTI, the
Effective Date, and (ii) any SUBI, the date of the applicable SUBI Servicing
Supplement.
"SERVICER TERMINATION EVENT" has the meaning set forth in Section 4.01.
"SERVICING FEE" means the fee payable on each Distribution Date with
respect to the related Collection Period equal to, with respect to (i) the UTI,
one twelfth of the product of 1.00% and the Pool Balance as of the first day of
such Collection Period, and (ii) a SUBI, the amount so designated in the related
SUBI Servicing Supplement.
"SPECIFIED LEASE RATE" means, with respect to any Sub-Trust, the rate
specified as such in the related Servicing Agreement, and if no rate is so
specified, there will be no Specified Lease Rate for the related Sub-Trust.
"SUBVENED RATE" means, with respect to each Subvened Lease, the
increased implicit lease rate specified by the Servicer at the time Rate
Subvention Funds related to such Lease are deposited to the Rate Subvention
Account.
"SUBVENTION FUNDS" means Rate Subvention Funds, Residual Subvention
Funds or any other payments made by a Person to the Trust designated as such to
fund a portion of the payments made related to a Lease or a Leased Vehicle.
"TRUST" has the meaning set forth in the Preamble.
"TRUST AGENT" initially means U.S. Bank National Association, a national
banking association, and its successors, if any, appointed pursuant to the Trust
Agreement.
"TRUST AGREEMENT" has the meaning set forth in the Recitals.
Section 1.02. INTERPRETATION. For all purposes of this Agreement,
except as otherwise expressly provided or unless the context otherwise requires,
(i) terms used in this Agreement include, as appropriate, all genders and the
plural as well as the singular, (ii) references to this Agreement include all
Exhibits and Schedules hereto, (iii) references to words such as "herein",
"hereof" and the like shall refer to this Agreement as a whole and not to any
particular part, Article or Section within this Agreement, (iv) references to a
section such as "Section 1.01" or an
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article such as "Article Five" shall refer to the applicable Section or
Article of this Agreement, (v) the term "include" and all variations thereof
shall mean "include without limitation," (vi) the term "or" shall include
"and/or", (vii) the term "proceeds" shall have the meaning ascribed to such
term in the UCC and (viii) the phrase "Trustee on behalf of the Trust," or
words of similar import, shall, to the extent required to effectuate the
appointment of any Co-Trustee pursuant to the Trust Agreement, be deemed to
refer to the Trustee (or such Co-Trustee) on behalf of the Trust.
ARTICLE TWO
ADMINISTRATION AND SERVICING OF LEASES
Section 2.01. DUTIES OF SERVICER.
(a) The Servicer shall service, administer and collect under the
Leases and in respect of the Leased Vehicles in accordance with this Agreement
and shall have full power and authority, acting alone and subject only to the
specific requirements and prohibitions of this Agreement, to do any and all
things in connection with such servicing, administration and collection that it
may reasonably deem necessary or desirable in the interest of the Trust. The
duties of the Servicer shall include, among other things, in accordance with
this Agreement, the Trust Agreement and any applicable Supplement or Servicing
Supplement, (i) performing on behalf of the Trust all obligations on the part of
the Lessor under the Leases, (ii) collecting and processing payments, responding
to inquiries of Lessees, investigating delinquencies, sending payment statements
and reporting tax information to Lessees, paying costs of the sale or other
disposition of Leased Vehicles related to Defaulted Leases and paying all state
and local personal property, use, excise and sales taxes on the Leased Vehicles
as and when such taxes become due, (iii) negotiating with the Lessees of Leases
nearing their respective Maturity Dates and arranging for the extension of the
related Lease or the sale (to the Lessee, a Dealer or any other Person) or other
disposition of the related Leased Vehicle in accordance with the Servicer's
customary practices, (iv) executing and delivering, in its own name or in the
name of the Trust or the Trustee on behalf of the Trust, any and all
instruments, certificates or other documents necessary or advisable in
connection with servicing, administering and collecting under the Leases and in
respect of the Leased Vehicles, including (A) bills of sale, (B) applications
for or duplicates of Certificates of Title in the name of the Trust or the
Trustee on behalf of the Trust, applications for registrations of Leased
Vehicles or license plates, applications for transfers of Certificates of Title
or registrations for Leased Vehicles or license plates and any instruments,
certificates or other documents which the Servicer deems necessary or advisable
to record, maintain or release title to or registration of Leased Vehicles in
the manner contemplated hereby, and (C) consents, amendments, extensions or
modifications to any of the Leases and all other similar instruments, (v)
servicing the Leases, including (A) accounting for collections and furnishing
monthly and annual statements to the Trustee with respect to distributions, (B)
making Advances, (C) generating federal and state tax information and returns on
behalf of the Trust, (D) administering audits for sales, (E) filing periodic
sales and use tax or property (real or personal) tax reports and (F) creating,
maintaining and amending the Schedule of Leases and Leased Vehicles, (vi) in
connection with the creation of each SUBI, delivering to the Trustee a revised
Schedule of Leases and Leased Vehicles that is current as of a date not more
than ten days prior to the date of
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such delivery and (vii) applying for and maintaining the licenses, permits
and authorizations and making the filings described in Section 5.01(c) of the
Trust Agreement.
(b) The Servicer agrees that the servicing, administering and
collecting of the Leases and the Leased Vehicles shall be carried out with
reasonable care, using that degree of skill and attention as is consistent with
customary and usual procedures employed by servicers in connection with the
servicing of automobile, sport utility vehicle, minivan or light duty truck
leases. The Servicer may retain subservicers or agents to assist the Servicer in
performing its servicing functions; provided, however, that any delegation of
duties to any subservicer or agent shall not relieve the Servicer of any of its
obligations hereunder. The Trustee shall furnish the Servicer with any powers of
attorney and other documents necessary or appropriate to enable the Servicer to
carry out its servicing, administration and collection duties hereunder.
(c) The Servicer is authorized, in its own name, in the name of the
Trust or in the name of the Trustee on behalf of the Trust, to commence, defend
against or otherwise participate in a Proceeding relating to or involving the
protection or enforcement of the interests of the Trust, the Trustee on behalf
of the Trust, a Holder or a Beneficiary in any Lease, Leased Vehicle or other
Trust Asset. If the Servicer shall commence, defend against or otherwise
participate in a Proceeding in its own name or in the name of the Trust or the
Trustee on behalf of the Trust, each relevant Holder or Beneficiary shall
thereupon be deemed to have automatically assigned its interest in (including
legal title to) the related Lease, Leased Vehicle or other Trust Asset, as
applicable, to the Servicer to the extent necessary for the purposes of such
Proceeding. If in any Proceeding it is held that the Servicer may not enforce
the rights of the Trust, the Trustee on behalf of the Trust, a Holder or a
Beneficiary in a Lease, Leased Vehicle or other Trust Asset on the grounds that
it is not the real party in interest or a holder entitled to enforce the Lease
or other relevant document or instrument, the Trustee shall, at the direction of
the Servicer, take steps to enforce the interest of the Trust, the Trustee on
behalf of the Trust, a Holder or a Beneficiary in such Lease, Leased Vehicle or
other Trust Asset including bringing suit in its name or in the name of the
Related Beneficiary or related Holders. The Servicer shall make a Servicing
Advance to pay, either directly or by making a deposit to the appropriate
Collection Account for use by the Trustee, the costs and expenses associated
with any Proceeding pursuant to this Section 2.01(c). Such costs and expenses
shall constitute Reimbursable Servicer Expenses.
Section 2.02. RECORDS.
(a) The Servicer shall maintain or cause to be maintained such
computer and manual records with respect to all funds and other receipts with
respect to the Trust Assets as are consistent with the customary servicing
procedures of the Servicer.
(b) The Servicer, in its capacity as custodian, shall hold the Lease
Documents or cause the Lease Documents to be held on behalf of the Trust for the
use and benefit of the Trust and all present and future Holders and
Beneficiaries and maintain accurate and complete accounts, records and computer
systems pertaining to the Lease Documents and relating directly to or maintained
in connection with the servicing of the Leases. Such accounts, records and
computer systems shall identify the UTI or applicable SUBI to which each Lease,
Leased Vehicle or other Trust Asset is allocated and reflect the interest of the
Related Beneficiary therein. The Lease Documents and related accounts, records
and computer systems need not be physically
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segregated from leases, vehicle information and related documentation for
other leases or vehicles serviced or owned by the Servicer. The Servicer
shall conduct, or cause to be conducted, periodic examinations of the files
for all leases owned or serviced by it, which shall include the Lease
Documents, 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.
(c) To ensure uniform quality in the servicing of the Leases and to
reduce administrative costs, the Trustee hereby revocably appoints the Servicer,
and the Servicer hereby accepts such appointment, to act as the agent of the
Trust as custodian of the Lease Documents, which are hereby constructively
delivered to the Trust with respect to each Lease and Leased Vehicle. The
Servicer shall maintain or cause to be maintained each Lease Document at one of
the locations specified in Schedule I, or at such other location or locations as
shall be specified by the Servicer 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 Lease Documents and the related
accounts, records and computer systems maintained by the Servicer or any
subservicer at such times as the Trustee shall reasonably instruct at the
location where maintained pursuant to this Agreement.
(d) In the exercise of its duties and powers hereunder, the Servicer
may release any Lease Document or other related item to the Trustee on behalf of
the Trust or its agent or designee, as the case may be, at such place or places
as the Trustee may designate. The Servicer shall not be responsible for any loss
occasioned by the failure of the Trustee to return any document or for any delay
in doing so.
(e) The Servicer shall promptly report to the Trustee any material
failure on its part to hold or retain possession of the Lease Documents and
maintain its accounts, records and computer systems as herein provided and shall
promptly take appropriate action to remedy any such failure.
Section 2.03. CERTIFICATES OF TITLE.
(a) In connection with the filing of the application for each
Certificate of Title, the Servicer shall arrange for the appropriate Registrar
of Titles to issue and deliver to or upon the order of the Servicer a
Certificate of Title identifying the Trust or the Trustee on behalf of the Trust
as the owner of each Leased Vehicle. The Certificates of Title shall be held by
the Servicer, as agent on behalf of the Trust and as custodian of the Lease
Documents pursuant to Section 2.02. The Servicer shall direct each Dealer or
other entity assigning Leases or causing Leases to be assigned to the Trust or
the Trustee on behalf of the Trust to cause each Certificate of Title to
identify (i) the owner of the Leased Vehicle as "Honda Lease Trust" or "HVT,
Inc., as Trustee for Honda Lease Trust" and (ii) in the event that
Administrative Liens are used, such first lienholder as may be agreed upon by
the Servicer and the UTI Beneficiaries from time to time and that is acceptable
to the applicable Registrar of Titles.
(b) Except as otherwise required by applicable law, Registrars of
Title or the Servicer's customary servicing procedures, the Servicer shall
direct each Dealer to include the address of the Trust as the mailing address
for the Certificate of Title, the address of the Lessee as the mailing address
for the vehicle registration, and, where applicable, the address of the
Principal
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Service Facility, or such other service facility identified as such by the
Servicer, as the address of the first lienholder, and otherwise to comply
with the Servicer's normal requirements under its Dealer Agreements with
respect to each Lease and Certificate of Title. Except as otherwise required
by applicable law or the applicable Registrar of Titles, so long as a Leased
Vehicle is owned by the Trust, the Servicer shall not permit the related
Certificate of Title to identify any entity other than the Trust or the
Trustee, on behalf of the Trust, as owner of such Leased Vehicle.
(c) Upon transfer to or from the Trust or the Trustee on behalf of
the Trust of legal title to any Leased Vehicle, the Servicer shall cause all
applicable Taxes to be paid and will comply with all applicable federal and
State law requirements related to the transfer of title to such Leased Vehicle.
Section 2.04. INITIAL FUNDING OF PAYMENTS TO DEALERS.
(a) In the ordinary course of its business, AHFC shall maintain or
enter into Dealer Agreements with Dealers eligible to generate Eligible Leases.
Except as otherwise provided in an Assignment Agreement, AHFC shall direct each
Dealer to assign to the Trust or the Trustee on behalf of the Trust all Eligible
Leases, the related Leased Vehicles and the Certificates of Title to the related
Leased Vehicles originated by such Dealer, with the proper name on the
Certificate of Title as specified by the Servicer in accordance with Section
2.03. In the event that any Dealer fails to assign to the Trust or the Trustee
on behalf of the Trust, as directed, an Eligible Lease and Leased Vehicle, the
Servicer shall use its best efforts to cause the correction thereof as soon as
reasonably practicable. Pursuant to each Assignment Agreement, AHFC will cause
the related Dealer to deliver the applicable Lease Documents to or upon the
order of the Servicer. The obligations of the Servicer pursuant to this Section
shall survive any partial or complete termination of the Servicer pursuant to
this Agreement.
(b) The Servicer shall establish and maintain the Draft Account for
the purpose of initially funding payments on behalf of the Trust to each Dealer
for Leases and Leased Vehicles acquired by the Trust from such Dealer. From time
to time, the Servicer shall make Servicing Advances to the Draft Account, in
amounts required to fund such payments pursuant to the related Lease Agreements.
Section 2.05. SERVICER'S REPURCHASE OBLIGATIONS.
(a) The Servicer hereby makes to the other parties hereto and the
parties to the Trust Agreement the following representations and warranties as
to each Lease and the related Leased Vehicle. The Trust shall rely on such
representations and warranties in accepting each Lease and Leased Vehicle. Such
representations and warranties shall speak as of the Lease Representation Dates
for the related Lease and shall survive the transfer of such Lease and the
related Leased Vehicle, and delivery of the related Lease Documents, to the
Trust pursuant to the Trust Agreement and this Agreement:
(i) such Lease is an Eligible Lease; and
(ii) the Servicer has satisfied, or has caused the related
Dealer to satisfy, the provisions of Section 2.03 with respect to such
Lease and the related Certificate of Title.
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(b) Upon discovery by the Trustee, the Related Beneficiary or a
related Holder that any representation or warranty in Section 2.05(a) was
incorrect as of either Lease Representation Date and materially and adversely
affects the interest of the Trust in a Lease or the related Leased Vehicle, the
Person discovering such incorrectness shall give prompt written notice to the
Servicer. Within 60 days of the Servicer's discovery or receipt of such notice
of such incorrectness, the Servicer shall cure in all material respects the
circumstance or condition with respect to which the representation or warranty
was incorrect as of the relevant Lease Representation Date. If the Servicer is
unable or unwilling to do so within such period, it shall promptly (i) deposit
(or cause to be deposited) into the related Collection Account an amount equal
to the Repurchase Amount, and (ii) if such Lease is a SUBI Asset, direct the
Trustee either to reallocate such Lease and the related Leased Vehicle from the
related SUBI to the UTI or to cause such Lease and Leased Vehicle to be conveyed
to the Servicer as described below. In the event that the Servicer receives
funds from a Dealer pursuant to such Dealer's obligation under a Dealer
Agreement to repurchase a Lease and Leased Vehicle that is required to be
repurchased or reallocated pursuant to this Section, the Servicer shall deposit
such funds within two Business Days of receipt to the applicable Collection
Account and return to such Dealer the Lease and any Certificate of Title that
has been issued with respect to the related Leased Vehicle. Such deposit of
funds received from a Dealer shall satisfy the Servicer's obligations pursuant
to this Section and shall be deemed to constitute payment in full of the
Repurchase Amount with respect thereto.
The purchase by the Servicer or a Dealer of a Lease and the related
Leased Vehicle pursuant to this Section shall be deemed to cure any
incorrectness of the related representations or warranties for purposes of this
Agreement. Upon such purchase, the Trust or the Trustee on behalf of the Trust,
as applicable, shall be deemed to transfer, assign, set over and otherwise
convey to the Servicer (or the related Dealer, as applicable), without recourse,
representation or warranty, all right, title and interest of the Trust in, to
and under the repurchased Lease and Leased Vehicle, all monies due or to become
due with respect thereto after the date of such repurchase and all proceeds
thereof. The Trustee shall, at the expense of the Servicer, execute such
documents and instruments of transfer or assignment and take such other actions
as shall reasonably be requested by the Servicer to effect the conveyance of
such Lease and Leased Vehicle pursuant to this Section, including executing and
filing with the Registrar of Titles an application for transfer of ownership of
the related Leased Vehicle to the Servicer or the Dealer, as applicable.
(c) If the Servicer extends the Maturity Date of a Lease beyond the
last day of the Collection Period related to the applicable Final Scheduled
Distribution Date, on the Deposit Date related to the Collection Period in which
the Servicer discovers or is notified that an improper extension was granted,
the Servicer shall (i) deposit (or cause to be deposited) into the related
Collection Account an amount equal to the Repurchase Amount and (ii) direct the
Trustee either (A) to cause such Lease and Leased Vehicle to be conveyed to the
Servicer as described in Section 2.05(b) or (B) as an alternative available if
such Lease is a SUBI Asset, to reallocate such Lease and the related Leased
Vehicle from the applicable SUBI to the UTI.
(d) Except as otherwise set forth herein or in any other Trust
Document, the sole remedy of the Trust, the Related Beneficiary and the related
Holder with respect to the failure of a Lease to constitute an Eligible Lease,
the failure of the related Leased Vehicle to be titled properly or
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the extension of the term of a Lease beyond the limits described in Section
2.05(c) shall be to require the Servicer to deposit the applicable Repurchase
Amount to the related Collection Account and thereby purchase or reallocate
the applicable Lease and Leased Vehicle as provided in this Section. In the
event that any such Lease and Leased Vehicle are reallocated to the UTI,
until such time, if ever, as such Lease and Leased Vehicle are allocated to a
new SUBI, the Servicer shall indemnify, defend and hold harmless the original
Related Beneficiary from and against any and all Loss with respect to or
resulting from such Lease or Leased Vehicle or the improper extension of the
Lease, as the case may be. The obligations of the Servicer under this Section
shall survive any partial or complete termination of the Servicer pursuant
hereto.
Section 2.06. COLLECTIONS; ACCOUNTS.
(a) The Servicer shall use commercially reasonable efforts to (i)
collect all payments required under each Lease and (ii) cause each Lessee to
make all payments required under its Lease, accompanied by an invoice or payment
coupon bearing the lease number to which such payment relates.
(b) Consistent with the foregoing, the Servicer may in its discretion
(i) waive any late payment charge, in whole or in part, in connection with
delinquent payments on or extensions of a Lease and (ii) subject to Section
2.05(c), extend the Maturity Date of any Lease.
(c) With respect to any Monthly Payments, Repossession Proceeds,
Matured Leased Vehicle Proceeds, other Liquidation Proceeds, Insurance Proceeds,
Prepayments, Payments Ahead, Extension Fees or any other payments made by or on
behalf of any Lessee or otherwise with respect to any Lease or Leased Vehicle,
including (if applicable) any proceeds of recourse payments by the related
Dealer received by the Servicer:
(i) the Servicer shall ascertain within two Business Days of
receipt of such funds the following information: (A) the amount of each
receipt, (B) the lease number to which such receipt relates, (C) the
nature of the payment (i.e., whether a Monthly Payment, Extension Fee,
Payment Ahead, Insurance Proceeds, Repossession Proceeds, Matured Leased
Vehicle Proceeds, other Liquidation Proceeds, a Prepayment, payment in
respect of the Residual Value or any other payment by or on behalf of
the Lessee), (D) the date of receipt of such payment and (E) the UTI or
SUBI to which such Lease has been allocated (collectively, the "Payment
Information");
(ii) as to any such funds received by the Servicer for which
the Servicer has received all Payment Information, the Servicer shall,
within two Business Days after receipt, (A) enter the Payment
Information into its computer system, (B) segregate by identifying in
its records the UTI or SUBI to which such funds relate and (C) except as
otherwise provided in Section 2.06(f), deposit to the related Collection
Account all such funds other than (1) Payments Ahead, (2) Administrative
Charges (except for Excess Mileage Fees and Extension Fees), (3)
Liquidation Expenses and Insurance Expenses to be reimbursed to the
Servicer as provided in Section 2.10(b) and (4) any other reimbursement
to be provided to the Servicer pursuant to the related Supplement;
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(iii) as to any such funds received by the Servicer for which
the Servicer does not have all Payment Information, the Servicer shall
enter into its computer system all available Payment Information, use
its commercially reasonable efforts to obtain all missing Payment
Information as soon as practicable and, upon receipt of the remaining
Payment Information, the Servicer shall, within two Business Days after
receipt, enter the remaining Payment Information in its computer system
and apply the related funds as described in clause (ii) above;
(iv) upon the determination by the Servicer that any funds
received by it with respect to a Lease constitute a Payment Ahead, the
Servicer shall, unless otherwise instructed by the Trustee, (A) maintain
appropriate records of such Payment Ahead so as to be able to timely
apply such Payment Ahead as a Monthly Payment with respect to the
applicable Lease, (B) if all Monthly Remittance Conditions are
satisfied, on each Deposit Date, deposit to each Collection Account an
amount equal to the Payahead Credit for each related Lease for which the
Lessee has failed to remit all or a portion of the Monthly Payment for
the related Collection Period, but otherwise have no obligation to
segregate or otherwise hold separate any Payments Ahead and (C)
commencing with the first day of the first Collection Period that begins
at least two Business Days after the day on which a Monthly Remittance
Condition is no longer satisfied, until such time as all Monthly
Remittance Conditions are once again satisfied, immediately deposit all
Payments Ahead then held by the Servicer into the Payahead Account and
remit all future Payments Ahead to the Payahead Account within two
Business Days after receipt thereof, pending transfer to the related
Collection Account pursuant to Section 2.06(e)(i);
(v) on each Deposit Date, the Servicer shall deposit to the
related Collection Account each Security Deposit that became Liquidation
Proceeds during the related Collection Period; and
(vi) transfers by the Servicer to an entity at which any Trust
Account is maintained may include (A) funds being deposited into more
than one Trust Account and (B) proceeds of Trust Assets and Other
Proceeds, in each case in a single wire transfer; provided, however,
that such transfer is accompanied by instructions as to the appropriate
division of all such proceeds.
(d) As to any other funds received by the Servicer with respect to
any Trust Asset:
(i) except as provided below, with respect to Collections
relating to a SUBI Asset or a UTI Asset (including but not limited to
Subvention Funds to the extent not covered by clause (iii) or (iv)
below), upon receipt the Servicer shall deposit such Collections into
the related Collection Account;
(ii) with respect to any Capital Contribution, except as
otherwise directed by the maker of such Capital Contribution, upon
receipt the Servicer shall deposit such funds into the related
Collection Account;
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(iii) with respect to Rate Subvention Funds, upon receipt, the
Servicer shall deposit such funds into the related Rate Subvention
Account, if such an account has been established pursuant to a
Supplement; and
(iv) with respect to Residual Subvention Funds, upon receipt,
the Servicer shall deposit such funds into the related Residual
Subvention Account, if such an account has been established pursuant to
a Supplement.
(e) The Servicer shall from time to time, determine the respective
amounts and recipients, and direct the Trustee to:
(i) on each Deposit Date on which one or more Monthly
Remittance Conditions are not satisfied, transfer from each Payahead
Account to the related Collection Account an amount equal to the
Payahead Credit for each related Lease for which the Lessee has failed
to remit all or a portion of the Monthly Payment for the related
Collection Period;
(ii) on each Deposit Date, make the following payments and
transfers from each Rate Subvention Account in the following order and
priority:
(A) transfer from the Rate Subvention Account to the
related Collection Account the Monthly Rate Subvention Payment
for each related Rate Subvened Lease;
(B) transfer from the Rate Subvention Account to the
related Collection Account any Rate Subvention Funds remaining on
deposit in the Rate Subvention Account allocable to any Matured
Lease or any Lease that has been terminated before its Maturity
Date; and
(C) transfer from the Rate Subvention Account to the
related Collection Account interest earned on Rate Subvention
Funds on deposit in the Rate Subvention Account during the most
recently ended Collection Period;
(iii) on each Deposit Date, make the following payments and
transfers from each Residual Subvention Account, in the following order
and priority:
(A) transfer from the Residual Subvention Account to
the related Collection Account an amount, if any, equal to the
related Residual Subvention Payment;
(B) transfer from the Residual Subvention Account to
the related Collection Account any Residual Subvention Funds
remaining on deposit in the Residual Subvention Account related
to Disposed Matured Leased Vehicles after the transfers, if any,
required by clause (A) have been made; and
(C) transfer from the Residual Subvention Account to
the related Collection Account interest earned on Residual
Subvention Funds on deposit in
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the Residual Subvention Account during the most recently ended
Collection Period;
(iv) except as otherwise described below, on each Deposit
Date, make the following payments and transfers from each Residual Value
Surplus Account in the following order and priority:
(A) transfer from the Residual Value Surplus Account
to the related Collection Account an amount equal to the sum of
(1) the aggregate of the Residual Values of Long-Term Matured
Leased Vehicle Inventory with respect to which such a transfer
has not previously been made, less the amount of any Residual
Subvention Payments related to such Long-Term Matured Leased
Vehicle Inventory and (2) the amounts by which Net Matured Leased
Vehicle Proceeds allocable to such Sub-Trust are less than the
aggregate of the Residual Values of all related Disposed Matured
Leased Vehicles; and
(B) transfer from the Residual Value Surplus Account
to the related Collection Account interest earned on funds on
deposit in the Residual Value Surplus Account during the most
recently ended Collection Period;
(v) on each Deposit Date, after making all transfers to each
Collection Account required to have been made on such date, make the
following payments and transfers from each Collection Account in the
following order and priority:
(A) transfer from each Collection Account to the
related Residual Value Surplus Account an amount, if any, equal
to the excess of related Net Matured Leased Vehicle Proceeds
(calculated without including any Residual Subvention Payments)
for the related Collection Period over the aggregate Residual
Value of all related Disposed Matured Leased Vehicles;
(B) upon presentation of an Officer's Certificate of
the Servicer setting forth the basis for the determination of the
amount to be paid, pay to or on behalf of the Servicer from each
Collection Account the sum of the following amounts
(collectively, the "Servicer Reimbursement"):
(1) any related Matured Leased Vehicle
Expenses for which the Servicer has not received
reimbursement pursuant to Section 2.10(b);
(2) any related Liquidation Expenses
(excluding, without limitation, reimbursed Matured Leased
Vehicle Expenses) or Insurance Expenses incurred by the
Servicer for which it has not otherwise been reimbursed;
(3) any Monthly Payments arising from a Lease
allocated to such Sub-Trust received by the Trustee or
the Servicer with respect to any prior Collection Period
as to which the Servicer has made an unreimbursed
Advance; and
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(4) any other amount of unreimbursed Advances
or expenses with respect to such Sub-Trust for which the
Servicer is entitled to reimbursement pursuant to the
related Servicing Supplement.
In lieu of causing the Trustee to deposit all Collections to the
related Collection Account and then remit to the Servicer all or
part of any Servicer Reimbursement, the Servicer may deduct from
such Collections an amount up to but not exceeding the total
amount due and owing to the Servicer with respect to the related
Sub-Trust.
(C) pay to or on behalf of the Servicer the Servicing
Fee in respect of the related Collection Period, together with
any unpaid Servicing Fees in respect of one or more prior
Collection Periods; and
(D) pay to or on behalf of the Person to whom due the
related Sub-Trust's share of (i) all Trust Expenses, Liabilities
or Reimbursable Servicer Expenses incurred during the related
Collection Period and (ii) any unpaid Trust Expenses, Liabilities
or Reimbursable Servicer Expenses incurred in one or more prior
Collection Periods;
(vi) make the following additional transfers from the
applicable Collection Accounts:
(A) on each date on which the Servicer seeks
reimbursement pursuant to Section 2.09(b), pay to or on behalf of
the Servicer any reimbursement properly due and not yet repaid to
the Servicer for Servicer Advances;
(B) as and when required by the related SUBI
Supplement or SUBI Servicing Supplement, transfer from the
related SUBI Collection Account to the related UTI Collection
Account (or a SUBI Lease Account, as applicable), such funds as
are required to be so transferred in connection with any Trust
Asset Transfer;
(C) as and when required by the related Securitization
Documents, transfer from the related Collection Account to the
related Distribution Account such amounts as are required to be
distributed from time to time in connection with each
Securitization; and
(D) as and when required by the Trust Agreement or any
related Supplement or Servicing Supplement, pay to the Related
Beneficiary or a Holder such amounts as may be specified therein;
(vii) upon request of the Required Related Holders of the UTI
Certificates, following receipt of an Officer's Certificate of the
Servicer as to the amount of Excess Funds, transfer any or all Excess
Funds so requested from the UTI Collection Account to the Holders of the
UTI Certificates;
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(viii) make such additional payments and transfers from each
related Trust Account as are required to be made pursuant to the related
Servicing Supplement; and
(ix) upon the revocation or termination of any Sub-Trust,
after payment to each other Person of all amounts required to be paid
pursuant to Section 7.02, distribute to the Related Beneficiary or its
designee all amounts in the related Trust Accounts and any other
remaining Related Trust Assets.
(f) Notwithstanding Section 2.06(c), the Servicer will be permitted
to remit Collections on a monthly basis (rather than within two Business Days
after receipt) with respect to any Sub-Trust by the deposit of such amounts to
the related Collection Account in immediately available funds no later than 3:00
p.m., Eastern Standard Time, on each Deposit Date for so long as the following
requirements are met (collectively, the "Monthly Remittance Conditions"):
(i) no Servicer Termination Event shall have occurred and be
continuing with respect to such Sub-Trust; and
(ii) either (A) no Rated Securities related to the UTI or such
SUBI, as applicable, are outstanding or (B) if Rated Securities are
outstanding, either (1) the short-term credit rating of the Servicer is
at least equal to the Required Servicer Rating, or (2) the Servicer
shall have obtained a Servicer Letter of Credit, together with a letter
from each Rating Agency to the effect that permitting the Servicer to
remit Collections on a monthly basis by virtue of the Servicer Letter of
Credit will not result in the qualification, reduction or withdrawal of
its then-current rating of such Rated Securities.
Except as otherwise provided in the reimbursement agreement pursuant to which a
Servicer Letter of Credit is issued, any funds held by the Servicer which it
determines are to be remitted (or any of its own funds which the Servicer
determines to pay to the issuer of the Servicer Letter of Credit) in respect of
a failure previously to remit collections which failure resulted in a payment
under the Servicer Letter of Credit shall not be remitted to a Collection
Account but shall instead be paid immediately and directly to such issuer,
together with such documentation as such issuer shall reasonably require.
(g) The Servicer shall from time to time, in accordance with the
Trust Agreement or the applicable Supplement, (i) identify and allocate on the
books and records of the Trust certain Leases and Leased Vehicles into one or
more SUBIs, either upon the initial creation of a SUBI or periodically following
its creation, and (ii) direct the Trustee to transfer periodically from and to
the related Trust Accounts (or to or from a SUBI Lease Account, as appropriate)
such funds as are provided for in such Supplement in connection with any Trust
Asset Transfer, and such SUBI's share of the expenses and liabilities of the
Trust as determined in accordance with the Trust Agreement and such Supplement
or Servicing Supplement.
(h) The Servicer shall account to the Trust for the Trust Assets
related to the UTI and each SUBI separately in accordance with this Agreement
and the related Supplement or Servicing Supplement. The Servicer shall arrange
for payments by the Trustee to or at the direction of the related Holder from
each Collection Account, in each case in accordance with the related Trust
Documents and Securitization Documents.
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(i) The Servicer shall apply all Administrative Charges received in
respect of insurance premiums, sales, personal property or excise taxes or other
similar charges to payments of such amounts as contemplated by the related
Leases.
Section 2.07. SECURITY DEPOSITS. Subject to Section 4.01(b), the
Servicer shall retain each Security Deposit remitted to it (or deemed remitted
to it) as agent and bailee for the Trust and as proceeds of the Leases, and
shall apply the proceeds of such Security Deposits in accordance with applicable
law, its customary servicing procedures and the Leases, including but not
limited to, using the Security Deposit for the payment of any amount resulting
from the related Lessor's default or failure to pay all amounts required to be
paid under the related Lease or resulting from damage to the related Leased
Vehicle. In the event that a Lease becomes a Charged-Off Lease or, if earlier,
the related Leased Vehicle is repossessed, then the related Security Deposit, to
the extent permitted by such Lease and applicable law, shall thereby become
Liquidation Proceeds. On a monthly basis as provided in Section 2.06(c)(v) or
(with respect to a Sub-Trust) as otherwise set forth in an applicable Servicing
Supplement, the Servicer shall deposit into the appropriate Trust Account each
Security Deposit that became Liquidation Proceeds during the previous month;
otherwise, each Security Deposit, after deduction for amounts applied towards
the payment of any amount resulting from the related Lessor's default or failure
to pay any amounts required to be paid under such Lease or damage to the related
Leased Vehicle, shall be returned to the related Lessee by the Servicer upon
termination of such Lease.
Section 2.08. SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under this
Agreement and subject to any applicable Servicing Supplement, the Servicer shall
be entitled to receive with respect to (i) the UTI, the Servicing Fee, together
with any Administrative Charges (excluding Extension Fees or Excess Mileage
Fees) paid pursuant to a related Lease during such Collection Period, and (ii)
any SUBI, such Servicing Fee and additional compensation as may be provided for
in an applicable SUBI Servicing Supplement. The Servicing Fee shall be
calculated on the basis of a 360 day year consisting of twelve 30 day months.
The Servicer shall pay all expenses incurred by it in connection with its
servicing activities hereunder and shall not be entitled to reimbursement of
such expenses except for Insurance Expenses, Liquidation Expenses and
Reimbursable Servicer Expenses. If at any time the Servicer shall service only
the Trust Assets allocated to certain Sub-Trusts, any servicing compensation
shall be calculated based only on the Related Trust Assets and shall be deemed
to be an expense incurred only with respect to such Sub-Trusts. The Servicing
Fee shall be deemed to be an expense incurred with respect to and allocated
among specific Leases and their respective Sub-Trusts rather than among all
Trust Assets generally.
Section 2.09. SERVICER ADVANCES AND SERVICER REIMBURSEMENT.
(a) The Servicer, on behalf of the Trust, shall make advances of
Reimbursable Servicer Expenses.
(b) The Servicer may obtain on any day from the Trust, out of each
Collection Account, reimbursement for unreimbursed Servicer Advances for the
related Sub-Trust for any or all prior
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Collection Periods, provided that (i) the Servicer shall have delivered to
the Trustee an Officer's Certificate setting forth the calculation of
unreimbursed Servicer Advances and the reports and Officer's Certificates
required pursuant to Section 3.01(b) with respect to the immediately
preceding Collection Period, and (ii) any such reimbursement of Servicer
Advances pursuant to this Section may not exceed the excess, if any, as of
the day immediately preceding the date of such Officer's Certificate, of the
related Collection Account Balance over the Required Collection Account
Balance.
(c) The Servicer shall advance Insurance Expenses and Liquidation
Expenses as and to the extent required by Section 2.10. The Servicer may elect
to obtain reimbursement for any such advance by (i) deducting such amounts from
related Liquidation Proceeds or Insurance Proceeds as provided in Section
2.10(b) or (ii) obtaining reimbursement from the applicable Collection Accounts
pursuant to Section 2.06(e)(v)(B).
(d) Except as otherwise provided in the related Servicing Supplement,
the Servicer shall make Advances as and to the extent provided in such Servicing
Supplement and be reimbursed for such Advances pursuant to Sections
2.06(e)(v)(B)(4).
Section 2.10. REPOSSESSION AND SALE OF LEASED VEHICLES.
(a) Subject to Section 2.10(b), the Servicer shall use commercially
reasonable efforts to sell or otherwise dispose of any Matured Leased Vehicle
not purchased by the Lessee and to repossess and sell or otherwise dispose of
any Defaulted Vehicle. In accordance with the foregoing standards, the Servicer
shall follow such practices and procedures as it shall deem necessary or
advisable in the servicing of closed-end automobile, sport utility vehicle,
minivan and light duty truck leases, which may include (A) exercising reasonable
efforts to realize upon any recourse to Dealers, (B) consigning a Leased Vehicle
to a Dealer for resale or re-lease,(C) selling a Leased Vehicle at public or
private sale in a commercially reasonable manner, or (D) commencing and
prosecuting Proceedings with respect to such Lease or the related Leased
Vehicle, in each case in compliance with the related Lease and all applicable
laws.
(b) If a Leased Vehicle is damaged by reason of an event for which
the related Lessee was not required under its Lease to obtain casualty or other
insurance or maintain such insurance in full force and effect, the Servicer
shall not be required to expend its own funds in repairing such Leased Vehicle
unless the Servicer shall reasonably determine that such expenditure is likely
to enhance Net Liquidation Proceeds. The Servicer shall expend funds in
connection with the repossession or sale of any Leased Vehicle (and such expense
shall be deemed to be a Liquidation Expense) only to the extent that it
reasonably determines that the Liquidation Expenses will not exceed the
anticipated Liquidation Proceeds. The Servicer shall be responsible for all
other costs and expenses incurred by it in connection with any action taken in
respect of a Lease or the related Leased Vehicle. The Servicer shall be entitled
to reimbursement of Liquidation Expenses and Insurance Expenses. All Liquidation
Proceeds and Insurance Proceeds shall be deposited and transferred as provided
in Section 2.06(c). Notwithstanding the foregoing, prior to such deposit and
transfer, the Servicer may elect to deduct from any Liquidation Proceeds or
Insurance Proceeds any unreimbursed Liquidation Expenses and Insurance Expenses
in lieu of obtaining reimbursement for such expenses pursuant to Section
2.06(e)(v)(B). In connection with this Section, the Trustee on behalf of the
Trust shall grant to the Servicer a
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Leased Vehicle Power of Attorney, and the Servicer, as "Grantee" thereunder,
with full power of substitution, shall give prompt notice to the Trustee upon
any such substitution.
Section 2.11. SERVICER TO ACT ON BEHALF OF TRUSTEE.
(a) The Servicer shall be deemed to have received proper instructions
with respect to any of the books and records relating to the Trust Assets,
including any Lease Document, upon its receipt of written instructions by a
Responsible Officer of the Trustee or the Trust Agent. A certified copy of a
bylaw or a Board Resolution of the Trustee or the Trust Agent 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 or the Trust Agent, as the
case may be.
(b) The Servicer shall identify from time to time all (i) periodic
sales and use tax or property (real or personal) tax reports, (ii) periodic
renewals of licenses and permits, (iii) periodic renewals of qualifications to
act as a business trust and (iv) other periodic governmental filings, returns,
registrations or approvals (collectively, "Filings") arising with respect to or
required of the Trustee or the Trust, including (in the case of clauses (ii) and
(iv)) such licenses, permits and other Filings as are required for the Trust or
the Trustee on behalf of the Trust, as the case may be, to accept assignments of
Leases or Leased Vehicles and to be identified and maintained as the owner of
the Leased Vehicles on the related Certificates of Title, as contemplated by
Sections 2.03 and 2.04(a). The Servicer shall also identify any surety bonds or
other ancillary undertakings required of the Trust or the Trustee in respect of
any Filing. The Servicer, with, to the extent applicable, the cooperation of the
Beneficiaries, the Trustee or the Trust, shall timely prepare and file or cause
to be filed, with the appropriate Person each Filing and each such ancillary
undertaking, and shall pay any and all fees, Taxes or expenses required to be
paid in connection with the foregoing. The Servicer shall provide to the Trustee
a copy of each such Filing or undertaking. In connection with this Section, the
Trustee shall grant to the Servicer such authority, including any necessary
power of attorney (including a Filings Power of Attorney), as it may require to
effect each such Filing or ancillary undertaking. If the Servicer receives
notice, or has actual knowledge, of any non-compliance with any Filing
requirement, it shall promptly so notify the Trustee. Notwithstanding the
foregoing, the Servicer shall not be required to perform any of the actions
specified in this Section in connection with any requirements that may be
applicable to any Co-Trustee, except to the extent provided for in a Co-Trustee
Agreement to which the Servicer is a party.
(c) The Servicer agrees to indemnify, defend and hold harmless the
Trustee (and any Co-Trustees), the Beneficiaries, the Holders and their
respective officers, directors, shareholders employees and agents (including any
Trust Agent) for any Loss that may be incurred as a result of any act, or any
failure to take action required to be taken pursuant to the Trust Documents, by
the Servicer in connection with:
(i) the use or operation by the Servicer or any Affiliate
thereof of any Leased Vehicle;
(ii) the Servicer's undertakings in Section 2.11(b); and
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(iii) the Servicer's maintenance and custody of the information
relating to the Trust Assets, the servicing of the Leases or any other
activity undertaken or omitted (when required to have been undertaken
pursuant to the Trust Documents) by the Servicer with respect to any
Trust Asset hereunder or under a Servicing Supplement, but only if and
to the extent that such loss, liability, claim, damage or expense arose
out of the Servicer's negligence, willful misconduct or bad faith in the
performance of its duties under this Agreement or under a Servicing
Supplement or in reckless disregard of such duties; provided, however,
that such indemnification by the Servicer shall not extend to any loss,
liability, claim, damage or expense incurred due to (A) the negligence,
willful misconduct or bad faith of the Trustee (or Co-Trustee, as
applicable), (B) an action (or omission to act) by the Servicer upon the
written request of a Responsible Officer of the Trustee (or Co-Trustee,
as applicable) or the Trust Agent, in each case except to the extent of
the Servicer's negligence, willful misconduct or bad faith, if any, in
connection therewith or in response thereto, or (C) any failure to cause
any Co-Trustee to be identified as the owner of a Leased Vehicle on any
Certificate of Title, unless the Servicer is specifically requested to
do so by the Trustee (or Co-Trustee, as applicable).
The obligations of the Servicer in this Section shall survive the termination of
this Agreement or the resignation or removal of the Servicer or the Trustee.
Section 2.12. THIRD PARTY CLAIMS. The Servicer shall immediately
notify the UTI Beneficiaries, the Related Beneficiary, the related Holders and
the Trustee, upon learning of a claim or Lien of a third party that would have a
material adverse impact (not reasonably expected to be covered by insurance) on
the Trust, any Sub-Trust or the Trust Assets allocated to a Sub-Trust. The
Servicer shall be responsible for the defense of any claim against the Trustee
arising pursuant to or in connection with a claim or Proceeding (i) contemplated
by Section 6.02(a) of the Trust Agreement or Section 2.1 l(c) hereof, subject in
each case to the qualifications described therein, (ii) originally commenced by
the Servicer to enforce a Lease or (iii) with respect to the servicing of a
Lease. To the extent that the Servicer is responsible for the defense of such a
Proceeding or claim, the Servicer will provide such information with respect
thereto as is reasonably requested by the UTI Beneficiaries, the Related
Beneficiary, the related Holders or the Trustee, as applicable.
Section 2.13. FIDELITY BOND; INSURANCE.
(a) To the extent commercially available, the Servicer shall maintain
a fidelity bond in such form and amount as is customary for financial
institutions acting as custodians of funds and documents in respect of mortgage
loans or consumer receivables on behalf of institutional investors. The cost of
such fidelity bond shall be borne by the Servicer.
(b) The Servicer shall take steps to ensure that each Lessee shall
have, and maintain in full force and effect during the term of the related
Lease, a comprehensive and collision physical damage insurance policy covering
the actual cash value of the related Leased Vehicle and naming the Trust or the
Trustee on behalf of the Trust, as applicable, depending on the name shown or to
be shown as owner on the Certificate of Title, as loss payee. The Servicer shall
also take steps to ensure that each Lessee shall have, and shall maintain in
full force and effect during the term of the related Lease, automotive liability
insurance in amounts at least equal to the
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amount prescribed by applicable state law and naming the Trust or the Trustee
on behalf of the Trust, as applicable, as an additional insured. The Servicer
shall, in accordance with its customary servicing procedures, take
appropriate steps to confirm and ensure that each Lessee maintain the
above-described insurance with respect to each Leased Vehicle in accordance
with the terms of the related Leases. If a Lessee fails to obtain or maintain
required insurance, the Servicer may (i) obtain insurance on behalf of and at
the expense of the related Lessee or (ii) deem the related Lease to be in
default, and the Servicer shall determine whether to repossess the related
Leased Vehicle in accordance with Section 2.10 or otherwise to seek
enforcement of such Lease.
(c) So long as any Certificates are outstanding, the Servicer will
maintain and pay when due all premiums with respect to, and the Servicer may not
terminate or cause the termination of: (i) the Contingent and Excess Liability
Insurance Policy unless (A) a replacement insurance policy or policies is
obtained providing coverage against third party claims that may be raised
against the Trust or the Trustee on behalf of the Trust, with respect to any
Leased Vehicle included in a Sub-Trust in an amount at least equal to $10
million per claim, not subject to any annual or aggregate cap (which policy or
policies may be a blanket insurance policy or policies covering the Servicer and
one or more of its Affiliates), and (B) in the case of Rated Securities, each
Rating Agency has delivered a letter to the Holder of each related Certificate
to the effect that the obtaining of any such replacement insurance policy or
policies, in and of itself, will not have a Ratings Effect; or (ii) the Residual
Value Insurance Policy, unless (A) the Leases may properly be treated as finance
leases for purposes of generally accepted accounting principles, consistently
applied and the Servicer has provided to the Trustee and the Related Beneficiary
a letter from its Independent Accountants to that effect and (B) in the case of
Rated Securities, each Rating Agency has delivered a letter to the Holder of
each related Certificate to the effect that the termination of the Residual
Value Insurance Policy under such conditions, in and of itself, will not have a
Ratings Effect. On or before March 31 of each year, commencing March 31, 1999
the Servicer shall provide to the Trustee an Officer's Certificate certifying
that each of the Insurance Policies that the Servicer is required to maintain
pursuant to this Section is in full force and effect. The obligations of the
Servicer pursuant to this Section with respect to the Trust Assets allocated to
any Sub-Trust shall survive any termination of the Servicer's other obligations
under this Agreement with respect to such Sub-Trust until such time as claims
can no longer be brought which would be covered by such policies, whether as a
result of the expiration of relevant statutes of limitations or otherwise.
Section 2.14. SERVICER NOT TO RESIGN; ASSIGNMENT.
(a) Except as provided in Section 4.01(b) or 6.01, the Servicer shall
not resign from the duties and obligations imposed on it hereby as Servicer
except upon a determination by its Board of Directors that by reason of change
in applicable legal requirements, the continued performance by the Servicer of
its duties as Servicer under this Agreement would cause it to be in violation of
such legal requirements in a manner that would result in a material adverse
effect on the Servicer or its financial condition, such determination to be
evidenced by the delivery to the Trustee of a Board Resolution and an Opinion of
Counsel to such effect. No such resignation shall become effective until the
date upon which the Servicer becomes unable to act as Servicer, as specified in
such notice and Opinion of Counsel unless a successor Servicer has been
appointed by the Trustee and assumed the duties of the Servicer hereunder. The
Servicer shall,
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during such period, assist the Trustee in finding a new Servicer, which will
enter into a new servicing agreement with the Trust, having substantially the
same provisions as this Agreement. The Trustee shall not unreasonably
withhold its consent to such a servicing agreement.
(b) The Servicer may not assign this Agreement or any of its rights,
powers, duties or obligations hereunder; provided, however, that the Servicer
may assign this Agreement in connection with a consolidation, merger,
conveyance, transfer or lease made in compliance with Section 2.15.
(c) Except as otherwise provided in this Section, the duties and
obligations of the Servicer under this Agreement shall continue until the
Servicer is replaced pursuant to Section 4.01 or until this Agreement shall have
been terminated as provided in Section 6.01 and shall survive the exercise by
the Trustee of any right or remedy under this Agreement or the enforcement by
the Trustee of any provision of the other Trust Documents.
Section 2.15. MERGER.
(a) The Servicer shall not consolidate with or merge into any other
corporation or convey, transfer or lease all or substantially all of its assets
as an entirety to any Person unless (i) the entity formed by such consolidation
or into which the Servicer has merged or the Person which acquires by
conveyance, transfer or lease all or substantially all the assets of the
Servicer as an entirety (A) is an entity organized and existing under the laws
of the United States or any State and (B) either executes and delivers to the
Trust an agreement, in form and substance reasonably satisfactory to the
Trustee, that contains an assumption by such successor entity of the due and
punctual performance and observance of each covenant and condition to be
performed or observed by the Servicer under this Agreement and the other Trust
Documents or is so bound by operation of law or (ii) the Servicer is the
surviving corporation resulting from such consolidation or merger.
(b) Any corporation (i) into which the Servicer may be merged or
consolidated, (ii) that may result from any merger, conversion or consolidation
to which the Servicer shall be a party, (iii) that may succeed to all or
substantially all of the business of the Servicer or (iv) more than 50% of the
voting stock of which is directly or indirectly owned by AHFC or any Affiliate
thereof and that is otherwise servicing motor vehicle leases or retail
installment sale contracts, which corporation in any of the foregoing cases,
executes an agreement of assumption to perform every obligation of the Servicer
under the Trust Documents, shall be the successor to the Servicer under this
Agreement without the execution or filing of any paper or any further act on the
part of any of the parties to this Agreement. The Servicer shall provide notice
of any merger, consolidation or succession pursuant to this Section to the
Trustee and, if any Rated Securities are outstanding, each Rating Agency. The
Servicer may appoint one or more nominees to hold title to some or all of the
Trust Assets in the name of such nominee title holder for the sole and exclusive
benefit of the Trust and, upon the appointment of such nominee title holder(s),
the Trust or the Trustee on behalf of the Trust, as applicable, will transfer
title to all or such portion of the Trust Assets as directed by the Servicer.
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Section 2.16. LIMITATION ON LIABILITY OF SERVICER.
(a) Neither the Servicer nor any of its directors, officers,
employees or agents shall be under any liability to the Trust, the Trustee, any
Beneficiary, any Holder or any third party beneficiary of this Agreement or any
other Trust Document, except as otherwise provided in the applicable Trust
Document, for any action taken or for refraining from the taking of any action
pursuant to this Agreement or any other Trust Document, or for errors in
judgment; provided, however, that this provision shall not protect the Servicer
or any such individual 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 or duties under this
Agreement or any other Trust Document.
(b) Except as otherwise provided in this Agreement or any other Trust
Document, the Servicer shall not be under any obligation to appear in, prosecute
or defend any Proceeding not incidental to its duties to service the Leases in
accordance with this 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 this
Agreement and the rights and duties of the parties hereto and the interests of
the Trust, and any reasonable expense related to any such undertaking by the
Servicer shall be a Reimbursable Servicer Expense.
(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 this Agreement or any other Trust Documents.
ARTICLE THREE
STATEMENTS AND REPORTS
Section 3.01. REPORTING BY THE SERVICER; DELIVERY OF CERTAIN
DOCUMENTATION.
(a) On or prior to the date hereof, and periodically thereafter as
required in order to update the contents thereof upon any changes in the matters
certified therein, the Servicer shall furnish to the Trustee and to each Related
Beneficiary an Officer's Certificate listing the officers and employees of the
Servicer involved in, or responsible for, the administration and servicing of
the Leases.
(b) On or before each Deposit Date, the Servicer shall, with respect
to each Sub-Trust, cause to be delivered to (i) the Trustee, a revised Schedule
of Leases and Leased Vehicles, containing data as of the last day of the related
Collection Period, (ii) the Trustee and the Related Beneficiary, a report with
respect to such Collection Period, setting forth the information required by the
related Servicing Supplement, (iii) the Trustee and the Related Beneficiary an
Officer's Certificate setting forth the calculation of the Required Collection
Account Balance and (iv) the Trustee, if reimbursement is requested pursuant to
Section 2.09(b), an Officer's Certificate identifying all related Leases and
Leased Vehicles acquired by the Trust during such Collection Period, the
aggregate cost of such acquisitions, the amount deposited by the Servicer
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during such Collection Period into the related Draft Accounts, the amount of
all Reimbursable Servicer Expenses paid by the Servicer during such
Collection Period, the amount of all Capital Contributions made during such
Collection Period, the amount of any transfers during such Collection Period
from each Residual Value Surplus Account into each Collection Account, the
amount of any transfers during such Collection Period into any Collection
Accounts and the balance due the Servicer with respect to any unreimbursed
Servicer Advances, in each case identified, to the extent applicable, by
Sub-Trust.
Section 3.02. ACCOUNTANTS' REPORTS. Within 120 days after March 31 of
each year (commencing March 31, 1999), the Servicer shall cause the Independent
Accountants of the Servicer to deliver a statement addressed to the Trustee, the
Servicer, the Related Beneficiaries and the Related Holders to the effect that
such accountants examined and tested certain documents and records of the
Servicer relating to the servicing of the Leases in accordance with generally
accepted accounting principles in the mortgage banking industry applicable to
the servicing of retail automotive leases for others, and that nothing came to
the attention of such Independent Accountants that caused them to believe that
the provisions of this Agreement were not being complied with, except for (i)
such exceptions as such Independent Accountants shall believe to be immaterial
and (ii) such other exceptions as shall be set forth in such statement.
Section 3.03. ANNUAL OFFICER'S CERTIFICATE. Within 120 days after
March 31 of each year (commencing March 31, 1999), the Servicer shall deliver an
Officer's Certificate to the Trustee to the effect that a review of the
activities of the Servicer during the prior calendar year (or such shorter
period in the case of the first such Officer's Certificate) has been made under
the supervision of the officer executing such Officer's Certificate with a view
to determining whether during such period the Servicer has performed and
observed all of its obligations under this Agreement and the Servicing
Supplements, and either (i) stating that, to the best knowledge of such officer,
no default by the Servicer under this Agreement or any Servicing Supplement has
occurred and is continuing or (ii) if such a default has occurred and is
continuing, specifying such default and the nature and status thereof.
ARTICLE FOUR
SERVICER TERMINATION EVENTS
Section 4.01. SERVICER TERMINATION EVENTS; TERMINATION OF SERVICER.
(a) Any of the following acts or occurrences shall constitute a
Servicer Termination Event:
(i) the Servicer shall fail to deliver to the Trustee for
distribution to or for the account of a Holder any amounts required to
be so distributed pursuant to this Agreement or the related Servicing
Supplement, and such failure shall have continued for a period of five
Business Days after either discovery by an officer of the Servicer of
such failure or written notice of such failure shall have been given to
the Servicer by the Trustee or such Holder; provided, however, that any
such failure with respect to any Sub-Trust shall be a
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Servicer Termination Event only with respect to such Sub-Trust and not
with respect to any other Sub-Trust;
(ii) the Servicer shall default in the due performance and
observance of any of its covenants or agreements in this Agreement or a
Servicing Supplement, which default materially and adversely affects the
rights of the Trust or a related Holder, and such default shall have
continued for a period of 90 days after written notice thereof shall
have been given to the Servicer by the Trustee or such Holder; provided,
however, that (A) any such default with respect to any Sub-Trust shall
be a Servicer Termination Event only with respect to such Sub-Trust and
not with respect to any other Sub-Trust, and (B) the determination of
materiality with respect to any Sub-Trust shall be made by reference to
the Holders related to such Sub-Trust and not by any other Holders;
(iii) the existence of any proceeding or action, or the entry
of a decree or order for relief by a court or regulatory authority
having jurisdiction over the Servicer in an involuntary case under the
federal bankruptcy laws, as now or hereafter in effect, or appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Servicer or of any substantial part of its
property, or ordering the winding up or liquidation of the affairs of
the Servicer and the continuance of any such action, proceeding, decree
or order unstayed and, in the case of any such order or decree, in
effect for a period of 90 consecutive days;
(iv) the commencement by the Servicer of a voluntary case
under the federal bankruptcy laws, as now or hereafter in effect, or the
consent by the Servicer to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or
other similar official of the Servicer or of any substantial part of its
property or the making by the Servicer of an assignment for the benefit
of creditors or the failure by the Servicer generally to pay its debts
as such debts become due or the taking of corporate action by the
Servicer in furtherance of any of the foregoing;
(v) any representation, warranty or statement of the Servicer
made in this Agreement or a Servicing Supplement (excluding those made
in Section 2.05(a)) or any certificate, report or other writing
delivered pursuant to this Agreement or a Servicing Supplement shall
prove to have been incorrect when made, which has a material adverse
effect on a related Holder and such material adverse effect continues
for a period of 30 days after written notice thereof shall have been
given to the Servicer by the Trustee or by such Holder; provided,
however, that (A) any such incorrect representation, warranty or
statement made with respect to any Sub-Trust shall be a Servicer
Termination Event only with respect to such Sub-Trust and not with
respect to any other Sub-Trust, and (B) the determination of a material
adverse effect with respect to any Sub-Trust shall be made by reference
to the Holder related to such Sub-Trust and not by any other Holders; or
(vi) the Servicer shall have failed to perform its obligations
under Section 2.13(c) with respect to the Contingent and Excess
Liability Insurance Policy or the Residual Value Insurance Policy and
such failure shall continue for a period of ten Business Days after
written notice thereof shall have been given to the Servicer by the
Trustee or a related Holder; provided, however, that any such failure
with respect to any
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Sub-Trust shall be a Servicer Termination Event only with respect
to such Sub-Trust and not with respect to any other Sub-Trust.
Notwithstanding the foregoing, a delay or failure in performance under
clause (i) for a period of ten Business Days, clause (ii) for a period of 180
Business Days or clause (v) for a period of 90 days shall not constitute a
Servicer Termination Event if caused by a Force Majeure Event. Upon the
occurrence of a Force Majeure Event, the Servicer shall use commercially
reasonable efforts to perform its obligations in a timely manner and shall
provide to the Trustee, the UTI Beneficiaries, each Related Beneficiary and each
related Holder prompt notice of the Force Majeure Event, the relevant failure or
delay hereunder and a description of its efforts to perform its obligations
hereunder.
(b) If a Servicer Termination Event shall have occurred and be
continuing, the Trustee may remedy such Servicer Termination Event, or, the
Trustee shall terminate the Servicer with respect to any or all Sub-Trusts to
which the Servicer Termination Event applies in accordance with the following
sentence. At the direction of the Required Related Holders, by notice to the
Servicer, the UTI Beneficiaries, the Related Beneficiary and the related
Holders, the Trustee shall terminate the rights and powers of the Servicer under
this Agreement and the related Servicing Supplement with respect to any
Sub-Trust to which the Servicer Termination Event applies, including the rights
of the Servicer to receive the servicing compensation provided for in Section
2.08 with respect to such Sub-Trust following the assumption by a successor of
the Servicer's duties hereunder. Upon any such termination, the Servicer shall
continue to perform its functions as Servicer until the earlier of the date
specified in the termination notice or, if no such date is specified, the date
of the Servicer's receipt of such notice, at which time all rights, powers,
duties and responsibilities of the Servicer under this Agreement and the related
Servicing Supplement, whether with respect to the Servicing Fee or otherwise, so
terminated with respect to one or more Sub-Trusts shall, as applicable, vest in
and be assumed by any successor Servicer appointed by the Trust pursuant to a
servicing with the Trust and the Related Beneficiary, containing substantially
the same provisions as this Agreement in respect of the related Sub-Trust
(including those with respect to the compensation of such successor servicer);
provided, however, that such successor shall have no responsibilities with
respect to the purchase by the Trust of additional Leases and Leased Vehicles or
with respect to making Advances), and the Trustee is hereby irrevocably
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, all documents and other instruments (including
any notices to Lessees deemed necessary or advisable by the Trustee), and to do
or accomplish all other acts or things necessary or appropriate to effect such
vesting and assumption, including, without limitation, directing some or all of
the related Lessees to remit payments on or in respect of the related Leases and
Leased Vehicles to an account or address designated by the Trustee or such new
servicer. Without limitation of the foregoing, if the rights of the Servicer
shall have been terminated in accordance with Section 6.01 with regard to any
one or more Sub-Trusts, the Servicer shall, upon demand of the Trustee or upon
direction of the Related Beneficiary, deliver to the Trustee or the successor
Servicer copies of all books and records necessary for the servicing of the
Leases allocated to each such Sub-Trust, all monies collected by it and required
to be deposited, as appropriate, in any Trust Account or other account relating
to each such Sub-Trust (including the transfer of applicable Security Deposits
being held by the Servicer pursuant to Section 2.07), and any related Leased
Vehicle in its possession that has been repossessed or is part of Matured Leased
Vehicle Inventory and in either case has not yet been sold or otherwise
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disposed of pursuant to Section 2.1-0. In addition, the Servicer shall use
its commercially reasonable efforts to effect the orderly and efficient
transfer of the servicing of the Leases allocated to each Sub-Trust with
respect to which such termination shall have occurred to the party that will
be assuming responsibility for such servicing and, as promptly as
practicable, the Servicer shall provide to the new servicer a current
computer tape containing all information required for the servicing of the
related Leases, together with documentation containing any and all
information necessary for use of such computer tape. All reasonable costs and
expenses (including servicer conversion costs and attorneys' fees) incurred
in connection with transferring the servicing of the related Leases and
Leased Vehicles to the new servicer and amending this 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 Trust Agent, the
initial Servicer) upon presentation of reasonable documentation of such costs
and expenses. In the event that a Servicer fails to pay costs and expenses
for which it is responsible under this Section within a reasonable time after
presentation of such documentation, the new Servicer shall be entitled to
reimbursement therefor as a Liability payable from Related Trust Assets of
the applicable Sub-Trusts in accordance with Section 3.08 of the Trust
Agreement, and the Trust shall be subrogated to the reimbursement rights of
the new Servicer against the departing Servicer.
If a successor Servicer is not appointed by the effective date of the
predecessor Servicer's termination hereunder or resignation pursuant to Section
2.14, the Trust Agent shall act as successor Servicer with respect to the
Sub-Trust or Sub-Trusts affected thereby. If the Trust Agent is legally unable
to so act or requests the Trust to appoint a different successor Servicer, then
the Trust shall promptly appoint or petition a court of competent jurisdiction
to appoint as successor Servicer with respect to such Sub-Trust or Sub-Trusts
any established entity the regular business of which includes the servicing of
motor vehicle leases or retail installment sale contracts.
In the event of the partial termination by the Trustee of some but not
all of the Servicer's rights and powers hereunder, the Servicer (and, except
with respect to the UTI Assets, unless otherwise directed by the Trustee) shall
continue to service, administer and collect the Leases and Leased Vehicles in
unaffected Sub-Trusts and shall have the right to receive servicing compensation
in accordance with Section 2.08 with respect to all such unaffected Sub-Trusts.
(c) The Trustee may waive any default by the Servicer in the
performance of its obligations hereunder and its consequences with regard to any
Sub-Trust, except that any such waiver in respect of a Sub-Trust created
pursuant to a Supplement may only be given as set forth in such Supplement or
the related Servicing Supplement. Upon any such waiver by the Trustee of a past
default, such default shall cease to exist, and any Servicer Termination Event
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement and the related Supplement or Servicing Supplement. No such
waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
(d) Any compensation payable to a successor Servicer may not be in
excess of that permitted the predecessor Servicer unless the related Holders
bear such excess costs exclusively.
Section 4.02. NO EFFECT ON OTHER PARTIES. Upon any complete or partial
termination of the rights and powers of the Servicer from time to time pursuant
to Section 6.01 or upon any
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appointment of a successor to the Servicer with respect to all or a portion
of the Trust Assets, all rights, powers, duties and obligations of the Trust
and the Trustee under this Agreement or any other Trust Document shall remain
unaffected by such termination or appointment and shall remain in full force
and effect thereafter, except as otherwise expressly provided in this
Agreement or in any other Trust Document.
ARTICLE FIVE
SERVICER REPRESENTATIONS AND WARRANTIES
Section 5.01. REPRESENTATIONS AND WARRANTIES. As of each related
Servicer Representation Date, the Servicer makes the following representations
and warranties to the Trust, the UTI Beneficiaries and each Related Beneficiary
as follows with respect to the UTI and each SUBI:
(a) ORGANIZATION AND GOOD STANDING. The Servicer has been duly
organized and 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 the power,
authority and legal right to acquire, own, sell and service the Leases and the
Leased Vehicles and to hold the Lease Documents as custodian on behalf of the
Trust, except where failure to do so will not have a material adverse effect on
the Servicer's ability to perform its obligations under this Agreement.
(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 Leases
and Leased Vehicles as required by this Agreement, as supplemented by any
related Servicing Supplement) requires such qualifications except when the
failure to have any such license, approval or qualification would not have a
material adverse effect on the condition, financial or otherwise, of the
Servicer or would not have a material adverse effect on the ability of the
Servicer to perform its obligations under this Agreement, as supplemented by any
related Servicing Supplement.
(c) POWER AND AUTHORITY. The Servicer has the power and authority to
execute and deliver this Agreement and any related Servicing Supplement and to
car out their terms; and the execution, delivery and performance of this
Agreement, as supplemented by any related Servicing Supplement, has been duly
authorized by the Servicer by all necessary corporate action.
(d) BINDING OBLIGATION. This Agreement, as supplemented by any
related Servicing Supplement, 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, fraudulent conveyance 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.
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(e) NO VIOLATION. The consummation of the transactions contemplated
by this Agreement, as supplemented by any related Servicing Supplement, and the
fulfillment of the terms of such agreements does not (i) conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time) a default under the articles of incorporation
or bylaws of the Servicer, (ii) 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 material indenture, agreement or other instrument to which
the Servicer is a party or by which it is bound, (iii) result in the creation or
imposition of any material lien upon any properties of the Servicer pursuant to
the terms of any such indenture, agreement or other instrument (other than this
Agreement and any Servicing Supplements) or (iv) violate any law or, to the best
of the Servicer's knowledge, any order, rule or 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; in each case which breach, default, conflict, lien
or violation would have a material adverse effect on the financial condition of
the Servicer.
(f) NO PROCEEDINGS. There are no proceedings or investigations
pending, or to the Servicer's 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 this Agreement, as supplemented by any related Servicing
Supplement, (ii) seeking to prevent the consummation of any of the transactions
contemplated by this Agreement, as supplemented by any related Servicing
Supplement, (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, this Agreement, as supplemented by any
related Servicing Supplement or (iv) relating to the Servicer and which might
adversely affect the federal income tax attributes of the Trust or any
Sub-Trust.
ARTICLE SIX
MISCELLANEOUS
Section 6.01. TERMINATION OF AGREEMENT. This Agreement shall
terminate, completely or (if so indicated) in part with respect to one or more
Sub-Trusts, upon the earlier of (i) the dissolution of the Trust or, with
respect to any Sub-Trust, upon the revocation or termination of such Sub-Trust
in accordance with Section 7.02 of the Trust Agreement, (ii) the discharge of
the Servicer in accordance with the terms hereof (completely or with regard to
(A) the Servicer's obligation to cause the assignment of Leases, Leased Vehicles
and related Trust Assets to the Trust or any Sub-Trust or (B) the Servicer's
servicing obligations with regard to one or more Sub-Trusts) or (iii) the mutual
written determination of the parties hereto (completely or in any part as set
forth in clause (ii) above). Upon any termination of the Servicer's servicing
obligations hereunder with regard to any Sub-Trust, then upon payment of all
amounts due to the Servicer hereunder with respect to such Sub-Trust (including
related accrued Servicing Fees and additional servicing compensation payable in
respect of such Sub-Trust and reimbursement of any Advances or Servicer
Advances), the Servicer shall pay to or upon the order of the Trustee or any
other Person entitled thereto all monies held by the Servicer on behalf of the
Trust or the Trustee with respect to such Sub-Trust. Termination of the Servicer
with respect to one Sub-
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Trust shall not effect the termination of the Servicer with respect to any
other Sub-Trusts that are in existence at the time of such termination.
Section 6.02. AMENDMENT.
(a) This Agreement may be amended, insofar as it applies to (i) all
Sub-Trusts, by written agreement among the Trust, the UTI Beneficiaries, the
Servicer and any additional Persons required by any Servicing Supplements and
(ii) a particular Sub-Trust, by one or more Servicing Supplements among the
Trust, the UTI Beneficiaries, the Servicer and any additional Persons required
by each related Servicing Supplement. A Servicing Supplement may provide, among
other things, for specific servicing obligations relating to the UTI or a SUBI
or the termination of this Agreement insofar as it applies to the UTI or a SUBI
upon the terms and conditions set forth therein. No SUBI Supplement shall be
effective to authorize or effect the termination of this Agreement insofar as it
relates to the UTI or any Other SUBJ. No UTI Supplement shall be effective to
authorize or effect the termination of this Agreement insofar as it relates to
any SUBJ.
(b) This Agreement may be amended at any time by the UTI
Beneficiaries, the Trust and the Servicer, without the consent of any Holder or
other Beneficiary, (i) (A) to cure any ambiguity, (B) to correct or supplement
any provision that may be inconsistent with any other provision, (C) to add any
provision that provides additional rights to the Holders or (D) to ensure that
the Trust or one or more Beneficiaries or Holders are not classified as an
association (or publicly traded partnership) taxable as a corporation for
federal income tax purposes as evidenced by an Opinion of Counsel; provided
that, in each case, such amendment will not, in the good faith judgment of the
parties thereto, materially and adversely affect the interest of any Holder or
(ii) for any other purpose provided that an Opinion of Counsel is delivered to
the Trustee to the effect that such amendment or supplement will not materially
and adversely affect the interest of any Holder.
(c) Any amendment or modification effected contrary to the provisions
of this Section shall be void.
Section 6.03. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of California.
Section 6.04. RELATIONSHIP OF THIS AGREEMENT TO OTHER TRUST DOCUMENTS.
Unless the context otherwise requires, this Agreement and the other Trust
Documents shall be interpreted so as to give full effect to all provisions
hereof and thereof. In the event of any actual conflict between the provisions
of this Agreement and (i) the Trust Agreement with respect to the servicing any
Trust Assets, the provisions of this Agreement shall prevail, and (ii) any
Servicing Supplement with respect to the servicing of Related Trust Assets, the
provisions of the Servicing Supplement shall control.
Section 6.05. NOTICES. All demands, notices and communications
hereunder shall be in writing and shall be delivered or mailed by registered or
certified first-class United States mail, postage prepaid, hand delivery,
prepaid courier service, or facsimile transmission, and addressed in each case
as follows: (i) if to the Servicer, at 700 Van Ness Avenue, Torrance, California
34
<PAGE>
90501 (telecopier no. (310) 787-3910), Attention: President; (ii) if to Honda
Titling A L.P., at 700 Van Ness Avenue, Torrance, California 90501 (telecopier
no. (310) 787-3910), Attention: General Partner; (iii) if to Honda Titling B
L.P., at 700 Van Ness Avenue, Torrance, California 90501 (telecopier no. (310)
787-3910), Attention: General Partner; (iv) if to the Trustee, at 111 East
Wacker Drive, Suite 3000, Chicago, Illinois 60601 (telecopier no. (312)
228-9401), Attention: Honda Lease Trust; (v) if to the Trust, at the Trust
Office (telecopier no. (310) 787-3910), Attention: Honda Lease Trust; or (vi)
with respect to any of the foregoing Persons, at such other address or
telecopier number as shall be designated by such Person in a written notice to
the other parties hereto. Delivery shall occur only upon receipt or rejected
tender of such communication by an officer of the recipient entitled to receive
such notices located at the address of such recipient for notices hereunder. A
copy of all notices to the Trustee shall be delivered to the Trust Agent.
Section 6.06. SEVERABILITY OF PROVISIONS. If any one or more of the
covenants, agreements, provisions or terms of this Agreement or any Servicing
Supplement 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 this Agreement, as supplemented,
and shall in no way affect the validity or enforceability of the other
covenants, agreements, provisions or terms of this Agreement or such Servicing
Supplement.
Section 6.07. INSPECTION AND AUDIT RIGHTS. The Servicer agrees that,
on reasonable prior notice, it will permit any representative or designee of the
Trustee or the Related Beneficiary, during the normal business hours of the
Servicer, to examine all books of account, records, reports and other papers of
the Servicer relating to the Trust Assets, to make copies and extracts
therefrom, to cause such books to be audited by Independent Accountants selected
by the Trustee or such Related Beneficiary and to discuss the affairs, finances
and accounts relating to the Trust Assets with its officers employees, all at
such reasonable times and as often as may be reasonably requested. Such rights
shall include, but shall not be limited to, any offsite storage facilities at
which any data (including, without limitation, computerized records), together
with all operating software and appropriate documentation, may be held. The
Trustee and each Beneficiary agrees to keep confidential all confidential
information of the Servicer acquired during any such examination as if such
information were its own confidential information, except to the extent
necessary, for the purposes of this Agreement. Any expense incident to the
exercise by the Trustee or a Related Beneficiary of any right under this Section
shall be paid as a Trust Expense of the relevant Sub-Trust or Sub-Trusts, as
applicable.
Section 6.08. BINDING EFFECT. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
permitted successors and assigns.
Section 6.09. TABLE OF CONTENTS AND HEADINGS. The Table of Contents and
Article and Section headings herein are for convenience of reference only and
shall not define or limit any of the terms or provisions hereof.
Section 6.10. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which so executed and delivered shall be deemed
to be an original, but all of which counterparts shall together constitute but
one and the same instrument.
35
<PAGE>
Section 6.11. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or instruments
as may be reasonably requested in order to effect the purposes of this Agreement
and to better assure and confirm unto the requesting party its rights, powers
and remedies hereunder.
Section 6.12. THIRD-PARTY BENEFICIARIES. The Related Beneficiary, the
related Holders and any other Persons designated as such in a Servicing
Supplement shall be third party beneficiaries of this Agreement, as supplemented
by such Servicing Supplement. The UTI Holders are third party beneficiaries of
this Agreement. Except as otherwise provided in this Agreement or a Servicing
Supplement, no other Person will have any rights hereunder.
Section 6.13. NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of any party hereto, any right, remedy,
power or privilege under this Agreement or any Servicing Supplement 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 provided in this Agreement and the
Servicing Supplements are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided at law, in equity or otherwise.
Section 6.14. NO PETITION. Each of the parties hereto covenants and
agrees that prior to the date which is one year and one day after the date upon
which all obligations under each Securitization have been paid in full, it will
not institute against, or join any other Person in instituting against any
Grantor, the Trustee, the Trust, any Special Purpose Affiliate, any Beneficiary,
any general partner of a Beneficiary or of a Special Purpose Affiliate that is a
partnership or any member of a Beneficiary or of a Special Purpose Affiliate (or
any of their respective general partners) that is a limited liability company,
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 complete or partial termination of this
Agreement or the complete or partial resignation or removal of the Servicer.
36
<PAGE>
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
Servicer
By: /s/ Y. KOHAMA
----------------------------
Name: Y. Kohama
Title: President
HONDA LEASE TRUST
By: HVT, INC.,
as Trustee of the Honda Lease Trust
By: /s/ MELISSA A. ROSAL
----------------------------
Name: Melissa A. Rosal
Title: Vice President
HONDA TITLING A L.P.,
as UTI Beneficiary
By: HONDA TITLING A LLC,
general partner
By: /s/ Y. KOHAMA
----------------------------
Name: Y. Kohama
Title: President
HONDA TITLING B L.P.,
as UTI Beneficiary
By: HONDA TITLING B LLC,
general partner
By: /s/ Y. KOHAMA
----------------------------
Name: Y. Kohama
Title: President
<PAGE>
SCHEDULE I
LEASE DOCUMENT LOCATIONS
American Honda Finance Corporation
21041 South Western Avenue, Suite 200
Torrance, California 90501
American Honda Finance Corporation
1335 Northmeadow Parkway, Suite 100
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
South 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 Dr., 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
American Honda Finance Corporation
1919 Torrance Boulevard
Torrance, California 90501
<PAGE>
EXHIBIT A
LEASED VEHICLE POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that HVT, Inc., a Delaware corporation
located at 111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601, as
trustee (the "Grantor"), of Honda Lease Trust, a Delaware business trust (the
"Trust"), does hereby appoint American Honda Finance Corporation, a California
corporation located at 700 Van Ness Avenue, Torrance, California 90501 (the
"Grantee"), as its attorney-in-fact with full power of substitution and hereby
authorizes and empowers the Grantee, in the name of and on behalf of the Grantor
or the Trust, to take the following actions from time to time with respect to
the motor vehicles referred to as "Leased Vehicles" in the Servicing Agreement,
dated as of April 1, 1998 (the "Servicing Agreement"), among the Trust, Honda
Titling A L.P., a Delaware limited partnership ("HTA LP"), and Honda Titling B
L.P., a Delaware limited partnership ("HTB LP"), as initial beneficiaries (the
"UTI Beneficiaries"), and the Grantee, such Leased Vehicles being more
particularly described in the currently effective "Schedule of Leases and Leased
Vehicles", as defined in the Trust Agreement described below (such motor
vehicles, the "Leased Vehicles"), a copy of which "Schedule of Leases and Leased
Vehicles" is maintained by the Grantee and is incorporated herein by this
reference as though fully set forth herein, for the purpose of enabling the
Grantee in the name of the Grantor or the Trust to transfer, liquidate or
dispose of the Leased Vehicles, upon such terms and conditions as the Grantee
deems advisable, namely to:
(i) sign the Grantor's or the Trust's name to any bills of sale,
certificates of title, assignments of title, transfers of title or
registration, applications for title or registration, applications for
transfer of title or registration, notices of sale, odometer statements
or similar forms with respect to any of the Leased Vehicles; and
(ii) execute and deliver any and all instruments and take any and
all further action in the name of or on behalf of the Grantor or the
Trust as may be required or deemed desirable to accomplish any and all
of the foregoing and carry out the purposes of this Power of Attorney.
The Grantee is hereby empowered to do any and all lawful acts necessary
or desirable to effect the transfer of the Leased Vehicles and the Grantor
hereby ratifies and confirms any and all lawful acts that the Grantee shall
undertake pursuant to and in conformity with this Power of Attorney.
This Power of Attorney is revocable in whole or in part as to the powers
herein granted with respect to the Leased Vehicles related to one or more
Sub-Trusts (as defined in the Trust Agreement described below) upon notice by
the Grantor. If not earlier revoked, this Power of Attorney shall expire,
completely or, if so indicated, in part, upon the earlier of (i) the termination
of the Second Amended and Restated Trust and Servicing Agreement, dated as of
April 1, 1998 (the "Trust Agreement"), among HTA LP and HTB LP, as grantors and
UTI Beneficiaries, Grantee, as servicer (the "Servicer"), Grantor, as trustee,
Delaware Trust Capital Management, Inc., as Delaware trustee, and for certain
limited purposes only, U.S. Bank National Association, as trust agent, and (ii)
the termination of the Servicing Agreement
<PAGE>
(completely or with regard to the Servicer's servicing obligations with
regard to one or more sub-trusts), as each may be amended, modified or
supplemented from time to time.
This Power of Attorney shall be created under and governed and construed
under the internal laws of the State of California.
The Grantor executes this Power of Attorney with the intent to be
legally bound hereby, and with the intent that such execution shall have the
full dignity afforded by the accompanying witnessing and notarization and all
lesser dignity resulting from the absence of such witnessing and notarization or
any combination thereof.
Dated this _________ day of __________, ____.
HVT, INC.,
as Trustee of the Honda Lease Trust
By:
------------------------------
Name:
Title:
A-2
<PAGE>
EXHIBIT B
FILINGS POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that HVT, Inc., a Delaware corporation
located at One Illinois Center, 111 East Wacker Drive, Suite 3000, Chicago,
Illinois 60601 as trustee (the "Grantor"), of Honda Lease Trust, a Delaware
business trust (the "Trust"), does hereby appoint American Honda Finance
Corporation, a California corporation, located at 700 Van Ness Avenue, Torrance,
California 90501 (the "Grantee"), as its attorney-in-fact, with full power of
substitution and hereby authorizes and empowers the Grantee, in the name of and
on behalf of the Grantor or the Trust, to take the following actions from time
to time with respect to certain filings referred to in the Servicing Agreement,
dated as of April 1, 1998 (the "Servicing Agreement"), among the Trust, Honda
Titling A L.P., a Delaware limited partnership ("HTA LP"), and Honda Titling B
L.P., a Delaware limited partnership ("HTB LP"), as initial beneficiaries (the
"UTI Beneficiaries"), and the Grantee, for the purposes of enabling the Grantee
in the name of the Grantor or the Trust to:
(i) sign the Grantor's or the Trust's name to any (A)
periodic sales and use or property (real or personal) tax reports, (B)
periodic renewals of licenses and permits, (C) periodic renewals of
qualification to act as a trust and a business trust or (D) other
periodic governmental filings, registrations, returns or approvals
(collectively, "Filings") arising with respect to or required of the
Grantor or the Trust; and
(ii) identify any surety bonds or other ancillary undertakings
required of the Grantor or the Trust in respect of any Filing, execute
and deliver any and all instruments and take any and all further action
in the name of and on behalf of the Grantor or the Trust as may be
required or deemed desirable to accomplish any and all of the foregoing
and carry out the purposes of this Power of Attorney.
The Grantee is hereby empowered to do any and all lawful acts necessary
or desirable to effect such Filings and the payment of such fees, costs and
taxes as necessary to complete these actions and the Grantor hereby ratifies and
confirms any and all lawful acts that the Grantee shall do pursuant to and in
conformity with this Power of Attorney.
This Power of Attorney is revocable in whole or in part as to the powers
herein granted with respect to the Filings related to one or more Sub-Trusts (as
defined in the Trust Agreement described below) upon notice by the Grantor. If
not earlier revoked, this Power of Attorney shall expire, completely or, if so
indicated, in part, upon the earlier of (i) the termination of the Second
Amended and Restated Trust and Servicing Agreement, dated as of April 1, 1998
(the "Trust Agreement") among HTA LP and HTB LP, as grantors and UTI
Beneficiaries, the Grantee, as servicer (the "Servicer"), the Grantor, as
trustee, Delaware Trust Capital Management, Inc., as Delaware trustee, and for
certain limited purposes only, U.S. Bank National Association, as trust agent,
and (ii) the termination of the Servicing Agreement (completely or with regard
to the Servicer's servicing obligations with regard to one or more sub-trusts)
as each may be amended, modified or supplemented from time to time.
<PAGE>
This Power of Attorney shall be created under and governed and construed
under the internal laws of the State of California.
The Grantor executes this Power of Attorney with the intent to be
legally bound hereby, and with the intent that such execution shall have the
full dignity afforded by the accompanying witnessing and notarization and all
lesser dignity resulting from the absence of such witnessing and notarization or
any combination thereof.
Dated this _________ day of __________, ____.
HVT, INC.,
as Trustee of the Honda Lease Trust
By:
---------------------------------
Name:
Title:
B-2
<PAGE>
- --------------------------------------------------------------------------------
FORM OF 1999-A SUPPLEMENT
to
SERVICING AGREEMENT
dated as of April 1, 1998,
Among
HVT, INC.,
as Origination Trustee of the HONDA LEASE TRUST,
HONDA TITLING A L.P.
and
HONDA TITLING B L.P.,
as UTI Beneficiaries,
AMERICAN HONDA FINANCE CORPORATION,
as Servicer,
and
U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
-----------------------------------
Dated as of [ ]
-----------------------------------
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
ARTICLE SEVEN
DEFINITIONS
Section 7.01. Definitions. . . . . . . . . . . . . . . . . . . . . . . . 3
Section 7.02. Interpretation . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE EIGHT
CREATION OF 1999-A SUBI
Section 8.01. Initial Creation of the 1999-A SUBI Portfolio and
1999-A SUBI Sub-Trust; Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 8.02. Servicer Payment in Respect of Certain Leases and
Leased Vehicles. . . . . . . . . . . . . . . . . . . . . . 4
Section 8.03. Filings. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 8.04. Servicer Representations and Warranties. . . . . . . . . . 5
ARTICLE NINE
SPECIFIC REQUIREMENTS FOR ADMINISTRATION AND SERVICING OF
LEASES IN 1999-A SUBI PORTFOLIO
Section 9.01. Servicer Bound by Servicing Agreement. . . . . . . . . . . 5
Section 9.02. Collection of Monthly Lease Remittances; Application of
Proceeds; Accounts . . . . . . . . . . . . . . . . . . . . 6
Section 9.03. Records. . . . . . . . . . . . . . . . . . . . . . . . . .11
Section 9.04. Advances . . . . . . . . . . . . . . . . . . . . . . . . .12
Section 9.05. Payment of Certain Fees and Expenses; No Offset. . . . . .12
Section 9.06. Servicing Compensation . . . . . . . . . . . . . . . . . .13
Section 9.07. Repossession and Sale of Leased Vehicles . . . . . . . . .13
Section 9.08. Third Party Claims . . . . . . . . . . . . . . . . . . . .13
Section 9.09. Insurance Policies . . . . . . . . . . . . . . . . . . . .13
Section 9.10. Servicer Resignation; Assignment . . . . . . . . . . . . .14
Section 9.11. Insurance Coverage in Respect of Leased Vehicles . . . . .14
Section 9.12. Corporate Existence; Status; Merger. . . . . . . . . . . .14
-i-
<PAGE>
Section 9.13. Servicer Administrative Duties under the 1999-A
Securitization Documents . . . . . . . . . . . . . . . . .15
ARTICLE TEN
STATEMENTS AND REPORTS
Section 10.01. Reporting by the Servicer. . . . . . . . . . . . . . . . . . .15
Section 10.02. Annual Accountants Reports . . . . . . . . . . . . . . . . . .15
Section 10.03. Other Certificates and Notices from Servicer . . . . . . . . .16
Section 10.04. Tax Returns. . . . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE ELEVEN
SERVICER TERMINATION EVENTS
Section 11.01. Servicer Termination Events; Termination of Servicer . . . . .16
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. Termination of Agreement . . . . . . . . . . . . . . . . . . .17
Section 12.02. Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 12.03. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . .18
Section 12.04. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Section 12.05. Severability . . . . . . . . . . . . . . . . . . . . . . . . .19
Section 12.06. Inspection and Audit Rights. . . . . . . . . . . . . . . . . .19
Section 12.07. Third Party Beneficiaries. . . . . . . . . . . . . . . . . . .20
Section 12.08. Table of Contents, Article and Section Headings. . . . . . . .20
Section 12.09. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . .20
Section 12.10. Further Assurances . . . . . . . . . . . . . . . . . . . . . .20
Section 12.11. No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . .20
Section 12.12. No Petition. . . . . . . . . . . . . . . . . . . . . . . . . .20
EXHIBITS
EXHIBIT A Schedule of 1999-A Contracts and 1999-A Leased
Vehicles as of the Cutoff Date . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Servicer's Certificate . . . . . . . . . . . . . . . B-1
</TABLE>
-ii-
<PAGE>
FORM OF 1999-A SUPPLEMENT TO
SERVICING AGREEMENT
This 1999-A Supplement (as amended, supplemented or restated from time
to time, the "1999-A Servicing Supplement"), dated as of [ ], 1999, to
the Servicing Agreement, dated as of April 1, 1998, is among HVT, Inc., a
Delaware corporation, as origination trustee (the "Origination Trustee") of
the Honda Lease Trust, a Delaware business trust (the "Origination Trust"),
Honda Titling A L.P. ("HTA LP") and Honda Titling B L.P. ("HTB LP"), each a
Delaware limited partnership, as grantors and initial beneficiaries (in such
capacities, the "Grantors" and the "UTI Beneficiaries", respectively),
American Honda Finance Corporation, a California corporation, as servicer (in
such capacity, the "Servicer"), and U.S. Bank National Association, a
national banking association ("U.S. Bank"), as Trust Agent (in such capacity,
the "Trust Agent").
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered
into that Second Amended and Restated Trust and Servicing Agreement, dated as
of April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending
and restating that certain Trust Agreement, dated July 17, 1997, among the
same parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things,
taking assignments and conveyances of, and holding in trust and dealing in,
various Trust Assets. Capitalized terms used and not defined in these
Recitals have the meanings given in the Agreement of Definitions described in
Section 7.01 hereof.
B. The Origination Trust Agreement contemplates that certain of
the Trust Assets, other than those previously identified on the Origination
Trust's books and records as Other SUBI Assets and allocated to a separate
SUBI Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth
constitute SUBI Assets within such SUBI Sub-Trust, and that in connection
with any such allocation the Origination Trustee shall create a SUBI at the
direction of the UTI Beneficiaries and shall issue to, or to the order of,
the UTI Beneficiaries one or more SUBI Certificates evidencing such SUBI, and
the related SUBI Beneficiaries and their permitted assignees generally will
be entitled to the net cash flows arising from, but only from, such SUBI
Assets.
C. Concurrently herewith, HTA LP and HTB LP, as Grantors and UTI
Beneficiaries, HTC LP and HTD LP, as Transferors, the Servicer, the
Origination Trustee, the Delaware Trustee and U.S. Bank, as Trust Agent and,
for certain limited purposes set forth therein, as 1999-A Owner Trustee, are
entering into that certain 1999-A SUBI Supplement to Second Amended and
Restated Trust and Servicing Agreement dated as of [ ] (as
amended, supplemented or restated from time to time, the "1999-A SUBI
Supplement"), pursuant to which the parties thereto have agreed to supplement
the terms of the Origination Trust Agreement to cause the Origination Trustee
to (i) identify a portfolio of Trust Assets (the "1999-A SUBI Assets") to be
<PAGE>
designated to a SUBI Portfolio (the "1999-A SUBI Portfolio") (ii) allocate
such 1999-A SUBI Assets to a SUBI Sub-Trust (the "1999-A SUBI Sub-Trust"),
(iii) create the related 1999-A SUBI and (iv) create and issue to or to the
order of (a) HTA LP one certificate representing a 98.01% interest in the
1999-A SUBI (the "HTA LP/HTC LP 1999-A SUBI Certificate") and one certificate
representing a 0.99% interest in the 1999-A SUBI (the "HTA LP/HTD LP 1999-A
SUBI Certificate"), and (b) HTB LP one certificate representing a 0.99%
interest in the 1999-A SUBI (the "HTB LP/HTC LP 1999-A SUBI Certificate") and
one certificate representing a 0.01% interest in the 1999-A SUBI (the "HTB
LP/HTD LP 1999-A SUBI Certificate" and, together with the HTA LP/HTC LP
1999-A SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI Certificate and the
HTB LP/HTD LP 1999-A SUBI Certificate, the "HTA LP/HTB LP 1999-A SUBI
Certificates").
D. Pursuant to the 1999-A SUBI Supplement, the parties hereto and
thereto desire that, concurrently herewith, U.S. Bank, as securities
intermediary (as defined in Section 8-102 of the UCC) (in such capacity, the
"1999-A SUBI Securities Intermediary"), establish two securities accounts (as
defined in Section 8-501 of the UCC) as follows: (i) a securities account in
the name of and for the benefit of HTA LP (the "HTA LP 1999-A SUBI Securities
Account") pursuant to that certain HTA LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ], between HTA LP and the 1999-A
SUBI Securities Intermediary (the "HTA LP 1999-A SUBI Securities Account
Control Agreement"), into which the HTA LP/HTC LP 1999-A SUBI Certificate and
the HTA LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTA LP directs the 1999-A SUBI Securities Intermediary to debit
the HTA LP 1999-A SUBI Securities Account to reflect the transfer of the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization and (ii) a securities account in the
name of and for the benefit of HTB LP (the "HTB LP 1999-A SUBI Securities
Account") pursuant to that certain HTB LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ] between HTB LP and the 1999-A
SUBI Securities Intermediary (the "HTB LP 1999-A SUBI Securities Account
Control Agreement") into which the HTB LP/HTC LP 1999-A SUBI Certificate and
the HTB LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTB LP directs the 1999-A SUBI Securities Intermediary to debit
the HTB LP 1999-A SUBI Securities Account to reflect the transfer of the HTB
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization.
E. Concurrently herewith, the UTI Beneficiaries, HTC LP and HTD LP
are entering into that certain 1999-A SUBI Certificates Purchase and Sale
Agreement, dated as of [ ] (the "1999-A SUBI Certificates Purchase
and Sale Agreement"), pursuant to which the UTI Beneficiaries will sell,
without recourse, to HTC LP and HTD LP, all of their respective right, title
and interest in and to the 1999-A SUBI and the HTA LP/HTB LP 1999-A SUBI
Certificates, all monies due thereon and paid thereon in respect thereof and
the right to realize on any property that may be deemed to secure the 1999-A
SUBI, and all proceeds thereof. In connection therewith, and concurrently
herewith and therewith, (1) HTA LP will transfer (a) the HTA LP/HTC LP 1999-A
SUBI Certificate to HTC LP and (b) the HTA LP/HTD LP 1999-A SUBI Certificate
to HTD LP, and (2) HTB LP will transfer (a) the HTB LP/HTC LP 1999-A SUBI
Certificate to HTC LP and (b) the HTB LP/HTD LP 1999-A SUBI Certificate to
HTD LP, all consideration of the pro rata cash payment to the UTI
Beneficiaries of an amount equal to the Aggregate Net Investment Value of the
1999-A SUBI as of [ ] (the "Cutoff Date"), based on their
respective share of the 1999-
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A SUBI less the cost and expenses of the Securitization and the value of any
securities issued in connection with the Securitization and retained by the
HTC LP and HTD LP.
F. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the
1999-A SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to
HTD LP representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD
LP 1999-A SUBI Certificate," and, together with the HTC LP 1999-A SUBI
Certificate, the "1999-A SUBI Certificates"), (iii) one certificate to HTC LP
representing a 0.198% beneficial interest in the 1999-A SUBI (the "HTC LP
Retained 1999-A SUBI Certificate") and (iv) one certificate to HTD LP
representing a 0.002% beneficial interest in the 1999-A SUBI (the "HTD LP
Retained 1999-A SUBI Certificate," and, together with the HTC LP Retained
1999-A SUBI Certificate, the "Retained 1999-A SUBI Certificates"). The
1999-A SUBI Certificates shall be exclusive of proceeds of the Residual Value
Insurance Policy or other residual value insurance policies relating to the
1999-A Contracts and 1999-A Leased Vehicles.
G. Concurrently herewith, the 1999-A SUBI Securities Intermediary
establish a securities account (as defined in Section 8-501 of the UCC) in
the name of and for the benefit of HTC LP (the "HTC LP 1999-A SUBI Securities
Account") pursuant to that certain HTC LP 1999-A SUBI Securities Account
Control Agreement dated as of [ ], between HTC LP and the 1999-A
SUBI Securities Intermediary (the "HTC LP 1999-A SUBI Securities Account
Control Agreement") into which the HTC LP 1999-A SUBI Certificate and the HTC
LP Retained 1999-A SUBI Certificate will initially be transferred and held
until such time as HTC LP directs the 1999-A SUBI Securities Intermediary to
debit the HTC LP 1999-A SUBI Securities Account to reflect the transfer of
the HTC LP 1999-A SUBI Certificate pursuant to a Securitization involving the
1999-A SUBI.
H. Concurrently herewith, the 1999-A SUBI Securities Intermediary
establish a securities account (as defined in Section 8-501 of the UCC) will
in the name of and for the benefit of HTD LP (the "HTD LP 1999-A SUBI
Securities Account") pursuant to that certain HTD LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTD LP and the
1999-A SUBI Securities Intermediary (the "HTD LP 1999-A SUBI Securities
Account Control Agreement") into which the HTD LP 1999-A SUBI Certificate and
the HTD LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTD LP directs the 1999-A SUBI Securities
Intermediary to debit the HTD LP 1999-A SUBI Securities Account to reflect
the transfer of the HTD LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
I. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of the 1999-A Securitization Trust (the
99.8% "1999-A SUBI Securities Account") pursuant to that certain 99.8% 1999-A
SUBI Securities Account Control Agreement dated as of [ ], between
the 1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, and
the 1999-A SUBI Securities Intermediary, (the "99.8% 1999-A SUBI Securities
Account Control Agreement") into which the HTC LP 1999-A SUBI Certificate
will be transferred from the HTC LP 1999-A SUBI Securities Account and the
HTD LP 1999-A SUBI Certificate will be transferred from the HTD LP 1999-A
SUBI Securities Account, respectively, and
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held until such time as the 1999-A Owner Trustee directs the 1999-A SUBI
Securities Intermediary to debit the [99.8% 1999-A SUBI Securities Account to
reflect the transfer of the HTC LP 1999-A SUBI Certificate and the HTD LP
1999-A SUBI Certificate to the 1999-A Securitization Trust pursuant to the
Securitization involving the 1999-A SUBI].
J. Concurrently herewith, HTC LP, HTD LP, U.S. Bank, as owner
trustee (in such capacity, the "1999-A Owner Trustee"), The Bank of New York,
as indenture trustee ("1999-A Indenture Trustee") and Wilmington Trust
Company, as Delaware owner trustee (the "Delaware Owner Trustee"), are
entering into that certain securitization trust agreement, dated as of
[May 31, 1999] (the "1999-A Securitization Trust Agreement") pursuant to
which the securitization trust (the "1999-A Securitization Trust") will be
formed and pursuant to which HTC LP and HTD LP will transfer to the 1999-A
Securitization Trust the 1999-A SUBI Certificates, the 1999-A Indenture
Trustee will issue the Notes and the 1999-A Securitization Trust will issue
the Certificates and deliver the Notes to HTC LP and HTD LP. The HTC LP
Retained 1999-A SUBI Certificate and the HTD LP Retained 1999-A SUBI
Certificate will be retained by HTC LP and HTD LP, respectively.
K. Concurrently herewith, the 1999-A Indenture Trustee and the
1999-A Owner Trustee are entering into that certain indenture, dated as of
[ ] (the "Indenture"), pursuant to which the 1999-A Indenture
Trustee will issue the Notes and the 1999-A Owner Trustee will grant a
security interest in all of the assets held by the 1999-A Securitization
Trust, including the 1999-A SUBI Certificates, to the 1999-A Indenture
Trustee to secure the 1999-A Owner Trustee's obligations under the Indenture.
L. The parties hereto desire to supplement the terms of that
certain Servicing Agreement, dated as of April 1, 1998, by and among the UTI
Beneficiaries, the Servicer and the Origination Trust (the "Servicing
Agreement"), insofar as such terms apply to the 1999-A SUBI, the 1999-A SUBI
Assets, the 1999-A SUBI Certificates and the Retained 1999-A SUBI
Certificates to provide for further specific servicing obligations that will
benefit the SUBI Beneficiaries with respect to the 1999-A SUBI, all as
generally contemplated by the Servicing Agreement.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained and in the Servicing Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledge by
each party hereto, the parties hereto agree to the following supplemental
obligations with regard to the 1999-A SUBI and the 1999-A SUBI Assets:
ARTICLE SEVEN
DEFINITIONS
Section 7.01. DEFINITIONS. For all purposes of this 1999-A Servicing
Supplement, except as otherwise expressly provided or unless the context
otherwise requires, capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement of
Definitions, dated as of [ ] (as amended, supplemented or restated
from time to time, the "Agreement of Definitions"), by and among the
Origination Trustee, the Delaware Trustee, the Servicer, HTA LP, HTB LP, HTC
LP, HTD LP, the 1999-A Owner Trustee, the 1999-A Indenture Trustee and the
Delaware Owner Trustee. In the event of any
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conflict between a definition set forth in the Agreement of Definitions and
in the Servicing Agreement, the definition set forth in the Agreement of
Definitions shall prevail. In the event of any conflict between a definition
set forth herein and in the Agreement of Definitions, the definition set
forth herein shall prevail.
Section 7.02. INTERPRETATION. For all purposes of this 1999-A
Servicing Supplement, except as otherwise expressly provided or unless the
context otherwise requires, (i) terms used in this 1999-A Servicing
Supplement include, as appropriate, all genders and the plural as well as the
singular, (ii) references to this 1999-A Servicing Supplement include all
Exhibits and Schedules hereto, (iii) references to words such as "herein",
"hereof" and the like shall refer to this 1999-A Servicing Supplement as a
whole and not to any particular part, Article or Section within this 1999-A
Servicing Supplement, (iv) references to a section such as "Section 8.01" or
an Article such as "Article Eight" shall refer to the applicable Section or
Article of this 1999-A Servicing Supplement, (v) the term "include" and all
variations thereof shall mean "include without limitation", (vi) the term
"or" shall mean "and/or", (vii) the term "proceeds" shall have the meaning
ascribed to such term in the UCC, (viii) the phrase "Origination Trustee,
acting on behalf of the Origination Trust," or words of similar import, shall
be deemed to refer to the Origination Trustee, acting on behalf of the Honda
Lease Trust and all beneficiaries thereof, and (ix) the phrase "1999-A Owner
Trustee, acting on behalf of the 1999-A Securitization Trust," or words of
similar import, shall be deemed to refer to the 1999-A Owner Trustee, acting
on behalf of the Honda Auto Lease Trust 1999-A and all beneficiaries thereof.
ARTICLE EIGHT
CREATION OF 1999-A SUBI
Section 8.01. INITIAL CREATION OF THE 1999-A SUBI PORTFOLIO AND
1999-A SUBI SUB-TRUST; REPRESENTATIONS AND WARRANTIES.
(a) Pursuant to Section 3.01 of the Origination Trust Agreement and
Section 12.01 of the 1999-A SUBI Supplement, the Origination Trustee has been
directed to cause to be identified and allocated on the books and records of
the Origination Trust an initial separate portfolio of SUBI Assets consisting
of Leases, related Leased Vehicles and other associated Trust Assets
specified therein. Pursuant to Section 2.01(a) of the Servicing Agreement,
the Origination Trustee, on behalf of the Origination Trust, hereby directs
that the Servicer so identify and allocate such a separate portfolio of SUBI
Assets consisting of Leases, related Leased Vehicles and other associated
Trust Assets from among all those Leases, related Leased Vehicles and other
associated Trust Assets owned by the Origination Trustee, on behalf of the
Origination Trust, and currently accounted for as part of the UTI.
(b) Pursuant to subsection (a) above and Section 2.01(a) of the
Servicing Agreement, the Servicer hereby identifies and allocates the
portfolio of Leases, related Leased Vehicles and other associated Trust
Assets more particularly described on Exhibit A hereto (which is in
substantially the form of a Schedule of 1999-A Contracts and 1999-A Leased
Vehicles), in order to create the initial 1999-A SUBI Portfolio and the
1999-A SUBI Sub-Trust.
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(c) The Servicer hereby represents and warrants to the Origination
Trustee, on behalf of the Origination Trust, to the 1999-A Owner Trustee, on
behalf of the Certificateholders, and to the 1999-A Indenture Trustee, on
behalf of the Noteholders, that each of the Leases described on Exhibit A
hereto is an Eligible Lease.
Section 8.02. SERVICER PAYMENT IN RESPECT OF CERTAIN LEASES AND
LEASED VEHICLES.
(a) The representations and warranties of the Servicer set forth in
Section 8.01(c) with respect to each 1999-A Contract shall survive delivery
of the related 1999-A Contract to the 1999-A SUBI Portfolio and the 1999-A
SUBI Sub-Trust and shall continue so long as each such 1999-A Contract
remains outstanding, or until the termination of the 1999-A Securitization
Trust Agreement pursuant to Article Seven thereof, whichever occurs earlier.
Upon discovery by the Origination Trustee, the 1999-A Owner Trustee, the
1999-A Indenture Trustee or the Servicer that any such representation or
warranty was incorrect as of the time effective and such incorrectness
materially and adversely affects the interests of HTC LP, HTD LP, the
Certificateholders or the Noteholders in such 1999-A Contract, the party
discovering such incorrectness shall give prompt written notice to the
others. Within 60 days of the Servicer's discovery of such incorrectness or
receipt of notice to such effect, the Servicer shall cure in all material
respects the circumstances or condition in respect of which the
representation or warranty was incorrect. If the Servicer is unable or
unwilling to do so timely, it shall, as the sole remedy for such breach,
promptly (i) deposit (or cause to be deposited) into the 1999-A SUBI
Collection Account an amount equal to the then Discounted Principal Balance
of such 1999-A Contract as of the Deposit Date related to the Collection
Period in which the 60-day cure period ended, plus an amount equal to the
imputed interest, or lease charge, portion of any Monthly Payments with
respect thereto at the related Lease Rate that was delinquent as of that
Collection Period, (ii) reallocate such 1999-A Contract and the related
1999-A Leased Vehicle and other related Trust Assets from the 1999-A SUBI
Portfolio to the UTI Portfolio, and (iii) indemnify, defend and hold harmless
the holders of any 1999-A SUBI Certificate (including the 1999-A Owner
Trustee, on behalf of the Certificateholders, and the 1999-A Indenture
Trustee, on behalf of the Noteholders) or Retained 1999-A SUBI Certificate
and any subsequent servicer (if other than the current Servicer) from and
against any and all loss or liability with respect to or resulting from such
1999-A Contract or the related 1999-A Leased Vehicle.
(b) If the Servicer receives funds from a Dealer pursuant to such
Dealer's obligation under a Dealer Agreement with the Servicer to repurchase
a 1999-A Contract or the related 1999-A Leased Vehicle included in the 1999-A
SUBI Portfolio, the Servicer shall, so long as the Monthly Remittance
Conditions are satisfied, deposit such funds into the 1999-A SUBI Collection
Account on the Deposit Date related to the Collection Period in which such
funds are received by the Servicer, which deposit shall satisfy the
Servicer's obligations with respect to such 1999-A Contract or 1999-A Leased
Vehicle pursuant to Section 9.02(b)(i), and return to the repurchasing Dealer
the Certificate of Title and Lease with respect to such 1999-A Leased
Vehicle; PROVIDED, HOWEVER, if, on or after the date the Servicer receives
such funds from a Dealer, the Servicer no longer satisfies the Monthly
Remittance Conditions, the Servicer shall deposit such funds into the 1999-A
SUBI Collection Account (i) within two Business Days of
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the date such funds are received or (ii) within two Business Days of the date
the Servicer ceases to satisfy the Monthly Remittance Conditions, whichever
is later.
(c) The obligations of the Servicer pursuant to this Section 8.02 shall
survive any termination of the Servicer with respect to the 1999-A SUBI
Portfolio and 1999-A SUBI Sub-Trust under this 1999-A Servicing Supplement or
the Servicing Agreement.
Section 8.03. FILINGS. The Servicer will undertake all other and
future actions and activities as may be reasonably necessary to perfect (or
evidence) and confirm the foregoing allocations of Trust Assets to the 1999-A
SUBI Portfolio and the 1999-A SUBI Sub-Trust including filing or causing to
be filed Form UCC financing statements and executing and delivering all
related filings, documents or writings as may be reasonably necessary
hereunder or under any other 1999-A Securitization Documents; PROVIDED,
HOWEVER, that in no event shall the Servicer be required to take any action
to perfect a security interest that may be held by the 1999-A Owner Trustee
or the 1999-A Indenture Trustee in any 1999-A Leased Vehicle.
Section 8.04. REPRESENTATIONS AND WARRANTIES OF THE SERVICER. Effective
as of the date of this 1999-A Servicing Supplement, the Servicer hereby
reaffirms the representations and warranties set forth in Section 5.01 of the
Servicing Agreement. For purposes of this Section 8.04, references in
Section 5.01 of the Servicing Agreement to "this Agreement" shall be deemed
to refer to the Servicing Agreement as supplemented by this 1999-A Servicing
Supplement.
ARTICLE NINE
SPECIFIC REQUIREMENTS FOR ADMINISTRATION
AND SERVICING OF LEASES IN 1999-A SUBI PORTFOLIO
Section 9.01. SERVICER BOUND BY SERVICING AGREEMENT.
(a) Except as otherwise specifically provided herein: (i) the Servicer
shall continue to be bound by all provisions of the Servicing Agreement with
respect to the 1999-A Contracts, the 1999-A Leased Vehicles and other
associated Trust Assets in the 1999-A SUBI Sub-Trust, including the
provisions thereof relating to the administration and servicing of 1999-A
Contracts, and (ii) the provisions set forth herein shall operate either as
additions to or modifications of the extant obligations of the Servicer under
the Servicing Agreement, as the context may require. If the provisions of
this 1999-A Servicing Supplement are more exacting or specific than those in
the Servicing Agreement or in the event of any conflict between the
provisions of this 1999-A Servicing Supplement with respect to the 1999-A
SUBI and those of the Servicing Agreement, the provisions of this 1999-A
Servicing Supplement shall prevail.
(b) For purposes of determining the Servicer's obligations with respect
to the servicing of the 1999-A SUBI Sub-Trust under this 1999-A Servicing
Supplement (including pursuant to Article Two of the Servicing Agreement),
general references in the Servicing Agreement to: (i) a SUBI Account shall be
deemed to refer more specifically to a 1999-A SUBI Account; (ii) a SUBI Asset
shall be deemed to refer more specifically to a 1999-A SUBI Asset; (iii) a
SUBI Collection Account shall be deemed to refer more specifically to the
1999-A SUBI Collection Account; (iv) a SUBI Lease Account shall be deemed to
refer more specifically to the 1999-A
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SUBI Lease Account; (v) a SUBI Portfolio shall be deemed to refer more
specifically to the 1999-A SUBI Portfolio, (vi) a SUBI Sub-Trust shall be
deemed to refer more specifically to the 1999-A SUBI Sub-Trust, (vii) a
Servicing Supplement shall be deemed to refer more specifically to this 1999-A
Servicing Supplement; and (viii) a SUBI Supplement shall be deemed to refer
more specifically to the 1999-A SUBI Supplement.
(c) Coincident with the execution and delivery of this 1999-A Servicing
Supplement, the Servicer shall furnish the 1999-A Owner Trustee, on behalf of
the Certificateholders, the 1999-A Indenture Trustee, on behalf of the
Noteholders, the Origination Trustee and each Related Beneficiary with an
Officer's Certificate listing the officers of the Servicer currently involved
in, or responsible for, the administration and servicing of the 1999-A Contracts
in the 1999-A SUBI Sub-Trust, which list shall from time to time be updated by
the Servicer as set forth in Section 10.01 hereof.
Section 9.02. COLLECTION OF MONTHLY LEASE REMITTANCES; APPLICATION OF
PROCEEDS; ACCOUNTS.
(a) The terms "Net Liquidation Proceeds", "Net Insurance Proceeds"
and "Net Matured Lease Vehicle Proceeds" shall be exclusive of the Residual
Value Insurance Policy, any other residual value insurance policies and the
proceeds of the Residual Value Insurance Policy and any other residual
value insurance policies. Notwithstanding Section 2.06(c) of the Servicing
Agreement, the Servicer shall not deposit any proceeds from the Residual
Value Insurance Policy or any other residual value insurance policies into
the 1999-A SUBI Collection Account. If any proceeds of the Residual Value
Insurance Policy or any other residual value insurance policies applicable
to the 1999-A Leased Vehicles and the 1999-A Contracts are deposited in any
SUBI Account, or another account maintained by the Origination Trustee, the
1999-A Owner Trustee or the 1999-A Indenture Trustee, such amounts shall be
distributed to the Servicer by the Origination Trustee, the 1999-A Owner
Trustee or the 1999-A Indenture Trustee, as applicable, on the succeeding
Distribution Date.
(b) With reference to Section 2.06 of the Servicing Agreement:
(i) the Servicer shall use commercially reasonable efforts,
consistent with its then current standards, policies and procedures
(including procedures used in connection with new programs commenced
in the ordinary course of business, whether or not implemented on a
test basis), to (i) collect all payments required under the terms and
provisions of each 1999-A Contract included in the 1999-A SUBI
Portfolio; (ii) cause each Lessee to make all payments in respect of
the related 1999-A Contracts included in the 1999-A SUBI Portfolio to
which such Lessee is a party or otherwise obligated; and (iii) deposit
all Collections (excluding proceeds of the Residual Value Insurance
Policy or any other residual value insurance policies, which amounts
shall not be deemed to be Collections) into the 1999-A SUBI Collection
Account on or before the Deposit Date relating to each Collection
Period except as otherwise specified herein or in Section 13.01 of the
1999-A SUBI Supplement or Section 2.06(f) of the Servicing Agreement
(in connection with any failure to satisfy the Monthly Remittance
Conditions);
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(ii) in accordance with the provisions of Section 2.06(f) of the
Servicing Agreement, so long as AHFC is the Servicer and each Monthly
Remittance Condition is satisfied, the Servicer will be entitled to make
deposits of Collections into the 1999-A SUBI Collection Account net of
amounts reimbursable or payable to the Servicer as compensation (including
in respect of amounts advanced by the Servicer otherwise payable to the
1999-A Owner Trustee, 1999-A Indenture Trustee, Origination Trustee or
Trust Agent) and net of amounts payable or reimbursable (and actually so
paid or reimbursed directly by the Servicer) in respect of the Origination
Trust. To the extent the Servicer makes deposits net of any such amounts,
the Servicer will cause each relevant Servicer's Certificate to correctly
and accurately account for such amounts in providing all information with
respect to allocations, applications and payments to be made pursuant to
Section 3.03 of the 1999-A Securitization Trust Agreement on the same basis
as though such amounts were in fact deposited into the 1999-A SUBI
Collection Account. Moreover, as set forth in Section 3.03(g) of the
1999-A Securitization Trust Agreement, the Servicer will, in each relevant
Servicer's Certificate, instruct the 1999-A Owner Trustee not to make any
distribution to the Servicer, HTC LP, HTD LP or the Origination Trustee to
the extent that the Servicer has made any deposit net of a corresponding
amount, and the Origination Trustee will have no obligation with respect to
or liability for following any such instruction by the Servicer;
(iii) notwithstanding Section 2.06 of the Servicing Agreement, the
Servicer shall not transfer into the 1999-A SUBI Collection Account, any
Extension Fee that it may receive in connection with the extension of a
1999-A Contract;
(iv) the Servicer may not grant more than [six] deferrals of any
1999-A Contract, and may not extend the Maturity Date of any 1999-A
Contract by more than [six] months in the aggregate or such that its
Maturity Date will occur later than the first day of the month preceding
the month in which the Final Scheduled Distribution Date for the Class B
Notes occurs; if the Servicer grants more than [six] deferrals on a
1999-A Contract included in the 1999-A SUBI Portfolio or if the Servicer
extends the Maturity Date of a 1999-A Contract included in the 1999-A
SUBI Portfolio by more than [six] months in the aggregate or if the
Servicer extends the Maturity Date of a 1999-A Contract included in the
1999-A Portfolio such that the Maturity Date will occur later than the
first day of the month preceding the month in which the Final Scheduled
Distribution Date for the Class B Notes occurs, then, as the sole remedy
therefor, the Servicer shall, on the Deposit Date related to the
Collection Period in which such deferral or extension was granted (or on
the Deposit Date relating to the Collection Period in which the Servicer
discovers or is notified that an improper deferral or extension was
granted), (y) deposit into the 1999-A SUBI Collection Account an amount
equal to the then Discounted Principal Balance of such 1999-A Contract
plus an amount equal to all interest, lease charges and portions of any
Monthly Payments with respect thereto at the related Lease Rate, which
amounts were delinquent as of the end of that Collection Period, and (z)
reallocate such 1999-A Contract and the related 1999-A Leased Vehicle
from the 1999-A SUBI Portfolio and 1999-A SUBI Sub-Trust to the UTI
Portfolio and UTI Sub-Trust. The obligations of the Servicer pursuant
to this Section 9.02(b) shall survive any termination of the Servicer's
obligations with respect to the
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1999-A SUBI Portfolio under this 1999-A Servicing Supplement or the
Servicing Agreement.
(c) With reference to Section 2.06 of the Servicing Agreement, the
Servicer shall treat all Repossession Proceeds and Matured Leased Vehicle
Proceeds in the manner provided for other Liquidation Proceeds and Insurance
Proceeds (subject to Section 9.02(a) herein with respect to the Residual Value
Insurance Policy and any other residual value insurance policies); PROVIDED,
HOWEVER, as set forth in Section 9.07, that the Servicer may be reimbursed for
related unreimbursed Repossession Expenses, Matured Leased Vehicle Expenses,
other Liquidation Expenses and Insurance Expenses as provided in Section
9.02(i).
(d) Upon the determination by the Servicer that any proceeds received by
it with respect to any 1999-A Contract constitute one or more Payments Ahead,
the Servicer shall, unless otherwise instructed by the Origination Trustee, (i)
maintain appropriate records of such Payment Ahead so as to be able to timely
apply such Payment Ahead as a Monthly Payment with respect to the applicable
1999-A Contract, (ii) so long as all Monthly Remittance Conditions are
satisfied, deposit such Payment Ahead into the 1999-A SUBI Collection Account on
the Deposit Date relating to the Collection Period during which such Payment
Ahead is to be applied, and (iii) commencing with the first day of the first
Collection Period that begins at least two Business Days after the day which a
Monthly Remittance Condition is no longer satisfied, deposit all Payments Ahead
then held by the Servicer into the Payahead Account and shall, until such time
as all Monthly Remittance Conditions are once again satisfied, remit all future
Payments Ahead to the Payahead Account within two Business Days after receipt
thereof, pending transfer to the 1999-A SUBI Collection Account pursuant to
Section 2.06(e)(i) of the Servicing Agreement.
(e) With reference to Sections 2.06(c) and 2.07 of the Servicing
Agreement, the Servicer shall deposit into the 1999-A SUBI Collection Account on
or before each Deposit Date each Security Deposit that became Liquidation
Proceeds during the related Collection Period.
(f) The Servicer, on behalf of the Origination Trustee, shall establish
and maintain in the name of the Origination Trustee, the 1999-A SUBI
Collection Account as set forth in Section 13.01 of the 1999-A SUBI
Supplement. The Servicer, on behalf of the 1999-A Owner Trustee, shall
establish the 1999-A Note Distribution Account for the benefit of the
Noteholders in the name of the 1999-A Indenture Trustee, as set forth in
Section 3.01(a) of the 1999-A Securitization Trust Agreement. The Servicer,
on behalf of the 1999-A Owner Trustee, shall establish the 1999-A Certificate
Distribution Account for the benefit of the Certificateholders in the name of
the 1999-A Owner Trustee, as set forth in Section 3.01(b) of the 1999-A
Securitization Trust Agreement.
(g) On each Determination Date, the Servicer shall make the calculations
necessary to allow the 1999-A Owner Trustee or the 1999-A Indenture Trustee, as
the case may be, to make the allocations, applications and payments to holders
of, or to the 1999-A SUBI Accounts, the 1999-A Certificate Distribution Account
and the Reserve Fund on behalf of the holders of, the 1999-A SUBI Certificates
and the Retained 1999-A SUBI Certificates on the related Distribution Date in
accordance with Section 3.03 of the 1999-A Securitization Trust Agreement. In
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connection therewith, the Servicer shall determine the amount of expenses and
liabilities incurred or suffered by the Origination Trust ("Origination Trust
Expenses") during the preceding Collection Period and shall allocate such
Origination Trust Expenses among the various Sub-Trusts, including the 1999-A
SUBI Sub-Trust, in good faith and so as not to disproportionately affect any
Sub-Trust, generally as provided for in Section 3.01(b) of the Origination
Trust Agreement.
(h) On each Deposit Date, the Servicer, pursuant to the instructions of
the 1999-A Owner Trustee, shall cause the transfer of funds from the 1999-A SUBI
Collection Account in respect of the 1999-A SUBI Certificates to the 1999-A Note
Distribution Account and the 1999-A Certificate Distribution Account as provided
in Section 3.03 of the 1999-A Securitization Trust Agreement. On each
Distribution Date, the Servicer, pursuant to the instructions of the 1999-A
Owner Trustee, shall cause the transfer of funds from the 1999-A SUBI Collection
Account to HTC LP and HTD LP in respect of the Retained 1999-A SUBI
Certificates. On each Distribution Date, 1999-A Owner Trustee (with respect to
the Certificates and the 1999-A Certificate Distribution Account) and the 1999-A
Indenture Trustee (with respect to the Notes, the 1999-A Note Distribution
Account and the Reserve Fund) shall make the distributions from the 1999-A Note
Distribution Account, the 1999-A Certificate Distribution Account and the
Reserve Fund in respect of the Notes and the Certificates, as provided in
Section 3.03 of the 1999-A Securitization Trust Agreement.
(i) The Servicer will be entitled to reimbursement of Matured Leased
Vehicle Expenses, Repossession Expenses, other Liquidation Expenses and
Insurance Expenses. The Servicer is hereby authorized to net such expenses
from proceeds or Collections in respect of the related 1999-A Contracts or
1999-A Leased Vehicles (including Liquidation Proceeds and Insurance Proceeds),
or to withdraw such amounts from amounts on deposit in the 1999-A SUBI
Collection Account. The Servicer also will be entitled to reimbursement of
certain payments it makes on behalf of Lessees (including payments it makes on
behalf of the related Lessees of taxes, vehicle registration charges, clearance
of parking tickets and similar items and expenses and charges incurred by it in
the ordinary course of servicing the 1999-A Contracts) from Collections with
respect to the 1999-A Contracts (whether or not as separate payments thereof by
the related Lessees) or from amounts realized upon the final disposition of
1999-A Leased Vehicles. To the extent such amounts are not reimbursed prior to
or at the final disposition of the related 1999-A Leased Vehicle but remain
unpaid by the related Lessee, such unreimbursed amounts (together with any
unpaid Monthly Payments under the related 1999-A Contract) will be treated as
Matured Leased Vehicle Expenses, Repossession Expenses, other Liquidation
Expenses or Insurance Expenses, as the case may be, and the Servicer is hereby
authorized to offset such reimbursable payments, expenses and charges against
Matured Leased Vehicle Proceeds, Repossession Proceeds, other Liquidation
Proceeds or Insurance Proceeds, as the case may be.
To the extent that during any Collection Period (i) Collections, Matured
Leased Vehicle Proceeds, Repossession Proceeds, other Liquidation Proceeds or
Insurance Proceeds or separate payments from the Lessee in respect of such
payments, charges and expenses are deposited into the 1999-A SUBI Collection
Account rather than so offset by the Servicer, (ii) any Monthly Payments arising
from a 1999-A Contract allocated to the 1999-A SUBI Sub-Trust are received
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by the Origination Trustee or deposited in the 1999-A SUBI Collection Account
with respect to any prior Collection Period as to which the Servicer has
outstanding an unreimbursed Advance, rather than being netted from Collections
by the Servicer, or (iii) any amount of unreimbursed Advances already deposited
in the 1999-A SUBI Collection Account on any Deposit Date are reasonably
determined by the Servicer to be Nonrecoverable Advances, then, on the related
Deposit Date, the Servicer shall (x) notify the Origination Trustee and the
1999-A Owner Trustee in writing as to any such amount and (y) instruct the
Origination Trustee to, and the Origination Trustee shall, promptly transfer an
amount equal to the aggregate of such amounts from the 1999-A SUBI Collection
Account to the 1999-A SUBI Lease Account. Thereafter, the Origination Trustee
shall remit to the Servicer from the 1999-A SUBI Lease Account the total of
such amounts, without interest (the "Servicer Reimbursement"). In lieu of
causing the Origination Trustee to transfer such amounts to the 1999-A SUBI
Lease Account (or if the 1999-A SUBI Lease Account has not been required to be
established as set forth in Section 13.02 of the 1999-A SUBI Supplement), the
Servicer is hereby authorized to withdraw such amounts from amounts on deposit
or deduct such amounts from amounts otherwise to be deposited into the 1999-A
SUBI Collection Account.
(j) The Servicer shall account to the Origination Trustee, the 1999-A
Indenture Trustee and the 1999-A Owner Trustee with respect to the 1999-A
SUBI Assets separately from any other Sub-Trust.
(k) The Servicer shall direct the Origination Trustee, the 1999-A
Indenture Trustee or the 1999-A Owner Trustee, as applicable, to invest
amounts held in the 1999-A SUBI Accounts, the 1999A Certificate Distribution
Account and the Reserve Fund in Eligible Investments as provided for in the
1999-A Securitization Documents. The maximum permissible maturities of any
such investments pursuant to this Section 9.02(k) on any date shall be not
later than the Business Day immediately preceding the Deposit Date for the
related Collection Period (with regard to investment of funds in the 1999-A
SUBI Collection Account, the 1999-A SUBI Lease Account and any 1999-A
Payahead Account) or the Business Day immediately preceding the Distribution
Date for the related Collection Period (with regard to investment of funds in
the 1999-A Note Distribution Account, the 1999-A Certificate Distribution
Account and the Reserve Fund) except for investments on which the 1999-A
Indenture Trustee is the obligor (including repurchase agreements on which
it, in its commercial capacity, is liable as principal), which may mature on
either the Deposit Date or Distribution Date for the related Collection
Period, respectively.
(l) If the Servicer obtains a letter from each Rating Agency, and
provides such letter to the UTI Beneficiaries, the Origination Trustee, the
1999-A Owner Trustee and the 1999-A Indenture Trustee, to the effect that
the utilization by the Servicer of an alternative remittance schedule with
respect to Collections to be deposited in the 1999-A SUBI Collection
Account pursuant to this 1999-A Servicing Supplement or the Servicing
Agreement will not result in a qualification, downgrading or withdrawal of
the then-current ratings assigned to the Rated Notes by such Rating Agency,
(i) this 1999-A Servicing Supplement (and any corresponding or related
sections in the Servicing Agreement or the 1999-A SUBI Supplement) may be
so modified without the consent of any Certificateholders or Noteholders
and (ii) the Servicer may remit
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Collections to the 1999-A SUBI Collection Account in accordance with that
alternative remittance schedule.
(m) The Servicer may make remittances to the 1999-A Note Distribution
Account and the 1999-A Certificate Distribution Account net of certain other
amounts, as and to the extent set forth in Section 3.03(g) of the 1999-A
Securitization Trust Agreement.
(n) The parties hereto acknowledge that the Origination Trustee, on
behalf of the Origination Trust, has made a complete transfer to the 1999-A
Owner Trustee of the Collections in respect of the 1999-A SUBI Assets contained
in all accounts maintained by the Origination Trustee and, except as provided
in this 1999-A Servicing Supplement, in the 1999-A SUBI Supplement and in the
1999-A Securitization Trust Agreement, neither the Origination Trustee nor the
Servicer has any right to direct such funds to a third party or to receive such
funds.
(o) In the event of a sale, disposition or other liquidation of the
1999-A SUBI Certificates and the Retained 1999-A SUBI Certificates and the
other property of the 1999-A Securitization Trust pursuant to Section 5.14 of
the Indenture or Section 7.02 of the 1999-A Securitization Trust Agreement, the
Servicer shall allocate the net proceeds thereof as set forth in Section 5.14
of the Indenture and Section 7.02 of the 1999-A Securitization Trust Agreement.
Section 9.03. RECORDS. Upon the occurrence and during the continuance
of a 1999-A Servicer Termination Event (as defined in Section 11.01), if the
rights of the Servicer with respect to the 1999-A SUBI Assets shall have been
terminated in accordance with Section 4.01(b) of the Servicing Agreement and
Section 11.01(b) of this 1999-A Servicing Supplement, or if this 1999-A
Servicing Supplement shall have been terminated pursuant to Section 12.01
hereof, the Servicer shall, on demand of the Origination Trustee, on behalf
of the Origination Trust (either at the request of the 1999-A Indenture
Trustee or, as provided in Section 11.01(b), upon demand of Noteholders
representing more than 50% of the aggregate Voting Interests of the Notes,
voting together as a single class), deliver to the Origination Trustee all
such data, operating software and appropriate documentation necessary for the
servicing of the 1999-A Contracts, including the related Lease Documents and
Title Documents, all monies collected by it and required to be deposited in
any 1999-A SUBI Account on behalf of the Origination Trust, or in the 1999-A
Note Distribution Account, the 1999-A Certificate Distribution Account or the
Reserve Fund on behalf of the 1999-A Securitization Trust, all Security
Deposits with respect to the 1999-A Contracts, and any 1999-A Leased Vehicle
in the possession of the Servicer that has been repossessed or is part of the
Matured Leased Vehicle Inventory and in either case has not yet been sold or
otherwise disposed of pursuant to Section 2.10 of the Servicing Agreement.
In addition to delivering such data, operating software and appropriate
documentation and monies, if a new servicer is appointed, the Servicer shall
use commercially reasonable efforts to effect the orderly and efficient
transfer of the servicing of the 1999-A Contracts to the party that will be
assuming responsibility for such servicing, including directing Lessees to
remit payments in respect of those 1999-A Contracts to an account or address
designated by the Origination Trustee or such new servicer.
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Section 9.04. ADVANCES.
(a) On or prior to each Deposit Date, the Servicer shall make any
Advance required by the definition thereof into the 1999-A SUBI Collection
Account.
(b) Notwithstanding any other provision of this 1999-A Servicing
Supplement, the Servicer shall not be obligated to make any Advance if and
to the extent that the Servicer shall have reasonably determined that any
such Advance, if made, would constitute a Nonrecoverable Advance. Any such
determination relating to a claim by the Servicer for reimbursement of
Nonrecoverable Advances from monies on deposit in the 1999-A SUBI
Collection Account shall be evidenced by an Officer's Certificate (or a
statement to Certificateholders and Noteholders or the certification by any
other authorized signatory) of the Servicer furnished to each UTI
Beneficiary, the Origination Trustee, the 1999-A Owner Trustee and the
1999-A Indenture Trustee setting out the basis for such determination,
which determination shall be conclusive and binding absent manifest error.
Section 9.05. PAYMENT OF CERTAIN FEES AND EXPENSES; NO OFFSET.
(a) As part of its obligations hereunder, to the extent that cash
flows arising from the 1999-A SUBI Sub-Trust, as set forth in Section
3.03(c) of the 1999-A Securitization Trust Agreement, are insufficient to
provide for the payment of all fees and expenses due and payable to the
Origination Trustee, the 1999-A Owner Trustee or the 1999-A Indenture
Trustee as Capped Origination Trust Administrative Expenses, Capped Owner
Trustee Administrative Expenses, Capped Indenture Trustee Administrative
Expenses or Uncapped Administrative Expenses, the Servicer shall advance an
amount equal to such excess fees and expenses as they become payable from
time to time and agrees to indemnify the Origination Trustee, the 1999-A
Owner Trustee and the 1999-A Indenture Trustee and their respective agents
for such amounts. The Servicer shall be entitled to reimbursement of such
advances as set forth in Section 3.03(g) of the 1999-A Securitization Trust
Agreement. The obligations of the Servicer pursuant to this
Section 9.05(a) shall survive any termination of the Servicer's rights and
obligations with respect to the 1999-A SUBI Portfolio under this 1999-A
Servicing Supplement or the Servicing Agreement.
(b) Prior to the termination of the Servicer's rights and obligations
with respect to the 1999-A SUBI Sub-Trust and thereafter if such
termination results from a 1999-A Servicer Termination Event, the
obligations of the Servicer with respect to the 1999-A SUBI Sub-Trust shall
not be subject to any defense, counterclaim or right of offset that the
Servicer has or may have against any UTI Beneficiary, the Origination
Trustee on behalf of the Origination Trust, any Affiliate of a
Transferor, the 1999-A Owner Trustee or the 1999-A Indenture Trustee,
whether in respect of this 1999-A Servicing Supplement, the 1999-A SUBI
Supplement, the Servicing Agreement, any Securitization Trust Document, any
1999-A Contract, any related Lease Document, any 1999-A Leased Vehicle or
otherwise.
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Section 9.06. SERVICING COMPENSATION.
(a) As compensation for the performance of its obligations under this
1999-A Servicing Supplement, the Servicer shall be entitled to receive from the
1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, on each
Distribution Date, the 1999-A SUBI Servicing Fee with respect to the 1999-A
SUBI Assets.
(b) The Servicer shall also be entitled to additional servicing
compensation with respect to the 1999-A SUBI Sub-Trust to the extent provided
in the 1999-A Securitization Trust Agreement.
Section 9.07. REPOSSESSION AND SALE OF LEASED VEHICLES. Notwithstanding
Section 2.06 of the Servicing Agreement, the Servicer is not required to deduct
from Repossession Proceeds, Matured Leased Vehicle Proceeds, other Liquidation
Proceeds or Insurance Proceeds with respect to any particular 1999-A Leased
Vehicle all related unreimbursed Repossession Expenses, Matured Leased Vehicle
Expenses, other Liquidation Expenses or Insurance Expenses prior to
transferring such funds out of its operating account. Such expenses may
instead be reimbursed as provided in Section 9.02(i).
Section 9.08. THIRD PARTY CLAIMS. In addition to the requirements set
forth in Section 2.12 of the Servicing Agreement, the Servicer shall
immediately notify HTC LP and HTD LP in writing (if AHFC is not acting as
Servicer) and the 1999-A Indenture Trustee upon learning of a claim or Lien of
whatever kind of a third party that would materially and adversely affect the
interests of HTC LP, HTD LP, the Origination Trust or any 1999-A SUBI Assets.
Section 9.09. INSURANCE POLICIES. So long as any 1999-A SUBI
Certificates or Retained 1999-A SUBI Certificates are outstanding, the
Servicer will maintain and pay when due all premiums with respect to, and the
Servicer may not terminate or cause the termination of, or permit any other
insured party to terminate or cause the termination of, each Contingent and
Excess Liability Insurance Policy, all premiums with respect to which shall
constitute Administrative Expenses, unless (A) one or more replacement
insurance policies or binders are obtained providing coverage against
third-party claims that may be raised against the Origination Trustee, on
behalf of the Origination Trust, with respect to any 1999-A Leased Vehicle
included in the 1999-A SUBI Sub-Trust, which coverage shall be in an amount
at least equal to ten million dollars ($10,000,000) per occurrence, not
subject to any annual or aggregate cap (which policy or policies may be a
blanket insurance policy or policies covering the Servicer and one or more of
its Affiliates), or (B) each Rating Agency has delivered a letter to the
1999-A Indenture Trustee and the 1999-A Owner Trustee to the effect that the
obtaining of any such replacement insurance policy or policies, in and of
itself, will not cause its then-current rating of any of the Rated Securities
to be qualified, reduced or withdrawn. On or before March 31 of each year,
the Servicer shall provide to the Origination Trustee one or more Officer's
Certificates certifying that each of the particular policies it is required
to maintain pursuant to this Section 9.09 remains in full force and effect.
The obligations of the Servicer pursuant to this Section 9.09 shall survive
any termination of the Servicer's obligations with respect to the 1999-A SUBI
Sub-Trust under this 1999-A Servicing Supplement or the Servicing Agreement.
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Section 9.10. SERVICER RESIGNATION; ASSIGNMENT.
(a) If the Servicer resigns in the circumstances contemplated by
Section 2.14(a) of the Servicing Agreement, in addition to the requirements
set forth therein, the Opinion of Counsel required thereby also shall be
reasonably satisfactory to the 1999-A Owner Trustee and the 1999-A Indenture
Trustee. Any servicing agreement entered into by a new servicer pursuant to
Section 2.14(a) of the Servicing Agreement also must contain substantially
the same provisions as this 1999-A Servicing Supplement. Neither the 1999-A
Owner Trustee nor the 1999-A Indenture Trustee shall unreasonably fail to
consent to a servicing agreement with a new servicer that proposes to enter
into a servicing agreement that meets the standards required by Section 2.14
of the Servicing Agreement and this 1999-A Servicing Supplement. No such
resignation shall affect the obligation of the Servicer to remit monies to
the 1999-A SUBI Collection Account (in lieu of unrecoverable insurance
proceeds) as set forth in Section 2.11 of the Servicing Agreement and Section
9.11 of this 1999-A Servicing Supplement, or the obligations of the Servicer
pursuant to Section 2.13(c) of the Servicing Agreement, Section 8.02(c),
Section 9.02(b) (as to any 1999-A Contract the Maturity Date of which has
been extended beyond the specified limit by the Servicer, or which 1999-A
Contract has been deferred in violation of the specified limit by the
Servicer), Section 9.05(a), Section 9.07 or Section 9.09 of this 1999-A
Servicing Supplement; no successor Servicer shall be required to undertake
any of the foregoing, other than the obligation set forth in Section 9.05(a)
(which shall remain a joint and several obligation of the initial Servicer
and any successor Servicer). The Origination Trustee shall give prompt
notice to each Rating Agency, the 1999-A Indenture Trustee and the 1999-A
Owner Trustee of any such resignation of the Servicer, and the Origination
Trustee must obtain from each Rating Agency a letter approving each
substitute servicer.
(b) The Servicer may not assign this 1999-A Servicing Supplement or any
of its rights, powers, duties or obligations hereunder except as permitted
pursuant to Section 2.14(b) of the Servicing Agreement.
(c) Except as provided in paragraphs (a) and (b) above, the duties and
obligations of the Servicer under this 1999-A Servicing Supplement shall
continue until they shall have been terminated as provided in Section 12.01
hereof or in the Servicing Agreement and shall survive the exercise by the
Origination Trustee, on behalf of the Origination Trust, of any right or remedy
under this 1999-A Servicing Supplement or the Servicing Agreement or the
enforcement by the Origination Trustee, on behalf of the Origination Trust, of
any provision of the 1999-A Trust Documents.
Section 9.11. INSURANCE COVERAGE IN RESPECT OF LEASED VEHICLES. With
reference to Section 2.06 of the Servicing Agreement, except as provided in
Section 9.02 hereof, the required deposits of insurance proceeds with respect
to 1999-A Leased Vehicles into the 1999-A SUBI Collection Account shall be made
by the Servicer within two Business Days after receipt of such proceeds.
Section 9.12. CORPORATE EXISTENCE; STATUS; MERGER.
(a) With regard to Sections 2.11(b) and 5.01(b) of the Servicing
Agreement, the Servicer also will obtain and preserve its qualification to
do business as a foreign corporation in each
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jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business (except where the
failure to so qualify would not have a material adverse effect on the
condition, financial or otherwise, of the Servicer and its subsidiaries
considered as a whole) and in each jurisdiction in which such qualification is
or shall be necessary to protect the validity and enforceability of, or to
permit the Servicer to perform its obligations under, this 1999-A Servicing
Supplement, the Servicing Agreement and the 1999-A Securitization Trust
Agreement.
(b) With reference to Section 2.15(b) of the Servicing Agreement,
whenever the consent of the Origination Trustee is required, so also shall the
consent of the 1999-A Owner Trustee and the 1999-A Indenture Trustee be
required, and whenever a successor to the Servicer by merger or consolidation
is required to execute and deliver to the Origination Trustee an agreement in
form and substance reasonably satisfactory to the Origination Trustee as to the
assumption by the successor of the Servicer's obligations under the Servicing
Agreement and the other 1999-A Securitization Documents, such agreement also
must be reasonably satisfactory to the 1999-A Owner Trustee and the 1999-A
Indenture Trustee and must contain a similar assumption of the Servicer's
obligations under this 1999-A Servicing Supplement.
Section 9.13. SERVICER ADMINISTRATIVE DUTIES UNDER THE 1999-A
SECURITIZATION DOCUMENTS. The Servicer shall be obligated to perform on behalf
of the 1999-A Securitization Trust all administrative duties required to be
performed by the Origination Trust pursuant to any of the 1999-A Securitization
Documents (including the preparation, delivery and filing of any and all
certificates, reports, filings and other documents required by law or the
1999-A Securitization Documents) within the time period specified by and
otherwise in compliance with the requirements of such 1999-A Securitization
Documents; provided that nothing in this Section 9.13 will be deemed to cause
the Servicer to be obligated to make payments on the Notes or the Certificates,
or to be an obligor or guarantor with respect to the Notes or the Certificates.
Without limiting the generality of the foregoing, the Servicer shall, on
behalf of the Origination Trust, perform any and all of the actions required by
Section 3.14 of the Indenture.
ARTICLE TEN
STATEMENTS AND REPORTS
Section 10.01. REPORTING BY THE SERVICER. At the time of the execution
and delivery of this 1999-A Servicing Supplement, as provided in Section
9.01(c), and periodically thereafter as required in order to update the
contents thereof upon any changes in the matters certified therein, the
Servicer shall furnish to the Origination Trustee, the 1999-A Owner Trustee,
the 1999-A Indenture Trustee and each Related Beneficiary an Officer's
Certificate listing the officers of the Servicer involved in, or responsible
for, the administration and servicing of the 1999-A SUBI Sub-Trust.
Section 10.02. ANNUAL ACCOUNTANTS' REPORTS The annual report of the
Independent Accountants of the Servicer required by Section 3.02 of the
Servicing Agreement, to the extent that it refers to the Servicing Agreement,
shall also specifically refer to the Servicing Agreement
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as supplemented by this 1999-A Servicing Supplement, and shall additionally be
delivered to the 1999-A Indenture Trustee and each Rating Agency.
Section 10.03. OTHER CERTIFICATES AND NOTICES FROM SERVICER.
(a) The annual Officer's Certificate of the Servicer required by Section
3.03 of the Servicing Agreement, to the extent that it refers to the Servicing
Agreement, shall also specifically refer to the Servicing Agreement as
supplemented by this 1999-A Servicing Supplement, and shall additionally be
delivered to the 1999-A Indenture Trustee and each Rating Agency.
(b) Upon the occurrence of any 1999-A Servicer Termination Event, in
addition to the requirements set forth in Section 4.01 of the Servicing
Agreement, the Servicer shall provide to the 1999-A Indenture Trustee, the
1999-A Owner Trustee, and any holders of Rated Securities, prompt notice of
such occurrence, together with a description of its efforts to cure such
1999-A Servicer Termination Event.
Section 10.04. TAX RETURNS. As contemplated by Section 6.12 of the 1999-A
Securitization Trust Agreement, the Servicer shall prepare or cause to be
prepared, on behalf of the 1999-A Securitization Trust, the 1999-A Owner
Trustee, HTC LP and HTD LP any required federal tax information returns (in a
manner consistent with the treatment of the Notes as indebtedness). Also as
contemplated by Section 6.12 of the 1999-A Securitization Trust Agreement, if
and to the extent the 1999-A Securitization Trust is treated as an association
for federal income tax purposes, the Servicer shall prepare or cause to be
prepared any federal and state income tax returns that may be required with
respect to the 1999-A Securitization Trust or the assets thereof and shall
timely deliver any such returns to the 1999-A Owner Trustee for signature.
ARTICLE ELEVEN
SERVICER TERMINATION EVENTS
Section 11.01. SERVICER TERMINATION EVENTS; TERMINATION OF SERVICER.
(a) Upon the occurrence of (i) any Servicer Termination Event under the
Servicing Agreement relating to the 1999-A SUBI Assets (with the sole
modification being that the events described in Section 4.01(a)(vi) of the
Servicing Agreement shall be a 1999-A Servicer Termination Event the failure
described therein shall continue for a period of ten Business Days after (A)
written notice thereof shall have been given to the Servicer or (B) discovery
by the Servicer of such failure) or (ii) the failure by the Servicer to
deliver to the Origination Trustee, the 1999-A Owner Trustee or the 1999-A
Indenture Trustee any report relating to the 1999-A SUBI Assets and required
to be delivered to the Origination Trustee, the 1999-A Owner Trustee or the
1999-A Indenture Trustee pursuant to the Servicing Agreement or this 1999-A
Servicing Supplement within ten Business Days after the date any such report
is due (each, a "1999-A Servicer Termination Event"), the Servicer shall
provide to the 1999-A Indenture Trustee, the 1999-A Owner Trustee, and each
Holder, prompt notice of such failure or delay by the Servicer, together with
a description of the Servicer's efforts to perform its obligations.
In addition to the provisions of Section 4.01 of the Servicing
Agreement, and notwithstanding the foregoing, a delay or failure in
performance under Section 11.01(a)(ii) for a
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period of sixty Business Days shall not constitute a 1999-A Servicer Termination
Event if caused by a Force Majeure Event. Upon the occurrence of a Force
Majeure Event, the Servicer shall use commercially reasonable efforts to perform
its obligations in a timely manner and shall provide to the Origination Trustee,
the UTI Beneficiaries, each Related Beneficiary and each related Holder prompt
notice of the Force Majeure Event, the relevant failure or delay hereunder and a
description of its efforts to perform its obligations hereunder.
(b) In addition to the provisions of Section 4.01(b) of the Servicing
Agreement, if a 1999-A Servicer Termination Event shall have occurred and be
continuing, the Origination Trustee on behalf of the Origination Trust shall, at
the direction of the Required Related Holders, by notice given to the Servicer,
each Rating Agency, the Related Beneficiary and the holders of the Rated
Securities, terminate the rights and obligations of the Servicer under this
1999-A Servicing Supplement in accordance with such Section. If the Servicer is
removed as servicer with respect to servicing the 1999-A SUBI Assets, subject to
the consent of the Origination Trustee, the Required Related Holders shall
appoint a successor Servicer. The successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Origination
Trustee. Such successor Servicer shall be approved by the Origination Trustee,
such approval not to be unreasonably withheld or delayed. With respect to any
1999-A Servicer Termination Event, the Origination Trustee, acting on the
direction of the Required Related Holders, may waive any default of the
Servicer. For purposes of this Section 11.01(b), so long as the Lien of the
Indenture is in effect, the Required Related Holders shall be deemed to be,
until the Note Balance has been reduced to zero, the 1999-A Indenture Trustee
(as Registered Pledgee of the 1999-A SUBI Certificates), acting at the
direction of the Required Percentage of the Noteholders, and, thereafter, the
1999-A Owner Trustee, acting at the direction of the Required Percentage of the
Certificateholders.
ARTICLE TWELVE
MISCELLANEOUS
Section 12.01. TERMINATION OF AGREEMENT.
(a) In connection with any purchase by the Servicer of the corpus of
the 1999-A Securitization Trust pursuant to Section 7.02 of the 1999-A
Securitization Trust Agreement, and the Servicer's then succeeding to all of
the interest in the 1999-A SUBI represented by the 1999-A SUBI Certificates
and the Retained 1999-A SUBI Certificates, and if the UTI Beneficiaries shall
thereafter succeed to such interest in the 1999-A SUBI, the Servicer, upon
the direction of the UTI Beneficiaries as provided in Section 12.05 of the
1999-A SUBI Supplement, shall reallocate all 1999-A Contracts, 1999-A Leased
Vehicles and related 1999-A SUBI Assets to the UTI Sub-Trust.
(b) Except as provided in this Section 12.01, the respective duties
and obligations of the Servicer and the Origination Trustee with respect to
the 1999-A SUBI Assets created by the Servicing Agreement and this 1999-A
Servicing Supplement shall terminate upon the termination of the 1999-A
Securitization Trust Agreement pursuant to Section 7.01 thereof. Upon such
a termination, the Servicer shall remit it to the Origination Trustee or
any other
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Person entitled thereto all monies held by the Servicer with respect to the
1999-A SUBI Sub-Trust pursuant to the Servicing Agreement and this 1999-A
Servicing Supplement.
Section 12.02. AMENDMENT.
(a) Notwithstanding Section 6.02(a) of the Servicing Agreement, the
Servicing Agreement, as supplemented by this 1999-A Servicing Supplement, to
the extent that it applies to or affects the 1999-A SUBI Sub-Trust, may be
amended from time to time in a writing signed by the Origination Trustee, on
behalf of the Origination Trust, the Trust Agent (but only to the extent that
such amendment applies to or affects Section 11.01(b)) and the Servicer, with
the prior written consent of the 1999-A Owner Trustee, which shall be given
only in the circumstances contemplated by Section 9.01 of the 1999-A
Securitization Trust Agreement.
(b) The Servicer shall provide each Rating Agency prior notice of the
content of any proposed amendment to the Servicing Agreement, whether or not
such amendment relates to the 1999-A SUBI or requires approval of any Rating
Agency.
(c) Any amendment to the Origination Trust Agreement that applies to or
affects the UTI or any Other SUBI, in addition to the 1999-A SUBI Sub-Trust,
shall also be subject to the foregoing provisions of this Section 12.02.
Notwithstanding the foregoing, this Section 12.02 does not modify or supersede
any provision in the Origination Trust Agreement. Without limiting the
foregoing, any amendment of the Origination Trust Agreement or any other SUBI
Servicing Agreement that neither applies to nor affects the 1999-A SUBI shall
not require the consent of (i) the Beneficiaries of the 1999-A SUBI
Certificates, (ii) the Beneficiaries of the Retained 1999-A SUBI Certificates
or (iii) the 1999-A Owner Trustee.
Section 12.03. GOVERNING LAW. THIS 1999-A SERVICING SUPPLEMENT SHALL BE
CREATED UNDER AND GOVERNED BY AND CONSTRUED UNDER THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF
CONFLICTS OF LAWS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 12.04. NOTICES. The notice provisions of Section 6.05 of the
Servicing Agreement shall apply equally to this 1999-A Servicing Supplement,
provided that any notice to the 1999-A Indenture Trustee shall be addressed as
follows:
The Bank of New York
101 Barclay Street
Floor 12E
New York, New York 10286
Attention: Honda Auto Lease Trust 1999-A
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and any notice to the 1999-A Owner Trustee shall be addressed as follows:
U.S. Bank National Association
One Illinois Center
111 East Wacker Drive, Suite 3000
Chicago, Illinois 60601
Attention: Corporate Trust Office
The Servicer, the Origination Trustee, the 1999-A Owner Trustee and
the 1999-A Indenture Trustee may change its address for notices hereunder by
giving notice of such change to the other such Persons. All notices and
demands (i) shall be deemed to have been given upon delivery or tender of
delivery thereof to any officer or other duly authorized recipient of the
Person entitled to receive such notices and demands at the address of such
Person for notices hereunder, (ii) if given by the Origination Trustee shall be
deemed to have been given by all of the beneficiaries of the Origination Trust
and (iii) if given by the 1999-A Owner Trustee shall be deemed to be given by
the Certificateholders and the Noteholders.
Section 12.05. SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this 1999-A Servicing Supplement shall for
any reason whatsoever be held invalid, then such covenants, agreements,
provisions or terms shall be deemed severable from the remaining covenants,
agreements, provisions or terms of this 1999-A Servicing Supplement, and shall
in no way affect the validity or enforceability of the remaining covenants,
agreements and provisions or the rights of the parties hereto. To the extent
permitted by law, the parties hereto waive any provision of law that renders
any provision of this 1999-A Servicing Supplement invalid or unenforceable in
any respect.
Section 12.06. INSPECTION AND AUDIT RIGHTS. The Servicer agrees that, on
reasonable prior notice, it will permit any representative or designee of the
Origination Trustee, on behalf of the Origination Trust, during the normal
business hours of the Servicer, to examine all books of account, records,
reports and other papers of the Servicer relating to the Trust Assets, to make
copies and extracts therefrom, to cause such books to be audited by Independent
Accountants selected by the Origination Trustee, and to discuss the affairs,
finances and accounts relating to the Trust Assets with its officers, employees
and Independent Accountants (and by this provision the Servicer hereby
authorizes such Independent Accountants to discuss with such representatives
such affairs, finances and accounts), all at such reasonable times and as often
as may be reasonably requested. Such rights shall include, but shall not be
limited to, any off-site storage facilities at which any data (including
computerized records), together with all operating software and appropriate
documentation, may be held. The Origination Trustee agrees to keep
confidential all the confidential information of the Servicer acquired during
any such examination as if such information were its own confidential
information, except to the extent necessary for the purposes of this 1999-A
Servicing Supplement. The expenses incident to the exercise by the Origination
Trustee of any right under this Section 12.06 shall be reimbursable by the
Servicer.
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Section 12.07. THIRD PARTY BENEFICIARIES. The provisions of this 1999-A
Servicing Supplement insofar as they relate to the 1999-A SUBI Sub-Trust shall
be binding upon and inure to the benefit of the respective parties and their
permitted successors and assigns, the Origination Trustee on behalf of the
Origination Trust, the 1999-A Owner Trustee, the 1999-A Indenture Trustee and
each of the holders of any legal or beneficial interest in the 1999-A SUBI
Certificates or the Retained 1999-A SUBI Certificates, who shall be considered
to be third party beneficiaries hereof. Except as provided in this 1999-A
Servicing Supplement, no other Person will have any right or obligation
hereunder.
Section 12.08. TABLE OF CONTENTS, ARTICLE AND SECTION HEADINGS. The
Table of Contents, Article and Section headings herein are for convenience
of reference only, and shall not define or limit any of the provisions
hereof.
Section 12.09. COUNTERPARTS. This 1999-A Servicing Supplement may be
executed in any number of counterparts, each of which when so executed and
delivered shall be deemed to be an original, but all of which counterparts
shall together constitute but one and the same instrument.
Section 12.10. FURTHER ASSURANCES. Each party will do such acts, and
execute and deliver to any other party such additional documents or
instruments as may be reasonably requested, in order to effect the purposes
of this 1999-A Servicing Supplement and to better assure and confirm unto
the requesting party its rights, powers and remedies hereunder.
Section 12.11. NO WAIVER; CUMULATIVE REMEDIES. No failure to
exercise and no delay in exercising, on the part of any party hereto, any
right, remedy, power or privilege under this 1999-A Servicing Supplement
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 provided in this
1999-A Servicing Supplement and any supplements are cumulative and not
exhaustive of any rights, remedies, powers and privileges provided at law,
in equity or otherwise.
Section 12.12. NO PETITION. Each of the parties hereto covenants and
agrees that prior to the date which is one year and one day after the last
date upon which (a) each Class of Notes and the Certificates has been paid
in full, and (b) all obligations due under any other Securitization have
been paid in full, it will not institute against, or join any other Person
in instituting against, the 1999-A Securitization Trust, HTA LP, HTB LP,
HTC LP, HTD LP, any general partner of HTA LP, HTB LP, HTC LP or HTD LP,
the Origination Trustee, the Origination Trust, any Special Purpose
Affiliate, any UTI Beneficiary, any Beneficiary, and any general partner or
member (as applicable) of a Beneficiary or a Special Purpose Affiliate, any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding or other proceedings under any federal or state bankruptcy or
similar law. The foregoing shall not limit the 1999-A Indenture Trustee's
or 1999-A Owner Trustee's right to file any claim in or otherwise take
actions with respect to any such proceeding instituted by any Person not
under such a constraint. This Section 12.12 shall survive the termination
of this 1999-A Servicing Supplement or the
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resignation or removal of the 1999-A Owner Trustee or the 1999-A Indenture
Trustee under the 1999-A Securitization Trust Agreement or the Indenture,
respectively.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this 1999-A Servicing
Supplement to be duly executed by their respective officers duly authorized as
of the day and year first above written.
AMERICAN HONDA FINANCE CORPORATION,
as Servicer
By: _____________________________________________
Name: Y. Kohama
Title: President
HVT, INC.,
as Origination Trustee of the HONDA LEASE TRUST
By: _____________________________________________
Name: _______________________________________
Title: ______________________________________
HONDA TITLING A L.P., as UTI Beneficiary
By: HONDA TITLING A LLC, its general partner
By: HONDA TITLING INC., its manager
By: _____________________________________________
Name: Y. Kohama
Title: President
HONDA TITLING B L.P., as UTI Beneficiary
By: HONDA TITLING B LLC, its general partner
By: HONDA TITLING INC., its manager
By: _____________________________________________
Name: Y. Kohama
Title: President
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U.S. BANK NATIONAL ASSOCIATION,
as Trust Agent
By: _____________________________________________
Name: _______________________________________
Title: ______________________________________
Acknowledged and Agreed:
THE BANK OF NEW YORK,
as Indenture Trustee
By: _________________________
Name: ___________________
Title: __________________
U.S. BANK NATIONAL ASSOCIATION,
as Owner Trustee
By: _________________________
Name: __________________
Title: _________________
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EXHIBIT A
SCHEDULE OF 1999-A CONTRACTS AND
1999-A LEASED VEHICLES AS OF THE CUTOFF DATE
[Omitted. Copies on file with the Servicer, the Origination Trustee, the
1999-A Owner Trustee and the 1999-A Indenture Trustee.]
A-1
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EXHIBIT B
FORM OF SERVICER'S CERTIFICATE
B-1
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FORM OF 1999-A SUBI CERTIFICATES PURCHASE AND SALE AGREEMENT
THIS 1999-A SUBI CERTIFICATES PURCHASE AND SALE AGREEMENT (as supplemented,
amended or restated from time to time, the "1999-A SUBI Certificates Purchase
and Sale Agreement") is dated as of [ ] by and among HONDA TITLING A
L.P. ("HTA LP") and HONDA TITLING B L.P. ("HTB LP"), each a Delaware limited
partnership, as UTI beneficiaries (in such capacities, the "UTI Beneficiaries"),
and HONDA TITLING C L.P. ("HTC LP") and HONDA TITLING D L.P. ("HTD LP"), each a
Delaware limited partnership.
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered
into that Second Amended and Restated Trust and Servicing Agreement, dated as
of April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending
and restating that certain Trust Agreement, dated July 17, 1997, among the
same parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things,
taking assignments and conveyances of, and holding in trust and dealing in,
various Trust Assets. Capitalized terms used and not defined in these
Recitals have the meanings given in the Agreement of Definitions described in
Section 1.01 hereof.
B. The Origination Trust Agreement contemplates that certain of
the Trust Assets, other than those previously identified on the Origination
Trust's books and records as Other SUBI Assets and allocated to a separate
SUBI Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth
constitute SUBI Assets within such SUBI Sub-Trust, and that in connection
with any such allocation the Origination Trustee shall create a SUBI at the
direction of the UTI Beneficiaries and shall issue to, or to the order of,
the UTI Beneficiaries one or more SUBI Certificates evidencing such SUBI, and
the related SUBI Beneficiaries and their permitted assignees generally will
be entitled to the net cash flows arising from, but only from, such SUBI
Assets.
C. Concurrently herewith, HTA LP and HTB LP, as Grantors and UTI
Beneficiaries, HTC LP and HTD LP, as Transferors, the Servicer, the
Origination Trustee, the Delaware Trustee and U.S. Bank, as Trust Agent and,
for certain limited purposes set forth therein, as 1999-A Owner Trustee, are
entering into that certain 1999-A SUBI Supplement to Second Amended and
Restated Trust and Servicing Agreement dated as of [ ] (as
amended, supplemented or restated from time to time, the "1999-A SUBI
Supplement"), pursuant to which the parties thereto have agreed to supplement
the terms of the Origination Trust Agreement to cause the Origination Trustee
to (i) identify a portfolio of Trust Assets (the "1999-A SUBI Assets") to be
designated to a SUBI Portfolio (the "1999-A SUBI Portfolio") (ii) allocate
such 1999-A SUBI Assets to a SUBI Sub-Trust (the "1999-A SUBI Sub-Trust"),
(iii)
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create the related 1999-A SUBI and (iv) create and issue to or to the
order of (a) HTA LP one certificate representing a 98.01% interest in the
1999-A SUBI (the "HTA LP/HTC LP 1999-A SUBI Certificate") and one certificate
representing a 0.99% interest in the 1999-A SUBI (the "HTA LP/HTD LP 1999-A
SUBI Certificate"), and (b) HTB LP one certificate representing a 0.99%
interest in the 1999-A SUBI (the "HTB LP/HTC LP 1999-A SUBI Certificate") and
one certificate representing a 0.01% interest in the 1999-A SUBI (the "HTB
LP/HTD LP 1999-A SUBI Certificate" and, together with the HTA LP/HTC LP
1999-A SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI Certificate and the
HTB LP/HTD LP 1999-A SUBI Certificate, the "HTA LP/HTB LP 1999-A SUBI
Certificates").
D. Pursuant to the 1999-A SUBI Supplement, the parties hereto and
thereto desire that, concurrently herewith, U.S. Bank, as securities
intermediary (as defined in Section 8-102 of the UCC) (in such capacity, the
"1999-A SUBI Securities Intermediary"), establish two securities accounts (as
defined in Section 8-501 of the UCC) as follows: (i) a securities account in
the name of and for the benefit of HTA LP (the "HTA LP 1999-A SUBI Securities
Account") pursuant to that certain HTA LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ], between HTA LP and the 1999-A
SUBI Securities Intermediary (the "HTA LP 1999-A Securities SUBI Account
Control Agreement"), into which the HTA LP/HTC LP 1999-A SUBI Certificate and
the HTA LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTA LP directs the 1999-A SUBI Securities Intermediary to debit
the HTA LP 1999-A SUBI Securities Account to reflect the transfer of the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization and (ii) a securities account in the
name of and for the benefit of HTB LP (the "HTB LP 1999-A SUBI Securities
Account") pursuant to that certain HTB LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ] between HTB LP and the 1999-A
SUBI Securities Intermediary (the "HTB LP 1999-A SUBI Securities Account
Control Agreement") into which the HTB LP/HTC LP 1999-A SUBI Certificate and
the HTB LP/HTD LP 1999-A SUBI Certificate will be transferred and held until
such time as HTB LP directs the 1999-A SUBI Securities Intermediary to debit
the HTB LP 1999-A SUBI Securities Account to reflect the transfer of the HTB
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI
Certificate pursuant to a Securitization.
E. Concurrently herewith, the Origination Trustee, on behalf of the
Origination Trust, and the Servicer are entering into the 1999-A Servicing
Supplement (as amended, supplemented or restated from time to time, the "1999-A
Servicing Supplement") pursuant to which, among other things, the terms of the
Origination Trust Agreement and the Servicing Agreement, dated April 1, 1998, by
and among the UTI Beneficiaries, the Servicer and the Origination Trust will be
supplemented insofar as they apply solely to the servicing of the 1999-A SUBI
Sub-Trust created hereby to provide for further specific servicing obligations
that will benefit the SUBI Beneficiaries with respect to the 1999-A SUBI created
by the 1999-A SUBI Supplement.
F. The parties hereto desire to enter into this 1999-A SUBI
Certificates Purchase and Sale Agreement to provide for the sale, without
recourse, by the UTI Beneficiaries to HTC LP and HTD LP of all of the UTI
Beneficiaries' respective right, title and interest in and to the 1999-A SUBI
and the HTA/HTB 1999-A SUBI Certificates, all monies due thereon and paid
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thereon in respect thereof and the right to realize on any property that may be
deemed to secure the 1999-A SUBI, and all proceeds thereof. In connection
herewith, (1) HTA LP will transfer (a) the HTA LP/HTC LP 1999-A SUBI Certificate
to HTC LP and (b) the HTA LP/HTD LP 1999-A SUBI Certificate to HTD LP, and (2)
HTB LP will transfer (a) the HTB LP/HTC LP 1999-A SUBI Certificate to HTC LP and
(b) the HTB LP/HTD LP 1999-A SUBI Certificate to HTD LP, all consideration of
the pro rata cash payment to the UTI Beneficiaries of an amount equal to the
Aggregate Net Investment Value of the 1999-A SUBI as of [ ] (the
"Cutoff Date"), based on their respective share of the 1999-A SUBI less the cost
and expenses of the Securitization and the value of any securities issued in
connection with the Securitization and retained by the HTC LP and HTD LP.
G. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the
1999-A SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to
HTD LP representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD
LP 1999-A SUBI Certificate" and, together with the HTC LP 1999-A SUBI
Certificate, the "1999-A SUBI Certificates"), (iii) one certificate to HTC LP
representing a 0.198% beneficial interest in the 1999-A SUBI (the "HTC LP
Retained 1999-A SUBI Certificate") and (iv) one certificate to HTD LP
representing a 0.002% beneficial interest in the 1999-A SUBI (the "HTD LP
Retained 1999-A SUBI Certificate" and, together with the HTC LP Retained
1999-A SUBI Certificate, the "Retained 1999-A SUBI Certificates"). The
1999-A SUBI Certificates shall be exclusive of proceeds of the Residual Value
Insurance Policy or other residual value insurance policies relating to the
1999-A Contracts and 1999-A Leased Vehicles.
H. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTC LP (the "HTC LP 1999-A SUBI
Securities Account") pursuant to that certain HTC LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTC LP and the
1999-A SUBI Securities Intermediary (the "HTC LP 1999-A SUBI Securities
Account Control Agreement") into which the HTC LP 1999-A SUBI Certificate and
the HTC LP Retained 1999-A SUBI Certificate will initially be transferred and
held until such time as HTC LP directs the 1999-A SUBI Securities
Intermediary to debit the HTC LP 1999-A SUBI Securities Account to reflect
the transfer of the HTC LP 1999-A SUBI Certificate pursuant to a
Securitization involving the 1999-A SUBI.
I. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of HTD LP (the "HTD LP 1999-A SUBI
Securities Account") pursuant to that certain HTD LP 1999-A SUBI Securities
Account Control Agreement dated as of [ ], between HTD LP and the
1999-A SUBI Securities Intermediary (the "HTD LP 1999-A SUBI Securities Account
Control Agreement") into which the HTD LP 1999-A SUBI Certificate and the HTD
LP Retained 1999-A SUBI Certificate will initially be transferred and held
until such time as HTD LP directs the 1999-A SUBI Securities Intermediary to
debit the HTD LP 1999-A SUBI Securities Account to reflect the transfer of
the HTD LP 1999-A SUBI Certificate pursuant to a Securitization involving the
1999-A SUBI.
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J. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC)
in the name of and for the benefit of the 1999-A Securitization Trust (the
"99.8% 1999-A SUBI Securities Account") pursuant to that certain 99.8% 1999-A
SUBI Securities Account Control Agreement dated as of [ ], between the
1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, and the
1999-A SUBI Securities Intermediary (the "99.8% 1999-A SUBI Securities
Account Control Agreement"), into which the HTC LP 1999-A SUBI Certificate
will be transferred from the HTC LP 1999-A SUBI Securities Account and the
HTD LP 1999-A SUBI Certificate will be transferred from the HTD LP 1999-A
SUBI Securities Account, respectively, and held until such time as the 1999-A
Owner Trustee directs the 1999-A SUBI Securities Intermediary to debit the
[99.8% 1999-A SUBI Securities Account to reflect the transfer of the HTC LP
1999-A SUBI Certificate and the HTD LP 1999-A SUBI Certificate to the 1999-A
Securitization Trust pursuant to the Securitization involving the 1999-A
SUBI].
K. Concurrently herewith, HTC LP, HTD LP, U.S. Bank, as owner
trustee (in such capacity, the "1999-A Owner Trustee"), The Bank of New York, as
indenture trustee ("1999-A Indenture Trustee") and Wilmington Trust Company, as
Delaware owner trustee (the "Delaware Owner Trustee"), are entering into that
certain securitization trust agreement, dated as of [ ] (the "1999-A
Securitization Trust Agreement") pursuant to which the securitization trust (the
"1999-A Securitization Trust") will be formed and pursuant to which HTC LP and
HTD LP will transfer to the 1999-A Securitization Trust the 1999-A SUBI
Certificates, the 1999-A Indenture Trustee will issue the Notes and the 1999-A
Securitization Trust will issue the Certificates and deliver the Notes to HTC LP
and HTD LP. The HTC LP Retained 1999-A SUBI Certificate and the HTD LP Retained
1999-A SUBI Certificate will be retained by HTC LP and HTD LP, respectively.
L. Concurrently herewith, the 1999-A Indenture Trustee and the
1999-A Owner Trustee are entering into that certain indenture, dated as of
[ ] (the "Indenture"), pursuant to which the 1999-A Indenture
Trustee will issue the Notes and the 1999-A Owner Trustee will grant a
security interest in all of the assets held by the 1999-A Securitization
Trust, including the 1999-A SUBI Certificates, to the 1999-A Indenture
Trustee to secure the 1999-A Owner Trustee's obligations under the Indenture.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE ONE
DEFINITIONS
SECTION 1.01. DEFINITIONS.
For all purposes of this 1999-A SUBI Certificates Purchase and Sale
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, capitalized terms used and not otherwise defined herein
shall have the respective meanings ascribed thereto in the Agreement of
Definitions, dated as of [ ] (as amended, supplemented or restated
from time to time, the "Agreement of Definitions"), by and among the Origination
Trustee, the
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Delaware Trustee, the Servicer, HTA LP, HTB LP, HTC LP, HTD LP, the Delaware
Owner Trustee, the 1999-A Indenture Trustee and U.S. Bank, as trust agent and
as owner trustee. In the event of any conflict between a definition set
forth herein and in the Agreement of Definitions, the definition set forth
herein shall prevail.
SECTION 1.02. INTERPRETATION.
For all purposes of this 1999-A SUBI Certificates Purchase and Sale
Agreement, except as otherwise expressly provided or unless the context
otherwise requires, (i) terms used in this 1999-A SUBI Certificates Purchase and
Sale Agreement include, as appropriate, all genders and the plural as well as
the singular, (ii) references to this 1999-A SUBI Certificates Purchase and Sale
Agreement include all Exhibits and Schedules hereto, (iii) references to words
such as "herein", "hereof" and the like shall refer to this 1999-A SUBI
Certificates Purchase and Sale Agreement as a whole and not to any particular
part, Article or Section within this 1999-A SUBI Certificates Purchase and Sale
Agreement, (iv) references to a section such as "Section 2.01" or an Article
such as "Article Two" shall refer to the applicable Section or Article of this
1999-A SUBI Certificates Purchase and Sale Agreement, (v) the term "include" and
all variations thereof shall mean "include without limitation", (vi) the term
"or" shall mean "and/or", (vii) the term "proceeds" shall have the meaning
ascribed to such term in the UCC, (viii) the phrase "Origination Trustee, acting
on behalf of the Origination Trust," or words of similar import, shall be deemed
to refer to the Origination Trustee, acting on behalf of the Honda Lease Trust
and all beneficiaries thereof and (ix) the phrase "1999-A Owner Trustee, acting
on behalf of the 1999-A Securitization Trust," or words of similar import, shall
be deemed to refer to the 1999-A Owner Trustee, acting on behalf of the Honda
Auto Lease Trust 1999-A and all beneficiaries thereof.
ARTICLE TWO
PURCHASE AND SALE OF 1999-A SUBI
SECTION 2.01. SALE OF 1999-A SUBI.
(a) In consideration of HTC LP's delivery to, or upon the order of, (i)
cash to HTA LP in the amount of $_________ and cash to HTB LP in the amount
of $_________, representing the cash proceeds from the sale of the Notes net
of certain expenses, and (ii) (A) $_________ evidenced by a subordinated
non-recourse promissory note in favor of HTA LP in the amount of $_________
and (B) $_________ evidenced by a subordinated non-recourse promissory note
in favor of HTB LP in the amount of $_________, each of the UTI Beneficiaries
does hereby absolutely sell, assign and otherwise convey to HTC LP, without
recourse, and HTC LP does hereby purchase and acquire, as of the date set
forth above:
(1) all right, title and interest in and to the 1999-A SUBI evidenced
by the HTA LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI
Certificate, and all monies due thereon and paid thereon or in respect thereof;
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(2) the right to realize upon any property that underlies or may be
deemed to secure the 1999-A SUBI to the extent of amounts payable under the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate;
and
(3) all proceeds of the foregoing.
(b) In consideration of HTD LP's delivery to, or upon the order of, (i)
cash to HTA LP in the amount of $_________ and cash to HTB LP in the amount
of $_________, representing the cash proceeds from the sale of the Notes net
of certain expenses, and (ii) (A) $_________ evidenced by a subordinated
non-recourse promissory note in favor of HTA LP in the amount of $_________
and (B) $_________ evidenced by a subordinated non-recourse promissory note
in favor of HTB LP in the amount of $_________, each of the UTI Beneficiaries
does hereby absolutely sell, assign and otherwise convey to HTD LP, without
recourse, and HTD LP does hereby purchase and acquire, as of the date set
forth above:
(1) all right, title and interest in and to the 1999-A SUBI evidenced
by the HTA LP/HTD LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI
Certificate, and all monies due thereon and paid thereon or in respect thereof;
(2) the right to realize upon any property that underlies or may be
deemed to secure the 1999-A SUBI to the extent of amounts payable under the HTA
LP/HTD LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate;
and
(3) all proceeds of the foregoing.
(c) It is the express and specific intent of the parties that the transfer
of the HTA LP/HTC LP 1999-A SUBI Certificate and the 1999-A SUBI represented
thereby and the HTB LP/HTC LP 1999-A SUBI Certificate and the 1999-A SUBI
represented thereby from HTA LP and HTB LP to HTC LP, as provided for in this
1999-A SUBI Certificates Purchase and Sale Agreement, is and shall be construed
for all purposes as a true, complete and absolute sale of the HTA LP/HTC LP
1999-A SUBI Certificate and the 1999-A SUBI represented thereby and the HTB
LP/HTC LP 1999-A SUBI Certificate and the 1999-A SUBI represented thereby and
all of the related property and rights as described in subsection (a) above.
The parties hereto represent and agree that the HTA LP/HTC LP 1999-A SUBI
Certificate and the 1999-A SUBI represented thereby and the HTB LP/HTC LP 1999-A
SUBI Certificate and the 1999-A SUBI represented thereby are hereby transferred
from HTA LP and HTB LP to HTC LP for fair consideration and without the intent
to hinder, delay or defraud creditors of HTA LP, HTB LP or HTC LP.
(d) It is the express and specific intent of the parties that the transfer
of the HTA LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI represented
thereby and the HTB LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI
represented thereby from HTA LP and HTB LP to HTD LP, as provided for in this
1999-A SUBI Certificates Purchase and Sale Agreement, is and shall be construed
for all purposes as a true, complete and absolute sale of the HTA LP/HTD LP
1999-A SUBI Certificate and the 1999-A SUBI represented thereby and the HTB
LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI represented thereby and
all of the related property and rights as described in subsection (b) above.
The parties hereto represent
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and agree that the HTA LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI
represented thereby and the HTB LP/HTD LP 1999-A SUBI Certificate and the
1999-A SUBI represented thereby are hereby transferred from HTA LP and HTB LP
to HTD LP for fair consideration and without the intent to hinder, delay or
defraud creditors of HTA LP, HTB LP or HTD LP.
(e) In connection with the foregoing conveyances to HTC LP, each of HTA LP
and HTB LP agree to record and file, at its own expense, a financing statement
with respect to the HTA LP/HTC LP 1999-A SUBI Certificate and the 1999-A SUBI
represented thereby and the HTB LP/HTC LP 1999-A SUBI Certificate and the 1999-A
SUBI represented thereby and all of the related property and rights specified in
subsection (a) above necessary (i) to provide third parties with notice of the
conveyance hereunder and (ii) to perfect the sale of the HTA LP/HTC LP 1999-A
SUBI Certificate and the 1999-A SUBI represented thereby, the HTB LP/HTC LP
1999-A SUBI Certificate and the 1999-A SUBI represented thereby and the proceeds
thereof to HTC LP (as well as to file any continuation statements required by
applicable state law to maintain the perfection afforded by the filing of such
financing statement), 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 2.01(e), consist of telephone confirmation of
such filing with the file stamped copy of each such filing to be provided to HTC
LP in due course), as soon as is practicable after receipt by HTA LP and HTB LP
thereof.
The parties hereto intend that the conveyances to HTC LP hereunder be a sale.
In the event that the conveyances hereunder are for any reason not considered a
sale, the conveyances described above and all filings described in the foregoing
paragraph shall give HTC LP a first priority perfected security interest in, to
and under the property and rights conveyed hereunder and all proceeds of any of
the foregoing and this 1999-A SUBI Certificates Purchase and Sale Agreement
shall constitute a security agreement under applicable law.
(f) In connection with the foregoing conveyances to HTD LP, each of the
UTI Beneficiaries agrees to record and file, at its own expense, a financing
statement with respect to the HTA LP/HTD LP 1999-A SUBI Certificate and the
1999-A SUBI represented thereby and the HTB LP/HTD LP 1999-A SUBI Certificate
and the 1999-A SUBI represented thereby and all of the related property and
rights specified in subsection (b) above necessary (i) to provide third parties
with notice of the conveyance hereunder and (ii) to perfect the sale of the HTA
LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI represented thereby and
the HTB LP/HTD LP 1999-A SUBI Certificate and the 1999-A SUBI represented
thereby and the proceeds thereof to HTD LP (as well as to file any continuation
statements required by applicable state law to maintain the perfection afforded
by the filing of such financing statement), 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 2.01(f), consist of
telephone confirmation of such filing with the file stamped copy of each such
filing to be provided to HTD LP in due course), as soon as is practicable after
receipt by HTA LP and HTB LP thereof.
The parties hereto intend that the conveyances to HTD LP hereunder be a sale.
In the event that the conveyances hereunder are for any reason not considered
a sale, the conveyances described above and all filings described in the
foregoing paragraph shall give HTD LP a first
7
<PAGE>
priority perfected security interest in, to and under the property and rights
conveyed hereunder and all proceeds of any of the foregoing and this 1999-A
SUBI Certificates Purchase and Sale Agreement shall constitute a security
agreement under applicable law.
SECTION 2.02. ACCEPTANCE BY HTC LP AND HTD LP.
(a) HTC LP agrees to comply with all covenants and restrictions
applicable to an owner of the 1999-A SUBI, the HTA LP/HTC LP 1999-A SUBI
Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate, whether set forth
therein, in the Origination Trust Agreement, the 1999-A SUBI Supplement or
otherwise, and assumes all obligations and liabilities, if any associated
therewith.
(b) HTD LP agrees to comply with all covenants and restrictions applicable
to an owner of the 1999-A SUBI, the HTA LP/HTD LP 1999-A SUBI Certificate and
the HTB LP/HTD LP 1999-A SUBI Certificate, whether set forth therein, in the
Origination Trust Agreement, the 1999-A SUBI Supplement or otherwise, and
assumes all obligations and liabilities, if any associated therewith.
SECTION 2.03. TRANSFER OF THE CERTIFICATES.
(a) In connection with the issuance of the HTA LP/HTC LP 1999-A SUBI
Certificate and the HTA LP/HTD LP 1999-A SUBI Certificate, the 1999-A SUBI
Securities Intermediary has established, in the name of and for the benefit
of HTA LP, a "securities account" (as such term is defined in Section 8-501
of the UCC) (the "HTA LP 1999-A SUBI Securities Account") pursuant to that
certain HTA LP 1999-A SUBI Securities Account Control Agreement, dated as of
[ ], between HTA LP and the 1999-A SUBI Securities Intermediary.
HTA LP shall accept the transfer of the HTA LP/HTC LP 1999-A SUBI Certificate
and the HTA LP/HTD LP 1999-A SUBI Certificate to the HTA LP 1999-A SUBI
Securities Account.
(b) In connection with the issuance of the HTB LP/HTC LP 1999-A SUBI
Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate, the 1999-A SUBI
Securities Intermediary has established, in the name of and for the benefit
of HTB LP, a "securities account" (as such term is defined in Section 8-501
of the UCC) (the "HTB LP 1999-A SUBI Securities Account") pursuant to that
certain HTB LP 1999-A SUBI Securities Account Control Agreement, dated as of
[ ], between HTB LP and the 1999-A SUBI Securities Intermediary.
HTB LP shall accept the transfer of the HTB LP/HTC LP 1999-A SUBI Certificate
and the HTB LP/HTD LP 1999-A SUBI Certificate to the HTB LP 1999-A SUBI
Securities Account.
(c) In connection with the subsequent transfer of the HTA LP/HTC LP
1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate, the
1999-A SUBI Securities Intermediary has established, in the name of and for
the benefit of HTC LP, a "securities account" (as such term is defined in
Section 8-501 of the UCC) Securities (the "HTC LP 1999-A SUBI Securities
Account") pursuant to that certain HTC LP 1999-A SUBI Securities Account
Control Agreement, dated as of [ ], between HTC LP and the 1999-A
SUBI Securities Intermediary. HTC LP shall accept the transfer of the HTA
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI
Certificate to the HTC LP 1999-A SUBI Securities Account.
8
<PAGE>
(d) In connection with the subsequent transfer of the HTA LP/HTD LP
1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate, the
1999-A SUBI Securities Intermediary has established, in the name of and for
the benefit of HTD LP, a "securities account" (as such term is defined in
Section 8-501 of the UCC) (the "HTD LP 1999-A SUBI Securities Account")
pursuant to that certain HTD LP 1999-A SUBI Securities Account Control
Agreement, dated as of [ ], between HTD LP and the 1999-A SUBI
Securities Intermediary. HTD LP shall accept the transfer of the HTA LP/HTD
LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate to
the HTD LP 1999-A SUBI Securities Account.
(e) On the Closing Date, HTA LP hereby agrees to (i) instruct the
1999-A SUBI Securities Intermediary to transfer (A) the HTA LP/HTC LP 1999-A
SUBI Certificate from the HTA LP 1999-A SUBI Securities Account to the HTC LP
1999-A SUBI Securities Account for the benefit of HTC LP and (B) the HTA
LP/HTD LP 1999-A SUBI Certificate from the HTA LP 1999-A SUBI Securities
Account to the HTD LP 1999-A SUBI Securities Account for the benefit of HTD
LP.
(f) On the Closing Date, HTB LP hereby agrees to (i) instruct the
1999-A SUBI Securities Intermediary to transfer (A) the HTB LP/HTC LP 1999-A
SUBI Certificate from the HTB LP 1999-A SUBI Securities Account to the HTC LP
1999-A SUBI Securities Account for the benefit of HTC LP and (B) the HTB
LP/HTD LP 1999-A SUBI Certificate from the HTB LP 1999-A SUBI Securities
Account to the HTD LP 1999-A SUBI Securities Account for the benefit of HTD
LP.
ARTICLE THREE
MISCELLANEOUS
SECTION 3.01. AMENDMENT.
This 1999-A SUBI Certificates Purchase and Sale Agreement may be amended
from time to time in a writing signed by the parties hereto, with the prior
written consent of the 1999-A Owner Trustee, which shall be given only in the
circumstances contemplated by Section 9.01 of the 1999-A Securitization Trust
Agreement.
SECTION 3.02. GOVERNING LAW.
This 1999-A SUBI Certificates Purchase and Sale Agreement shall be created
under and governed by and construed under the internal laws of the State of
Delaware, without regard to any otherwise applicable principles of conflict of
laws and the obligations, rights and remedies of the parties hereunder shall be
determined in accordance with such laws.
SECTION 3.03. SEVERABILITY.
If one or more of the covenants, agreements, provisions or terms of this
1999-A SUBI Certificates Purchase and Sale 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 this 1999-A SUBI Certificates Purchase and Sale Agreement, and shall
in no way affect the validity or enforceability of the other provisions of this
9
<PAGE>
1999-A SUBI Certificates Purchase and Sale Agreement, or the rights of any
parties hereto. To the extent permitted by law, the parties hereto waive any
provision of law that renders any provision of this 1999-A SUBI Certificates
Purchase and Sale Agreement invalid or unenforceable in any respect.
SECTION 3.04. BINDING EFFECT.
The provisions of this 1999-A SUBI Certificates Purchase and Sale Agreement
shall be binding upon and inure to the benefit of the respective successors and
permitted assigns of the parties hereto.
SECTION 3.05. ARTICLE AND SECTION HEADINGS.
The article and section headings herein are for convenience of reference
only, and shall not limit or otherwise affect the meaning hereof.
SECTION 3.06. COUNTERPARTS.
This 1999-A SUBI Certificates Purchase and Sale Agreement may be executed
in any number of counterparts, each of which so executed and delivered shall be
deemed to be an original, but all of which counterparts shall together
constitute but one and the same instrument.
SECTION 3.07. FURTHER ASSURANCES.
Each party will do such acts, and execute and deliver to any other party
such additional documents or instruments as may be reasonably requested in order
to effect the purposes of this 1999-A SUBI Certificates Purchase and Sale
Agreement and to better assure and confirm unto the requesting party its rights,
powers and remedies hereunder.
SECTION 3.08. THIRD-PARTY BENEFICIARIES.
This 1999-A SUBI Certificates Purchase and Sale Agreement will inure to the
benefit of and be binding upon each subsequent holder of any legal or beneficial
interest in any of the HTA LP/HTB LP 1999-A SUBI Certificates or certificates
issued in replacement thereof (which holders shall include the 1999-A
Securitization Trust and the holders of any securities issued thereby), who
shall be considered to be third-party beneficiaries hereof. Except as otherwise
provided in this 1999-A SUBI Certificates Purchase and Sale Agreement, no other
Person will have any right or obligation hereunder.
SECTION 3.09. NO PETITION.
Each of the parties hereto covenants and agrees that prior to the date
which is one year and one day after the last date upon which (a) each Class of
Notes and the Certificates has been paid in full, and (b) all obligations due
under any other Securitization have been paid in full, it will not institute
against, or join any other Person in instituting against, the 1999-A
Securitization Trust, HTA LP, HTB LP, HTC LP, HTD LP, any general partner or
member (as applicable) of a
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<PAGE>
UTI Beneficiary or of a Transferor which is a partnership or a limited
liability company, the Origination Trustee, the Origination Trust, any
Special Purpose Affiliate, any UTI Beneficiary, any Beneficiary, and any
general partner or member (as applicable) of a Beneficiary or of a Special
Purpose Affiliate partnership (or any of their respective general partners)
that is a partnership or a limited liability company, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law. The
foregoing shall not limit the 1999-A Indenture Trustee's or 1999-A Owner
Trustee's right to file any claim in or otherwise take actions with respect
to any such proceeding instituted by any Person not under such a constraint.
This Section 3.09 shall survive the termination of this 1999-A SUBI
Certificates Purchase and Sale Agreement or the resignation or removal of the
1999-A Owner Trustee or the 1999-A Indenture Trustee under the 1999-A
Securitization Trust Agreement or the Indenture, respectively.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this 1999-A SUBI
Certificates Purchase and Sale Agreement to be duly executed by their respective
officers duly authorized as of the day and year first above written.
HONDA TITLING A L.P., as UTI Beneficiary
By: HONDA TITLING A LLC, its general partner
By: HONDA TITLING INC., as its manager
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
HONDA TITLING B L.P., as UTI Beneficiary
By: HONDA TITLING B LLC, its general partner
By: HONDA TITLING INC., as its manager
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
HONDA TITLING C L.P.
By: HONDA TITLING C LLC, its general partner
By: HONDA FUNDING INC., as its manager
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
HONDA TITLING D L.P.
By: HONDA TITLING D LLC, its general partner
By: HONDA FUNDING INC., as its manager
By:
-----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AGREEMENT OF DEFINITIONS
RELATING TO THE HONDA AUTO LEASE TRUST 1999-A
by and among
Honda Titling A L.P.
and
Honda Titling B L.P.,
as UTI Beneficiaries and Grantors,
U.S. Bank National Association,
as Trust Agent and as Owner Trustee,
American Honda Finance Corporation, as Servicer,
HVT, Inc., as Origination Trustee,
Delaware Trust Capital Management, Inc.,
as Delaware Trustee
Wilmington Trust Company,
as Delaware Owner Trustee,
The Bank of New York, as Indenture Trustee,
and
Honda Titling C L.P.
and
Honda Titling D L.P.,
as Transferors
------------------------------
Dated as of [June 30, 1999]
------------------------------
<PAGE>
AGREEMENT OF DEFINITIONS
This Agreement of Definitions (this "Agreement of Definitions"), dated
as of [June 30], 1999, is by and among Honda Titling A L.P. ("HTA LP") and Honda
Titling B L.P. ("HTB LP"), each a Delaware limited partnership, as grantors and
initial beneficiaries of the Honda Lease Trust, a Delaware business trust,
American Honda Finance Corporation, a California corporation, as servicer (in
such capacity, the "Servicer"), U.S. Bank National Association ("U.S. Bank"), a
national banking association, as trust agent (in such capacity, the "Trust
Agent") and owner trustee of the Honda Auto Lease Trust 1999-A (in such
capacity, the "1999-A Owner Trustee"), HVT, Inc., as origination trustee of the
Honda Lease Trust (in such capacity, the "Origination Trustee"), Delaware Trust
Capital Management, Inc., as Delaware trustee of the Honda Lease Trust (in such
capacity, the "Delaware Trustee"), Wilmington Trust Company, as Delaware owner
trustee of the Honda Auto Lease Trust 1999-A (in such capacity, the "Delaware
Owner Trustee"), The Bank of New York, as indenture trustee of the Honda Auto
Lease Trust 1999-A (in such capacity, the "Indenture Trustee"), Honda Titling C
L.P. ("HTC LP") and Honda Titling D L.P. ("HTD LP"), each a Delaware limited
partnership, as transferors (in such capacity, the "Transferors").
RECITALS
A. HTA LP and HTB LP, as Grantors and UTI Beneficiaries, the
Servicer, the Origination Trustee, the Delaware Trustee, and, for certain
limited purposes set forth therein, U.S. Bank, as Trust Agent, have entered into
that Second Amended and Restated Trust and Servicing Agreement, dated as of
April 1, 1998, amending and restating that certain Trust and Servicing
Agreement, dated as of September 1, 1997, among the same parties, amending and
restating that certain Trust Agreement, dated July 17, 1997, among the same
parties (as supplemented, amended or restated from time to time, the
"Origination Trust Agreement"), pursuant to which the Honda Lease Trust (the
"Origination Trust") was formed for the purpose of, among other things, taking
assignments and conveyances of, and holding in trust and dealing in, various
Trust Assets. Capitalized terms used and not defined in these Recitals have the
meanings given in this Agreement of Definitions described in Section 1.01
hereof.
B. The Origination Trust Agreement contemplates that certain of the
Trust Assets, other than those previously identified on the Origination Trust's
books and records as Other SUBI Assets and allocated to a separate SUBI
Sub-Trust, may be allocated to a SUBI Sub-Trust and thenceforth constitute SUBI
Assets within such SUBI Sub-Trust, and that in connection with any such
allocation the Origination Trustee shall create a SUBI at the direction of the
UTI Beneficiaries and shall issue to, or to the order of, the UTI Beneficiaries
one or more SUBI Certificates evidencing such SUBI, and the related SUBI
Beneficiaries and their permitted assignees generally will be entitled to the
net cash flows arising from, but only from, such SUBI Assets.
C. Concurrently herewith, HTA LP and HTB LP, as Grantors and UTI
Beneficiaries, HTC LP and HTD LP, as Transferors, the Servicer, the Origination
Trustee, the Delaware Trustee and U.S. Bank, as Trust Agent and, for certain
limited purposes set forth therein, as 1999-A Owner Trustee, are entering into
that certain 1999-A SUBI Supplement to
<PAGE>
Second Amended and Restated Trust and Servicing Agreement dated as of [June 30,
1999] (as amended, supplemented or restated from time to time, the "1999-A SUBI
Supplement"), pursuant to which the parties thereto have agreed to supplement
the terms of the Origination Trust Agreement to cause the Origination Trustee to
(i) identify a portfolio of Trust Assets (the "1999-A SUBI Assets") to be
designated to a SUBI Portfolio (the "1999-A SUBI Portfolio") (ii) allocate such
1999-A SUBI Assets to a SUBI Sub-Trust (the "1999-A SUBI Sub-Trust"), (iii)
create the related 1999-A SUBI and (iv) create and issue to or to the order of
(a) HTA LP one certificate representing a 98.01% interest in the 1999-A SUBI
(the "HTA LP/HTC LP 1999-A SUBI Certificate") and one certificate representing a
0.99% interest in the 1999-A SUBI (the "HTA LP/HTD LP 1999-A SUBI Certificate"),
and (b) HTB LP one certificate representing a 0.99% interest in the 1999-A SUBI
(the "HTB LP/HTC LP 1999-A SUBI Certificate") and one certificate representing a
0.01% interest in the 1999-A SUBI (the "HTB LP/HTD LP 1999-A SUBI Certificate"
and, together with the HTA LP/HTC LP 1999-A SUBI Certificate, the HTA LP/HTD LP
1999-A SUBI Certificate and the HTB LP/HTC LP 1999-A SUBI Certificate, the "HTA
LP/HTB LP 1999-A SUBI Certificates").
D. Pursuant to the 1999-A SUBI Supplement, the parties hereto and
thereto desire that, concurrently herewith, U.S. Bank, as securities
intermediary (as defined in Section 8-102 of the UCC) (in such capacity, the
"1999-A SUBI Securities Intermediary"), establish two securities accounts (as
defined in Section 8-501 of the UCC) as follows: (i) a securities account in the
name of and for the benefit of HTA LP (the "HTA LP 1999-A SUBI Securities
Account") pursuant to that certain HTA LP 1999-A SUBI Securities Account Control
Agreement, dated as of [June 30, 1999], between HTA LP and the 1999-A SUBI
Securities Intermediary (the "HTA LP 1999-A SUBI Securities Account Control
Agreement"), into which the HTA LP/HTC LP 1999-A SUBI Certificate and the HTA
LP/HTD LP 1999-A SUBI Certificate will be transferred and held until such time
as HTA LP directs the 1999-A SUBI Securities Intermediary to debit the HTA LP
1999-A SUBI Securities Account to reflect the transfer of the HTA LP/HTC LP
1999-A SUBI Certificate and the HTA LP/HTD LP 1999-A SUBI Certificate pursuant
to a Securitization and (ii) a securities account in the name of and for the
benefit of HTB LP (the "HTB LP 1999-A SUBI Securities Account") pursuant to that
certain HTB LP 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999] between HTB LP and the 1999-A SUBI Securities Intermediary (the
"HTB LP 1999-A SUBI Securities Account Control Agreement") into which the HTB
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate
will be transferred and held until such time as HTB LP directs the 1999-A SUBI
Securities Intermediary to debit the HTB LP 1999-A SUBI Securities Account to
reflect the transfer of the HTB LP/HTC LP 1999-A SUBI Certificate and the HTB
LP/HTD LP 1999-A SUBI Certificate pursuant to a Securitization.
E. Concurrently herewith, the Origination Trustee, on behalf of the
Origination Trust, and the Servicer are entering into the 1999-A Servicing
Supplement (as amended, supplemented or restated from time to time, the "1999-A
Servicing Supplement") pursuant to which, among other things, the terms of the
Origination Trust Agreement and the Servicing Agreement, dated April 1, 1998, by
and among the UTI Beneficiaries, the Servicer and the Origination Trust will be
supplemented insofar as they apply solely to the servicing of the 1999-A SUBI
Sub-Trust created hereby to provide for further specific servicing obligations
that
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<PAGE>
will benefit the SUBI Beneficiaries with respect to the 1999-A SUBI created by
the 1999-A SUBI Supplement.
F. Concurrently herewith, the UTI Beneficiaries, HTC LP and HTD LP
are entering into that certain 1999-A SUBI Certificates Purchase and Sale
Agreement, dated as of [June 30, 1999] (the "1999-A SUBI Certificates Purchase
and Sale Agreement"), pursuant to which the UTI Beneficiaries will sell, without
recourse, to HTC LP and HTD LP, all of their respective right, title and
interest in and to the 1999-A SUBI and the HTA LP/HTB LP 1999-A SUBI
Certificates, all monies due thereon and paid thereon in respect thereof and the
right to realize on any property that may be deemed to secure the 1999-A SUBI,
and all proceeds thereof. In connection therewith, and concurrently herewith
and therewith, (1) HTA LP will transfer (a) the HTA LP/HTC LP 1999-A SUBI
Certificate to HTC LP and (b) the HTA LP/HTD LP 1999-A SUBI Certificate to HTD
LP, and (2) HTB LP will transfer (a) the HTB LP/HTC LP 1999-A SUBI Certificate
to HTC LP and (b) the HTB LP/HTD LP 1999-A SUBI Certificate to HTD LP, all
consideration of the pro rata cash payment to the UTI Beneficiaries of an amount
equal to the Aggregate Net Investment Value of the 1999-A SUBI as of [June 30,
1999] (the "Cutoff Date"), based on their respective share of the 1999-A SUBI
less the cost and expenses of the Securitization and the value of any securities
issued in connection with the Securitization and retained by the HTC LP and HTD
LP.
G. Concurrently herewith, HTC LP and HTD LP will submit the HTA
LP/HTB LP 1999-A SUBI Certificates to the Origination Trustee and direct the
Origination Trustee to issue four new SUBI Certificates as follows: (i) one
certificate to HTC LP representing a 98.802% beneficial interest in the 1999-A
SUBI (the "HTC LP 1999-A SUBI Certificate"), (ii) one certificate to HTD LP
representing a 0.998% beneficial interest in the 1999-A SUBI (the "HTD LP 1999-A
SUBI Certificate" and, together with the HTC LP 1999-A SUBI Certificate, the
"1999-A SUBI Certificates"), (iii) one certificate to HTC LP representing a
0.198% beneficial interest in the 1999-A SUBI (the "HTC LP Retained 1999-A SUBI
Certificate") and (iv) one certificate to HTD LP representing a 0.002%
beneficial interest in the 1999-A SUBI (the "HTD LP Retained 1999-A SUBI
Certificate" and, together with the HTC LP Retained 1999-A SUBI Certificate, the
"Retained 1999-A SUBI Certificates"). The 1999-A SUBI Certificates shall be
exclusive of proceeds of the Residual Value Insurance Policy or other residual
value insurance policies relating to the 1999-A Contracts and 1999-A Leased
Vehicles.
H. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC) in
the name of and for the benefit of HTC LP (the "HTC LP 1999-A SUBI Securities
Account") pursuant to that certain HTC LP 1999-A SUBI Securities Account Control
Agreement dated as of [June 30, 1999], between HTC LP and the 1999-A SUBI
Securities Intermediary (the "HTC LP 1999-A SUBI Securities Account Control
Agreement") into which the HTC LP 1999-A SUBI Certificate and the HTC LP
Retained 1999-A SUBI Certificate will initially be transferred and held until
such time as HTC LP directs the 1999-A SUBI Securities Intermediary to debit the
HTC LP 1999-A SUBI Securities Account to reflect the transfer of the HTC LP
1999-A SUBI Certificate pursuant to a Securitization involving the 1999-A SUBI.
3
<PAGE>
I. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC) in
the name of and for the benefit of HTD LP (the "HTD LP 1999-A SUBI Securities
Account") pursuant to that certain HTD LP 1999-A SUBI Securities Account Control
Agreement dated as of [June 30, 1999], between HTD LP and the 1999-A SUBI
Securities Intermediary (the "HTD LP 1999-A SUBI Securities Account Control
Agreement") into which the HTD LP 1999-A SUBI Certificate and the HTD LP
Retained 1999-A SUBI Certificate will initially be transferred and held until
such time as HTD LP directs the 1999-A SUBI Securities Intermediary to debit the
HTD LP 1999-A SUBI Securities Account to reflect the transfer of the HTD LP
1999-A SUBI Certificate pursuant to a Securitization involving the 1999-A SUBI.
J. Concurrently herewith, the 1999-A SUBI Securities Intermediary
will establish a securities account (as defined in Section 8-501 of the UCC) in
the name of and for the benefit of the 1999-A Securitization Trust (the "99.8%
1999-A SUBI Securities Account") pursuant to that certain 99.8% 1999-A SUBI
Securities Account Control Agreement dated as of [June 30, 1999], between the
1999-A Owner Trustee, on behalf of the 1999-A Securitization Trust, and the
1999-A SUBI Securities Intermediary (the "99.8% 1999-A SUBI Securities Account
Control Agreement"), into which the HTC LP 1999-A SUBI Certificate will be
transferred from the HTC LP 1999-A SUBI Securities Account and the HTD LP 1999-A
SUBI Certificate will be transferred from the HTD LP 1999-A SUBI Securities
Account, respectively, and held until such time as the 1999-A Owner Trustee
directs the 1999-A SUBI Securities Intermediary to debit the [99.8% 1999-A SUBI
Securities Account to reflect the transfer of the HTC LP 1999-A SUBI Certificate
and the HTD LP 1999-A SUBI Certificate to the 1999-A Securitization Trust
pursuant to the Securitization involving the 1999-A SUBI.]
K. Concurrently herewith, HTC LP, HTD LP, U.S. Bank, as owner
trustee (in such capacity, the "1999-A Owner Trustee"), The Bank of New York, as
indenture trustee ("1999-A Indenture Trustee") and Wilmington Trust Company, as
Delaware owner trustee (the "Delaware Owner Trustee"), are entering into that
certain securitization trust agreement, dated as of [June 30, 1999] (the "1999-A
Securitization Trust Agreement") pursuant to which the securitization trust (the
"1999-A Securitization Trust") will be formed and pursuant to which HTC LP and
HTD LP will transfer to the 1999-A Securitization Trust the 1999-A SUBI
Certificates, the 1999-A Indenture Trustee will issue the Notes and the 1999-A
Securitization Trust will issue the Certificates and deliver the Notes to HTC LP
and HTD LP. The HTC LP Retained 1999-A SUBI Certificate and the HTD LP Retained
1999-A SUBI Certificate will be retained by HTC LP and HTD LP, respectively.
L. Concurrently herewith, the 1999-A Indenture Trustee and the
1999-A Owner Trustee are entering into that certain indenture, dated as of [June
30, 1999] (the "Indenture"), pursuant to which the 1999-A Indenture Trustee will
issue the Notes and the 1999-A Owner Trustee will grant a security interest in
all of the assets held by the 1999-A Securitization Trust, including the 1999-A
SUBI Certificates, to the 1999-A Indenture Trustee to secure the 1999-A Owner
Trustee's obligations under the Indenture.
M. The parties hereto have agreed to enter into this Agreement of
Definitions in an effort to establish and agree upon a single set of definitions
for any capitalized term used and
4
<PAGE>
not otherwise defined in any documents executed in connection with the 1999-A
SUBI if such document references this Agreement of Definitions.
NOW, THEREFORE, in consideration of the parties' mutual agreement to
rely upon the definitions contained herein in the interpretation of the 1999-A
Servicing Supplement, the 1999-A SUBI Supplement, the 1999-A Securitization
Trust Agreement and various other documents relating to the transactions
described therein, the parties hereto agree as follows:
Section 1.01. DEFINITIONS. In the event of any conflict between a
definition set forth both herein and in any document relating to such
Securitization, including the 1999-A SUBI Supplement or the 1999-A Servicing
Supplement, the definitions set forth therein shall prevail. For all purposes
of this Agreement of Definitions, except as otherwise expressly provided or
unless the context otherwise requires, (i) terms used in this Agreement of
Definitions include, as appropriate, all genders and the plural as well as the
singular, (ii) the term "include" and all variations thereof means "include
without limitation", (iii) the term "or" means "and/or", (iv) the term
"proceeds" has the meaning ascribed to such term in the UCC, (v) any reference
herein to an agreement includes any amendment, supplement or restatement
thereof, (vi) any reference herein to any person includes, as applicable, any
successors and permitted assigns of that person, and (vii) any reference herein
to a statute means that statute, as it has been amended, and including all rules
and regulations promulgated thereunder.
Whenever any agreement relating to the 1999-A SUBI specifically
contemplates using the definitions contained in this Agreement of Definitions,
then, subject to the preceding paragraph, capitalized terms used without
definitions in such agreement shall have the following meanings:
"1999-A CERTIFICATE DISTRIBUTION ACCOUNT" means the account
established with and in the name of the 1999-A Owner Trustee for the benefit of
the Certificateholders pursuant to the 1999-A Securitization Trust Agreement and
the 1999-A Servicing Supplement and designated as the "1999-A Certificate
Distribution Account".
"1999-A CONTRACTS" means the Leases allocated to the 1999-A SUBI and
1999-A SUBI Sub-Trust pursuant to the 1999-A SUBI Supplement.
"1999-A DELAWARE OWNER TRUSTEE" means Wilmington Trust Company, in its
capacity as Delaware owner trustee, and its successors and assigns.
"1999-A INDENTURE TRUSTEE" means The Bank of New York, in its capacity
as trustee under the Indenture, and any successor trustee appointed thereunder.
"1999-A LEASED VEHICLES" means the Leased Vehicles allocated to the
1999-A SUBI and 1999-A SUBI Sub-Trust pursuant to the 1999-A SUBI Supplement.
"1999-A NOTE DISTRIBUTION ACCOUNT" means the account established with
and in the name of the 1999-A Indenture Trustee for the benefit of the
Noteholders pursuant to the
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1999-A Securitization Trust Agreement and the 1999-A Servicing Supplement and
designated as the "1999-A Note Distribution Account".
"1999-A OWNER TRUSTEE" means U.S. Bank, in its capacity as trustee
under the 1999-A Securitization Trust Agreement, and any successor trustee
appointed thereunder.
"1999-A PAYAHEAD ACCOUNT" means the account established by the
Origination Trustee and maintained by the Trust Agent, in the name of the
Origination Trustee and for the benefit of the Holders of the 1999-A SUBI
Certificates and the Retained 1999-A SUBI Certificates, pursuant to Section
13.03 of the 1999-A SUBI Supplement.
"1999-A SECURITIZATION DOCUMENTS" means the Indenture, the Origination
Trust Agreement, the Servicing Agreement, the 1999-A Servicing Supplement, the
1999-A SUB1 Supplement, the Backup Security Agreement and each other operative
document related to the 1999-A Securitization Trust.
"1999-A SECURITIZATION TRUST" means the Honda Auto Lease Trust 1999-A
created by the 1999-A Securitization Trust Agreement, the estate of which
consists or will consist of (i) the 1999-A SUBI Certificates, the portion of the
1999-A SUBI Assets evidenced thereby and all monies due and to become due
thereunder from and after the Cutoff Date; (ii) such monies as are from time to
time deposited in each of the 1999-A SUBI Accounts (excluding any proceeds of
the Residual Value Insurance Policy or any other residual value insurance
policies which are not subject to the Lien of the 1999-A Securitization Trust
Agreement); (iii) all rights accruing to the holder of either of the 1999-A SUBI
Certificates as a third-party beneficiary of the Origination Trust Agreement,
the 1999-A SUBI Supplement, the 1999-A Servicing Supplement and certain amounts
held in the Reserve Fund; and (iv) all proceeds of the foregoing.
"1999-A SECURITIZATION TRUST AGREEMENT" means that certain
Securitization Trust Agreement, dated as of [June 30], 1999, among HTC LP and
HTD LP, as Transferors, Wilmington Trust Company, as Delaware Owner Trustee, The
Bank of New York, as 1999-A Indenture Trustee, and U.S. Bank, as 1999-A Owner
Trustee, pursuant to which the 1999-A SUBI Certificates will be transferred to
the 1999-A Owner Trustee, in that capacity, in connection with the
Securitization of the portion of the 1999-A SUBI Assets represented by the
1999-A SUBI Certificates.
"1999-A SECURITIZATION TRUST ESTATE" means (i) the property conveyed
to the 1999-A Securitization Trust under Section 2.04 of the 1999-A
Securitization Trust Agreement; (ii) the 1999-A Note Distribution Account,
1999-A Certificate Distribution Account, the Reserve Fund and such monies as are
from time to time deposited therein; (iii) all proceeds of the foregoing and
(iv) any property which is subsequently added.
"1999-A SERVICER TERMINATION EVENT" means (i) any event relating to
the 1999-A SUBI Assets which constitutes a "Servicer Termination Event" under
Section 4.01 of the Servicing Agreement or (ii) the failure by the Servicer to
deliver to the Origination Trustee or the 1999-A Indenture Trustee any report
relating to the 1999-A SUBI Assets and required to be delivered to the
Origination Trustee or the 1999-A Indenture Trustee pursuant to the Servicing
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Agreement or the 1999-A Servicing Supplement within ten Business Days after the
date any such report is due; PROVIDED, HOWEVER, a delay or failure in
performance under clause (ii) for a period of sixty Business Days shall not
constitute a 1999-A Servicer Termination Event if caused by a Force Majeure
Event.
"1999-A SERVICING SUPPLEMENT" means that certain Servicing Supplement
to the Servicing Agreement, dated as of [June 30, 1999,] by and among HVT, Inc.,
as Origination Trustee of the Honda Lease Trust, HTA LP and HTB LP, as UTI
Beneficiaries, AHFC, as Servicer, and U.S. Bank, as Trust Agent, and relating to
the servicing of the 1999-A SUBI Assets.
"1999-A SUBI" means the SUBI created pursuant to the 1999-A SUBI
Supplement.
"1999-A SUBI ACCOUNT" means each or any of the 1999-A SUBI Collection
Account, the 1999-A Note Distribution Account, the 1999-A Certificate
Distribution Account, the 1999-A SUBI Lease Account and any 1999-A Payahead
Account.
"1999-A SUBI ASSETS" means the 1999-A SUBI Portfolio and related Trust
Assets allocated to the 1999-A SUBI and 1999-A SUBI Sub-Trust pursuant to the
1999-A SUBI Supplement.
"1999-A SUBI BENEFICIARY" means any Beneficiary that is a Beneficiary
because it is the holder or pledgee of a 1999-A SUBI Certificate.
"1999-A SUBI CERTIFICATES" means the HTC LP 1999-A SUBI Certificate
and the HTD LP 1999-A SUBI Certificate issued by the Origination Trust pursuant
to the 1999-A SUBI Supplement, collectively evidencing a 99.8% beneficial
interest in the 1999-A SUBI Assets (other than the Residual Value Insurance
Policy or other residual value insurance policies and the proceeds of the
Residual Value Insurance Policy or any other residual value insurance policies
relating to the 1999-A Leased Vehicles).
"1999-A SUBI CERTIFICATES PURCHASE AND SALE AGREEMENT" means that
certain 1999-A SUBI Certificates Purchase and Sale Agreement, dated as of [June
30, 1999], pursuant to which HTA LP and HTB LP will sell to HTC LP and HTD LP,
without recourse, all of their respective right, title and interest in and to
the 1999-A SUBI and the HTA LP/HTB LP 1999-A SUBI Certificates.
"1999-A SUBI COLLECTION ACCOUNT" means the account established by the
Servicer on behalf of and in the name of the Origination Trustee for the benefit
of the Beneficiaries of the 1999-A SUBI Certificates and the Retained 1999-A
SUBI Certificates, which account shall be established pursuant to the 1999-A
SUBI Supplement and the 1999-A Servicing Supplement and designated as the
"1999-A SUBI Collection Account".
"1999-A SUBI INTEREST" means the interest in the 1999-A SUBI
collectively represented by the 1999-A SUBI Certificates.
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"1999-A SUBI LEASE ACCOUNT" means the SUBI Lease Account, if any,
designated as the "1999-A SUBI Lease Account" and established by the Servicer in
the name of the Origination Trustee for the benefit of the Beneficiaries of the
1999-A SUBI Certificates and the Retained 1999-A SUBI Certificates, which
account shall be established pursuant to Section 13.02 of the 1999-A SUBI
Supplement.
"1999-A SUBI POOL BALANCE" means, as of any date with respect to the
1999-A SUBI Sub-Trust, the Adjusted Lease Balances of all 1999-A Contracts at
such date.
"1999-A SUBI PORTFOLIO" means the SUBI Portfolio that includes the
1999-A Contracts and 1999-A Leased Vehicles allocated to the 1999-A SUBI and
1999-A SUBI Sub-Trust pursuant to the 1999-A SUBI Supplement.
"1999-A SUBI SECURITIES INTERMEDIARY" means U.S. Bank, in its capacity
as securities intermediary, for purposes of establishing the HTA LP 1999-A SUBI
Securities Account, the HTB LP 1999-A SUBI Securities Account, the HTC LP 1999-A
SUBI Securities Account, the HTD LP 1999-A SUBI Securities Account and the 99.8%
1999-A SUBI Securities Account.
"1999-A SUBI SERVICING FEE" means, for the 1999-A SUBI Sub-Trust, the
fee payable on each Distribution Date with respect to the related Collection
Period equal to one-twelfth of the product of 1.00% and the Aggregate Net
Investment Value as of the first day of such Collection Period (or, in the case
of the first Distribution Date, as of the Cutoff Date).
"1999-A SUBI SUB-TRUST" means the SUBI Sub-Trust created pursuant to
the 1999-A SUBI Supplement including as its assets the 1999-A SUBI Portfolio and
the related Trust Assets.
"1999-A SUBI SUPPLEMENT" means that certain SUBI Supplement to the
Origination Trust Agreement, dated as of [June 30, 1999], pursuant to which,
among other things, (i) the Origination Trustee, at the direction of the UTI
Beneficiaries, creates the 1999-A SUBI Sub-Trust and the 1999-A SUBI and issues
the HTA LP/HTB LP 1999-A SUBI Certificates and (ii) the Origination Trustee
subsequently issues the 1999-A SUBI Certificates and the Retained 1999-A SUBI
Certificates.
"1999-A TRUST DOCUMENTS" means the Origination Trust Agreement, the
1999-A SUBI Supplement, the Servicing Agreement, the 1999-A Servicing
Supplement, the Certificate of Trust, any Co-Trustee Agreement, any Assignment
Agreement and any Trust Agency Agreement, to the extent that such documents or
agreements deal with the Securitization contemplated by 1999-A Securitization
Documents.
"99.8% 1999-A SUBI SECURITIES ACCOUNT" means the securities account
established by the 1999-A SUBI Securities Intermediary in the name of and for
the benefit of the 1999-A Securitization Trust pursuant to the 99.8% 1999-A SUBI
Securities Account Control Agreement.
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"99.8% 1999-A SUBI SECURITIES ACCOUNT CONTROL AGREEMENT" means that
certain 99.8% 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999], between U.S. Bank, The Bank of New York and the 1999-A SUBI
Securities Intermediary.
"ACCOUNTANT" means a Person qualified to pass upon accounting
questions, whether or not such Person shall be an officer or employee of a
Beneficiary, the Servicer or any of their respective Affiliates (unless
otherwise required to be "independent" (as contemplated by Rule 101 of the Code
of Professional Conduct of the American Institute of Certified Public
Accountants) and such status would invalidate such Person's qualification as
independent).
"ADDITIONAL LOSS AMOUNT" means, with respect to any Collection Period,
all payments (including any indemnification or reimbursement of the Origination
Trustee or any Trust Agent) with respect to Claims by Persons other than the
Origination Trustee, the Trust Agent, the Servicer, the 1999-A Indenture
Trustee, the 1999-A Owner Trustee, the Certificateholders, the Noteholders and
any other beneficiary of the Origination Trust against or with respect to the
1999-A SUBI Assets paid during that Collection Period, including reasonable fees
and expenses of attorneys incurred in defending or settling such Claims, all as
allocated by the Origination Trustee pursuant to Section 3.08 of the Origination
Trust Agreement, and the amount of reserves for possible future such payments
that the Servicer, on behalf of the Origination Trustee, deems advisable (after
consultation with Independent Accountants) to retain in the 1999-A SUBI
Collection Account out of monies that otherwise would constitute Collections for
that Collection Period.
"ADDITIONAL LOSS LEASE" means a 1999-A Contract that has been sold or
otherwise disposed of to pay an Additional Loss Amount.
"ADJUSTED CAPITALIZED COST" means, with respect to any Lease and the
related Leased Vehicle, the Gross Capitalized Cost less the Capitalized Cost
Reduction, which amount is used in calculating the Monthly Payment.
"ADJUSTED CERTIFICATE BALANCE" means the Certificate Balance less: (i)
amounts allocated and deposited into the 1999-A Certificate Distribution Account
in respect of the Adjusted Certificate Balance; (ii) without duplicating the
foregoing, amounts paid to Certificateholders in respect of the Adjusted
Certificate Balance; and (iii) the amount of Unreimbursed Certificate Principal
Loss Amounts allocated thereto.
"ADJUSTED CLASS A-1 NOTE BALANCE" means the Class A-1 Note Balance
less: (i) amounts allocated and deposited into the 1999-A Note Distribution
Account in respect of the Adjusted Class A-1 Note Balance; (ii) without
duplicating the foregoing, amounts paid to Noteholders in respect of the
Adjusted Class A-1 Note Balance; and (iii) the amount of Unreimbursed Class A-1
Principal Loss Amounts allocated thereto.
"ADJUSTED CLASS A-2 NOTE BALANCE" means the Class A-2 Note Balance
less: (i) amounts allocated and deposited into the 1999-A Note Distribution
Account in respect of the Adjusted Class A-2 Note Balance; (ii) without
duplicating the foregoing, amounts paid to
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Noteholders in respect of the Adjusted Class A-2 Note Balance; and (iii) the
amount of Unreimbursed Class A-2 Principal Loss Amounts allocated thereto.
"ADJUSTED CLASS A-3 NOTE BALANCE" means the Class A-3 Note Balance
less: (i) amounts allocated and deposited into the 1999-A Note Distribution
Account in respect of the Adjusted Class A-3 Note Balance; (ii) without
duplicating the foregoing, amounts paid to Noteholders in respect of the
Adjusted Class A-3 Note Balance; and (iii) the amount of Unreimbursed Class A-3
Principal Loss Amounts allocated thereto.
"ADJUSTED CLASS A-4 NOTE BALANCE" means the Class A-4 Note Balance
less: (i) amounts allocated and deposited into the 1999-A Note Distribution
Account in respect of the Adjusted Class A-4 Note Balance; (ii) without
duplicating the foregoing, amounts paid to Noteholders in respect of the
Adjusted Class A-4 Note Balance; and (iii) the amount of Unreimbursed Class A-4
Principal Loss Amounts allocated thereto.
"ADJUSTED CLASS B NOTE BALANCE" means the Class B Note Balance less:
(i) amounts allocated and deposited into the 1999-A Note Distribution Account in
respect of the Adjusted Class B Note Balance; (ii) without duplicating the
foregoing, amounts paid to Noteholders in respect of the Adjusted Class B Note
Balance; and (iii) the amount of Unreimbursed Class B Principal Loss Amounts
allocated thereto.
"ADJUSTED LEASE BALANCE" means, with respect to any 1999-A Contract
and the related 1999-A Leased Vehicle as of any date, the Adjusted Capitalized
Cost minus the aggregate principal actually paid by or on behalf of the related
Lessee on or prior to such date; PROVIDED that the Lease Principal component of
Payments Ahead received but not yet applied shall not be considered to have been
paid by such Lessee.
"ADMINISTRATION AGREEMENT" means that certain Administration
Agreement, dated as of [June 30, 1999], by and among the Honda Auto Lease Trust
1999-A, as Issuer, AHFC, as administrator, and The Bank of New York, as
indenture trustee.
"ADMINISTRATIVE CHARGE" means, with respect to any 1999-A Contract,
any payment (whether or not part of the fixed monthly payment) payable to the
related lessor representing a late payment fee, an Extension Fee, an allocation
to the related Lessee of insurance premiums, sales, personal property or excise
taxes or any other similar charge.
"ADMINISTRATIVE EXPENSE" means any reasonable administrative cost or
expense associated with the Indenture, the Notes, the 1999-A Securitization
Trust or the Origination Trust, including reasonable fees and expenses of
attorneys and accountants.
"ADMINISTRATOR" means AHFC.
"ADVANCE" means, with respect to all Delinquent Leases included in the
1999-A SUBI Assets during a Collection Period, an advance required to be made
with respect to such Delinquent Leases, the amount of which shall equal the sum
of all Monthly Payments due but not received during such Collection Period.
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"AFFILIATE" means, as to any Person, any other Person that (i)
directly or indirectly controls, is controlled by or is under common control
with such Person (excluding any trustee under, or any committee with
responsibility for administering, any employee benefit plan) or (ii) is an
officer, director, member or partner of such Person. For purposes of this
definition, a Person shall be deemed to be "controlled by" another Person if
such other Person possesses, directly or indirectly, the power (x) to vote 5% or
more of the securities (on a fully diluted basis) having ordinary voting power
for the election of directors, members or managing partners of such Person or
(y) to direct or cause the direction of the management and policies of such
Person, whether by contract or otherwise.
"AGGREGATE NET INVESTMENT VALUE" means, as of any day, the sum of
(i) the aggregate of the Discounted Principal Balances of all 1999-A Contracts
at such date, each such Discounted Principal Balance being derived from the
Schedule of 1999-A Contracts and 1999-A Leased Vehicles as in effect on such
date; PROVIDED that as of the last day of any Collection Period, there shall be
eliminated from the Schedule of 1999-A Contracts and 1999-A Leased Vehicles for
the purpose of this definition (including, without limitation, the determination
at any subsequent time of the Aggregate Net Investment Value as of the last day
of any Collection Period) each 1999-A Contract that became a Charged-off,
Liquidated, Matured or Additional Loss Lease before the end of such Collection
Period and (ii) the aggregate of the Booked Residual Values of those Leased
Vehicles that have been added to Matured Leased Vehicle Inventory within the
three immediately preceding Collection Periods but have not been sold or
otherwise disposed of as of the last day of the most recent Collection Period
for no more than two full Collection Periods, each such Booked Residual Value
being derived from the Schedule of 1999-A Contracts and 1999-A Leased Vehicles
as in effect on such date.
"AGGREGATE NET LOSSES" means, with respect to a Collection Period, an
amount equal to the aggregate Discounted Principal Balances of all 1999-A
Contracts that became Charged-off Leases during such Collection Period minus all
Net Repossession Proceeds and other Net Liquidation Proceeds collected during
such Collection Period with respect to Charged-off Leases.
"AGREEMENT OF DEFINITIONS" means this Agreement of Definitions.
"AHFC" means American Honda Finance Corporation, a California
corporation, and its successors and assigns.
"ALTERNATE RESERVE FUND REQUIREMENT" means that formula pursuant to
which the Reserve Fund Requirement is to be calculated if any Reserve Fund Test
is not satisfied as of any Distribution Date. Pursuant to the Alternate Reserve
Fund Requirement, the Reserve Fund Requirement will equal the lesser of
(i) [$_________] and (ii) the Note Balance as of the related Distribution Date
(after giving effect to reductions in the Note Balance on such Distribution
Date).
"ASSIGNMENT AGREEMENT" means any agreement between AHFC and the 1999-A
Securitization Trust pursuant to which AHFC assigns to the 1999-A Securitization
Trust its rights under each Dealer Agreement described therein.
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"AUTHENTICATING AGENT" means any Authenticating Agent appointed as
such pursuant to Section 6.15 of the Indenture, and includes any successor
thereto.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation in The
City of New York, printed in the English language and customarily published on
each Business Day, whether or not published on Saturdays, Sundays and holidays.
"BACKUP SECURITY AGREEMENT" means that certain backup security
agreement, dated as of [June 30,] 1999, by and among the Servicer, the UTI
Beneficiaries, the Origination Trustee, HTC LP, HTD LP, the 1999-A Owner Trustee
and the 1999-A Indenture Trustee.
"BANKRUPT LEASE" means a 1999-A Contract as to which a voluntary or
involuntary case has commenced against the related Lessee under the federal
bankruptcy laws, as now or hereafter in effect, or under another present or
future federal or state bankruptcy, insolvency or similar law, after the date of
origination of the related 1999-A Contract.
"BASE RESERVE FUND FORMULA" means that formula pursuant to which the
Reserve Fund Requirement is to be calculated if all Reserve Fund Tests are
satisfied as of any Distribution Date. Pursuant to the Base Reserve Fund
Formula, the Reserve Fund Requirement with respect to any Distribution Date will
equal [___%] of 99.8% of the Aggregate Net Investment Value as of the Cutoff
Date.
"BASIC DOCUMENTS" means the Origination Trust Agreement, the Servicing
Agreement, the 1999-A Servicing Supplement, the 1999-A SUBI Supplement, the
1999-A Securitization Trust Agreement, the 1999-A SUBI Certificates Purchase and
Sale Agreement, the Backup Security Agreement, the Indenture and any other
operative document relating to the Securitization of the 1999-A SUBI Assets.
"BENEFICIARY" means any Related Beneficiary of any Sub-Trust, and
"BENEFICIARIES" means, collectively, all of the Beneficiaries.
"BOOK VALUE" means, with respect to any 1999-A Contract and the
related 1999-A Leased Vehicle as of any date, the Adjusted Capitalized Cost
minus the aggregate Lease Principal scheduled to have been received on or prior
to such date.
"BOOKED RESIDUAL VALUE" means, with respect to any 1999-A Contract,
the value of the related 1999-A Leased Vehicle at the Maturity Date as
established or assigned by the Servicer at the time of origination of such
Contract in accordance with the Servicer's customary practices, which value
shall be used in determining the Monthly Payment.
"BOOK-ENTRY NOTES" means a beneficial interest in the Notes, ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 2.10 of the Indenture.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in New York, New York, Chicago, Illinois,
Wilmington, Delaware or
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Los Angeles, California are authorized or obligated by law, executive order or
governmental decree to be closed.
"BUSINESS TRUST STATUTE" means Chapter 38 of Title 12 of the Delaware
Code, 12 Del. Code Section 3801 ET SEQ.
"CAPITAL CONTRIBUTION" means any capital contribution to the
Origination Trust made by a Beneficiary, the Servicer or any of their respective
Affiliates.
"CAPITALIZED COST REDUCTION" means, with respect to any 1999-A
Contract and the related 1999-A Leased Vehicle, the total amount of any rebate,
cash payment, net trade-in allowance and non-cash credits that reduced the Gross
Capitalized Cost at the time of origination of such 1999-A Contract.
"CAPPED CONTINGENT AND EXCESS LIABILITY PREMIUMS" means, as of any
Deposit Date, an amount sufficient to pay the premiums then due on the portion
of any Contingent and Excess Liability Insurance Policy allocable to the 1999-A
SUBI; PROVIDED, HOWEVER, that to the extent that the portion of such amount
allocable to the 1999-A SUBI Certificates, collectively, together with all such
portions since the beginning of the calendar year in which such Deposit Date
occurs, exceeds $550,000, such portion shall not constitute a Capped Contingent
and Excess Liability Premium but instead shall constitute an "Uncapped
Administrative Expense".
"CAPPED INDENTURE TRUSTEE ADMINISTRATIVE EXPENSES" means, with respect
to any Distribution Date, the compensation of the 1999-A Indenture Trustee
pursuant to Section 6.07 of the Indenture and those other Administrative
Expenses with respect to the Indenture, the Notes [and the Certificates],
including those due under Section 6.07 of the Indenture that, together with all
such Administrative Expenses paid since the beginning of the calendar year in
which such Distribution Date occurs, do not exceed $50,000 (or $100,000 in any
year in which an Indenture Event of Default occurs and the 1999-A Indenture
Trustee sells the SUBI Interest pursuant to Section 5.14 of the Indenture).
"CAPPED ORIGINATION TRUST ADMINISTRATIVE EXPENSES" means, as of any
Deposit Date, Administrative Expenses with respect to the Origination Trust due
on or before such Deposit Date as are allocable to the 1999-A SUBI, but
specifically not including any premiums on any portion of the Contingent and
Excess Liability Insurance Policy allocable to the 1999-A SUBI; PROVIDED,
HOWEVER, that to the extent the portion of such Administrative Expenses
allocable to the 1999-A SUBI Certificates, collectively, together with all such
portions since the beginning of the calendar year in which such Deposit Date
occurs, exceeds $100,000, such portion shall not constitute a Capped Origination
Trust Administrative Expense but instead shall constitute an "Uncapped
Administrative Expense".
"CAPPED OWNER TRUSTEE ADMINISTRATIVE EXPENSES" means, with respect to
any Distribution Date, the compensation of the 1999-A Owner Trustee pursuant to
Section 6.05 of the 1999-A Securitization Trust Agreement and those other
Administrative Expenses with respect to the 1999-A Securitization Trust,
including those due under Section 6.05 of the 1999-A Securitization Trust
Agreement, as are due on such Distribution Date that, together with all such
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Administrative Expenses paid since the beginning of the calendar year in which
such Distribution Date occurs, do not exceed $5,000.
"CASH" means such coin or currency of the United States as at the time
shall be legal tender for the payment of public and private debts.
"CASH VALUE" means, with respect to any or all Trust Assets, as the
context may require, on any date, the sum of all cash and the aggregate Adjusted
Lease Balance of the 1999-A Contracts comprising such Trust Assets on such date.
"CEDE" means Cede & Co., as the nominee of DTC, the initial Clearing
Agency.
"CERTIFICATE" means one of the Certificates executed and authenticated
by the 1999-A Owner Trustee, or a duly appointed Authenticating Agent, in
substantially the form thereof set forth as Exhibit A to the 1999-A
Securitization Trust Agreement.
"CERTIFICATE ADDITIONAL LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Certificate Allocation
Percentage, (ii) the Investor Percentage with respect to Loss Amounts for the
related Collection Period and (iii) the portion of the Additional Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CERTIFICATE ALLOCATION PERCENTAGE" means, as of any Distribution
Date, the Certificate Balance of a Certificateholder, as of the last day of the
related Collection Period as a percentage of the aggregate outstanding
Certificate Balance as of such last day.
"CERTIFICATE BALANCE" means the Initial Certificate Balance less the
sum of (i) all payments made on or prior to such date allocable to principal
(including any reimbursements of Loss Amounts allocable to Certificate Principal
Loss Amounts) and (ii) the amount of Certificate Principal Loss Amounts, if any,
which have not been reimbursed.
"CERTIFICATE CHARGED-OFF AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Certificate Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Charged-off Amount incurred in
respect of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CERTIFICATE DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Certificate Principal Distributable Amount and
the Certificate Interest Distributable Amount.
"CERTIFICATE FACTOR" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Certificate Balance as of the close of
business on such Distribution Date (after giving effect to all changes in the
Certificate Balance made on that date) divided by the Initial Certificate
Balance.
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"CERTIFICATE INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (i) the Certificate Interest
Distributable Amount for such Distribution Date plus any outstanding Certificate
Interest Carryover Shortfall from the immediately preceding Distribution Date
plus interest on such outstanding Certificate Interest Carryover Shortfall, to
the extent permitted by law, at the Certificate Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date
exceeds (ii) the amount of interest distributed to Certificateholders on such
current Distribution Date.
"CERTIFICATE INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Certificate Rate or, in
the case of the first Distribution Date, [one-seventh] of such amount, and (ii)
the Certificate Balance as of the immediately preceding Distribution Date (after
giving effect to changes in the Certificate Balance made on such immediately
preceding Distribution Date) or, in the case of the first Distribution Date, the
Initial Certificate Balance.
"CERTIFICATE LOSS AMOUNT" means, with respect to any Distribution
Date, the product of (a) the Certificate Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and (c)
the Loss Amount for the related Collection Period allocable to the 1999-A SUBI
Interest.
"CERTIFICATE OF TITLE" means a certificate of title or other evidence
of ownership of a 1999-A Leased Vehicle issued by the Registrar of Titles in the
jurisdiction in which the 1999-A Leased Vehicle is registered.
"CERTIFICATE OF TRUST" means the Certificate of Trust filed for the
1999-A Securitization Trust pursuant to the Business Trust Statute.
"CERTIFICATE OWNER" means, with respect to any Certificate, any Person
holding or owning a beneficial interest therein, whether or not such Person is a
Holder.
"CERTIFICATE PRINCIPAL CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount that otherwise would have been distributed to the
Certificateholders in respect of Principal Collections, but instead is applied
as set forth in clauses (x) through (xv) of Section 3.03(c) of the 1999-A
Securitization Trust Agreement.
"CERTIFICATE PRINCIPAL CARRYOVER SHORTFALL INTEREST AMOUNT" means,
with respect to any Distribution Date, the aggregate amount of accrued and
compounded interest (at the Certificate Rate) on the aggregate amount of
unreimbursed Certificate Principal Carryover Shortfall as of the immediately
preceding Distribution Date.
"CERTIFICATE PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to
any Distribution Date, the amount (if any) that is distributable to the
Certificateholders pursuant to Section 3.03(e) of the 1999-A Securitization
Trust Agreement.
"CERTIFICATE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Certificate
Loss Amount for the related
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Collection Period and any previously unreimbursed Certificate Principal Loss
Amount exceeds (ii) the amount available to be distributed pursuant to Section
3.03 of the 1999-A Securitization Trust Agreement on such Distribution Date.
"CERTIFICATE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Certificate Rate) on the aggregate amount of unreimbursed Certificate
Principal Loss Amounts.
"CERTIFICATE RATE" means -%.
"CERTIFICATE RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Certificate Allocation
Percentage, (ii) the Investor Percentage with respect to Loss Amounts for the
related Collection Period and (iii) the portion of the Residual Value Loss
Amount incurred in respect of such Collection Period that is allocable to the
1999-A SUBI Interest.
"CERTIFICATEHOLDER" means HTC LP, HTD LP and their respective
successors in their respective capacities as holders of the Certificates.
"CHARGED-OFF AMOUNT" means, as of any Distribution Date, an amount
equal to the sum of the Discounted Principal Balances, as of the end of the
related Collection Period, of any Charged-off Leases that became Charged-off
Leases during that related Collection Period.
"CHARGED-OFF LEASE" means a 1999-A Contract (a) with respect to which
the related 1999-A Leased Vehicle has been repossessed and sold or otherwise
disposed of, or (b) which has been written off by the Servicer in accordance
with its normal policies for writing off lease contracts other than with respect
to repossessions.
"CHARGE-OFF RATE" means, with respect to any Collection Period, a
percentage equivalent to a fraction, the numerator of which is the product of
(a) 12 and (b) the Aggregate Net Losses with respect to such Collection Period,
and the denominator of which is the quotient of (a) the Aggregate Net Investment
Value as of the last day of such Collection Period plus the Aggregate Net
Investment Value as of the last day of the immediately preceding Collection
Period, divided by (b) 2.
"CHARGE-OFF RATE TEST" means that determination, made on each
Distribution Date, of the average of the Charge-off Rates for the immediately
preceding three Collection Periods (except (i) in the case of the _________ 199_
Determination Date, such determination shall only look to the Charge-off Rate
for the _________ 199_ Collection Period, and (ii) in the case of the _________
199_ Determination Date, such determination shall be the average of the
Charge-off Rates for the _________ and _________ 199_ Collection Periods). The
Charge-off Rate Test will be satisfied if such average is ___% or less.
"CLAIMS" means any losses, liabilities and expenses (including
reasonable attorneys' and other professional fees and expenses) incurred in
connection with reasonable collection efforts or the defense of any suit or
action.
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<PAGE>
"CLASS" means all Securities whose form is identical except for
variation in denomination, principal amount or owner.
"CLASS A AGGREGATE LOSS AMOUNT" means the sum of (i) the Class A Loss
Amount, (ii) the Class A Note Principal Loss Amount and (iii) the Class A Note
Principal Loss Interest Amount.
"CLASS A LOSS AMOUNT" means the sum of the Class A-1 Loss Amount, the
Class A-2 Loss Amount, the Class A-3 Loss Amount and the Class A-4 Loss Amount.
"CLASS A NOTE BALANCE" means the sum of the Class A-1 Note Balance,
the Class A-2 Note Balance, the Class A-3 Note Balance and the Class A-4 Note
Balance.
"CLASS A NOTE PRINCIPAL LOSS AMOUNT" means the sum of the Class A-1
Note Principal Loss Amount, the Class A-2 Note Principal Loss Amount, the Class
A-3 Note Principal Loss Amount and the Class A-4 Note Principal Loss Amount.
"CLASS A NOTE PRINCIPAL LOSS INTEREST AMOUNT" means the sum of the
Class A-1 Note Principal Loss Interest Amount, the Class A-2 Note Principal Loss
Interest Amount, the Class A-3 Note Principal Loss Interest Amount and the Class
A-4 Note Principal Loss Interest Amount.
"CLASS A NOTEHOLDER" means any Holder of or Note Owner with respect to
a Class A Note.
"CLASS A NOTES" means collectively the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes and the Class A-4 Notes.
"CLASS A PERCENTAGE" means the Class A Note Balance immediately after
the Class A-3 Notes have been paid in full as a percentage of the Note Balance
at such time.
"CLASS A-1 ADDITIONAL LOSS AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Class A-1 Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-1 ALLOCATION PERCENTAGE" means, as of any Distribution Date,
the Class A-1 Note Balance as a percentage of the Note Balance, each as of the
last day of the related Collection Period.
"CLASS A-1 CHARGED-OFF AMOUNT" means, as of any Distribution Date, an
amount equal to the product of (i) the Class A-1 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Charged-off Amount incurred in respect of
such Collection Period that is allocable to the 1999-A SUBI Interest.
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<PAGE>
"CLASS A-1 DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class A-1 Principal Distributable Amount and
the Class A-1 Interest Distributable Amount.
"CLASS A-1 FINAL DISTRIBUTION DATE" means the -, 200- Distribution
Date.
"CLASS A-1 INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (i) the Class A-1 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-1 Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class A-1 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-1 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date
exceeds (ii) the amount of interest distributed to Class A-1 Noteholders on such
current Distribution Date.
"CLASS A-1 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Class A-1 Note Rate or,
in the case of the first Distribution Date, [one-seventh] of such amount, and
(ii) the Class A-1 Note Balance as of the immediately preceding Distribution
Date (after giving effect to changes in the Class A-1 Note Balance made on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, the Initial Class A-1 Note Balance.
"CLASS A-1 LOSS AMOUNT" means, with respect to any Distribution Date,
the product of (a) the Class A-1 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and (c)
the Loss Amount for the related Collection Period allocable to the 1999-A SUBI
Interest.
"CLASS A-1 NOTE" means one of the Notes executed by the 1999-A Owner
Trustee and authenticated by the 1999-A Indenture Trustee, or a duly appointed
Authenticating Agent, in substantially the form of a Class A-1 Note set forth as
an exhibit to the Indenture.
"CLASS A-1 NOTE BALANCE" means initially the Initial Class A-1 Note
Balance and, on any date, means the Initial Class A-1 Note Balance reduced by
the sum of (i) all amounts distributed to Class A-1 Noteholders and allocable to
principal on or prior to such date (including any reimbursements of Loss Amounts
allocable to Class A-1 Note Principal Loss Amounts) and (ii) the amount, if any,
by which (a) the aggregate of all Class A-1 Note Principal Loss Amounts on or
prior to such date exceeds (b) the aggregate of all Class A-1 Note Principal
Loss Amounts reimbursed on or prior to such date.
"CLASS A-1 NOTE FACTOR" means, with respect to any Distribution Date,
a seven-digit decimal figure equal to the Class A-1 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-1 Note Balance made on that date) divided by the Initial Class A-1 Note
Balance.
"CLASS A-1 NOTE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Class A-1
Loss Amount for the related Collection Period and any previously unreimbursed
Class A-1 Note Principal Loss Amount
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<PAGE>
exceeds (ii) the amount available to be distributed in respect of the Class A-1
Notes pursuant to Section 3.03 of the 1999-A Securitization Trust Agreement on
such Distribution Date.
"CLASS A-1 NOTE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Class A-1 Note Rate) on the aggregate amount of unreimbursed Class A-1 Note
Principal Loss Amounts.
"CLASS A-1 NOTE RATE" means -% per annum.
"CLASS A-1 NOTEHOLDER" means any Holder of or Note Owner with respect
to a Class A-1 Note, as indicated by the context.
"CLASS A-1 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount (if any) that is distributable to the Class A-1
Noteholders pursuant to Section 3.03(e) of the 1999-A Securitization Trust
Agreement.
"CLASS A-1 RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Class A-1 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Residual Value Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CLASS A-1 STATED MATURITY" means the -, 200- Distribution Date.
"CLASS A-2 ADDITIONAL LOSS AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Class A-2 Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-2 ALLOCATION PERCENTAGE" means, as of any Distribution Date,
the Class A-2 Note Balance as a percentage of the then Note Balance, each as of
the last day of the related Collection Period.
"CLASS A-2 CHARGED-OFF AMOUNT" means, as of any Distribution Date, an
amount equal to the product of (i) the Class A-2 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Charged-off Amount incurred in respect of
such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-2 DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class A-2 Principal Distributable Amount and
the Class A-2 Interest Distributable Amount.
"CLASS A-2 FINAL DISTRIBUTION DATE" means the -, 200- Distribution
Date.
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<PAGE>
"CLASS A-2 INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (i) the Class A-2 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-2 Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class A-2 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-2 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date
exceeds (ii) the amount of interest distributed to Class A-2 Noteholders on such
current Distribution Date.
"CLASS A-2 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Class A-2 Note Rate or,
in the case of the first Distribution Date, [one-seventh] of such amount, and
(ii) the Class A-2 Note Balance as of the immediately preceding Distribution
Date (after giving effect to changes in the Class A-2 Note Balance made on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, the Initial Class A-2 Note Balance.
"CLASS A-2 LOSS AMOUNT" means, with respect to any Distribution Date,
the product of (a) the Class A-2 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and (c)
the Loss Amount for the related Collection Period allocable to the 1999-A SUBI
Interest.
"CLASS A-2 NOTE" means one of the Notes executed by the 1999-A Owner
Trustee and authenticated by the 1999-A Indenture Trustee, as duly appointed
Authenticating Agent in substantially the form set forth is an exhibit to the
Indenture.
"CLASS A-2 NOTE BALANCE" means initially the Initial Class A-2 Note
Balance and, on any date, means the Initial Class A-2 Note Balance, reduced by
the sum of (i) all amounts distributed to Class A-2 Noteholders and allocable to
principal on or prior to such date (including any reimbursements of Loss Amounts
allocable to Class A-2 Note Principal Loss Amounts) and (ii) the amount, if any,
by which (a) the aggregate of all Class A-2 Note Principal Loss Amounts on or
prior to such date exceeds (b) the aggregate of all Class A-2 Note Principal
Loss Amounts reimbursed on or prior to such date.
"CLASS A-2 NOTE FACTOR" means, with respect to any Distribution Date,
a seven-digit decimal figure equal to the Class A-2 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-2 Note Balance made on that date) divided by the Initial Class A-2 Note
Balance.
"CLASS A-2 NOTE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Class A-2
Loss Amount for the related Collection Period and any previously unreimbursed
Class A-2 Note Principal Loss Amount exceeds (ii) the amount available to be
distributed in respect of the Class A-2 Notes pursuant to Section 3.03 of the
1999-A Securitization Trust Agreement on such Distribution Date.
"CLASS A-2 NOTE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Class A-2 Note Rate) on the aggregate amount of unreimbursed Class A-2 Note
Principal Loss Amounts.
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<PAGE>
"CLASS A-2 NOTE RATE" means -% per annum.
"CLASS A-2 NOTEHOLDER" means any Holder of or Note Owner with respect
to a Class A-2 Note, as indicated by the context.
"CLASS A-2 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount (if any) that is distributable to the Class A-2
Noteholders pursuant to Section 3.03(e) of the 1999-A Securitization Trust
Agreement.
"CLASS A-2 RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Class A-2 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Residual Value Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CLASS A-2 STATED MATURITY" means the -, 200- Distribution Date.
"CLASS A-3 ADDITIONAL LOSS AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Class A-3 Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-3 ALLOCATION PERCENTAGE" means, as of any Distribution Date,
the Class A-3 Note Balance as a percentage of the then Note Balance, each as of
the last day of the related Collection Period.
"CLASS A-3 CHARGED-OFF AMOUNT" means, as of any Distribution Date, an
amount equal to the product of (i) the Class A-3 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Charged-off Amount incurred in respect of
such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-3 DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class A-3 Principal Distributable Amount and
the Class A-3 Interest Distributable Amount.
"CLASS A-3 FINAL DISTRIBUTION DATE" means the -, 200- Distribution
Date.
"CLASS A-3 INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (i) the Class A-3 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-3 Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class A-3 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-3 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date
exceeds (ii) the amount of interest distributed to Class A-3 Noteholders on such
current Distribution Date.
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<PAGE>
"CLASS A-3 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Class A-3 Note Rate or,
in the case of the first Distribution Date, [one-seventh] of such amount, and
(ii) the Class A-3 Note Balance as of the immediately preceding Distribution
Date (after giving effect to changes in the Class A-3 Note Balance made on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, the Initial Class A-3 Note Balance.
"CLASS A-3 LOSS AMOUNT" means, with respect to any Distribution Date,
the product of (a) the Class A-3 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and
(c) the Loss Amount for the related Collection Period allocable to the 1999-A
SUBI Interest.
"CLASS A-3 NOTE" means one of the Notes executed by the 1999-A Owner
Trustee and authenticated by the 1999-A Indenture Trustee, or a duly appointed
Authenticating Agent, in substantially the form set forth as in exhibit to the
Indenture.
"CLASS A-3 NOTE BALANCE" means initially the Initial Class A-3 Note
Balance and, on any date, means the Initial Class A-3 Note Balance, reduced by
the sum of (i) all amounts distributed to Class A-3 Noteholders and allocable to
principal on or prior to such date (including any reimbursements of Loss Amounts
allocable to Class A-3 Principal Loss Amounts) and (ii) the amount, if any, by
which (a) the aggregate of all Class A-3 Note Principal Loss Amounts on or prior
to such date exceeds (b) the aggregate of all Class A-3 Note Principal Loss
Amounts reimbursed on or prior to such date.
"CLASS A-3 NOTE FACTOR" means, with respect to any Distribution Date,
a seven-digit decimal figure equal to the Class A-3 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-3 Note Balance made on that date) divided by the Initial Class A-3 Note
Balance.
"CLASS A-3 NOTE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Class A-3
Loss Amount for the related Collection Period and any previously unreimbursed
Class A-3 Note Principal Loss Amount exceeds (ii) the amount available to be
distributed in respect of the Class A-3 Notes pursuant to Section 3.03 of the
1999-A Securitization Trust Agreement such Distribution Date.
"CLASS A-3 NOTE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Class A-3 Note Rate) on the aggregate amount of unreimbursed Class A-3 Note
Principal Loss Amounts.
"CLASS A-3 NOTE RATE" means -% per annum.
"CLASS A-3 NOTEHOLDER" means any Holder of or Note Owner with respect
to a Class A-3 Note, as indicated by the context.
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<PAGE>
"CLASS A-3 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount (if any) that is distributable to the Class A-3
Noteholders pursuant to Section 3.03(e) of the 1999-A Securitization Trust
Agreement.
"CLASS A-3 RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Class A-3 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Residual Value Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CLASS A-3 STATED MATURITY" means the -, 200- Distribution Date.
"CLASS A-4 ADDITIONAL LOSS AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Class A-4 Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-4 AGGREGATE LOSS AMOUNT" means the sum of (i) the Class A-4
Loss Amount, (ii) the Class A-4 Note Principal Loss Amount and (iii) the Class
A-4 Note Principal Loss Interest Amount.
"CLASS A-4 ALLOCATION PERCENTAGE" means, as of any Distribution Date,
the Class A-4 Note Balance as a percentage of the then Note Balance, each as of
the last day of the related Collection Period.
"CLASS A-4 CHARGED-OFF AMOUNT" means, as of any Distribution Date, an
amount equal to the product of (i) the Class A-4 Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Charged-off Amount incurred in respect of
such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS A-4 DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the sum of the Class A-4 Principal Distributable Amount and
the Class A-4 Interest Distributable Amount.
"CLASS A-4 FINAL DISTRIBUTION DATE" means the -, 200- Distribution
Date.
"CLASS A-4 INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (i) the Class A-4 Interest Distributable
Amount for such Distribution Date plus any outstanding Class A-4 Interest
Carryover Shortfall from the immediately preceding Distribution Date plus
interest on such outstanding Class A-4 Interest Carryover Shortfall, to the
extent permitted by law, at the Class A-4 Note Rate from such immediately
preceding Distribution Date to but not including the current Distribution Date
exceeds (ii) the amount of interest distributed to Class A-4 Noteholders on such
current Distribution Date.
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<PAGE>
"CLASS A-4 INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Class A-4 Note Rate or,
in the case of the first Distribution Date, [one-seventh] of such amount, and
(ii) the Class A-4 Note Balance as of the immediately preceding Distribution
Date (after giving effect to changes in the Class A-4 Note Balance made on such
immediately preceding Distribution Date) or, in the case of the first
Distribution Date, the Initial Class A-4 Note Balance.
"CLASS A-4 LOSS AMOUNT" means, with respect to any Distribution Date,
the product of (a) the Class A-4 Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and (c)
the Loss Amount for the related Collection Period allocable to the 1999-A SUBI
Interest.
"CLASS A-4 NOTE" means one of the Notes executed by the 1999-A Owner
Trustee and authenticated by the 1999-A Indenture Trustee, or a duly appointed
Authenticating Agent, in substantially the form of a Class A-4 Note set forth as
an exhibit to the Indenture.
"CLASS A-4 NOTE BALANCE" means initially the Initial Class A-4 Note
Balance and, on any date, means the Initial Class A-4 Note Balance, reduced by
the sum of (i) all amounts distributed to Class A-4 Noteholders and allocable to
principal on or prior to such date (including any reimbursements of Loss Amounts
allocable to Class A-4 Note Principal Loss Amounts) and (ii) the amount, if any,
by which (a) the aggregate of all Class A-4 Note Principal Loss Amounts on or
prior to such date exceeds (b) the aggregate of all Class A-4 Note Principal
Loss Amounts reimbursed on or prior to such date.
"CLASS A-4 NOTE FACTOR" means, with respect to any Distribution Date,
a seven-digit decimal figure equal to the Class A-4 Note Balance as of the close
of business on such Distribution Date (after giving effect to all changes in the
Class A-4 Note Balance made on that date) divided by the Initial Class A-4 Note
Balance.
"CLASS A-4 NOTE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Class A-4
Loss Amount for the related Collection Period and any previously unreimbursed
Class A-4 Note Principal Loss Amount exceeds (ii) the amount available to be
distributed in respect of the Class A-4 Notes pursuant to Section 3.03 of the
1999-A Securitization Trust Agreement on such Distribution Date.
"CLASS A-4 NOTE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Class A-4 Note Rate) on the aggregate amount of unreimbursed Class A-4 Note
Principal Loss Amounts.
"CLASS A-4 NOTE RATE" means -% per annum.
"CLASS A-4 NOTEHOLDER" means any Holder of or Note Owner with respect
to a Class A-4 Note, as indicated by the context.
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<PAGE>
"CLASS A-4 PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount (if any) that is distributable to the Class A-4
Noteholders pursuant to Section 3.03(e) of the 1999-A Securitization Trust
Agreement.
"CLASS A-4 RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Class A-4 Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Residual Value Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CLASS A-4 STATED MATURITY" means the -, 200- Distribution Date.
"CLASS B ADDITIONAL LOSS AMOUNT" means, as of any Distribution Date,
an amount equal to the product of (i) the Class B Allocation Percentage, (ii)
the Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Additional Loss Amount incurred in respect
of such Collection Period that is allocable to the 1999-A SUBI Interest.
"CLASS B ALLOCATION PERCENTAGE" means, as of any Distribution Date,
the Class B Note Balance as of the last day of the related Collection Period as
a percentage of the then Note Balance as of such last day.
"CLASS B CHARGED-OFF AMOUNT" means, as of any Distribution Date, an
amount equal to the product of (i) the Class B Allocation Percentage, (ii) the
Investor Percentage with respect to Loss Amounts for the related Collection
Period and (iii) the portion of the Charged-off Amount incurred in respect of
such Collection Period that is allocable to the 1999-A SUBI Interest.
"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 FINAL DISTRIBUTION DATE" means the -, 200- Distribution Date.
"CLASS B INTEREST CARRYOVER SHORTFALL" means, with respect to any
Distribution Date, the amount by which (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 Class B Note Rate from such immediately preceding
Distribution Date to but not including the current Distribution Date exceeds
(ii) the amount of interest distributed to Class B Noteholders on such current
Distribution Date.
"CLASS B INTEREST DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the product of (i) one-twelfth of the Class B Note Rate or,
in the case of the first Distribution Date, [one-seventh] of such amount, and
(ii) the Class B Note Balance as of the immediately preceding Distribution Date
(after giving effect to changes in the Class B Note
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Balance made on such immediately preceding Distribution Date) or, in the case of
the first Distribution Date, the Initial Class B Note Balance.
"CLASS B LOSS AMOUNT" means, with respect to any Distribution Date,
the product of (a) the Class B Allocation Percentage, (b) the Investor
Percentage with regard to Loss Amounts for the related Collection Period and (c)
the Loss Amount for the related Collection Period allocable to the 1999-A SUBI
Interest.
"CLASS B NOTE" means any one of the Notes executed by the 1999-A Owner
Trustee and authenticated by the 1999-A Indenture Trustee, or duly appointed
Authenticating Agent, in substantially the form of a Class B Note set forth as
an exhibit to the Indenture.
"CLASS B NOTE BALANCE" means initially equal the Initial Class B Note
Balance and, on any date, means the Initial Class B Note Balance, reduced by the
sum of (i) all amounts distributed to Class B Noteholders and allocable to
principal on or prior to such date, (ii) the amount, if any, by which (a) the
aggregate of all Class B Note Principal Loss Amounts on or prior to such date
exceeds (b) the aggregate of all Class B Note Principal Loss Amounts reimbursed
on or prior to such date and (iii) the amount, if any, by which (a) the
aggregate of all Class B Note Principal Carryover Shortfalls on or prior to such
Distribution Date exceeds (b) the aggregate of all Class B Note Principal
Carryover Shortfalls reimbursed on or prior to such date.
"CLASS B NOTE FACTOR" means, with respect to any Distribution Date, a
seven-digit decimal figure equal to the Class B Note Balance as of the close of
business on such Distribution Date (after giving effect to all changes in the
Class B Note Balance made on that date) divided by the Initial Class B Note
Balance.
"CLASS B NOTE PRINCIPAL CARRYOVER SHORTFALL" means, with respect to
any Distribution Date from and after the Distribution Date on which the Class
A-4 Notes are paid in full, the amount that otherwise would have been
distributed to the Class B Noteholders, in respect of Principal Collections, but
instead is applied as set forth in clauses (x), (xi) and (xii) of
Section 3.03(c) of the 1999-A Securitization Trust Agreement.
"CLASS B NOTE PRINCIPAL CARRYOVER SHORTFALL INTEREST AMOUNT" means,
with respect to any Distribution Date, the aggregate amount of accrued and
compounded interest (at the Class B Note Rate) on the aggregate amount of
unreimbursed Class B Note Principal Carryover Shortfall as of the immediately
preceding Distribution Date.
"CLASS B NOTE PRINCIPAL LOSS AMOUNT" means, with respect to any
Distribution Date, the amount, if any, by which (i) the sum of the Class B Loss
Amount for the related Collection Period and any previously unreimbursed Class B
Note Principal Loss Amount exceeds (ii) the amount available to be distributed
pursuant to Section 3.03 of the 1999-A Securitization Trust Agreement on such
Distribution Date.
"CLASS B NOTE PRINCIPAL LOSS INTEREST AMOUNT" means, with respect to
any Distribution Date, the aggregate amount of accrued and unpaid interest (at
the Class B Note Rate) on the aggregate amount of unreimbursed Class B Note
Principal Loss Amounts.
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"CLASS B NOTE RATE" means -% per annum.
"CLASS B NOTEHOLDER" means any Holder of or Note Owner with respect to
a Class B Note.
"CLASS B PERCENTAGE" means the Class B Note Balance immediately after
the Class A-3 Notes have been paid in full as a percentage of the Note Balance
at such time.
"CLASS B PRINCIPAL DISTRIBUTABLE AMOUNT" means, with respect to any
Distribution Date, the amount (if any) that is distributable to the Class B
Noteholders pursuant to Section 3.03(e) of the 1999-A Securitization Trust
Agreement.
"CLASS B RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution
Date, an amount equal to the product of (i) the Class B Allocation Percentage,
(ii) the Investor Percentage with respect to Loss Amounts for the related
Collection Period and (iii) the portion of the Residual Value Loss Amount
incurred in respect of such Collection Period that is allocable to the 1999-A
SUBI Interest.
"CLASS B STATED MATURITY" means the -, 200- Distribution Date.
"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.
"CLOSING DATE" means [July __], 1999.
"CODE" means the Internal Revenue Code of 1986, as amended.
"COLLATERAL" has the meaning set forth in the introductory granting
clause paragraphs of the Indenture.
"COLLECTION PERIOD" means with respect to any Distribution Date, the
period from and including the first day of the calendar month immediately
preceding the calendar month in which such Distribution Date occurs (or, with
respect to the first Distribution Date, from and including the Cutoff Date) to
and including the last day of the calendar month immediately preceding the
calendar month in which the Distribution Date occurs.
"COLLECTIONS" means, with respect to any Collection Period, all net
collections received on or in respect of the 1999-A Contracts and 1999-A Leased
Vehicles during such Collection Period, including the following, but subject to
any limitations set forth in the 1999-A Securitization Documents: (i) Monthly
Payments (including amounts that previously were Payments Ahead but which became
due during such Collection Period), Prepayments (other than Payments Ahead),
and, subject to the proviso below, any other payment by a Lessee under a 1999-A
Contract; (ii) Net Matured Leased Vehicle Proceeds, Net Repossession Proceeds,
and all
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other Net Liquidation Proceeds; (iii) any Net Insurance Proceeds not included in
Net Liquidation Proceeds; and (iv) Advances; PROVIDED, HOWEVER, that Collections
(A) shall in no event include proceeds of claims made under the Residual Value
Insurance Policy or any other residual value insurance policies, and (B) shall
in no event include, and shall be net of, the following: (1) any Administrative
Charges, including Extension Fees; (2) Payments Ahead; (3) to the extent not
otherwise covered in clauses (i) through (iv) above, the amount of all Advances,
Matured Leased Vehicle Expenses, Repossession Expenses and other Liquidation
Expenses and Insurance Expenses reimbursed to the Servicer; (4) Additional Loss
Amounts in respect of such Collection Period; and (5) any amounts required to be
retained in the 1999-A SUBI Collection Account in order to maintain that account
in good standing.
"COMMISSION" means the United States Securities and Exchange
Commission and any successor thereto.
"CONTINGENT AND EXCESS LIABILITY INSURANCE POLICY" means that certain
policy numbered ISA 07319423, issued to the Servicer and the Origination
Trustee, on behalf of the Origination Trust, by Indemnity Insurance Company of
North America (CIGNA) and that certain policy numbered 9857829613 issued to the
Servicer and the Origination Trustee, on behalf of the Origination Trust, by
Tokio Marine & Fire Ins. Co., Ltd., plus all contingent, excess or umbrella
policies from time to time issued with the Origination Trustee or the
Origination Trust named as an additional insured or loss payee, in each case to
the extent applicable to any 1999-A Contract or 1999-A Leased Vehicle and, in
each case, all replacement or successor policies.
"CORPORATE TRUST OFFICE" means, (a) with respect to the 1999-A
Indenture Trustee, as set forth in the Indenture, or at such other address as
the Indenture Trustee may designate from time to time by notice to the
Noteholders, the Servicer and the 1999-A Securitization Trust, or the principal
corporate trust office of any successor Indenture Trustee, except that, with
respect to presentation of Notes for payment, for registration of transfer or
for exchange, and with respect to the location of the Note Register, such term
shall mean the office or agency of the 1999-A Indenture Trustee maintained for
that purpose, which as of the date of this Indenture is the same as set forth
above, (b) with respect to the 1999-A Owner Trustee, the Corporate Trust
Department of the 1999-A Owner Trustee located at One Illinois Center, 111 East
Wacker Drive, Chicago, Illinois 60601, or at such other address in the United
States as the 1999-A Owner Trustee may designate from time to time by notice to
the 1999-A Indenture Trustee, HTC LP, HTD LP, the Servicer and the 1999-A
Securitization Trust, or the principal corporate trust office of any successor
Owner Trustee, and (c) with respect to the Delaware Owner Trustee, Rodney Square
North, 1100 North Market Street, Wilmington, Delaware 19890.
"CO-TRUSTEE AGREEMENT" means any instrument or agreement through which
the 1999-A Indenture Trustee and the Administrator appoint a co-trustee.
"COVERED LOSS AMOUNTS" means, for any Distribution Date, the lesser of
(i) the Investor Percentage of Loss Amounts for such Distribution Date and (ii)
amounts available for distribution remaining after application of (a) clauses
(i) through (ix) of Section 3.03(c) of the 1999-A Securitization Trust Agreement
prior to the reduction of the Class A Note Balance to
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zero or (b) clauses (i) through (xii) of Section 3.03(c) of the 1999-A
Securitization Trust Agreement following the reduction of the Class A Note
Balance to zero.
"CREDIT AND COLLECTION POLICY" means those lease origination and
credit and collection policies and practices of the Servicer as applied by the
Servicer with respect to Leases and Leased Vehicles.
"CURRENT LEASE" means each 1999-A Contract that is not a Charged-off
Lease, a Matured Lease, a Liquidated Lease or an Additional Loss Lease.
"CUTOFF DATE" means [June 30, 1999.]
"DEALER" means a motor vehicle dealer that is a party to a Dealer
Agreement.
"DEALER AGREEMENT" means a lease plan agreement between a Dealer and
AHFC that sets forth the respective rights and obligations of the parties with
respect to the origination of lease contracts by the Dealer.
"DEFAULTED LEASE" means a 1999-A Contract (a) as to which any Monthly
Payment or part thereof in excess of [$40.00], remains unpaid for more than [90]
days from the original due date for such payment, or (b) that is a Charged-off
Lease.
"DEFINITIVE NOTES" shall have the meaning specified in Section 2.10 of
the Indenture.
"DELAWARE ACT" means the Delaware Business Trust Act, specifically,
the provisions of 12 Del. Code, Section 3801 ET SEQ., as amended.
"DELAWARE OWNER TRUSTEE" means Wilmington Trust Company, and its
successors and assigns, in its capacity as Delaware owner trustee of the 1999-A
Securitization Trust.
"DELAWARE TRUSTEE" means Delaware Trust Capital Management, Inc., and
its successors and assigns, in its capacity as the Delaware trustee of the
Origination Trust.
"DELINQUENCY RATE" means, with respect to any Collection Period, the
percentage equivalent to a fraction, the numerator of which is the number of
outstanding 1999-A Contracts as to which, as of the last day of such Collection
Period, all or any part of a Monthly Payment in excess of [$40.00] is unpaid
(including because of a check being returned for insufficient funds) 61 days or
more past due (other than a 1999-A Contract as to which an extension has been
granted with respect to such Due Date by the Servicer pursuant to Section
2.06(b)(ii) of the Servicing Agreement and Section 9.02(b) of the 1999-A
Servicing Supplement), whether or not (a) the related 1999-A Leased Vehicle has
been repossessed (or the process of repossession has been commenced) but has not
yet been sold or otherwise disposed of during such Collection Period, or (b) the
related Lessee is the subject of bankruptcy or similar proceedings, and the
denominator of which is the aggregate number of Current Leases on the last day
of such Collection Period.
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"DELINQUENCY RATE TEST" means that determination, made on each
Determination Date, of the average of the Delinquency Rates for the three
immediately preceding Collection Periods (or the _________ 199_ Collection
Period, in the case of the _____________199_ Determination Date, or the
_____________ and ______________ 199_ Collection Periods, in the case of the
___________________ 199_ Determination Date). The Delinquency Rate Test will be
satisfied if such average is 1.75% or less.
"DELINQUENT LEASES" means [(i)] 1999-A Contracts that are 31 days or
more past due as of the end of the related Collection Period [, and (ii) 1999-A
Contracts with respect to which the Servicer has granted an extension pursuant
to Section 9.02(b) of the 1999-A Servicing Supplement].
"DEPOSIT DATE" means, with respect to any Collection Period, the
Business Day preceding the related Distribution Date.
"DETERMINATION DATE" means, with respect to any Distribution Date, the
tenth calendar day of each month or, if such day is not a Business Day, the next
succeeding Business Day.
"DISCOUNT RATE" means -% per annum.
"DISCOUNTED LEASE" means a 1999-A Contract with a Lease Rate of less
than -%.
"DISCOUNTED PRINCIPAL BALANCE" means (i) with respect to any 1999-A
Contract that is a Discounted Lease, an amount equal to the present value of the
sum of all remaining Monthly Payments on such 1999-A Contract paid on a timely
basis, plus the Booked Residual Value of the related 1999-A Leased Vehicle,
calculated by discounting such Monthly Payments and Booked Residual Value by the
Discount Rate, and (ii) with respect to any other 1999-A Contract, its
Outstanding Principal Balance at such time.
"DISTRIBUTION DATE" means, with respect to a Collection Period, the
fifteenth day of the following month, or if that day is not a Business Day, the
next Business Day, beginning with [August 15, 1999].
"DTC" means The Depository Trust Company and its successors.
"DUE DATE" means, as to any Monthly Payment, the date during each
month upon which such payment is due, which date is specified in the related
1999-A Contract.
"EARLY TERMINATION AMOUNT" means, as of any Distribution Date, an
amount equal to the sum of the Discounted Principal Balances, as of the end of
the related Collection Period, of any Early Termination Leases that became Early
Termination Leases during that related Collection Period, such Discounted
Principal Balances calculated without reference to payments received by the
Servicer in the form of non-cash items.
"EARLY TERMINATION LEASE" means a 1999-A Contract which is terminated
prior to its Maturity Date by agreement between the Servicer and the Lessee in
connection with the
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payment (excluding payments in the form of non-cash items) of less than 100% of
the [Outstanding Principal Balance] [Adjusted Lease Balance] [Discounted
Principal Balance] of a 1999-A Contract; PROVIDED, HOWEVER, that such a 1999-A
Contract will not constitute an Early Termination Lease if such deficit is less
than $[200.00].
"ELIGIBLE ACCOUNT" means an account maintained with a depositary
institution or trust company (i) having corporate trust powers, and (ii) (a) the
short-term unsecured debt obligations of which have the Required Deposit Rating
or (b) having a long-term unsecured debt rating acceptable to each Rating
Agency, provided such account is maintained in a segregated trust account in the
corporate trust department of such depository institution or trust company.
"ELIGIBLE INVESTMENTS" means, as used in the 1999-A SUBI Supplement,
the 1999-A Servicing Supplement, the 1999-A Securitization Trust Agreement and
the Origination Trust Agreement with respect to any investments to be made with
respect to any 1999-A SUBI Assets or proceeds thereof (notwithstanding the
definition of "Eligible Investments" set forth in the Origination Trust
Agreement), any one or more of the following instruments, obligations or
securities, in each case subject to any further criteria specified in the 1999-A
SUBI Supplement:
(a) 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;
(b) (i) general obligations of or obligations guaranteed by
FNMA, or (ii) 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;
(c) certificates of deposit issued by any depository institution
or trust company (including any trustee) incorporated under the laws of the
United States or of 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 are then rated the highest available credit rating of each
Rating Agency for such obligations;
(d) certificates of deposit, demand or time deposits of,
bankers' acceptances issued by, or federal funds sold by, any depository
institution or trust company (including any trustee) incorporated under the
laws of the United States or any State and subject to supervision and
examination by federal and/or State banking authorities and the deposits of
which are fully insured by the FDIC, so long as at the time of such
investment or contractual commitment providing for such investment either
such depository institution or trust company has the Required Deposit
Rating (or if such investment will mature after more than one month, the
long-term, unsecured debt of the issuer has the highest available credit
rating from each Rating Agency) or such trustee shall have received a
letter from each Rating Agency to the effect that credit such investment
would not result in the qualification, downgrading or withdrawal of the
credit ratings then assigned to any Rated Securities issued by the 1999-A
Securitization Trust;
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(e) certificates of deposit issued by any bank, trust company,
savings bank or other savings institution and fully insured by the FDIC
having the Required Deposit Rating (or if such investment will mature after
more than one month, the long-term, unsecured debt of the issuer has the
highest available credit rating from each Rating Agency);
(f) repurchase obligations held by the 1999-A Owner Trustee that
are acceptable to the 1999-A Owner Trustee with respect to any security
described in clauses (a), (b) or (g) 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 (d) above
(including the 1999-A Owner Trustee); PROVIDED, HOWEVER, that repurchase
obligations entered into with any particular depository institution or
trust company (including the 1999-A Owner Trustee) will not be Eligible
Investments to the extent that the aggregate principal amount of such
repurchase obligations with such depository institution or trust company
held by the 1999-A Owner Trustee on behalf of the 1999-A Securitization
Trust or of all of the Trust Assets shall exceed 10% of either the related
Aggregate Net Investment Value or the aggregate unpaid principal balance or
face amount, as the case may be, of all Eligible Investments so held
thereby;
(g) interests in any open-end or closed-end management type
investment company or investment trust (i) registered under the Investment
Company Act, the portfolio of which is limited to the obligations of, or
guaranteed by, the United States and to agreements to repurchase such
obligations, which agreements, with respect to principal and interest, are
at least 100% collateralized by such obligations marked to market on a
daily basis and the investment company or investment trust shall take
delivery of such obligations either directly or through an independent
custodian designated in accordance with the Investment Company Act and (ii)
acceptable to each Rating Agency (as approved in writing by each Rating
Agency) as collateral for securities having ratings equivalent to the
ratings of the Rated Securities on the Closing Date;
(h) securities bearing interest or sold at a discount issued by
any corporation incorporated under the laws of the United States or any
State thereof so long as at the time of such investment or contractual
commitment providing for such investment (i) the long-term, unsecured debt
of such corporation has the highest available credit rating from each
Rating Agency, or (ii) the 1999-A Owner Trustee shall have received a
letter from each Rating Agency to the effect that such investment would not
result in the qualification, downgrading or withdrawal of the ratings then
assigned to any Rated Securities issued by the 1999-A Securitization Trust
or commercial paper, or other short-term debt earning the [Required
Rating];
(i) money market funds so long as such funds are rated Aaa by
Moody's (so long as Moody's is a Rating Agency), AAA by Standard & Poor's
(so long as Standard & Poor's is a Rating Agency) and F1+ by Fitch (so long
as Fitch is a Rating Agency), including any such fund for which the 1999-A
Owner Trustee or an Affiliate thereof serves as an investment advisor,
administrator, shareholder servicing agent and/or
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custodian or subcustodian, and notwithstanding that (i) such Person charges
and collects fees and expenses from such funds for services rendered, (ii)
such Person charges and collects fees and expenses for services rendered
pursuant to the 1999-A Securitization Trust Agreement and (iii) services
performed for such funds and pursuant to the 1999-A Securitization Trust
Agreement may converge at any time. Each of HTC LP, HTD LP and the
Servicer hereby specifically authorizes the 1999-A Owner Trustee or
Origination Trustee or an Affiliate thereof to charge and collect all fees
and expenses from such funds for services rendered to such funds, in
addition to any fees and expenses such Person may charge and collect for
services rendered pursuant to the 1999-A Securitization Trust Agreement;
and
(j) 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 ratings then assigned by
such Rating Agency to any Rated Securities issued by the 1999-A
Securitization Trust; PROVIDED that each of the foregoing investments shall
mature no later than the day specified in the 1999-A Servicing Supplement,
and shall be required to be held to such maturity.
None of the foregoing will be considered an Eligible Investment if:
(i) it constitutes a certificated security, bankers' acceptance,
commercial paper, negotiable certificate of deposit or other obligation that
constitutes "financial assets" within the meaning of Section 8-102(a)(9)(c) of
the UCC unless a security entitlement with respect to such Eligible Investment
has been created, in favor of the Origination Trustee or the 1999-A Owner
Trustee, as appropriate, in accordance with Section 8-501(b) of the UCC and the
related securities intermediary has agreed not to comply with entitlement orders
of any secured party other than the 1999-A Owner Trustee or the Origination
Trustee, as the case may be; or
(ii) it constitutes a book-entry security held through the Federal
Reserve System pursuant to federal book-entry regulations, unless, in accordance
with applicable law, (A) a book-entry registration thereof is made to an
appropriate book-entry account maintained with a Federal Reserve Bank by the
Origination Trustee or the 1999-A Owner Trustee, as appropriate, or by a
custodian therefor, (B) a deposit advice or other written confirmation of such
book-entry registration is issued to such trustee or custodian, (C) any such
custodian makes entries in its books and records identifying that such
book-entry security is held through the Federal Reserve System pursuant to
federal book-entry regulations and belongs to such trustee and indicating that
such custodian holds such Eligible Investment solely as agent for the 1999-A
Owner Trustee or the Origination Trustee, as appropriate, (D) the 1999-A Owner
Trustee or Origination Trustee, as appropriate, makes entries in its books and
records establishing that it holds such security solely in such capacity, and
(E) any additional or alternative procedures as may hereafter become necessary
to effect complete transfer of ownership thereof to such trustee are satisfied,
consistent with changes in applicable law or regulations or the interpretation
thereof.
Notwithstanding anything to the contrary contained in this definition,
no Eligible Investment may be purchased at a premium and no Eligible Investment
shall be an "interest
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only" instrument.
None of the foregoing will be an Eligible Investment with respect to
amounts on deposit in the 1999-A Note Distribution Account or the 1999-A
Certificate Distribution Account unless by its own terms it matures on or before
the Deposit Date preceding the next relevant Distribution Date and it includes a
demand, put or similar feature such that the 1999-A Owner Trustee is able to
cause such investment to mature before such Deposit Date to the extent set forth
in Section 3.03 of the 1999-A Securitization Trust Agreement.
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 (excluding any "+" signs associated with such
rating), 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 by such Rating Agency to any Rated Securities issued by
the 1999-A Securitization Trust.
"ELIGIBLE LEASE" means a Lease as to which the following are true as
of the Cutoff Date (unless otherwise specified below):
a. that was originated by a Dealer (i) in the ordinary
course of its business, (ii) on a form of Lease, (iii) pursuant
to a form of Dealer Agreement that provides for recourse to the
Dealer in the event of certain defects in the Lease but not for
default by the Lessee, and (iv) in compliance with the Credit and
Collection Policy;
b. which Lease and the related Leased Vehicle are owned by
the Origination Trustee, on behalf of the Origination Trust, free
of all Liens, tax liens, mechanics' liens and liens that arise by
operation of law, but other than any lien on the title of such
Vehicle noted solely to provide for delivery of title
documentation to the Origination Trustee or its designee;
c. that was originated in compliance with, and complies
with, all material applicable legal requirements, including, to
the extent applicable, the Federal Consumer Credit Protection
Act, as amended, Regulations M and Z of the Board of Governors of
the Federal Reserve System, as amended, all state leasing and
consumer protection laws and all state and federal usury laws;
d. as to which all material consents, licenses, approvals
or authorizations of, or registrations or declarations with, any
governmental authority required to be obtained, effected or given
by the originator of such Lease in connection with (i) the
origination of such Lease, (ii) the execution, delivery and
performance by such originator of such Lease, and (iii) the
acquisition by the Origination Trust of such Lease and the
related Leased Vehicle, have been duly obtained, effected or
given and are in full force and effect as of such date of
creation or acquisition;
e. that is the legal, valid and binding full-recourse
payment obligation of the Lessee thereunder, enforceable against
such Lessee in
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accordance with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws, now or hereafter in effect,
affecting the enforcement of creditors' rights in general and except
as such enforceability may be limited by general principles of equity
(whether considered in a suit at law or in equity);
f. that, to the knowledge of the Servicer, is not subject
to any right of rescission, setoff, counterclaim or other defense
(including defenses arising out of violations of usury laws) of
the Lessee thereof to payment of the amounts due thereunder, and
no such right of rescission, setoff, counterclaim or other
defense has been asserted or threatened;
g. as to which each of the originator of such Lease, the
Servicer and the Origination Trustee, on behalf of the
Origination Trust, has each satisfied all obligations required to
be fulfilled on its part on or prior to the Cutoff Date with
respect to such Lease and the related Leased Vehicle;
h. that is payable solely in United States dollars in the
United States;
i. the Lessee of which is a Person located in one or more
of the 50 states of the United States, the District of Columbia
or a territory of the United States and is not (i) a Grantor, the
Servicer, a Transferor, or an Affiliate thereof or (ii) the
United States of America or any state or local government or any
agency or political subdivision thereof;
j. that requires the Lessee thereunder to maintain
insurance against loss or damage to the related Leased Vehicle
under an insurance policy that names the Origination Trust or the
Origination Trustee, on behalf of the Origination Trust, as
necessary, as loss payee, and the related Leased Vehicle is
covered by the Residual Value Insurance Policy;
k. the related Leased Vehicle of which is titled in the
name of the Origination Trust or the Origination Trustee on
behalf of the Origination Trust (or properly completed
applications for such title have been submitted to the
appropriate titling authority), as necessary, and all transfer
and similar taxes imposed in connection therewith have been paid;
l. that arises under a closed-end Lease that (i) requires
equal monthly payments to be made within a fixed time period from
the date of origination of such Lease, such time period to be at
least 24 months and no more than 60 months, and (ii) requires
such payments to be made by the Lessee thereof within 30 days
after the billing date for such payment;
m. that is fully assignable and that does not require the
consent of the Lessee thereunder as a condition to any transfer,
sale or assignment of the rights of the originator under such
Lease;
n. as to which the Booked Residual Value of the related
Vehicle does not exceed the lesser of (i) $60,000, and (ii) the
amount
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reasonably established by the Servicer consistent with its policies
and practices regarding the setting of residual values as applied with
respect to closed-end retail automobile, minivan and sport utility
vehicle leases;
o. that, as of the related Cutoff Date, has not been
extended by more than five months in the aggregate or been
otherwise compromised, adjusted or modified except in accordance
with the Credit and Collection Policy;
p. as to which the Lessee thereof has not made a claim
under the Soldiers' and Sailors' Relief Act of 1940;
q. that satisfies all applicable requirements of the
Credit and Collection Policy;
r. that is not allocated to any SUBI other than the 1999-A
SUBI;
s. that, as of the Cutoff Date, is not a Delinquent Lease,
a Defaulted Lease or a Bankrupt Lease;
t. that is a finance lease for purposes of generally
accepted accounting principles, consistently applied;
u. that is a "true lease", as opposed to a lease intended
as security, under the laws of the jurisdiction in which it was
originated;
v. as to which the Servicer has not exercised any right of
set off against the originating Dealer as contemplated by Section
2.05 of the Servicing Agreement;
w. the related Leased Vehicle of which was produced by the
original manufacturer to U.S. specifications and standards, as
evidenced by the vehicle identification number which is within
the approved series for the make and model at the time of
origination of the Lease;
x. the related Leased Vehicle of which has not been used
commercially as a taxi cab, public omnibus, livery, sightseeing
conveyance or for any carrying of goods or passengers for hire;
and
y. which Lease, as of the Cutoff Date, (i) is written with
respect to a Leased Vehicle that was, at the time of origination
of the Lease, a new vehicle, a dealer demonstration vehicle
driven fewer than 6,000 miles, or a manufacturer's program
vehicle; (ii) was originated in the United States after [-];
(iii) has a Maturity Date on or after -, 1999 and no later than
-, 2002; and (iv) fully amortizes to an amount equal to the
Booked Residual Value of the related 1999-A Leased Vehicle based
on a fixed Lease Rate calculated on a constant yield basis and
provides for level payments over its term (except for payment of
such Booked Residual Value).
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"ELIGIBLE SERVICER" means AHFC or an entity that is servicing a
portfolio of automobile, minivan and sport utility vehicle retail installment
lease contracts, that is legally qualified and has the capacity to service the
1999-A Contracts and that has demonstrated the ability to service a portfolio of
similar lease contracts professionally and competently in accordance with
reasonable standards of skill and care.
"ENDORSEMENT" has the meaning set forth under "Endorsement" or
"Indorsement", as applicable, in Section 8-304 of the UCC.
"ENTITLEMENT NOTEHOLDER" has the meaning set forth in Section
8-102(a)(7) of the UCC.
"ENTITLEMENT ORDERS" has the meaning set forth in Section 8-102(a)(8)
of the UCC.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA COMPLIANCE TEST" means the timely, true and accurate
certification, on a quarterly basis, as required, by the Servicer to the 1999-A
Indenture Trustee and each Rating Agency stating that none of the Servicer and
its affiliates for purposes of ERISA (i) maintains an ERISA plan which, as of
its last valuation date, had any unfunded current liability, (ii) anticipates
that the value of the assets of any ERISA plan it maintains would not be
sufficient to cover any current liability and (iii) is contemplating benefit
improvements with respect to any plans then maintained or the establishment of
any new ERISA plans, either of which would cause it to maintain an ERISA plan
with unfunded current liability.
"EVENT OF DEFAULT" means with respect to the Notes, the meaning
specified in Section 5.01 of the Indenture.
"EXCESS INTEREST COLLECTIONS" means, with respect to any Distribution
Date, the balance of any Interest Collections allocated to the Notes and
Certificates for the related Collection Period after all distributions pursuant
to Section 3.03(c) of the 1999-A Securitization Trust Agreement have been made,
net of any amount required to maintain the 1999-A Note Distribution Account or
the 1999-A Certificate Distribution Account in good standing.
"EXCESS MILEAGE FEE" means, with respect to any 1999-A Contract or
1999-A Leased Vehicle, any applicable charge for excess mileage or excess wear
and use.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXTENSION FEE" means, with respect to any 1999-A Contract that has
had its Maturity Date extended pursuant to the Servicing Agreement and the
1999-A Servicing Supplement, any payment required to be made with respect to
such 1999-A Contract by the Lessee in exchange for the extension.
"FDIC" means the Federal Deposit Insurance Corporation and its
successors.
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"FINAL SCHEDULED DISTRIBUTION DATE" means the Class A-1 Final
Distribution Date, the Class A-2 Final Distribution Date, the Class A-3 Final
Distribution Date, the Class A-4 Final Distribution Date and the Class B Final
Distribution Date, as the case may be.
"FINANCIAL INTERMEDIARY" means a financial intermediary, as such term
is defined in Section 8-313(4) of the UCC.
"FITCH" means Fitch IBCA, Inc., and its successors and assigns.
"FNMA" means the Federal National Mortgage Association and its
successors.
"FLOW-THROUGH ENTITY" has the meaning in Section 2.04 of the
Indenture.
"FORCE MAJEURE EVENT" means an act beyond the Servicer's reasonable
control, including an act of God, war, vandalism or sabotage; rioting,
accidents, fires, floods, earthquakes, hurricanes, strikes, labor disputes,
mechanical breakdowns, shortages or delays in obtaining suitable parts,
equipment, material, labor or transportation; acts of subcontractors;
interruption of utility services, acts of any unit of government or governmental
agency; or any similar or dissimilar cause.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
"GRANT" means mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, grant a lien upon and a
security interest in and right of set-off against, deposit, set over and confirm
pursuant to the Indenture. A Grant of the Collateral or of any other agreement
or instrument shall include all rights, powers and options (but none of the
obligations) of the Granting party thereunder, including the immediate and
continuing right to claim for, collect, receive and give receipt for principal
and interest payments in respect of the Collateral and all other moneys payable
thereunder, to give and receive notices and other communications, to make
waivers or other agreements, to exercise all rights and options, to bring
Proceedings in the name of the Granting party or otherwise and generally to do
and receive anything that the Granting party is or may be entitled to do or
receive thereunder or with respect thereto. Other forms of the verb "to Grant"
shall have correlative meanings.
"GRANTORS" means HTA LP and HTB LP, in their respective capacities as
grantors.
"GROSS CAPITALIZED COST" means, with respect to any 1999-A Contract
and the related 1999-A Leased Vehicle, the amount agreed to by the Lessee at the
time of origination of such 1999-A Contract as the value of the related 1999-A
Leased Vehicle and any items that are capitalized during the term of such 1999-A
Contract, including acquisition fees, taxes, insurance, service agreements and
any outstanding balance from a prior motor vehicle loan or lease contract.
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"HOLDER" means, with respect to any Certificate or Note, the Person
listed in the Certificate Register or the Note Register as the registered owner
thereof; PROVIDED, HOWEVER, that a Registered Pledgee shall be entitled to
exercise any or all of the rights or powers of the Holder of a Note hereunder,
including receiving distributions, providing notices or giving consents, to the
extent that such entitlement is set forth in the Holder's registration of pledge
or the documents relating to such pledge.
"HTA LP" means Honda Titling A L.P., a Delaware limited partnership,
and its successors and assigns.
"HTA LP 1999-A SUBI SECURITIES ACCOUNT" means the securities account
established by the 1999-A SUBI Securities Intermediary in the name of and for
the benefit of HTA LP pursuant to the HTA LP 1999-A SUBI Securities Account
Control Agreement.
"HTA LP 1999-A SUBI SECURITIES ACCOUNT CONTROL AGREEMENT" means that
certain HTA LP 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999], between HTA LP and the 1999-A SUBI Securities Intermediary.
"HTA LP/HTB LP 1999-A SUBI CERTIFICATES" means the HTA LP/HTC LP
1999-A SUBI Certificate, the HTA LP/HTD LP 1999-A SUBI Certificate, the HTB
LP/HTC LP 1999-A SUBI Certificate and the HTB LP/HTD LP 1999-A SUBI Certificate.
"HTA LP/HTC LP 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTA LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 98.01% of the 1999-A SUBI.
"HTA LP/HTD LP 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTA LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 0.99% of the 1999-A SUBI.
"HTB LP" means Honda Titling B L.P., a Delaware limited partnership,
and its successors and assigns.
"HTB LP 1999-A SUBI SECURITIES ACCOUNT" means the securities account
established by the 1999-A SUBI Securities Intermediary in the name of and for
the benefit of HTB LP pursuant to the HTB LP 1999-A SUBI Securities Account
Control Agreement.
"HTB LP 1999-A SUBI SECURITIES ACCOUNT CONTROL AGREEMENT" means that
certain HTB LP 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999], between HTB LP and the 1999-A SUBI Securities Intermediary.
"HTB LP/HTC LP 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTB LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 0.99% of the 1999-A SUBI.
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<PAGE>
"HTB LP/HTD LP 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTB LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 0.01% of the 1999-A SUBI.
"HTC LP" means Honda Titling C L.P., a Delaware limited partnership,
and its successors and assigns.
"HTC LP 1999-A SUBI CERTIFICATE" means the certificate issued by the
Origination Trustee to HTC LP pursuant to the 1999-A SUBI Supplement evidencing
a beneficial interest in 98.802% of the 1999-A SUBI.
"HTC LP 1999-A SUBI INTEREST" means the interest in the 1999-A SUBI
represented by the HTC LP 1999-A SUBI Certificate.
"HTC LP 1999-A SUBI SECURITIES ACCOUNT" means the securities account
established by the 1999-A SUBI Securities Intermediary in the name of and for
the benefit of HTC LP pursuant to the HTC LP 1999-A SUBI Securities Account
Control Agreement.
"HTC LP 1999-A SUBI SECURITIES ACCOUNT CONTROL AGREEMENT" means that
certain HTC LP 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999], between HTC LP and the 1999-A SUBI Securities Intermediary.
"HTC LP RETAINED 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTC LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 0.198% of the 1999-A SUBI.
"HTD LP" means Honda Titling D L.P., a Delaware limited partnership,
and its successors and assigns.
"HTD LP 1999-A SUBI CERTIFICATE" means the certificate issued by the
Origination Trustee to HTD LP pursuant to the 1999-A SUBI Supplement evidencing
a beneficial interest in 0.998% of the 1999-A SUBI.
"HTD LP 1999-A SUBI INTEREST" means the interest in the 1999-A SUBI
represented by the HTD LP 1999-A SUBI Certificate.
"HTD LP 1999-A SUBI SECURITIES ACCOUNT" means the securities account
established by the 1999-A SUBI Securities Intermediary in the name of and for
the benefit of HTD LP pursuant to the HTD LP 1999-A SUBI Securities Account
Control Agreement.
"HTD LP 1999-A SUBI SECURITIES ACCOUNT CONTROL AGREEMENT" means that
certain HTD LP 1999-A SUBI Securities Account Control Agreement, dated as of
[June 30, 1999], between HTD LP and the 1999-A SUBI Securities Intermediary.
"HTD LP RETAINED 1999-A SUBI CERTIFICATE" means the certificate issued
by the Origination Trustee to HTD LP pursuant to the 1999-A SUBI Supplement
evidencing a beneficial interest in 0.002% of the 1999-A SUBI.
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"INDENTURE" means that certain Indenture, dated as of [June 30, 1999],
by and among the 1999-A Securitization Trust and the 1999-A Indenture Trustee.
"INDENTURE EVENT OF DEFAULT" means an "Event of Default" as defined in
Section 5.01 of the Indenture.
"INDEPENDENT" means, when used with respect to any specified Person,
such a Person who (a) is in fact independent of the Issuer, any other obligor
upon the Notes, HTC LP or HTD LP and any of their respective Affiliates; (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, HTC LP or HTD LP or any of their
respective Affiliates; and (c) is not connected with the Issuer, any such other
obligor, HTC LP or HTD LP or any of their respective Affiliates as an officer,
employee, promoter, underwriter, trustee, partner, director or Person performing
similar functions. "Independent" when used with respect to any Accountant means
such an Accountant, who may also be the Accountant who audits the books of the
Issuer, any other obligor upon the Notes or any of their respective Affiliates,
who is independent with respect to the Issuer, any other obligor upon the Notes
and their respective Affiliates as contemplated by Rule 101 of the Code of
Professional Conduct of the American Institute of Certified Public Accountants.
Whenever it is provided that any Independent Person's opinion or certificate
shall be furnished to the 1999-A Indenture Trustee, such Person shall be
acceptable to the 1999-A Indenture Trustee if selected in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read this definition and that the signer is independent within the meaning
thereof.
"INDEPENDENT ACCOUNTANT" means an Accountant, who may also be the
Accountant who audits a Beneficiary, AHFC, the Servicer or any of their
respective Affiliates, who is "independent" with respect to such entity as
contemplated by Rule 101 of the Code of Professional Conduct of the American
Institute of Certified Public Accountants. Whenever any Independent Accountant's
opinion or certificate shall be furnished to the Trust or the 1999-A Owner
Trustee, the Accountant shall be acceptable to the 1999-A Owner Trustee if such
opinion or certificate shall state that the signer has read this definition and
that the signer is Independent within the meaning hereof.
"INDEPENDENT DIRECTOR" means a director of the manager of the general
partner of HTC LP or HTD LP who shall at no time be (i) a director, officer,
employee or former employee of any Affiliate of HTC LP or HTD LP, (ii) a natural
person related to any director, officer, employee or former employee of any
Affiliate, (iii) a holder (directly or indirectly) of any voting securities of
any Affiliate, or (iv) a natural person related to a holder (directly or
indirectly) of any voting securities of any Affiliate. For these purposes,
"AFFILIATE" shall mean any entity other than HTC LP, HTD LP or any similarly
organized special purpose finance subsidiary of an Affiliate (i) which owns
beneficially, directly or indirectly, more than 5% of the outstanding shares of
the common stock or partnership interests of HTC LP or HTD LP, (ii) which is in
control of HTC LP or HTD LP, as currently defined under Section 230.405 of the
Rules and Regulations of the Commission, 17 C.F.R. Section 230.405, (iii) of
which 10% or more of the outstanding shares of its common stock or partnership
interests are owned beneficially, directly or indirectly, by any entity
described in clause (i) or (ii) above, or (iv) which is controlled by an
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entity described in clause (i) or (ii) above, as currently defined under Section
230.405 of the Rules and Regulations of the Commission, 17 C.F.R. Section
230.405.
"INITIAL CERTIFICATE BALANCE" means $-.
"INITIAL CLASS A NOTE BALANCE" means the sum of the Initial Class A-1
Note Balance, the Initial Class A-2 Note Balance, the Initial Class A-3 Note
Balance and the Initial Class A-4 Note Balance.
"INITIAL CLASS A-1 NOTE BALANCE" means $-.
"INITIAL CLASS A-2 NOTE BALANCE" means $-.
"INITIAL CLASS A-3 NOTE BALANCE" means $-.
"INITIAL CLASS A-4 NOTE BALANCE" means $-.
"INITIAL CLASS B NOTE BALANCE" means $-.
"INITIAL NOTE BALANCE" means the sum of the Initial Class A Note
Balance and the Initial Class B Note Balance.
"INSTITUTIONAL ACCREDITED INVESTOR" means an institutional "accredited
investor" as defined in Rule 501(a)(1), (2), (3) or (7) under the Securities
Act.
"INSURANCE EXPENSES" means any amount of Insurance Proceeds (a)
applied to the repair of the related 1999-A Leased Vehicle, (b) released to a
Lessee in accordance with the normal servicing procedures of the Servicer, or
(c) representing other related expenses incurred by the Servicer not otherwise
included in Liquidation Expenses and recoverable under the Servicing Agreement
or the 1999-A Servicing Supplement.
"INSURANCE POLICY" means, with respect to a 1999-A Contract, 1999-A
Leased Vehicle or Lessee under a 1999-A Contract, any policy of comprehensive,
collision, public liability, physical damage, personal liability, credit health
or accident, credit life or employment or other form of insurance.
"INSURANCE PROCEEDS" means, with respect to any 1999-A Contracts,
1999-A Leased Vehicles or Lessees, proceeds paid to the Servicer or the
Origination Trustee, on behalf of the Origination Trust, pursuant to an
Insurance Policy and amounts paid to the Origination Trustee, on behalf of the
Origination Trust, or the Servicer under any other insurance policy related to
such 1999-A Contracts, 1999-A Leased Vehicles or Lessees (including any
contingent and excess liability insurance policy maintained by or on behalf of
the Origination Trustee, on behalf of the Origination Trust, but excluding the
Residual Value Insurance Policy or any other residual value insurance policies).
"INTEREST COLLECTIONS" means, with respect to any Collection Period,
all Collections received during or allocable to such Collection Period other
than Principal
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Collections, less the following, which shall be paid to the appropriate parties
or retained in the 1999-A SUBI Collection Account, as appropriate, in the
following order and priority for so long as AHFC is the Servicer: (a) Capped
Contingent and Excess Liability Premiums, but with regard to the Investor
Percentage of Interest Collections allocable to the 1999-A SUBI Certificates,
only to the extent such deduction and payment would have the same effect as if
it followed item (iii) of Section 3.03(c) of the 1999-A Securitization Trust
Agreement; (b) Capped Origination Trust Administrative Expenses, but with regard
to the Investor Percentage of Interest Collections allocable to the 1999-A SUBI
Certificates, only to the extent that such deduction and payment would have the
same effect as if it followed item (iii) of Section 3.03(c) of the 1999-A
Securitization Trust Agreement and then followed the deduction and payment set
forth in clause (a) above; and (c) the Servicing Fee and any unpaid Servicing
Fee with respect to one or more prior Collection Periods, but with regard to the
Investor Percentage of Interest Collections allocable to the 1999-A SUBI
Certificates, only to the extent that such deduction and payment would be made
with the same effect as if it followed item (xi) of Section 3.03(c) of the
1999-A Securitization Trust Agreement and the deductions and payments in clauses
(a) and (b) have been made as indicated. If AHFC is not the Servicer, the
deduction and payment in clause (c) shall instead be made only to the extent
that it would have the same effect as if it followed item (iv) of Section
3.03(c) of the 1999-A Securitization Trust Agreement and the deductions and
payments in clauses (a) and (b) of the preceding sentence have been made as
indicated. Without limiting the generality of the foregoing, Interest
Collections with respect to any Collection Period shall include any excess of
Net Matured Leased Vehicle Proceeds for that Collection Period over the sum of
the Booked Residual Values of all Matured Leased Vehicles sold or otherwise
disposed of from Matured Leased Vehicle Inventory during the Collection Period.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
"INVESTOR BALANCE" means, on any Distribution Date, the sum of the
Note Balance and the Certificate Balance.
"INVESTOR INTEREST" means the aggregate of the interests of the
Noteholders and the Certificateholders.
"INVESTOR PERCENTAGE" means 99.8%.
"ISSUER" means Honda Auto Lease Trust 1999-A, and its successors and
assigns.
"ISSUER ORDER" means a written order signed by any officer of the
1999-A Indenture Trustee who is authorized to act for the Issuer, and delivered
to the 1999-A Indenture Trustee.
"ISSUER REQUEST" means a written request signed by any officer of the
1999-A Indenture Trustee who is authorized to act for the Issuer, and delivered
to the 1999-A Indenture Trustee.
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"LEASE" means any lease contract for a Leased Vehicle assigned to the
Origination Trust or to the Origination Trustee on behalf of the Origination
Trust.
"LEASE CHARGE" means, with respect to any 1999-A Contract and any
month, the portion of the Monthly Payment equal to the product of the (i) Book
Value as of the end of the immediately preceding month (or, in the case of the
first month, as of the date of origination of such 1999-A Contract) and (ii)
1/12 of the related Lease Factor.
"LEASE DOCUMENTS" means, with respect to each 1999-A Contract, the
fully executed 1999-A Contract and any agreement(s) modifying such 1999-A
Contract (including any extension or deferral agreement(s) relating to extended
1999-A Contract(s)).
"LEASE FACTOR" means, with respect to any 1999-A Contract, a per annum
yield determined by the Servicer at the time of origination of such 1999-A
Contract in accordance with its customary practices.
"LEASE PRINCIPAL" means, with respect to any 1999-A Contract, that
portion of the Monthly Payment that is not a Lease Charge.
"LEASE RATE" means, with respect to each Lease, the implicit interest
rate, calculated on the basis of an annual percentage rate, included in the
calculation of the Monthly Payment due with respect to such Lease.
"LEASED VEHICLE" means a new or used Honda or Acura automobile,
minivan or sport utility vehicle, together with all accessories, parts and
additions constituting a part thereof, and all accessions thereto, leased to a
Lessee pursuant to a Lease.
"LESSEE" means each Person that is obligated under a Lease, including
any Person that executes a guarantee on behalf of a lessee.
"LIEN" means any security interest, lien, charge, pledge, equity or
encumbrance of any kind, other than tax liens, mechanics' liens and liens that
attach to property by operation of law.
"LIQUIDATED LEASE" means a 1999-A Contract that (a) has been the
subject of a Prepayment in full, or (b) has been paid in full, regardless of
whether all or any part of such payment has been made by the Lessee under the
related 1999-A Contract, the Servicer pursuant to the Servicing Agreement or
1999-A Servicing Supplement, an insurer pursuant to an Insurance Policy or
otherwise.
"LIQUIDATION EXPENSES" means Matured Leased Vehicle Expenses,
Repossession Expenses, and all other reasonable out-of-pocket expenses incurred
by the Servicer in connection with the attempted realization of the full amounts
due or to become due under any 1999-A Contract, including expenses incurred in
connection with any collection effort (whether or not resulting in a lawsuit
against the Lessee under such 1999-A Contract) or an application or request for
Insurance Proceeds.
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"LIQUIDATION PROCEEDS" means Matured Leased Vehicle Proceeds,
Repossession Proceeds, and all other gross amounts received by the Servicer or
the Origination Trustee, on behalf of the Origination Trust (before
reimbursement for Liquidation Expenses), in connection with the realization of
the full amounts due or to become due under any 1999-A Contract, whether from
the proceeds of any collection effort (whether or not resulting in a lawsuit
against the Lessee under such Lease), receipt of Insurance Proceeds, or
collection of amounts due under the Servicing Agreement (including the
application of Security Deposits pursuant to Section 2.07 thereof), the 1999-A
Servicing Supplement (including any amount required to be deposited by the
Servicer into the 1999-A SUBI Collection Account pursuant to Section 9.02
thereof) or otherwise.
"LOSS AMOUNT" means, with respect to any Distribution Date, an amount
equal to the sum of the Charged-off Amount, the Residual Value Loss Amount and
the Additional Loss Amount, in each case for the related Collection Period.
"MATURED LEASE" means a 1999-A Contract (a) that has reached its
scheduled maturity and (b) as to which all payments related to such 1999-A
Contract have been made.
"MATURED LEASED VEHICLE" as of any date means [any 1999-A Leased
Vehicle the related 1999-A Contract of which has reached its Maturity Date and
as to which all scheduled Monthly Payments and other payments due thereunder
have been made, and which 1999-A Leased Vehicle has been returned to the
Servicer on behalf of the Origination Trustee, on behalf of the Origination
Trust, regardless of the status of the disposition of such 1999-A Leased Vehicle
as of such date].
"MATURED LEASED VEHICLE EXPENSES" means reasonable out-of-pocket
expenses incurred by the Servicer in connection with the sale or other
disposition of a 1999-A Leased Vehicle included in Matured Leased Vehicle
Inventory.
"MATURED LEASED VEHICLE INVENTORY" as of any date means all Matured
Leased Vehicles that first became Matured Leased Vehicles within the three
immediately preceding Collection Periods (or during the months of _____, _______
and ________ 199_ in respect of any date during the ________ 199_ Collection
Period; the months of _________ and __________ 199_ and the _________ 199_
Collection Period in respect of any date during the _________ 199_ Collection
Period; and the month of ___________ 199_ and the _____________ and __________
199_ Collection Periods in respect of any date during the _________ 199_
Collection Period), and that, as of the last day of the most recent Collection
Period have remained unsold and not otherwise disposed of by the Servicer for no
more than two full calendar months and/or Collection Periods, as applicable.
"MATURED LEASED VEHICLE PROCEEDS" means gross amounts received by the
Servicer or the Origination Trustee, on behalf of the Origination Trust (before
reimbursement for Matured Leased Vehicle Expenses), in connection with the sale
or other disposition of a 1999-A Leased Vehicle included in the Matured Leased
Vehicle Inventory (including any charges for excess mileage and excess wear and
use).
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"MATURITY" means the date on which the entire unpaid principal amount
of the Class A-1 Notes, Class A-2 Notes, Class A-3, Class A-4 Notes or Class B
Notes becomes due and payable as therein or herein provided, whether at the
Class A-1 Stated Maturity, Class A-2 Stated Maturity, Class A-3 Stated Maturity,
Class A-4 Stated Maturity or Class B Stated Maturity, respectively, or
otherwise.
"MATURITY DATE" means, with respect to a 1999-A Contract, the date on
which the last scheduled Monthly Payment shall be due and payable, as such date
may be extended pursuant to clause (ii) of Section 2.06(b) of the Servicing
Agreement and Section 9.02 of the 1999-A Servicing Supplement.
"MONTHLY PAYMENT" means, with respect to a 1999-A Contract, the amount
of each fixed monthly payment payable in respect of such 1999-A Contract 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 Lessees for payment of insurance premiums, excise taxes
or similar items.
"MONTHLY REMITTANCE CONDITIONS" means each of the following
conditions: (i) no 1999-A Servicer Termination Event shall have occurred and be
continuing with respect to the 1999-A SUBI Sub-Trust; and (ii) either (A) no
Rated Securities related to the UTI or the 1999-A SUBI, as applicable, are
outstanding or (B) if Rated Securities are outstanding, the short-term credit
rating of the Servicer is at least equal to the Required Servicer Rating.
"MOODY'S" means Moody's Investors Services, Inc., and its successors
and assigns.
"NET INSURANCE PROCEEDS" means Insurance Proceeds less Insurance
Expenses.
"NET LIQUIDATION PROCEEDS" means Liquidation Proceeds less Liquidation
Expenses.
"NET MATURED LEASED VEHICLE PROCEEDS" means Matured Leased Vehicle
Proceeds less Matured Leased Vehicle Expenses.
"NET REPOSSESSION PROCEEDS" means Repossession Proceeds less
Repossession Expenses.
"NONRECOVERABLE ADVANCE" means any Advance that, in the Servicer's
reasonable judgment, may not be ultimately recoverable by the Servicer from
Matured Leased Vehicle Proceeds, Repossession Proceeds, Liquidation Proceeds or
Insurance Proceeds, or otherwise.
"NOTE BALANCE" initially means the Initial Note Balance and, as of any
date, means the sum of the Class A Note Balance and the Class B Note Balance as
of the close of business on such date, after giving effect to any changes
therein on such date.
"NOTE FACTOR" means, with respect to any Class of Notes, a seven-digit
decimal computed by the Servicer each month indicating the Note Balance of the
related Class of Notes
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<PAGE>
as of the close of business on the Distribution Date in such month as a fraction
of the Initial Note Balance of such Class of Notes.
"NOTE OWNER" means, with respect to a Book-Entry Note, the Person who
is the owner of such Book-Entry Note, 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 accordance with the rules of
such Clearing Agency) and means, with respect to a Definitive Note, the related
Noteholder.
"NOTE RATE" means the Class A-1 Note Rate, the Class A-2 Note Rate,
the Class A-3 Note Rate, the Class A-4 Note Rate or the Class B Note Rate, as
the case may be.
"NOTE REGISTER" means the register of Noteholders maintained by the
1999-A Indenture Trustee pursuant to Section 2.04 of the Indenture.
"NOTE REGISTRAR" means the entity which is appointed for the purposes
of maintaining the Note Register and registering Notes and transfers of Notes as
provided in the Indenture. The Note Registrar shall initially be the 1999-A
Indenture Trustee, until a successor is appointed pursuant to the Indenture.
"NOTEHOLDER" means the Person in whose name a Note is registered in
the Note Register, except that, solely for the purposes of giving any consent,
waiver, request or demand pursuant to this Agreement, the interest evidenced by
any Note registered in the name of HTC LP, HTD LP, either UTI Beneficiary or
AHFC, or any Person controlling, controlled by or under common control with HTC
LP, HTD LP, either UTI Beneficiary or AHFC, 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.
"NOTES" means the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes and the Class B Notes.
"NOTICE OF ADVERSE CLAIM" has the meaning set forth in Section
8-102(a)(1) and 8-105 of the UCC.
"OFFICER'S CERTIFICATE" means a certificate signed by the Chairman of
the Board of Directors, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of any specified
Person (which, in the case of a (i) limited liability company, shall be any of
the foregoing officers of a member or a manager or (ii) partnership, shall be
any of the foregoing officers of the managing general partner or, if there is no
managing general partner, any general partner) and delivered to any other
specified Person.
"OPINION OF COUNSEL" means a written opinion of counsel (who, in the
case of counsel to HTC LP, HTD LP, the Servicer or any of their respective
Affiliates, may be an employee of or outside counsel to HTC LP, HTD LP, the
Servicer or any of their respective Affiliates), which counsel, in the case of
an opinion delivered to the 1999-A Indenture Trustee or the 1999-A Owner
Trustee, respectively, shall be reasonably acceptable to such Trustee.
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<PAGE>
"ORIGINATION TRUST" means Honda Lease Trust, a Delaware business
trust.
"ORIGINATION TRUST AGREEMENT" means that certain Second Amended and
Restated Trust and Servicing Agreement, dated as of April 1, 1998, among HTA LP
and HTB LP, as Grantors and UTI Beneficiaries, the Origination Trustee, the
Servicer, the Delaware Trustee and, for certain limited purposes set forth
therein, U.S. Bank, as Trust Agent.
"ORIGINATION TRUST EXPENSES" means the amount of expenses and
liabilities incurred or suffered by the Origination Trust.
"ORIGINATION TRUSTEE" means HVT, Inc., a Delaware corporation, in
its capacity as origination trustee for the Origination Trust, and its
successors and assigns.
"OTHER SUBI" means any SUBI other than the 1999-A SUBI.
"OTHER SUBI ASSETS" means the Trust Assets identified as SUBI Assets
of, and allocated to, an Other SUBI on the Origination Trust's books and
records.
"OUTSTANDING" means, with respect to the Notes, as of any date of
determination, all Notes theretofore authenticated and delivered under the
Indenture except:
(a) Notes theretofore canceled by the 1999-A Indenture Trustee or
delivered to the 1999-A Indenture Trustee for cancellation;
(b) Notes or portions thereof for whose payment or redemption Cash in
the necessary amount has been theretofore irrevocably deposited with the 1999-A
Indenture Trustee or any Paying Agent in trust for the Holders of such Notes;
PROVIDED, HOWEVER, that, if such Notes or portions thereof are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provision therefor satisfactory to the 1999-A Indenture Trustee has been made;
and
(c) Notes in exchange for or in lieu of which other Notes have been
authenticated and delivered pursuant to the Indenture unless proof satisfactory
to the 1999-A Indenture Trustee is presented that any such Notes are held by a
bona fide Protected Purchaser;
PROVIDED, HOWEVER, that for purposes of determining required percentages for
voting rights, consents and other actions of the Noteholders hereunder, Notes
owned by HTC LP, HTD LP or any Affiliate of HTC LP or HTD LP, as shown on the
Note Register, shall not be deemed to be Outstanding. Notes so owned that have
been pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the 1999-A Indenture Trustee the pledgee's
right to so act with respect to such Notes and that the pledgee is not HTC LP,
HTD LP or any Affiliate of HTC LP or HTD LP.
"OUTSTANDING ADVANCES" means, with respect to a Distribution Date, 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 that are specified in Section 9.02(i) of
the 1999-A Servicing Supplement as applied to reimburse such Advance as are
unreimbursed or are Nonrecoverable Advances.
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<PAGE>
"OUTSTANDING AMOUNT" means, except as otherwise indicated by the
context, the aggregate principal amount of all Notes of all Classes Outstanding
or of all Certificates Outstanding at the date of determination.
"OVERDUE INTEREST RATE" means the lesser of (1) the highest legally
permissible interest rate per annum and (2) the greater of (a) the Class A-1
Note Interest Rate, Class A-2 Note Interest Rate, Class A-3 Note Interest Rate,
Class A-4 Note Interest Rate or Class B Note Interest Rate, as applicable, plus
[2%] per annum, or (b) the interest rate per annum announced from time to time
by the 1999-A Indenture Trustee as its reference rate.
"OUTSTANDING PRINCIPAL BALANCE" means, with respect to any 1999-A
Contract as of any date, an amount equal to (a) the sum of all Monthly Payments
remaining to be made (PROVIDED, HOWEVER, that Payments Ahead received but not
yet applied are deemed to be Monthly Payments remaining to be made), less any
unearned finance or other charges relating to the period beginning after the
next succeeding Due Date on such 1999-A Contracts (determined in accordance with
the actuarial method as applied to the Lease Rate for such 1999-A Contract in
accordance with the Servicer's usual practices), plus (b) the Booked Residual
Value of the related 1999-A Leased Vehicle.
"PAYAHEAD ACCOUNT" means any account created, designated and
maintained as such pursuant to Section 4.02 of the Origination Trust Agreement
and Section 13.03 of the 1999-A SUBI Supplement.
"PAYING AGENT" means the 1999-A Indenture Trustee or any other Person
that meets the eligibility standards for the 1999-A Indenture Trustee specified
in Section 6.08 of the Indenture and is authorized by the Issuer to pay on
behalf of the Issuer the principal or any interest that may become payable on
any Notes.
"PAYMENT AHEAD" means any payment of one or more Monthly Payments
(other than in connection with a Prepayment) remitted by a Lessee with respect
to a 1999-A Contract in excess of the Monthly Payment due during such Collection
Period with respect to such 1999-A Contract [,which sums the Lessee has
instructed the Servicer to apply to Monthly Payments due in one or more
immediately subsequent Collection Periods].
"PERCENTAGE INTEREST" means, as to any Note or Certificate, the
percentage obtained by dividing the outstanding principal balance of such Note
or Certificate by the Note Balance or Certificate Balance or by the Class A Note
Balance, the Class A-1 Note Balance, the Class A-2 Note Balance, the Class A-3
Note Balance, the Class A-4 Note Balance, the Class B Note Balance or the
Certificate Balance, as the context may require; PROVIDED, HOWEVER, that where
the Percentage Interest is relevant in determining whether the vote of the
requisite percentage of Noteholders or Certificateholders necessary to effect
any consent, waiver, request or demand shall have been obtained, the aggregate
Percentage Interest shall be deemed to be reduced by the amount equal to the
Percentage Interest (without giving effect to this provision) represented by the
interests evidenced by any such Note or Certificate that is registered in the
name of the UTI Beneficiaries, HTC LP, HTD LP, AHFC or any Person controlling,
controlled by or under common control with the UTI Beneficiaries, HTC LP, HTD LP
or AHFC.
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<PAGE>
"PERSON" means any legal person, including any individual,
corporation, partnership, joint venture, association, limited liability company,
joint stock company, trust, bank, trust company, estate (including any
beneficiaries thereof), unincorporated organization or government or any agency
or political subdivision thereof.
"POOL BALANCE" means, as of any date with respect to a Sub-Trust, the
Adjusted Lease Balances of all related Leases at such date.
"PREDECESSOR NOTES" means, with respect to any particular Note, every
previous Note evidencing all or a portion of the same debt as that evidenced by
such particular Note; and, for the purpose of this definition, any Note
authenticated and delivered under Section 2.05 of the Indenture in lieu of a
mutilated, lost, destroyed or stolen Note shall be deemed to evidence the same
debt as the mutilated, lost, destroyed or stolen Note.
"PREPAYMENT" means: (a) payment to the Servicer of 100% of the
Outstanding Principal Balance of a 1999-A Contract (exclusive of any Charged-off
Lease) or such lesser amount as may be provided for in such 1999-A Contract,
including any related payment of interest, or (b) payment by the Servicer to the
Origination Trustee, on behalf of the Origination Trust, of any amount required
to be deposited by the Servicer into the 1999-A SUBI Collection Account with
respect to a 1999-A Contract pursuant to Section 8.02 of the 1999-A Servicing
Supplement.
"PRINCIPAL COLLECTIONS" means, with respect to any Collection Period,
all Collections received during or allocable to such Collection Period allocable
to the principal component of any 1999-A Contract (including any payment in
respect of the Booked Residual Value of the related 1999-A Leased Vehicle, but
not including Collections with regard to which a Loss Amount has already
accrued); PROVIDED, HOWEVER, that, solely for purposes of calculating Principal
Collections, the principal portion of Monthly Payments included in such
Collections arising from a Discounted Lease will be discounted to a present
value at the Discount Rate.
"PROCEEDING" means any suit in equity, action at law or other judicial
or administrative proceeding.
"PROSPECTUS" means that certain prospectus dated [July __, 1999]
relating to the public offering of the Notes.
"PROTECTED PURCHASER" shall have the meaning set forth in
Article 8-303 of the UCC.
"RATED SECURITIES" means each Class of Securities that has been rated
by a Rating Agency at the request of HTC LP or HTD LP.
"RATING AGENCY" means each of Moody's, Standard & Poor's and Fitch and
any other nationally recognized statistical rating agency, but only if it has
rated any Class of Notes as of the Closing Date at the request of HTC LP or HTD
LP and continues to do so.
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<PAGE>
"RATING AGENCY CONDITION" means, with respect to any action, that each
Rating Agency shall have been given ten Business Days (or such shorter period as
is acceptable to each Rating Agency) prior notice thereof and that each Rating
Agency shall have notified HTC LP, HTD LP, the Administrator, the Issuer [and
the 1999-A Indenture Trustee] in writing that such action will not result in a
Rating Event.
"RATING EVENT" means the qualification, reduction or withdrawal by any
Rating Agency of its then-current rating of the Notes.
"REALLOCATION DEPOSIT AMOUNT" means any amount required to be
deposited by the Servicer into the 1999-A SUBI Collection Account pursuant to
the last sentence of Section 8.02(a) of the 1999-A Servicing Supplement.
"RECORD DATE" means, with respect to each Distribution Date, (i) in
the case of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes or the
Class A-4 Notes, the calendar day immediately preceding such Distribution Date
(or, if Definitive Notes have been issued, the last day of the immediately
preceding calendar month) and (ii) in the case of the Class B Notes or the
Certificates, the last day of the calendar month immediately preceding the month
in which such Distribution Date occurs.
"REDEMPTION DATE" means, with respect to any Note to be redeemed
pursuant to Article Ten of the Indenture, any date fixed for such redemption
pursuant to the Indenture, which date shall be a Distribution Date.
"REDEMPTION PRICE" means, as of any Distribution Date, the amount
equal to the greater of (i) the Aggregate Net Investment Value as of the last
day of the related Collection Period, and (ii) the sum of (A) the Adjusted Class
A-1 Note Balance, the Adjusted Class A-2 Note Balance, the Adjusted Class A-3
Note Balance, the Adjusted Class A-4 Note Balance, the Adjusted Class B Note
Balance and the Adjusted Certificate Balance, (B) the accrued and unpaid Class
A-1 Interest Distributable Amount, Class A-2 Interest Distributable Amount,
Class A-3 Interest Distributable Amount, Class A-4 Interest Distributable
Amount, Class B Interest Distributable Amount and Certificate Interest
Distributable Amount, (C) any accrued and unpaid Class A-1 Interest Carryover
Shortfall, Class A-2 Interest Carryover Shortfall, Class A-3 Interest Carryover
Shortfall, Class A-4 Interest Carryover Shortfall, Class B Interest Carryover
Shortfall and Certificate Interest Carryover Shortfall, (D) any unpaid Class A-1
Note Principal Loss Amount, Class A-2 Note Principal Loss Amount, Class A-3 Note
Principal Loss Amount, Class A-4 Note Principal Loss Amount, Class B Note
Principal Loss Amount, Class B Note Principal Carryover Shortfall, Certificate
Principal Loss Amount and Certificate Principal Carryover Shortfall, and (E) any
accrued and unpaid Class A-1 Note Principal Loss Interest Amount, Class A-2 Note
Principal Loss Interest Amount, Class A-3 Note Principal Loss Interest Amount,
Class A-4 Note Principal Loss Interest Amount, Class B Note Principal Loss
Interest Amount, Class B Note Principal Carryover Shortfall Interest Amount,
Certificate Principal Loss Interest Amount and Certificate Principal Carryover
Shortfall Interest Amount, in each case through the day preceding the final
Distribution Date.
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<PAGE>
"REGISTERED PLEDGEE" means, with respect to any notes, the Person
listed in the Note Register as the registered pledgee of such Notes.
"RELATED BENEFICIARIES" means HTC LP and HTD LP.
"REPOSSESSION EXPENSES" means reasonable out-of-pocket expenses
incurred by the Servicer in connection with the sale or other disposition of a
1999-A Leased Vehicle that has been repossessed by the Servicer or has been
returned to the Servicer for sale or other disposition, other than for inclusion
in Matured Leased Vehicle Inventory.
"REPOSSESSION PROCEEDS" means gross amounts received by the Servicer
or the Origination Trustee, on behalf of the Origination Trust (before
reimbursement for Repossession Expenses), in connection with the sale or other
disposition of a 1999-A Leased Vehicle that has been repossessed by the Servicer
or has been returned to the Servicer for sale or other disposition in connection
with a Prepayment of the related 1999-A Contract.
"REQUIRED AMOUNT" means, as of any Deposit Date, the lesser of (a) the
excess of (i) the sum of any anticipated amounts to be payable as set forth in
clauses (i) through (iv) and (vi) through (xii) of Section 3.03(c) of the 1999-A
Securitization Trust Agreement with respect to the related Distribution Date
(plus those amounts included in clauses (a) through (c) of the definition of
"Interest Collections" in this Agreement of Definitions), over (ii) the product
of (x) the Investor Percentage with respect to Interest Collections and (y) the
Interest Collections collected during or received with respect to the related
Collection Period and allocable to the 1999-A SUBI Interest and (b) the total
amount on deposit in the Reserve Fund after all deposits thereto pursuant to
clause (ix) of Section 3.03(c) of the 1999-A Securitization Trust Agreement.
"REQUIRED DEPOSIT RATING" means [, with respect to any investment or
account, the highest available credit rating of each Rating Agency for such
investment or account].
"REQUIRED PERCENTAGE" means (a) with respect to the Noteholders,
Noteholders representing more than 50% of the aggregate Voting Interests of the
Notes, voting together as a single Class, and (b) with respect to the
Certificateholders, Certificateholders representing more than 50% of the
aggregate Voting Interests of the Certificates.
"REQUIRED RATING" means a rating on commercial paper or other short
term unsecured debt obligations of Prime-1 by Moody's so long as Moody's is a
Rating Agency, [_____] by Fitch so long as Fitch is a Rating Agency, and A-1+ by
Standard & Poor's so long as Standard & Poor's is a Rating Agency; and any
requirement that deposits or debt obligations have the "Required Rating" shall
mean that such deposits or debt obligations have the foregoing required ratings
from Moody's, Fitch and Standard & Poor's.
"REQUIRED RELATED HOLDERS" means, with respect to (i) the UTI, the UTI
Beneficiaries, and (ii) any SUBI, the Holders of SUBI Certificates representing
beneficial ownership of more than 50% of the aggregate Cash Value of the related
SUBI Assets (excluding for the purpose of calculations with respect to SUBIs all
SUBI Certificates held by the UTI Beneficiaries, the Related Beneficiary, the
Servicer or any Affiliate thereof).
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<PAGE>
"REQUIRED SERVICER RATING" means a rating of A-1 or its equivalent by
each applicable Rating Agency.
"RESERVE FUND" means the account established and maintained by the
Servicer on behalf of the 1999-A Owner Trustee pursuant to Section 3.04 of the
1999-A Securitization Trust Agreement and designated as the "Reserve Fund."
"RESERVE FUND INITIAL DEPOSIT" means $-.
"RESERVE FUND PROPERTY" means the Reserve Fund and all amounts,
securities, investments, financial assets, investment property and other
property from time to time deposited in or credited to the Reserve Fund and all
proceeds thereof, including the Initial Reserve Fund Deposit.
"RESERVE FUND REQUIREMENT" means, with respect to any Distribution
Date, (i) if all applicable Reserve Fund Tests are satisfied as of the related
Determination Date, the amount calculated in accordance with the Base Reserve
Fund Formula, or (ii) if any Reserve Fund Test is not satisfied as of any
Distribution Date, the amount calculated in accordance with the Alternate
Reserve Fund Requirement.
"RESERVE FUND SECURITIES INTERMEDIARY" means -, in its capacity as
securities intermediary, for purposes of establishing the Reserve Fund.
"RESERVE FUND TEST" means either of the Charge-off Rate Test or the
Delinquency Rate Test.
"RESIDUAL NOTE" means each of the one Class A-1 Note, the one Class
A-2 Note, the one Class A-3 Note, the one Class A-4 Note and the one Class B
Note which may be issued on the Closing Date in a denomination that includes any
remaining portion of the Initial Class A-1 Note Balance, the Initial Class A-2
Note Balance, the Initial Class A-3 Note Balance, the Initial Class A-4 Note
Balance and the Initial Class B Note Balance, respectively, which remaining
portion has not otherwise been accounted for by the other Notes of such Class.
"RESIDUAL VALUE INSURANCE POLICY" means that certain Residual Value
Insurance Policy number 7390635 issued effective January 1, 1998, by Premier
Lease and Loan Services, in favor of the Servicer, the Origination Trustee and
each UTI Beneficiary.
"RESIDUAL VALUE LOSS AMOUNT" means, as of any Distribution Date, the
sum of the following: (a) the Booked Residual Values of all 1999-A Leased
Vehicles included in long-term Matured Leased Vehicle Inventory as of the last
day of the related Collection Period but which as of such day had remained
unsold and not otherwise disposed of by the Servicer for at least two full
Collection Periods; (b) any excess of the sum of the Booked Residual Values of
all 1999-A Leased Vehicles included in Matured Leased Vehicle Inventory sold or
otherwise disposed of from Matured Leased Vehicle Inventory during the related
Collection Period over Net Matured Leased Vehicle Proceeds; and (c) any Early
Termination Amount for the related Collection Period.
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"RESIDUAL VALUE LOSS DETERMINATION" means, with respect to a
Collection Period, the fifteenth day of the following month, or if that day is
not a Business Day, the next Business Day, or (with respect to the first
Residual Value Loss Determination) ________, 1999.
"RESPONSIBLE OFFICER" means an officer of the 1999-A Owner Trustee,
1999-A Indenture Trustee or Administrator, as applicable, assigned to the
applicable Corporate Trust Office, including any president, vice president,
assistant vice president, trust officer, secretary, assistant secretary or other
officer performing functions similar to those performed by the individual who at
the time shall be such officers, respectively, or to whom any corporate trust
matter is referred because of his or her knowledge of and familiarity with the
particular subject.
"RETAINED 1999-A SUBI CERTIFICATES" means the HTC LP Retained 1999-A
SUBI Certificate and the HTD LP Retained 1999-A SUBI Certificate issued by the
Origination Trust pursuant to the 1999-A SUBI Supplement collectively evidencing
a 0.2% beneficial interest in the 1999-A SUBI Assets (other than the Residual
Value Insurance Policy or other residual value insurance policies and the
proceeds of the Residual Value Insurance Policy or any other residual value
insurance policies relating to the 1999-A Leased Vehicles).
"RETAINED 1999-A SUBI INTEREST" means the interest in the 1999-A SUBI
collectively represented by the Retained 1999-A SUBI Certificates.
"SALE" means the sale, disposal or other liquidation by the 1999-A
Indenture Trustee of the 1999-A SUBI Interest, the 1999-A SUBI Certificates or
other property of the 1999-A Securitization Trust Estate in a commercially
reasonable manner.
"SCHEDULE OF 1999-A CONTRACTS AND 1999-A LEASED VEHICLES" means the
microfiche, microfilm, paper or computer list of 1999-A Contracts and the
related 1999-A Leased Vehicles that are included as 1999-A SUBI Assets as of the
Cutoff Date, as such list may be revised and supplemented from time to time, and
which shall set forth substantially all of the following types of information
with respect to each such 1999-A Contract and 1999-A Leased Vehicle:
<TABLE>
<S> <C> <C>
Lease Number Date of Origination Maturity Date
Monthly Payment Vehicle Identification No. Model Year
Make Model Lessee Name
Residual Value Security Deposit Payment Date
Adjusted Capitalized Cost Adjusted Lease Balance Lessee Address
</TABLE>
"SECURITIES" means the Notes and the Certificates.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITIES INTERMEDIARY" has the meaning set forth in Section
8-102(a)(14) of the UCC.
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<PAGE>
"SECURITIZATION" means (i) a financing undertaken by a Beneficiary or
a Special Purpose Affiliate that is secured, directly or indirectly, by Trust
Assets or the UTI, a SUBI or any interest therein and any financing undertaken
in connection with the issuance, pledge or assignment of the UTI or a SUBI and
the related UTI Certificate or SUBI Certificate, as the case may be, (ii) any
sale by a Beneficiary or a Special Purpose Affiliate of an interest in the UTI
or a SUBI or (iii) any other asset securitization, secured loan or similar
transaction involving Trust Assets or any beneficial interest therein or in the
Origination Trust.
"SECURITY DEPOSIT" means, with respect to any 1999-A Contract, the
refundable security deposit specified in such 1999-A Contract.
"SECURITY ENTITLEMENT" has the meaning set forth in Section
8-102(a)(17) of the UCC.
"SECURITYHOLDERS" means Holders of the Notes and the Holders of the
Certificates.
"SERVICER" means American Honda Finance Corporation, a California
corporation, in its capacity as servicer, and its successors and assigns.
"SERVICER REIMBURSEMENT" has the meaning set forth in Section 9.02(i)
of the 1999-A Servicing Supplement.
"SERVICER'S CERTIFICATE" means an Officer's Certificate of the
Servicer completed and executed pursuant to the provisions of the 1999-A
Servicing Supplement.
"SERVICING AGREEMENT" means that certain Servicing Agreement dated as
of April 1, 1998, among HTA LP and HTB LP, as UTI Beneficiaries, Honda Lease
Trust and the Servicer.
"SERVICING FEE" means the fee payable on each Distribution Date with
respect to the related Collection Period equal to, with respect to (i) the UTI,
one twelfth of the product of 1.00% and the Pool Balance as of the first day of
such Collection Period, and (ii) the 1999-A SUBI, the amount so designated in
the definition of "1999-A SUBI Servicing Fee" herein.
"SPECIAL PURPOSE AFFILIATE" means a special purpose entity that is an
Affiliate of a Beneficiary and was created for the purpose of one or more
Securitizations.
"STAMP" means the Securities Transfer Agent's Medallion Program.
"STANDARD & POOR'S" means Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., its successors and assigns.
"STATED MATURITY" means, with respect to any Note, as applicable, the
Class A-1 Stated Maturity, the Class A-2 Stated Maturity, the Class A-3 Stated
Maturity, the Class A-4 Stated Maturity or the Class B Stated Maturity.
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<PAGE>
"SUB-TRUST" means the UTI and each SUBI, each of which constitutes a
separate series of the Origination Trust pursuant to Section 3806(b)(2) of the
Delaware Act.
"SUBI" means any "special unit of beneficial interest" in the
Origination Trust comprised of a beneficial interest in a SUBI Sub-Trust.
"SUBI ACCOUNT" means each Trust Account created with respect to a
particular SUBI.
"SUBI ASSETS" means the Trust Assets identified by the UTI
Beneficiaries as having been allocated to a SUBI on the books and records of the
Origination Trust.
"SUBI BENEFICIARY" means any Beneficiary that is a Beneficiary because
it is the holder or pledgee of a SUBI Certificate.
"SUBI CERTIFICATE" means, with respect to a SUBI, each of the
certificates evidencing such SUBI, substantially in the form included as an
exhibit to each SUBI Supplement, executed and delivered pursuant to the related
SUBI Supplement.
"SUBI COLLECTION ACCOUNT" means any account established as a
"Collection Account" in accordance with Section 4.02 of the Origination Trust
Agreement.
"SUBI LEASE ACCOUNT" means any account established as a "SUBI Lease
Account" in accordance with Section 4.04 of the Origination Trust Agreement.
"SUBI PORTFOLIO" means, with respect to any SUBI, the related Leases
and Leased Vehicles comprising the related SUBI Assets.
"SUBI SUB-TRUST" means a separate Sub-Trust of the Origination Trust
(other than the UTI Sub-Trust) (i) that from time to time is established by the
Origination Trustee at the direction in writing of a UTI Beneficiary, subject to
Sections 3.01 and 3.02 of the Origination Trust Agreement, on the books and
records of the Origination Trust; (ii) that is accounted for separately within
the Origination Trust and (iii) to which the Origination Trustee shall identify
and allocate, or cause to be identified and allocated, on such books and records
certain Trust Assets that are not then allocated to another SUBI Sub-Trust.
"SUBI SUPPLEMENT" means any of the one or more supplements to the
Origination Trust Agreement, each substantially in the form attached thereto as
an exhibit, the execution and delivery of which by the UTI Beneficiaries and the
Origination Trustee in accordance with Section 3.01(a) of the Origination Trust
Agreement will effect the creation of a SUBI.
"TIA" means the Trust Indenture Act of 1939, as amended.
"TITLE DOCUMENTS" means, with respect to any Leased Vehicle, the
related Certificate of Title and all related or ancillary documents or
instruments necessary for the recordation or transfer of title in each relevant
jurisdiction.
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<PAGE>
"TRANSFERORS" means Honda Titling C L.P., a Delaware limited
partnership, and Honda Titling D L.P., a Delaware limited partnership, and their
respective successors and assigns.
"TRUST ACCOUNT" means any "Collection Account", "Payahead Account" or
"Residual Value Surplus Account" established pursuant to Section 4.02(a) of the
Origination Trust Agreement, any SUBI Lease Account created pursuant to Section
4.04 of the Origination Trust Agreement and any other accounts that may be
specified in the Servicing Agreement, the 1999-A Servicing Supplement or the
1999-A SUBI Supplement.
"TRUST AGENCY AGREEMENT" means any agency agreement entered into
pursuant to Section 5.11(d) of the Origination Trust Agreement pursuant to which
a trust agent is appointed.
"TRUST AGENT" means U.S. Bank, in its capacity as trust agent, and its
successors and assigns.
"TRUST ASSETS" means (i) cash capital; (ii) the Leases; (iii) the
Leased Vehicles and all proceeds thereof, including (A) proceeds of the sale or
other disposition of the Leased Vehicles to Lessees or others upon expiration or
termination of the Leases and (B) payments in respect of the Leased Vehicles
under any Insurance Policy (excluding the Residual Value Insurance Policy or any
other residual value insurance policies, or the proceeds thereof relating to any
Leases or Leased Vehicles); (iv) the Certificates of Title; (v) all rights (but
not obligations) of the Origination Trust, AHFC and the related lessors or
Dealers with respect to the Leases and the Leased Vehicles, including rights to
(A) any incentive or other payments made by any Person to fund a portion of the
payments made related to a Lease or a Leased Vehicle and (B) proceeds arising
from any repurchase obligations arising under any Lease Agreement; (vi) any
Security Deposit related to a Lease to the extent not payable to the Lessee
pursuant to such Lease; (vii) all Insurance Proceeds and Liquidation Proceeds;
(viii) such other assets as may be designated "Trust Assets" in a SUBI
Supplement; and (ix) all proceeds of the items described in clauses (i) through
(viii).
"U.S. BANK" means U.S. Bank National Association, a national banking
association, and its successors and assigns.
"UCC" means the Uniform Commercial Code, as in effect in the relevant
jurisdiction.
"UNCAPPED ADMINISTRATIVE EXPENSES" means Administrative Expenses that
would be Capped Contingent and Excess Liability Premiums, Capped Origination
Trust Administrative Expenses, Capped Indenture Trustee Administrative Expenses
or Capped Owner Trustee Administrative Expenses, respectively, except that they
exceed $550,000, $100,000, $50,000 (or $100,000, as applicable) or $5,000 in any
calendar year, respectively.
"UNCOVERED LOSS AMOUNT" means, with respect to any Distribution Date,
the excess of (i) the Investor Percentage of Loss Amounts for such Distribution
Date over (ii) Covered Loss Amounts for such Distribution Date.
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<PAGE>
"UNDIVIDED TRUST INTEREST" means the exclusive, undivided beneficial
interest in all Origination Trust Assets (including Leases and Leased Vehicles),
other than SUBI Assets, held by the UTI Beneficiaries.
"UNDIVIDED TRUST INTEREST CERTIFICATE" means the one or more trust
certificates (together with any replacements thereof) issued by the Origination
Trust at the direction of the UTI Beneficiaries, each substantially in the form
attached as an exhibit to the form of UTI Supplement.
"UNITED STATES" means the United States of America, its territories
and possessions and areas subject to its jurisdiction.
"UNMATURED EVENT OF DEFAULT" means any occurrence with which notice or
the lapse of time or both would become an Event of Default.
"UNREIMBURSED CERTIFICATE PRINCIPAL LOSS AMOUNT" means[, as of any
date, the amount of all Certificate Principal Loss Amounts which have not yet
been reimbursed].
"UNREIMBURSED CLASS A-1 PRINCIPAL LOSS AMOUNT" means[, as of any date,
the amount of all Class A-1 Note Principal Loss Amounts which have not yet been
reimbursed].
"UNREIMBURSED CLASS A-2 PRINCIPAL LOSS AMOUNT" means[, as of any date,
the amount of all Class A-2 Note Principal Loss Amounts which have not yet been
reimbursed].
"UNREIMBURSED CLASS A-3 PRINCIPAL LOSS AMOUNT" means[, as of any date,
the amount of all Class A-3 Note Principal Loss Amounts which have not yet been
reimbursed].
"UNREIMBURSED CLASS A-4 PRINCIPAL LOSS AMOUNT" means[, as of any date,
the amount of all Class A-4 Note Principal Loss Amounts which have not yet been
reimbursed].
"UNREIMBURSED CLASS B PRINCIPAL LOSS AMOUNT" means[, as of any date,
the amount of all Class B Note Principal Loss Amounts which have not yet been
reimbursed].
"UTI" means the exclusive, undivided beneficial interest in all
Origination Trust Assets (including Leases and Leased Vehicles), other than SUBI
Assets, held by the UTI Beneficiaries.
"UTI ASSETS" means all Origination Trust Assets that have not been
allocated to a SUBI Sub-Trust.
"UTI BENEFICIARIES" means HTA LP and HTB LP, each in its capacity as
respective initial beneficiary of the Origination Trust on the date of the UTI
Supplement, and their respective successors and assigns.
"UTI CERTIFICATE" means the one or more trust certificates (together
with any replacements thereof) issued by the Origination Trust at the direction
of the UTI Beneficiaries substantially in the form attached as an exhibit to the
form of UTI Supplement.
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<PAGE>
"UTI PLEDGE" means a pledge of, and a grant of a security interest in,
the UTI, a UTI Certificate or any interest therein, in connection with a
Securitization.
"UTI PORTFOLIO" means the Leases and Leased Vehicles comprising the
UTI.
"UTI SUB-TRUST" means the separate Sub-Trust of the Origination Trust
containing all Origination Trust Assets that have not been allocated to any SUBI
Sub-Trust.
"UTI SUPPLEMENT" means any of the one or more supplements or
amendments to the Origination Trust Agreement, substantially in the form
attached thereto as an exhibit, the execution and delivery of which by the UTI
Beneficiaries and the Origination Trustee in accordance with Section 3.03 of the
Origination Trust Agreement will permit the issuance of additional UTI
Certificates.
"VOTING INTERESTS" means the aggregate voting interests evidenced by
the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes, the Class B Notes and the Certificates, as the case may be.
59
<PAGE>
Section 1.02. NOTICES. All demands, notices and communications hereunder
shall be in writing and shall be delivered or mailed by registered or certified
first-class United States mail, postage prepaid, hand delivery, prepaid courier
service, or by telecopier, and addressed in each case as follows: (i) if to the
1999-A Indenture Trustee, at The Bank of New York, 101 Barclay Street, Floor
12E, New York, New York 10286 (telecopier no. (212) 815-5344), Attention:
Corporate Trust Department; (ii) if to the 1999-A Owner Trustee, at U.S. Bank
National Association, 111 East Wacker Drive, Suite 3000, Chicago, Illinois 60601
(telecopier no. (312) 228-9401), Attention: _________________________, (iii) if
to HTC LP, at 700 Van Ness Avenue, Torrance, California 90501, Attention:
General Partner, (iv) if to HTD LP, at 700 Van Ness Avenue, Torrance, California
90501 (telecopier no. (310) 787-3910), Attention: General Partner, (v) if to
the Delaware Owner Trustee, at Wilmington Trust Company, Rodney Square North,
1100 North Market Street, Wilmington, Delaware 19890, (vi) if to the Origination
Trustee, at HVT, Inc. at One Illinois Center, 111 East Wacker Drive, Suite 3000,
Chicago, Illinois 60601, (vii) if to HTA LP, at 700 Van Ness Avenue, Torrance,
California, (viii) if to HTB LP, at 700 Van Ness Avenue, Torrance, California
90501, and (ix) if to the Servicer, at 700 Van Ness Avenue, Torrance, California
90501. Delivery shall occur only upon receipt or reported tender of such
communication by an officer of the recipient entitled to receive such notices
located at the address of such recipient for notices hereunder.
Section 1.03. SEVERABILITY OF PROVISIONS. Any provision of this Agreement
of Definitions that is prohibited or unenforceable in any jurisdiction shall, as
to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
Section 1.04. COUNTERPARTS. This Agreement of Definitions may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
Section 1.05. SUCCESSORS AND ASSIGNS. All covenants and agreements
contained herein shall be binding upon, and inure to the benefit of, HTC LP, HTD
LP, the 1999-A Owner Trustee, the 1999-A Indenture Trustee, the Delaware
Trustee, the Delaware Owner Trustee and their respective successors and
permitted assigns, all to the extent as herein provided.
Section 1.06. HEADINGS. The headings of the various Articles and Sections
herein are for convenience of reference only and shall not define or limit any
of the terms or provisions hereof.
Section 1.07. GOVERNING LAW. THIS AGREEMENT OF DEFINITIONS SHALL BE
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO ANY OTHERWISE APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.
[Remainder of page intentionally left blank]
60
<PAGE>
IN WITNESS WHEREOF, Honda Titling A L.P., Honda Titling B L.P., Honda
Titling C L.P., Honda Titling D L.P., U.S. Bank National Association, HVT, Inc.,
Delaware Trust Capital Management, Inc., American Honda Finance Corporation, The
Bank of New York and Wilmington Trust Company have caused this Agreement of
Definitions to be duly executed by their respective officers as of the day and
year first above written.
HONDA TITLING A L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling A LLC, its general partner
By: Honda Titling Inc., as its manager
By:
------------------------------
Name:
Title:
HONDA TITLING B L.P.,
as Grantor and UTI Beneficiary
By: Honda Titling B LLC, its general partner
By: Honda Titling Inc., as its manager
By:
------------------------------
Name:
Title:
HONDA TITLING C L.P.,
as Transferor
By: Honda Titling C LLC, its general partner
By: Honda Funding Inc., as its manager
By:
------------------------------
Name:
Title:
HONDA TITLING D L.P.,
as Transferor
By: Honda Titling D LLC, its general partner
By: Honda Funding Inc., as its manager
By:
------------------------------
Name:
Title:
S-1
<PAGE>
HVT, INC.,
as Origination Trustee of HONDA LEASE
TRUST
By:
------------------------------
Name:
Title:
DELAWARE TRUST CAPITAL
MANAGEMENT, INC.,
as Delaware Trustee of HONDA LEASE
TRUST
By:
------------------------------
Name:
Title:
AMERICAN HONDA FINANCE CORPORATION, as
Servicer
By:
------------------------------
Name:
Title:
U.S. BANK NATIONAL ASSOCIATION,
as 1999-A Owner Trustee
By:
------------------------------
Name:
Title:
THE BANK OF NEW YORK, as
1999-A Indenture Trustee
By:
------------------------------
Name:
Title:
S-2
<PAGE>
WILMINGTON TRUST COMPANY, as
Delaware Owner Trustee
By:
------------------------------
Name:
Title:
S-3
