UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT Pursuant to
Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 22, 2018
Honda Auto Receivables 2018-2 Owner Trust
(Issuing Entity)
Central Index Key Number: 0001736790
American Honda Receivables LLC
(Depositor)
Central Index Key Number: 0000890975
American Honda Finance Corporation
(Sponsor)
Central Index Key Number: 0000864270
(Exact name of Issuing Entity, Depositor/Registrant and Sponsor as specified in their respective charters)
| Delaware | 333-205883-10 | 82-7050011 | ||
| (State or Other Jurisdiction of Incorporation) |
(Commission File Number) | (Issuing Entity’s IRS Employer Identification No.) |
| American Honda Receivables LLC 2800 Madrona Avenue Torrance, California |
90503 |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (310) 781-4100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2 (b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
¨ Emerging growth company
¨ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act
ITEM 1.01. Entry into a Material Definitive Agreement.
On May 22, 2018, American Honda Receivables LLC (“AHR LLC”) and American Honda Finance Corporation (“AHFC”) entered into an Underwriting Agreement with Barclays Capital Inc., BNP Paribas Securities Corp. and Mizuho Securities USA LLC, each on behalf of itself and as a representative of the several underwriters, for the sale of certain notes of Honda Auto Receivables 2018-2 Owner Trust (the “Issuer”), in the following classes and in the amounts described therein: Class A-2 2.66% Asset Backed Notes (the “Class A-2 Notes”), Class A-3 3.01% Asset Backed Notes (the “Class A-3 Notes”) and Class A-4 3.16% Asset Backed Notes (the “Class A–4 Notes”) (collectively, the “Underwritten Notes”). The Underwritten Notes will be issued on or about May 30, 2018 (the “Closing Date”). AHFC will retain all of the Class A-1 Notes and at least 5% (by initial principal amount) of each of the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively with the Underwritten Notes, the “Notes”). The Notes have an initial principal amount of $1,315,836,000.
Attached as Exhibit 1.1 is the Underwriting Agreement.
ITEM 8.01. Other Events.
On the Closing Date, AHR LLC and AHFC will enter into a Receivables Purchase Agreement, to be dated as of the Closing Date (the “Receivables Purchase Agreement”), pursuant to which AHFC will transfer to AHR LLC certain retail installment sale contracts relating to new or used Honda or Acura automobiles (the “Receivables”) and related property. The Issuer, a Delaware statutory trust, was established pursuant to a Trust Agreement dated April 6, 2018, to be amended and restated as of the Closing Date, among AHR LLC, The Bank of New York Mellon, as owner trustee, and BNY Mellon Trust of Delaware, as Delaware trustee (the “Amended and Restated Trust Agreement”). On the Closing Date, the Issuer will enter into a Sale and Servicing Agreement, to be dated as of the Closing Date (the “Sale and Servicing Agreement”), with AHR LLC, as seller, AHFC, as servicer, RPA seller and sponsor, and acknowledged and accepted by Citibank, N.A., as indenture trustee (the “Indenture Trustee”), pursuant to which the Receivables and related property will be transferred to the Issuer. On the Closing Date, the Issuer, AHFC, as sponsor and servicer, and Clayton Fixed Income Services LLC, as asset representations reviewer, will enter into an Asset Representations Review Agreement, to be dated as of the Closing Date (the “Asset Representations Review Agreement”), relating to the review of certain representations relating to the Receivables. Also on the Closing Date, the Issuer will enter into an Indenture, to be dated as of the Closing Date (the “Indenture”), by and between the Issuer and the Indenture Trustee and acknowledged and accepted by AHFC, as servicer. Pursuant to the Indenture, the Issuer will cause the issuance of the Notes. Also on the Closing Date, the Issuer, AHFC, as sponsor and administrator, AHR LLC, as depositor, and the Indenture Trustee will enter into an Administration Agreement, to be dated as of the Closing Date (the “Administration Agreement”), relating to the provision by AHFC of certain services relating to the Notes.
Attached as Exhibit 4.1 is the form of Indenture, as Exhibit 10.1 is the form of Receivables Purchase Agreement, as Exhibit 10.2 is the form of Sale and Servicing Agreement, as Exhibit 10.3 is the form of Administration Agreement, as Exhibit 10.4 is the form of Amended and Restated Trust Agreement and as Exhibit 10.5 is the form of Asset Representations Review Agreement.
In connection with the offering of the Underwritten Notes, the chief executive officer of the registrant has made the certifications required by Paragraph I.B.1(a) of Form SF-3 attached as Exhibit 36.1. The certification is being filed on this Current Report to satisfy the requirements of Item 601(b)(36) of Regulation S-K.
ITEM 9.01. Financial Statements and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) Exhibits:
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on behalf of the undersigned thereunto duly authorized.
| AMERICAN HONDA RECEIVABLES LLC | ||
| By: | /s/ Paul C. Honda | |
| Name: | Paul C. Honda | |
| Title: | Treasurer | |
Dated: May 24, 2018
Exhibit 1.1
Execution Version
$1,315,836,000
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST
$271,000,000 2.35000% ASSET BACKED NOTES, CLASS A-1
$494,000,000 2.66% ASSET BACKED NOTES, CLASS A-2
$419,000,000 3.01% ASSET BACKED NOTES, CLASS A-3
$131,836,000 3.16% ASSET BACKED NOTES, CLASS A-4
AMERICAN HONDA RECEIVABLES LLC
UNDERWRITING AGREEMENT
May 22, 2018
Barclays Capital Inc.
745 7th Avenue, 5th Floor
New York, New York 10019
BNP Paribas Securities Corp.
787 Seventh Avenue
New York, New York 10019
Mizuho Securities USA LLC
320 Park Avenue, 12th Floor
New York, NY 10022
Ladies and Gentlemen:
1. Introductory. American Honda Receivables LLC, a Delaware limited liability company (the “Company”), proposes, subject to the terms and conditions stated herein, to cause the Honda Auto Receivables 2018-2 Owner Trust (the “Trust”) to issue $271,000,000 aggregate principal amount of 2.35000 % Asset Backed Notes, Class A-1 (the “Class A-1 Notes”), $494,000,000 aggregate principal amount of 2.66% Asset Backed Notes, Class A-2 (the “Class A-2 Notes”), $419,000,000 aggregate principal amount of 3.01% Asset Backed Notes, Class A-3 (the “Class A-3 Notes”) and $131,836,000 aggregate principal amount of 3.16% Asset Backed Notes, Class A-4 (the “Class A-4 Notes” and together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the “Notes”) and the Company proposes to sell a portion of the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, such Notes, the “Underwritten Notes” (as set forth on Schedule A) to the several underwriters set forth on Schedule A (each, an “Underwriter”), for which Barclays Capital Inc., BNP Paribas Securities Corp. and Mizuho Securities USA LLC are each acting as a representative (in such capacity, each a “Representative” and collectively, the “Representatives”), pursuant to the terms of this underwriting agreement dated May 22, 2018 by and among the Company, American Honda Finance Corporation (“AHFC”) and the Representatives (this “Agreement”). The Class A-1 Notes will be retained by the Company. The Notes will be issued pursuant to the Indenture, dated May 30, 2018 (the “Indenture”), between the Trust and Citibank, N.A. (the “Indenture Trustee”).
The Trust, the Company and AHFC, as sponsor (in such capacity, the “Sponsor”), hereby confirm their agreement with the Underwriters concerning the purchase of the Underwritten Notes from the Trust by the Underwriters. The Sponsor or a “majority-owned affiliate” of the Sponsor (as such term is defined in Regulation RR, 17 C.F.R. §246.1 et seq. (the “Risk Retention Rules”) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), intends to retain an amount equal to at least 5% of the initial principal amount of each class of the Notes (the “Retained Interest”), pursuant to the requirements of the final rules contained in the Risk Retention Rules.
Concurrently with the issuance of the Notes and sale of the Underwritten Notes as contemplated herein, the Trust will issue $33,739,737.54, aggregate principal amount of certificates of beneficial interest (the “Certificates”), each representing an interest in the Owner Trust Estate. The Company will retain the Certificates. The Certificates will be issued pursuant to the Amended and Restated Trust Agreement, dated May 30, 2018 (the “Trust Agreement”), among the Company, The Bank of New York Mellon, as owner trustee (in such capacity, the “Owner Trustee”) and BNY Mellon Trust of Delaware, as Delaware trustee (in such capacity, the “Delaware Trustee”). The Certificates are subordinated to the Notes.
The assets of the Trust will include, among other things, a pool of retail installment sale contracts secured by new and used Honda and Acura motor vehicles (including automobiles and light-duty trucks) (the “Receivables”) and certain monies due thereunder on or after May 1, 2018 (the “Cutoff Date”), such Receivables to be sold to the Trust by the Company and to be serviced for the Trust by AHFC (or, in its capacity as servicer, the “Servicer”). The Trust will provide for the review of the Receivables for compliance with representations and warranties made about them in certain circumstances under an asset representations review agreement, dated as of May 30, 2018 (the “Asset Representations Review Agreement”) among the Trust, AHFC and Clayton Fixed Income Services LLC, as asset representations reviewer (the “Asset Representations Reviewer”).
Capitalized terms used but not defined herein have the meanings ascribed thereto in Appendix A to the Sale and Servicing Agreement, dated May 30, 2018 (the “Sale and Servicing Agreement”), by and among the Trust, the Company and the Servicer. As used herein, “Basic Documents” shall have the meaning specified in Appendix A to the Sale and Servicing Agreement.
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At or prior to the time when sales to investors of the Underwritten Notes were first made to investors by the several Underwriters, which was approximately 4:24 p.m. New York City time on May 22, 2018 (the “Time of Sale”), the Company had prepared the following information (collectively, the “Time of Sale Information”): (i) the preliminary prospectus dated May 16, 2018 relating to the Notes and containing all information to be included in the Final Prospectus (as defined below) other than pricing related information (together, along with information referred to under the caption “Static Pools” therein regardless of whether it is deemed a part of the Registration Statement or Final Prospectus, the “Preliminary Prospectus”) and (ii) a free writing prospectus, dated May 16, 2018 (the “Ratings Free Writing Prospectus”). If, subsequent to the Time of Sale and prior to the Closing Date (as defined below), the Company wishes to convey additional or changed information in order to make the Time of Sale Information, in light of the circumstances under which statements in the Time of Sale Information were made, not misleading, and as a result investors in the Underwritten Notes elect to terminate their old “Contracts of Sale” (within the meaning of Rule 159 under the Securities Act of 1933, as amended (the “Act”)) for any Underwritten Notes and enter into new Contracts of Sale with the Underwriters, then “Time of Sale Information” will refer to the information conveyed to investors at the time of entry into the first such new Contract of Sale, in an amended Preliminary Prospectus approved by the Company and the Representatives that corrects such material misstatements or omissions (a “Corrected Prospectus”) and “Time of Sale” will refer to the time and date on which such new Contracts of Sale were entered into.
Any reference herein to “Registration Statement,” “Preliminary Prospectus” or “Final Prospectus” shall be deemed to refer to and include the documents incorporated by reference therein pursuant to Item 14 of Form SF-3, which were filed under the Exchange Act on or before the effective date of the Registration Statement or the date of the Preliminary Prospectus or the Final Prospectus, as the case may be.
The Company hereby agrees with the several Underwriters as follows:
2. Representations and Warranties of the Company and AHFC. The Company and AHFC, jointly and severally, represent and warrant to, and agree with, the several Underwriters that:
(a) A registration statement on Form SF-3 (No. 333-205883), including a prospectus, relating to the Underwritten Notes has been filed with the Securities and Exchange Commission (the “Commission”) and has become effective and is still effective as of the date hereof. The Preliminary Prospectus was filed with the Commission pursuant to Rule 424(h) (“Rule 424(h)”) of the Act and the rules and regulations thereunder (the “Rules and Regulations”), within the time period required thereby. A Ratings Free Writing Prospectus was filed pursuant to Rule 433 of the Rules and Regulations within the time period required thereby. A final prospectus dated the date hereof, containing the same information as the Preliminary Prospectus, but including the pricing related information (together, along with information referred to under the caption “Static Pools” therein regardless of whether it is deemed a part of the Registration Statement or Final Prospectus, the “Final Prospectus,” and together with the Preliminary Prospectus and any Corrected Prospectus, the “Prospectus”) will be filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations (“Rule 424(b)”) within the time period required thereby. Such registration statement, as amended as of its effective date (including without limitation each deemed effective date with respect to the Company and the Underwriters pursuant to Rule 430D(f)(2) of the Rules and Regulations) is hereinafter referred to as the “Registration Statement.” Except as described in this Section 2(a) and in Section 5A(b), no “issuer free writing prospectus” as defined in Rule 433 of the Rules and Regulations relating to the Underwritten Notes has been or will be used by or on behalf of the Company.
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(b) On the effective date of the Registration Statement (including without limitation each deemed effective date with respect to the Company and the Underwriters pursuant to Rule 430D(f)(2) of the Rules and Regulations) relating to the Underwritten Notes, such Registration Statement (including any documents incorporated by reference therein) conformed, as of the Time of Sale conforms, and on the Closing Date will conform in all respects to the requirements of the Act, the Rules and Regulations and Form SF-3, and did not include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and as of each such date, such Registration Statement (including any documents incorporated by reference therein) conforms in all respects to the requirements contained in the Act and the Rules and Regulations. With regard to the Preliminary Prospectus, as of the date of the Preliminary Prospectus and as of the Time of Sale; with regard to the Ratings Free Writing Prospectus, as of the date of the Ratings Free Writing Prospectus, as of the Time of Sale and as of the Closing Date; and with regard to the Final Prospectus, as of the date of the Final Prospectus and as of the Closing Date; each prospectus (including any documents incorporated by reference therein) will conform in all respects to the requirements of the Act, the Rules and Regulations and Form SF-3, and none of such documents includes or will include any untrue statement of a material fact or omits or will omit to state any material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The Time of Sale Information, at the Time of Sale, did not, and at the Closing Date will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined herein). The three preceding sentences do not apply with respect to any statements or omissions made in reliance upon and in conformity with the Underwriter Information (as defined herein).
(c) The Underwritten Notes are “asset backed securities” within the meaning of, and satisfy the requirements for use of, Form SF-3 under the Act.
(d) The Company is not, and on the date on which the first bona fide offer of the Underwritten Notes is made, will not be an “ineligible issuer” as defined in Rule 405.
(e) The Company has been duly formed and is a validly existing limited liability company in good standing under the laws of the State of Delaware, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and the Company is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect the Company’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
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(f) AHFC has been duly incorporated and is a validly existing corporation in good standing under the laws of the State of California, with full power and authority (corporate and other) to own its properties and conduct its business as described in the Prospectus; and AHFC is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect AHFC’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(g) No consent, approval, authorization or order of, or filing with, any governmental agency or body or any court is required to be obtained or made by the Company, AHFC or the Trust for the consummation of the transactions contemplated by this Agreement and the Basic Documents in connection with the issuance of the Notes and the Certificates and the sale by the Company of the Underwritten Notes, except such as have been obtained and made under the Act, such as may be required under state securities laws and the filing of any financing statements required to perfect the Company’s, the Trust’s and the Indenture Trustee’s interest in the Receivables, which financing statements will be filed in the appropriate offices prior to the Closing Date (as such term is defined in Section 3).
(h) Neither the Company nor AHFC is (i) in breach or violation of its Certificate of Formation or Limited Liability Company Agreement or Articles of Incorporation or By-laws, respectively, (ii) in default in the performance or observance of any obligation, agreement, covenant or condition contained in any agreement or instrument to which it is a party or by which it or its properties are bound, or (iii) in violation of any applicable law, statute, regulation or ordinance or any governmental body having jurisdiction over it, in each case with respect to clauses (i), (ii) and (iii), that could have a material adverse effect on the transactions contemplated herein or in the Basic Documents.
(i) The execution, delivery and performance of this Agreement and the Basic Documents by the Company and AHFC, the issuance of the Notes and the Certificates by the Trust, the Company’s causing the sale by the Trust of the Underwritten Notes and the compliance by the Company and AHFC with the terms and provisions hereof and thereof will not, subject to obtaining any consents or approvals as may be required under the securities or “blue sky” laws of various jurisdictions, result in a breach or violation of, or conflict with, any of the terms and provisions of, or constitute a default under, any statute, rule, regulation or order of any governmental agency or body or any court, domestic or foreign, having jurisdiction over the Company or AHFC or any of their respective properties, or any agreement or instrument to which the Company or AHFC is a party or by which the Company or AHFC is bound or to which any of the properties of the Company or AHFC is subject, or the Articles of Incorporation or By-laws of the Company and AHFC, or result in the creation of any lien upon any of their respective properties or assets (other than pursuant to the Basic Documents). AHFC has full power and authority to cause the Trust to authorize and issue the Notes and the Company has full power and authority to cause the Trust to issue the Certificates and to sell the Underwritten Notes as contemplated by this Agreement, the Indenture and the Trust Agreement, and each of the Company and AHFC has full power and authority to enter into this Agreement and the Basic Documents and to consummate the transactions contemplated hereby and thereby.
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(j) On the Closing Date, the Company will have directed the Owner Trustee to authenticate and execute the Certificates and, when delivered and paid for pursuant to the Trust Agreement, the Certificates will have been duly issued and delivered and will constitute valid and legally binding obligations of the Trust, entitled to the benefits provided in the Trust Agreement and enforceable in accordance with their terms.
(k) Except as disclosed in the Prospectus, there are no pending actions, suits or proceedings against or affecting the Company or AHFC or any of their respective properties that, if determined adversely to the Company or AHFC, would individually or in the aggregate have a material adverse effect on the condition (financial or other), business or results of operations of the Company or AHFC, respectively, or would materially and adversely affect the ability of the Company or AHFC to perform its obligations under this Agreement or the other Basic Documents to which it is a party, or which are otherwise material in the context of the issuance of the Notes and sale of the Underwritten Notes or the issuance of the Certificates; and no such actions, suits or proceedings are threatened or, to the Company’s or AHFC’s knowledge, contemplated.
(l) As of the date of this Agreement and as of the Closing Date (or such other specified date with respect to the Receivables), the representations and warranties of the Company and AHFC contained in the Basic Documents (including those regarding the Receivables) will be true and correct, such representations and warranties are incorporated herein by reference in their entirety.
(m) This Agreement has been duly authorized, executed and delivered by each of the Company and AHFC.
(n) As of the Closing Date, the Company will have directed the Trust to execute and issue the Notes and to sell the Underwritten Notes and, the Notes, when duly and validly executed by the Indenture Trustee, authenticated and delivered in accordance with the Indenture, and (in the case of the Underwritten Notes) delivered and paid for pursuant hereto will be validly issued and outstanding and entitled to the benefits of the Indenture.
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(o) As of the Closing Date, the Company will have directed the Trust to execute and issue the Certificates and, the Certificates, when duly and validly executed by the Owner Trustee, authenticated and delivered in accordance with the Trust Agreement, will be validly issued and outstanding and entitled to the benefits of the Trust Agreement.
(p) Any taxes, fees and other governmental charges in connection with the execution, delivery and performance of this Agreement, the Basic Documents, the Notes and the Certificates and any other agreements contemplated herein or therein shall have been paid or will be paid by the Company at or prior to the Closing Date to the extent then due.
(q) The consummation of the transactions contemplated by this Agreement and the Basic Documents, and the fulfillment of the terms hereof and thereof, will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, or result in the creation of any lien, charge or encumbrance upon any of the property or assets of the Company or AHFC pursuant to the terms of, any indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing agreement or similar agreement or instrument under which the Company or AHFC is a debtor or guarantor.
(r) The Company is not and, after giving effect to the issuance of the Certificates and the offering and sale of the Underwritten Notes and the application of the proceeds thereof as described in the Prospectus, will not be required to be registered as an “investment company” as defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
(s) Except for the Underwriters, neither the Company nor AHFC has employed or retained a broker, finder, commission agent or other person in connection with the sale of the Underwritten Notes, and neither the Company nor AHFC is under any obligation to pay any broker’s fee or commission in connection with such sale.
(t) AHFC has executed and delivered a written representation to any credit rating agency identified in the Ratings Free Writing Prospectus as issuing a rating to a Class of Notes on issuance of the Notes and sale of the Underwritten Notes (the “hired NRSROs” and each, a “hired NRSRO”) that it will take the actions specified in paragraphs (a)(3)(iii)(A) through (E) of Rule 17g-5 of the Exchange Act (“Rule 17g-5”), and it has complied with each such representation; provided that no failure to comply with any such representation shall constitute a breach of this clause (u) if it (i) would not have a material adverse effect on the Notes or (ii) arises from a breach by any Underwriter of Section 5B(c) hereof.
(u) AHFC has complied and, at and as of the Time of Sale of the Underwritten Notes, shall have complied with its diligence and disclosure obligations under Rule 193 of the Securities Act.
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(v) The Trust’s assignment of the Receivables to the Indenture Trustee pursuant to the Indenture will vest in the Indenture Trustee, for the benefit of the Noteholders, a first priority perfected security interest therein, subject to no prior lien, mortgage, security interest, pledge, adverse claim, charge or other encumbrance.
(w) The Trust is not and, after giving effect to the offering and sale of the Underwritten Notes, will not be required to be registered as an “investment company” under the Investment Company Act. In making this determination for the Trust, the Trust is relying on the exemption from the definition of “investment company” under the Investment Company Act contained in Section 3(c)(5) of the Investment Company Act, although other exclusions or exemptions may also be available to the Trust.
(x) The Trust is structured so as not to constitute a “covered fund” under the regulations adopted to implement Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly known as the “Volcker Rule.”
(y) Neither the Company nor AHFC have engaged any third-party to provide “due diligence services” (as defined in Rule 17g-10(d)(1) under the Exchange Act) other than from a nationally recognized accounting firm who are independent public accountants and acceptable to the Underwriters, and the only report generated as a result of such engagement is the Report of Independent Accountants on Applying Agreed-Upon Procedures, dated May 14, 2018, (the “Accountant’s Report”). The Accountant’s Report is, as among the parties to this Agreement, deemed to have been obtained by the Company and AHFC pursuant to Rule 15Ga-2 and Rule 17g-10 of the Exchange Act, and all legal obligations with respect to the Accountant’s Report have been timely complied with by the Company and AHFC. The Company or AHFC have furnished to the Commission the Form ABS-15G required in connection with the Accountant’s Report within the time period required by Rule 15Ga-2. A copy of the final draft of the Form ABS-15G containing the findings and conclusions of the Accountant’s Report was furnished to the Underwriters with a reasonable opportunity to review prior to furnishing to the Commission.
(z) AHFC is solely responsible for complying, has complied, and is the appropriate entity to comply with all requirements imposed on the “sponsor” of a “securitization transaction” (as each such term is defined in the Risk Retention Rules) in accordance with the provisions of the Risk Retention Rules in connection with the transactions contemplated by the Basic Documents including, without limitation, the disclosure required by Section 4(c)(2)(i) of the Risk Retention Rules. On the Closing Date, AHFC (with respect to the Notes) and the Company as a “majority-owned affiliate” of the Sponsor (with respect to the Certificates) will hold an “eligible vertical interest” (as such term is defined in the Risk Retention Rules) in an amount equal to at least 5% of each class of “ABS interests” (as such term is defined in the Risk Retention Rules) issued as part of the transactions contemplated by the Basic Documents, determined as of the Closing Date.
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3. Purchase, Sale and Delivery of the Underwritten Notes. On the basis of the representations, warranties and agreements herein contained, but subject to the terms and conditions herein set forth, the Company agrees to cause the Trust to sell to the Underwriters, and the Underwriters agree, severally and not jointly, to purchase from the Trust, at a purchase price of, in the case of (i) the Class A-2 Notes, 99.79985% of the offered amount thereof, (ii) the Class A-3 Notes, 99.75782% of the offered amount thereof and (iii) the Class A-4 Notes, 99.71373% of the offered amount thereof, the respective principal amounts of each Class of the Notes set forth opposite the names of the Underwriters in Schedule A hereto.
AHFC will cause the Trust to deliver against payment of the purchase price, the Underwritten Notes of each Class in the form of one or more permanent global securities (the “Global Notes”) deposited with the Indenture Trustee as custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., as nominee for DTC. Interests in any permanent Global Notes will be held only in book-entry form through DTC, except in the limited circumstances described in the Prospectus. Payment for the Underwritten Notes shall be made by the Underwriters in Federal (same day) funds by official check or checks or wire transfer to an account previously designated to the Representatives by the Company at a bank acceptable to the Representatives at the offices of Mayer Brown LLP, 71 South Wacker Drive, Chicago, Illinois 60606 not later than 11:00 A.M., New York City time, on May 30, 2018 or at such other time not later than seven full business days thereafter as the Representatives and the Company determine, such time being herein referred to as the “Closing Date,” against delivery to the Indenture Trustee as custodian for DTC of the Global Notes representing all of the Underwritten Notes. The Global Notes will be made available for checking at the above office of Mayer Brown LLP at least 24 hours prior to the Closing Date.
The Company will deliver the Certificates to the above office of Mayer Brown LLP on the Closing Date. The Certificates to be delivered will be in definitive form, in authorized denominations and registered in the name of the Company and will be made available for checking at the above office of Mayer Brown LLP at least 24 hours prior to the Closing Date.
Pursuant to Rule 15c6-1(d) under the Exchange Act, the parties hereto have agreed that the Closing Date will be not later than May 30, 2018, unless otherwise agreed to as described above.
4. Offering by Underwriters. It is understood that the several Underwriters propose to offer the Underwritten Notes for sale to the public as set forth in the Prospectus, and each Underwriter represents, warrants and covenants, severally and not jointly, to the Company and AHFC that:
(a) (i) it has only communicated or caused to be communicated and will only communicate or cause to be communicated any invitation or inducement to engage in investment activity, within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”), received by it in connection with the issue or sale of any Underwritten Notes in circumstances in which Section 21(1) of the FSMA does not apply to the Trust or the depositor; and (ii) it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Underwritten Notes in, from or otherwise involving the United Kingdom;
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(b) in relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”), with effect from and including the date on which the Prospectus Directive is implemented in that Relevant Member State it has not made and will not make an offer of Underwritten Notes to any person in that Relevant Member State; provided that no such offer of Underwritten Notes shall require the Trust, the depositor or any Underwriter to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive; and
(c) it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Underwritten Notes to any “retail investor” in the European Economic Area.
For purposes of this Section 4 of this Agreement: (1) the expression “retail investor” means a person who is one (or more) of the following: (A) a “retail client” as defined in Point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MIFID II”); or (B) a “customer” within the meaning of Directive 2002/92/EC (known as the Insurance Mediation Directive) as amended, where that customer would not qualify as a “professional client” as defined in Point (10) of Article 4(1) of MIFID II; or (C) not a “qualified investor” as defined in the Prospective Directive; (2) the expression “offer” includes the communication in any form and by any means of sufficient information on the terms of the offer and the Underwritten Notes to be offered so as to enable an investor to decide to purchase or to subscribe for the Underwritten Notes; and (3) the expression “Prospectus Directive” means Directive 2003/71/EC (as amended, including y Directive 2010/73/EU), and includes any relevant implementing measure in each Relevant Member State.
5A. Certain Agreements of the Company and AHFC. The Company (and AHFC solely with respect to clauses (m) and (o) below) agrees with the several Underwriters:
(a) The Company will file the Final Prospectus, properly completed, with the Commission pursuant to and in accordance with subparagraph (2) (or, if applicable and if consented to by each Representative, subparagraph (5)) of Rule 424(b) in the manner and within the time period required by Rule 424(h). The Company will advise the Representatives promptly of any such filing pursuant to Rule 424(b). The Company will file the Preliminary Prospectus pursuant to Rule 424(h), in the manner and within the time period required by Rule 424(h).
(b) The Company will file the certifications and the Basic Documents necessary to satisfy the conditions for the offering of the Underwritten Notes under Form SF-3 in the manner and within the time required by the General Instructions to Form SF-3.
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(c) The Company shall file the final pricing information, which may be posted on a Bloomberg screen or distributed via Bloomberg, as a free writing prospectus.
(d) The Company will advise the Representatives promptly, in writing, of any proposal to amend or supplement the Registration Statement or the Prospectus and will not effect such amendment or supplementation without each Representative’s reasonable consent; and the Company will also advise the Representatives promptly of any amendment or supplementation of the Registration Statement or the Prospectus and of the institution by the Commission of any stop order proceedings in respect of the Registration Statement and will use its best efforts to prevent the issuance of any such stop order and to obtain as soon as possible its lifting, if issued.
(e) If, at any time when a prospectus relating to the Underwritten Notes is required to be delivered under the Act in connection with sales by any Underwriter or dealer, any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Act, the Company will promptly notify the Representatives of such event and will promptly prepare and file with the Commission (subject to the Representatives’ prior review pursuant to Section 5A(c)), at its own expense, an amendment or supplement which will correct such statement or omission, or an amendment which will effect such compliance. Neither the Representatives’ consent to, nor the Underwriters’ delivery of, any such amendment or supplement shall constitute a waiver of any of the conditions set forth in Section 6.
(f) The Company will furnish to the Underwriters copies of each Prospectus, the Registration Statement and all amendments and supplements to such documents, in each case as soon as available and in such quantities as each Representative reasonably requests. The Final Prospectus shall be furnished on or prior to 3:00 P.M., New York time, on the business day following the execution and delivery of this Agreement. All other such documents shall be so furnished as soon as available. The Company will pay the expenses of printing and distributing to the Underwriters all such documents.
(g) The Company will arrange for the qualification of the Underwritten Notes for offering and sale and the determination of their eligibility for investment under the securities or “blue skies” laws of such jurisdictions as each Representative may reasonably request and will continue such qualifications in effect so long as required for the distribution of the Underwritten Notes; provided that in connection therewith the Company shall not be required to qualify as a foreign corporation to do business or to file a general consent to service of process in any such jurisdiction.
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(h) For a period from the date of this Agreement until the retirement of the Underwritten Notes, the Company will furnish, to the extent such documents are required to be delivered pursuant to the relevant sections described within this section and to the extent not otherwise available from any publicly available source, (i) upon request, to each Underwriter copies of each certificate and the annual statements of compliance delivered to the Indenture Trustee pursuant to Section 3.09 of the Indenture and Sections 3.10 and 3.11 of the Sale and Servicing Agreement and the annual independent certified public accountant’s servicing reports furnished to the Trust pursuant to Section 3.12 of the Sale and Servicing Agreement, via electronic mail or by first-class mail as soon as practicable, and in due course, after such statements and reports are furnished to the Indenture Trustee or the Trust, as the case may be, and (ii) upon request, to each Underwriter, such other forms of periodic certificates or reports as may be delivered to the Indenture Trustee, the Owner Trustee or the Noteholders under the Indenture, the Sale and Servicing Agreement or the other Basic Documents; provided, that, the Company may provide access to such documents under this clause (h) to an Underwriter by providing a link to a website on which such documents are available.
(i) So long as any Note is outstanding, the Company will furnish to each Representative by electronic mail or first-class mail as soon as practicable, except as otherwise provided to each Representative pursuant to Section 5A(f) above and to the extent not otherwise available from any publicly available source, (i) all documents distributed, or caused to be distributed, by the Company to the Noteholders, (ii) all documents filed or caused to be filed by the Company with the Commission pursuant to the Exchange Act or any order of the Commission thereunder and (iii) such other information in the possession of the Company concerning the Trust as each Representative from time to time may reasonably request; provided, that, the Company may provide access to such documents under this clause (i) to an Underwriter by providing a link to a website on which such documents are available.
(j) Subject to the provisions of Section 10 hereof, the Company will pay (A) all expenses incident to the performance of its obligations under this Agreement and will reimburse the Underwriters (if and to the extent incurred by them) for any filing fees and other expenses (including fees and disbursements of counsel) incurred by them in connection with qualification of the Underwritten Notes for sale in jurisdictions that each Representative may designate pursuant to Section 5A(g) hereof and determination of their eligibility for investment under the laws of such jurisdictions as each Representative reasonably designates and the printing of memoranda relating thereto, for any fees charged by each hired NRSRO for the rating of the Underwritten Notes, for any travel expenses of the officers and employees of the Underwriters and any other expenses of the Underwriters in connection with attending or hosting meetings with prospective purchasers of the Underwritten Notes and for expenses incurred in distributing the Prospectus (including any amendments and supplements thereto) and (B) the fees and expenses of the Asset Representations Reviewer.
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(k) To the extent, if any, that the rating provided with respect to the Underwritten Notes by any hired NRSRO is conditional upon the furnishing of documents or the taking of any other action by the Company, the Company shall furnish such documents and take any such other action.
(l) On or before the Closing Date, the Company shall annotate and indicate unambiguously in the computer records of the Company relating to the Receivables to show the Trust’s absolute ownership of the Receivables, and from and after the Closing Date the Company shall not take any action inconsistent with the Trust’s ownership of such Receivables, other than as permitted by the Sale and Servicing Agreement.
(m) AHFC will comply, and will cause the Company to comply, with the representations or certifications made in any 17g-5 Certification delivered to a hired NRSRO; provided, however, that failure to comply with any representations or certifications in a 17g-5 Certification that would not have a material adverse effect on the Noteholders will not be considered a breach of this Section 5A(m).
(n) The Company shall have timely complied with all requirements of Rule 15Ga-2 and 17g-10 under the Exchange Act.
(o) AHFC will comply with the post-closing disclosure requirements set forth in Section 4(c)(2)(ii) of the Risk Retention Rules (without any action by the Underwriters) and will not permit the sale, transfer, financing or hedging of the Retained Interest except as permitted by the Risk Retention Rules.
5B. Certain Agreements of the Underwriters. Each of the several Underwriters, for itself only, severally and not jointly, represents, warrants and agrees with the Company as follows:
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(a) Other than the Preliminary Prospectus, the Final Prospectus, the other Time of Sale Information and the EDGAR filing of Form ABS 15-G, each Underwriter has not conveyed and will not convey, without the Company’s prior written approval, to any potential investor in the Underwritten Notes any other written material of any kind relating to any “issuer information” as defined in Rule 433(h)(2) of the Act, or the Underwritten Notes that would constitute a “prospectus” or a “free writing prospectus,” each as defined in the Act (“Prohibited Materials”), including, but not limited to the materials constituting a “road show” presentation to Potential Investors (other than use of such materials as part of the road show itself) and any “ABS informational and computational materials” within the meaning of Item 1101(a) of Regulation AB promulgated by the Commission under the Act and the Securities Exchange Act of 1934, as amended; provided, however, that each Underwriter may convey to one or more of its Potential Investors (the following, collectively, “Permitted Information”): (i) information permitted in Rule 134 under the Act or previously included in the Preliminary Prospectus, (ii) the Ratings Free Writing Prospectus, and (iii) a free writing prospectus, as defined in Rule 405 under the Act, containing only: (a) syndicate structure and a column or other entry showing the status of the subscriptions for each class of the Underwritten Notes (both for the issuance as a whole and for each Underwriters’ specific retention) and confirmation information, (b) expected settlement date and expected and actual pricing parameters of the Underwritten Notes, (c) information relating to the class, size, rating, price, CUSIP, coupon, yield, spread, benchmark, status of the Underwritten Notes, the expected final payment date, the trade date and payment window of one or more classes of Underwritten Notes, the weighted average life of any class of Underwritten Notes, pricing prepayment speeds and clean up call information, and any credit enhancement expected to be provided or any derivatives entered into in connection with the Underwritten Notes, (d) expected maturities of any class of Underwritten Notes, (e) the eligibility of the Underwritten Notes to be purchased by ERISA plans and (f) Intex.cdi files containing data derived from information available in the Prospectus; provided further, that, in the case of the Permitted Information contained in clauses (i) and (ii), such Permitted Information is posted on a Bloomberg screen or distributed via Bloomberg and, in the case of clause (ii), other than the final pricing terms, which will be posted on a Bloomberg screen or distributed via Bloomberg, such free writing prospectus shall not contain information that would require the issuer to file such free writing prospectus pursuant to Rule 433 under the Act.
(b) Prior to entering into any Contract of Sale with a prospective investor, the applicable Underwriter shall convey the Time of Sale Information to the prospective investor. The Underwriter shall maintain sufficient records to document its conveyance of the Time of Sale Information to the potential investor prior to the formation of the related Contract of Sale and shall maintain such records as required by the Rules and Regulations.
(c) Each Underwriter covenants with the Company and AHFC that on or prior to the Closing Date, it will not provide to any hired NRSRO or any other “nationally recognized statistical rating organization” (within the meaning of the Exchange Act), any information, written or oral, relating to the Trust, the Notes, the Receivables, the transaction contemplated by this Agreement or the other Basic Documents or any other information, that could be reasonably determined to be relevant to determining an initial credit rating for the Notes (as contemplated by Rule 17g-5(a)(3)(iii)(C)), without the participation of a representative of AHFC.
(d) Each Underwriter represents and warrants that it has not engaged any third-party to provide “due diligence services” (as defined in Rule 17g-10(d)(1) under the Exchange Act) with respect to the transaction contemplated by this Agreement, it being understood that a nationally recognized accounting firm who are independent public accountants and acceptable to the Underwriters has been engaged by the Company and AHFC for the purpose of providing the Accountant’s Report.
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6. Conditions of the Obligations of the Underwriters. The obligations of the several Underwriters to purchase and pay for the Underwritten Notes on the Closing Date will be subject to the accuracy of the representations and warranties on the part of the Company and AHFC herein on the Closing Date, to the accuracy of the statements of Company and AHFC officers made pursuant to the provisions hereof, to the performance by the Company and AHFC of their respective obligations hereunder and to the following additional conditions precedent:
(a) Each Representative shall have received a letter, dated the date of each of the Preliminary Prospectus and the Final Prospectus, as applicable, from a nationally recognized accounting firm who are independent public accountants and acceptable to the Representatives, in form and substance satisfactory to the Representatives and counsel for the Underwriters, confirming that they are independent public accountants within the meaning of the Act and the applicable Rules and Regulations and stating in effect that (i) they have performed certain specified procedures as a result of which they determined that certain information of an accounting, financial or statistical nature (which is limited to accounting, financial or statistical information derived from the general accounting records of the Trust, AHFC and the Company) set forth in the Registration Statement, the Preliminary Prospectus, each Prospectus (and any supplements thereto), agrees with the accounting records of the Trust, AHFC and the Company, excluding any questions of legal interpretation, and (ii) they have performed certain specified procedures with respect to the Receivables and certain static pool data (within the meaning of Item 1105 of Regulation AB under the Act) included on the Form 8-K incorporated by reference into the Preliminary Prospectus and the Prospectus.
(b) Prior to the Closing Date, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the knowledge of the Company or the Representatives, shall be contemplated by the Commission.
(c) Subsequent to the execution and delivery of this Agreement, there shall not have occurred (i) any change, or any development or event involving a prospective change, in or affecting particularly the business, properties, condition (financial or otherwise) or results of operations of the Company or AHFC which, in the judgment of a majority in interest of the Underwriters (including the Representatives), materially impairs the investment quality of any Class of the Underwritten Notes or makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for any Class of the Underwritten Notes; (ii) any suspension or limitation of trading in securities generally on the New York Stock Exchange, or any setting of minimum prices for trading on such exchange; (iii) any banking moratorium declared by Federal, California or New York authorities; or (iv) any outbreak or escalation of major hostilities in which the United States is involved, any declaration of war by Congress or any substantial national or international calamity or emergency if, in the judgment of a majority in interest of the Underwriters (including the Representatives), the effect of any such outbreak, escalation, declaration, calamity or emergency makes it impractical or inadvisable to proceed with completion of the public offering or the sale of and payment for any Class of the Underwritten Notes.
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(d) Each Representative shall have received an opinion of Gresham Savage Nolan & Tilden, PC, special California counsel to the Company and AHFC, or of such other California counsel satisfactory to the Representatives, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(e) Each Representative shall have received an opinion of Mayer Brown LLP, special counsel to the Company and AHFC, dated the Closing Date, regarding usual and customary corporate and securities law matters (including, without limitation, an opinion regarding compliance with the Act and its rules and regulations, and a negative assurance statement regarding the contents of the Registration Statement, the Preliminary Prospectus and the Final Prospectus), and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(f) Each Representative shall have received an opinion of Mayer Brown LLP, special counsel to the Company and AHFC, dated the Closing Date, regarding “true sale” related matters, and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(g) Each Representative shall have received an opinion of Mayer Brown LLP, as tax counsel for the Company, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters, to the effect that (A) for federal income tax purposes (i) the Underwritten Notes will be characterized as indebtedness, (ii) the Trust will not be classified as an association (or publicly traded partnership) taxable as a corporation and (iii) the statements set forth in the Final Prospectus under the headings “Summary of Terms—Tax Status,” “Material U.S. Federal Income Tax Considerations” and Annex A to the Prospectus, “Global Clearance, Settlement and Tax Documentation Procedures—Certain U.S. Federal Income Tax Documentation Requirements,” to the extent they constitute matters of law or legal conclusions, accurately described the material United States federal income tax consequences to Noteholders and (B) the statements in each Prospectus under the headings “Summary of Terms – Certain ERISA Considerations” and “Certain Considerations for ERISA and other U.S. Benefit Plans,” to the extent that they constitute matters of federal law, or federal legal conclusions provide a fair and accurate summary of such law or conclusions.
(h) Each Representative shall have received an opinion of Mayer Brown LLP, tax counsel for the Company, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters, to the effect that for California state franchise and California state income tax purposes the Trust will not be classified as an association (or publicly traded partnership) taxable as a corporation.
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(i) Each Representative shall have received from Morgan, Lewis & Bockius LLP, counsel for the Underwriters, such opinion or opinions, dated the Closing Date, with respect to the validity of the Underwritten Notes, the Registration Statement, the Prospectus and other related matters as the Representatives may require, and the Company shall have furnished to such counsel such documents as it may request for the purpose of enabling it to pass upon such matters.
(j) Each Representative shall have received a certificate, dated the Closing Date, of the Chairman of the Board, the President or any Vice-President, a principal financial or accounting officer, or any secretary of each of the Company and AHFC in which such officers, to the best of their knowledge after reasonable investigation, shall state that: the representations and warranties of the Company and AHFC in this Agreement are true and correct in all material respects; the Company or AHFC, as applicable, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to the Closing Date in all material respects; the representations and warranties of the Company or AHFC, as applicable, in the Basic Documents are true and correct as of the dates specified in such agreements in all material respects; the Company or AHFC, as applicable, has complied with all agreements and satisfied all conditions on its part to be performed or satisfied under such agreements at or prior to the Closing Date; no stop order suspending the effectiveness of the Registration Statement has been issued and no proceedings for that purpose have been instituted or are contemplated by the Commission; and, subsequent to the date of the Final Prospectus, there has been no material adverse change, nor any development or event involving a prospective material adverse change, in the condition (financial or otherwise), business, properties or results of operations of the Company or AHFC or their respective businesses except as set forth in or contemplated by the Prospectus or as described in such certificate.
(k) Each Representative shall have received an opinion of Hinckley, Allen & Snyder LLP, counsel to the Indenture Trustee, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(l) Each Representative shall have received an opinion of Emmet, Marvin & Martin, LLP, counsel to the Owner Trustee, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(m) Each Representative shall have received an opinion of Richards, Layton & Finger, P.A., counsel to the Delaware Trustee, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
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(n) Each Representative shall have received one or more opinions of Richards, Layton & Finger, P.A., special Delaware counsel to the Trust, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(o) Each Representative shall have received an opinion of Mayer Brown LLP, counsel to the Company, dated the Closing Date and satisfactory in form and substance to the Representatives and in form and scope to counsel for the Underwriters, (i) with respect to the characterization of the transfer of the Receivables by AHFC to the Company and (ii) to the effect that should AHFC become the debtor in a case under Title 11 of the United States Code (the “Bankruptcy Code”) the Company would not otherwise properly be a debtor in a case under the Bankruptcy Code, and in a properly presented and decided case, a federal bankruptcy court would not use its equitable discretion to disregard the corporate forms of the Company and AHFC so as to substantively consolidate the assets and liabilities of the Company with the assets and liabilities of AHFC, and such opinion shall be in substantially the form previously discussed with the Representatives and counsel for the Underwriters and in any event satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(p) Each Representative shall have received evidence satisfactory to it and its counsel that, on or before the Closing Date, UCC-1 financing statements have been or are being filed in the office of the Secretaries of State of the states of (i) California reflecting the transfer of the interest of AHFC in the Receivables and the proceeds thereof to the Company and (ii) Delaware reflecting (A) the transfer of the interest of the Company in the Receivables and the proceeds thereof to the Trust and (B) the grant of the security interest by the Trust in the Receivables and the proceeds thereof to the Indenture Trustee, respectively.
(q) Each Representative shall have received an opinion of Mayer Brown LLP, special counsel to the Company, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters, to the effect that upon execution and delivery of the Sale and Servicing Agreement and the Indenture, the provisions of the Indenture will be effective to create a valid security interest in favor of the Indenture Trustee, to secure payment of the Notes, in the Trust’s rights in all “security entitlements” (as defined in Section 8-102(a)(17) of the UCC) with respect to “financial assets” (as defined in Section 8-102(a)(9) of the UCC) now or hereafter credited to each Securities Account and in all “security entitlements” (within the meaning of the Federal Book-Entry Regulations) with respect to Federal Book-Entry Securities now or hereafter credited to each Securities Account (such security entitlements, collectively, the “Security Entitlements”); the provisions of the Indenture will be effective to perfect the security interest of the Indenture Trustee in the Security Entitlements; and no security interest of any other creditor of the Trust will be prior to the security interest of the Indenture Trustee in the Security Entitlements.
(r) Each Class of the Underwritten Notes shall have been rated in the highest rating category by each hired NRSRO.
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(s) On or prior to the Closing Date, the Certificates shall have been issued to the Company.
(t) If applicable, each Representative shall be entitled to rely on any other opinion rendered by any counsel in connection with this transaction addressed to any hired NRSRO in connection with the rating of any Class of the Underwritten Notes, as if each such opinion were addressed to the Underwriters.
(u) Each Representative shall have received an opinion of Honda North America, Inc., as counsel to the Company and AHFC, dated the Closing Date, and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters, to the effect that to the best knowledge of such counsel after due inquiry, there are (a) no actions, proceedings or investigations to which the Company or AHFC is a party or that are threatened before any court, administrative agency or other tribunal having jurisdiction over AHFC or the Company and (b) no judgments, written injunctions, decrees, orders or rulings of any court or governmental authority binding on AHFC or the Company, in each case (a) or (b), (i) that are required to be disclosed in the Registration Statement, (ii) asserting the invalidity of this Agreement, any Basic Document, the Notes or the Certificates, (iii) seeking to prevent the issuance of the Notes or the Certificates or the consummation of any of the transactions contemplated by this Agreement or the Basic Documents, (iv) which might materially and adversely affect the performance by the Company or AHFC of its obligations under, or the validity or enforceability of, this Agreement, any Basic Document, the Notes or the Certificates or (v) seeking adversely to affect the federal income tax attributes of the Notes as described in the Prospectus under the heading “Material U.S. Federal Income Tax Considerations.”
(v) Each Representative shall have received one or more opinions of Richards, Layton & Finger, P.A., special Delaware counsel to the Company, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(w) Each Representative shall have received one or more opinions of the Asset Representations Reviewer, dated the Closing Date and satisfactory in form, scope and substance to the Representatives and counsel for the Underwriters.
(x) As of the Closing Date, the Company has paid the registration fee for the Underwritten Notes in accordance with Rule 456 of the Rules and Regulations.
(y) As of the Closing Date, the representations and warranties of the Company and AHFC contained in the Basic Documents will be true and correct in all material respects.
The Company will furnish each Representative with copies of any other opinions, certificates, letters and documents as the Representatives reasonably request.
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The Representatives may, in their sole discretion, waive on behalf of the Underwriters compliance with any conditions to the obligations of the Representatives hereunder.
7. Indemnification and Contribution.
(a) The Company and AHFC will, jointly and severally, indemnify and hold harmless each Underwriter and its respective directors, officers, employees and controlling persons against any losses, claims, damages or liabilities, joint or several, to which such Underwriter may become subject, under the Act, or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained or incorporated in the Registration Statement, each Prospectus, the Ratings Free Writing Prospectus, any issuer free writing prospectus or any amendment or supplement thereto, any Form ABS-15G furnished on EDGAR with respect to the transaction contemplated by this Agreement whether prepared or furnished by the Company or AHFC, or in any information contained in any underwriter free writing prospectus which information (i) is Permitted Information, (ii) is also included in the Preliminary Prospectus (other than Underwriter Information) and to which AHFC has consented in writing to be included in such underwriter free writing prospectus, or (iii) has been provided by the Company or AHFC to each Representative specifically for inclusion in any such underwriter free writing prospectus, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading and will reimburse each Underwriter for any legal or other expenses reasonably incurred by such Underwriter in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred; provided, however, that neither the Company nor AHFC will be liable in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement in or omission or alleged omission from any of such documents in reliance upon and in conformity with the Underwriter Information (as defined in subsection (b) below).
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(b) Each Underwriter will severally and not jointly indemnify and hold harmless the Company and AHFC against any losses, claims, damages or liabilities to which the Company or AHFC may become subject, under the Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained or incorporated in the Registration Statement, each Prospectus, or any amendment or supplement thereto, or arise out of or are based upon the omission or the alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Underwriter through the Representatives specifically for use therein, and will reimburse any legal or other expenses reasonably incurred by the Company or AHFC in connection with investigating or defending any such loss, claim, damage, liability or action as such expenses are incurred, it being understood and agreed that the only such information furnished by any Underwriter consists of the following information furnished on behalf of each Underwriter: in the Final Prospectus appearing under the caption “Underwriting”, the concession and reallowance figures, information regarding the intention of the Underwriters to make a market in the Underwritten Notes, and information regarding notice by the Underwriters that certain persons may engage in transactions, including stabilizing bids, syndicate covering transactions or the imposition of penalty bids, which may have the effect of stabilizing or maintaining the market price of the Underwritten Notes (collectively, the “Underwriter Information”).
(c) Promptly after receipt by an indemnified party under this Section of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under subsection (a) or (b) above, notify the indemnifying party of the commencement thereof, but the omission so to notify the indemnifying party will not relieve it from any liability which it may have to any indemnified party otherwise than under subsection (a) or (b) above. In case any such action is brought against any indemnified party and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein and, to the extent that it may wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof and after acceptance by the indemnified party of such counsel, the indemnifying party will not be liable to such indemnified party under this Section for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, an indemnified party shall have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel for the indemnified party will be at the expense of such indemnified party unless a conflict or potential conflict exists (based upon advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party). No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement of any pending or threatened action in respect of which any indemnified party is or could have been a party if indemnity could have been sought hereunder by such indemnified party unless such settlement includes (i) an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of the indemnified party.
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(d) If the indemnification provided for in this Section is unavailable or insufficient to hold harmless an indemnified party under subsection (a) or (b) above, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of the losses, claims, damages or liabilities referred to in subsection (a) or (b) above (i) in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Underwritten Notes or (ii) if the allocation provided by clause (i) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) above but also the relative fault of the Company on the one hand and the Underwriters on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities as well as any other relevant equitable considerations. The relative benefits received by the Company on the one hand and the Underwriters on the other shall be deemed to be in the same proportion as the total net proceeds from the offering (before deducting expenses) received by the Company bear to the total underwriting discounts and commissions received by the Underwriters. The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The amount paid by an indemnified party as a result of the losses, claims, damages or liabilities referred to in the first sentence of this subsection (d) shall be deemed to include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any action or claim which is the subject of this subsection (d). Notwithstanding the provisions of this subsection (d), no Underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Underwritten Notes underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Underwriters’ obligations in this subsection (d) to contribute are several in proportion to their respective underwriting obligations and not joint.
(e) The obligations of the Company or AHFC under this Section shall be in addition to any liability which the Company or AHFC may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Underwriter within the meaning of the Act; and the obligations of the Underwriters under this Section shall be in addition to any liability which the respective Underwriters may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company or AHFC, to each officer of the Company and AHFC who has signed the Registration Statement and to each person, if any, who controls the Company or AHFC within the meaning of the Act.
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8. Absence of Fiduciary Relationship. Each of the Company and AHFC acknowledges and agrees that:
(a) The Underwriters have agreed solely to act as Underwriters in connection with the sale of the Underwritten Notes pursuant to this Agreement and that no fiduciary, advisory or agency relationship between each of the Company and AHFC and the Representatives or any of the Underwriters has been created in respect of any of the transactions contemplated by this Agreement, irrespective of whether any Underwriter has advised or is advising the Company or AHFC on other matters;
(b) the price of the Underwritten Notes set forth in this Agreement was established by the Company and/or AHFC following discussions and arms-length negotiations with the Representatives and each of the Company and AHFC is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated by this Agreement;
(c) it has been advised that the Underwriters and their affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and/or AHFC and that the Underwriters have no obligation to disclose such interests and transactions to the Company or AHFC by virtue of any fiduciary, advisory or agency relationship; and
(d) it waives, to the fullest extent permitted by law, any claims it may have against any Underwriter for breach of fiduciary duty or alleged breach of fiduciary duty arising out of this Agreement and agrees that the Underwriters shall have no liability (whether direct or indirect) to the Company or AHFC in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on behalf of or in right of the Company or AHFC, including stockholders, employees or creditors of the Company or AHFC.
9. Default of Underwriters. If any Underwriter or Underwriters default in their obligations to purchase Underwritten Notes hereunder on the Closing Date and the aggregate principal amount of Underwritten Notes that such defaulting Underwriter or Underwriters agreed but failed to purchase does not exceed 10% of the total principal amount of Underwritten Notes that the Underwriters are obligated to purchase on such Closing Date, the Representatives may make arrangements satisfactory to the Company for the purchase of such Underwritten Notes by other persons, including any of the Underwriters, but if no such arrangements are made by such Closing Date, the non-defaulting Underwriters shall be obligated severally, in proportion to their respective commitments hereunder, to purchase the Underwritten Notes that such defaulting Underwriters agreed but failed to purchase on such Closing Date. If any Underwriter or Underwriters so default and the aggregate principal amount of Underwritten Notes with respect to which such default or defaults occur exceeds 10% of the total principal amount of Underwritten Notes that the Underwriters are obligated to purchase on such Closing Date and arrangements satisfactory to the Representatives and the Company for the purchase of such Underwritten Notes by other persons are not made within 36 hours after such default, this Agreement will terminate without liability on the part of any non-defaulting Underwriter or the Company, except as provided in Section 10. As used in this Agreement, the term “Underwriter” includes any person substituted for an Underwriter under this Section. Nothing herein will relieve a defaulting Underwriter from liability for its default.
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10. Survival of Certain Representations and Obligations. The respective indemnities, agreements, representations, warranties and other statements of the Company or AHFC or their respective officers and of the several Underwriters set forth in or made pursuant to this Agreement will remain in full force and effect, regardless of any investigation, or statement as to the results thereof, made by or on behalf of any Underwriter or the Company or AHFC or any of their respective representatives, officers or directors or any controlling person, and will survive delivery of and payment for the Underwritten Notes. If this Agreement is terminated pursuant to Section 9 or if for any reason the purchase of the Underwritten Notes by the Underwriters is not consummated, the Company shall remain responsible for the expenses to be paid or reimbursed by it pursuant to Section 5A and the respective obligations of the Company, AHFC and the Underwriters pursuant to Section 7 shall remain in effect. If the purchase of the Underwritten Notes by the Underwriters is not consummated for any reason other than solely because of the termination of this Agreement pursuant to Section 9 or the occurrence of any event specified in clause (ii), (iii) or (iv) of Section 6(c), the Company and AHFC, jointly and severally, will reimburse the Underwriters for all out-of pocket expenses (including fees and disbursements of counsel) reasonably incurred by them in connection with the offering of the Underwritten Notes.
11. Notices. All communications hereunder will be in writing and, if sent to the Underwriters, will be mailed, delivered by hand or overnight delivery service (FedEx or United Parcel Service), sent by electronic mail (including as a scanned document) where specified in this Agreement or sent by facsimile and confirmed to the Representatives, (i) in the case of Barclays Capital Inc. at 745 7th Avenue, 5th Floor, New York, New York 10019 (ii) in the case of BNP Paribas Securities Corp. at 787 Seventh Avenue, New York, New York 10019; and (iii) in the case of Mizuho Securities USA LLC at 320 Park Avenue, 12th Floor, New York, New York 10022 or, if sent to the Company, will be mailed, delivered by hand or overnight delivery service (FedEx or United Parcel Service), sent by electronic mail (including as a scanned document) or sent by facsimile transmission and confirmed to it at 20800 Madrona Avenue, Torrance, California 90503, Attention: Treasury Manager (facsimile: (310) 972-2482), and if to AHFC, will be mailed, delivered by hand or overnight delivery service (FedEx or United Parcel Service), sent by electronic mail (including as a scanned document) or sent by facsimile transmission and confirmed to it at 20800 Madrona Avenue, Torrance, California 90503, Attention: Treasury Manager (facsimile: (310) 972-2482); provided that any notice to an Underwriter pursuant to Section 7 will be mailed, delivered by hand or overnight delivery service (FedEx or United Parcel Service), sent by electronic mail (including as a scanned document) or sent by facsimile and confirmed to such Underwriter.
12. No Bankruptcy Petition. Each Underwriter agrees that, prior to the date which is one year and one day after the payment in full of all securities issued by the Company or by a trust for which the Company was the depositor, which securities were rated by any nationally recognized statistical rating organization, it will not institute against, or join any other person in instituting against, the Company any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any Federal or state bankruptcy or similar law.
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13. Successors. This Agreement will inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and controlling persons referred to in Section 10, and no other person will have any right or obligation hereunder.
14. Representation of Underwriters. Each Representative will act for the several Underwriters in connection with this financing, and any action under this Agreement taken by the Representatives will be binding upon all the Underwriters.
15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original but all such counterparts shall together constitute one and the same Agreement.
16. USA PATRIOT Act Notification. The Company and AHFC acknowledge that the Underwriters are required by U.S. Federal law to obtain, verify and record information that identifies each person or corporation who opens an account or enters into a business relationship with a financial institution to help fight the funding of terrorism and money laundering activities
17. Applicable Law; Submission to Jurisdiction; Waiver of Trial by Jury.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND 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.
(b) EACH OF THE PARTIES HERETO HEREBY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY. EACH OF THE PARTIES HERETO HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK JURISDICTION OVER SUCH PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH COURT LACKS JURISDICTION OVER SUCH PARTY. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE UNDERWRITTEN NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
[Remainder of Page Intentionally Left Blank]
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If the foregoing is in accordance with the Representatives’ understanding of our agreement, kindly sign and return to each of the Company and AHFC one of the counterparts hereof, whereupon it will become a binding agreement between the Company, AHFC and the several Underwriters in accordance with its terms.
| Very truly yours, | ||
| AMERICAN HONDA | ||
| RECEIVABLES LLC | ||
| By: | /s/ Paul C. Honda | |
| Name: Paul C. Honda | ||
| Title: Treasurer | ||
| AMERICAN HONDA | ||
| FINANCE CORPORATION | ||
| By: | /s/ Paul C. Honda | |
| Name: Paul C. Honda | ||
| Title: Vice President and Assistant Secretary | ||
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the date first above written:
| BARCLAYS CAPITAL INC. | ||
| acting on behalf of itself and as a | ||
| Representative of the several Underwriters | ||
| By: | /s/ Eric Chang | |
| Name: Eric Chang | ||
| Title: Managing Director | ||
| BNP Paribas Securities Corp. | ||
| acting on behalf of itself and as a | ||
| Representative of the several Underwriters | ||
| By: | /s/ Mary Dierdorff | |
| Name: Mary Dierdorff | ||
| Title: Managing Director | ||
| Mizuho Securities USA LLC | ||
| acting on behalf of itself and as a | ||
| Representative of the several Underwriters | ||
| By: | /s/ Jeremy Ebrahim | |
| Name: Jeremy Ebrahim | ||
| Title: Managing Director | ||
Schedule A
| Underwriters | Class A-2 Notes | Class A-3 Notes | Class A-4 Notes | |||||||||
| Barclays Capital Inc. | $ | 178,334,000 | $ | 151,260,000 | $ | 47,592,000 | ||||||
| BNP Paribas Securities Corp. | $ | 126,711,000 | $ | 107,473,000 | $ | 33,816,000 | ||||||
| Mizuho Securities USA LLC | $ | 126,711,000 | $ | 107,473,000 | $ | 33,816,000 | ||||||
| ANZ Securities, Inc. | $ | 9,386,000 | $ | 7,961,000 | $ | 2,505,000 | ||||||
| Merrill Lynch, Pierce, Fenner & Smith Incorporated | $ | 9,386,000 | $ | 7,961,000 | $ | 2,505,000 | ||||||
| RBC Capital Markets, LLC | $ | 9,386,000 | $ | 7,961,000 | $ | 2,505,000 | ||||||
| TD Securities (USA) LLC | $ | 9,386,000 | $ | 7,961,000 | $ | 2,505,000 | ||||||
| Total | $ | 469,300,000 | $ | 398,050,000 | $ | 125,244,000 | ||||||
| Schedule A-1 |
Exhibit 4.1
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST,
as Issuer,
and
CITIBANK, N.A.,
as Indenture Trustee
INDENTURE
Dated May 30, 2018
CROSS REFERENCE TABLE*
| TIA Section | Indenture Section | ||
| 310 | (a)(1) | 6.11 | |
| (a)(2) | 6.11 | ||
| (a)(3) | 6.10; 6.11 | ||
| (a)(4) | N.A.** | ||
| (a)(5) | 6.11 | ||
| (b) | 6.08; 6.11 | ||
| (c) | N.A.** | ||
| 311 | (a) | 6.12 | |
| (b) | 6.12 | ||
| (c) | N.A. | ||
| 312 | (a) | 7.01 | |
| (b) | 7.02 | ||
| (c) | 7.02 | ||
| 313 | (a) | 7.04 | |
| (b)(1) | 7.04 | ||
| (b)(2) | 7.04 | ||
| (c) | 7.04; 11.05 | ||
| (d) | 7.04 | ||
| 314 | (a) | 7.03 | |
| (b) | 11.15 | ||
| (c)(1) | 11.01 | ||
| (c)(2) | 11.01 | ||
| (c)(3) | 11.01 | ||
| (d) | 11.01 | ||
| (e) | 11.01 | ||
| (f) | 11.01 | ||
| 315 | (a) | 6.01 | |
| (b) | 6.05; 11.01 | ||
| (c) | 6.01 | ||
| (d) | 6.01 | ||
| (e) | 5.13 | ||
| 316 | (a) | 1.01 | |
| (a)(1)(A) | 5.11 | ||
| (a)(1)(B) | 5.12 | ||
| (a)(2) | N.A. | ||
| (b) | 5.07 | ||
| (c) | N.A. | ||
| 317 | (a)(1) | 5.03 | |
| (a)(2) | 5.03 | ||
| (b) | 3.03 | ||
| 318 | (a) | 11.07 | |
| * | This Cross Reference Table shall not, for any purpose, be deemed to be part of this Indenture. |
| ** | N.A. means Not Applicable. |
| i |
Table of Contents
| Page | ||
| ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE | 2 | |
| Section 1.01. | Definitions | 2 |
| Section 1.02. | Incorporation by Reference of Trust Indenture Act | 2 |
| ARTICLE II THE NOTES | 2 | |
| Section 2.01. | Form | 2 |
| Section 2.02. | Execution, Authentication and Delivery | 3 |
| Section 2.03. | Temporary Notes | 3 |
| Section 2.04. | Note Register, Registration of Transfer and Exchange | 4 |
| Section 2.05. | Mutilated, Destroyed, Lost or Stolen Notes | 7 |
| Section 2.06. | Persons Deemed Owner | 8 |
| Section 2.07. | Payment of Principal and Interest, Defaulted Interest | 8 |
| Section 2.08. | Cancellation | 9 |
| Section 2.09. | Book-Entry Notes | 9 |
| Section 2.10. | Notices to Clearing Agency | 10 |
| Section 2.11. | Definitive Notes | 11 |
| Section 2.12. | Release of Collateral | 11 |
| Section 2.13. | Tax Treatment; Tax Information | 11 |
| Section 2.14. | Employee Benefit Plans | 12 |
| ARTICLE III COVENANTS | 13 | |
| Section 3.01. | Payment of Principal and Interest | 13 |
| Section 3.02. | Maintenance of Office or Agency | 13 |
| Section 3.03. | Money for Payments to be Held in Trust | 14 |
| Section 3.04. | Existence | 15 |
| Section 3.05. | Protection of Owner Trust Estate | 16 |
| Section 3.06. | Opinions as to Owner Trust Estate | 16 |
| Section 3.07. | Performance of Obligations; Servicing of Receivables | 17 |
| Section 3.08. | Negative Covenants | 18 |
| Section 3.09. | Annual Statement as to Compliance | 19 |
| Section 3.10. | Issuer May Consolidate, etc., Only on Certain Terms | 19 |
| Section 3.11. | Successor or Transferee | 21 |
| -i- |
| Section 3.12. | No Other Business | 21 |
| Section 3.13. | No Borrowing | 21 |
| Section 3.14. | Servicer’s Obligations | 21 |
| Section 3.15. | Guarantees, Loans, Advances and Other Liabilities | 21 |
| Section 3.16. | Capital Expenditures | 21 |
| Section 3.17. | Removal of Administrator | 22 |
| Section 3.18. | Restricted Payments | 22 |
| Section 3.19. | Notice of Events of Default | 22 |
| Section 3.20. | Further Instruments and Acts | 22 |
| Section 3.21. | Compliance with Laws | 22 |
| Section 3.22. | Amendments of Sale and Servicing Agreement and Trust Agreement | 22 |
| ARTICLE IV SATISFACTION AND DISCHARGE | 22 | |
| Section 4.01. | Satisfaction and Discharge of Indenture | 22 |
| Section 4.02. | Application of Trust Money | 24 |
| Section 4.03. | Repayment of Monies Held by Paying Agent | 24 |
| ARTICLE V REMEDIES | 24 | |
| Section 5.01. | Events of Default | 24 |
| Section 5.02. | Acceleration of Maturity, Rescission and Annulment | 25 |
| Section 5.03. | Collection of Indebtedness and Suits for Enforcement by Indenture Trustee | 26 |
| Section 5.04. | Remedies, Priorities | 28 |
| Section 5.05. | Optional Preservation of the Receivables | 30 |
| Section 5.06. | Limitation of Suits | 30 |
| Section 5.07. | Unconditional Rights of Noteholders to Receive Principal and Interest | 31 |
| Section 5.08. | Restoration of Rights and Remedies | 31 |
| Section 5.09. | Rights and Remedies Cumulative | 31 |
| Section 5.10. | Delay or Omission Not a Waiver | 31 |
| Section 5.11. | Control by Noteholders | 31 |
| Section 5.12. | Waiver of Past Defaults | 32 |
| Section 5.13. | Undertaking for Costs | 32 |
| Section 5.14. | Waiver of Stay or Extension Laws | 32 |
| -ii- |
| Section 5.15. | Action on Notes | 33 |
| Section 5.16. | Performance and Enforcement of Certain Obligations | 33 |
| ARTICLE VI THE INDENTURE TRUSTEE | 33 | |
| Section 6.01. | Duties of Indenture Trustee | 33 |
| Section 6.02. | Rights of Indenture Trustee | 35 |
| Section 6.03. | Individual Rights of Indenture Trustee | 37 |
| Section 6.04. | Indenture Trustee’s Disclaimer | 37 |
| Section 6.05. | Notice of Defaults | 37 |
| Section 6.06. | Reports by Indenture Trustee to Noteholders | 37 |
| Section 6.07. | Compensation and Indemnity | 38 |
| Section 6.08. | Replacement of Indenture Trustee | 38 |
| Section 6.09. | Successor Indenture Trustee by Merger | 40 |
| Section 6.10. | Appointment of Co-Trustee or Separate Trustee | 40 |
| Section 6.11. | Eligibility, Disqualification | 41 |
| Section 6.12. | Preferential Collection of Claims Against Issuer | 42 |
| Section 6.13. | Representations and Warranties of Indenture Trustee | 42 |
| ARTICLE VII NOTEHOLDERS’ LISTS AND REPORTS | 43 | |
| Section 7.01. | Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders | 43 |
| Section 7.02. | Preservation of Information; Communications, Reports and Certain Documents to Noteholders | 43 |
| Section 7.03. | Reports by Issuer | 44 |
| Section 7.04. | Reports by Indenture Trustee | 45 |
| Section 7.05. | Noteholder and Note Owner Demand for Asset Representations Review | 45 |
| Section 7.06. | Voting of Notes Held by Honda Parties | 46 |
| ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES | 46 | |
| Section 8.01. | Collection of Money | 46 |
| Section 8.02. | Accounts | 46 |
| Section 8.03. | General Provisions Regarding Accounts | 49 |
| Section 8.04. | Release of Owner Trust Estate | 50 |
| Section 8.05. | Opinion of Counsel | 50 |
| ARTICLE IX SUPPLEMENTAL INDENTURES | 51 | |
| -iii- |
| Section 9.01. | Supplemental Indentures Without Consent of Noteholders | 51 |
| Section 9.02. | Supplemental Indentures With Consent of Noteholders | 52 |
| Section 9.03. | Execution of Supplemental Indentures | 53 |
| Section 9.04. | Effect of Supplemental Indenture | 54 |
| Section 9.05. | Conformity with Trust Indenture Act | 54 |
| Section 9.06. | Reference in Notes to Supplemental Indentures | 54 |
| ARTICLE X REDEMPTION OF NOTES | 54 | |
| Section 10.01. | Redemption | 54 |
| Section 10.02. | Form of Redemption Notice | 54 |
| Section 10.03. | Notes Payable on Redemption Date | 55 |
| ARTICLE XI MISCELLANEOUS | 55 | |
| Section 11.01. | Compliance Certificates and Opinions, etc | 55 |
| Section 11.02. | Form of Documents Delivered to Indenture Trustee | 57 |
| Section 11.03. | Acts of Noteholders | 58 |
| Section 11.04. | Notices, etc., to Indenture Trustee, Issuer and Rating Agencies | 58 |
| Section 11.05. | Notices to Noteholders; Waiver | 59 |
| Section 11.06. | Alternate Payment and Notice Provisions | 60 |
| Section 11.07. | Conflict with Trust Indenture Act | 60 |
| Section 11.08. | Effect of Headings and Table of Contents | 60 |
| Section 11.09. | Successors and Assigns | 60 |
| Section 11.10. | Separability | 60 |
| Section 11.11. | Benefits of Indenture | 60 |
| Section 11.12. | Legal Holidays | 60 |
| Section 11.13. | Governing Law; Submission to Jurisdiction; Waiver of Jury Trial | 61 |
| Section 11.14. | Counterparts | 61 |
| Section 11.15. | Recording of Indenture | 61 |
| Section 11.16. | Trust Obligation | 62 |
| Section 11.17. | No Petition | 62 |
| Section 11.18. | Inspection | 62 |
| Section 11.19. | [Reserved] | 62 |
| Section 11.20. | Disclosure of Tax Treatment | 62 |
| Section 11.21. | Intent of the Parties; Reasonableness | 63 |
| -iv- |
| Section 11.22. | Owner Trustee | 63 |
| Section 11.23. | U.S.A. Patriot Act | 63 |
| Section 11.24. | Communications with Rating Agencies | 64 |
| -v- |
SCHEDULES
| Schedule A – Schedule of Receivables | S-A-1 |
| EXHIBITS | |
| Exhibit A – Form of Class A-1, A-2, A-3 and A-4 Notes | A-1 |
| Exhibit B – Form of Transferor Certificate for Retained Notes | B-1 |
| Exhibit C – Form of Investment Letter for Retained Notes | C-1 |
| Exhibit D – Servicing Criteria to be Addressed in Assessment of Compliance | D-1 |
| Exhibit E – Form of Monthly 15GA-1 Report | E-1 |
| -vi- |
This Indenture, dated May 30, 2018, is between Honda Auto Receivables 2018-2 Owner Trust, a Delaware statutory trust (the “Issuer”), Citibank, N.A., as indenture trustee (the “Indenture Trustee” and “Citibank”).
Each party agrees as follows for the benefit of the other party and for the equal and ratable benefit of the holders of the Issuer’s Class A-1 2.35000% Asset Backed Notes, Class A-2 2.66% Asset Backed Notes, Class A-3 3.01% Asset Backed Notes, Class A-4 3.16% Asset Backed Notes.
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee 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 in, to and under (i) the Receivables and all monies due thereon and payments received thereon on and after May 1, 2018; (ii) the security interests in the Financed Vehicles; (iii) any proceeds of any physical damage insurance policies covering the Financed Vehicles and in any proceeds of any credit life or credit disability insurance policies relating to the Receivables or the Obligors; (iv) any proceeds of Dealer Recourse; (v) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer; (vi) all funds, and all investment property, from time to time carried in or credited to the Accounts, including the Reserve Fund Initial Deposit and the Yield Supplement Account Deposit and in all investment income and proceeds thereof; (vii) the rights of the Seller under the Receivables Purchase Agreement including, but not limited to, the representations and warranties set forth in Sections 2.02 and 2.03 therein and the rights of the Issuer under the Sale and Servicing Agreement; and (viii) 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, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing as each such term is defined in Section 1.01 (collectively, the “Collateral”).
The foregoing Grant is made in trust to secure (i) the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, except as expressly provided in this Indenture and the Sale and Servicing Agreement and (ii) to secure compliance with the provisions of this Indenture, all as provided in this Indenture.
The Indenture Trustee, as 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 end that the interests of the Noteholders may be adequately and effectively protected.
ARTICLE I
DEFINITIONS AND INCORPORATION BY REFERENCE
Section 1.01. Definitions. Except as otherwise specified herein or as the context may otherwise require, defined terms used in this Indenture shall have the meanings ascribed thereto in the Sale and Servicing Agreement.
Section 1.02. Incorporation by Reference of Trust Indenture Act. Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:
“Commission” means the Securities and Exchange Commission.
“indenture securities” means the Notes.
“indenture security holder” means a Noteholder.
“indenture to be qualified” means this Indenture.
“indenture trustee” or “institutional trustee” means the Indenture Trustee.
“obligor” on the indenture securities means the Issuer and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined by the TIA or by reference to another statute or defined by Commission rule have the meaning assigned to them by such definitions.
ARTICLE II
THE NOTES
Section 2.01. Form. The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, in each case together with the Indenture Trustee’s certificate of authentication, shall be in substantially the form set forth in Exhibit A with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture, and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may, consistently herewith, be determined by the officers executing such Notes, as evidenced by their execution of the Notes. Any portion of the text of any Note may be set forth on the reverse thereof, with an appropriate reference thereto on the face of the Note.
Definitive Notes shall be typewritten, printed, lithographed or engraved or produced by any combination of these methods (with or without steel engraved borders), all as determined by the officers executing such Notes, as evidenced by their execution of such Notes.
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Each Note shall be dated the date of its authentication. The terms of the Notes are the terms of this Indenture.
Section 2.02. Execution, Authentication and Delivery. The Notes shall be executed on behalf of the Issuer by any of its Authorized Officers. The signature of any such Authorized Officer on the Notes may be manual, facsimile or scanned. Notes bearing the manual, facsimile or scanned signature of individuals who were at any time Authorized Officers of the Issuer 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 such Notes.
The Indenture Trustee shall, upon Issuer Order, authenticate and deliver for original issue the following aggregate principal amount of Notes: (i) $271,000,000 of Class A-1 Notes, (ii) $494,000,000 of Class A-2 Notes, (iii) $419,000,000 of Class A-3 Notes and (iv) $131,836,000 of Class A-4 Notes. The aggregate principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes outstanding at any time may not exceed such respective amounts except as provided in Section 2.05.
Each Note shall be dated the date of its authentication. The Notes shall be issuable as registered Notes in minimum denominations of $1,000 and in integral multiples of $1,000 in excess thereof.
No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for herein executed by the Indenture Trustee by the manual signature of one of its authorized signatories, and such certificate upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder.
Section 2.03. Temporary Notes. Pending the preparation of Definitive Notes pursuant to Section 2.11, the Issuer may execute, and upon receipt of an Issuer Order the Indenture Trustee shall authenticate and deliver, temporary Notes that are printed, lithographed, typewritten, mimeographed or otherwise produced, of the tenor of the Definitive Notes in lieu of which they are issued and with such variations not inconsistent with the terms of this Indenture as the officers executing such Notes may determine, as evidenced by their execution of such Notes.
If temporary Notes are issued, the Issuer shall cause Definitive Notes to be prepared without unreasonable delay. After the preparation of Definitive Notes, the temporary Notes shall be exchangeable for Definitive Notes upon surrender of the temporary Notes at the office or agency of the Issuer to be maintained as provided in Section 3.02, without charge to the related Noteholder. Upon surrender for cancellation of any one or more temporary Notes, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver in exchange therefor, a like tenor and principal amount of Definitive Notes of authorized denominations. Until so exchanged, the temporary Notes shall in all respects be entitled to the same benefits under this Indenture as Definitive Notes.
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Section 2.04. Note Register, Registration of Transfer and Exchange. The Issuer shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of all transfers of Notes. The Indenture Trustee initially shall be the “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. Upon any resignation 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 Indenture Trustee is appointed by the Issuer as Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Executive 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, the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, 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 the 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 (as determined by the Issuer), the Issuer shall execute, and the Indenture Trustee shall authenticate and the Noteholder shall obtain from the Indenture Trustee, the Notes which the Noteholder making the exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of 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 be duly endorsed by, or be accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder thereof or such Noteholder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“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 Exchange Act.
No service charge shall be made to a Noteholder for any registration of transfer or exchange of Notes, but the Issuer or the Indenture Trustee may require payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.03 or 9.06 not involving any transfer.
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Neither the Issuer nor the Note Registrar will be required to register transfers or exchanges of Notes that will be redeemed within fifteen (15) days after the requested date of transfer or exchange.
Any Notes issued to and beneficially owned by the Issuer or any other person treated as the same person as the Issuer for U.S. federal income tax purposes may not be sold, pledged, or otherwise transferred unless counsel satisfactory to the Indenture Trustee has rendered an opinion to the effect that such Notes to be sold, pledged, or otherwise transferred will be characterized as indebtedness for U.S. federal income tax purposes after such sale, pledge, or other transfer. Any attempted sale, pledge, or other transfer in contravention of this paragraph will be void ab initio and the purported transferor will continue to be treated as the owner of such Notes. If for tax or other reasons it may be necessary to track any Notes, tracking conditions such as requiring separate CUSIPs or definitive form instruments may be required by the Sponsor or the Administrator as a condition to such transfer.
Section 2.04A. Transfer Restrictions on the Retained Notes.
(a) On the Closing Date, each of the Retained Notes will be registered in the name of the Sponsor and issued in physical form as a Definitive Note in the applicable form of Exhibit A hereto. No transfer of a Retained Note, other than to an Affiliate of the Sponsor, shall be made unless such transfer is made pursuant to, (i) an effective registration statement under the Securities Act and any applicable state securities laws or, (ii) is exempt from the registration requirements under the Securities Act and such state securities laws. Except in the case of a transfer by the Sponsor to an Affiliate, in the event that a transfer is to be made in reliance upon an exemption from the Securities Act and state securities laws, in order to assure compliance with the Securities Act and such laws, the Noteholder desiring to effect such transfer and such Noteholder’s prospective transferee shall each certify to the Owner Trustee, the Issuer, the Indenture Trustee and the Sponsor in writing the facts surrounding the transfer in substantially the forms set forth in Exhibit B (the “Transferor Certificate”) and Exhibit C (the “Investment Letter”). Except in the case of a transfer by the Sponsor to an Affiliate, there shall also be delivered to the Owner Trustee, the Issuer and the Indenture Trustee an opinion of counsel that such transfer may be made pursuant to an exemption from the Securities Act and state securities laws, which opinion of counsel shall not be an expense of the Issuer, the Owner Trustee or the Indenture Trustee; provided that such opinion of counsel in respect of the applicable state securities laws may be a memorandum of law rather than an opinion if such counsel is not licensed in the applicable jurisdiction. If the Sponsor subsequently transfers any of the Retained Notes in a transaction exempt from the registration requirements under the Securities Act pursuant to Section 4(2) thereof and any Noteholder intends to transfer such Retained Notes pursuant to Rule 144A, the Sponsor shall provide to any Noteholder and any prospective transferee designated by any such Noteholder information regarding such Retained Notes and the Receivables and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such Retained Notes without registration thereof under the Securities Act pursuant to the registration exemption provided by Rule 144A, in each case with the cost of the provision of such information to be borne by the requesting noteholder. Each Noteholder desiring to effect such a transfer shall, and does hereby agree to, indemnify the Issuer, the Owner Trustee, the Indenture Trustee, the Depositor and AHFC (in any capacity) against any liability that may result if the transfer is not so exempt or is not made in accordance with federal and state securities laws.
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(b) By directly or indirectly acquiring any Retained Note in a transaction pursuant to Rule 144A, each underwriter, transferee and owner of an ownership or beneficial interest will be required to represent, warrant and agree (if in Definitive Note form) or will be deemed to represent, warrant and agree (if in Book Entry Note form) as follows:
(i) it understands that the Retained Notes have not been registered under the Securities Act, but were retained by the Sponsor, and may not be sold except as permitted in the following sentence. It understands and agrees, on its own behalf and on behalf of any accounts for which it is acting as hereinafter stated, (x) that such Retained Notes are being offered only in a transaction not involving any public offering within the meaning of the Securities Act and (y) that such Retained Notes may be resold, pledged or transferred only (i) to the Sponsor or an Affiliate, (ii) to an “accredited investor” as defined in Rule 501(a)(1),(2),(3) or (7) of Regulation D under the Securities Act (an “Accredited Investor”) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are Accredited Investors unless the holder is a bank acting in its fiduciary capacity) that executes a certificate substantially in the form of the Investment Letter, (iii) so long as such Retained Note is eligible for resale pursuant to Rule 144A under the Securities Act, to a person whom it reasonably believes after due inquiry is a “qualified institutional buyer” as defined in Rule 144A, acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are “qualified institutional buyers”) to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A or (iv) in a sale, pledge or other transfer made in a transaction otherwise exempt from the registration requirements of the Securities Act, in which case the Sponsor shall require that both the prospective transferor and the prospective transferee certify to the Indenture Trustee and the Sponsor in writing the facts surrounding such transfer, which certification shall be in form and substance reasonably satisfactory to the Issuer, the Owner Trustee, the Indenture Trustee and the Sponsor. Except in the case of a transfer described in clauses (i) or (iii) above, the Sponsor shall require that a written opinion of counsel (which will not be at the expense of the Sponsor, any affiliate of the Sponsor, the Owner Trustee or the Indenture Trustee), reasonably satisfactory to the Issuer and the Sponsor, be delivered to the Issuer, the Owner Trustee, the Indenture Trustee and the Sponsor to the effect that such transfer will not violate the Securities Act, and will be effected in accordance with any applicable securities laws of each state of the United States. It will notify any purchaser of the Retained Notes from it of the above resale restrictions, if then applicable. It further understands that in connection with any transfer of the Retained Notes by it that the Issuer and the Sponsor may request, and if so requested it will furnish, such certificates and other information as they may reasonably require to confirm that any such transfer complies with the foregoing restrictions;
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(ii) if eligible for resale pursuant to Rule 144A, it is a “qualified institutional buyer” as defined under Rule 144A under the Securities Act and is acquiring the Retained Notes for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are “qualified institutional buyers”). It is familiar with Rule 144A under the Securities Act and is aware that the seller of the Retained Notes and other parties intend to rely on the foregoing representations, warranties and acknowledgements and the exemption from the registration requirements of the Securities Act provided by Rule 144A;
(iii) if in Definitive Note form, it satisfies the requirements of Section 2.14 of this Indenture;
(iv) it understands that the Indenture Trustee, the Sponsor and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements, and it agrees that if any of the acknowledgments, representations and warranties deemed to have been made by it by its purchase of the Retained Notes, for its own account or for one or more accounts as to each of which it exercises sole investment discretion, are no longer accurate, it shall promptly notify the Sponsor; and
(v) the Indenture Trustee and the Sponsor are entitled to rely upon the foregoing representations, warranties and acknowledgements and are irrevocably authorized to produce the foregoing representations, warranties and acknowledgments or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
(c) In the case of a transfer of the Retained Notes to an Affiliate of the Sponsor, the Sponsor shall provide a written representation to the Issuer, the Indenture Trustee and the Owner Trustee that the transferee is an Affiliate of the Sponsor, and the Issuer, the Indenture Trustee and the Owner Trustee may conclusively rely on such representation.
Section 2.05. Mutilated, Destroyed, Lost or Stolen Notes. If (i) any mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee receives evidence to its satisfaction of the destruction, loss or theft of any Note, (ii) there is delivered to the Indenture Trustee such security or indemnity as may be required by it to hold the Issuer and the Indenture Trustee harmless and (iii) 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 Indenture Trustee that such Note has been acquired by a Protected Purchaser, the Issuer shall execute, and upon its written request the 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; provided, however, that if any such destroyed, lost or stolen Note, but not a mutilated Note, shall have become or within seven (7) days shall be due and payable, or shall have been called for redemption, instead of issuing a replacement Note, the Issuer may 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 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 Indenture Trustee in connection therewith.
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Upon the issuance of any replacement Note under this Section, the Issuer or the Indenture Trustee may require the payment by the Noteholder 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 Indenture Trustee or the Note Registrar) connected therewith.
Every replacement Note issued pursuant to this Section in replacement of any mutilated, destroyed, lost or stolen Note shall constitute an original additional contractual obligation of the Issuer, whether or not the mutilated, destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.06. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Note, the Issuer, the Indenture Trustee and any of their respective agents may treat the Person in whose name any Note is registered (as of the day of determination) as the owner of such Note for the purpose of receiving payments of principal of and interest, if any, on such Note and for all other purposes whatsoever, whether or not such Note be overdue, and none of the Issuer, the Indenture Trustee or any of their respective agents shall be affected by notice to the contrary.
Section 2.07. Payment of Principal and Interest, Defaulted Interest.
(a) Each Class of Notes shall accrue interest at the related Interest Rate, and such interest shall be due and payable on each Payment Date as specified therein, subject to Sections 3.01 and 11.12 hereof. Any installment of interest or principal, if any, payable on any Note that is punctually paid or duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered on the Record Date by check mailed first-class postage prepaid to such Person’s address as it appears on the Note Register on such Record Date, except that, unless Definitive Notes have been issued pursuant to Section 2.11, with respect to Notes registered on the Record Date in the name of the nominee of the Clearing Agency (initially, such nominee to be Cede & Co.), payment will be made by wire transfer in immediately available funds to the account designated by such nominee and except for the final installment of principal payable with respect to such Note on a Payment Date, a Redemption Date or on the related Final Scheduled Payment Date, as the case may be (and except for the Redemption Price for any Note called for redemption pursuant to Section 10.01), which shall be payable as provided below. The funds represented by any such checks returned undelivered shall be held in accordance with Section 3.03.
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(b) The principal of each Note shall be payable as provided in Section 8.02(d) hereof. Notwithstanding the foregoing, the entire unpaid principal amount of the Notes shall be due and payable, if not previously paid, on the related Final Scheduled Payment Date or the date on which an Event of Default shall have occurred and be continuing, if the Indenture Trustee or Noteholders representing not less than a majority of the Outstanding Amount have declared the Notes to be immediately due and payable in the manner provided in Section 5.02. All principal payments on each Class of Notes shall be made pro rata to the Noteholders of such Class entitled thereto. The Indenture Trustee shall notify the Person in whose name a Note is registered at the close of business five (5) Business Days preceding the Payment Date on which the Issuer expects that the final installment of principal of and interest on such Note will be paid. Such notice shall be mailed or transmitted by facsimile prior to such final Payment Date and shall specify that such final installment will be payable only upon presentation and surrender of such Note and shall specify the place where such Note may be presented and surrendered for payment of such installment; provided, however, if a Definitive Note is held by the Sponsor or any of its Affiliates, then the final installment of principal of and interest on such Note may be paid prior to the surrender of the Note. Notices in connection with redemptions of Notes shall be mailed to Noteholders as provided in Section 10.02.
(c) 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 Interest 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 (5) Business Days prior to the next payment date. The Issuer shall fix or cause to be fixed any such special record date and related payment date, and, at least fifteen (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.
Section 2.08. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Indenture Trustee, be delivered to the Indenture Trustee and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver to the Indenture Trustee for cancellation any Notes previously authenticated and delivered hereunder which the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly cancelled by the Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange for any Notes cancelled as provided in this Section, except as expressly permitted by this Indenture. All cancelled Notes may be held or disposed of by the Indenture Trustee in accordance with its standard retention or disposal policy as in effect at the time unless the Issuer shall direct by an Issuer Order that they be destroyed or returned to it; provided, that such Issuer Order is timely and the Notes have not been previously disposed of by the Indenture Trustee.
Section 2.09. Book-Entry Notes. The Non-Retained Notes, upon original issuance, will be issued in the form of a typewritten Note or Notes representing the Book-Entry Notes, to be delivered to the Indenture Trustee, as agent for The Depository Trust Company, the initial Clearing Agency, by, or on behalf of, the Issuer. The Book-Entry Notes shall be registered initially on the Note Register in the name of Cede & Co., the nominee of the initial Clearing Agency, and no Note Owner will receive a definitive Note representing such Note Owner’s interest in such Note, except as provided in Section 2.11. Unless and until definitive, fully registered Notes (the “Definitive Notes”) have been issued to such Note Owners pursuant to Section 2.11:
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(i) the provisions of this Section shall be in full force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be entitled to deal with the Clearing Agency for all purposes of this Indenture (including the payment of principal of and interest on the Notes and the giving of instructions or directions hereunder) as the sole holder of the Notes, and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section conflict with any other provisions of this Indenture, the provisions of this Section shall control;
(iv) the rights of Note Owners shall be exercised only through the Clearing Agency and shall be limited to those established by law and agreements between such Note Owners and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the Note Depository Agreement, unless and until Definitive Notes are issued pursuant to Section 2.11, the Clearing Agency will make book-entry transfers among the Clearing Agency Participants and receive and transmit payments of principal of and interest on the Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to be taken based upon instructions or directions of Noteholders evidencing a specified percentage of the Outstanding Amount, the Clearing Agency shall be deemed to represent such percentage only to the extent that it has received instructions to such effect from Note Owners and/or Clearing Agency Participants owning or representing, respectively, such required percentage of the beneficial interest in the Notes and has delivered such instructions to the Indenture Trustee.
Section 2.10. Notices to Clearing Agency. Whenever a notice or other communication to the Noteholders is required under this Indenture, unless and until Definitive Notes shall have been issued to such Note Owners pursuant to Section 2.11, the Indenture Trustee shall give all such notices and communications specified herein to be given to Noteholders to the Clearing Agency, and shall have no obligation to such Note Owners.
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Section 2.11. Definitive Notes. On the Closing Date, the Retained Notes will be issued in physical form as Definitive Notes in the applicable form of Exhibit A hereto and registered in the name of the Sponsor. The Non-Retained Notes will be issued on the Closing Date as Book-Entry Notes; however, if at anytime (i)(A) the Administrator advises the Indenture Trustee in writing that the Clearing Agency is no longer willing or able to properly discharge its responsibilities with respect to the Book-Entry Notes and (B) neither the Indenture Trustee nor the Administrator is able to locate a qualified successor, (ii) the Administrator at its option advises the 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 a Servicer Default, Owners of Book-Entry Notes representing beneficial interests aggregating at least a majority of the Outstanding Amount of such Notes advise the Indenture Trustee and the Clearing Agency Participants through the Clearing Agency, in writing that the continuation of a book-entry system through the Clearing Agency is no longer in the best interests of such Note Owners, then, in each case, the Indenture Trustee shall notify all Note Owners of the related Class of Notes through the Clearing Agency of the occurrence of any such event and of the availability of Definitive Notes of the related Class of Notes to Note Owners requesting the same. Upon surrender to the Indenture Trustee of the Note or Notes representing the Book-Entry Notes by the Clearing Agency, accompanied by registration instructions, the Issuer shall execute and the Indenture Trustee shall authenticate the Definitive Notes in accordance with the instructions of the Clearing Agency. None of the Issuer, the Note Registrar or the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Notes of a Class, the Indenture Trustee shall recognize the holders of the Definitive Notes as Noteholders hereunder. Except in the case of a Noteholder who is an Affiliate of the Sponsor, subsequent Noteholders of Notes that were initially Retained Notes shall have the right, but at such Noteholders sole cost and expense, to request that such Retained Notes be converted to Book Entry Notes and the Issuer, the Indenture Trustee, the Administrative Agent and the Sponsor agree to cooperate and use reasonable efforts to effect such conversion.
Section 2.12. Release of Collateral. Subject to Section 11.01 and the terms of the other Basic Documents, the Indenture Trustee shall release property from the lien of this Indenture only upon receipt of an Issuer Request accompanied by an Officer’s Certificate, an Opinion of Counsel and (except in the case of a full redemption under Section 10.01) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) or an Opinion of Counsel in lieu of such Independent Certificates to the effect that the TIA does not require any such Independent Certificates.
Section 2.13. Tax Treatment; Tax Information.
(a) The Issuer has entered into this Indenture, and the Notes will be issued (other than Notes beneficially owned by the Issuer or any other person treated as the same person as the Issuer for U.S. federal income tax purposes unless transferred in accordance with Section 2.04), 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 secured by the Owner 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 (other than Notes beneficially owned by the Issuer or any other person treated as the same person as the Issuer for U.S. federal income tax purposes unless transferred in accordance with Section 2.04) for all purposes including federal, state and local income, single business and franchise tax purposes as indebtedness.
(b) Each Noteholder, by its acceptance of a Note, and Note Owner, if different, by its acceptance of a beneficial interest in a Note, agrees to provide and shall provide to the person making payments on the Note to it (or other person responsible for withholding of taxes) with the Tax Information, and will update or replace such Tax Information when it becomes incorrect or obsolete, at any time required by applicable law or promptly upon request. Each Noteholder and Note Owner is deemed to understand, acknowledge and agree that the Indenture Trustee, Paying Agent and Issuer (or other person responsible for withholding of taxes) have the right to withhold on payments with respect to a Note (without any corresponding gross-up) where an applicable party fails to comply with the requirements set forth in the preceding sentence or the Indenture Trustee, Paying Agent or Issuer (or other person responsible for withholding of taxes) is otherwise required to so withhold under applicable law.
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Section 2.14. Employee Benefit Plans. The transfer of a Definitive Note shall not be registered unless the prospective transferee (and if the transferee is a Plan, its fiduciary) has represented in writing to the Indenture Trustee that either (i) it is not acquiring such Note with the assets of a Benefit Plan Investor or a Plan that is subject to Similar Law; or (ii) its acquisition and holding of such Note will not give rise to, in the case of a Benefit Plan Investor, a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or, in the case of a Plan that is subject to Similar Law, a violation of Similar Law. In addition, each prospective transferee that is a Benefit Plan Investor, including any fiduciary acting on behalf of a Benefit Plan Investor (“Benefit Plan Investor Fiduciary”) must have represented in writing that:
(a) If any of the Issuer, the Depositor, the Administrator, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, any underwriter, or any of their respective affiliated entities (the “Transaction Parties”), has provided or shall provide advice with respect to the acquisition of the Notes by the Benefit Plan Investor, it has or shall provide such advice only to the Benefit Plan Investor Fiduciary which is independent of the Transaction Parties giving such advice, if any, and the Benefit Plan Investor Fiduciary either:
(i) is a bank as defined in Section 202 of the Investment Advisers Act of 1940 (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a State or Federal agency;
(ii) is an insurance carrier which is qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of assets of a Benefit Plan Investor;
(iii) is an investment adviser registered under the Advisers Act, or, if not registered an as investment adviser under the Advisers Act by reason of paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the state in which it maintains its principal office and place of business;
(iv) is a broker-dealer registered under the Securities Exchange Act of 1934, as amended; or
(v) has, and at all times that the Benefit Plan Investor is invested in the Definitive Note will have, total assets of at least U.S. $50,000,000 under its management or control (provided that this clause (v) shall not be satisfied if the Benefit Plan Investor Fiduciary is either (A) the owner or a relative of the owner of an investing IRA or (B) a participant or beneficiary or a relative of a participant or beneficiary of the Benefit Plan Investor investing in the Definitive Note in such capacity);
(b) the Benefit Plan Investor Fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies, including the acquisition by the Benefit Plan Investor of the Definitive Note;
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(c) the Benefit Plan Investor Fiduciary is a “fiduciary” with respect to the Benefit Plan Investor within the meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both, and is responsible for exercising independent judgment in evaluating the Benefit Plan Investor’s acquisition of the Definitive Note;
(d) none of the Transaction Parties has exercised any authority to cause the Benefit Plan Investor to invest in the Definitive Note or to negotiate the terms of the Benefit Plan Investor’s investment in the Definitive Note; and
(e) the Benefit Plan Investor Fiduciary has been informed by the Transaction Parties:
(i) in connection with the Benefit Plan Investor’s acquisition of the Notes (1) that none of the Transaction Parties is undertaking to provide impartial investment advice or to give advice in a fiduciary capacity, and (2) that no such entity has given investment advice or otherwise made a recommendation, (other than advice, if any, given by an underwriter to the Benefit Plan Investor Fiduciary which satisfies the requirements of clause (a) above); and
(ii) of the existence and nature of the Transaction Parties financial interests in the Benefit Plan Investor’s acquisition of the Definitive Note.
The above representations in Sections 2.14(a), (b), (c), (d) and (e) are intended to comply with the Department of Labor’s Reg. Sections 29 C.F.R. 2510.3-21(a) and (c)(1) as promulgated on April 8, 2016 (81 Fed. Reg. 20,997). If these regulations are revoked, repealed or no longer effective, these representations shall be deemed to not be in effect. Any Person that acquires a beneficial interest in a Book Entry Note shall be deemed to make the same representations as set forth above in this Section 2.14.
ARTICLE
III
COVENANTS
Section 3.01. Payment of Principal and Interest. The Issuer will duly and punctually pay the principal of and interest, if any, on the Notes in accordance with the terms of the Notes and this Indenture. Without limiting the foregoing, subject to Section 8.02(c), the Issuer will cause to be distributed all amounts on deposit in the Note Distribution Account on a Payment Date deposited therein in accordance with Section 8.02(d). 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 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 and such office initially will be located in St. Paul, Minnesota. The Issuer hereby initially appoints the Indenture Trustee to serve as its agent for the foregoing purposes. The Issuer will give prompt written notice to the 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 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 Indenture Trustee as its agent to receive all such surrenders, notices and demands, provided that the Indenture Trustee shall not serve as an agent or office for the purpose of service of process on behalf of the Issuer.
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Section 3.03. Money for 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 Collection Account and the Note Distribution Account pursuant to Section 8.02(c) shall be made on behalf of the Issuer by the Indenture Trustee or by another Paying Agent, and no amounts so withdrawn from the Collection Account and the Note Distribution Account for payments of Notes shall be paid over to the Issuer except as provided in this Section.
On or before the Business Day immediately preceding each Payment Date and Redemption Date, the Issuer shall deposit or cause to be deposited in the Collection Account (to be transferred to the Note Distribution Account on the related Payment Date) an aggregate sum sufficient to pay the amounts then becoming due under the Notes, such sum to be held in trust for the benefit of the Persons entitled thereto, and (unless the Paying Agent is the Indenture Trustee) shall promptly notify the Indenture Trustee in writing of its action or failure so to act.
The Issuer will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section, that such Paying Agent will:
(i) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by the Issuer (or any other obligor upon the Notes) of which it has actual knowledge in the making of any payment required to be made with respect to the Notes;
(iii) at any time during the continuance of any such default, upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent;
(iv) immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of Notes if at any time it ceases to meet the standards required to be met by a Paying Agent at the time of its appointment;
(v) comply with all requirements of the Code with respect to the withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon (including obtaining and retaining from Persons entitled to payments with respect to the Notes any Tax Information and making any withholdings with respect to the Notes as required by the Code and paying over such withheld amounts to the appropriate governmental authority) and
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(vi) comply with any applicable reporting requirements in connection with any payments made by it on any Notes and any withholding of taxes therefrom, and, upon request, provide any Tax Information to the Issuer.
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 Indenture Trustee all sums held in trust by such Paying Agent, such sums to be held by the Indenture Trustee upon the same trusts as those upon which the sums were held by such Paying Agent; and upon such payment by any Paying Agent to the 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 Indenture Trustee or any Paying Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two years after such amount has become due and payable shall be discharged from such trust and be paid to the Issuer on Issuer Request; and the Noteholder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the amounts so paid to the Issuer), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease; provided, however, that the Indenture Trustee or such Paying Agent, before being required to make any such repayment, shall at the expense and written direction of the Issuer cause to be published once, in a newspaper published in the English language, customarily published on each Business Day and of general circulation in The City of New York, notice that such money remains unclaimed and that, after a date specified therein, which shall not be less than thirty (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. The Indenture Trustee shall also adopt and employ, at the expense and written direction of the Issuer, any other reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Noteholders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in monies due and payable but not claimed is determinable from the records of the Indenture Trustee or of any Paying Agent, at the last address of record for each such Noteholder).
Section 3.04. Existence. The Issuer will keep in full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware (unless it becomes, or any successor Issuer hereunder is or becomes, organized under the laws of any other State or of the United States, in which case the Issuer will keep in full effect its existence, rights and franchises under the laws of such other jurisdiction) and will obtain and preserve its qualification to do business in each jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes, the Collateral and each other instrument or agreement included in the Owner Trust Estate in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby until such time as the Issuer shall terminate in accordance with the terms hereof.
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Section 3.05. Protection of Owner Trust Estate. The Issuer intends the security interest Granted pursuant to this Indenture in favor of the Indenture Trustee on behalf of the Noteholders to be prior to all other liens in respect of the Owner Trust Estate, and the Issuer shall take all actions necessary to obtain and maintain, for the benefit of the Indenture Trustee on behalf of the Noteholders, a first lien on and a first priority, perfected security interest in the Owner Trust Estate. The Issuer will from time to time execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, all as prepared by the Administrator and delivered to the Issuer, and will take such other action necessary or advisable to:
(i) grant more effectively any portion of the Owner 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;
(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 Collateral;
(v) preserve and defend title to the Owner Trust Estate and the rights of the Indenture Trustee and the Noteholders in such Owner Trust Estate against the claims of all persons and parties; or
(vi) pay all taxes or assessments levied or assessed upon the Owner Trust Estate when due.
Section 3.06. Opinions as to Owner Trust Estate.
(a) Promptly after the execution and delivery of this Indenture, the Issuer shall furnish to the 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 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 ninety (90) days after the beginning of each fiscal year of the Issuer (commencing with the first fiscal year that begins on a date that is more than three months after the Cutoff Date), the Issuer shall furnish to the Indenture Trustee an Opinion of Counsel, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, either (i) all financing statements and continuation statements have been filed that are necessary to create and continue the 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.
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Section 3.07. Performance of Obligations; Servicing of Receivables.
(a) The Issuer will not take any action and will use its best efforts not to permit any action to be taken by others that would release any Person from any of such Person’s material covenants or obligations under any instrument or agreement included in the Owner Trust Estate or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the validity or effectiveness of, any such instrument or agreement, except as expressly provided in this Indenture, the other Basic Documents or such other instrument or agreement.
(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 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 Basic Documents and in the instruments and agreements included in the Owner Trust Estate, including but not limited to 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 Basic 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 Basic Document or any provision thereof without the written consent of the Indenture Trustee or the Noteholders of at least a majority of the Outstanding Amount or such greater percentage as may be specified in the particular provision.
(d) If the Issuer shall have knowledge of the occurrence of a Servicer Default, the Issuer shall promptly provide written notice to a Responsible Officer of the Indenture Trustee and to the Administrator thereof, and shall specify in such notice the action, if any, the Issuer is taking with respect of such default. If a Servicer Default shall arise from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the Issuer shall take all reasonable steps available to it to remedy such failure. The Administrator shall, in accordance with Section 1.02(c) of the Administration Agreement, make such notice available to each Rating Agency.
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(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 7.01 of the Sale and Servicing Agreement, the Issuer shall promptly notify a Responsible Officer of the Indenture Trustee and the Indenture Trustee shall appoint a Successor Servicer, and such Successor Servicer shall accept its appointment by a written assumption in a form acceptable to the Indenture Trustee. In the event that a Successor Servicer has not been appointed and accepted its appointment at the time when the Servicer ceases to act as Servicer, the Indenture Trustee without further action shall automatically be appointed the Successor Servicer. The Indenture Trustee may resign as the 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 Sale and Servicing Agreement. As soon as such a Successor Servicer is appointed, the Issuer shall notify the Indenture Trustee of such appointment, specifying in such notice the name and address of such Successor Servicer. Any Successor Servicer other than the Indenture Trustee shall (i) be an established financial institution having a net worth of not less than $50,000,000 and whose regular business includes the servicing of motor vehicle receivables and (ii) enter into a servicing agreement with the Issuer and the Seller having substantially the same provisions as the provisions of the Sale and Servicing Agreement applicable to the Servicer. If within thirty (30) days after the delivery of the notice referred to above, the Issuer shall not have obtained such a new servicer, the Indenture Trustee may appoint, or may petition a court of competent jurisdiction to appoint, a Successor Servicer. In connection with any such appointment, the Issuer may make such arrangements for the compensation of such successor as it and such successor shall agree, subject to the limitations set forth below and in the Sale and Servicing Agreement, and in accordance with Section 7.02 of the Sale and Servicing Agreement, the Issuer and the Seller shall enter into an agreement with such successor for the servicing of the Receivables (such agreement to be in form and substance satisfactory to the Indenture Trustee). If the Indenture Trustee shall succeed to the Servicer’s duties as servicer of the Receivables as provided herein, it shall do so in its individual capacity and not in its capacity as Indenture Trustee and, accordingly, the provisions of Article VI shall be inapplicable (except as set forth in the proviso contained in Section 6.01(a)) to the Indenture Trustee in its duties as the successor to the Servicer and the servicing of the Receivables. In case the Indenture Trustee shall become successor to the Servicer under the Sale and Servicing Agreement, the Indenture Trustee shall be entitled to appoint as Servicer any one of its Affiliates or agents, provided that it shall be fully liable for the actions and omissions of such Affiliate or agent in such capacity as Successor Servicer.
Section 3.08. Negative Covenants. So long as any Notes are Outstanding, the Issuer shall not:
(i) except as expressly permitted by Section 3.10(b) and the Basic Documents, sell, transfer, exchange or otherwise dispose of any of the properties or assets of the Issuer, including those included in the Owner Trust Estate, unless directed to do so by the Indenture Trustee;
(ii) 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 applicable state law) or assert any claim against any present or former Noteholder by reason of the payment of the taxes levied or assessed upon any part of the Owner Trust Estate;
(iii) (A) permit the validity or effectiveness of this Indenture to be impaired, or permit the lien created by 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, (B) permit any lien, charge, excise, claim, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Owner 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 Financed Vehicles and arising solely as a result of an action or omission of the related Obligor) or (C) permit the lien created by this Indenture not to constitute a valid first priority (other than with respect to any such tax, mechanics’ or other lien) security interest in the Owner Trust Estate; or
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(iv) dissolve or liquidate in whole or in part.
Section 3.09. Annual Statement as to Compliance.
(a) The Issuer will deliver to the Indenture Trustee, within 90 days after the end of each fiscal year of the Issuer (commencing with the fiscal year ended March 31, 2019), an Officer’s Certificate stating, as to the Authorized Officer signing such Officer’s Certificate, that:
(i) a review of the activities of the Issuer during such year and of its performance under this Indenture has been made under such Authorized Officer’s supervision; and
(ii) to the best of such Authorized Officer’s knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year or, if there has been a default in its compliance with any such condition or covenant, specifying each such default known to such Authorized Officer and the nature and status thereof.
(b) On or before June 1st of each calendar year in which a Form 10-K is required to be filed on behalf of the Issuer, commencing in 2019, the Indenture Trustee shall deliver to the Issuer and the Administrator a report regarding the Indenture Trustee’s assessment of compliance with each of the Servicing Criteria specified on Exhibit D hereto during the immediately preceding reporting year accompanied by an attestation report by a registered public accounting firm, in each case as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be signed by an authorized officer of the Indenture Trustee, and shall address each of the Servicing Criteria specified on Exhibit D hereto.
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:
(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 Indenture Trustee, in form satisfactory to the 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 Basic Document, on the part of the Issuer to be performed or observed;
(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
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(iii) the 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 Indenture Trustee) to the effect that such transaction will not have any material adverse U.S. federal tax consequence to the Issuer, any Noteholder or any Certificateholder;
(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 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 comply with this Article and that all conditions precedent herein provided for relating to such transaction have been complied with (including any filing required by the Exchange Act).
(b) The Issuer shall not convey or transfer all or substantially all of its properties or assets, including those included in the Owner Trust Estate, to any Person (except as expressly permitted by the Basic Documents), unless:
(i) 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 Indenture Trustee, in form satisfactory to the 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 Basic 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 Noteholders, (D) unless otherwise provided in such supplemental indenture, expressly agree to indemnify, defend and hold harmless the Issuer against and from any loss, liability or expense arising under or related to this Indenture and the Notes and (E) expressly agree by means of such supplemental indenture that such Person (or if a group of Persons, then one specified Person) shall make all filings with the Commission (and any other appropriate Person) required by the Exchange Act in connection with the Notes;
(ii) immediately after giving effect to such transaction, no Default or Event of Default shall have occurred and be continuing;
(iii) the Rating Agency Condition shall have been satisfied with respect to such transaction;
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(iv) the Issuer shall have received an Opinion of Counsel (and shall have delivered copies thereof to the Indenture Trustee) to the effect that such transaction will not have any material adverse U.S. federal tax consequence to the Issuer, any Noteholder or any Certificateholder;
(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 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 Article 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 with the same effect as if such Person had been named as the Issuer herein.
(b) Upon a conveyance or transfer of 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 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, purchasing, owning, selling and managing the Receivables in the manner contemplated by this Indenture and the other Basic 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 Basic Documents.
Section 3.14. Servicer’s Obligations. The Issuer shall cause the Servicer to comply with Sections 3.10, 3.11, 3.12, 4.10 and Article VIII of the Sale and Servicing Agreement.
Section 3.15. Guarantees, Loans, Advances and Other Liabilities. Except as contemplated by the Basic 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 stock, obligations, assets or securities of, or any other interest in, or make any capital contribution to, any other Person.
Section 3.16. Capital Expenditures. The Issuer shall not make any expenditure (by long-term or operating lease or otherwise) for capital assets (either realty or personalty).
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Section 3.17. Removal of Administrator. So long as any Notes are Outstanding, the Issuer shall not remove the Administrator without cause unless the Rating Agency Condition shall have been satisfied in connection with such removal.
Section 3.18. Restricted Payments. Except as expressly permitted by the Basic 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 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 this Indenture, the Sale and Servicing Agreement or the Trust Agreement, (b) payments to the 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 the Collection Account except in accordance with this Indenture and the Basic Documents.
Section 3.19. Notice of Events of Default. The Issuer shall give a Responsible Officer of the Indenture Trustee and each Rating Agency prompt written notice of each Event of Default hereunder and each default on the part of the Servicer or the Seller of its obligations under the Sale and Servicing Agreement.
Section 3.20. Further Instruments and Acts. Upon request of the Indenture Trustee, the Issuer will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture.
Section 3.21. 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 Basic Document.
Section 3.22. Amendments of Sale and Servicing Agreement and Trust Agreement. The Issuer shall not agree to any amendment to Section 9.01 of the Sale and Servicing Agreement or Section 11.01 of the Trust Agreement to eliminate the requirements thereunder that the Indenture Trustee or the Noteholders consent to amendments thereto as provided therein.
ARTICLE IV
SATISFACTION AND DISCHARGE
Section 4.01. Satisfaction and Discharge of Indenture. 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, 3.20 and 3.22, (v) the rights, obligations and immunities of the Indenture Trustee hereunder (including the rights of the Indenture Trustee under Section 6.07 and the obligations of the Indenture Trustee under Section 4.02) and (vi) the rights of Noteholders as beneficiaries hereof with respect to the property so deposited with the Indenture Trustee payable to all or any of them, and the Indenture Trustee, on written 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
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(i) either
(A) all Notes theretofore authenticated and delivered (other than (i) Notes that have been destroyed, lost or stolen and that have been replaced or paid as provided in Section 2.05 and (ii) 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 Indenture Trustee for cancellation; or
(B) all Notes not theretofore delivered to the Indenture Trustee for cancellation
(1) have become due and payable,
(2) will become due and payable at the Class A-4 Final Scheduled Payment Date within one year, or
(3) are to be called for redemption within one year under arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Issuer,
and the Issuer, in the case of clauses (1), (2) or (3) above, has irrevocably deposited or caused to be irrevocably deposited with the 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 purpose, in an amount sufficient to pay and discharge the entire indebtedness on such Notes not theretofore delivered to the Indenture Trustee for cancellation when due to the related Final Scheduled Payment Date or Redemption Date (if Notes shall have been called for redemption pursuant to Section 10.01), as the case may be;
(ii) the Issuer has paid or performed or caused to be paid or performed all amounts and obligations which the Issuer may owe to or on behalf of the Indenture Trustee for the benefit of the Noteholders, under this Indenture or the Notes; and
(iii) the Issuer has delivered to the Indenture Trustee an Officer’s Certificate, an Opinion of Counsel and (if required by the TIA or the 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.
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Section 4.02. Application of Trust Money. All monies deposited with the Indenture Trustee pursuant to Section 4.01 shall be held in trust in a segregated non-interest bearing account and applied by it, (a) in accordance with the provisions of the Notes, the Sale and Servicing Agreement and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the Noteholders of the particular Notes for the payment or redemption of which such monies have been deposited with the 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 of the Issuer except to the extent required herein or in the Sale and Servicing Agreement or required by law and (b) in accordance with instructions from the Administrator, on which instructions the Indenture Trustee may conclusively rely.
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 Indenture Trustee under the provisions of this Indenture with respect to such Notes shall, upon demand of the Issuer, be paid to the 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.
ARTICLE V
REMEDIES
Section 5.01. Events of Default. “Event of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):
(i) default by the Issuer in the payment of any interest on any Note when the same becomes due and payable, and such default shall continue for a period of five (5) days;
(ii) default by the Issuer in the payment of the principal of or any installment of the principal of any Note at the Final Scheduled Payment Date for such Class of Notes;
(iii) default in the observance or performance of any covenant or agreement of the Issuer made in this Indenture (other than a covenant or agreement, a default in the observance or performance of which is elsewhere in this Section specifically dealt with), or any representation or warranty of 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 shall continue or not be cured, or the circumstance or condition in respect of which such misrepresentation or warranty was incorrect shall not have been eliminated or otherwise cured, for a period of sixty (60) days after there shall have been given, by registered or certified mail, to the Issuer by the Indenture Trustee or to the Issuer and the Indenture Trustee by the Noteholders of at least 25% of the Outstanding Amount, 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;
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(iv) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of the Issuer or any substantial part of the Owner 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 any substantial part of the Owner 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 sixty (60) consecutive days; or
(v) 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 any substantial part of the Owner 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;
provided, however, that (A) if any delay or failure of performance referred to in clause (i) above shall have been caused by Force Majeure or other similar occurrences, the five day grace period referred to in such clause shall be extended for an additional thirty (30) days, (B) if any delay or failure of performance referred to in clause (ii) above shall have been caused by Force Majeure or other similar occurrences, such failure or delay shall not constitute an Event of Default for an additional thirty (30) days and (C) if any delay or failure of performance referred to in clause (iii) above shall have been caused by Force Majeure or other similar occurrences, the 30-day grace period referred to in such clause shall be extended for an additional thirty (30) days.
The Issuer shall deliver to a Responsible Officer of the Indenture Trustee, within five (5) days after the occurrence thereof, written notice in the form of an Officer’s Certificate of any event which with the giving of notice and the lapse of time would become an Event of Default under clause (iii) 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 should occur and be continuing, then and in every such case the Noteholders representing not less than a majority of the Outstanding Amount or the Indenture Trustee, at the request or direction of the Noteholders of Notes representing not less than a majority of the Outstanding Amount, may declare all the Notes to be immediately due and payable, by a notice in writing to the Issuer (and to the 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.
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(b) At any time after such declaration of acceleration of maturity has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter in this Article provided, the Noteholders of Notes representing a majority of the Outstanding Amount, by written notice to the Issuer and the Indenture Trustee, may rescind and annul such declaration and its consequences if:
(i) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes and all other amounts that would then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel; and
(ii) all Events of Default, other than the nonpayment of the principal of the Notes that has become due solely by such acceleration, have been cured or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right consequent thereto.
Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee.
(a) The Issuer covenants that if the Notes are accelerated following the occurrence of an Event of Default, the Issuer will, upon demand of the Indenture Trustee, pay to it, for the benefit of the Noteholders, the whole amount then due and payable on such Notes for principal and interest, with interest on the overdue principal and, to the extent payment at such rate of interest shall be legally enforceable, on overdue installments of interest at the related Interest Rate and, in addition thereto, such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee and its agents and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such demand, the Indenture Trustee, in its own name and as trustee of an express trust, may institute a Proceeding for the collection of the sums so due and unpaid, and may prosecute such Proceeding to judgment or final decree and may enforce the same against the Issuer or other obligor upon such Notes and collect in the manner provided by law out of the property of the Issuer or other obligor upon such Notes, wherever situated, the monies adjudged or decreed to be payable.
(c) If an Event of Default occurs and is continuing, the 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 Indenture Trustee shall deem most effective to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or to enforce any other proper remedy or legal or equitable right vested in the Indenture Trustee by this Indenture or by law.
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(d) In case 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 Owner Trust Estate, Proceedings under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or other similar law, or in case a receiver, assignee or trustee in bankruptcy or reorganization, 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 in case of 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 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 Indenture Trustee shall have made any demand pursuant to the provisions of this Section, shall be entitled and empowered, by intervention in such Proceedings or otherwise:
(i) to file and prove a claim or claims for the entire 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 Indenture Trustee (including any claim for reasonable compensation to the Indenture Trustee and each predecessor Indenture Trustee, and their respective agents, attorneys and counsel, and for reimbursement of all expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee, except as a result of negligence 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 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 Indenture Trustee or the Noteholders allowed in any Proceedings relative to the Issuer, its creditors and its property;
(v) 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 Indenture Trustee and, in the event that the Indenture Trustee shall consent to the making of payments directly to such Noteholders, to pay to the Indenture Trustee such amounts as shall be sufficient to cover reasonable compensation to the Indenture Trustee, each predecessor Indenture Trustee and their respective agents, attorneys and counsel, and all other expenses and liabilities incurred, and all advances made, by the Indenture Trustee and each predecessor Indenture Trustee except as a result of negligence or bad faith.
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(e) Nothing herein contained shall be deemed to authorize the 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 Noteholder thereof or to authorize the 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 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 Indenture Trustee shall be brought in its own name as trustee of an express trust, and any recovery of judgment, subject to the payment of the expenses, disbursements and compensation of the Indenture Trustee, each predecessor Indenture Trustee and their respective agents and attorneys, shall be for the ratable benefit of the Noteholders.
(g) In any Proceedings brought by the Indenture Trustee (including any Proceedings involving the interpretation of any provision of this Indenture to which the Indenture Trustee shall be a party), the Indenture Trustee shall be held to represent all the 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 Indenture Trustee may do one or more of the following (subject to Sections 5.02 and 5.05):
(i) institute Proceedings in its own name and/or as trustee of an express trust for the collection of all amounts then payable on the Notes or under this Indenture with respect thereto, whether by declaration or otherwise, enforce any judgment obtained and collect from the Issuer and any other obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Owner Trust Estate;
(iii) exercise any remedies of a secured party under the UCC and any other remedy available to the Indenture Trustee and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee on behalf of the Noteholders under this Indenture; and
(iv) sell the Owner 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;
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provided, however, that the Indenture Trustee may not sell or otherwise liquidate the Owner Trust Estate following an Event of Default, unless (A) the Noteholders of 100% of the Outstanding Amount consent thereto, (B) the proceeds of such sale or liquidation distributable to the Noteholders and Certificateholders are sufficient to discharge in full all amounts then due and unpaid upon such Notes and Certificates for principal and interest or (C) the Indenture Trustee determines that the Owner Trust Estate will not continue to provide sufficient funds for the payment of principal of and interest on the Notes and Certificates as would have become due if the Notes and Certificates had not been declared due and payable, and the Indenture Trustee obtains the consent of Noteholders of 100% of the Outstanding Amount. In determining such sufficiency or insufficiency with respect to clause (B) and (C) above, the Indenture Trustee may, but need not, obtain, at the expense of the Issuer, 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 Owner Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to this Article, it shall pay out the money or property in the following order and priority:
(i) on a pro rata basis, to the Indenture Trustee, the Delaware Trustee and the Owner Trustee, any amounts due under the Trust Agreement or Section 6.07 hereof;
(ii) to the Servicer, for amounts due and unpaid in respect of Nonrecoverable Advances under the Sale and Servicing Agreement;
(iii) to the Servicer, for amounts due and unpaid in respect of the Total Servicing Fee under the Sale and Servicing Agreement;
(iv) to the Asset Representations Reviewer, any amounts due under the Asset Representations Review Agreement that were not previously paid;
(v) to the Noteholders of the Notes of each Class, the Note Interest Distributable Amount ratably in proportion to the Note Interest Distributable Amount for each Class at their respective Interest Rates;
(vi) to the Noteholders of Class A-1 Notes, the Outstanding Amount of the Class A-1 Notes, until the Class A-1 Notes are paid in full;
(vii) to the Noteholders of the Class A-2, Class A-3 and Class A-4 Notes, pro rata in proportion to the Outstanding Amount of each such Class, until the Class A-2, Class A-3 and Class A-4 Notes are paid in full;
(viii) to the Certificate Distribution Account for distribution to the Certificateholders, the Certificate Interest Distributable Amount;
(ix) to the Certificate Distribution Account for distribution to the Certificateholders, the outstanding principal amount of the Trust Certificates; and
(x) to the Seller, any remaining amount.
The Indenture Trustee may fix a record date and payment date for any payment to Noteholders pursuant to this Section. At least fifteen (15) days before such record date, the Issuer shall mail to each Noteholder and the Indenture Trustee a notice that states the record date, the payment date and the amount to be paid.
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Section 5.05. Optional Preservation of the Receivables. If the Notes have been declared to be due and payable under Section 5.02 following an Event of Default and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee may, but need not, elect to maintain possession of the Owner Trust Estate. It is the desire of the parties hereto and the Noteholders that there be at all times sufficient funds for the payment of any principal of and interest on the Notes, and the Indenture Trustee shall take such desire into account when determining whether or not to maintain possession of the Owner Trust Estate. In determining whether to maintain possession of the Owner Trust Estate, the Indenture Trustee may, but need not, obtain, at the expense of the Issuer, 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 Owner Trust Estate for such purpose.
Section 5.06. Limitation of Suits. 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 Noteholder has previously given written notice to the Indenture Trustee of a continuing Event of Default;
(ii) the Event of Default arises from the failure to remit payments when due or the Noteholders of not less than 25% of the Outstanding Amount have made written request to the Indenture Trustee to institute such Proceeding in respect of such Event of Default in its own name as Indenture Trustee hereunder;
(iii) such Noteholder or Noteholders have offered to the Indenture Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in complying with such request;
(iv) the Indenture Trustee for sixty (60) days after its receipt of such notice, request and offer of indemnity has failed to institute such Proceedings; and
(v) no direction inconsistent with such written request has been given to the Indenture Trustee during such 60-day period by the Noteholders of a majority of the Outstanding Amount.
It is understood and intended that no one or more Noteholders shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Noteholders or to obtain or to seek to obtain priority or preference over any other Noteholders or to enforce any right under this Indenture, except in the manner herein provided.
In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more groups of Noteholders, each representing less than a majority of the Outstanding Amount, the Indenture Trustee in its sole discretion may determine what action, if any, shall be taken, notwithstanding any other provisions of this Indenture. The Indenture Trustee shall not be liable for any such determination made in good faith.
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Section 5.07. Unconditional Rights of Noteholders to Receive Principal and Interest. Notwithstanding any other provisions in this Indenture, the Noteholder of any Note shall have the right, which is absolute and unconditional, to receive payment of the principal of and interest, if any, on such Note on or after the respective due dates thereof expressed in such Note or in this Indenture (or, in the case of redemption, on or after the Redemption Date) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Noteholder.
Section 5.08. Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason or has been determined adversely to the Indenture Trustee or to such Noteholder, then and in every such case the Issuer, the 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 Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.09. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy.
Section 5.10. Delay or Omission Not a Waiver. No delay or omission of the Indenture Trustee or any Noteholder of any Note to exercise any right or remedy accruing upon any Default or Event of Default shall impair any such right or remedy or constitute a waiver of any such Default or Event of Default or an acquiescence therein. Every right and remedy given by this Article or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.
Section 5.11. Control by Noteholders. The Noteholders of Notes representing a majority of the Outstanding Amount shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture Trustee with respect to the Notes or exercising any trust or power conferred on the Indenture Trustee; provided that:
(i) such direction shall not be in conflict with any rule of law or with this Indenture;
(ii) subject to the terms of Section 5.04, any direction to the Indenture Trustee to sell or liquidate the Owner Trust Estate shall be by the Noteholders of Notes representing not less than 100% of the Outstanding Amount;
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(iii) if the conditions set forth in Section 5.05 have been satisfied and the Indenture Trustee elects to retain the Owner Trust Estate pursuant to such Section, then any direction to the Indenture Trustee by the Noteholders of Notes representing less than 100% of the Outstanding Amount to sell or liquidate the Owner Trust Estate shall be of no force and effect; and
(iv) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not inconsistent with such direction.
Notwithstanding the rights of Noteholders set forth in this Section, subject to Section 6.01, the Indenture Trustee need not take any action for which it will not be adequately indemnified or might materially adversely affect the rights of any Noteholders not consenting to such action.
Section 5.12. Waiver of Past Defaults. Prior to the declaration of the acceleration of the maturity of the Notes as provided in Section 5.02, the Noteholders of Notes of not less than a majority of the Outstanding Amount may waive any past Default or Event of Default and its consequences except a Default (i) in payment of principal of or interest on any of the Notes or (ii) in respect of a covenant or provision hereof which cannot be modified or amended without the consent of each Noteholder. In the case of any such waiver, the Issuer, the Indenture Trustee and the Noteholders shall respectively be restored to their former positions and rights hereunder; but no such waiver shall extend to any subsequent or other Default or Event of Default or impair any right consequent thereto. Upon any such waiver, such Default shall cease to exist and be deemed to have been cured and not to have occurred, and any Event of Default arising therefrom shall be deemed to have been cured and not to have occurred, for every purpose of this Indenture.
Section 5.13. Undertaking for Costs. All parties to this Indenture agree, and each Noteholder by such Noteholder’s acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees and reasonable expenses, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section shall not apply to (i) any suit instituted by the Indenture Trustee, (ii) any suit instituted by any Noteholder, or group of Noteholders, in each case holding in the aggregate more than 10% of the Outstanding Amount or (iii) any suit instituted by any Noteholder for the enforcement of the payment of principal of or interest on any Note on or after the respective due dates expressed in such Note and in this Indenture (or, in the case of redemption, on or after the Redemption Date).
Section 5.14. Waiver of Stay or Extension Laws. 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 or the 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, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.
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Section 5.15. Action on Notes. The 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 Indenture Trustee or the Noteholders shall be impaired by the recovery of any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Owner Trust Estate or upon any of the assets of the Issuer. Any money or property collected by the Indenture Trustee shall be applied in accordance with Section 5.04(b).
Section 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so and at the Administrator’s expense, the Issuer shall take all such lawful action as the Indenture Trustee may request to compel or secure the performance and observance by the Seller or the Servicer, as applicable, of each of their obligations to the Issuer under or in connection with the Sale and Servicing Agreement in accordance with the terms thereof, and to exercise any and all rights, remedies, powers and privileges lawfully available to the Issuer under or in connection with the Sale and Servicing Agreement to the extent and in the manner directed by the Indenture Trustee, including the transmission of notices of default on the part of the Seller or the Servicer thereunder and the institution of legal or administrative actions or proceedings to compel or secure performance by the Seller or the Servicer of each of their obligations under the Sale and Servicing Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture Trustee may, and at the direction (which direction shall be in writing) of the Noteholders of at least 66 2/3% of the Outstanding Amount shall, exercise all rights, remedies, powers, privileges and claims of the Issuer against the Seller or the Servicer under or in connection with the Sale and Servicing Agreement, including the right or power to take any action to compel or secure performance or observance by the Seller or the Servicer, as applicable, of each of their obligations to the Issuer thereunder and to give any consent, request, notice, direction, approval, extension or waiver under the Sale and Servicing Agreement, as applicable, and any right of the Issuer to take such action shall be suspended.
ARTICLE VI
THE INDENTURE TRUSTEE
Section 6.01. Duties of Indenture Trustee.
(a) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the 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; provided, however, that if the Indenture Trustee shall assume the duties of the Servicer pursuant to Section 3.07(e), the Indenture Trustee in performing such duties shall use the degree of care and skill customarily exercised by a prudent institutional servicer with respect to installment sale contracts that it services for itself or others.
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(b) Except during the continuance of an Event of Default of which a Responsible Officer of the Indenture Trustee has actual knowledge:
(i) the Indenture Trustee shall undertake to perform such duties and only such duties as are specifically set forth in this Indenture and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Indenture Trustee and conforming to the requirements of this Indenture; however, the Indenture Trustee shall examine the certificates and opinions specifically required to be furnished pursuant to any provision of this Agreement to determine whether or not they conform to the requirements of this Indenture.
(c) The 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 paragraph does not limit the effect of Section 6.01(b);
(ii) the Indenture Trustee shall not be liable for any error of judgment made in good faith by a Responsible Officer unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 5.11.
(d) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Indenture Trustee shall not be liable for interest on any money received by it except as the Indenture Trustee may agree in writing with the Issuer.
(f) Money held in trust by the Indenture Trustee need not be segregated from other funds except to the extent required by law or the terms of this Indenture or the Sale and Servicing Agreement.
(g) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it.
(h) Every provision of this Indenture relating to the conduct or affecting the liability of or affording protection to the Indenture Trustee shall be subject to the provisions of this Section and to the provisions of the TIA.
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(i) The Indenture Trustee shall not be charged with knowledge of any Event of Default or any breach of a representation or warranty, as made in the Receivables Purchase Agreement, unless either (i) a Responsible Officer shall have actual knowledge of such Event of Default or breach, as applicable, or (ii) written notice of such Event of Default, or breach, as applicable, shall have been received by a Responsible Officer of the Indenture Trustee in accordance with the provisions of this Indenture. The receipt by the Indenture Trustee of a Review Report shall not obligate the Indenture Trustee to exercise its rights to enforce repurchase obligations under the Receivables Purchase Agreement unless the Indenture Trustee is directed to do so by a Noteholder or Note Owner.
(j) The Indenture Trustee shall have no duty (A) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording or filing or depositing or to any rerecording, refiling or redepositing of any thereof, (B) to see to any insurance, (C) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Owner Trust Estate, or (D) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Indenture Trustee pursuant to this Indenture believed by the Indenture Trustee to be genuine and to have been signed or presented by the proper party or parties.
Section 6.02. Rights of Indenture Trustee.
(a) Except as otherwise provided in the second succeeding sentence, the Indenture Trustee may conclusively rely on, and shall be protected in acting or refraining from acting upon, any resolution, Officer’s Certificate, Opinion of Counsel, certificate of auditors, Independent Certificate or any other document believed by it to be genuine and to have been signed or presented by the proper person. The Indenture Trustee need not investigate any fact, calculation or matter stated in the document. Notwithstanding the foregoing, the Indenture Trustee, upon receipt of all resolutions, certificates, statements, opinions, reports, documents, orders or other instruments furnished to the 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 Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel. The 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 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 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.
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(d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, that the Indenture Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.
(e) The Indenture Trustee may consult with counsel, and the advice or opinion of counsel with respect to legal matters relating to this Indenture and the Notes shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by it hereunder in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, other than requests, demands or directions relating to an asset representations review pursuant to Section 7.05, unless such Noteholders shall have offered to the Indenture Trustee security or indemnity reasonably satisfactory to the Indenture Trustee against the costs, expenses and liabilities which may be incurred therein or thereby; provided, however, nothing contained herein shall relieve the Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge (which has not been cured), to exercise such of the rights and powers vested in it by this Indenture, and to 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.
(g) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable in the performance of such act for other than its negligence or willful misconduct.
(h) The Indenture Trustee shall not be required to give any bond or surety in respect of the execution of the Owner Trust Estate created hereby or the powers granted hereunder.
(i) All rights of action and claims under this Indenture or the Note may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any proceeding relating thereto, any such proceeding instituted by the Indenture Trustee shall be brought in its own name or in its capacity as Indenture Trustee. Any recovery of judgment shall, after provision for the payments to the Indenture Trustee provided for in Section 6.07, be for the ratable benefit of the Noteholders in respect of which such judgment has been recovered.
(j) In no event shall the Indenture Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, Force Majeure; it being understood that the Indenture Trustee shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performances as soon as practicable under the circumstances.
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(k) The Indenture Trustee shall not be obligated to monitor, supervise or enforce the performance of the Depositor or Sponsor under the Basic Documents, except as otherwise expressly required herein or therein.
Section 6.03. Individual Rights of Indenture Trustee. The 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 Indenture Trustee. Any Paying Agent, Note Registrar, co-registrar or co-paying agent may do the same with like rights. However, the Indenture Trustee must comply with Sections 6.11 and 6.12.
Section 6.04. Indenture Trustee’s Disclaimer. The Indenture Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Indenture, the Owner Trust Estate or the Notes, it shall not be accountable for the Issuer’s use of the proceeds from the Notes, and it shall not be responsible for any statement of the Issuer in this Indenture or in any document issued in connection with the sale of the Notes or in the Notes other than the Indenture Trustee’s certificate of authentication. The Indenture Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to record this Indenture.
Section 6.05. Notice of Defaults. If a Default occurs and is continuing and if it is known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall mail to each Noteholder notice of the Default within ninety (90) days after it occurs. Except in the case of a Default in payment of principal of or interest on any Note (including payments pursuant to the mandatory redemption provisions of such Note), the Indenture Trustee may withhold the notice if and so long as a committee of its Responsible Officers in good faith determines that withholding the notice is in the interests of Noteholders.
Section 6.06. Reports by Indenture Trustee to Noteholders. The Indenture Trustee shall make available to each Noteholder such information as may be required to enable each Noteholder to prepare its respective federal and state income tax returns. The Indenture Trustee will make documents or information which it is required to provide available to the Noteholders, including, without limitation, the Servicer’s Certificate, and the Indenture Trustee will post at http://www.sf.citidirect.com information regarding principal and interest due and paid on the Notes. The Indenture Trustee shall have the right to change the way such statements are distributed in order to make such distribution more convenient and/or more accessible to the above parties and the Indenture Trustee shall provide timely and adequate notification to all above parties regarding any such changes; provided, however, that the Indenture Trustee will also mail copies of any such statements to any Noteholders who so request in writing.
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Section 6.07. Compensation and Indemnity. The Issuer shall, or shall cause the Administrator to, (i) pay to the Indenture Trustee from time to time reasonable compensation for its services, which compensation shall not be limited by any law on compensation of a trustee of an express trust, (ii) reimburse the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made by it (including reasonable expenses incurred pursuant to Section 7.05), including without limitation, costs of collection, in addition to the compensation for its services, which expenses shall include the reasonable compensation and expenses, disbursements and advances of the Indenture Trustee’s agents, counsel, accountants and experts and (iii) indemnify the Indenture Trustee and its officers, directors, employees and agents against any and all loss, liability or expense (including reasonable attorneys’ fees and expenses) incurred by it in connection with the administration of this trust and the performance of its duties hereunder (including any reasonable legal fees and expenses incurred by the Indenture Trustee in connection with the enforcement of any indemnification or other obligation of the Issuer) not resulting from its own willful misconduct, negligence or bad faith. The Indenture Trustee shall notify the Issuer and the Administrator promptly of any claim for which it may seek indemnity. Failure by the Indenture Trustee to so notify the Issuer and the Administrator shall not relieve the Issuer or the Administrator of its obligations hereunder. The indemnities contained in this Section 6.07 shall survive the resignation or removal of the Indenture Trustee or the termination of this Indenture. Absent an Event of Default, in the event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section 6.07, the Indenture Trustee’s choice of legal counsel shall be subject to the approval of the Depositor (or if the Depositor is no longer an owner, the designee of the Depositor), which approval shall not be unreasonably withheld, conditioned, delayed or denied. Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by the Indenture Trustee (1) through the Indenture Trustee’s own willful misconduct, negligence or bad faith or (2) in the case of the inaccuracy of any representation or warranty contained in Section 6.13 expressly made by the Indenture Trustee.
The Issuer’s payment obligations to the Indenture Trustee pursuant to this Section shall survive the discharge of this Indenture and the resignation or discharge of the Indenture Trustee and shall extend to any co-trustee or separate trustee appointed pursuant to Section 6.10 hereunder. When the Indenture Trustee incurs expenses after the occurrence of a Default specified in Section 5.01 (iv) or (v) with respect to the Issuer, the expenses are intended to constitute expenses of administration under Title 11 of the United States Code or any other applicable federal or state bankruptcy, insolvency or similar law.
Anything in this Indenture to the contrary notwithstanding, in no event shall the Indenture Trustee be liable for special, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profits, other than interest due but not paid on the Notes), even if the Indenture Trustee has been advised of the likelihood of such loss or damage and regardless of the form of action.
Section 6.08. Replacement of Indenture Trustee. No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee shall become effective until the acceptance of appointment by the successor Indenture Trustee pursuant to this Section. The Indenture Trustee may resign at any time by so notifying the Issuer. Noteholders representing a majority of the Outstanding Amount may remove the Indenture Trustee at any time (with thirty-one (31) days’ prior notice) and appoint a successor Indenture Trustee by so notifying the Indenture Trustee in writing. The Issuer shall remove the Indenture Trustee (with thirty-one (31) days’ prior notice) if:
(i) the Indenture Trustee fails to comply with Section 6.11;
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(ii) a court having jurisdiction in the premises in respect of the 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 Indenture Trustee or for any substantial part of the Indenture Trustee’s property, or ordering the winding-up or liquidation of the Indenture Trustee’s affairs, provided any such decree or order shall have continued unstayed and in effect for a period of thirty (30) consecutive days;
(iii) the 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 appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, conservator, sequestrator or other similar official for the Indenture Trustee or for any substantial part of the 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 Indenture Trustee otherwise becomes incapable of acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the office of the Indenture Trustee for any reason (the Indenture Trustee in such event being referred to herein as the retiring Indenture Trustee), the Issuer shall promptly appoint a successor Indenture Trustee.
A successor Indenture Trustee shall deliver a written acceptance of its appointment to the retiring Indenture Trustee and to the Issuer. Thereupon the resignation or removal of the retiring Indenture Trustee shall become effective, and the successor Indenture Trustee shall have all the rights, powers and duties of the Indenture Trustee under this Indenture. The successor Indenture Trustee shall mail a notice of its succession to the Noteholders. The retiring Indenture Trustee shall promptly transfer all property held by it as Indenture Trustee to the successor Indenture Trustee.
If a successor Indenture Trustee does not take office within sixty (60) days after the retiring Indenture Trustee resigns or is removed, the retiring Indenture Trustee, the Issuer or the Noteholders of a majority in Outstanding Amount may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee.
If the Indenture Trustee fails to comply with Section 6.11, any Noteholder may petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee.
Any resignation or removal of the Indenture Trustee and appointment of a successor Indenture Trustee pursuant to the provisions of this Section shall not become effective until acceptance of appointment by the successor Indenture Trustee pursuant to this Section and payment of all fees and expenses owed to the outgoing Indenture Trustee. Notwithstanding the replacement of the Indenture Trustee pursuant to this Section, the Issuer’s and the Administrator’s obligations under Section 6.07 shall continue for the benefit of the retiring Indenture Trustee.
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Section 6.09. Successor Indenture Trustee by Merger. If the Indenture Trustee consolidates or merges with, 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 act, be the successor Indenture Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 6.11. The Indenture Trustee shall provide the Administrator prior written notice of any such transaction, and in accordance with Section 1.02(c) of the Administration Agreement, the Administrator will make such notice available to each Rating Agency.
In case at the time such successor or successors by merger, conversion or consolidation to the 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 Indenture Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Notes so authenticated; and in case at that time any of the Notes shall not have been authenticated, any successor to the Indenture Trustee may authenticate such Notes either in the name of any predecessor hereunder or in the name of the successor to the Indenture Trustee; and in all such cases such certificates shall have the full force as is provided anywhere in the Notes or in this Indenture that the certificate of the Indenture Trustee shall have.
Section 6.10. Appointment of 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 Owner Trust Estate may at the time be located, the 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 Trust, and to vest in such Person or Persons, in such capacity and for the benefit of the Noteholders, such title to the Owner Trust Estate or any part thereof, and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Indenture Trustee may consider necessary or desirable. If the Administrator shall not have joined in such appointment within fifteen (15) days after its receipt of a request to do so, the 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:
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(i) all rights, powers, duties and obligations conferred or imposed upon the Indenture Trustee shall be conferred or imposed upon and exercised or performed by the 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 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 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 Owner 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 Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by reason of any act or omission of any other trustee hereunder; and
(iii) the 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 Indenture Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. 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 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 Indenture Trustee. Every such instrument shall be filed with the Indenture Trustee and a copy thereof given to the Administrator.
(d) Any separate trustee or co-trustee may at any time constitute the 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 Indenture Trustee, to the extent permitted by law, without the appointment of a new or successor trustee.
Section 6.11. Eligibility, Disqualification. The Indenture Trustee shall at all times satisfy the requirements of TIA § 310(a). The 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 Indenture Trustee shall have a rating that is otherwise acceptable to the Rating Agencies, such that the rating of the Indenture Trustee, the Owner Trustee or any other bank would not in and of itself result in a qualification, downgrade or withdrawal of any of the then-current ratings assigned thereby to the Notes (as evidenced by written notice to the Indenture Trustee, Owner Trustee or any other bank). The Indenture Trustee shall comply with TIA § 310(b); provided, however, that there shall be excluded from the operation of TIA § 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 § 310(b)(1) are met.
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In the event that, (A) the Indenture Trustee (i) or any of its directors or executive officers is an underwriter, or (ii) directly or indirectly, controls or is controlled by, or is in common control with, an underwriter; and (B) an Event of Default occurs, the Indenture Trustee shall comply with TIA § 310(b). For this purpose only and pursuant to TIA § 310(b), an “underwriter” means any person who, within one year prior to the occurrence of the Event of Default, was an underwriter of any of the notes outstanding at the time of such Event of Default.
Section 6.12. Preferential Collection of Claims Against Issuer. The Indenture Trustee shall comply with TIA § 311 (a), excluding any creditor relationship listed in TIA § 311(b). An Indenture Trustee who has resigned or been removed shall be subject to TIA § 31l(a) to the extent indicated.
Section 6.13. Representations and Warranties of Indenture Trustee. The 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 the United States of America;
(ii) it has full power, authority and legal right to execute, deliver, and perform this Indenture and shall have taken all necessary action to authorize the execution, delivery and performance by it of this Indenture;
(iii) assuming the necessary authorization, execution and delivery thereof by the other parties thereto, the duties and obligations of the Indenture Trustee under the Indenture constitute the valid, legal and binding obligations of the Indenture Trustee enforceable in accordance with its terms except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar laws or equitable principles limiting creditors’ rights generally, and provided that no representation is expressed as to the availability of equitable remedies;
(iv) that to the best knowledge of the Indenture Trustee, the Indenture Trustee is not in breach of or default under any law or administrative rule or regulation of the United States of America, or any department, division, agency or instrumentality thereof, or any applicable court or administrative decree or order, and which would materially impair the ability of the Indenture Trustee to perform its obligations under the Indenture; and
(v) that to the best knowledge of the Indenture Trustee, no authorization, consent or other order of any state or federal government authority or agency having jurisdiction over the trust powers of the Indenture Trustee are required to be obtained by the Indenture Trustee for the valid authorization, execution and delivery by the Indenture Trustee of the Indenture or the authentication of the Notes.
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ARTICLE VII
NOTEHOLDERS’ LISTS AND REPORTS
Section 7.01. Issuer to Furnish Indenture Trustee Names and Addresses of Noteholders. If Definitive Notes are issued, the Issuer will furnish or cause to be furnished to the Indenture Trustee (i) not more than five (5) 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 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 Indenture Trustee may request in writing, within thirty (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 (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished.
Section 7.02. Preservation of Information; Communications, Reports and Certain Documents to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Noteholders contained in the most recent list furnished to the Indenture Trustee as provided in Section 7.01 and the names and addresses of Noteholders received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in such Section 7.01 upon receipt of a new list so furnished.
(b) Noteholders may communicate pursuant to TIA § 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. A Noteholder or Note Owner, as applicable, that seeks to communicate with other Noteholders or Note Owners, as applicable, about the exercise of Noteholder and Note Owner rights under this Indenture or the other Basic Documents may send a request to the Issuer or the Servicer to include information regarding the communication in the Form 10-D to be filed by the Servicer, on behalf of the Issuer, with the Securities and Exchange Commission relating to the Collection Period in which such request was received. Each request must include (i) the name of the requesting Noteholder or Note Owner, (ii) the method by which the other Noteholders or Note Owners, as applicable, may contact the requesting Noteholder or Note Owner and (iii) in the case of a Note Owner, a certification from that Note Owner that it is a Note Owner, together with at least one form of documentation, acceptable to the Indenture Trustee, evidencing its ownership of a Note, including, but not limited to, a trade confirmation, account statement, letter from a broker or dealer or other similar document. On receipt of such a request, the Servicer will include in the Form 10-D to be filed (i) a statement that the Issuer has received a request from a Noteholder or a Note Owner, as applicable, that is interested in communicating with other Noteholders or Note Owners, as applicable, about a possible exercise of rights under this Indenture or the other Basic Documents, (ii) the name of the requesting Noteholder or Note Owner, (iii) the date the request was received and (iv) a description of the date and method by which the other Noteholders or Note Owners, as applicable, may contact the requesting Noteholder or Note Owner.
(c) The Issuer, the Indenture Trustee and the Note Registrar shall have the protection of TIA § 312(c).
(d) The Indenture Trustee will provide to Securityholders the reports, certificates, opinions and documents specified in Section 3.15 of the Sale and Servicing Agreement, upon written request to the Indenture Trustee.
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(e) The Indenture Trustee shall, no later than the third Business Day after the last day of each calendar month, provide notice to American Honda Finance Corporation and American Honda Receivables LLC (each, a “Honda Party,” and together, the “Honda Parties”) in the form set forth as Exhibit E hereto (or such other form or format as the Honda Parties may otherwise specify) of the request or any requests of (i) all demands communicated to the Indenture Trustee for the repurchase or replacement of any Receivable for breach of the representations and warranties concerning such Receivable relating to the Issuer and (ii) any actions taken by the Indenture Trustee with respect to such demand communicated to the Indenture Trustee in respect of any Receivables. In addition, the Indenture Trustee shall, upon written request of either Honda Party, at any time they reasonably feel necessary, provide notification to the Honda Parties with respect to any actions taken by the Indenture Trustee as soon as practicable and in any event within five (5) Business Days of receipt of such request. Such notices shall be provided to the Honda Parties in accordance with Section 11.04(iv) of this Indenture. The Indenture Trustee and the Issuer acknowledge and agree that the purpose of this Section 7.02(e) is to facilitate compliance by the Honda Parties with Rule 15Ga-1 under the Securities Exchange Act of 1934, as amended, and Items 1104(e), 1121(c) and 1125 of Regulation AB (the “Repurchase Rules and Regulations”). The Indenture Trustee acknowledges that interpretations of the requirements of the Repurchase Rules and Regulations may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with reasonable written requests (including email in PDF format) made by the Honda Parties in good faith for delivery of information in its possession under these provisions on the basis of evolving interpretations of the Repurchase Rules and Regulations. The Indenture Trustee shall cooperate fully with the Honda Parties to deliver any and all records and any other information in its possession and necessary in the good faith determination of the Honda Parties to permit them to comply with the provisions of Repurchase Rules and Regulations. In no event shall the Indenture Trustee have any responsibility or liability in connection with any filing required to be made by a securitizer under the Repurchase Rules and Regulations.
Section 7.03. Reports by Issuer.
(a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15) days after the Issuer is required to file the same with the Commission, copies of the annual reports and 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 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 Indenture Trustee (and the Indenture Trustee shall transmit by mail to all Noteholders described in TIA § 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 7.03(a) and by rules and regulations prescribed from time to time by the Commission.
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(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer shall end on March 31 of each year.
Section 7.04. Reports by Indenture Trustee. If required by TIA § 313(a), within sixty (60) days after each March 31st (commencing March 31, 2019), the Indenture Trustee shall mail to each Noteholder as required by TIA § 313(c) a brief report dated as of such date that complies with TIA § 313(a). The Indenture Trustee also shall comply with TIA § 313(b).
A copy of each report at the time of its mailing to Noteholders shall be filed by the Indenture Trustee with the Commission and each stock exchange, if any, on which the Notes are listed. The Issuer shall promptly notify the Indenture Trustee in writing if and when the Notes are listed on any stock exchange and of any delisting thereof.
Section 7.05. Noteholder and Note Owner Demand for Asset Representations Review. If the Delinquency Percentage on any Payment Date meets or exceeds the Delinquency Trigger for that Payment Date, the Servicer shall notify the Noteholders and Note Owners on the Form 10-D filed for that Payment Date. On or after such Payment Date, an Investor may make a demand on the Indenture Trustee, in accordance with Section 11.03 to cause a vote of the Investors about whether to direct the Asset Representations Reviewer to conduct an Asset Representations Review under the Asset Representations Review Agreement. The Servicer shall notify Investors of the initiation of such a vote on the Form 10-D filed for that Payment Date. If Investors of at least 5% in the aggregate of the Outstanding Amount of the Notes, as of the filing of the Form 10-D that disclosed that the Delinquency Trigger was met or exceeded, demand a vote within ninety (90) days after the filing of the Form 10-D in which the occurrence of the Delinquency Trigger being met or exceeded was reported, the Indenture Trustee, in accordance with its standard internal vote solicitation process, will promptly request a vote of the Noteholders (through the Clearing Agency) and Note Owners. The Indenture Trustee shall set a record date for purposes of determining the identity of Noteholders or Note Owners, as applicable, entitled to vote in accordance with TIA Section 316(c) as of the date of filing of the Form 10-D that disclosed that the Delinquency Trigger was met or exceeded. The vote will be initiated no later than ninety (90) days after the filing of the Form 10-D reporting that the Delinquency Percentage met or exceeded the Delinquency Trigger for that Payment Date and will remain open until one hundred fifty (150) days after such Form 10-D filing. The Servicer shall pay the costs, expenses and liabilities incurred by the Indenture Trustee, the Owner Trustee and the Issuer in connection with the voting process, including the costs and expenses of counsel to such parties. If the Investors of a majority of the Outstanding Amount of Notes (out of those that are voted) vote in favor of an Asset Representations Review, the Indenture Trustee will promptly notify the Asset Representations Reviewer, the Issuer, the RPA Seller, the Administrator and the Servicer of such vote. Following the completion of the voting process, the next Form 10-D filed by the Depositor will disclose whether or not the Noteholders and Note Owners have voted for an Asset Representations Review.
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Section 7.06. Voting of Notes Held by Honda Parties. If any of the Notes are held by any of the Honda Parties or any of their Affiliates, such Notes shall not be considered for purposes of determining whether a specified percentage of the Outstanding Amount has voted to take any action under this Indenture or any other Basic Document.
ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
Section 8.01. Collection of Money. Except as otherwise expressly provided herein, the 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 Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall apply all such money received by it as provided in this Indenture. Except as otherwise expressly provided in this Indenture, if any default occurs in the making of any payment or performance under any agreement or instrument that is part of the Owner Trust Estate, the Indenture Trustee may take such action as may be appropriate to enforce such payment or performance, including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and any right to proceed thereafter as provided in Article V.
Section 8.02. Accounts.
(a) Pursuant to Section 4.01 of the Sale and Servicing Agreement, there has been established and there shall be maintained an Eligible Account (initially at the Securities Intermediary) in the name, and under the sole dominion and control, of the Indenture Trustee until the Outstanding Amount has been reduced to zero, and thereafter, in the name, and under the sole dominion and control, of the Owner Trustee, which is designated as the Yield Supplement Account.
(b) On or prior to the Closing Date, the Issuer shall cause the Servicer to establish and maintain, in the name of the Indenture Trustee, Eligible Accounts for the benefit of the (i) Securityholders, the Collection Account, the Yield Supplement Account and the Reserve Fund and (ii) Noteholders, the Note Distribution Account as provided in Section 4.01 of the Sale and Servicing Agreement.
(c) On or before each Payment Date, with respect to the preceding Collection Period, all amounts required to be deposited in the Collection Account will be deposited as provided in Sections 4.02 and 4.05 of the Sale and Servicing Agreement. On or before each Payment Date, all amounts required to be deposited in the Note Distribution Account with respect to the preceding Collection Period pursuant to Sections 4.06 and 4.07 of the Sale and Servicing Agreement will be transferred from the Collection Account, the Reserve Fund and/or the Yield Supplement Account to the Note Distribution Account.
(d) On each Payment Date and Redemption Date, the Indenture Trustee shall distribute all amounts on deposit in the Note Distribution Account to Noteholders, in respect of the Notes to the extent of amounts due and unpaid on the Notes for principal and interest (including any premium), in the amounts and order as set forth in the Servicer’s Certificate which shall be in the following amounts and in the following order of priority (except as otherwise provided in Section 5.04(b)):
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(i) the Note Interest Distributable Amount; provided, that if there are not sufficient funds in the Note Distribution Account to pay the allocable portion of the Note Interest Distribution Amount with respect to each Class of Notes, the amount in the Note Distribution Account shall be applied to the payment of such amount pro rata on the basis of the total Note Interest Distributable Amount due on the Notes;
(ii) the Note Principal Distributable Amount (first to the Class A-1 Notes until the Class A-1 Notes are paid in full, second to the Class A-2 Notes until paid in full, third to the Class A-3 Notes until paid in full, and fourth to the Class A-4 Notes until paid in full);
(iii) notwithstanding clause (ii) above, on each Payment Date after the Notes have been accelerated as provided in Section 5.02(a) following the occurrence of an Event of Default, until such time as the Notes have been paid in full, the Note Principal Distributable Amount shall be paid first to the Class A-1 Notes until the Class A-1 Notes are paid in full and then to the Class A-2, Class A-3 and Class A-4 Notes on a pro rata basis based on the Outstanding Amount of each such Class of Notes; and
(iv) in the event that there are insufficient funds in the Note Distribution Account, an amount will be withdrawn from the Reserve Fund pursuant to Section 4.07(b) of the Sale and Servicing Agreement.
The Indenture Trustee shall, subject to Article VI, make the distributions on the Notes in a manner consistent with the Servicer’s Certificate and will, upon the request of the Issuer, confirm to the Issuer that it has made such payments in accordance with the Servicer’s Certificate.
(e) The Securities Intermediary.
(i) Citibank is hereby appointed as the initial securities intermediary with respect to the Collection Account, the Yield Supplement Account and the Reserve Fund (the “Securities Intermediary”) and Citibank hereby accepts such appointment as Securities Intermediary. The Securities Intermediary hereby agrees with the parties hereto that the jurisdiction of the Securities Intermediary with respect to the Collection Account, the Yield Supplement Account and the Reserve Fund shall be the State of New York. The Securities Intermediary hereby represents and covenants that it is not and will not be (as long as it is the Securities Intermediary hereunder) a party to any agreement that is inconsistent with the provisions of this Indenture. The Securities Intermediary hereby agrees that any item of property credited to the Collection Account, the Yield Supplement Account or the Reserve Fund shall not be subject to any security interest, lien, encumbrance or right of setoff in favor of the Securities Intermediary or anyone claiming through the Securities Intermediary (other than the Indenture Trustee).
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(ii) It is the intent of the Indenture Trustee and the Issuer that each of the Collection Account, the Yield Supplement Account and the Reserve Fund shall be a securities account of the Indenture Trustee and not an account of the Issuer. In furtherance thereof, the Securities Intermediary agrees to comply with entitlement orders with respect to and with instructions directing the disposition of funds held in or credited to the Collection Account, the Yield Supplement Account and the Reserve Fund originated by the Indenture Trustee without further consent by the Issuer, the Servicer or any other person or entity. The Securities Intermediary hereby covenants that it will not agree with any person or entity other than the Indenture Trustee, the Issuer and the Servicer that it will comply with entitlement orders originated by any person or entity, or instructions regarding the disposition of funds, with respect to such Accounts other than the Indenture Trustee, the Issuer and the Servicer. The Securities Intermediary hereby agrees (A) to treat all Account Property as Financial Assets, and (B) that all Account Property will be physically delivered to (accompanied by any required endorsements) to, or credited to an account in the name of, the Securities Intermediary in accordance with the Securities Intermediary’s customary procedures such that the Securities Intermediary establishes a Security Entitlement in favor of the Indenture Trustee with respect thereto over which the Indenture Trustee has Control.
(iii) Any successor Securities Intermediary shall be required to make the same representations and covenants as set forth above in clauses (i) and (ii).
(iv) Nothing herein shall imply or impose upon the Securities Intermediary any duties or obligations other than those expressly set forth herein and those applicable to a securities intermediary under the UCC (and the Securities Intermediary shall be entitled to all of the protections available to a securities intermediary under the UCC). Without limiting the foregoing, nothing herein shall imply or impose upon the Securities Intermediary any duties of a fiduciary nature (such as the fiduciary duties of the Indenture Trustee hereunder).
(v) The rights and powers granted herein to the Indenture Trustee, and the covenants and obligations of the Securities Intermediary hereunder, have been granted in order to perfect the Indenture Trustee’s security interest in the Collection Account, the Yield Supplement Account and the Reserve Fund, and such rights, powers, covenants and obligations hereunder shall continue in effect with respect to the Collection Account, the Yield Supplement Account and the Reserve Fund until the Outstanding Amount of the Notes has been reduced to zero.
(vi) The Indenture Trustee, to the extent it is acting in the capacity as Securities Intermediary with respect to the Accounts, represents, warrants and covenants that:
(A) it is a “securities intermediary,” as such term is defined in Section 8-102(a)(14)(B) of the relevant UCC;
(B) pursuant to Section 8-110(e)(1) of the relevant UCC for purposes of the relevant UCC, the jurisdiction of the Securities Intermediary is the law of the State of New York; and
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(C) the Securities Intermediary has and shall continue to have at all relevant times one or more offices in the United States of America engaged in a business or other regular activity of maintaining securities accounts.
(vii) To the extent that there are any other agreements with the Indenture Trustee or the Securities Intermediary governing the Accounts, the parties agree that each and every such agreement is hereby amended to provide that with respect to the Accounts, the law applicable to all issues specified in Article 2(1) of the Hague Securities Convention shall be the laws of the State of New York.
Section 8.03. General Provisions Regarding Accounts.
(a) So long as no Default or Event of Default shall have occurred and be continuing, all or a portion of the funds in the Reserve Fund and the Yield Supplement Account shall be invested in Eligible Investments and reinvested by the Securities Intermediary upon the written direction of the Servicer, subject to the provisions of Section 4.01(b) of the Sale and Servicing Agreement. All income or other gain from investments of monies deposited in the Reserve Fund and the Yield Supplement Account shall be credited to such Account, and any loss resulting from such investments shall be charged to such Account.
(b) To the extent that the Servicer is required to remit all payments received from or on behalf of the Obligors on or in respect of the Receivables and all Net Liquidation Proceeds daily to the Collection Account as provided in Section 4.02 of the Sale and Servicing Agreement, all or a portion of the funds in the Collection Account may be invested in Eligible Investments and reinvested by the Securities Intermediary upon the written direction of the Servicer, subject to the provisions of Section 4.01(b) of the Sale and Servicing Agreement. All income or other gain from investments of monies deposited in the Collection Account, if any, shall be paid to the Servicer as part of the Supplemental Servicing Fee, and any loss resulting from such investments shall be charged to the Collection Account in accordance with Section 4.01(b) of the Sale and Servicing Agreement.
(c) Subject to Section 6.01(c), the Securities Intermediary shall not in any way be held liable by reason of any insufficiency in any of the Reserve Fund, the Yield Supplement Account or the Collection Account resulting from any loss on any Eligible Investment included therein except for losses attributable to the Securities Intermediary’s failure to make payments on such Eligible Investments issued by the Securities Intermediary, in its commercial capacity as principal obligor and not as trustee, in accordance with their terms.
(d) If (i) the Servicer shall have failed to give investment directions for any funds on deposit in the Reserve Fund, Yield Supplement Account or Collection Account to the Securities Intermediary by 2:00 P.M., New York Time (or such other time as may be agreed by the Issuer and the Securities Intermediary) on any Business Day or (ii) to the knowledge of a Responsible Officer of the Indenture Trustee a Default or Event of Default shall have occurred and be continuing with respect to the Notes but the Notes shall not have been declared due and payable pursuant to Section 5.02 or (iii) if such Notes shall have been declared due and payable following an Event of Default but amounts collected or receivable from the Owner Trust Estate are being applied in accordance with Section 5.05 as if there had not been such a declaration, then the Indenture Trustee upon actual knowledge by a Responsible Officer of such event shall, in the case of clause (i) above, maintain such funds in cash or, in the case of clauses (ii) or (iii) above, to the fullest extent practicable, invest and reinvest funds in the Reserve Fund, Yield Supplement Account or Collection Account as specified in the most recent investment direction received by the Securities Intermediary from the Servicer.
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Section 8.04. Release of Owner Trust Estate.
(a) Subject to the payment of its fees and expenses pursuant to Section 6.07, the Indenture Trustee may, and when required by the provisions of this Indenture shall, execute instruments to release property from the lien of this Indenture, or convey the 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 Indenture Trustee as provided in this Article shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.07 have been paid, release any remaining portion of the Owner 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 Accounts. The 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) Independent Certificates in accordance with TIA §§ 314(c) and 314(d)(1) meeting the applicable requirements of Section 11.01. Such release shall be deemed to have been made upon completion of the requirements set forth in the foregoing sentence.
Section 8.05. Opinion of Counsel. The Indenture Trustee shall receive at least seven (7) days written 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 Indenture Trustee shall also require, as a condition to such action, an Opinion of Counsel, in form and substance satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with and such action will not materially and adversely impair the security for the Notes or the rights of the Noteholders in contravention of the provisions of this Indenture; provided, however, that such Opinion of Counsel shall not be required to express an opinion as to the fair value of the Owner 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 the Indenture Trustee in connection with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
Section 9.01. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders of any Notes but with prior notice from the Administrator to each Rating Agency, the Issuer and the Indenture Trustee, when authorized by an Issuer Order, at any time and from time to time, may enter into one or more indentures supplemental hereto (which shall conform to the provisions of the TIA as in force at the date of the execution thereof), in form satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject additional property to the lien of this Indenture;
(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 herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the benefit of the Noteholder of any Notes, or to surrender any right or power herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any property to or with the 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 Basic 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 adversely affect 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 VI;
(vii) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted and to add to this Indenture such other provisions as may be expressly required by the TIA; or
(viii) to correct any manifest error in the terms of this Indenture as compared to the terms expressly set forth in the Prospectus.
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The Indenture Trustee is hereby authorized to join in the execution of any such supplemental indenture and to make any further appropriate agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer Order, may, also without the consent of any of the Noteholders but with prior notice from the Administrator 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 whose written consent has not been obtained.
Section 9.02. Supplemental Indentures With Consent of Noteholders. The Issuer and the Indenture Trustee, when authorized by an Issuer Order, also may, with prior notice from the Administrator to each Rating Agency and with the written consent of the Noteholders of not less than a majority of the Outstanding Amount, by Act of such Noteholders delivered to the Issuer, the Indenture Trustee (which consent shall not be unreasonably withheld), 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 written consent of the Noteholder of each Outstanding Note affected thereby:
(i) change the date of payment of any installment of principal of or interest on any Note, or reduce the principal amount thereof, the Interest Rate thereon or the Redemption Price with respect thereto, change the provisions of this Indenture relating to the application of collections on, or the proceeds of the sale of, the Owner Trust Estate to payment of principal of or interest on the Notes, or change any place of payment where, or the coin or currency in which, any Note or the interest thereon is payable, or impair the right to institute suit for the enforcement of the provisions of this Indenture requiring the application of funds available therefor, as provided in Article V, to the payment of any such amount due on the Notes on or after the respective due dates thereof (or, in the case of redemption, on or after the Redemption Date);
(ii) reduce the percentage of the Outstanding Amount, the consent of the Noteholders of which is required for any such supplemental indenture, or the consent of the Noteholders of which is required for any waiver of compliance with certain provisions of this Indenture or certain defaults hereunder and their consequences provided for in this Indenture;
(iii) modify or alter the provisions of the proviso to the definition of the term “Outstanding”;
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(iv) reduce the percentage of the Outstanding Amount required to direct the Indenture Trustee to direct the Issuer to sell or liquidate the Owner Trust Estate pursuant to Section 5.04 or amend the provisions of this Article which specify the percentage of the Outstanding Amount required to amend this Indenture or the other Basic Documents;
(v) modify any provision of this Section except to increase any percentage specified herein or provide that certain additional provisions of this Indenture or the Basic Documents cannot be modified or waived without the consent of the Noteholder 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 Payment Date (including the calculation of any of the individual components of such calculation) or affect the rights of the Noteholders to the benefit of any provisions for the mandatory redemption of the Notes contained herein;
(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 Owner 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 Noteholder of any Note of the security provided by the lien of this Indenture; or
(viii) amend the provisions of Section 7.06 regarding the voting of Notes held by the Honda Parties, if any.
The Administrator shall certify to the Indenture Trustee whether or not any Notes would be affected by any supplemental indenture and any such certification shall be conclusive upon all Noteholders, whether theretofore or thereafter authenticated and delivered hereunder.
It shall not be necessary for any Act of Noteholders under this Section to approve the particular form of any proposed supplemental indenture, but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section, the Indenture Trustee shall mail to the Noteholders 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 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 or the modification thereby of the trusts created by this Indenture, the Trustees 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. The Trustees may, but shall not be obligated to, enter into any such supplemental indenture that affects the respective Trustee’s own rights, duties, liabilities or immunities under this Indenture or otherwise. No supplemental indenture that adversely affects a Trustee shall be effective without its prior written consent.
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Section 9.04. Effect of Supplemental Indenture. 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 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 any and all purposes.
Section 9.05. Conformity with Trust Indenture Act. Every amendment of this Indenture and every supplemental indenture executed pursuant to this Article shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA.
Section 9.06. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental indenture pursuant to this Article may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Issuer or the Indenture Trustee shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Issuer, to any such supplemental indenture may be prepared and executed by the Issuer and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes.
ARTICLE X
REDEMPTION OF NOTES
Section 10.01. Redemption. The Outstanding Notes are subject to redemption in whole, but not in part, pursuant to Section 8.01 of the Sale and Servicing Agreement, on any Payment Date on which the Servicer exercises its option to purchase the Owner Trust Estate pursuant to said Section, for a purchase price equal to the Redemption Price; provided that the Issuer has available funds sufficient to pay the Redemption Price. The Administrator shall make notice available to each Rating Agency of such redemption. If the outstanding Notes are to be redeemed pursuant to this Section, the Servicer or the Issuer shall furnish written notice of such election to the Indenture Trustee not later than twenty-five (25) days prior to the Redemption Date and the Issuer shall deposit by 8:00 A.M., Los Angeles time, on the Redemption Date with the Indenture Trustee in the Note Distribution Account the Redemption Price of the Notes to be redeemed, 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.
Section 10.02. Form of Redemption Notice. Notice of redemption under Section 10.01 shall be given by the Indenture Trustee by first-class mail, postage prepaid, by electronic mail in accordance with Section 11.04, or by facsimile, mailed or transmitted not later than ten (10) days prior to the applicable Redemption Date to each Noteholder, as of the close of business on the Record Date preceding the applicable Redemption Date, at such Noteholder’s address or facsimile number appearing in the Note Register.
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All notices of redemption shall include the following information:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the CUSIP number;
(iv) 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); and
(v) that on the Redemption Date, the Redemption Price will become due and payable upon each Note and that interest thereon shall cease to accrue from and after the Redemption Date.
Notice of redemption of the Notes shall be given by the Indenture Trustee in the name and at the expense of the Issuer. Failure to give notice of redemption, or any defect therein, to any Noteholder of any Note shall not impair or affect the validity of the redemption of any other Note.
Section 10.03. Notes Payable on Redemption Date. The Notes or portions thereof to be redeemed shall, following notice of redemption as required by Section 10.02, on the 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 Redemption Price for any period after the date to which accrued interest is calculated for purposes of calculating the Redemption Price.
ARTICLE XI
MISCELLANEOUS
Section 11.01. Compliance Certificates and Opinions, etc.
(a) Upon any application or request by the Issuer to the Indenture Trustee to take any action that is not specifically required by any provision of this Indenture, the Issuer shall furnish to the Indenture Trustee (i) an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with, (ii) an Opinion of Counsel stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with and (iii) (if required by the TIA and except in the case of a full redemption under Section 10.01) an Independent Certificate from a firm of certified public accountants meeting the applicable requirements of this Section. Upon any application or request by the Issuer to the Indenture Trustee to take any action under any provision of this Indenture wherein such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture, no additional certificate or opinion need be furnished.
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Every certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture shall include:
(i) a statement that each signatory of such certificate or opinion has read or has caused to be read such covenant or condition and the definitions herein relating thereto;
(ii) a brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate or opinion are based;
(iii) a statement that, in the opinion of each such signatory, such signatory has made such examination or investigation as is necessary to enable such signatory to express an informed opinion as to whether or not such covenant or condition has been complied with; and
(iv) a statement as to whether, in the opinion of each such signatory, such condition or covenant has been complied with.
(b) (i) Prior to the deposit of any Collateral or other property or securities with the 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 Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (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 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 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 less than $25,000 or less than one percent of the 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 Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within ninety (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.
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(iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the 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)) 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 less than $25,000 or less than one percent of the then Outstanding Amount.
(v) Notwithstanding Section 2.12 or any other provision of this Section, the Issuer may, without compliance with the requirements of the other provisions of this Section, (A) collect, liquidate, sell or otherwise dispose of Receivables and Financed Vehicles as and to the extent permitted or required by the Basic Documents and (B) make cash payments out of the Accounts as and to the extent permitted or required by the Basic Documents.
Section 11.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of 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 of an Authorized Officer or Opinion of Counsel may be based, insofar as it relates to factual matters, upon a certificate or opinion of, or representations by, an officer or officers of the Servicer, the Seller, the Issuer or the Administrator, stating that the information with respect to such factual matters is in the possession of the Servicer, the Seller, the Issuer 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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Whenever in this Indenture, in connection with any application or certificate or report to the 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 or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Article VI.
Section 11.03. Acts of Noteholders.
(a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by agents duly appointed in writing; and except as herein otherwise expressly provided such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section.
(b) The fact and date of the execution by any person of any such instrument or writing may be proved in any manner that the Indenture Trustee deems sufficient.
(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 any Noteholder shall bind the Noteholder 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 Indenture Trustee or the Issuer in reliance thereon, whether or not notation of such action is made upon such Note.
Section 11.04. Notices, etc., to Indenture Trustee, Issuer and Rating Agencies. (a) Any request, demand, authorization, direction, notice, consent, waiver or 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 or Act of Noteholders is to be made upon, given or furnished to or filed with:
(i) the 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, overnight delivery service or facsimile to or with the Indenture Trustee at its Corporate Trust Office, or (as to notices sent by the Issuer to the Indenture Trustee only) if sent by electronic mail, to an address provided by the Indenture Trustee in writing, or
(ii) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed first-class, postage prepaid, overnight delivery service or facsimile to the Issuer addressed to the address set forth on Schedule A to the Sale and Servicing Agreement or at any other address previously furnished in writing to the Indenture Trustee by the Issuer or the Administrator. The Issuer shall promptly transmit any notice received by it from the Noteholders to the Indenture Trustee.
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(iii) (a) Notices required to be given to each Rating Agency by the Issuer or the Administrator shall be in writing, personally delivered, couriered or mailed by certified mail, return receipt requested, electronic mail (if an address therefore has been provided by the respective party in writing) or overnight delivery service to the address set forth for such Rating Agency on Schedule A to the Sale and Servicing Agreement; or at such other address (including electronic mail addresses) as shall be designated by written notice to the party or parties providing notice under this paragraph.
(b) Notwithstanding subsection (iii)(a) above, notices required to be given to each Rating Agency by the Issuer or the Administrator, as the case may be, may be made available by the Administrator through a website post, provided that the Administrator shall inform or cause each Rating Agency to be informed in writing (including by electronic mail) that a notice has been posted.
(i) Notices required to be given to the Honda Parties pursuant to Section 7.02(e) shall be in writing, personally delivered or mailed by certified mail, return receipt requested, or overnight delivery service, by facsimile or by electronic mail (if an address therefore has been provided by the Honda Parties in writing) to the address set forth on Schedule A to the Sale and Servicing Agreement.
Section 11.05. Notices to Noteholders; Waiver. Where this Indenture provides for notice to Noteholders of any event, such notice shall be sufficiently given (unless otherwise herein expressly provided) if in writing and mailed, first-class, postage prepaid to each Noteholder affected by such event, at such Noteholder’s address as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice. In any case where notice to Noteholders is given by mail, neither the failure to mail such notice nor any defect in any notice so mailed to any particular Noteholder shall affect the sufficiency of such notice with respect to other Noteholders, and any notice that is mailed in the manner herein provided shall conclusively be presumed to have been duly given.
Where this Indenture provides for notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such a waiver.
In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice.
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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 a Default or Event of Default.
Section 11.06. 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 of a Note providing for a method of payment, or notice by the Indenture Trustee or any Paying Agent to such Noteholder, that is different from the methods provided for in this Indenture for such payments or notices. The Issuer will furnish to the Indenture Trustee a copy of each such agreement and the Indenture Trustee will cause payments to be made and notices to be given in accordance with such agreements.
Section 11.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the Trust Indenture Act, such required provision shall control.
The provisions of TIA Sections 310 through 317 that impose duties on any person (including the provisions automatically deemed included herein unless expressly excluded by this Indenture) are a part of and govern this Indenture, whether or not physically contained herein.
Section 11.08. 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 11.09. Successors and Assigns. All covenants and agreements in this Indenture and the Notes by the Issuer shall bind its successors and assigns, whether so expressed or not. All agreements of the Indenture Trustee in this Indenture shall bind its successors, co-trustees and agents.
Section 11.10. Separability. In case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions of this Indenture and the Notes shall not in any way be affected or impaired thereby.
Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the Notes, express or implied, shall give to any Person, other than the parties hereto, the Trustees and their successors hereunder, the Noteholders, and any other party secured hereunder, and any other Person with an ownership interest in any part of the Owner Trust Estate, any benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 11.12. Legal Holidays. In any case where the date on which any payment is due shall not be a Business Day, then (notwithstanding any other provision of the Note’s or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day with the same force and effect as if made on the date on which nominally due, and no interest shall accrue for the period from and after any such nominal date.
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Section 11.13. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. Regardless of any provision in any other agreement, for purposes of the UCC, New York shall be deemed to be the Securities Intermediary’s jurisdiction, and the law of the State of New York shall govern all issues specified in Article 2(1) of the Hague Securities Convention.
Each of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this agreement.
Section 11.14. Counterparts. This Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 11.15. Recording of Indenture. If this Indenture is subject to recording in any appropriate public recording offices, such recording is to be effected by the Issuer and at its expense accompanied by an Opinion of Counsel (which may be counsel to the Indenture Trustee or any other counsel reasonably acceptable to the 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 Indenture Trustee under this Indenture.
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Section 11.16. Trust Obligation. No recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the 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 the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the 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 Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles VI, VII and VIII of the Trust Agreement as if specifically set forth herein.
Section 11.17. No Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Issuer, or join in any institution against the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any U.S. federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this Indenture or any of the other Basic Documents.
Section 11.18. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee, during the Issuer’s normal business hours, to examine all the accounting books, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent certified public accountants, and to discuss the Issuer’s affairs, finances and accounts with the Issuer’s officers and Independent certified public accountants, all at such reasonable times and as often as may be reasonably requested. Notwithstanding anything herein to the contrary, the foregoing shall not be construed to prohibit (i) the disclosure of any and all information that is or becomes publicly known, or information obtained by the Indenture Trustee from sources other than the Servicer or the Issuer, (ii) the disclosure of any and all information (A) if required to do so by any applicable law, rule or regulation, (B) to any government agency or regulatory body having or claiming authority to regulate or oversee any aspects of the Indenture Trustee’s business or that of its affiliates, (C) pursuant to any subpoena, civil investigative demand or similar demand or request of any court, regulatory authority, arbitrator or arbitration to which the Indenture Trustee or any affiliate or an officer, director, employer or shareholder thereof is a party, (D) in any preliminary or final offering circular, registration statement or contract or other document pertaining to the transactions contemplated by the Agreement approved in advance by the Servicer or the Issuer or (E) to any affiliate, independent or internal auditor, agent, employee or attorney of the Indenture Trustee having a need to know the same for reasons directly related to the ability of the Indenture Trustee to perform its duties hereunder, provided that the Indenture Trustee advises such recipient of the confidential nature of the information being disclosed, or (iii) any other disclosure authorized by the Servicer or the Issuer.
Section 11.19. [Reserved]
Section 11.20. Disclosure of Tax Treatment. Notwithstanding the foregoing or anything herein to the contrary, all persons (and their respective employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction described herein and all materials of any kind (including opinions or other tax analyses) that are provided to the recipient relating to such tax treatment and tax structure. However, any such information relating to the tax treatment or tax structure shall be required to be kept confidential to the extent necessary to comply with any applicable securities laws.
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Section 11.21. Intent of the Parties; Reasonableness. The Indenture Trustee and Issuer acknowledge and agree that the purpose of Section 3.09 and 7.02(e) of this Agreement is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.
Neither the Issuer nor the Administrator (acting on behalf of the Issuer) shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with federal securities laws, including the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder. Each of the parties hereto agrees that (a) the obligations of the parties hereunder shall be interpreted in such a manner as to accomplish compliance with Regulation AB, (b) the parties’ obligations hereunder will be supplemented and modified as necessary to be consistent with any such amendments, interpretive advice or guidance from the Securities and Exchange Commission, convention or consensus among active participants in the asset-backed securities markets, or otherwise in respect of the requirements of Regulation AB as they may be applied by the Securities and Exchange Commission to the Issuer in connection with the Notes and (c) the parties shall comply with reasonable requests made by or on behalf of the Issuer or the Indenture Trustee for delivery of additional or different information, to the extent such information is available, as the person requesting such information may determine in good faith is necessary for it to comply with the provisions of Regulation AB. Any and all expenses incurred by the Indenture Trustee in compliance with this Section shall be considered indemnities payable in accordance with Section 6.07 hereof.
The Issuer (or the Administrator, acting on behalf of the Issuer) shall cooperate with the Indenture Trustee by providing timely notice of requests for information under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment of the Issuer to comply with Regulation AB.
Section 11.22. Owner Trustee. The parties hereto agree that this Agreement is executed and delivered by the Owner Trustee, not individually or personally but solely as owner trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Amended and Restated Trust Agreement; each of the representations, undertakings and agreements herein made on the part of the Issuer are made and intended not as personal representations, undertakings and agreements by The Bank of New York Mellon or BNY Mellon Trust of Delaware but are made and intended for the purpose of binding only the Issuer; and under no circumstances shall The Bank of New York Mellon or BNY Mellon Trust of Delaware be personally liable for the inaccuracy or breach of any statements made by the Issuer in this Agreement.
Section 11.23. U.S.A. Patriot Act. The parties hereto acknowledge that in accordance with Section 326 of the U.S.A. Patriot Act, the Indenture Trustee, like all financial institutions and in order to help fight the funding of terrorism and money laundering, is required to obtain, verify, and record information that identifies each person or legal entity that establishes a relationship or opens an account with the Indenture Trustee. The parties to this Indenture agree that they will provide the Indenture Trustee with such information about the Owner Trustee as it may request in order for the Indenture Trustee to satisfy the requirements of the U.S.A. Patriot Act.
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Section 11.24. Communications with Rating Agencies. If the Indenture Trustee shall receive any written or oral communication from any Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, the Indenture Trustee agrees to refrain from communicating with such Rating Agency and to promptly notify the Administrator of such communication. The Indenture Trustee agrees to coordinate with the Administrator with respect to any communication received from a Rating Agency and further agrees that in no event shall the Indenture Trustee engage in any oral communication with respect to the substance of the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Administrator.
The Indenture Trustee will not be responsible for delays attributable to the Administrator’s failure to deliver any information related to any communication with a Rating Agency (with respect to this section, the “Information”), defects in the Information supplied to the Rating Agency or Administrator or other circumstances beyond the control of the Indenture Trustee. The Indenture Trustee shall be under no obligation to make any determination as to the veracity or applicability of any Information provided to it, or whether any such Information is required to be maintained on a website or other public medium.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed by their respective officers, thereunto duly authorized and duly attested, all as of the day and year first above written.
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST, | |
| By: The Bank of New York Mellon, not in its individual capacity but solely as Owner Trustee on behalf of the Trust, |
| By: | ||
| Name: | ||
| Title: |
| CITIBANK, N.A., | |
| not in its individual capacity but solely as Indenture Trustee and as Securities Intermediary |
| By: | ||
| Name: | ||
| Title: |
Agreed to with respect to Section 7.02(b):
AMERICAN HONDA FINANCE
CORPORATION, as Servicer
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Vice President and Assistant Secretary | ||
| S-1 | HAROT 2018-2 Indenture |
| STATE OF ________________ | ) |
| ) ss | |
| COUNTY OF ______________ | ) |
On _______________, 2018 before me, _______________, Notary Public, personally appeared ____________________, _______________________.
| ¨ | 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/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
| Signature | [Seal] |
| STATE OF ________________ | ) |
| ) ss | |
| COUNTY OF ______________ | ) |
On ______________, 2018 before me, _______________, Notary Public, personally appeared ____________________, _______________________.
| ¨ | 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/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument the person, or the entity upon behalf of which such person acted, executed the instrument.
WITNESS my hand and official seal.
| Signature | [Seal] |
SCHEDULE A
SCHEDULE OF RECEIVABLES
To be provided to the Indenture Trustee
| Schedule A-1 |
EXHIBIT A
FORM OF CLASS [A-1] [A-2] [A-3] [A-4] NOTE
[For Retained Notes: THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE SECURITIES OR BLUE SKY LAWS OF ANY STATE IN THE UNITED STATES OR ANY FOREIGN SECURITIES LAWS. NO SALE, PLEDGE OR OTHER TRANSFER OF THIS NOTE MAY BE MADE BY ANY PERSON UNLESS EITHER (i) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE BY THE SPONSOR TO AN AFFILIATE, (ii) SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO AN ACCREDITED INVESTOR THAT EXECUTES A NOTE, SUBSTANTIALLY IN THE FORM SPECIFIED IN THE INDENTURE, TO THE EFFECT THAT IT IS AN ACCREDITED INVESTOR ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE ACCREDITED INVESTORS UNLESS THE HOLDER IS A BANK ACTING IN ITS FIDUCIARY CAPACITY), (iii) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT, SUCH SALE, PLEDGE OR OTHER TRANSFER IS MADE TO A PERSON WHO THE PROSPECTIVE TRANSFEROR REASONABLY BELIEVES AFTER DUE INQUIRY IS A QUALIFIED INSTITUTIONAL BUYER, ACTING FOR ITS OWN ACCOUNT (AND NOT FOR THE ACCOUNT OF OTHERS) OR AS A FIDUCIARY OR AGENT FOR OTHERS (WHICH OTHERS ALSO ARE QUALIFIED INSTITUTIONAL BUYERS) TO WHOM NOTICE IS GIVEN THAT THE SALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, OR (iv) SUCH SALE, PLEDGE OR OTHER TRANSFER IS OTHERWISE MADE IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT, IN WHICH CASE THE SPONSOR SHALL REQUIRE THAT BOTH THE PROSPECTIVE TRANSFEROR AND THE PROSPECTIVE TRANSFEREE CERTIFY TO THE ISSUER, THE OWNER TRUSTEE, THE INDENTURE TRUSTEE AND THE SPONSOR IN WRITING THE FACTS SURROUNDING SUCH TRANSFER, WHICH CERTIFICATION SHALL BE IN FORM AND SUBSTANCE SATISFACTORY TO THE SPONSOR. EXCEPT IN THE CASE OF A TRANSFER DESCRIBED IN CLAUSES (i) OR (iii) ABOVE, THE SPONSOR SHALL REQUIRE A WRITTEN OPINION OF COUNSEL (WHICH SHALL NOT BE AT THE EXPENSE OF THE TRUST, THE OWNER TRUSTEE OR THE INDENTURE TRUSTEE) SATISFACTORY TO THE SPONSOR TO THE EFFECT THAT SUCH TRANSFER WILL NOT VIOLATE THE 1933 ACT.
UNLESS COUNSEL SATISFACTORY TO THE SPONSOR SHALL HAVE RENDERED AN OPINION TO THE EFFECT THAT THE RETAINED NOTES TO BE SOLD, PLEDGED, OR TRANSFERRED WILL BE CHARACTERIZED AS INDEBTEDNESS FOR U.S. FEDERAL INCOME TAX PURPOSES, NO SALE, PLEDGE, OR TRANSFER OF THIS RETAINED NOTE MAY BE MADE.]
[For Non-Retained 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.]
| A-1-1 |
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
| REGISTERED | $__________ |
| No. R-_____ | CUSIP NO. _______ |
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST
____% ASSET BACKED NOTES, CLASS [A-1][A-2] [A-3] [A-4]
Honda Auto Receivables 2018-2 Owner Trust, a statutory trust organized and existing under the laws of the State of Delaware (the “Issuer”), for value received, hereby promises to pay to [American Honda Finance Corporation][Cede & Co.], or registered assigns, the principal sum of _____________________ Dollars ($__________), payable to the extent described in the Indenture referred to on the reverse hereof on each Payment Date; provided, however, that the entire unpaid principal amount of this Note shall be payable on the earlier of ________________ ___, 20__ (the “Class [A-1] [A-2] [A-3] [A-4] Final Scheduled Payment Date”) and the Redemption Date, if any, selected pursuant to the Indenture.
The Issuer will pay interest on this Note at the rate per annum shown above on each Payment Date until the principal of this Note is paid or made available for payment, on the principal amount of this Note outstanding on the preceding Payment Date (after giving effect to all payments of principal made on the preceding Payment Date), or on the Closing Date in the case of the first Payment Date or if no interest has yet been paid, subject to certain limitations contained in the Indenture. Interest on this [Class A-1] [Class A-2] [Class A-3] [Class A-4] Note will accrue for each Payment Date from and including the [immediately preceding Payment Date][18th day of the prior month] (or, in the case of the first Payment Date, the Closing Date) to but excluding [the 18th day of the month of] such Payment Date and will be computed on the basis of [the actual number of days in the Interest Accrual Period with respect to the Class A-1 Notes divided by 360][a 360-day year consisting of twelve 30-day months]. Such principal of and interest on this Note shall be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuer with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the unpaid principal of this Note.
| A-1-2 |
Reference is made to the further provisions of this Note set forth on the reverse hereof, which shall have the same effect as though fully set forth on the face of this Note.
Unless the certificate of authentication hereon has been executed by the Indenture Trustee whose name appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose.
| A-1-3 |
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed, manually, in facsimile or scanned, by its Authorized Officer, as of the date set forth below.
| Date: | HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST, |
| By: | THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Owner Trustee on behalf of the Trust, |
| By: | |
| Authorized Signatory | |
| A-1-4 |
INDENTURE TRUSTEE’S CERTIFICATE OF AUTHENTICATION
This is one of the Notes designated above and referred to in the within-mentioned Indenture.
| Date: | CITIBANK, N.A., not in its individual capacity but solely as Indenture Trustee, |
| By: | |
| Authorized Signatory |
| A-1-5 |
This Note is one of a duly authorized issue of Notes of the Issuer, designated as its ___% Asset Backed Notes, Class [A-1] [A-2] [A-3] [A-4] (the “Class [A-1] [A-2] [A-3] [A-4] Notes”), all issued under the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Notes are subject to all terms of the Indenture. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Sale and Servicing Agreement.
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes (collectively, the “Notes”) are and will be equally and ratably secured by the collateral pledged as security therefore, except as provided in the Indenture or the Sale and Servicing Agreement.
Principal payable on the Notes will be paid on each Payment Date in the amount specified in the Indenture and in the Sale and Servicing Agreement. As described above, the entire unpaid principal amount of this Note will be payable on the earlier of the Class [A-1] [A-2] [A-3] [A-4] Final Scheduled Payment Date and the Redemption Date, if any, selected pursuant to the Indenture. Notwithstanding the foregoing, under certain circumstances, the entire unpaid principal amount of the Class [A-1] [A-2] [A-3] [A-4] Notes shall be due and payable following the occurrence and continuance of an Event of Default, as described in the Indenture. All principal payments on the Class [A-1] [A-2] [A-3] [A-4] Notes shall be made pro rata to the Class [A-1] [A-2] [A-3] [A-4] Noteholders entitled thereto.
Payments of principal and interest on this Note due and payable on each Payment Date or Redemption Date shall be made by check mailed to the Person whose name appears as the registered Noteholder of this 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 the Depository (initially, such nominee to be Cede & Co.), 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 this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) affected by any payments made on any Payment Date or Redemption Date shall be binding upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture or the Sale and Servicing Agreement, for payment in full of the remaining unpaid principal amount of this Note on a Payment Date or Redemption Date, then the Indenture Trustee, in the name of and on behalf of the Issuer, will notify the Person who was the registered Noteholder hereof as of the Record Date preceding such Payment Date or Redemption Date by notice mailed within five (5) Business Days of such Payment Date or Redemption Date and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Corporate Trust Office of the Indenture Trustee.
| A-1-6 |
As provided in the Indenture and subject to the limitations set forth therein and on the face hereof, the transfer of this Note may be registered on the Note Register upon surrender of this Note for registration of transfer at the office or agency designated by the Issuer pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“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, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration of transfer or exchange.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the 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 or employee of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed 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.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of a Note Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Note Owner will not at any time institute against the Depositor or the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings under any U.S. federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, the Indenture or the other Basic Documents.
Other than with respect to the Retained Notes, by acquiring this Note (or interest herein), each purchaser and transferee (and if the purchaser or transferee is a Plan, its fiduciary) is deemed to represent and warrant that either (i) it is not acquiring the Note (or interest therein) with the assets of a Benefit Plan Investor or a Plan that is subject to Similar Law; or (ii) the acquisition and holding of the Note (or interest therein) will not give rise to, in the case of a Benefit Plan Investor, a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or, in the case of a Plan that is subject to Similar Law, a violation of Similar Law.
In addition, each purchaser and transferee that is a Benefit Plan Investor, including any fiduciary acting on behalf of a Benefit Plan Investor (the “Benefit Plan Investor Fiduciary”) is deemed to represent and warrant that:
| A-1-7 |
(a) If any of the Issuer, the Depositor, the Administrator, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, any underwriter, or any of their respective affiliated entities (the “Transaction Parties”), has provided or shall provide advice with respect to the acquisition of the Notes by the Benefit Plan Investor, it has or shall provide such advice only to the Benefit Plan Investor Fiduciary which is independent of the Transaction Parties giving such advice, if any, and the Benefit Plan Investor Fiduciary either:
(i) is a bank as defined in Section 202 of the Investment Advisers Act of 1940 (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a State or Federal agency;
(ii) is an insurance carrier which is qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of assets of a Benefit Plan Investor;
(iii) is an investment adviser registered under the Advisers Act, or, if not registered an as investment adviser under the Advisers Act by reason of paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the state in which it maintains its principal office and place of business;
(iv) is a broker-dealer registered under the Securities Exchange Act of 1934, as amended; or
(v) has, and at all times that the Benefit Plan Investor is invested in the Note will have, total assets of at least U.S. $50,000,000 under its management or control (provided that this clause (v) shall not be satisfied if the Benefit Plan Investor Fiduciary is either (A) the owner or a relative of the owner of an investing IRA or (B) a participant or beneficiary or a relative of a participant or beneficiary of the Benefit Plan Investor investing in the Note in such capacity);
(b) the Benefit Plan Investor Fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies, including the acquisition by the Benefit Plan Investor of the Note;
(c) the Benefit Plan Investor Fiduciary is a “fiduciary” with respect to the Benefit Plan Investor within the meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both, and is responsible for exercising independent judgment in evaluating the Benefit Plan Investor’s acquisition of the Note;
(d) none of the Transaction Parties has exercised any authority to cause the Benefit Plan Investor to invest in the Note or to negotiate the terms of the Benefit Plan Investor’s investment in the Note; and
(e) the Benefit Plan Investor Fiduciary has been informed by the Transaction Parties:
| A-1-8 |
(i) in connection with the Benefit Plan Investor’s acquisition of the Notes (1) that none of the Transaction Parties is undertaking to provide impartial investment advice or to give advice in a fiduciary capacity, and (2) that no such entity has given investment advice or otherwise made a recommendation, (other than advice, if any, given by an underwriter to the Benefit Plan Investor Fiduciary which satisfies the requirements of clause (a) above); and
(ii) of the existence and nature of the Transaction Parties financial interests in the Benefit Plan Investor’s acquisition of the Note.
The above representations in subparagraphs (a), (b), (c), (d) and (e) of this paragraph are intended to comply with the Department of Labor’s Reg. Sections 29 C.F.R. 2510.3-21(a) and (c)(1) as promulgated on April 8, 2016 (81 Fed. Reg. 20,997). If these regulations are revoked, repealed or no longer effective, these representations shall be deemed to not be in effect.
None of the Transaction Parties is undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the acquisition of any of the notes by any Benefit Plan Investor. Neither the Indenture Trustee nor the Owner Trustee is undertaking to provide nor are they required to provide investment advice.
The Issuer has entered into the Indenture and this Note is issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness secured by the Owner Trust Estate. Each Noteholder (other than a Noteholder of a Retained Note), by acceptance of a Note (and each Note Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuer, the Indenture Trustee or any such agent shall be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Issuer and the rights of the Noteholders under the Indenture at any time by the Issuer with the consent of the Noteholders of Notes representing a majority of the Outstanding Amount of all Notes at the time Outstanding. The Indenture also contains provisions permitting the Noteholders of Notes representing specified percentages of the Outstanding Amount of the Notes, on behalf of the Noteholders of all the Notes, to waive compliance by the Issuer with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Noteholder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Noteholder and upon all future Noteholders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the Indenture Trustee to amend or waive certain terms and conditions set forth in the Indenture without the consent of Noteholders of the Notes issued thereunder.
| A-1-9 |
The Notes are issuable only in registered form in denominations as provided in the Indenture, subject to certain limitations therein set forth.
This 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 and thereunder shall be determined in accordance with such laws.
| A-1-10 |
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: | 1 | ||||
| Signature Guaranteed: | * |
1 NOTICE: 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 whatever. Such signature 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.
| A-1-11 |
EXHIBIT B
FORM OF TRANSFEROR CERTIFICATE FOR RETAINED NOTES
[DATE]
Citibank, N.A.
388 Greenwich Street
New York, New York 10013
Attention: HAROT 2018-2
American Honda Finance Corporation
20800 Madrona Avenue,
Torrance, California 90503
| Re: | Honda Auto Receivables 2018-2 Owner Trust, Class [__] Notes (Retained Notes) |
Ladies and Gentlemen:
In connection with our disposition of such of the Class [__] Notes that are Retained Notes (the “Retained Notes”) we certify that (a) we understand that the Retained Notes have not been registered under the Securities Act of 1933, as amended (the “Act”), but were retained by the Sponsor, and are being transferred by us in a transaction that is exempt from the registration requirements of the Act and (b) we have not offered or sold any Retained Notes to, or solicited offers to buy any Retained Notes from, any person, or otherwise approached or negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action which would result in, a violation of Section 5 of the Act.
| Very truly yours, | |
| [NAME OF TRANSFEROR] |
| By: | ||
| Authorized Officer |
| B-1 |
EXHIBIT C
FORM OF INVESTMENT LETTER FOR RETAINED NOTES
Citibank, N.A.
388 Greenwich Street
New York, New York 10013
American Honda Finance Corporation
20800 Madrona Avenue,
Torrance, California 90503
Ladies and Gentlemen:
In connection with our proposed purchase of such of the Class [__] Notes that are Retained Notes (the “Retained Notes”) of Honda Auto Receivables 2018-2 Owner Trust (the “Issuing Entity”), we confirm that:
1. We understand that such Retained Notes have not been registered under the Securities Act of 1933, as amended (the “1933 Act”) but were retained by American Honda Finance Corporation (the “Sponsor”), and may not be sold except as permitted in the following sentence. We understand and agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, (x) that such Retained Notes are being offered only in a transaction not involving any public offering within the meaning of the 1933 Act and (y) that such Retained Notes may be resold, pledged or transferred only (i) to the Sponsor or an Affiliate, (ii) to an “accredited investor” as defined in Rule 501(a)(1),(2),(3) or (7) of Regulation D under the 1933 Act (an “Accredited Investor”) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are Accredited Investors unless the holder is a bank acting in its fiduciary capacity) that executes a certificate substantially in the form hereof, (iii) so long as such Retained Note is eligible for resale pursuant to Rule 144A under the 1933 Act (“Rule 144A”), to a person whom we reasonably believe after due inquiry is a “qualified institutional buyer” as defined in Rule 144A, acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others also are “qualified institutional buyers”) to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A or (iv) in a sale, pledge or other transfer made in a transaction otherwise exempt from the registration requirements of the 1933 Act, in which case the Sponsor shall require that both the prospective transferor and the prospective transferee certify to the Indenture Trustee and the Sponsor in writing the facts surrounding such transfer, which certification shall be in form and substance satisfactory to the Issuer and the Sponsor. Except in the case of a transfer described in clauses (i) or (iii) above, the Sponsor shall require that a written opinion of counsel (which will not be at the expense of the Sponsor, any Affiliate of the Sponsor, the Owner Trustee or the Indenture Trustee), reasonably satisfactory to the Issuer and the Sponsor, be delivered to the Issuer, the Owner Trustee, the Indenture Trustee and the Sponsor to the effect that such transfer will not violate the 1933 Act, and will be effected in accordance with any applicable securities laws of each state of the United States. We will notify any purchaser of the Retained Notes from us of the above resale restrictions, if then applicable. We further understand that in connection with any transfer of the Retained Notes by us that the Issuer and the Sponsor may request, and if so requested we will furnish, such certificates and other information as they may reasonably require to confirm that any such transfer complies with the foregoing restrictions.
| C-1 |
2. [CHECK ONE]
(a) We are an Accredited Investor acting for our own account (and not for the account of others) or as a fiduciary or agent for others (which others also are Accredited Investors unless we are a bank acting in its fiduciary capacity). We have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Retained Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or their investment for an indefinite period of time. We are acquiring the Retained Notes or investment and not with a view to, or for offer and sale in connection with, a public distribution.
(b) We are a “qualified institutional buyer” as defined under Rule 144A under the 1933 Act and are acquiring the Retained Notes for our own account (and not for the account of others) or as a fiduciary or agent for others (which others also are “qualified institutional buyers”). We are familiar with Rule 144A under the 1933 Act and are aware that the seller of the Retained Notes and other parties intend to rely on the statements made herein and the exemption from the registration requirements of the 1933 Act provided by Rule 144A.
3. Either (a) we are not a Plan (as defined below) that is subject to (i) Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”) (each of the foregoing, a “Benefit Plan Investor”), or (ii) a law that is similar to the fiduciary or prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code (“Similar Law”) or (b) we and our fiduciary represent and warrant that the acquisition and holding of this Note (or any interest herein) will not give rise to, in the case of a Benefit Plan Investor, a nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or, in the case of a Plan that is subject to Similar Law, a violation of Similar Law. For purposes of the foregoing, the term “Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA whether or not subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code, or an entity deemed to hold the plan assets of any of the foregoing. In addition, if we are a Benefit Plan Investor:
(a) If any of the Issuer, the Depositor, the Administrator, the Indenture Trustee, the Owner Trustee, the Delaware Trustee, any underwriter, or any of their respective affiliated entities (the “Transaction Parties”), has provided or shall provide advice with respect to the acquisition of the Retained Notes by us, it has or shall provide such advice only to a fiduciary which is independent of the Transaction Parties giving such advice, if any, and our fiduciary is either:
(i) a bank as defined in Section 202 of the Investment Advisers Act of 1940 (the “Advisers Act”), or similar institution that is regulated and supervised and subject to periodic examination by a State or Federal agency;
| C-2 |
(ii) an insurance carrier which is qualified under the laws of more than one state to perform the services of managing, acquiring or disposing of assets of a Benefit Plan Investor;
(iii) an investment adviser registered under the Advisers Act, or, if not registered an as investment adviser under the Advisers Act by reason of paragraph (1) of Section 203A of the Advisers Act, is registered as an investment adviser under the laws of the state in which it maintains its principal office and place of business;
(iv) a broker-dealer registered under the Securities Exchange Act of 1934, as amended; or
(v) has, and at all times that we are invested in the Retained Notes will have, total assets of at least U.S. $50,000,000 under its management or control (provided that this clause (v) shall not be satisfied if our fiduciary is either (A) the owner or a relative of the owner of an investing IRA or (B) a participant or beneficiary or a relative of a participant or beneficiary of us;
(b) our fiduciary is capable of evaluating investment risks independently, both in general and with respect to particular transactions and investment strategies, including the acquisition by us of the Retained Notes;
(c) our fiduciary is a “fiduciary” with respect to us within the meaning of Section 3(21) of ERISA, Section 4975 of the Code, or both, and is responsible for exercising independent judgment in evaluating our acquisition of the Retained Notes;
(d) none of the Transaction Parties has exercised any authority to cause us to invest in the Retained Notes or to negotiate the terms of our investment in the Retained Notes; and
(e) our fiduciary has been informed by the Transaction Parties:
(i) in connection with the Benefit Plan Investor’s acquisition of the Notes (1) that none of the Transaction Parties is undertaking to provide impartial investment advice or to give advice in a fiduciary capacity, and (2) that no such entity has given investment advice or otherwise made a recommendation, (other than advice, if any, given by an underwriter to the Benefit Plan Investor Fiduciary which satisfies the requirements of clause (a) above); and
(ii) of the existence and nature of the Transaction Parties financial interests in the Benefit Plan Investor’s acquisition of the Retained Notes.
The above representations in subparagraphs (a), (b), (c), (d) and (e) of this paragraph 3 are intended to comply with the Department of Labor’s Reg. Sections 29 C.F.R. 2510.3-21(a) and (c)(1) as promulgated on April 8, 2016 (81 Fed. Reg. 20,997). If these regulations are revoked, repealed or no longer effective, these representations shall be deemed to not be in effect.
| C-3 |
None of the Transaction Parties is undertaking to provide impartial investment advice, or to give advice in a fiduciary capacity, in connection with the acquisition of any of the notes by any Benefit Plan Investor. Neither the Indenture Trustee nor the Owner Trustee is undertaking to provide nor are they required to provide investment advice.
4. We understand that the Indenture Trustee, the Sponsor and others will rely upon the truth and accuracy of the foregoing acknowledgments, representations and agreements, and we agree that if any of the acknowledgments, representations and warranties deemed to have been made by us by our purchase of the Retained Notes, for our own account or for one or more accounts as to each of which we exercise sole investment discretion, are no longer accurate, we shall promptly notify the Sponsor.
5. You are entitled to rely upon this letter and you are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
| Very truly yours, | |
| [NAME OF PURCHASER] |
| By: |
| Name: | ||
| Title: | ||
| Date: |
| C-4 |
EXHIBIT D
Servicing Criteria To Be Addressed In Assessment Of Compliance
The assessment of compliance to be delivered by the Indenture Trustee, shall address, at a minimum, the criteria identified below as “Applicable Servicing Criteria”:
| Reference | Criteria | |||
|
Cash Collection and Administration
|
||||
| 1122(d)(2)(ii) | Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | X | ||
|
Investor Remittances and Reporting
|
||||
| 1122(d)(3)(ii) | Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements.* | X | ||
| 1122(d)(3)(iii) | Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements. | X | ||
| 1122(d)(3)(iv) | Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | X |
* With respect to remittances.
| D-1 |
EXHIBIT E
Form of Monthly Rule 15Ga-1 Asset Repurchase Activity Report
Reporting Period: ____________
Name of Issuing Entity: HAROT 2018-2
Trustee: Citibank, N.A.
¨ Check here if the Trustee has no activity to report during Reporting Period indicated above
| Name
of Issuing Entity |
Check
if Registered |
Name
of Originator |
Total
Assets in ABS by Originator |
Assets
That Were Subject of Demand |
Assets
That Were Repurchased or Replaced |
Assets
Pending Repurchase or Replacement (within cure period) |
Demand in Dispute | Demand Withdrawn | Demand Rejected | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (#) (d) |
($) (e) |
(%
of principal balance) (f) |
(#) (g) |
($) (h) |
(%
of principal balance) (i) |
(#) (j) |
($) (k) |
(%
of principal balance) (l) |
(#) (m) |
($) (n) |
(%
of principal balance) (o) |
(#) (p) |
($) (q) |
(%
of principal balance) (r) |
(#) (s) |
($) (t) |
(%
of principal balance) (u) |
(#) (v) |
($) (w) |
(%
of principal balance) (x) |
|||||||||||||||||||||||||||||||||||||||||||||
| Asset Class X | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuing Entity A CIK # | X | Originator 1 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Originator 2 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Asset Class Y | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Issuing Entity B | Originator 3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| E-1 |
Exhibit 10.1
AMERICAN HONDA FINANCE CORPORATION,
as RPA Seller,
and
AMERICAN HONDA RECEIVABLES LLC,
as Purchaser
RECEIVABLES PURCHASE AGREEMENT
Dated May 30, 2018
TABLE OF CONTENTS
| Page | ||
| ARTICLE One DEFINITIONS | 1 | |
| Section 1.01 | Definitions | 1 |
| Section 1.02 | Other Definitional Provisions | 1 |
| ARTICLE Two CONVEYANCE OF RECEIVABLES | 1 | |
| Section 2.01 | Conveyance of Receivables | 1 |
| Section 2.02 | Representations and Warranties of the RPA Seller and the Purchaser | 2 |
| Section 2.03 | Representations and Warranties as to the Receivables | 6 |
| Section 2.04 | Covenants of the RPA Seller | 7 |
| ARTICLE Three PAYMENT OF RECEIVABLES PURCHASE PRICE | 8 | |
| Section 3.01 | Payment of Receivables Purchase Price | 8 |
| ARTICLE Four TERMINATION | 8 | |
| Section 4.01 | Termination | 8 |
| ARTICLE Five MISCELLANEOUS PROVISIONS | 8 | |
| Section 5.01 | Amendment | 8 |
| Section 5.02 | Protection of Right, Title and Interest to Receivables | 9 |
| Section 5.03 | GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL | 10 |
| Section 5.04 | Notices | 10 |
| Section 5.05 | Severability of Provisions | 10 |
| Section 5.06 | Assignment | 11 |
| Section 5.07 | Further Assurances | 11 |
| Section 5.08 | No Waiver; Cumulative Remedies | 11 |
| Section 5.09 | Counterparts | 11 |
| Section 5.10 | Third-Party Beneficiaries | 11 |
| Section 5.11 | Headings | 11 |
| Section 5.12 | RPA Seller Indemnification | 11 |
| Section 5.13 | Merger, Consolidation or Assumption of the Obligations of the RPA Seller | 12 |
| Section 5.14 | Dispute Resolution | 13 |
EXHIBIT
| Exhibit A - Representations and Warranties as to the Receivables | A-1 |
| ii |
This Receivables Purchase Agreement (the “Agreement”), dated May 30, 2018, is between American Honda Finance Corporation, a California corporation, as seller (the “RPA Seller”), and American Honda Receivables LLC, a Delaware limited liability company, as purchaser (the “Purchaser”).
In consideration of the premises and mutual agreements herein contained, each party agrees as follows for the benefit of the other party and for the benefit of the Owner Trustee:
ARTICLE One
DEFINITIONS
Section 1.01 Definitions. Terms not defined in this Agreement shall have the meanings assigned thereto in Appendix A to the Sale and Servicing Agreement dated as of the date hereof (as from time to time amended, supplemented or otherwise modified and in effect, the “Sale and Servicing Agreement”) among the Purchaser, as seller, Honda Auto Receivables 2018-2 Owner Trust, as Issuer, and the RPA Seller, as Servicer and Sponsor.
Section 1.02 Other Definitional Provisions. The words “hereof,” “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; the words Section, subsection and Schedule references contained in this Agreement are references to Sections, subsections and Schedules in or to this Agreement unless otherwise specified; the term “proceeds” shall have the meaning set forth in the applicable UCC; and the word “including” means including without limitation.
ARTICLE Two
CONVEYANCE OF RECEIVABLES
Section 2.01 Conveyance of Receivables.
(a) In consideration of the payment by the Purchaser to the RPA Seller of the Receivables Purchase Price as set forth in Section 3.01, the RPA Seller hereby sells, transfers, assigns and otherwise conveys to the Purchaser, and the Purchaser hereby purchases from the RPA Seller, without recourse (subject to the RPA Seller’s obligations hereunder), all of the right, title and interest of the RPA Seller in, to and under the following:
(i) the Receivables listed in the Schedule of Receivables delivered to the Indenture Trustee promptly after the Closing Date and all monies paid thereunder or in respect thereof (including proceeds of the repurchase of Receivables by the RPA Seller pursuant to Section 2.03(c)) on or after the Cutoff Date;
(ii) the security interests in the Financed Vehicles;
(iii) any proceeds of any physical damage insurance policies covering the Financed Vehicles and in any proceeds of any credit life or credit disability insurance policies relating to the Receivables or the Obligors;
(iv) any proceeds of Dealer Recourse;
(v) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer; and
(vi) the proceeds of any and all of the foregoing.
(b) In connection with the foregoing conveyance, the RPA Seller agrees to record and file, at its own expense, one or more financing statements with respect to the Receivables now existing and hereafter created for the sale of chattel paper (as defined in Section 9-102 of the UCC as in effect in the State of California) meeting the requirements of applicable state law in such manner as is necessary to perfect the sale of the Receivables to the Purchaser, and the proceeds thereof (and any continuation statements as are required by applicable state law), and to deliver a file-stamped copy to the Indenture Trustee of each such financing statement (or continuation statement) or other evidence of such filings (which may, for purposes of this Section, consist of telephone confirmation of such filings with the file stamped copy of each such filings to be provided to the Purchaser in due course), as soon as is practicable after receipt by the RPA Seller thereof.
In connection with the foregoing conveyance, the RPA Seller further agrees, at its own expense, on or prior to the Closing Date (i) to annotate and indicate in its computer files that the Receivables have been transferred to the Purchaser pursuant to this Agreement, (ii) to create a Schedule of Receivables containing a true and complete list of all such Receivables, identified by account number and by the Principal Balance of each Receivable as of the Cutoff Date, which file or list shall be kept on file at the offices of the Servicer and (iii) to deliver the Receivable Files to or upon the order of the Purchaser.
The parties hereto intend that the conveyance hereunder be a sale. In the event that the conveyance hereunder is not for any reason considered a sale, the RPA Seller hereby grants to the Purchaser a first priority perfected security interest in all of its right, title and interest in, to and under the Receivables, and all other property conveyed hereunder and listed in this Section and all proceeds of any of the foregoing, and intends that this Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder, including, without limitation, the Receivables Purchase Price.
Section 2.02 Representations and Warranties of the RPA Seller and the Purchaser.
(a) The RPA Seller hereby represents and warrants to the Purchaser as of the date of this Agreement and the Closing Date that:
(i) Organization and Good Standing. The RPA Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of California, and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Receivables and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
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(ii) Due Qualification. The RPA Seller is duly qualified to do business as a foreign corporation in good standing, and has obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect the RPA Seller’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(iii) Power and Authority. The RPA Seller shall have the power and authority to execute and deliver this Agreement and to carry out its terms, and the execution, delivery and performance of this Agreement shall have been duly authorized by the RPA Seller by all necessary corporate action.
(iv) Valid Sale; Binding Obligation. This Agreement evidences a valid sale, transfer and assignment of the Receivables, enforceable against creditors of and purchasers from the RPA Seller, and constitutes a legal, valid and binding obligation of the RPA Seller enforceable in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law
(v) No Violation. The execution, delivery and performance by the RPA Seller of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the RPA Seller, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the RPA Seller is a party or by which it may be bound or any of its properties are subject; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to the knowledge of the RPA Seller, any order, rule or regulation applicable to it or its properties of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the RPA Seller or any of its properties, in each case where any such conflict, breach, default, lien or violation would reasonably be expected to have a material adverse effect on the RPA Seller’s ability to perform its obligations under this Agreement and consummate the transactions contemplated by the Basic Documents.
(vi) No Proceedings. To the RPA Seller’s knowledge, there are no proceedings or investigations pending or, to the knowledge of the RPA Seller, threatened against the RPA Seller, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that, in the reasonable judgment of the RPA Seller, would materially and adversely affect the performance by the RPA Seller of its obligations under this Agreement.
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(vii) Schedule of Receivables. The information set forth in the Schedule of Receivables shall be true and correct in all material respects as of the opening of business on the Cutoff Date and no selection procedures believed to be adverse to the Securityholders were utilized in selecting the Receivables from those automobile receivables of the RPA Seller that met the selection criteria set forth in this Agreement.
(viii) All Filings Made. Both the RPA Seller and the Purchaser, respectively, have caused or will have caused, or have taken or will take, within ten (10) days of the Closing Date, all steps necessary, including the filing of all appropriate financing statements (including UCC filings) necessary in the appropriate jurisdictions under the applicable law, to give the Issuer a first priority perfected security interest in the Receivables (other than the Related Security with respect thereto, to the extent that an ownership interest therein cannot be perfected by the filing of a financing statement), and to give the Indenture Trustee a first priority perfected security interest therein.
(ix) Security Interest. This agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Receivables in favor of the Purchaser, which is prior to all other Liens (other than Permitted Liens and any Lien which will be released prior to the assignment hereunder) and is enforceable against all creditors of and purchasers from the RPA Seller.
(x) Title. It is the intention of the RPA Seller that the transfer and assignment herein contemplated, taken as a whole, constitutes a sale of the Receivables from the RPA Seller to the Purchaser and that the beneficial interest in and title to the Receivables not be part of the debtor’s estate in the event of the filing of a bankruptcy petition by or against the RPA Seller under any bankruptcy law. Other than (1) the sale by the RPA Seller to the Purchaser pursuant to this Agreement, (2) the sale by the Purchaser to the Issuer pursuant to the Sale and Servicing Agreement and (3) the security interest granted by the Issuer to the Indenture Trustee in the Indenture, no Receivable has been sold, transferred, assigned or pledged by the RPA Seller to any Person other than the Purchaser or by the Purchaser to any Person other than the Issuer, and no Receivable has been sold, transferred, assigned or pledged by the Issuer to any Person other than the Indenture Trustee, and no provision of a Receivable shall have been waived, except as provided in this Agreement. Immediately prior to the transfer and assignment herein contemplated, the RPA Seller has good and marketable title to each Receivable free and clear of all Liens (except Permitted Liens and any Lien which will be released prior to the sale and transfer of such Receivable to the Issuer), and, immediately upon the transfer and assignment contemplated herein, the Purchaser shall have good and marketable title to each Receivable, free and clear of all Liens (except Permitted Liens and any Lien which will be released prior to the sale and transfer of such Receivable to the Issuer).
(b) The Purchaser hereby represents and warrants to the RPA Seller as of the date of this Agreement and the Closing Date that:
(i) Organization and Good Standing. The Purchaser is a limited liability company duly organized, validly existing and in good standing under the laws of the State of Delaware, and had at all relevant times, and shall have, power, authority and legal right to acquire, own and sell the Receivables and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
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(ii) Due Qualification. The Purchaser is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect the Purchaser’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(iii) Power and Authority. The Purchaser shall have the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement shall have been duly authorized by the Purchaser by all necessary corporate action.
(iv) Binding Obligation. This Agreement evidences a valid sale, transfer and assignment of the Receivables, and constitutes a legal, valid and binding obligation of the Purchaser, enforceable against it in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.
(v) No Violation. The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the certificate of formation or limited liability company agreement of the Purchaser, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Purchaser is a party or by which it may be bound or any of its properties are subject; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor, to the knowledge of the Purchaser, violate any law or any order, rule or regulation applicable to it or its properties of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Purchaser or any of its properties, in each case where any such conflict, breach, default, lien or violation would reasonably be expected to have a material adverse effect on the Purchaser’s ability to perform its obligations under this Agreement and consummate the transactions contemplated by the Basic Documents.
(vi) No Proceedings. To the Purchaser’s knowledge, there are no proceedings or investigations pending or, to the knowledge of the Purchaser, threatened against the Purchaser, before any court, regulatory body, administrative agency or other tribunal or governmental instrumentality (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that, in the reasonable judgment of the Purchaser, would materially and adversely affect the performance by the Purchaser of its obligations under this Agreement.
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(c) The representations and warranties set forth in this Section shall survive the sale of the Receivables by the RPA Seller to the Purchaser and the sale of the Receivables by the Purchaser to the Issuer. Upon discovery by the RPA Seller or the Purchaser of a breach of any of the foregoing representations and warranties, the party discovering such breach shall give prompt written notice to the others.
Section 2.03 Representations and Warranties as to the Receivables.
(a) Eligibility of Receivables.
(i) The RPA Seller hereby (A) makes the representations and warranties set forth on Exhibit A as of the Cutoff Date as to the Receivables (on which the Purchaser relies in accepting the Receivables) and (B) consents to the assignment by the Purchaser to the Issuer of the Purchaser’s rights with respect thereto. Such representations and warranties speak as of the respective dates set forth therein, but shall survive the sale, transfer and assignment of the Receivables to the Issuer under the Sale and Servicing Agreement and the pledge of such Receivables to the Indenture Trustee under the Indenture. The RPA Seller hereby acknowledges and agrees that under the Sale and Servicing Agreement, the Purchaser will transfer to the Issuer the Purchaser’s rights under the Receivables Purchase Agreement, including the representations and warranties of the RPA Seller as set forth on Exhibit A to this Agreement (upon which representations and warranties the Issuer relies in accepting the Receivables and delivering the Securities), together with all rights of the Purchaser with respect to any breach thereof, including the right to require the RPA Seller to repurchase Receivables in accordance with this Agreement. Any inaccuracy in any of such representations or warranties will be deemed not to constitute a breach of such representations or warranties if such inaccuracy does not affect the ability of the Issuer to receive and retain payment in full on such Receivable on the terms and conditions and within the timeframe set forth in the underlying retail installment sales contract.
(ii) The RPA Seller hereby agrees that the Administrator, on behalf of the Issuer, shall have the right to enforce any and all rights under this Agreement assigned to the Issuer under the Sale and Servicing Agreement, including the right to cause the RPA Seller to repurchase any Receivable with respect to which it is in breach of any of its representations and warranties set forth in Exhibit A, directly against the RPA Seller as though the Issuer were a party to this Agreement, and the Issuer shall not be obligated to exercise any such rights indirectly through the Purchaser.
(b) Notice of Breach. The representations and warranties set forth in this Section shall speak as of the execution and delivery of this Agreement, but shall survive the sale, transfer and assignment of the Receivables to the Purchaser and any subsequent assignment or transfer pursuant to the Sale and Servicing Agreement. The Purchaser, the RPA Seller, the Issuer, the Owner Trustee, the Delaware Trustee or the Indenture Trustee, as the case may be, shall inform the other parties promptly, in writing, upon discovery of any breach of the RPA Seller’s representations and warranties pursuant to this Section which materially and adversely affects the interests of the Noteholders in any Receivable.
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(c) Repurchase of Receivables. In the event of a breach of any representation or warranty set forth on Exhibit A which materially and adversely affects the interests of the Issuer or the Securityholders and unless the breach shall have been cured by the last day of the second Collection Period following the Collection Period in which the discovery of the breach is made or notice is received, as the case may be (or, at the option of the RPA Seller, the last day in the first Collection Period following the Collection Period in which such discovery is made), the RPA Seller shall repurchase such Receivable. In consideration of the purchase of any such Receivable, on the related Payment Date, the RPA Seller shall remit an amount equal to the Warranty Purchase Payment in respect of such Receivable to the Purchaser and shall be entitled to receive the Released Warranty Amount. Upon any such repurchase, each of the Purchaser and the Issuer shall, without further action, be deemed to transfer, assign and otherwise convey to the RPA Seller, without recourse, representation or warranty, all the right, title and interest of either the Purchaser or the Issuer in, to and under such repurchased Receivable, all monies due or to become due with respect thereto and all proceeds thereof. The Purchaser, the Issuer, the Owner Trustee, the Delaware Trustee or the Indenture Trustee, as applicable, shall execute such documents and instruments of transfer or assignment and take such other actions as shall reasonably be requested by the RPA Seller to effect the conveyance of such Receivable pursuant to this Section. The sole remedy of the Purchaser, the Issuer, the Trustees or the Securityholders with respect to a breach of the RPA Seller’s representations and warranties pursuant to Section 2.03(a) shall be to require the RPA Seller to repurchase the related Receivables pursuant to this Section.
Section 2.04 Covenants of the RPA Seller. The RPA Seller hereby covenants that:
(a) Security Interests. Except for the conveyances and grants of security interests hereunder and contemplated pursuant to this Agreement and the other Basic Documents, the RPA Seller shall not sell, pledge, assign or transfer to any other Person, or grant, create, incur, assume or suffer to exist any Lien on any Receivable or interest therein, and the RPA Seller shall defend the right, title and interest of the Purchaser in, to and under such Receivables against all claims of third parties claiming through or under the RPA Seller; provided, however, that the RPA Seller’s obligations under this Section 2.04(a) shall terminate upon the termination of the Trust pursuant to Section 9.01 of the Trust Agreement.
(b) Delivery of Payments. The RPA Seller agrees to deliver in kind upon receipt to the Servicer under the Sale and Servicing Agreement (if other than the RPA Seller) all payments received by the RPA Seller in respect of the Receivables as soon as practicable after receipt thereof by the RPA Seller.
(c) No Impairment. The RPA Seller shall take no action, nor omit to take any action, which would impair the rights of the Purchaser in any Receivable, nor shall it, except as otherwise provided in this Agreement or the Sale and Servicing Agreement, reschedule, revise or defer payments due on any Receivable.
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ARTICLE Three
PAYMENT OF RECEIVABLES PURCHASE PRICE
Section 3.01 Payment of Receivables Purchase Price. In consideration of the sale of the Receivables from the RPA Seller to the Purchaser as provided in Section 2.01, on the Closing Date the Purchaser agrees to pay the RPA Seller an amount equal to the estimated fair market value of the Receivables (such amount, the “Receivables Purchase Price”), which amount shall be paid in the form of (i) cash, less the par value of the Retained Notes to be issued to the RPA Seller on the Closing Date, and (ii) a capital contribution from the RPA Seller to the Purchaser in an amount equal to the excess, if any, of such estimated fair market value of the Receivables over the net sum of such cash payment.
ARTICLE Four
TERMINATION
Section 4.01 Termination. The respective obligations and responsibilities of the RPA Seller and the Purchaser created hereby shall terminate, except for the indemnity obligations of the RPA Seller as provided herein, upon the termination of the Issuer as provided in the Trust Agreement.
ARTICLE Five
MISCELLANEOUS PROVISIONS
Section 5.01 Amendment.
(a) Any term or provision of this Agreement may be amended by the Purchaser and the RPA Seller, but without the consent of any Securityholders or any other Person subject to the satisfaction of one of the following conditions:
(i) the Purchaser or the RPA Seller delivers an Opinion of Counsel to the Indenture Trustee to the effect that such amendment will not materially and adversely affect the interests of any Noteholders that have not consented in writing to such amendment; or
(ii) the Rating Agency Condition is satisfied with respect to such amendment and the Purchaser or the RPA Seller notifies the Indenture Trustee in writing that the Rating Agency Condition is satisfied with respect to such amendment;
provided, that in the event that any Trust Certificates are then held by anyone other than the Depositor or any of its Affiliates, this Agreement may only be amended by the Purchaser and the RPA Seller if, in addition, (i) the Certificateholders evidencing a majority of the Certificate Balance of the Trust Certificates consent to such amendment or (ii) such amendment shall not, as evidenced by an Officer’s Certificate of the Purchaser or the RPA Seller or an Opinion of Counsel delivered to the Owner Trustee, materially and adversely affect the interests of the Certificateholders.
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(b) This Agreement may also be amended from time to time by the Purchaser and the RPA Seller, with notice to the Indenture Trustee, the written consent of the Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes and the consent of the Certificateholders evidencing not less than a majority of all the percentage interests evidenced by the Trust Certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement.
(c) Any term or provision of this Agreement may also be amended from time to time by the Purchaser and the RPA Seller, for the purpose of conforming the terms of this Agreement to the description thereof in the Prospectus, without the consent of any Securityholders or any other Person.
(d) Promptly after the execution of any such amendment, the RPA Seller or the Purchaser shall furnish written notification of the substance of such amendment to the Indenture Trustee and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement). It shall not be necessary for the consent of Securityholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of Certificateholders of the execution thereof shall be subject to such reasonable requirements as the Owner Trustee may require.
(e) No amendment that adversely affects the Indenture Trustee, the Owner Trustee or the Delaware Trustee shall be effective without the prior written consent of the party adversely affected.
Section 5.02 Protection of Right, Title and Interest to Receivables.
(a) The RPA Seller, at its expense, shall cause this Agreement and/or all financing statements and continuation statements and any other necessary documents covering the Purchaser’s right, title and interest to the Receivables and other property conveyed by the RPA Seller to the Purchaser hereunder to be promptly recorded, registered and filed, and at all times to be kept recorded, registered and filed, all in such manner and in such places as may be required by law fully to preserve and protect the right, title and interest of the Purchaser hereunder to all of the Receivables and such other property. The RPA Seller shall deliver to the Purchaser file-stamped copies of, or filing receipts for, any document recorded, registered or filed as provided above, as soon as available following such recording, registration or filing. The Purchaser shall cooperate fully with the RPA Seller in connection with the obligations set forth above and will execute any and all documents reasonably required to fulfill the intent of this subsection.
(b) In the event that the RPA Seller makes any change in its name, identity or corporate structure which would make any financing statement or continuation statement filed in accordance with Section 5.02(a) seriously misleading within the meaning of Section 9-507(c) of the UCC as in effect in the applicable state, the RPA Seller shall give the Purchaser not less than five (5) days prior written notice of any such change and shall, within thirty (30) days of such change, execute and file such financing statements or amendments as may be necessary to continue the perfection of the Purchaser’s security interest in the Receivables and the proceeds thereof.
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(c) The RPA Seller will give the Purchaser prompt written notice of any relocation of any office from which the RPA Seller keeps records concerning the Receivables or of its principal executive office and whether, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall execute and file such financing statements or amendments as may be necessary to continue the perfection of the interest of the Purchaser in the Receivables and the proceeds thereof.
Section 5.03 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Each of the parties hereto hereby submits to the jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this agreement.
Section 5.04 Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to have been duly given if personally delivered at or mailed by registered mail, return receipt requested, or overnight delivery service, by facsimile or by electronic mail (if an address therefore has been provided by the respective party in writing) to, the address of each party as set forth on Schedule B to the Sale and Servicing Agreement, or, as to any of such Persons, at such other address as shall be designated by such Person in a written notice to the other Persons.
Section 5.05 Severability of Provisions. If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be held invalid, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions and terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions or terms of this Agreement or any amendment or supplement hereto.
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Section 5.06 Assignment. This Agreement may not be assigned by the Purchaser or the RPA Seller except as contemplated by this Section and the Sale and Servicing Agreement; provided, however, that simultaneously with the execution and delivery of this Agreement, the Purchaser shall assign all of its right, title and interest herein to the Issuer, which in turn, will pledge its rights to the Indenture Trustee for the benefit of the Noteholders as provided in Section 2.01 of the Sale and Servicing Agreement, to which the RPA Seller hereby expressly consents. The RPA Seller agrees to perform its obligations hereunder for the benefit of the Issuer and that the Indenture Trustee may enforce the provisions of this Agreement, exercise the rights of the Purchaser and enforce the obligations of the RPA Seller hereunder without the consent of the Purchaser.
Section 5.07 Further Assurances. The RPA Seller and the Purchaser agree to do and perform, from time to time, any and all acts and to execute any and all further instruments required or reasonably requested by the other party hereto or by the Issuer or the Indenture Trustee more fully to effect the purposes of this Agreement, including, without limitation, the execution of any financing statements, amendments, continuation statements or releases relating to the Receivables for filing under the provisions of the UCC or other law of any applicable jurisdiction.
Section 5.08 No Waiver; Cumulative Remedies. No failure to exercise and no delay in exercising, on the part of the Purchaser, the Issuer or the RPA Seller, any right, remedy, power or privilege hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided are cumulative and not exhaustive of any rights, remedies, powers and privileges provided by law.
Section 5.09 Counterparts. This Agreement may be executed in two or more counterparts, (and by different parties on separate counterparts), each of which shall be an original, but all of which together shall constitute one and the same instrument.
Section 5.10 Third-Party Beneficiaries. This Agreement will inure to the benefit of and be binding upon the parties hereto, the Issuer, the Owner Trustee, the Delaware Trustee and the Indenture Trustee for the benefit of the Noteholders, each of which shall be considered to be third-party beneficiaries hereof. Except as otherwise provided in this Agreement, no other Person will have any right or obligation hereunder.
Section 5.11 Headings. The headings herein are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.
Section 5.12 RPA Seller Indemnification.
(a) Purchaser. The RPA Seller shall indemnify and hold harmless the Purchaser from and against any loss, liability, expense or damage suffered or sustained by reason of any acts, omissions or alleged acts or omissions arising out of activities of the RPA Seller pursuant to this Agreement or as a result of the transactions contemplated hereby, including, but not limited to, any judgment, award, settlement, reasonable attorneys’ fees and other costs or expenses incurred in connection with the defense of any actual or threatened action, proceeding or claim; provided, however, that the RPA Seller shall not indemnify the Purchaser if such acts, omissions or alleged acts or omissions constitute negligence or willful misconduct by the Purchaser.
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(b) Trustees. The RPA Seller shall indemnify, defend and hold harmless the Trustees from and against any and all costs, expenses, losses, claims, damages and liabilities to the extent that such cost, expense, loss, claim, damage or liability arose out of, and was imposed upon the Trustees through the negligence, willful misfeasance or bad faith of the RPA Seller in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement.
(c) Taxes. The RPA Seller shall indemnify, defend and hold harmless the Purchaser and any of the officers, directors, employees and agents of the Purchaser from and against any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Basic Documents, including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes and costs and expenses in defending against the same.
Section 5.13 Merger, Consolidation or Assumption of the Obligations of the RPA Seller.
(a) The RPA Seller shall not consolidate with or merge into any other corporation or convey or transfer its properties and assets substantially as an entirety to any Person, unless:
(i) the corporation formed by such consolidation or into which the RPA Seller is merged or the Person which acquires by conveyance or transfer the properties and assets of the RPA Seller substantially as an entirety shall be organized and existing under the laws of the United States, any state thereof or the District of Columbia, and, if the RPA Seller is not the surviving entity, shall expressly assume, by an agreement supplemental hereto, executed and delivered to the Purchaser and the Indenture Trustee, in form satisfactory to the Purchaser and the Indenture Trustee, the performance of every covenant and obligation of the RPA Seller hereunder and shall benefit from all the rights granted to the RPA Seller hereunder; and
(ii) the RPA Seller shall have delivered to the Purchaser and the Indenture Trustee an Officer’s Certificate of the RPA Seller and an Opinion of Counsel each stating that such consolidation, merger, conveyance or transfer and such supplemental agreement comply with this Section and that all conditions precedent herein provided for relating to such transaction have been complied with.
(b) The obligations of the RPA Seller hereunder shall not be assignable nor shall any Person succeed to the obligations of the RPA Seller hereunder except in each case in accordance with the provisions of Section 5.06 and this Section.
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Section 5.14 Dispute Resolution.
(a) If any Investor (each, a “Requesting Party”) requests that the RPA Seller repurchase any Receivable pursuant to Section 2.03(c) of this Agreement and the repurchase request has not been fulfilled or otherwise resolved to the reasonable satisfaction of such Requesting Party within one-hundred eighty (180) days of the receipt of notice of the request by the RPA Seller, the Requesting Party will have the right to refer the matter, at its discretion, to mediation, non-binding arbitration or binding arbitration pursuant to this Section 5.14. In order to make a repurchase request, such Requesting Party will provide a notice stating the request to the RPA Seller.
(b) The Requesting Party will provide notice in accordance with the provisions of Section 5.04 of its intention to refer the matter to mediation, non-binding arbitration or binding arbitration, as applicable, to the RPA Seller, with a copy to the Issuer, the Purchaser, the Owner Trustee and the Indenture Trustee. The RPA Seller agrees that it will participate in the resolution method selected by the Requesting Party. Any settlement agreement reached in a mediation and any decision by an arbitrator in a binding arbitration shall be binding upon the Requesting Party, the Purchaser, the Issuer, the Owner Trustee, and the Indenture Trustee with respect to the Receivable that is the subject matter of the repurchase request, and, in that situation, issues relating to that Receivable may not be re-litigated by the Purchaser, the Issuer, the Owner Trustee, or the Indenture Trustee or become the subject of a subsequent repurchase request by the Requesting Party in mediation (including non-binding arbitration), arbitration, court, or otherwise.
(c) If the Requesting Party selects mediation as the resolution method, the following provisions will apply:
(i) The mediation will be administered by a nationally recognized arbitration and mediation association selected by the Requesting Party pursuant to such association’s mediation procedures in effect at such time.
(ii) The fees and expenses of the mediation will be allocated as mutually agreed by the parties as part of the mediation.
(iii) The mediator will be impartial, knowledgeable about and experienced with the laws of the State of New York that are relevant to the repurchase dispute and will be appointed from a list of neutrals maintained by the AAA.
(d) If the Requesting Party selects arbitration as the resolution method, the following provisions will apply:
(i) The arbitration will be administered by a nationally recognized arbitration and mediation association jointly selected by the parties, and if the parties are unable to agree on an association, the arbitration will be administered by the AAA, and conducted pursuant to such association’s arbitration procedures in effect at such time.
(ii) The arbitrator will be impartial, knowledgeable about and experienced with the laws of the State of New York that are relevant to the dispute hereunder and will be appointed from a list of neutrals maintained by AAA.
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(iii) The arbitrator will make its final determination no later than 90 days after appointment or as soon as practicable thereafter. The arbitrator will resolve the dispute in accordance with the terms of this Agreement, and may not modify or change this Agreement in any way. The arbitrator will not have the power to award punitive damages or consequential damages in any arbitration conducted by it, and the RPA Seller shall not be required to pay more than the applicable Repurchase Amount with respect to any Receivable which the RPA Seller is required to repurchase under the terms of this Agreement. In its final determination, the arbitrator will determine and award the costs of the arbitration (including the fees of the arbitrator, cost of any record or transcript of the arbitration, and administrative fees) and reasonable attorneys’ fees to the parties as determined by the arbitrator in its reasonable discretion. The determination of the arbitrator will be in writing and counterpart copies will be promptly delivered to the parties. For binding arbitration, the arbitrator’s determination will be final and non-appealable (absent manifest error), except for actions to confirm or vacate the determination permitted under federal or state law, and may be entered and enforced in any court with jurisdiction over the parties and the matter.
(iv) By selecting binding arbitration, the Requesting Party waives the right to sue in court, including the right to a trial by jury.
(e) The following provisions will apply to both mediations (including non-binding arbitration) and arbitrations:
(i) Any mediation or arbitration will be held in New York, New York or such other location mutually agreed to by the Requesting Party and the RPA Seller;
(ii) Notwithstanding this dispute resolution provision, the parties will have the right to seek provisional relief from a competent court of law, including a temporary restraining order, preliminary injunction or attachment order, provided such relief would otherwise be available by law;
Other than as publicly available with the Commission or otherwise publicly disclosed, the details and/or existence of any unfulfilled repurchase request, any meetings or discussions regarding any unfulfilled repurchase request, mediations or arbitration proceedings conducted under this Section 5.14, including all offers, promises, conduct and statements, whether oral or written, made in the course of the parties' attempt to resolve an unfulfilled repurchase request, any information exchanged in connection with any mediation, and any discovery taken in connection with any arbitration (collectively, “Confidential Information”), shall be and remain confidential and inadmissible (except as permitted in accordance with applicable law) for any purpose, including impeachment, in any mediation, arbitration or litigation, or other proceeding (including any proceeding under this Section 5.14) other than as required to be disclosed in accordance with applicable law, regulatory requirements, or court order or to the extent that the RPA Seller, in its sole discretion, elects to disclose such information. Such information will be kept strictly confidential and will not be disclosed or discussed with any third party, and except that a party may disclose such information to its own attorneys, experts, accountants and other agents and representatives (collectively “Representatives”), as reasonably required in connection with any resolution procedure under this Section 5.14), if the disclosing Party (a) directs such Representatives to keep the information confidential, (b) is responsible for any disclosure by its Representatives of such information and (c) takes at its sole expense all reasonable measures to restrain such Representatives from disclosing such information. If any party receives a subpoena or other request for information from a third party (other than a governmental regulatory body) for Confidential Information, the recipient will promptly notify the other party and will provide the other party with the opportunity to object to the production of its Confidential Information or seek other appropriate protective remedies, consistent with the applicable requirements of law and regulation. If, in the absence of a protective order, such party or any of its representatives are compelled as a matter of law, regulation, legal process or by regulatory authority to disclose any portion of the Confidential Information, such party may disclose to the party compelling disclosure only the part of such Confidential Information that is required to be disclosed.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective officers as of the day and year first above written.
| AMERICAN HONDA FINANCE CORPORATION, | |
| as RPA Seller |
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Vice President and Assistant Secretary |
| AMERICAN HONDA RECEIVABLES LLC, | |
| as Purchaser |
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Treasurer |
| S-1 | HAROT 2018-2 Receivables Purchase Agreement |
EXHIBIT A
REPRESENTATIONS AND WARRANTIES AS TO THE RECEIVABLES
(i) Characteristics of Receivables. Each Receivable
| (a) | was originated by a Dealer located in the United States for the sale of the related Financed Vehicle, fully executed by the Obligor thereto, purchased by AHFC from such Dealer under an existing agreement with AHFC, assigned by such Dealer to the RPA Seller and subsequently sold by the RPA Seller to the Purchaser pursuant to the Receivables Purchase Agreement, |
| (b) | has created or shall create a first priority security interest in favor of the RPA Seller in the related Financed Vehicle, which security interest has been assigned by the RPA Seller to the Purchaser and shall be assignable, and shall be so assigned, by the Purchaser to the Issuer, |
| (c) | contains provisions that permit the repossession and sale of the Financed Vehicle upon a default under the Receivable by the Obligor, |
| (d) | except as otherwise provided in this Agreement, provides, at the time of origination, for level Monthly Payments (provided that the first and last payments in the life of the Receivable may be different from but in no event more than two times the level payment) that fully amortize the Amount Financed over its original term, |
| (e) | allows for prepayment, |
| (f) | is not listed on the Servicer’s records as a federal, state or local governmental entity and |
| (g) | is a retail installment sales contract. |
(ii) Compliance with Law. At the time it was originated, the Receivable complied in all material respects with all requirements of law in effect at the time and applicable to such Receivable.
(iii) Binding Obligation. Each Receivable is on a form contract that includes the legal and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws affecting the enforcement of creditors’ rights and by general principles of equity, consumer protection laws and the Servicemembers Civil Relief Act.
(iv) Receivables in Force. According to the Servicer’s Receivables system, the Receivable shall not have been satisfied, subordinated or rescinded, nor shall the Financed Vehicle have been released in whole or in part from the lien granted by the related Receivable on the Cutoff Date.
| A-1 |
(v) No Defenses. To the RPA Seller’s knowledge, no right of rescission, setoff, counterclaim or defense has been asserted or threatened in writing by any Obligor against the Receivable.
(vi) No Defaults. Except for payment delinquencies that, as of the Cutoff Date, were not more than thirty (30) days, according to the accounting records of the RPA Seller, no payment default existed under the terms of any Receivable as of the Cutoff Date.
(vii) Insurance. Each Obligor of a Receivable has been required to obtain physical damage insurance covering the related Financed Vehicle and is required under the terms of the related Receivable to maintain such insurance.
(viii) Lawful Assignment. The terms of the Receivable do not limit the right of the owner of the Receivable to sell the Receivable.
(ix) Chattel Paper. The Receivable is either “tangible chattel paper” or “electronic chattel paper” within the meaning of the applicable UCC and there is only one original authenticated copy of the Receivable.
(x) Security Interest. The RPA Seller has, or the Servicer has, started procedures that will result in the RPA Seller having a perfected, first priority security interest in the Financed Vehicle within ten (10) days of the Closing Date, which security interest was validly created and is assignable by the RPA Seller to the Purchaser.
(xi) Individual Characteristics. Each Receivable has the following individual characteristics as of the Cutoff Date:
| (a) | is not listed on the Servicer’s records as the subject of a pending bankruptcy proceeding; |
| (b) | had an original maturity of not greater than 72 payments; |
| (c) | provides for the payment of a finance charge or shall yield interest calculated on the basis of a Contract Rate of at least 0.50%; |
| (d) | has a Scheduled Payment that is not more than thirty (30) days past due; |
| (e) | the Financed Vehicle to which the Receivable relates is a new or used Honda or Acura automobile or light-duty truck; and |
| (f) | the Obligor under each Receivable had a billing address in the United States or its territories or possessions, according to the records of the Servicer. |
| A-2 |
Exhibit 10.2
HONDA AUTO
RECEIVABLES 2018-2 OWNER TRUST,
as Issuer,
AMERICAN HONDA
RECEIVABLES LLC,
as Seller,
and
AMERICAN HONDA
FINANCE CORPORATION,
as Servicer, RPA Seller and Sponsor
SALE AND SERVICING AGREEMENT
Dated May 30, 2018
Table of Contents
| Page | ||
| ARTICLE One | DEFINITIONS | 1 |
| Section 1.01. | General Definitions | 1 |
| Section 1.02. | Other Definitional Provisions | 1 |
| ARTICLE Two | CONVEYANCE OF RECEIVABLES; CUSTODY OF RECEIVABLES FILES | 1 |
| Section 2.01. | Conveyance of Receivables | 1 |
| Section 2.02. | Custody of Receivable Files | 2 |
| Section 2.03. | Representations and Warranties as to the Receivables | 3 |
| Section 2.04. | Repurchase of Receivables Upon Breach | 4 |
| Section 2.05. | Duties of Servicer as Custodian | 5 |
| Section 2.06. | [Reserved] | 6 |
| Section 2.07. | Indemnification by Custodian | 6 |
| Section 2.08. | Effective Period and Termination | 6 |
| ARTICLE Three | ADMINISTRATION AND SERVICING OF RECEIVABLES | 7 |
| Section 3.01. | Duties of Servicer | 7 |
| Section 3.02. | Collection of Receivable Payments | 7 |
| Section 3.03. | [Reserved] | 7 |
| Section 3.04. | Realization Upon Receivables | 8 |
| Section 3.05. | Maintenance of Physical Damage Insurance Policies | 8 |
| Section 3.06. | Maintenance of Security Interests in Financed Vehicles | 8 |
| Section 3.07. | Covenants of Servicer | 8 |
| Section 3.08. | Purchase of Receivables Upon Breach | 9 |
| Section 3.09. | Total Servicing Fee; Payment of Certain Expenses by Servicer | 9 |
| Section 3.10. | Servicer’s Certificate | 9 |
| Section 3.11. | Annual Statement as to Compliance; Notice of Default | 10 |
| Section 3.12. | Assessment of Compliance and Annual Accountants’ Report | 10 |
| Section 3.13. | Access to Certain Documentation and Information Regarding Receivables | 11 |
| Section 3.14. | [Reserved] | 11 |
| Section 3.15. | Reports to Securityholders and Rating Agencies | 12 |
| Section 3.16. | Appointment of Subservicer or Subcontractor | 12 |
| -i- |
Table of Contents
(continued)
| Page | ||
| Section 3.17. | Information to be Provided by the Servicer | 13 |
| Section 3.18. | Remedies | 14 |
| ARTICLE Four | DISTRIBUTIONS; RESERVE FUND; STATEMENTS TO SECURITYHOLDERS | 14 |
| Section 4.01. | Establishment of Accounts | 14 |
| Section 4.02. | Collections | 15 |
| Section 4.03. | Application of Collections | 16 |
| Section 4.04. | Advances | 17 |
| Section 4.05. | Additional Deposits | 17 |
| Section 4.06. | Distributions | 18 |
| Section 4.07. | Reserve Fund | 19 |
| Section 4.08. | Yield Supplement Account | 20 |
| Section 4.09. | Net Deposits | 20 |
| Section 4.10. | Statements to Securityholders | 20 |
| ARTICLE Five | THE SELLER | 21 |
| Section 5.01. | Representations of Seller | 21 |
| Section 5.02. | Liability of Seller; Indemnities | 22 |
| Section 5.03. | Merger, Consolidation or Assumption of the Obligations of Seller; Certain Limitations | 23 |
| Section 5.04. | Limitation on Liability of Seller and Others | 23 |
| Section 5.05. | Seller May Own Notes | 23 |
| ARTICLE Six | THE SERVICER | 23 |
| Section 6.01. | Representations of Servicer | 23 |
| Section 6.02. | Indemnities of Servicer | 25 |
| Section 6.03. | Merger, Consolidation or Assumption of the Obligations of Servicer | 26 |
| Section 6.04. | Limitation on Liability of Servicer and Others | 26 |
| Section 6.05. | AHFC Not to Resign as Servicer | 26 |
| ARTICLE Seven | SERVICER DEFAULTS | 27 |
| Section 7.01. | Servicer Defaults | 27 |
| Section 7.02. | Appointment of Successor Servicer | 28 |
| -ii- |
Table of Contents
(continued)
| Page | ||
| Section 7.03. | Notification of Servicer Termination | 29 |
| Section 7.04. | Waiver of Past Defaults | 29 |
| Section 7.05. | Repayment of Advances | 29 |
| ARTICLE Eight | TERMINATION | 29 |
| Section 8.01. | Optional Purchase of All Receivables | 29 |
| ARTICLE Nine | MISCELLANEOUS | 31 |
| Section 9.01. | Amendment | 31 |
| Section 9.02. | Protection of Title to Trust | 32 |
| Section 9.03. | Notices | 34 |
| Section 9.04. | Assignment | 34 |
| Section 9.05. | Limitations on Rights of Others | 34 |
| Section 9.06. | Severability | 34 |
| Section 9.07. | Separate Counterparts | 34 |
| Section 9.08. | Headings | 35 |
| Section 9.09. | Governing Law; Submission to Jurisdiction; Waiver of Jury Trial | 35 |
| Section 9.10. | Nonpetition Covenants | 35 |
| Section 9.11. | Limitation of Liability of Owner Trustee and Indenture Trustee | 36 |
| Section 9.12. | Third-Party Beneficiary | 36 |
| Section 9.13. | Confidentiality | 36 |
| Section 9.14. | Federal Tax Treatment | 37 |
| Section 9.15. | Intent of the Parties; Reasonableness | 37 |
| Section 9.16. | Cooperation with Voting | 37 |
| -iii- |
| APPENDICES | |||
| Appendix A | - | Definitions | A-1 |
| SCHEDULES | |||
| Schedule A | - | Addresses for Notices | A-1 |
| EXHIBITS | |||
| Exhibit A | - | Form of Redemption Notice | A-1 |
| Exhibit B | - | Form of Officer’s Certificate | B-1 |
| Exhibit C | - | Form of Annual Certification | C-1 |
| Exhibit D | - | Servicing Criteria to be Addressed In Assessment of Compliance | D-1 |
| -iv- |
This Sale and Servicing Agreement, dated May 30, 2018 is among American Honda Receivables LLC, a Delaware limited liability company (“AHR” or, in its capacity as Seller, the “Seller”), American Honda Finance Corporation, a California corporation (“AHFC” or, in its capacity as Servicer, the “Servicer” and in its capacity as seller under the Receivables Purchase Agreement, the “RPA Seller”), and Honda Auto Receivables 2018-2 Owner Trust, a Delaware statutory trust, as Issuer (the “Issuer”).
WHEREAS the Issuer desires to purchase from the Seller a portfolio of receivables arising in connection with retail installment sale contracts (the “Receivables”) generated by AHFC in the ordinary course of its business, which Receivables have been sold by AHFC to AHR;
WHEREAS, AHR is willing to sell the Receivables to the Issuer pursuant to the terms hereof; and
WHEREAS, AHFC is willing to service the Receivables pursuant to the terms hereof;
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. General Definitions. Whenever used in this Agreement, any capitalized term shall have the meaning set forth in Appendix A to this Agreement.
Section 1.02. Other Definitional Provisions. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
ARTICLE
Two
CONVEYANCE OF RECEIVABLES; CUSTODY OF RECEIVABLES FILES
Section 2.01. Conveyance of Receivables.
(a) In consideration of the Issuer’s delivery to or upon the order of the Seller of the Certificates and the net proceeds of the sale of the Notes, less an amount equal to the Reserve Fund Initial Deposit to be deposited to the Reserve Fund and the Yield Supplement Account Deposit to be deposited to the Yield Supplement Account, each on the Closing Date, the Seller does hereby sell, transfer, assign, set over and otherwise convey to the Issuer, without recourse (subject to the obligations of the Seller set forth herein), all right, title and interest of the Seller in, to and under:
(i) the Receivables and all monies due thereon or paid thereunder or in respect thereof (including proceeds of the repurchase of Receivables by the RPA Seller pursuant to Section 2.04 or the purchase of Receivables by the Servicer pursuant to Section 3.08 or 8.01) on or after the Cutoff Date;
(ii) the security interests in the Financed Vehicles;
(iii) any proceeds of any physical damage insurance policies covering the Financed Vehicles and in any proceeds of any credit life or credit disability insurance policies relating to the Receivables or the Obligors;
(iv) any proceeds of Dealer Recourse (excluding Receivables repurchased from the Issuer);
(v) the Receivables Purchase Agreement, but not the obligations of the Seller thereunder;
(vi) the right to realize upon any property (including the right to receive future Liquidation Proceeds) that shall have secured a Receivable and have been repossessed by or on behalf of the Issuer;
(vii) all funds on deposit from time to time in the Accounts, including the Reserve Fund Initial Deposit and the Yield Supplement Account Deposit, and in all investment income and proceeds thereof; and
(viii) the proceeds of any and all of the foregoing.
The Seller hereby confirms to the Issuer that, as of the Closing Date, the Seller shall have caused the portions of all related electronic records relating to the Receivables to be clearly and unambiguously marked, and shall have made the appropriate entries in its general accounting records, to indicate that such Receivables have been transferred and sold to the Issuer.
(b) The parties hereto intend that the conveyance hereunder be a sale. In the event that the conveyance hereunder is not for any reason considered a sale, the Seller hereby grants to the Issuer a first priority perfected security interest in all of its right, title and interest in, to and under the Receivables, and all other property conveyed hereunder and all proceeds of any of the foregoing, and intends that this Agreement constitute a security agreement under applicable law. Such grant is made to secure the payment of all amounts payable hereunder.
Section 2.02. Custody of Receivable Files. To assure uniform quality in servicing the Receivables and to reduce administrative costs, the Issuer hereby revocably appoints the Servicer, and the Servicer accepts such appointment, to act for the benefit of the Issuer and the Indenture Trustee as custodian of the following documents or instruments which are hereby constructively delivered to the Indenture Trustee, as pledgee of the Issuer, as of the Closing Date with respect to each Receivable:
(a) the fully executed original of the Receivable;
(b) the original credit application of each Obligor, fully executed by such Obligor on AHFC’s customary form, or on a form approved by AHFC for such application;
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(c) the original certificate of title (or evidence that such certificate of title has been applied for) or such documents that the Servicer shall keep on file, in accordance with its customary procedures, evidencing the security interest in the related Financed Vehicle; and
(d) any and all other documents that the Seller or the Servicer, as the case may be, shall keep on file, in accordance with its customary procedures, relating to such Receivable or the related Obligor or Financed Vehicle;
provided that the Servicer may appoint one or more agents to act as subcustodians of certain items contained in a Receivable File so long as the Servicer remains primarily responsible for their safekeeping.
Section 2.03. Representations and Warranties as to the Receivables.
(a) The RPA Seller has made each of the representations and warranties set forth in Exhibit A to the Receivables Purchase Agreement and has consented to the assignment by the Seller to the Issuer of the Seller’s rights with respect thereto. Such representations and warranties speak as of the respective dates set forth therein, but shall survive the sale, transfer and assignment of the Receivables to the Issuer hereunder and the pledge of such Receivables to the Indenture Trustee under the Indenture. Pursuant to Section 2.01 of this Agreement, the Seller has sold, assigned, transferred and conveyed to the Issuer, as part of the assets of the Issuer, its rights under the Receivables Purchase Agreement, including the representations and warranties of the RPA Seller therein as set forth in Exhibit A to the Receivables Purchase Agreement (upon which representations and warranties the Issuer relies in accepting the Receivables and delivering the Securities) together with all rights of the Seller with respect to any breach thereof, including the right to require the RPA Seller to repurchase Receivables in accordance with the Receivables Purchase Agreement. It is understood and agreed that the representations and warranties referred to in this Section shall survive the sale and delivery of the Receivables to the Issuer.
(b) The RPA Seller hereby agrees that the Issuer shall have the right to enforce any and all rights under the Receivables Purchase Agreement assigned to the Issuer herein, including the right to cause the RPA Seller to repurchase any Receivable with respect to which it is in breach of any of its representations and warranties set forth in Exhibit A to the Receivables Purchase Agreement, directly against the RPA Seller as though the Issuer were a party to the Receivables Purchase Agreement, and the Issuer shall not be obligated to exercise any such rights indirectly through the Seller.
(c) The Seller makes the following representations and warranties on which the Issuer shall rely in acquiring the Receivables. Such representations and warranties speak as of the execution and delivery of this Agreement and as of the Closing Date, but shall survive the sale, transfer and assignment of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee.
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(i) Title. It is the intention of the Seller that the transfer and assignment herein contemplated, taken as a whole, constitute a sale of the Receivables from the Seller to the Issuer and that the beneficial interest in and title to the Receivables not be part of the debtor’s estate in the event of the filing of a bankruptcy petition by or against the Seller under any bankruptcy law. Other than (1) the sale by the Seller to the Issuer pursuant to this Agreement and (2) the security interest granted by the Issuer to the Indenture Trustee in the Indenture, no Receivable has been sold, transferred, assigned or pledged by the Seller to any Person other than the Issuer, and no Receivable has been sold, transferred, assigned or pledged by the Issuer to any Person other than the Indenture Trustee, and no provision of a Receivable shall have been waived, except as provided in clause (h) above; immediately prior to the transfer and assignment herein contemplated, the Seller had good and marketable title to each Receivable free and clear of all Liens and rights of any other Person and immediately prior to the pledge of security interest contemplated in the Indenture, the Issuer had good and marketable title to each Receivable free and clear of all Liens and rights of any other Person; immediately upon the transfer and assignment contemplated herein, the Issuer shall have good and marketable title to each Receivable, free and clear of all Liens and rights of any other Person and immediately upon the pledge of the security interest contemplated in the Indenture, the Indenture Trustee will have a valid and continuing security interest in the Receivables; and both the transfer and assignment herein contemplated and the pledge of security interest contemplated by the Indenture have been perfected under the applicable UCC.
(ii) All Filings Made. Both the Seller and the Issuer, respectively, have caused or will have caused, or have taken or will take, within ten (10) days of the Closing Date, all steps necessary, including the filing of all appropriate financing statements (including UCC filings) necessary in the appropriate jurisdictions under the applicable law, to give the Issuer a first priority perfected security interest in the Receivables, and to give the Indenture Trustee a first priority perfected security interest therein, shall have been made. Except as contemplated hereby or in the Indenture, as applicable, neither the Seller nor the Issuer has authorized the filing of or is aware of any financing statements with respect to the Receivables, other than such financing statements that have been terminated on or prior to the Closing Date.
(iii) Security Interest. This Agreement creates a valid and continuing security interest (as defined in the UCC) in the Receivables in favor of the Issuer, which security interest is prior to all other Liens, and is enforceable as such against creditors of and purchasers from the Seller.
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Section 2.04. Repurchase of Receivables Upon Breach. In the event of a breach of any representation or warranty set forth on Exhibit A to the Receivables Purchase Agreement which materially and adversely affects the interests of the Issuer or the Securityholders and unless the breach shall have been cured by the last day of the second Collection Period following the Collection Period in which the discovery of the breach is made or notice is received, as the case may be (or, at the option of the RPA Seller, the last day in the first Collection Period following the Collection Period in which such discovery is made), the RPA Seller shall repurchase such Receivable from the Issuer. On the Business Day before the related Payment Date, the RPA Seller shall remit the Warranty Purchase Payment in respect of such Receivable to the Collection Account in the manner specified in Section 4.05. Upon any such repurchase, the Issuer shall, without further action, be deemed to transfer, assign, set-over and otherwise convey to the RPA Seller, all right, title and interest of the Issuer in, to and under such repurchased Receivable, all monies due or to become due with respect thereto and all proceeds thereof. The Issuer and the Trustees shall execute such documents and instruments of transfer and assignment and take such other actions as shall be reasonably requested by the RPA Seller to effect the conveyance of such Receivable pursuant to this Section. The sole remedy of the Issuer, the Trustees and the Securityholders with respect to a breach of the RPA Seller’s representations and warranties pursuant to Exhibit A to the Receivables Purchase Agreement shall be to require the RPA Seller to repurchase the related Receivable pursuant to this Section. Neither the Owner Trustee nor the Indenture Trustee shall have any duty to conduct an affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to Section 2.04 or the eligibility of any Receivables for purposes of this Agreement.
Section 2.05. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer, in its capacity as custodian, shall hold the Receivable Files for the benefit of the Issuer and maintain such accurate and complete accounts, records and computer systems pertaining to each Receivable File as shall enable the Issuer to comply with this Agreement. In performing its duties as custodian, the Servicer shall act with reasonable care, using that degree of skill and attention that it exercises with respect to the receivable files of comparable automobile receivables (including light-duty trucks) that the Servicer services for itself or others. The Servicer shall conduct, or cause to be conducted, periodic examinations of the files of all receivables owned or serviced by it which shall include the Receivable Files held by it under this Agreement, and of the related accounts, records and computer systems, in such a manner as shall enable the Issuer or the Indenture Trustee to verify the accuracy of the Servicer’s record keeping. The Servicer shall promptly report to the Issuer and the Indenture Trustee any failure on its part to hold the Receivable Files and maintain its accounts, records and computer systems as herein provided and promptly take appropriate action to remedy any such failure. Nothing herein shall be deemed to require an initial review or any periodic review of the Receivable Files by the Issuer or the Indenture Trustee.
(b) Maintenance of and Access to Records. The Servicer shall maintain each Receivable File solely in its capacity as Servicer at one of its (or its agents’) offices or the offices of one of its custodians in the United States or at such other office as shall be specified to the Issuer and the Indenture Trustee in writing upon the request of such party. The Servicer shall make available to the Issuer and the Indenture Trustee or its duly authorized representatives, attorneys or auditors the Receivable Files and the related accounts, records and computer systems maintained by the Servicer at such times as the Issuer and the Indenture Trustee shall reasonably instruct.
(c) Release of Documents. Upon instruction from the Indenture Trustee, the Servicer shall release any document in the Receivable Files to the Indenture Trustee or its agent or designee, as the case may be, at such place or places as the Indenture Trustee may designate, as soon as practicable. The Servicer shall not be responsible for any loss occasioned by the failure of the Indenture Trustee to return any document or any delay in doing so.
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Section 2.06. [Reserved].
Section 2.07. Indemnification by Custodian. The Servicer, as custodian of the Receivable Files, shall fully indemnify and hold harmless the Issuer and the Trustees for any and all liabilities, obligations, losses, compensatory damages, payments, costs or expenses of any kind whatsoever (including any reasonable legal fees and expenses incurred by any Trustee in connection with the enforcement of any indemnification or other obligation of the Servicer, as custodian of the Receivable Files) that may be imposed on, incurred or asserted against the Issuer and the Trustees as the result of any improper act or omission in any way relating to the maintenance and custody of the Receivable Files by the Servicer, as custodian; provided, however, that the Servicer shall not be liable for any portion of any such amount resulting from the willful misfeasance, bad faith or negligence of the Indenture Trustee or the willful misfeasance, bad faith or gross negligence (except for errors in judgment) of the Owner Trustee or of the Delaware Trustee.
Section 2.08. Effective Period and Termination. The Servicer’s appointment as custodian of the Receivable Files shall become effective as of the Cutoff Date and shall continue in full force and effect until terminated pursuant to this Section. If the Servicer shall resign as Servicer pursuant to Section 6.05 or if all of the rights and obligations of the Servicer have been terminated pursuant to Section 7.02, the appointment of the Servicer as custodian of the Receivable Files shall be terminated without further action by the Indenture Trustee or by the Noteholders. The Indenture Trustee or, with the written consent of the Indenture Trustee, the Owner Trustee may terminate the Servicer’s appointment as custodian of the Receivable Files with cause at any time immediately upon written notification to the Servicer and, without cause, upon thirty (30) days’ prior written notification by the Servicer. As soon as practicable, but in no event later than thirty (30) days immediately following the effective date of any termination of such appointment, the Servicer shall deliver the Receivable Files to the Indenture Trustee or its agent at such place or places as the Indenture Trustee may reasonably designate. Notwithstanding the termination of the Servicer as custodian of the Receivable Files, the Indenture Trustee agrees that upon any such termination, the Indenture Trustee shall provide, or cause its agent to provide, access to the Receivable Files to the Servicer for the purpose of carrying out its duties and responsibilities with respect to the servicing of the Receivables pursuant to this Agreement.
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ARTICLE
Three
ADMINISTRATION AND SERVICING OF RECEIVABLES
Section 3.01. Duties of Servicer. The Servicer, for the benefit of the Issuer (to the extent provided herein), shall manage, service, administer and make collections on the Receivables (other than Administrative Receivables and Warranty Receivables) with reasonable care, using that degree of skill and attention that the Servicer exercises with respect to all comparable automobile receivables (including light-duty trucks) that it services for itself or others. The Servicer’s duties shall include collecting and posting of all payments, responding to inquiries of Obligors or by federal, state or local government authorities with respect to the Receivables, investigating delinquencies, sending payment statements to Obligors, reporting tax information to Obligors in accordance with its customary practices, policing the collateral, accounting for collections and furnishing monthly and annual statements to the Trustees with respect to distributions, generating federal income tax information, making Advances and performing the other duties specified herein. The Servicer shall follow its customary standards, policies and procedures and shall have full power and authority, acting alone, to do any and all things in connection with such managing, servicing, administering and collecting that it may deem necessary or desirable. Without limiting the generality of the foregoing, the Servicer shall be authorized and empowered to execute and deliver, on behalf of itself, the Issuer, the Trustees, the Securityholders or any of them, any and all instruments of satisfaction or cancellation, or of partial or full release or discharge and all other comparable instruments, with respect to the Receivables and the Financed Vehicles. The Servicer is hereby authorized to commence, in its own name or in the name of the Issuer, a legal proceeding to enforce a Defaulted Receivable pursuant to Section 3.04 or to commence or participate in a legal proceeding (including without limitation a bankruptcy proceeding) relating to or involving a Receivable, including a Defaulted Receivable. If the Servicer commences or participates in such a legal proceeding in its own name, the Issuer shall thereupon be deemed to have automatically assigned, solely for the purpose of collection on behalf of the party retaining an interest in such Receivable, such Receivable and the other property conveyed to the Issuer pursuant to Section 2.01 with respect to such Receivable to the Servicer for purposes of commencing or participating in any such proceeding as a party or claimant, and the Servicer is authorized and empowered by the Issuer to execute and deliver in the Servicer’s name any notices, demands, claims, complaints, responses, affidavits or other documents or instruments in connection with any such proceeding. If in any enforcement suit or legal proceeding it shall be held that the Servicer may not enforce a Receivable on the grounds that it shall not be a real party in interest or a holder entitled to enforce such Receivable, the Owner Trustee on behalf of the Issuer shall, at the Servicer’s expense and written direction, take steps to enforce such Receivable, including bring suit in its name or the name of the Issuer, the Indenture Trustee, the Noteholders or the Certificateholders. The Owner Trustee on behalf of the Issuer shall furnish the Servicer with any powers of attorney and other documents and take any other steps which the Servicer may deem necessary or appropriate to enable the Servicer to carry out its servicing and administrative duties hereunder.
Section 3.02. Collection of Receivable Payments. The Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Receivables as and when the same shall become due, and shall follow such collection procedures as it follows with respect to all comparable automobile receivables (including light-duty trucks) that it services for itself or others. The Servicer shall be authorized to grant extensions, rebates or adjustments on a Receivable without the prior consent of the Issuer. If, as a result of the extending of payments in accordance with the customary servicing standards of the Servicer, any Receivable will be outstanding later than the Final Scheduled Maturity Date of the latest maturing class of Notes, the Servicer shall be obligated to repurchase such Receivable pursuant to Section 3.08. Notwithstanding the foregoing, extensions or modifications of the payment schedule of a Receivable can be made only in accordance with the customary servicing procedures of the Servicer, as such customary servicing procedures may be changed from time to time. The Servicer may, in accordance with its customary servicing procedures, waive any prepayment charge, late payment charge or any other fees that may be collected in the ordinary course of servicing the Receivables.
Section 3.03. [Reserved]
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Section 3.04. Realization Upon Receivables. On behalf of the Issuer, the Servicer shall use its best efforts, consistent with its customary servicing procedures, to repossess or otherwise comparably convert the ownership of any Financed Vehicle that it has reasonably determined should be repossessed or otherwise converted following a default under the Receivable secured by the Financed Vehicle. The Servicer shall follow such practices and procedures as it shall deem necessary or advisable and as shall be customary and usual in its servicing of automobile receivables (including light-duty trucks), which practices and procedures may include reasonable efforts to realize upon any Dealer Recourse, selling the related Financed Vehicle at public or private sale and other actions by the Servicer in order to realize upon such a Receivable. The Servicer shall be entitled to recover its reasonable Liquidation Expenses with respect to each Defaulted Receivable, which are not to exceed the related Net Liquidation Proceeds with respect to each such Defaulted Receivable; provided, however, that the Servicer shall not be obligated to take actions to realize upon any Defaulted Receivables unless, in its reasonable opinion, Liquidation Proceeds will exceed Liquidation Expenses. All Net Liquidation Proceeds realized in connection with any such action with respect to a Receivable shall be deposited by the Servicer in the Collection Account in the manner specified in Section 4.02(a).
Section 3.05. Maintenance of Physical Damage Insurance Policies. The Servicer shall, in accordance with its customary servicing procedures and underwriting standards, require that each Obligor shall have obtained physical damage insurance covering each Financed Vehicle as of the origination of the related Receivable.
Section 3.06. Maintenance of Security Interests in Financed Vehicles. The Servicer is hereby authorized to and shall, in accordance with its customary servicing procedures and at its own expense, take such steps as are necessary to maintain perfection of and/or reperfect the security interest created by each Receivable in the related Financed Vehicle, including in the event of the relocation of a Financed Vehicle or for any other reason. In the event that the assignment of a Receivable to the Issuer is insufficient, without a notation on the related Financed Vehicle’s certificate of title, to grant to the Issuer a first priority perfected security interest in the related Financed Vehicle, the Servicer hereby agrees to serve as the agent of the Issuer for the purpose of perfecting the security interest of the Issuer in such Financed Vehicle and agrees that the Servicer’s listing as the secured party on the certificate of title is solely in its capacity as agent of the Issuer.
Section 3.07. Covenants of Servicer. The Servicer makes the following covenants on which the Issuer shall rely in accepting the Receivables in trust pursuant to Section 2.01:
(a) Liens in Force. Except as otherwise contemplated by this Agreement, the Servicer shall not release in whole or in part any Financed Vehicle from the security interest securing the related Receivable.
(b) No Impairment. The Servicer shall do nothing to impair the rights of the Issuer in the Receivables.
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(c) No Amendments. Subject to Section 3.02, the Servicer shall not amend or otherwise modify any Receivable such that the total number of Scheduled Payments is extended beyond the Final Scheduled Maturity Date, or either the Amount Financed or the APR is altered, unless it is required to take the action by law or court order.
Section 3.08. Purchase of Receivables Upon Breach. Upon a breach of any of the covenants of the Servicer set forth in Section 3.07 that materially and adversely affects the interests of the Issuer or the Securityholders in any Receivable, or if an improper extension, rescheduling or modification of a Receivable is made by the Servicer as described in Section 3.02, and such breach or impropriety shall not have been cured in all material respects, the Servicer shall, as of the last day of the second Collection Period following the Collection Period in which it discovers such breach (or, at the Servicer’s election, the last day of the first Collection Period following the Collection Period in which it discovers such breach) purchase from the Issuer such Receivable and remit on the related Payment Date the Administrative Purchase Payment to the Collection Account in the manner specified in Section 4.05. Upon such deposit of the Administrative Purchase Payment, the Servicer shall for all purposes of this Agreement be deemed to have released all claims for reimbursement of Outstanding Advances made in respect of such Receivable. The sole remedy of the Issuer, the Trustees or the Securityholders against the Servicer with respect to a breach pursuant to Section 3.02 or 3.07 shall be to require the Servicer to purchase the related Receivables pursuant to this Section, except as otherwise provided in Section 6.02. Neither the Owner Trustee nor the Indenture Trustee shall have any duty to conduct any affirmative investigation as to the occurrence of any condition requiring the repurchase of any Receivable pursuant to this Section.
Section 3.09. Total Servicing Fee; Payment of Certain Expenses by Servicer. As compensation for the performance of its obligations hereunder, the Servicer shall be entitled to receive on each Payment Date the Total Servicing Fee; provided, the Servicing Fee in respect of a Collection Period (together with any portion of the Servicing Fee that remains unpaid from prior Payment Dates) will be paid at the beginning of that Collection Period out of collections of interest on the Receivables for such Collection Period. The Basic Servicing Fee in respect of a Collection Period shall be calculated based on a 360 day year comprised of twelve 30-day months. Except to the extent otherwise provided herein, the Servicer shall be required to pay all expenses incurred by it in connection with its activities under this Agreement (including taxes imposed on the Servicer and expenses incurred in connection with the preparation of reports and fees to independent accountants).
Section 3.10. Servicer’s Certificate. On or before each Determination Date, the Servicer will deliver to the Trustees and the Administrator (which the Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement) a servicing report containing all information necessary to make the payments, transfers and distributions pursuant to Sections 4.05, 4.06 and 4.07 hereof and Section 8.02(d) of the Indenture for the related Payment Date, together with the written statements to be furnished pursuant to Section 4.10 hereof and Section 6.06 of the Indenture (such report, the “Servicer’s Certificate”) for that Payment Date and the related Collection Period. A Responsible Person of the Servicer will certify that the information in the Servicer’s Certificate is accurate, to the best of his/her knowledge, in all material respects.
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Section 3.11. Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustees and the Administrator, on or before ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer, commencing with the fiscal year ended March 31, 2019, an Officer’s Certificate of the Servicer (which the Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement), stating that (i) a review of the activities of the Servicer during the preceding 12-month period ended March 31 (or, if applicable, such shorter period in the case of the first such Officer’s Certificate) and of its performance under this Agreement has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled all its obligations under this Agreement throughout such period in all material respects, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof.
(b) The Servicer shall deliver to the Trustees and the Administrator, promptly after having obtained knowledge thereof, an Officer’s Certificate (which the Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement) specifying the nature and status of any event which with the giving of notice or lapse of time, or both, would become a Servicer Default.
Section 3.12. Assessment of Compliance and Annual Accountants’ Report.
(a) On or before ninety (90) days after the end of each fiscal year for which a report on Form 10-K is required to be filed with the Commission by or on behalf of the Issuer, commencing with the fiscal year ended March 31, 2019, the Servicer shall:
(i) deliver to the Issuer, the Owner Trustee and the Administrator a report (which the Administrator shall make available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement) regarding the Servicer’s assessment of compliance with the Servicing Criteria during the immediately preceding calendar year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and signed by an authorized officer of the Servicer, and shall address each of the Servicing Criteria specified in Exhibit D hereto delivered to the Issuer and the Administrator concurrently with the execution of this Agreement;
(ii) deliver to the Issuer, the Owner Trustee and the Administrator a report of a registered public accounting firm reasonably acceptable to the Issuer and the Administrator that attests to, and reports on, the assessment of compliance made by the Servicer and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act;
(iii) use its best efforts to cause each Subservicer and each Subcontractor determined by the Servicer to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Issuer and the Administrator an assessment of compliance and accountants’ attestation as and when provided in paragraphs (i) and (ii) of this Section;
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(iv) use its best efforts to cause each Subservicer and Subcontractor determined by the Servicer to be a “servicer” within the meaning of Item 1108(a)(2)(i) through (iii) of Regulation AB, to deliver to the Issuer, the Owner Trustee and the Administrator a statement of compliance as and when provided in Section 3.11(a); and
(v) deliver to the Issuer, the Owner Trustee and the Administrator and any other Person that will be responsible for signing the certification (a “Sarbanes Certification”) required by Rules 13a-14(d) and 15d-14(d) under the Exchange Act (pursuant to Section 302 of the Sarbanes-Oxley Act of 2002) on behalf of an asset-backed issuer with respect to a securitization transaction a certification in the form attached hereto as Exhibit C.
The Servicer acknowledges that the parties identified in clause (a)(v) above may rely on the certification provided by the Servicer pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. The Administrator, acting on behalf of the Issuer, will not request delivery of a certification under clause (a)(v) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10-K with respect to an Issuer whose asset pool includes the Receivables.
(b) Each assessment of compliance provided by a Subservicer pursuant to Section 3.12(a)(iii) shall address each of the Servicing Criteria specified on a certification to be delivered to the Servicer, Issuer, the Owner Trustee and the Administrator on or prior to the date of such appointment. An assessment of compliance provided by a Subcontractor pursuant to Section 3.12(a)(iii) need not address any elements of the Servicing Criteria other than those specified by the Servicer and the Issuer on the date of such appointment.
Section 3.13. Access to Certain Documentation and Information Regarding Receivables. At the request of the RPA Seller, the Servicer shall provide to the Trustees and the Asset Representations Reviewer reasonable access to the documentation regarding the Receivables including, but not limited to, any information required to be provided by the Servicer pursuant to Section 2.03 of the Receivables Purchase Agreement. The Servicer shall provide such access to any Securityholder only in such cases where a Securityholder is required by applicable statutes or regulations to review such documentation. In each case, such access shall be afforded without charge but only upon reasonable request and during normal business hours at the respective offices of the Servicer. Nothing in this Section shall derogate from the obligation of the Servicer to observe any applicable law prohibiting disclosure of information regarding the Obligors, and the failure of the Servicer to provide access as provided in this Section as a result of such obligation shall not constitute a breach of this Section.
Section 3.14. [Reserved].
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Section 3.15. Reports to Securityholders and Rating Agencies.
(a) At the expense of the Issuer, the Indenture Trustee shall provide to any Note Owner, and the Owner Trustee shall provide to any Certificateholder, who so requests in writing a copy of (i) any Servicer’s Certificate, (ii) any annual statement as to compliance described in Section 3.1l(a), (iii) any assessment of compliance and annual accountants’ report described in Section 3.12, (iv) any statement to Securityholders pursuant to Section 4.10, (v) the Trust Agreement, (vi) the Indenture or (vii) this Agreement (without Exhibits). In addition, such statements may be posted by the Indenture Trustee on its website at http://www.sf.citidirect.com. The Indenture Trustee or the Owner Trustee, as applicable, may require such Securityholder or Note Owner to pay a reasonable sum to cover the cost of the Trustee’s complying with such request.
(b) The Servicer shall forward to the Administrator a copy of each (i) Servicer’s Certificate, (ii) annual statement as to compliance described in Section 3.11(a), (iii) Officer’s Certificate of the Servicer described in Section 3.11(b), (iv) any assessment of compliance and annual accountants’ report pursuant to Section 3.12, (v) statement to Securityholders pursuant to Section 4.10 and (vi) other report it may receive pursuant to this Agreement, the Trust Agreement or the Indenture; and in the case of each of (i) through (vi), the Administrator shall make a copy available to each Rating Agency in accordance with Section 1.02(c) of the Administration Agreement.
Section 3.16. Appointment of Subservicer or Subcontractor.
(a) The Servicer may at any time appoint a subservicer to perform all or any portion of its obligations as Servicer hereunder if the Administrator and the Indenture Trustee has received ten (10) days prior written notice of the Servicer’s intention to do so and such appointment has satisfied the Rating Agency Condition; provided, however, that the Servicer shall remain obligated and be liable to the Issuer, the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders and the Noteholders for the servicing and administering of the Receivables in accordance with the provisions hereof without diminution of such obligation and liability by virtue of the appointment of such subservicer and to the same extent and under the same terms and conditions as if the Servicer alone were servicing and administering the Receivables. The fees and expenses of the subservicer shall be as agreed between the Servicer and its subservicer from time to time, and none of the Issuer, the Owner Trustee, the Delaware Trustee, the Indenture Trustee, the Certificateholders or the Noteholders shall have any responsibility therefor.
(b) The Servicer shall cause any Subservicer used by the Servicer (or by any Subservicer) for the benefit of the Issuer to comply with the reporting and compliance provisions of this Agreement to the same extent as if such Subservicer were the Servicer, and to provide the information required with respect to such Subservicer as is required to file all required reports with the Commission. The Servicer shall be responsible for obtaining from each Subservicer and delivering to the Issuer and the Administrator any servicer compliance statement required to be delivered by such Subservicer under Section 3.11, any assessment of compliance and attestation required to be delivered by such Subservicer under Section 3.12 and any certification required to be delivered to the Person that will be responsible for signing the Sarbanes Certification under Section 3.12(a)(iv) as and when required to be delivered.
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(c) The Servicer shall promptly upon request provide to the Issuer or the Administrator, acting on behalf of the Issuer, a written description (in form and substance satisfactory to the Issuer and the Administrator) of the role and function of each Subcontractor utilized by the Servicer or any Subservicer, specifying (i) the identity of each such Subcontractor, (ii) which, if any, of such Subcontractors are “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and (iii) which, if any, elements of the Servicing Criteria will be addressed in assessments of compliance provided by each Subcontractor identified pursuant to clause (ii) of this paragraph.
As a condition to the utilization of any Subcontractor determined to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, the Servicer shall cause any such Subcontractor used by the Servicer (or by any Subservicer) for the benefit of the Issuer and the Depositor to comply with the reporting and compliance provisions of Section 3.12(a) of this Agreement to the same extent as if such Subcontractor were the Servicer. The Servicer shall be responsible for obtaining from each Subcontractor and delivering to the Issuer and the Administrator any assessment of compliance and attestation required to be delivered by such Subcontractor, in each case as and when required to be delivered.
Section 3.17. Information to be Provided by the Servicer.
(a) At the request of the Administrator, acting on behalf of the Issuer, for the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Servicer shall (or shall cause each Subservicer to) (i) notify the Issuer and the Administrator in writing of any material litigation or governmental proceedings pending against the Servicer or any Subservicer and (ii) provide to the Issuer and the Administrator a description of such proceedings.
(b) As a condition to the succession to the Servicer or any Subservicer as servicer or subservicer under this Agreement by any Person (i) into which the Servicer or such Subservicer may be merged or consolidated, or (ii) which may be appointed as a successor to the Servicer or any Subservicer, the Servicer shall provide to the Issuer, the Administrator and the Depositor, at least ten (10) Business Days prior to the effective date of such succession or appointment, (x) written notice to the Issuer and the Administrator of such succession or appointment and (y) in writing and in form and substance reasonably satisfactory to the Issuer and the Administrator, all information reasonably requested by the Issuer or the Administrator, acting on behalf of the Issuer, in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.
(c) In addition to such information as the Servicer, as servicer, is obligated to provide pursuant to other provisions of this Agreement, if so requested by the Issuer or the Administrator, acting on behalf of the Issuer, the Servicer shall provide such information regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB. Such information shall be provided concurrently with the monthly reports otherwise required to be delivered by the Servicer under this Agreement, commencing with the first such report due not less than ten (10) Business Days following such request.
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Section 3.18. Remedies.
(a) The Servicer shall be liable to the Issuer, the Administrator and the Depositor for any monetary damages incurred as a result of the failure by the Servicer, any Subservicer or any Subcontractor to deliver any information, report, certification, attestation, accountants’ letter or other material when and as required under this Article III, including any failure by the Servicer to identify any Subcontractor “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, and shall reimburse the applicable party for all costs reasonably incurred by each such party in order to obtain the information, report, certification, accountants’ letter or other material not delivered as required by the Servicer, any Subservicer, or any Subcontractor.
(b) The Seller shall promptly reimburse the Issuer and the Administrator for all reasonable expenses incurred by the Issuer or Administrator as such are incurred, in connection with the termination of the Servicer as servicer and the transfer of servicing of the Receivables to a Successor Servicer. The provisions of this paragraph shall not limit whatever rights the Issuer or Administrator may have under other provisions of this Agreement or otherwise, whether in equity or at law, such as an action for damages, specific performance or injunctive relief.
ARTICLE
Four
DISTRIBUTIONS; RESERVE FUND;
STATEMENTS TO SECURITYHOLDERS
Section 4.01. Establishment of Accounts.
(a) The Servicer shall establish and maintain an Eligible Account with the Securities Intermediary in the name of the Indenture Trustee for the benefit of (i) the Securityholders (the “Collection Account”), (ii) the Noteholders (the “Note Distribution Account”), (iii) the Securityholders (the “Reserve Fund”) and (iv) the Securityholders (the “Yield Supplement Account”), in each case, bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the related Securityholders. Except as otherwise provided in this Agreement, in the event that the Indenture Trustee is no longer an Eligible Institution, the Servicer shall, with the assistance of the Indenture Trustee as necessary, cause the Accounts to be moved to an Eligible Institution.
(b) To the extent permitted by applicable laws, rules and regulations, all amounts held in the Collection Account, the Reserve Fund and the Yield Supplement Account shall be either invested by the Securities Intermediary in Eligible Investments selected in writing by the Servicer or maintained in cash. No amounts held in the Note Distribution Account will be invested. Earnings on investment of funds in the Collection Account (net of losses and investment expenses) shall be paid to the Servicer as part of the Supplemental Servicing Fee and any losses and investment expenses shall be charged against the funds on deposit in the related Account.
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(i) Except as otherwise provided in Section 4.01(b), the Indenture Trustee shall possess all right, title and interest in all funds on deposit from time to time in the Accounts and in all proceeds thereof (including all income thereon) and all such funds, investments, proceeds and income shall be part of the Owner Trust Estate. The Accounts shall be under the sole dominion and control of the Indenture Trustee for the benefit of the Noteholders or the Securityholders, as the case may be.
(ii) Notwithstanding anything else contained herein, the Servicer agrees that the Reserve Fund, the Yield Supplement Account and the Collection Account will be established only with an Eligible Institution which agrees substantially as follows: (A) it will comply with Entitlement Orders related to such account issued by the Indenture Trustee without further consent by the Servicer or Issuer; (B) until termination of this Agreement, it will not enter into any other agreement related to such account pursuant to which it agrees to comply with Entitlement Orders of any Person other than the Indenture Trustee; (C) all Account Property delivered or credited to it in connection with such account and all proceeds thereof will be promptly credited to such account; (D) it will treat all Account Property as Financial Assets; and (E) all Account Property will be physically delivered (accompanied by any required endorsements) to, or credited to an account in the name of, the Eligible Institution maintaining the related Account in accordance with such Eligible Institution’s customary procedures such that such Eligible Institution establishes a Security Entitlement in favor of the Indenture Trustee with respect thereto over which the Indenture Trustee (or such other Eligible Institution) has Control.
(iii) The Servicer shall have the power, revocable by the Indenture Trustee or by the Owner Trustee with the consent of the Indenture Trustee, to instruct the Indenture Trustee to make withdrawals and payments from the Accounts for the purpose of permitting the Servicer or the Owner Trustee to carry out its respective duties hereunder or under the Trust Agreement or permitting the Indenture Trustee to carry out its duties under the Indenture.
Section 4.02. Collections.
(a) The Servicer shall remit daily to the Collection Account all payments received from or on behalf of the Obligors on or in respect of the Receivables and all Net Liquidation Proceeds within two (2) Business Days after receipt thereof, in each case, minus (i) an amount equal to amounts previously deposited by the Servicer in the Collection Account but later determined by the Servicer in its reasonable opinion to have resulted from mistaken deposits or postings, which amounts have not been previously reimbursed to the Servicer, and (ii) any prepayment charge and other administrative fees and expenses or similar charges which shall be retained by the Servicer and Supplemental Servicing Fees; provided, that any payments received in respect of an Obligor that are not immediately identifiable as such, shall not be deemed “received” until such time as the Obligor is identified and the payment is allocated as such, in accordance with the Servicer’s customary servicing practices.
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(b) Notwithstanding the provisions of clause (a) above and subject to and upon compliance with the terms and conditions set forth in this clause (b), the Servicer may be permitted to make remittances of collections on a less frequent basis than that specified in clause (a) above for so long as such terms and conditions are fulfilled. Accordingly, the Servicer will be permitted to remit collections referred to in clause (a) above to the Collection Account in immediately available funds on each Deposit Date for so long as (i) (A) the Servicer shall be AHFC, (B) no Servicer Default or Event of Default shall have occurred and be continuing and not have been waived in accordance with the Basic Documents, and (C) (x) the Required Servicer Rating is satisfied, or (y) if the Required Servicer Rating is not satisfied, the Servicer shall have provided the Trustees written confirmation from each Rating Agency that the proposed alternative collections remittance schedule will not result in the reduction of withdrawal of the rating then assigned to any Class of Notes. The Indenture Trustee shall not be deemed to have knowledge of any event or circumstance under clause (i)(B) above that would require daily remittance by the Servicer to the Collection Account unless a Responsible Officer has received notice of such event or circumstance from the Seller or the Servicer in an Officer’s Certificate, from Securityholders as provided in Section 7.01. Notwithstanding the foregoing, immediately following (x) non-compliance with any of clause (A), (B) or (C) above, or (y) the occurrence of an event specified in Section 7.01(c) (notwithstanding any period of grace contained in such clause), the Servicer shall remit all collections referred to in clause (a) above to the Collection Account on a daily basis within two (2) Business Days of receipt thereof in accordance with clause (a) above. For purposes of this Article the phrase “payments made on behalf of Obligors” shall mean payments made by Persons other than the Seller or the Servicer.
Section 4.03. Application of Collections. On each Payment Date, all collections for the related Collection Period shall be applied by the Servicer as follows:
(a) With respect to each Receivable (other than an Administrative Receivable or a Warranty Receivable), payments made by or on behalf of the Obligor which are not Supplemental Servicing Fees shall be applied first to reimburse the Servicer for Outstanding Advances made with respect to such Receivable (each such payment, an “Overdue Payment”). Next, the amount of any payment in excess of Supplemental Servicing Fees and Outstanding Advances with respect to such Receivable shall be applied to the Scheduled Payment with respect to such Receivable. The amount of such payment remaining after the applications described in the two preceding sentences shall be applied to prepay the principal balance of such Receivable.
(b) With respect to each Administrative Receivable and Warranty Receivable, payments made by or on behalf of the Obligor shall be applied in the same manner. A Warranty Purchase Payment shall be applied to reduce Outstanding Advances and such Warranty Purchase Payment or an Administrative Purchase Payment, as applicable, shall then be applied to the Scheduled Payment, in each case to the extent that the payments by the Obligor shall be insufficient, and then to prepay the unpaid principal balance of such Receivable in full.
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Section 4.04. Advances.
(a) As of the close of business on the last day of a Collection Period, if the payments during such Collection Period by or on behalf of the Obligor on or in respect of a Receivable (other than an Administrative Receivable or a Warranty Receivable) after application under Section 4.03(a) shall be less than the Scheduled Payment, whether as a result of any extension granted to the Obligor or otherwise, then the Servicer may, at its option, advance to the Trust an amount equal to the product of the principal balance of such Receivable as of the first day of such Collection Period and one-twelfth of its APR minus the amount of interest actually received on such Receivable during such Collection Period (each, an “Advance”). If the calculation above results in a negative number, an amount equal to such negative amount shall be paid to the Servicer in reimbursement of any Outstanding Advances in respect of such Receivables. In addition, in the event that a Receivable becomes a Liquidated Receivable, the amount of accrued and unpaid interest thereon (but not including interest for the current Collection Period) shall, up to the amount of Outstanding Advances in respect of such Receivables in respect thereof, be withdrawn from the Collection Account and paid to the Servicer in reimbursement of such Outstanding Advances. No Advances will be made with respect to the Principal Balance of Receivables or with respect to Defaulted Receivables. Notwithstanding the foregoing, the Servicer shall not be required to make any Advance. On each Deposit Date, the Servicer will deposit into the Collection Account an amount equal to all Advances to be made, at its option, in respect of the related Collection Period.
(b) The Servicer shall be entitled to reimbursement for Outstanding Advances, without interest, with respect to a Receivable from the following sources with respect to such Receivable: (i) subsequent payments made by or on behalf of the related Obligor, (ii) Liquidation Proceeds, (iii) the Administrative Purchase Payment and (iv) the Warranty Purchase Payment.
(c) To the extent that during any Collection Period any funds described above in Section 4.04(b) with respect to a Receivable as to which the Servicer previously has made an unreimbursed Advance are received by the Issuer or the Servicer, and the Servicer determines that any Outstanding Advances (other than in respect of an interest shortfall due to an Excess Payment) with respect to such Receivable are unlikely to be recovered from payments made on or with respect to such Receivable (each, a “Nonrecoverable Advance”), then, on the related Payment Date, upon the Trustees’ receipt of the Servicer’s Certificate for such Nonrecoverable Advance, the Indenture Trustee shall promptly remit to the Servicer from the Collection Account, (i) from Available Interest an amount equal to the portion of such Nonrecoverable Advance allocable to interest and (ii) from Available Principal an amount equal to the portion of such Nonrecoverable Advance allocable to principal, in each case without interest, in accordance with Section 4.06(c)(i). In lieu of causing the Indenture Trustee to remit any such amounts or the amounts described in clauses (i) through (iv) in Section 4.04(b), the Servicer may deduct such amounts from deposits otherwise to be made into the Collection Account in accordance with Section 4.09.
Section 4.05. Additional Deposits.
(a) The following additional deposits shall be made to the Collection Account one (1) day prior to each Payment Date: (i) the RPA Seller shall remit the aggregate Warranty Purchase Payments with respect to Warranty Receivables pursuant to Section 2.04 and (ii) the Servicer shall remit (A) any extension fee charged in connection with the extension of a Receivable pursuant to Section 3.02, (B) the aggregate Advances pursuant to Section 4.04(a), (C) the aggregate Administrative Purchase Payments with respect to Administrative Receivables pursuant to Section 3.08, and (D) the amount required upon the optional purchase of all Receivables by the Servicer or any successor to the Servicer pursuant to Section 8.01.
(b) [Reserved]
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(c) All deposits required to be made in respect of a Collection Period pursuant to this Section by the Seller or the Servicer, as the case may be, may be made in the form of a single deposit and shall be made in immediately available funds, on the related Deposit Date.
Section 4.06. Distributions.
(a) On each Deposit Date, the Indenture Trustee shall cause to be made (or request the Servicer to make, as applicable) the transfer and distribution in immediately available funds, from the Yield Supplement Account to the Collection Account, an amount equal to the Yield Supplement Withdrawal Amount, if any, for such Payment Date.
(b) On each Determination Date, the Servicer shall (i) calculate all amounts required to be deposited in the Note Distribution Account and the Certificate Distribution Account and (ii) make all distributions on the related Payment Date.
(c) On each Payment Date, the Servicer shall instruct the Indenture Trustee in writing (based on the information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 3.10) to make the following deposits and distributions for receipt by the Servicer or deposit in the applicable account, to the extent of the Available Amount, in the following order of priority:
(i) to the Servicer, Nonrecoverable Advances;
(ii) to the Servicer, the Total Servicing Fee (including any unpaid Total Servicing Fees from one or more prior Collection Periods);
(iii) on a pro rata basis, to the Indenture Trustee, the Delaware Trustee and the Owner Trustee, any accrued and unpaid Trust Fees and Expenses, in each case to the extent such fees and expenses have not been previously paid by the Sponsor, until the Notes have been paid in full, the annual amount paid to the Trustees out of the Available Amount allocation as described in this clause (iii) shall not exceed $100,000 while notes remain outstanding, so long as an Event of Default has not occurred;
(iv) to the Asset Representations Reviewer, any accrued and unpaid Asset Representations Reviewer Fees and Expenses, in each case to the extent such fees and expenses have not been previously paid by the Sponsor, in its capacity as Administrator, until the Notes have been paid in full, the annual amount paid to the Asset Representations Reviewer out of the Available Amount allocation as described in this clause (iv) shall not exceed $150,000 while notes remain outstanding, so long as an Event of Default has not occurred;
(v) on a pro rata basis, to the Note Distribution Account, the Note Interest Distributable Amount to be distributed to the holders of the Notes at their respective Interest Rates;
(vi) to the Note Distribution Account, the Note Principal Distributable Amount;
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(vii) to the Certificate Distribution Account, the Certificate Interest Distributable Amount to be distributed to Certificateholders;
(viii) after the Notes have been paid in full, to the Certificate Distribution Account, the Certificate Principal Distributable Amount;
(ix) to the Reserve Fund, the amount, if any, necessary to reinstate the balance in the Reserve Fund up to the Specified Reserve Fund Balance;
(x) on a pro rata basis, to the Indenture Trustee, the Delaware Trustee and the Owner Trustee, any accrued and unpaid Trust Fees and Expenses remaining after application of the payments described in clause (iii) above;
(xi) to the Asset Representations Reviewer, any accrued and unpaid Asset Representations Reviewer Fees and Expenses remaining after application of the payments described in clause (iv) above; and
(xii) to the Depositor, any Available Amount remaining (after giving effect to the reduction in the Available Amount described in clauses (i) through (xi) above.
Notwithstanding that the Notes have been paid in full, the Indenture Trustee shall continue to maintain the Collection Account hereunder until the Pool Balance has been reduced to zero.
Section 4.07. Reserve Fund.
(a) On the Closing Date, the Seller will deposit the Reserve Fund Initial Deposit into the Reserve Fund from the net proceeds of the sale of the Notes. The Reserve Fund shall be the property of the Issuer subject to the rights of the Indenture Trustee in the Reserve Fund Property.
(b) In the event that the Note Distributable Amount exceeds the sum of the amounts deposited into the Note Distribution Account pursuant to Sections 4.06(c)(v) and (vi) on each Payment Date (or, if the Reserve Fund is not maintained by the Indenture Trustee, on the related Deposit Date), the Indenture Trustee (based on information contained in the Servicer’s Certificate delivered on the related Determination Date pursuant to Section 3.10) shall cause an amount equal to the lesser of (A) the amount on deposit in the Reserve Fund and (B) the amount by which the Note Distributable Amount exceeds the sum of the amounts in the Note Distribution Account, to be deposited from the Reserve Account into the Note Distribution Account in immediately available funds in the amounts set forth in the Servicer’s Certificate for such Payment Date; provided that such amount shall be applied first, to the payment of interest due on the Notes to the extent, if any, that the amount deposited pursuant to Section 4.06(c)(v) is not sufficient to cover such payment of interest and, second, to the payment of principal of the Notes.
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(c) In the event that the Certificate Distributable Amount exceeds the sum of the amounts deposited into the Certificate Distribution Account pursuant to Sections 4.06(c)(vii) and (viii) on each Payment Date (or, if the Reserve Fund is not maintained by the Indenture Trustee, on the related Deposit Date), the Indenture Trustee shall cause an amount equal to the lesser of (A) the amount on deposit in the Reserve Fund and (B) the amount by which the Certificate Distributable Amount exceeds the sum of the amounts in the Certificate Distribution Account, to be deposited into the Certificate Distribution Account in immediately available funds in the amounts set forth in the Servicer’s Certificate for such Payment Date; provided that such amount shall be applied first, to the payment of interest due on the Certificates to the extent, if any, that the amount deposited pursuant to Section 4.06(c)(vii) is not sufficient to cover such payment of interest and, second, to the payment of principal of the Certificates.
(d) On each Payment Date (or, if the Reserve Fund is not maintained by the Indenture Trustee, on the related Deposit Date), all interest and other income (net of losses and investment expenses) on funds on deposit in the Reserve Fund shall upon the written direction of the Servicer, be paid to the Seller to the extent that the funds therein exceed the Specified Reserve Fund Balance. Upon any distribution to the Seller of amounts in excess of the Specified Reserve Fund Balance, the Noteholders will not have any rights in, or claims to, such amounts.
Section 4.08. Yield Supplement Account. On the Closing Date, the Seller will deposit the Yield Supplement Account Deposit to the Yield Supplement Account from the net proceeds of the sale of the Notes. The Yield Supplement Account shall be the property of the Issuer subject to the rights of the Indenture Trustee for the benefit of the Securityholders.
Section 4.09. Net Deposits. For so long as AHFC shall be the Servicer, the Servicer and the Indenture Trustee may make any remittances pursuant to this Article net of amounts to be distributed by the applicable recipient to such remitting party. Nonetheless, each such party shall account in writing for all of the above described remittances and distributions as if the amounts were deposited and/or transferred separately.
Section 4.10. Statements to Securityholders.
(a) On each Payment Date, the Servicer shall provide to the Owner Trustee to furnish to each Certificateholder of record and to the Indenture Trustee to make available to each Noteholder of record (by posting on its website at http://www. sf.citidirect.com) the Servicer’s Certificate furnished pursuant to Section 3.10 hereof.
(b) Within the prescribed period of time for tax reporting purposes after the end of each calendar year during the term of the Issuer, but not later than the latest date permitted by law, the related Trustee shall, upon written request, mail to each Person who at any time during such calendar year shall have been a Securityholder, a statement, prepared by the Servicer, containing certain information for such calendar year or, in the event such Person shall have been a Securityholder during a portion of such calendar year, for the applicable portion of such year, for the purposes of such Securityholder’s preparation of federal income tax returns. In addition, the Servicer shall furnish to the Trustees for distribution to such Person at such time any other information necessary under applicable law for the preparation of such income tax returns.
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ARTICLE
Five
THE SELLER
Section 5.01. Representations of Seller. The Seller makes the following representations on which the Issuer is deemed to have relied in acquiring the Receivables. The representations speak as of the execution and delivery of this Agreement, and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture.
(a) Organization and Good Standing. The Seller has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Receivables and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(b) Due Qualification. The Seller is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals in each jurisdiction where any such failure to do so would materially and adversely affect the Seller’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(c) Power and Authority. The Seller has the power and authority to execute and deliver this Agreement and to carry out its terms, the Seller has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Issuer and has duly authorized such sale and assignment by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary corporate action.
(d) Valid Sale; Binding Obligation. This Agreement evidences a valid sale, transfer and assignment of the Receivables, enforceable against creditors of and purchasers from the Seller, and constitutes a legal, valid and binding obligation of the Seller enforceable in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or at law.
(e) No Violation. The execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms of this Agreement does 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 certificate of formation or limited liability company agreement of the Seller, or conflict with or violate any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Seller is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor, to the Seller’s knowledge, violate any law or any order, rule or regulation applicable to the Seller of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties, which breach, default, conflict, lien or violation would have a material adverse effect on the earnings, business affairs or business prospects of the Seller.
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(f) No Proceedings. There are no proceedings or investigations pending or, to the Seller’s knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties: (i) asserting the invalidity of this Agreement or any other Basic Document, (ii) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Seller of its obligations under, or the validity or enforceability of, the Basic Documents or the Securities or (iv) relating to the Seller and which might adversely affect the federal income tax attributes of the Securities.
Section 5.02. Liability of Seller; Indemnities. The Seller shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Seller under this Agreement, which obligations shall include the following:
(a) The Seller shall indemnify, defend and hold harmless the Issuer, the Trustees and the Servicer and any of the officers, directors, employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and the Indenture Trustee from and against (i) any taxes that may at any time be asserted against any such Person with respect to the transactions contemplated herein and in the other Basic Documents, including any sales, gross receipts, general corporation, tangible personal property, privilege or license taxes (but, in the case of the Issuer, not including any taxes asserted with respect to, and as of the date of, the sale of the Receivables to the Issuer or the issuance and original sale of the Securities, or asserted with respect to ownership of the Receivables, or federal or other income taxes arising out of distributions on the Securities) and costs and expenses in defending against the same, (ii) any loss, liability or expense (including any reasonable legal fees and expenses incurred by the Trustees in connection with the enforcement of any indemnification or other obligation of the Issuer) incurred by reason of (x) the Seller’s willful misfeasance, bad faith or negligence in the performance of its duties under this Agreement, or by reason of reckless disregard of its obligations and duties under this Agreement and (y) the Seller’s or the Issuer’s violation of federal or state securities laws in connection with the offering and sale of the Securities.
(b) The Seller shall indemnify, defend and hold harmless the Trustees and their respective officers, directors, employees and agents from and against all costs, expenses, losses, claims, damages and liabilities (including any reasonable legal fees and expenses incurred by the Trustees in connection with the enforcement of any indemnification or other obligation of the Issuer) arising out of or incurred in connection with the acceptance or performance of the trusts and duties herein and contained in the Trust Agreement, in the case of the Owner Trustee and the Delaware Trustee, and contained in the Indenture, in the case of the Indenture Trustee, except to the extent that such cost, expense, loss, claim, damage or liability: (i) in the case of the Owner Trustee or the Delaware Trustee, shall be due to the willful misfeasance, bad faith or gross negligence (except for errors in judgment) of the Owner Trustee or the Delaware Trustee or shall arise from the breach by the Owner Trustee or the Delaware Trustee of any of its representations or warranties set forth in Section 7.03 of the Trust Agreement or (ii) in the case of the Indenture Trustee, shall be due to the willful misfeasance, bad faith or negligence of the Indenture Trustee or shall arise from the breach by the Indenture Trustee of any of its representations or warranties set forth in Section 6.13 of the Indenture.
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(c) The Seller shall pay any and all taxes levied or assessed upon all or any part of the Owner Trust Estate.
Indemnification under this Section shall survive the resignation or removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee, as the case may be, and the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Seller shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter shall collect any of such amounts from others, such Person shall promptly repay such amounts to the Seller, without interest.
Section 5.03. Merger, Consolidation or Assumption of the Obligations of Seller; Certain Limitations. Any Person (i) into which the Seller may be merged or consolidated, (ii) which may result from any merger, conversion or consolidation to which the Seller shall be a party or (iii) which may succeed to all or substantially all of the business of the Seller, which Person in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Seller under this Agreement, shall be the successor to the Seller under this Agreement without the execution or filing of any document or any further act on the part of any of the parties to this Agreement, except that if the Seller in any of the foregoing cases is not the surviving entity, then the surviving entity shall execute an agreement of assumption to perform every obligation of the Seller hereunder. The Seller shall satisfy the Rating Agency Condition with respect to any merger, consolidation or succession pursuant to this Section.
Section 5.04. Limitation on Liability of Seller and Others. The Seller and any director, officer, employee or agent of the Seller may rely in good faith on the advice of counsel or on any document of any kind, prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Seller shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its obligations under this Agreement, and that in its opinion may involve it in any expense or liability.
Section 5.05. Seller May Own Notes. The Seller and any Affiliate thereof 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 the Seller or an Affiliate thereof, except as expressly provided herein or in any other Basic Document.
ARTICLE
Six
THE SERVICER
Section 6.01. Representations of Servicer. The Servicer makes the following representations on which the Issuer is deemed to have relied in acquiring the Receivables. The representations speak as of the execution and delivery of this Agreement and as of the Closing Date, and shall survive the sale of the Receivables to the Issuer and the pledge thereof to the Indenture Trustee pursuant to the Indenture:
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(a) Organization and Good Standing. The Servicer has been duly organized and is validly existing as a corporation in good standing under the laws of the State of California, and had at all relevant times, and has, power, authority and legal right to acquire, own, sell and service the Receivables and to hold the Receivable Files as custodian on behalf of the Issuer and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(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 each jurisdiction where any such failure to do so would materially and adversely affect the Servicer’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(c) Power and Authority. The Servicer has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement constitutes a legal, valid and binding obligation of the Servicer enforceable in accordance with its terms, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other similar laws affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or in law.
(e) No Violation. The execution, delivery and performance by the Servicer of this Agreement and the execution, delivery and performance by the Seller of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms of this Agreement shall not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Servicer, or conflict with or breach any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Servicer is a party or by which it shall be bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than this Agreement); nor violate any law or, to 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, which breach, default, conflict, Lien or violation would have a material adverse effect on the earnings, business affairs or business prospects of the Servicer.
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(f) No Proceedings. There are no proceedings or investigations pending, or to the Servicer’s best knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Servicer or its properties: (i) asserting the invalidity of this Agreement or any other Basic Document, (ii) seeking to prevent the issuance of the Securities or the consummation of any of the transactions contemplated by the Basic Documents, (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, the Basic Documents or the Securities or (iv) relating to the Servicer and which might adversely affect the federal income tax attributes of the Securities.
(g) Existence. The Servicer is qualified to do business in each jurisdiction in which such qualification is necessary to protect the validity and enforceability of the Indenture, the Notes, the Collateral (including any security interests therein) and each other instrument or agreement included in the Owner Trust Estate.
Section 6.02. Indemnities of Servicer.
(a) The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically undertaken by the Servicer under this Agreement. In this regard, the Servicer shall indemnify, defend and hold harmless the Issuer, the Trustees, the Securityholders and the Seller and any of the officers, directors, employees and agents of the Issuer, the Owner Trustee, the Delaware Trustee and the Indenture Trustee (each, an “Indemnified Party”) from and against any and all costs, expenses, losses, damages, claims and liabilities (including any reasonable legal fees and expenses incurred by an Indemnified Party in connection with the enforcement of any indemnification or other obligation of the Servicer) (i) arising out of or resulting from the use, ownership or operation by the Servicer or any Affiliate thereof of a Financed Vehicle, and (ii) to the extent that such cost, expense, loss, claim, damage or liability arose out of or was imposed upon any such Person through the negligence, willful misfeasance or bad faith of the Servicer in the performance of its duties under this Agreement or by reason of reckless disregard of its obligations and duties under this Agreement.
For purposes of this Section, in the event of the termination of the rights and obligations of AHFC (or any successor thereto pursuant to Section 6.03) as Servicer pursuant to Section 7.01, or a resignation by such Servicer pursuant to this Agreement, such Servicer shall be deemed to be the Servicer pending appointment of a Successor Servicer (other than the Indenture Trustee) pursuant to Section 7.02. For the avoidance of doubt, AHFC shall not be liable for any claims described in the first sentence of this Section which relate to a date or period on or after the date on which AHFC is terminated or removed as the Servicer or which are cause by a successor servicer.
(b) Indemnification under this Section shall survive the resignation or removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee, as the case may be, or the termination of this Agreement and shall include reasonable fees and expenses of counsel and expenses of litigation. If the Servicer shall have made any indemnity payments pursuant to this Section and the Person to or on behalf of whom such payments are made thereafter collects any of such amounts from others, such Person shall promptly repay such amounts to the Servicer, without interest.
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Section 6.03. Merger, Consolidation or Assumption of the Obligations of Servicer. Any corporation (i) into which the Servicer may be merged or consolidated, (ii) which may result from any merger, conversion or consolidation to which the Servicer shall be a party or (iii) which may succeed to all or substantially all of the business of the Servicer, which corporation in any of the foregoing cases executes an agreement of assumption to perform every obligation of the Servicer under this Agreement, 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 Trustees and the Administrator, and in accordance with Section 1.02(c) of the Administration Agreement, the Administrator shall make such notice available to each Rating Agency.
Section 6.04. Limitation on Liability of Servicer and Others. Neither the Servicer nor any of the directors, officers, employees or agents of the Servicer shall be under any liability to the Issuer or any Securityholder, except as provided under this Agreement, for any action taken or for refraining from the taking of any action pursuant to this Agreement or for errors in judgment; provided, however, that this provision shall not protect the Servicer or any such person against any liability that would otherwise be imposed by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of reckless disregard of obligations and duties under this Agreement. The Servicer and any director, officer, employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising under this Agreement.
Except as otherwise provided in this Agreement, the Servicer shall not be under any obligation to appear in, prosecute or defend any legal action that shall not be incidental to its duties to service the Receivables in accordance with 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 other Basic Documents and the rights and duties of the parties to this Agreement and the other Basic Documents and the interests of the Certificateholders under this Agreement and the Noteholders under the Indenture. The legal expenses and costs of such action and any liability resulting therefrom will be expenses, costs and liabilities of the Issuer.
Section 6.05. AHFC Not to Resign as Servicer. Subject to the provisions of Section 6.03, AHFC shall not resign from the obligations and duties hereby imposed on it as Servicer under this Agreement except upon a determination that the performance of its duties under this Agreement shall no longer be permissible under applicable law. Notice of any such determination permitting the resignation of AHFC shall be communicated to the Trustees at the earliest practicable time (and, if such communication is not in writing, shall be confirmed in writing at the earliest practicable time) and any such determination shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustees concurrently with or promptly after such notice. No such resignation shall become effective until the Indenture Trustee or a Successor Servicer shall have (i) assumed the responsibilities and obligations of AHFC in accordance with Section 7.02 and (ii) become the Administrator pursuant to Section 1.09 of the Administration Agreement.
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ARTICLE
Seven
SERVICER DEFAULTS
Section 7.01. Servicer Defaults. If any one of the following events (each, a “Servicer Default”) shall occur and be continuing:
(a) any failure by the Servicer to deliver to the related Trustee for deposit in any of the Accounts or the Certificate Distribution Account any required payment or to direct the Indenture Trustee to make any required distributions therefrom, which failure continues unremedied for a period of five (5) Business Days after discovery of such failure by an officer of the Servicer or after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (i) to the Servicer by the related Trustee or (ii) to the Servicer and to the Trustees by the Noteholders, evidencing not less than 25% of the Outstanding Amount of the Notes;
(b) failure by the Servicer duly to observe or to perform in any material respect any other covenants or agreements of the Servicer set forth in this Agreement or any other Basic Document, which failure shall (i) materially and adversely affect the rights of Certificateholders or Noteholders and (ii) continue unremedied for a period of ninety (90) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given (A) to the Servicer by the related Trustee or (B) to the Servicer, and to the related Trustee by the Noteholders, evidencing not less than 25% of the Outstanding Amount of the Notes; or
(c) the occurrence of an Insolvency Event with respect to the Servicer;
provided, however, that (A) if any delay or failure of performance referred to in clause (a) above shall have been caused by Force Majeure or other similar occurrences, the five (5) Business Day grace period referred to in such clause (a) shall be extended for an additional sixty (60) days and (B) if any delay or failure of performance referred to in clause (b) above shall have been caused by Force Majeure or other similar occurrences, the ninety (90) day grace period referred to in such clause (b) shall be extended for an additional sixty (60) days.
then, and in each and every case, so long as the Servicer Default shall not have been remedied, either the Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes or the Indenture Trustee, at the request or direction of the Noteholders evidencing not less than 25% of the Outstanding Amount of the Notes (or, if the Notes have been paid in full and the Indenture has been discharged in accordance with its terms, by holders of Certificates evidencing not less than 25% of the Percentage Interests), by notice then given in writing to the Servicer and the Owner Trustee (and to the Indenture Trustee if given by the Noteholders) may terminate all the rights and obligations (other than the obligations set forth in Section 6.02 that accrued on or prior to the effective date of the termination) of the Servicer under this Agreement.
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On or after the date specified in such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Notes, the Certificates or the Receivables or otherwise, shall, without further action, pass to and be vested in the Indenture Trustee or such Successor Servicer as may be appointed under Section 7.02; and, without limitation, the Indenture Trustee and the Owner Trustee are hereby authorized and empowered to execute and deliver, for the benefit of the predecessor Servicer, as attorney-in-fact or otherwise, any and all documents and other instruments, and to do or accomplish all other acts or things necessary or appropriate to effect the purposes of such notice of termination, whether to complete the transfer and endorsement of the Receivables and related documents, or otherwise. The predecessor Servicer shall cooperate with the Successor Servicer and the Trustees in effecting the termination of the responsibilities and rights of the predecessor Servicer under this Agreement, including the transfer to the Successor Servicer for administration by it of all cash amounts that shall at the time be held by the predecessor Servicer for deposit, or have been deposited by the predecessor Servicer, in the Accounts or the Certificate Distribution Account or thereafter received with respect to the Receivables that shall at that time by held by the predecessor Servicer. All reasonable costs and expenses (including servicer conversion costs and attorneys’ fees) incurred in connection with transferring the Receivable Files to the Successor Servicer and amending this Agreement to reflect such succession as Servicer pursuant to this Section shall be paid by the predecessor Servicer upon presentation of reasonable documentation of such costs and expenses. Any costs or expenses incurred in connection with a Servicer Default shall constitute an expense of administration under Title 11 of the United States Bankruptcy Code or any other applicable Federal or State bankruptcy laws. Upon receipt of notice of the occurrence of a Servicer Default, the Indenture Trustee shall give notice thereof to the Administrator, and in accordance with Section 1.02(c) of the Administration Agreement, the Administrator shall make such notice available to each Rating Agency.
Section 7.02. Appointment of Successor Servicer.
(a) Upon the Servicer’s receipt of notice of termination pursuant to Section 7.01 or the Servicer’s resignation pursuant to Section 6.05, the predecessor Servicer shall continue to perform its functions as Servicer under this Agreement, in the case of termination, only until the date specified in such termination notice or, if no such date is specified in a notice of termination, until receipt of such notice and, in the case of resignation, until the later of (i) the date forty-five (45) days from the delivery to the Trustees of written notice of such resignation (or written confirmation of such notice) in accordance with the terms of this Agreement and (ii) the date upon which the predecessor Servicer shall become unable to act as Servicer, as specified in the notice of resignation and accompanying Opinion of Counsel. In the event of the Servicer’s termination hereunder, the Indenture Trustee shall appoint a Successor Servicer, and the Successor Servicer shall accept its appointment (including its appointment as Administrator under the Administration Agreement as set forth in Section 7.02(b)) by a written assumption in form acceptable to the Trustees. In the event that a Successor Servicer has not been appointed at the time when the predecessor Servicer has ceased to act as Servicer in accordance with this Section, the Indenture Trustee without further action shall automatically be appointed the Successor Servicer and the Indenture Trustee shall be entitled to receive the Total Servicing Fee. Notwithstanding the above, the Indenture Trustee shall, if it shall be legally unable or unwilling so to act, appoint or petition a court of competent jurisdiction to appoint any established institution, having a net worth of not less than $50,000,000 and whose regular business shall include the servicing of automobile receivables (including light-duty trucks), as the successor to the Servicer under this Agreement. In no event shall the Successor Servicer be liable for the acts or omissions of any predecessor Servicer.
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(b) Upon appointment, the Successor Servicer (including the Indenture Trustee acting as Successor Servicer) shall (i) be the successor in all respects to the predecessor Servicer and shall be subject to all the responsibilities, duties and liabilities arising thereafter relating thereto placed on the predecessor Servicer and shall be entitled to the Total Servicing Fee and all the rights granted to the predecessor Servicer by the terms and provisions of this Agreement and (ii) become the Administrator pursuant to Section 1.09 of the Administration Agreement.
Section 7.03. Notification of Servicer Termination. Upon any termination of, or appointment of a successor to, the Servicer pursuant to this Article, the Owner Trustee shall give prompt written notice thereof to Certificateholders, and the Indenture Trustee shall give prompt written notice thereof to Noteholders and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement).
Section 7.04. Waiver of Past Defaults. The Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes or the Certificateholders evidencing not less than a majority of the Percentage Interests (in the case of a default by the Servicer that does not adversely affect the Indenture Trustee or the Noteholders or if all Notes have been paid in full and the Indenture Trustee has been discharged in accordance with its terms) may, on behalf of all Securityholders waive in writing any default by the Servicer in the performance of its obligations hereunder and its consequences, except a default in making any required deposits to or payments from any of the Accounts or the Certificate Distribution Account in accordance with this Agreement or in respect of a covenant or provision hereof that cannot be modified with the consent of each Securityholder. Upon any such waiver of a past default, such default shall cease to exist, and any Servicer Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly so waived.
Section 7.05. Repayment of Advances. If a Successor Servicer replaces the Servicer, the predecessor Servicer shall be entitled to receive reimbursement for all outstanding Advances made by the predecessor Servicer.
ARTICLE
Eight
TERMINATION
Section 8.01. Optional Purchase of All Receivables.
(a) On the Payment Date following the last day of any Collection Period as of which the Pool Balance is 10% or less of the Original Pool Balance, the Servicer or any successor to the Servicer shall have the option to purchase the Owner Trust Estate, other than the Accounts and the Certificate Distribution Account. To exercise such option, on the related Deposit Date the Servicer shall deposit pursuant to Section 4.05(a) in the Collection Account an amount equal to the aggregate Administrative Purchase Payments for the Receivables (including Defaulted Receivables) and shall succeed to all interests in and to the Issuer. Notwithstanding the foregoing, the Servicer or any successor to the Servicer shall not be permitted to exercise such option if the amount to be distributed to Securityholders on the related Payment Date would be less than the Note Distributable Amount and Certificate Distributable Amount.
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(b) On or prior to any optional purchase of the Owner Trust Estate as described in clause (a) above, the following shall be completed:
(i) As described in Article Nine of the Trust Agreement and Article X of the Indenture, notice of any termination of the Trust shall be given by the Servicer to the Owner Trustee, the Delaware Trustee and the Indenture Trustee as soon as practicable after the Servicer has received notice thereof, but no later than twenty-five (25) days prior to the date of such optional purchase, substantially in the form attached hereto as Exhibit A;
(ii) As described in the Note Depository Agreement, notice of any termination of the Trust shall be given by the Indenture Trustee to DTC as soon as practicable after the Indenture Trustee has received notice thereof from the Servicer, but no later than thirty (30) days prior to the date of such optional purchase;
(iii) As described in Section 10.01 of the Indenture, notice of any termination of the Trust shall be given by the Indenture Trustee to each Noteholder as soon as practicable after the Indenture Trustee has received notice thereof from the Servicer, but no later than ten (10) days prior to the date of such optional purchase;
(iv) As described in Section 9.01(c) of the Trust Agreement, notice of any termination of the Trust shall be given by the Owner Trustee to the Certificateholders within five (5) Business Days of receipt of notice of such termination by the Owner Trustee from the Servicer, specifying the Payment Date upon which Certificateholders shall surrender their Trust Certificates to the Paying Agent for payment of the final distribution and cancellation. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the time such notice is given to Certificateholders;
(v) Upon receipt of notice of any termination of the Trust by the Certificateholder, the Certificateholder, or its affiliate, shall forward the Trust Certificate to the Owner Trustee or the Paying Agent (if other than the Owner Trustee);
(vi) As described in Section 4.01 of the Indenture, AHFC shall deliver to the Indenture Trustee an Officer’s Certificate relating to such optional purchase, substantially in the form attached hereto as Exhibit B;
(vii) As described in Section 4.01 of the Indenture, an Opinion of Counsel to AHFC shall be delivered to the Indenture Trustee and the Owner Trustee stating that all conditions precedent relating to the satisfaction and discharge of the Indenture have been complied with;
(viii) As described in Section 9.01(e) of the Trust Agreement, upon termination of the Trust Estate, the Owner Trustee shall upon the direction and at the expense of the Depositor cause the Certificate of Trust to be cancelled by filing a certificate of cancellation with the Secretary of State in accordance with Section 3810 of the Statutory Trust Statute; and
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(ix) Upon termination of the Trust Estate, AHFC shall (1) file UCC termination statements and (2) cancel State licenses, as necessary.
(c) Following the satisfaction and discharge of the Indenture and the payment in full of the principal of and interest on the Notes, the Certificateholders will succeed to the rights of the Noteholders hereunder and the Owner Trustee will succeed to the rights of the Indenture Trustee pursuant to this Agreement.
ARTICLE
Nine
MISCELLANEOUS
Section 9.01. Amendment.
(a) Any term or provision of this Agreement (including Appendix A) may be amended by the Seller and the Servicer without the consent of any Securityholders, the Issuer or any other Person subject to the satisfaction of one of the following conditions:
(i) the Seller or the Servicer delivers an Opinion of Counsel to the Indenture Trustee to the effect that such amendment will not materially and adversely affect the interests of any Noteholders; or
(ii) the Rating Agency Condition is satisfied with respect to such amendment and the Seller or the Servicer notifies the Indenture Trustee in writing that the Rating Agency Condition is satisfied with respect to such amendment;
provided, that in the event that any Trust Certificates are then held by anyone other than the Depositor or any of its Affiliates, this Agreement may only be amended by the Seller and the Servicer if, in addition, (i) the Certificateholders evidencing a majority of the Certificate Balance of the Trust Certificates consent to such amendment or (ii) such amendment shall not, as evidenced by an Officer’s Certificate of the Seller or the Servicer or an Opinion of Counsel delivered to the Owner Trustee, materially and adversely affect the interests of the Certificateholders.
(b) This Agreement (including Appendix A) may also be amended from time to time by the Seller and the Servicer, with the consent of the Indenture Trustee, the written consent of the Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes and the written consent of the Certificateholders of outstanding Certificates evidencing not less than a majority of the Percentage Interests, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Securityholders; provided, however, that no such amendment shall (i) 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 Receivables or distributions that shall be required to be made for the benefit of the Securityholders or (ii) reduce the aforesaid percentage of the Outstanding Amount of the Notes and the Percentage Interests, the holders of which are required to consent to any such amendment, without the written consent of all of the Securityholders.
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(c) Any term or provision of this Agreement (including Appendix A) may also be amended from time to time by the Seller and the Servicer, for the purpose of conforming the terms of this Agreement to the description thereof in the Prospectus, without the consent of any Securityholders, the Issuer or any other Person.
(d) Promptly after the execution of any such amendment, the Servicer shall furnish written notification of the substance of such amendment to the Indenture Trustee and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement). It shall not be necessary for the consent of Securityholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of Certificateholders of the execution thereof shall be subject to such reasonable requirements as the Owner Trustee may require.
(e) Prior to the execution of any amendment to this Agreement, the Trustees shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and the Opinion of Counsel referred to in Section 9.02(g). No amendment that adversely affects the Trustees shall be effective without the prior written consent of the party adversely affected. The Trustees may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s, the Delaware Trustee’s or the Indenture Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.
Section 9.02. Protection of Title to Trust.
(a) The Seller shall execute and file such financing statements and cause to be executed and filed such continuation statements, all in such manner and in such places as may be required by law fully to preserve, maintain and protect the interest of the Issuer and of the Indenture Trustee in the Receivables and in the proceeds thereof. The Seller shall deliver (or cause to be delivered) to the Trustees file-stamped copies of, or filing receipts for, any document filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity or corporate structure in any manner that would, could or might make any financing statement or continuation statement filed in accordance with Section 9.02(a) seriously misleading within the meaning of Section 9-507(c) of the UCC, unless it shall have given the Trustees at least thirty (30) days’ prior written notice thereof and shall, within thirty (30) days of such change, execute and file the appropriate amendments to all previously filed financing statements or continuation statements.
(c) Each of the Seller and the Servicer shall give the Trustees at least sixty (60) days’ prior written notice of any relocation of its principal executive office if, as a result of such relocation, the applicable provisions of the UCC would require the filing of any amendment of any previously filed financing or continuation statement or of any new financing statement and shall promptly file any such amendment or new financing statement. The Servicer shall at all times maintain each office from which it shall service Receivables, and its principal executive office, within the United States.
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(d) The Servicer shall maintain accounts and records as to the Receivables accurately and in sufficient detail to permit (i) the reader thereof to know at any time the status of the Receivables, including payments and recoveries made and payments owing (and the nature of each) and (ii) reconciliation between payments or recoveries on (or with respect to) the Receivables and the amounts from time to time deposited in the Accounts.
(e) The Servicer shall maintain its computer systems so that, from and after the time of sale under this Agreement of the Receivables, the Servicer’s master computer records (including any backup archives) that refer to a Receivable shall indicate clearly the interest of the Issuer and the Indenture Trustee in such Receivable and that such Receivable is owned by the Issuer and has been pledged to the Indenture Trustee. Indication of the Issuer’s and the Indenture Trustee’s interest in a Receivable shall be deleted from or modified on the Servicer’s computer systems when, and only when, the related Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell, grant a security interest in, or otherwise transfer any interest in automobile receivables (including light-duty trucks) to any prospective purchaser, lender or other transferee, the Servicer shall give to such prospective purchaser, lender or other transferee computer tapes, records or printouts (including any restored from backup archives) that, if they shall refer in any manner whatsoever to any Receivable, shall indicate clearly that such Receivable has been sold and is owned by the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall deliver to the Trustees:
(1) promptly after the execution and delivery of each amendment hereto, an Opinion of Counsel stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements have been executed and filed that are necessary to fully preserve and protect the interest of the Trustees in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to preserve and protect such interest; and
(2) within ninety (90) days after the beginning of each fiscal year of the Issuer beginning with the first fiscal year more than three months after the Cutoff Date, an Opinion of Counsel, dated as of a date during such 90-day period, stating that, in the opinion of such counsel, either (A) all financing statements and continuation statements have been filed that are necessary to create and continue the interest of the Trustees in the Receivables, and reciting the details of such filings or referring to prior Opinions of Counsel in which such details are given, or (B) no such action shall be necessary to perfect such security interest.
Each Opinion of Counsel referred to in clause (1) or (2) above shall specify any action necessary (as of the date of such opinion) to be taken in the following year to preserve and protect such interest.
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(h) The Seller shall, to the extent required by applicable law, cause the Notes to be registered with the Commission pursuant to Section 12(b) or Section 12(g) of the Exchange Act within the time periods specified in such sections.
Section 9.03. Notices. All demands, notices and communications under this Agreement shall be in writing, personally delivered or mailed by certified mail, return receipt requested, or overnight delivery service, by facsimile or by electronic mail (if an address therefore has been provided by the respective party in writing) and shall be deemed to have been duly given upon receipt by such party at the address set forth on Schedule A to this Agreement or at such other address as shall be designated by written notice to the other parties.
Section 9.04. Assignment.
(a) Except as provided in the remainder of this Section or as provided in Sections 5.03, 6.03 and 6.05, this Agreement may not be assigned by the Seller or the Servicer without the prior written consent of Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes and Certificateholders evidencing not less than a majority of the Percentage Interests. And as provided in the provisions of this Agreement concerning the resignation of the Servicer, this Agreement may not be assigned by the Seller or the Servicer.
(b) The Seller hereby acknowledges and consents to the mortgage, pledge, assignment and grant of a security interest by the Issuer to the Indenture Trustee pursuant to the Indenture for the benefit of the Noteholders of all right, title and interest of the Issuer in, to and under the Receivables and/or the assignment of any or all of the Issuer’s rights and obligations hereunder.
Section 9.05. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Seller, the Servicer, the Issuer, the Owner Trustee, the Certificateholders, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. The Owner Trustee and the Delaware Trustee are third-party beneficiaries of certain Sections of this Agreement, including with respect to the Delaware Trustee, Sections 2.07, 3.09, 3.16, 4.06, 5.02, 6.02, 8.01 and 9.01, and with respect to the Owner Trustee, Sections 2.04, 2.07, 2.08, 3.08, 3.09, 3.15, 3.16, 4.06, 4.10, 5.02, 6.02, 7.01, 8.01, 9.01 and 9.11, and is entitled to the rights and benefits thereof and may enforce the provisions as if it were a party hereto.
Section 9.06. 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 covenants, agreements, provisions or terms of this Agreement.
Section 9.07. Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
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Section 9.08. 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 9.09. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Each of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this agreement.
Section 9.10. Nonpetition Covenants.
(a) Notwithstanding any prior termination of this Agreement, the Servicer and the Seller shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Issuer, acquiesce, petition or otherwise invoke or cause the Issuer to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Issuer under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Issuer or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Issuer.
(b) Notwithstanding any prior termination of this Agreement, the Servicer shall not, prior to the date which is one year and one day after the termination of this Agreement with respect to the Seller, acquiesce, petition or otherwise invoke or cause the Seller to invoke the process of any court or government authority for the purpose of commencing or sustaining a case against the Seller under any federal or state bankruptcy, insolvency or similar law, or appointing a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Seller or any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Seller.
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Section 9.11. Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this Agreement has been countersigned by The Bank of New York Mellon, not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer and in no event shall The Bank of New York Mellon, in its individual capacity or, except as expressly provided in the Trust Agreement, The Bank of New York Mellon as Owner Trustee of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of its duties or obligations hereunder or in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement as if specifically set forth herein.
(b) Notwithstanding anything contained herein to the contrary, this Agreement has been accepted by Citibank N.A., not in its individual capacity but solely as Indenture Trustee and in no event shall Citibank N.A. have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.
Section 9.12. Third-Party Beneficiary. The Trustees and other indemnitees hereunder are third-party beneficiaries to this Agreement and are entitled to the rights and benefits hereunder and may enforce the provisions hereof as if they were parties hereto.
Section 9.13. Confidentiality.
The Issuer hereby agrees to hold and treat all Confidential Information (as defined below) provided to it in connection with the offering of the Notes in confidence and in accordance with this Section 9.13, and will implement and maintain safeguards to further assure the confidentiality of such Confidential Information. Such Confidential Information will not, without the prior written consent of the Servicer, be disclosed or used by the Issuer or by its subsidiaries or, affiliates, or its or their directors, officers, employees, agents or controlling persons or agents or advisors (collectively, the “Information Recipients”) other than for the purposes of (i) structuring the securitization transaction and facilitating the issuance of the Notes, or (ii) in connection with the performance of its required due diligence on the Receivables. Disclosure that is not in violation of the Right to Financial Privacy Act of 1978, as amended, the Gramm-Leach-Bliley Act of 1999, as amended, (the “G-L-B Act”) or other applicable law by the Issuer of any Confidential Information at the request of its outside auditors or governmental regulatory authorities in connection with an examination of the Issuer by any such authority or for the purposes specified in above shall not constitute a breach of its obligations under this Section 9.13, and shall not require the prior consent of the Servicer.
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As used herein, “Confidential Information” means non-public personal information (as defined in the G-L-B Act and its enabling regulations issued by the Federal Trade Commission) regarding obligors on the Receivables that is identified as such by the Servicer. Confidential Information shall not include information which (i) is or becomes generally available to the public other than as a result of disclosure by the Issuer or any of its Information Recipients; (ii) was available to the Issuer on a non-confidential basis from a person or entity other than the Servicer prior to its disclosure to the Issuer; (iii) is requested to be disclosed by a governmental authority or related governmental, administrative, or regulatory or self-regulatory agencies having or claiming authority to regulate or oversee any aspect of the Issuer’s business or that of its affiliates or is otherwise required by law or by legal or regulatory process to be disclosed; (iv) becomes available to the Issuer on a non-confidential basis from a person or entity other than the Servicer who, to the best knowledge of the Issuer, is not otherwise bound by a confidentiality agreement with the Servicer, and is not otherwise prohibited from transmitting the information to the Issuer; or (v) the Servicer provides written permission to the Issuer to release.
Section 9.14. Federal Tax Treatment. Notwithstanding anything to the contrary contained in this Agreement or any document delivered herewith, all persons may disclose to any and all persons, without limitation of any kind, the federal income tax treatment of the Notes, any fact relevant to understanding the federal tax treatment of the Notes, and all materials of any kind (including opinions or other tax analyses) relating to such federal tax treatment.
Section 9.15. Intent of the Parties; Reasonableness.
The Seller, Servicer, Sponsor and Issuer acknowledge and agree that the purpose of Article Three of this Agreement is to facilitate compliance by the Issuer and the Depositor with the provisions of Regulation AB and related rules and regulations of the Commission.
None of the Sponsor, the Administrator nor the Issuer shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act). The Servicer acknowledges that interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with requests made by the Issuer or the Administrator in good faith for delivery of information under these provisions on the basis of evolving interpretations of Regulation AB. In connection with this transaction, the Servicer shall cooperate fully with the Administrator and the Issuer to deliver to the Administrator or Issuer, as applicable (including any of its assignees or designees), any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuer or the Administrator to permit the Issuer or Administrator (acting on behalf of the Issuer) to comply with the provisions of Regulation AB, together with such disclosures relating to the Servicer, any Subservicer and the Receivables, or the servicing of the Receivables, reasonably believed by the Issuer or the Administrator to be necessary in order to effect such compliance.
The Issuer shall, and shall cause the Administrator (including any of its assignees or designees) to cooperate with the Servicer by providing timely notice of requests for information under these provisions and by reasonably limiting such requests to information required, in the reasonable judgment or the Issuer or the Administrator, as applicable, to comply with Regulation AB.
Section 9.16. Cooperation with Voting. Each of the Sponsor, the Seller and the Issuer hereby acknowledges and agrees that it shall reasonably cooperate with the Indenture Trustee to facilitate any vote by the Noteholders and Note Owners pursuant to terms of Section 7.05 of the Indenture.
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IN WITNESS WHEREOF, the parties hereto have caused this Sale and Servicing Agreement to be duly executed by their respective officers as of the day and year first above written.
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST | |||
| By: | THE BANK OF NEW YORK MELLON, not in | ||
| its individual capacity but solely as Owner | |||
| Trustee on behalf of the Trust | |||
| By: | |||
| Name: | |||
| Title: | |||
| AMERICAN HONDA RECEIVABLES LLC, as Seller | |||
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Treasurer | ||
| AMERICAN HONDA FINANCE CORPORATION, as Servicer | |||
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Vice President and Assistant Secretary | ||
| Acknowledged and accepted as of the day | ||
| and year first above written: | ||
| CITIBANK, N.A., | ||
| not in its individual capacity but solely as | ||
| Indenture Trustee | ||
| By: | ||
| Name: | ||
| Title: | ||
| S-1 | HAROT 2018-2 | |
| Sale and Servicing Agreement |
APPENDIX A
I. Defined Terms
“61-Day Delinquent Receivables” means, as of any date of determination, all Receivables outstanding and held by the Issuer (other than Receivables in repossession and charged-off Receivables) that are 61 or more days delinquent as of such date (or, if such date is not the last day of a calendar month, as of the last day of the calendar month immediately preceding such date), as determined in accordance with the Servicer’s customary servicing practices.
“AAA” means the American Arbitration Association.
“Accounts” means the Collection Account, the Note Distribution Account, the Yield Supplement Account and the Reserve Fund.
“Account Property” means, with respect to each Account, such Account, together with all cash, securities, financial assets and investments and other property from time to time deposited or credited to such Account and all proceeds thereof, including, with respect to the (i) Reserve Fund, the Reserve Fund Initial Deposit and (ii) Yield Supplement Account, the Yield Supplement Account Deposit.
“Act” shall have the meaning specified in Section 11.03(a) of the Indenture.
“Actual Payment” means, with respect to a Receivable and a Collection Period, all payments received by the Servicer from or for the account of the related Obligor on such Receivable during such Collection Period, net of any Supplemental Servicing Fees attributable to such Receivable.
“Administration Agreement” means the Administration Agreement, dated as of the Closing Date, among the Administrator, the Issuer, the Depositor and the Indenture Trustee, as amended or supplemented from time to time.
“Administrator” means AHFC, or any successor Administrator under the Administration Agreement.
“Administrative Purchase Payment” means, with respect to a Payment Date and to an Administrative Receivable purchased by the Seller or the Servicer as of the end of the related Collection Period, the sum of (a) the unpaid principal balance owed by the related Obligor in respect of such Receivable and (b) interest on such unpaid principal balance at a rate equal to the APR of the related Receivable from the date of last payment by such Obligor to the last day of such Collection Period.
“Administrative Receivable” means a Receivable which the Servicer is required to purchase pursuant to Section 3.08 of the Sale and Servicing Agreement or which the Servicer has elected to purchase pursuant to Section 8.01 of the Sale and Servicing Agreement.
“Advance” shall have the meaning set forth in Section 4.04(a) of the Sale and Servicing Agreement.
| App A-1 |
“Affiliate” means, with respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purpose of this definition, “control”, when used with respect to any specified Person, means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Aggregate Net Losses” means, with respect to a Collection Period, an amount equal to the aggregate Principal Balance of all Receivables that became Defaulted Receivables during such Collection Period minus all Net Liquidation Proceeds collected during such Collection Period with respect to all Defaulted Receivables.
“AHFC” means American Honda Finance Corporation, and its successors.
“AHR” means American Honda Receivables LLC, and its successors.
“Amended and Restated Trust Agreement” means the amended and restated trust agreement, dated as of the Closing Date, among American Honda Receivables LLC, as depositor, the Owner Trustee and the Delaware Trustee.
“Amended Partnership Audit Rules” means subchapter C of chapter 63 of subtitle F of the Code as amended by the Bipartisan Budget Act of 2015.
“Amount Financed” in respect of a Receivable means the aggregate amount advanced under such Receivable toward the purchase price of the related Financed Vehicle and any related costs, including but not limited to accessories, insurance premiums, service and warranty contracts and other items customarily financed as part of automobile retail installment sale contracts.
“Annual Percentage Rate” or “APR” of a Receivable means the annual rate of finance charges stated in such Receivable.
“Applicants” shall have the meaning specified in Section 3.07 of the Trust Agreement.
“Asset Representations Review” means a review by the Asset Representations Reviewer as specified in the Asset Representations Review Agreement of all Subject Receivables as of the first date on which the Review Conditions are satisfied for compliance with the representations and warranties set forth in Section 2.03 of the Receivables Purchase Agreement.
“Asset Representations Review Agreement” means the asset representations review agreement, dated as of the Closing Date, among the Issuer, the Sponsor, the Servicer and the Asset Representations Reviewer.
“Asset Representations Reviewer” means Clayton Fixed Income Services LLC.
| App A-2 |
“Asset Representations Reviewer Fees and Expenses” means all accrued and unpaid Asset Representations Reviewer’s fees and any amounts due to the Asset Representations Reviewer for reimbursement of expenses or in respect of indemnification to the extent not previously paid to the Asset Representations Reviewer by the Servicer.
“Authenticating Agent” means the Owner Trustee or any authenticating agent appointed pursuant to Section 3.03 of the Trust Agreement.
“Authorized Officer” means, with respect to the Issuer, any officer of the Owner Trustee or person appointed pursuant to a power of attorney who is authorized to act for the Owner Trustee in matters relating to the Issuer and who is identified on the list of Authorized Officers delivered by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter) and, so long as the Administration Agreement is in effect, any Vice President or more senior officer of the Administrator who is authorized to act for the Administrator in matters relating to the Issuer and to be acted upon by the Administrator pursuant to the Administration Agreement and who is identified on the list of Authorized Officers delivered by the Administrator to the Indenture Trustee on the Closing Date (as such list may be modified or supplemented from time to time thereafter).
“Available Amount” means, with respect to any Payment Date, the sum of Available Interest and Available Principal.
“Available Interest” means, with respect to any Payment Date, the total of the following amounts allocable to interest received by the Servicer on or in respect of the Receivables during the related Collection Period (computed by the simple interest method): (i) the sum of the interest component of all (a) collections on or in respect of all Receivables other than Defaulted Receivables, (b) Net Liquidation Proceeds, (c) Advances made by the Servicer, if any, (d) Warranty Purchase Payments, (e) Administrative Purchase Payments and (f) the Yield Supplement Withdrawal Amount, if any, for the related Payment Date, less (ii) the sum of all (a) amounts received on or in respect of a particular Receivable (other than a Defaulted Receivable) to the extent of the aggregate Outstanding Interest Advances in respect of such Receivable and (b) Net Liquidation Proceeds with respect to a particular Receivable to the extent of the aggregate Outstanding Interest Advances in respect of such Receivable.
“Available Principal” means, with respect to any Payment Date, the total of the following amounts allocable to principal received by the Servicer on or in respect of the Receivables during the related Collection Period (computed by the simple interest method): (i) the sum of the principal component of all (a) collections on or in respect of all Receivables other than Defaulted Receivables, (b) Net Liquidation Proceeds, (c) Advances made by the Servicer, if any, (d) Warranty Purchase Payments and (e) Administrative Purchase Payments, less (ii) an amount equal to all (a) amounts received on or in respect of a particular Receivable (other than a Defaulted Receivable) to the extent of the aggregate Outstanding Principal Advances in respect of such Receivable and (b) Net Liquidation Proceeds with respect to a particular Receivable to the extent of the aggregate Outstanding Principal Advances in respect of such Receivable.
“Basic Documents” means the Sale and Servicing Agreement, the Administration Agreement, the Asset Representations Review Agreement, the Indenture, the Note Depository Agreement, the Receivables Purchase Agreement and the Trust Agreement, and any other documents or certificates delivered in connection therewith as the same may be amended, supplemented or otherwise modified and in effect.
| App A-3 |
“Basic Servicing Fee” means the fee payable pursuant to Section 3.09 of the Sale and Servicing Agreement to the Servicer on each Payment Date for services rendered during the related Collection Period, which shall be equal to one-twelfth of the Servicing Fee Rate multiplied by the Pool Balance as of the first day of the related Collection Period or, with respect to the first Payment Date, the Original Pool Balance.
“Benefit Plan Investor” means an “employee benefit plan” as defined in Section 3(3) of ERISA that is subject to Title I of ERISA, a “plan” as defined in and subject to Section 4975 of the Code or an entity whose underlying assets include plan assets of any of the foregoing.
“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 2.09 of the Indenture.
“Business Day” means any day other than a Saturday or Sunday that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in New York City, Chicago, Illinois or Wilmington, Delaware.
“Certificate Balance” means, on any Payment Date, the Original Certificate Balance reduced by all distributions of principal previously made in respect of the Certificates.
“Certificate Distributable Amount” means, with respect to any Payment Date, the sum of the Certificate Interest Distributable Amount and the Certificate Principal Distributable Amount for such Payment Date.
“Certificate Distribution Account” means the account established and maintained as such pursuant to Section 5.01 of the Trust Agreement.
“Certificate Interest Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of (x) the sum of (i) the Certificate Monthly Interest Distributable Amount and (ii) any outstanding Certificate Interest Carryover Shortfall for the preceding Payment Date, over (y) the amount in respect of interest on the Certificates that is actually paid as interest on the Certificates on such Payment Date, plus, to the extent permitted by applicable law, interest on the Certificate Interest Carryover Shortfall at the Certificate Rate for the Interest Accrual Period.
“Certificate Interest Distributable Amount” means, with respect to any Payment Date, the sum of the Certificate Monthly Interest Distributable Amount for such Payment Date and the Certificate Interest Carryover Shortfall for such Payment Date.
“Certificate Monthly Interest Distributable Amount” means, with respect to any Payment Date, interest accrued for the related Interest Accrual Period at the Certificate Rate on the Certificate Balance on the immediately preceding Payment Date after giving effect to all payments of principal to Certificateholders on or prior to such Payment Date (or, in the case of the first Payment Date, on the Original Certificate Balance).
| App A-4 |
“Certificate Monthly Principal Distributable Amount” means, with respect to any Payment Date, the Certificate Percentage of the Principal Distributable Amount for such Payment Date.
“Certificate of Trust” means the Certificate of Trust filed for the Issuer pursuant to Section 3810(a) of the Statutory Trust Statute, substantially in the form of Exhibit A to the Initial Trust Agreement.
“Certificate Owner” means, with respect to a Certificate, any Person who is the beneficial owner of such Certificate for U.S. federal income tax purposes.
“Certificate Percentage” means (i) for each Payment Date until the Notes have been paid in full, 0%; and (ii) thereafter, 100%.
“Certificate Pool Factor” means, with respect to the Certificates on any Payment Date, a seven-digit decimal figure equal to the outstanding principal balance of the Certificates on such Payment Date (after giving effect to any reductions thereof to be made on such Payment Date) divided by the Original Certificate Balance.
“Certificate Principal Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of (x) the sum of (i) the Certificate Monthly Principal Distributable Amount and (ii) any outstanding Certificate Principal Carryover Shortfall for the preceding Payment Date, over (y) the amount in respect of principal that is actually paid as principal on the Certificates on such Payment Date.
“Certificate Principal Distributable Amount” means, with respect to any Payment Date, the sum of the Certificate Monthly Principal Distributable Amount for each Payment Date and any outstanding Certificate Principal Carryover Shortfall as of the close of the immediately preceding Payment Date; provided, however, that the Certificate Principal Distributable Amount shall not exceed the Certificate Balance. In addition, on the Payment Date as of which all of the Receivables are to be purchased pursuant to Section 8.01 of the Sale and Servicing Agreement, the principal required to be deposited into the Certificate Distribution Account will include the amount necessary to reduce the Certificate Balance to zero.
“Certificate Rate” means 0.00% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).
“Certificate Register” and “Certificate Registrar” means the register maintained and the registrar (or any successor thereto) appointed pursuant to Section 3.04 of the Trust Agreement.
“Certificateholder” means a Person in whose name a Trust Certificate is registered.
“Class” means all Notes whose form is identical except for variation in denomination, principal amount or owner (i.e., each of Class A-1, Class A-2, Class A-3 and Class A-4).
“Class A Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
| App A-5 |
“Class A-1 Final Scheduled Payment Date” means the June 2019 Payment Date.
“Class A-1 Interest Rate” means 2.35000% per annum (computed on the basis of the actual number of days in the related Interest Accrual Period divided by 360).
“Class A-1 Noteholder” means a Person in whose name a Class A-1 Note is Registered in the Note Register.
“Class A-1 Notes” means the Class A-1 2.35000% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.
“Class A-2 Final Scheduled Payment Date” means the December 2020 Payment Date.
“Class A-2 Interest Rate” means 2.66% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).
“Class A-2 Noteholder” means the Person in whose name a Class A-2 Note is registered in the Note Register.
“Class A-2 Notes” means the Class A-2 2.66% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.
“Class A-3 Final Scheduled Payment Date” means the May 2022 Payment Date.
“Class A-3 Interest Rate” means 3.01% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).
“Class A-3 Noteholder” means a Person in whose name a Class A-3 Note is registered in the Note Register.
“Class A-3 Notes” means the Class A-3 3.01% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.
“Class A-4 Final Scheduled Payment Date” means the August 2024 Payment Date.
“Class A-4 Interest Rate” means 3.16% per annum (computed on the basis of a 360-day year consisting of twelve 30-day months).
“Class A-4 Noteholder” means the Person in whose name a Class A-4 Note is registered in the Note Register.
“Class A-4 Notes” means the Class A-4 3.16% Asset Backed Notes, substantially in the form of Exhibit A to the Indenture.
“Clearing Agency” means an organization registered as a “clearing agency” pursuant to Section 17A of the Exchange Act, which initially shall be The Depository Trust Company.
| App A-6 |
“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 May 30, 2018.
“Code” means the Internal Revenue Code of 1986, as amended from time to time, and Treasury Regulations promulgated thereunder.
“Collateral” has the meaning specified in the Granting Clause of the Indenture.
“Collection Account” means the account designated as such, and established and maintained pursuant to Section 4.01 of the Sale and Servicing Agreement.
“Collection Period” means each calendar month during the term of this Agreement (or, in the case of the first Collection Period, the period of time since the Cutoff Date through the last day of the calendar month immediately preceding the month in which the first Payment Date occurs).
“Commission” means the Securities and Exchange Commission, and its successors.
“Contract Rate” means, with respect to a Receivable, the rate per annum at which interest accrues under the motor vehicle retail installment sales contract or installment loan evidencing such Receivable. Such rate may be less than the “Annual Percentage Rate” disclosed in the Receivable.
“Control” shall have the meaning specified in Section 8-106 of the UCC.
“Corporate Trust Office” means (i) with respect to the Indenture Trustee, the office of the Indenture Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of this Agreement is located at the address set forth on Schedule A to the Sale and Servicing Agreement or at such other address as the Indenture Trustee may designate from time to time by notice to the Noteholders and the Seller, or the principal corporate trust office of any successor Indenture Trustee (of which address such successor Indenture Trustee will notify the Noteholders, the Seller and the Issuer) and (ii) with respect to the Owner Trustee, the corporate trust office of the Owner Trustee located at the address set forth on Schedule A to the Sale and Servicing Agreement, or at such other address as the Owner Trustee may designate by notice to the Owners and, the Depositor, or the principal corporate trust office of any successor Owner Trustee at the address designated by such successor Owner Trustee by notice to the Owners and the Depositor.
“Cutoff Date” means the opening of business on May 1, 2018.
“Dealer” means the dealer of automobiles who sold a Financed Vehicle and who originated and assigned the Receivable relating to such Financed Vehicle to AHFC under an existing agreement between such dealer and AHFC.
| App A-7 |
“Dealer Recourse” means, with respect to a Receivable, all recourse rights against the Dealer which originated the Receivable, and any successor to such Dealer.
“Default” means any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default.
“Defaulted Receivable” means a Receivable (other than an Administrative Receivable or a Warranty Receivable as to which a Warranty Purchase Payment or an Administrative Purchase Payment has been made) as to which (i) all or any part of a Scheduled Payment is 120 or more days past due and the Servicer has not repossessed the related Financed Vehicle or (ii) the Servicer has, in accordance with its customary servicing procedures, determined that eventual payment in full is unlikely and either repossessed and liquidated the related Financed Vehicle or repossessed and held the related Financed Vehicle in its repossession inventory for 90 days, whichever occurs first.
“Definitive Notes” shall have the meaning specified in Section 2.11 of the Indenture.
“Delaware Trustee” means BNY Mellon Trust of Delaware, as Delaware Trustee under the Trust Agreement.
“Delinquency Percentage” means, for each Payment Date and the related preceding calendar month, an amount equal to the ratio (expressed as a percentage) of (i) the aggregate Principal Balance of all 61-Day Delinquent Receivables as of the last day of calendar month immediately preceding such Payment Date to (ii) the Pool Balance of all outstanding Receivables held by the Issuer as of the last day of such preceding calendar month.
“Delinquency Trigger” means, for any Payment Date and the related preceding calendar month, 4.80%.
“Deposit Date” means, with respect to any Collection Period and Payment Date, the Business Day immediately preceding such Payment Date.
“Depositor” means AHR in its capacity as Depositor under the Trust Agreement.
“Determination Date” means, with respect to any Payment Date, the 13th calendar day of the month in which such Payment Date occurs or, if such day is not a Business Day, the immediately succeeding Business Day.
“Discount Receivable” means any Receivable that has an APR which is less than the Required Rate.
“Domestic Corporation” means an entity that is treated as a corporation for U.S. federal income tax purposes and is a United States person under Section 7701(a)(30) of the Code.
“DTC” means The Depository Trust Company, and its successors.
| App A-8 |
“Eligible Account” means either (A) a segregated deposit account or securities account over which the applicable Trustee has sole signature authority, maintained with an Eligible Institution meeting the requirements of clause (i) thereof or (B) a segregated trust account maintained with an Eligible Institution meeting the requirements of clause (ii) thereof, in each case bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Securityholders, the Noteholders or the Certificateholders, as the case may be.
“Eligible Institution” means (i) a federally insured depository institution or trust company (which may be the Owner Trustee, the Indenture Trustee or any of their respective affiliates) organized under the laws of the United States, any state thereof, the District of Columbia or the Commonwealth of Puerto Rico (or any domestic branch of a foreign bank whose deposits are federally insured, provided that the foreign bank meets the requirements of Rule 13k-1(b)(1) under the Exchange Act (17 C.F.R. §240.1k-1(b)(1)) which at all times has either (A) a short-term certificate of deposit rating of “A-1” by S&P or a long-term deposit rating of “A” by S&P and a short-term certificate of deposit rating of “F-1” by Fitch or a long-term deposit rating of “A” by Fitch or (B) such other rating that is acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition or (ii) the corporate trust department of (A) the Indenture Trustee (B) the Owner Trustee, or (C) any other bank or depository institution organized under the laws of the United States, any state thereof, the District of Columbia or the Commonwealth of Puerto Rico (or any domestic branch of a foreign bank whose deposits are federally insured, provided that the foreign bank meets the requirements of Rule 13k-1(b)(1) under the Exchange Act (17 C.F.R. §240.1k-1(b)(1)) that (x) is authorized under such laws to act as a trustee or in any other fiduciary capacity, (y) will hold any Accounts as trust accounts and (z) has a rating that is otherwise acceptable to the Rating Agencies, as evidenced by satisfaction of the Rating Agency Condition, such that the rating of the Indenture Trustee, the Owner Trustee or any other bank would not in and of itself result in a qualification, downgrade or withdrawal of any of the then-current ratings assigned thereby to the Notes (as evidenced by written notice to the Indenture Trustee, Owner Trustee or any other bank).
“Eligible Investments” means, at any time, any one or more of the following obligations and 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, any state of the United States, the District of Columbia or the Commonwealth of Puerto Rico then rated the highest available credit rating of each Rating Agency for such obligations;
(iii) any mutual fund, money market fund, common trust fund or other pooled investment vehicle, that has the highest available credit rating of each Rating Agency, that invests solely in any (or any combination) of the obligations described in clauses (i) and (ii) above;
| App A-9 |
(iv) securities bearing interest or sold at a discount (including commercial paper) issued by any corporation incorporated under the laws of the United States or any state thereof, the District of Columbia or the Commonwealth of Puerto Rico, so long as at the time of such investment or contractual commitment providing for such investment either the long-term unsecured debt of such corporation has a rating from each Rating Agency in the highest investment category granted thereby for such obligations or the commercial paper or other short-term debt which is then rated has a rating from each Rating Agency in the highest investment category granted thereby for such obligations;
(v) certificates of deposit, demand deposits, time deposits or bankers’ acceptances issued by any depository institution or trust company (including the Trustee) incorporated under the laws of the United States or any state thereof, the District of Columbia or the Commonwealth of Puerto Rico and subject to supervision and examination by banking authorities of one or more of such jurisdictions, provided that the short-term unsecured debt obligations of such depository institution or trust company has the highest available category of credit rating of each Rating Agency for such obligations;
(vi) certificates of deposit issued by any bank, trust company, savings bank or other savings institution, having a rating in the highest investment category from each of the Rating Agencies, and fully insured by the FDIC;
(vii) repurchase obligations held by the Trustee that are acceptable to the Trustee with respect to any security described in clauses (i) or (ii) hereof or any other security issued or guaranteed by any other agency or instrumentality of the United States, in either case entered into with a federal agency or a depository institution or trust company (acting as principal) described in clause (iv) above;
(viii) any mutual fund, money market fund, common trust fund or other pooled investment vehicle having a rating, at the time of such investment, from each of the Rating Agencies rating in the highest investment category granted thereby (including, but not limited to funds of which Citibank, N.A. or an affiliate thereof is the manager or financial advisor); and
(ix) such other investments acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition;
provided that each of the foregoing investments shall mature no later than the Deposit Date immediately following the date of purchase (other than in the case of the investment of monies in instruments of which the entity at which the Reserve Fund, the Yield Supplement Account or the Collection Account, as the case may be, is located is the obligor, which may mature on the related Payment Date), and shall be required to be held to such maturity.
Notwithstanding anything to the contrary contained in this definition, (a) no Eligible Investment may be purchased at a premium, and (b) no obligation or security is an “Eligible Investment” unless (i) the Trustee has Control over such obligation or security and (ii) 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.
| App A-10 |
For purposes of this definition, any reference to the highest available credit rating of an obligation shall mean the highest available credit rating for such obligation, or such lower credit rating acceptable to each Rating Agency, as evidenced by satisfaction of the Rating Agency Condition.
“Entitlement Holder” shall have the meaning specified in Section 8-102 of the UCC.
“Entitlement Order” shall have the meaning specified in Section 8-102 of the UCC.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Event of Default” shall have the meaning specified in Section 5.01 of the Indenture.
“Excess Payment” means, with respect to a Receivable and a Collection Period, the amount, if any, by which the Actual Payment exceeds the sum of (i) the Scheduled Payment and (ii) any Overdue Payment.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Executive Officer” means, with respect to any corporation or depository institution, the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, President, Executive Vice President, any Vice President, Secretary, Assistant Secretary or Treasurer of such corporation or depository institution; and with respect to any partnership, any general partner thereof.
“Expenses” means all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all reasonable out of pocket costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever.
“FATCA” means Sections 1471 through 1474 of the Code, as of the date hereof (or any amended or successor provisions that are substantially similar), any current or future regulations or official interpretations thereunder or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any published intergovernmental agreement entered into in connection with the implementation of the foregoing and any fiscal or regulatory legislation, rules or official practices adopted pursuant to such published intergovernmental agreement.
“FATCA Withholding Tax” means any withholding or deduction required pursuant to FATCA.
“FDIC” means the Federal Deposit Insurance Corporation.
“FNMA” means the Federal National Mortgage Association, and its successors.
“Final Scheduled Payment Dates” means, collectively, the Class A-1 Final Scheduled Payment Date, the Class A-2 Final Scheduled Payment Date, the Class A-3 Final Scheduled Payment Date and the Class A-4 Final Scheduled Payment Date.
“Final Scheduled Maturity Date” means August 19, 2024.
| App A-11 |
“Financed Vehicle” means, with respect to any retail installment sale or conditional sale contract, the related new or used Honda or Acura automobile, together with all accessions thereto, securing the related Obligor’s indebtedness under such retail installment sale or conditional sale contract.
“Financial Asset” shall have the meaning specified in Section 8-102(a)(9) of the UCC.
“Fitch” means Fitch Ratings, Inc., or its successors.
“Force Majeure” means acts beyond an entity’s control, including, but not limited to, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes, vandalism, sabotage, accidents, fires, floods, strikes, work stoppages, labor disputes, mechanical breakdowns, shortages, acts of any unit of government or governmental agency, and interruptions, loss or malfunctions of utilities, communications or computer (hardware and software) services, or any similar cause.
“Grant” means mortgage, pledge, bargain, sell, warrant, alienate, remise, release, convey, assign, transfer, create and grant a lien upon and a security interest in and a right of set-off against, deposit, set over and confirm pursuant to this 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 monies 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.
“Hague Securities Convention” means the Hague Convention on the Law Applicable to Certain Rights in Respect of Securities held with an Intermediary (concluded July 5, 2006).
“Honda Parties” shall have the meaning specified in Section 7.02(e) of the Indenture.
“Honda Party” shall have the meaning specified in Section 7.02(e) of the Indenture.
“Indenture” means the indenture, dated as of the Closing Date between the Issuer and the Indenture Trustee.
“Indenture Trustee” means Citibank, N.A., as indenture trustee under the Indenture, its successors in interest and any successor trustee under the Indenture.
“Independent” means, when used with respect to any specified Person, that the Person (i) is in fact independent of the Issuer, any other obligor on the Notes, the Seller and any of their respective Affiliates, (ii) does not have any direct financial interest or any material indirect financial interest in the Issuer, any such other obligor, the Seller or any of their respective Affiliates and (iii) is not connected with the Issuer, any such other obligor, the Seller or any of their respective Affiliates as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions.
| App A-12 |
“Independent Certificate” means a certificate or opinion to be delivered to the Indenture Trustee under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, made by an Independent appraiser or other expert appointed by an Issuer Order and approved by the Indenture Trustee, and such opinion or certificate shall state that the signer has read the definition of “Independent” in this Indenture and that the signer is Independent within the meaning thereof.
“Initial Trust Agreement” means the trust agreement, dated April 6, 2018 among the Depositor, the Owner Trustee and the Delaware Trustee, pursuant to which the Issuer was created.
“Insolvency Event” means, with respect to a specified Person, (i) the filing of a decree or order for relief by a court having jurisdiction in the premises in respect of such Person or any substantial part of its property 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 for such Person or for any substantial part of its property, or ordering the winding-up or liquidation of such Person’s affairs, and such decree or order shall remain unstayed and in effect for a period of 90 consecutive days; or (ii) the commencement by such Person 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 such Person to the entry of an order for relief in an involuntary case under any such law, or the consent by such Person to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator or similar official for such Person or for any substantial part of its property, or the making by such Person of any general assignment for the benefit of creditors, or the failure by such Person generally to pay its debts as such debts become due, or the taking of action by such Person in furtherance of any of the foregoing.
“Insurance Policy” means, with respect to a Receivable, an insurance policy covering physical damage, credit life, credit disability, theft, mechanical breakdown or any similar event relating to the related Financed Vehicle or Obligor.
“Interest Accrual Period” means with respect to any Payment Date and (i) the Class A-1 Notes, the period from and including the immediately preceding Payment Date (or, in the case of the first Payment Date, the Closing Date) to but excluding such Payment Date and (ii) the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes, the period from and including the 18th day of the prior month (or, in the case of the first Payment Date, the Closing Date) to but excluding the 18th day of the month of such Payment Date.
“Interest Rate” means the Class A-1 Interest Rate, the Class A-2 Interest Rate, the Class A-3 Interest Rate or the Class A-4 Interest Rate, as applicable.
“Investment Letter” means a letter delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of the Trust Agreement, substantially in the form of Exhibit C to the Trust Agreement.
“Investor” means a Noteholder or Note Owner, as applicable.
| App A-13 |
“Issuer” means Honda Auto Receivables 2018-2 Owner Trust, a Delaware statutory trust, until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained in the Indenture and required by the TIA, each other obligor on the Notes.
“Issuer Order” or “Issuer Request” means a written order or request signed in the name of the Issuer by any Authorized Officer and delivered to the Indenture Trustee.
“Lien” means any security interest, lien, charge, pledge, equity or encumbrance of any kind other than tax liens, mechanics’ liens and any liens that attach to a Receivable or any property, as the context may require, by operation of law.
“Liquidated Receivable” means a Receivable that (i) has been the subject of a prepayment in full, (ii) has otherwise been paid in full or (iii) the Servicer has determined that the final amounts in respect of such payment have been paid with respect to a Defaulted Receivable, regardless of whether all or any part of such payment has been made by the Obligor under such Receivable, the Seller pursuant to this Agreement, AHFC pursuant to the Receivables Purchase Agreement, the Servicer pursuant hereto, an insurer pursuant to an Insurance Policy or otherwise.
“Liquidation Expenses” means, with respect to a Defaulted Receivable, the amount charged by the Servicer, in accordance with its customary servicing procedures, to or for its account for repossessing, refurbishing and disposing of the related Financed Vehicle and other out-of-pocket costs related to such liquidation.
“Liquidation Proceeds” means, with respect to a Defaulted Receivable, all amounts realized with respect to such Receivable from whatever sources (including, without limitation, proceeds of any Insurance Policy), net of amounts that are required by law or such Receivable to be refunded to the related Obligor.
“Maximum Yield Supplement Amount” means with respect to any Collection Period and the related Deposit Date, after giving effect to the Yield Supplement Amount, the maximum amount required to be on deposit in the Yield Supplement Account on the immediately succeeding Payment Date, which is equal to the present value (using an interest rate of: 0.25%) of the sum of all Yield Supplement Amounts for all future Payment Dates, assuming that future Scheduled Payments on the Discount Receivables are made on the date on which they are scheduled as being due.
“Monthly Payment” means, with respect to any Receivable, the amount of each fixed monthly payment payable to the obligee under such Receivable in accordance with the terms thereof, net of any portion of such monthly payment that represents late payment charges, extension fees or collections allocable to payments to be made by Obligors for payment of insurance premiums, extended service contracts or similar items.
“Net Liquidation Proceeds” means, with respect to a Defaulted Receivable, Liquidation Proceeds less Liquidation Expenses.
“Nonrecoverable Advance” shall have the meaning specified in Section 4.04(c) of the Sale and Servicing Agreement.
| App A-14 |
“Non-Retained Notes” shall mean any Notes that are not Retained Notes.
“Non-U.S. Person” means any Person who is not (i) a citizen or resident of the United States who is a natural person, (ii) a corporation or partnership (or an entity treated as a corporation or partnership) created or organized in or under the laws of the United States or any state thereof, including the District of Columbia (unless, in the case of a partnership, Treasury Regulations are adopted that provide otherwise), (iii) an estate, the income of which is subject to U.S. federal income taxation, regardless of its source, (iv) a trust, if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons (as defined in the Code and Treasury Regulations) have the authority to control all substantial decisions of the trust; or (v) a trust that was in existence prior to August 20, 1996 and that, under Treasury Regulations, is eligible to elect, and does validly elect, to be treated as a United States person (as defined in the Code and Treasury Regulations) despite not meeting the requirements of clause (iv).
“Note Depository Agreement” means the agreement dated as of the Closing Date, executed by the Issuer in favor of The Depository Trust Company, as the initial Clearing Agency, relating to the Notes.
“Note Distributable Amount” means, with respect to any Payment Date, the sum of the Note Interest Distributable Amount and the Note Principal Distributable Amount for such Payment Date.
“Note Distribution Account” means the account designated as such, and established and maintained pursuant to Section 4.01 of the Sale and Servicing Agreement.
“Note Interest Carryover Shortfall” means, with respect to any Payment Date and a Class of Notes, the excess, if any, of (x) the sum of (i) the Note Monthly Interest Distributable Amount for such Class for the preceding Payment Date and (ii) any outstanding Note Interest Carryover Shortfall for such Class on such preceding Payment Date, over (y) the amount of interest that is actually paid on the Notes on such preceding Payment Date, plus, to the extent permitted by law, interest on the Note Interest Carryover Shortfall at the related Interest Rate for the related Interest Accrual Period.
“Note Interest Distributable Amount” means, with respect to any Payment Date and a Class of Notes, the sum of the Note Monthly Interest Distributable Amount for such Payment Date and the Note Interest Carryover Shortfall for such Class of Notes. For all purposes of this Agreement and the other Basic Documents, interest with respect to the Class A-2, Class A-3 and Class A-4 Notes shall be computed on the basis of a 360-day year consisting of twelve 30-day months; and interest with respect to the Class A-1 Notes shall be computed on the basis of the actual number of days in each applicable Interest Accrual Period, divided by 360.
“Note Monthly Interest Distributable Amount” means, with respect to any Payment Date, interest accrued for the related Interest Accrual Period at the related Interest Rate for each Class of Notes on the Outstanding Amount of the Notes of each such Class on the immediately preceding Payment Date (or, in the case of the first Payment Date, the original principal amount of each such Class of Notes), after giving effect to all distributions of principal to the Noteholders of each such Class on or prior to such Payment Date.
| App A-15 |
“Note Monthly Principal Distributable Amount” means, with respect to any Payment Date, the Note Percentage of the Principal Distributable Amount for such Payment Date.
“Note Owner” means, with respect to a Book-Entry Note, the Person who is the beneficial 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 as a Clearing Agency Participant or as an indirect participant, in each case in accordance with the rules of such Clearing Agency).
“Note Percentage” means (i) for each Payment Date until the aggregate principal amount of each Class of Notes has been paid in full, 100%; and (ii) thereafter, 0%.
“Note Pool Factor” means, with respect to each Class of Notes as of any Payment Date, a seven-digit decimal figure equal to the Outstanding Amount of such Class of Notes as of such Payment Date (after giving effect to any reductions thereof to be made on such Payment Date) divided by the original outstanding principal balance of such Class of Notes.
“Note Principal Carryover Shortfall” means, with respect to any Payment Date, the excess, if any, of the sum of the Note Monthly Principal Distributable Amount plus any outstanding Note Principal Carryover Shortfall for the preceding Payment Date, over the amount in respect of principal that is actually paid as principal on the Notes on such Payment Date.
“Note Principal Distributable Amount” means, with respect to any Payment Date, the sum of (i) the Note Monthly Principal Distributable Amount, (ii) any outstanding Note Principal Carryover Shortfall as of the close of the immediately preceding Payment Date and, (iii) on the Final Payment Date for a Class of Notes or the Payment Date as of which all of the Receivables are to be purchased pursuant to Section 8.01 of the Sale and Servicing Agreement, the amount necessary (after giving effect to all amounts allocable to principal required to be deposited in the Note Distribution Account on such Payment Date) to reduce the Outstanding Amount of each related Class of Notes to zero; provided, however, that the Note Principal Distributable Amount with respect to a Class of Notes shall not exceed the Outstanding Amount of such Class of Notes.
“Note Register” and “Note Registrar” shall have the respective meanings specified in Section 2.04 of the Indenture.
“Noteholder” means the Person in whose name a Note is registered on the Note Register.
“Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-4 Notes.
“Obligor” on a Receivable means the purchaser or co-purchasers of the related Financed Vehicle purchased in part or in whole by the execution and delivery of a retail installment contract or any other Person who owes or may be liable for payments under such retail installment contract.
| App A-16 |
“Officer’s Certificate” means (i) with respect to the Seller or the Servicer, a certificate signed by the president, any vice president, the treasurer, the secretary, the assistant secretary, or the compliance officer of the Seller or the Servicer, as the case may be, and delivered to the Trustee or (ii) with respect to the Issuer, a certificate signed by any Authorized Officer of the Issuer, under the circumstances described in, and otherwise complying with, the applicable requirements of Section 11.01 of the Indenture, and delivered to the Indenture Trustee. Unless otherwise specified, any reference in the Indenture to an Officer’s Certificate shall be to an Officer’s Certificate of the Issuer.
“Opinion of Counsel” means (i) with respect to the Seller, the RPA Seller, the Servicer or the Depositor, a written opinion of counsel (who may be an employee of or outside counsel to the Seller, the RPA Seller, the Servicer or the Depositor) or (ii) with respect to the Issuer, one or more written opinions of counsel who may, except as otherwise expressly provided in the Indenture, be an employee of or counsel to the Issuer and who shall be satisfactory to the Indenture Trustee, and which opinion or opinions shall be addressed to the Indenture Trustee as Indenture Trustee, shall comply with any applicable requirements of Section 11.01 of the Indenture and shall be in form and substance satisfactory to the Indenture Trustee.
“Original Certificate Balance” means $33,739,737.54.
“Original Pool Balance” means $1,349,575,737.54.
“Outstanding” means, as of the date of determination, all Notes theretofore authenticated and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note Registrar or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof the payment for which money in the necessary amount has been theretofore deposited with the Indenture Trustee or any Paying Agent in trust for the Holders of such Notes (provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision for such notice has been made, satisfactory to the Indenture Trustee); and
(iii) Notes cancelled or paid pursuant to Section 2.05 of the Indenture in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide Protected Purchaser;
provided, that in determining whether the Holders of the requisite Outstanding Amount have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Basic Document, Notes owned by the Issuer, any other obligor upon the Notes, the Seller or any of their respective Affiliates shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver, only Notes that the Indenture Trustee knows to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Issuer, any other obligor upon the Notes, the Seller or any Affiliate of any of their respective Affiliates.
| App A-17 |
“Outstanding Advances” means, with respect to a Receivable and the last day of a Collection Period, the sum of all Advances, if any, made as of or prior to such date, minus (1) all payments or collections as of or prior to such date which are specified in Section 4.04(b) and (c) of the Sale and Servicing Agreement as applied to reimburse all unpaid Advances with respect to such Receivable and (2) all amounts for which the Servicer has deemed to have released all claims for reimbursement of Outstanding Advances pursuant to Section 3.08 of the Sale and Servicing Agreement.
“Outstanding Amount” means the aggregate principal amount of all Notes, or if indicated by the context, all Notes of any class, Outstanding at the date of the determination.
“Outstanding Interest Advances” means, as of the last day of a Collection Period with respect to a Receivable, the portion of Outstanding Advances allocable to interest.
“Outstanding Principal Advances” means, as of the last day of a Collection Period with respect to a Receivable, the portion of Outstanding Advances allocable to principal.
“Overdue Payment” shall have the meaning specified in Section 4.03(a) of the Sale and Servicing Agreement.
“Owner Trust Estate” means all right, title and interest of the Issuer in and to the property and rights assigned to the Issuer pursuant to Article Two of the Sale and Servicing Agreement, all funds on deposit from time to time in the Accounts and the Certificate Distribution Account, all other property of the Issuer from time to time, including any rights of the Owner Trustee and the Issuer pursuant to the Sale and Servicing Agreement and the Administration Agreement and all proceeds of the foregoing.
“Owner Trustee” means The Bank of New York Mellon, as owner trustee under the Trust Agreement, its successors in interest and any successor owner trustee under the Trust Agreement.
“Paying Agent” means (i) with respect to the Notes, the Indenture Trustee or any other Person that meets the eligibility standards for the Indenture Trustee specified in Section 6.11 of the Indenture and is authorized by the Issuer to make payments to and distributions from the Collection Account and the Note Distribution Account, including payments of principal of or interest on the Notes on behalf of the Issuer and (ii) with respect to the Certificates, any paying agent or co-paying agent appointed pursuant to Section 3.09 of the Trust Agreement.
“Payment Date” means, with respect to a Collection Period, the 18th calendar day of the next succeeding calendar month or, if such day is not a Business Day, the next succeeding Business Day, commencing June 18, 2018.
| App A-18 |
“Percentage Interest” means, as to any Trust Certificate, (i) the original certificate balance for such Trust Certificate, as specified on the face thereof, divided by (ii) the Original Certificate Balance; provided, that in determining whether the Holders of the requisite portion or percentage of the Trust Certificates have given any request, demand, authorization, direction, notice, consent or waiver hereunder or under any other Basic Document, Trust Certificates owned by the Issuer, any other obligor upon the Certificates, the Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be disregarded and deemed to be excluded from the Certificate Balance (unless such Persons own 100% of the Trust Certificates), except that, in determining whether the Indenture Trustee and Owner Trustee shall be protected in relying on any such request, demand, authorization, direction, notice, consent or waiver, only Trust Certificates that a Responsible Officer of the Indenture Trustee and the Owner Trustee have actual knowledge of being so owned shall be so disregarded. Trust Certificates so owned that have been pledged in good faith may be regarded as included in the Certificate Balance if the pledgee establishes to the satisfaction of the Indenture Trustee or the Owner Trustee, as applicable, the pledgee’s right so to act with respect to such Trust Certificates and that the pledgee is not the Issuer, any other obligor upon the Trust Certificates, the Seller or any Affiliate of any of their respective Affiliates. Neither the Indenture Trustee nor the Owner Trustee shall incur any liability to any person in determining whether a pledgee has the right to act with respect to such Trust Certificates.
“Permitted Liens” means (a) any liens created by the Basic Documents; (b) any liens for taxes not yet due and payable or the amount of which is being contested in good faith by appropriate proceedings; and (c) any liens of mechanics, suppliers, vendors, materialmen, laborers, employees, repairmen and other like liens securing obligations which are not due and payable or the amount or validity of which is being contested in good faith by appropriate proceedings.
“Person” means any legal person, including any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
“Plan” means an “employee benefit plan” as defined in Section 3(3) of ERISA whether or not subject to Title I of ERISA, a “plan” as defined in Section 4975 of the Code, or an entity deemed to hold the plan assets of any of the foregoing.
“Pool Balance” means, as of any date, the aggregate Principal Balance of the Receivables (exclusive of all Administrative Receivables for which the Servicer has paid the Administrative Purchase Payment, Warranty Receivables for which the Seller has paid the Warranty Purchase Payment and Defaulted Receivables) as of the close of business on such date.
“Predecessor Note” 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.
“Principal Balance” means, with respect to any Receivable as of any date, the Amount Financed minus the sum of the following amounts, without duplication: (i) that portion of all Scheduled Payments actually received on or prior to such date allocable to principal, computed in accordance with the simple interest method, (ii) any Warranty Purchase Payment or Administrative Purchase Payment with respect to such Receivable allocable to principal and (iii) any Excess Payments or other payments applied to reduce the unpaid principal balance of such Receivable.
| App A-19 |
“Principal Distributable Amount” means, with respect to any Payment Date, the sum of the following amounts, without duplication: (i) the principal portion of all Scheduled Payments actually received during the related Collection Period, computed in accordance with the simple interest method, (ii) the principal portion of all Excess Payments, received during such Collection Period, (iii) the Principal Balance of each Receivable that became an Administrative Receivable or a Warranty Receivable during such Collection Period and (iv) the Principal Balance of each Receivable that became a Defaulted Receivable during such Collection Period.
“Proceeding” means any suit in equity, action at law or other judicial or administrative proceeding.
“Prospectus” means the prospectus dated as of May 22, 2018.
“Protected Purchaser” shall have the meaning set forth in Article 8 of the UCC.
“Purchaser” means American Honda Receivables LLC, in its capacity as purchaser of the Receivables under the Receivables Purchase Agreement, and its successors and assigns.
“Rating Agency” means each of Fitch and S&P.
“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 practicable or acceptable to each Rating Agency) prior notice thereof and within ten Business Days of each Rating Agency’s receipt of such notice (or such shorter period as is practicable or acceptable to each Rating Agency) such Rating Agency shall not have notified the Seller, the Servicer, the Indenture Trustee and the Owner Trustee in writing that such action will result in a qualification, reduction or withdrawal of the then current rating of the Notes.
“Receivable” means any retail installment sale contract executed by an Obligor in respect of a Financed Vehicle, and all proceeds thereof and payments thereunder, which Receivables shall be identified in a Schedule of Receivables.
“Receivable Files” means the documents (whether tangible or electronic) specified in Section 2.02 of the Sale and Servicing Agreement.
“Receivables Purchase Agreement” means the receivables purchase agreement, dated as of the Closing Date, between AHFC and the Seller, as amended or supplemented from time to time.
“Receivables Purchase Price” has the meaning set forth in Section 3.01 of the Receivables Purchase Agreement.
| App A-20 |
“Record Date” means, with respect to a Payment Date or Redemption Date, the day immediately preceding such Payment Date or Redemption Date or, if Definitive Notes have been issued, the close of business on the last day of the month immediately preceding the month in which such Payment Date or Redemption Date occurs.
“Redemption Date” means, in the case of a redemption of the Notes pursuant to Section 10.01 of the Indenture, the Payment Date specified by the Servicer or the Issuer pursuant to Section 10.01 of the Indenture.
“Redemption Price” means, in the case of a redemption of the Notes pursuant to Section 10.01 of the Indenture, an amount equal to the unpaid principal amount of the Notes redeemed plus accrued and unpaid interest thereon at the weighted average of the Interest Rates for each Class of Notes being so redeemed to but excluding the Redemption Date.
“Regulation AB” means Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting releases (Asset Backed Securities, Securities Act Release No. 33 8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005) and the portions of Asset-Backed Securities Disclosure and Registration, Securities Act Release No. 33-9638, 79 Fed. Reg. 57,184 (Sept. 24, 2014)) that are in effect on any specific date or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.
“Repurchase Rules and Regulations” shall have the meaning specified in Section 7.02(e) of the Indenture.
“Requesting Party” has the meaning set forth in Section 5.14(a) of the Receivables Purchase Agreement.
“Required Rate” means 6.20%.
“Required Deposit Rating” means the short-term credit rating of the related entity is at least equal to “F-1” by Fitch and “A-1” by S&P.
“Required Rating” means, with respect to any entity, that such entity (or the parent of such entity) meets at all times the ratings criteria acceptable to each Rating Agency rating the Notes, so as to preclude a downgrade of the Notes and/or credit watch of the Notes with negative implications.
“Required Servicer Rating” means, with respect to the Servicer, that the then short-term unsecured debt obligations of the Servicer are rated at least equal to “F-1” by Fitch and “A-1” by S&P.
“Reserve Fund” means the account designated as such, and established and maintained pursuant to Section 4.01 of the Sale and Servicing Agreement.
“Reserve Fund Initial Deposit” means the initial deposit of cash in the amount of $3,373,939.34 made by or on behalf of the Seller into the Reserve Fund on the Closing Date.
| App A-21 |
“Reserve Fund Property” means, the Reserve Fund Initial Deposit and all proceeds thereof and all other amounts deposited in or credited to the Reserve Fund from time to time under this Agreement, all Eligible Investments made with amounts on deposit therein, all earnings and distributions thereon and proceeds thereof.
“Responsible Officer” means, in the case of the Indenture Trustee and the Securities Intermediary, any officer within the Corporate Trust Office of the Indenture Trustee, including any Managing Director, Vice President, assistant Vice President, director, associate, or any other officer of the Indenture Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, in each case having direct responsibility for the administration of the Indenture and, with respect to the Owner Trustee, any officer of the Owner Trustee or person acting pursuant to a power of attorney with direct responsibility for the administration of the Trust Agreement and the Basic Documents on behalf of the Owner Trustee.
“Retained Note” shall mean any Notes held by the Issuer (or any other person treated as the same person as the Issuer for U.S. federal income tax purposes), but only so long as such Notes are held by such entity, until such time as such Notes are transferred in accordance with the terms and conditions of Section 2.04 of the Indenture.
“Review Conditions” means (i) the Delinquency Percentage for any Payment Date exceeds the Delinquency Trigger for that Payment Date and (ii) the Noteholders or Note Owners, as applicable, have voted, pursuant to Section 2.03(d) of the Receivables Purchase Agreement, to direct an Asset Representations Review of the Subject Receivables.
“RPA Seller” means AHFC, in its capacity as seller of the Receivables pursuant to the Receivables Purchase Agreement, and each successor thereto (in the same capacity).
“Rule 144A Letter” means a letter delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of the Trust Agreement, substantially in the form attached hereto as Exhibit D to the Trust Agreement.
“S&P” means S&P Global Ratings, a division of S&P Global, and any successor or successors thereto.
“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of the Closing Date, among American Honda Receivables LLC, as seller, American Honda Finance Corporation, as servicer, and the Issuer.
“Sarbanes Certification” shall have the meaning specified in Section 3.12(a)(v) of the Sale and Servicing Agreement.
“Schedule of Receivables” means the schedule of Receivables created by the RPA Seller and delivered to the Indenture Trustee promptly after the Closing Date, at the address listed on Schedule A to the Sale and Servicing Agreement, as it may be amended from time to time.
| App A-22 |
“Scheduled Payment” means, with respect to any Payment Date and to a Receivable, the payment set forth in such Receivable as due from the Obligor in the related Collection Period; provided, however, that in the case of the first Collection Period, the Scheduled Payment shall include all such payments due from the Obligor on or after the Cutoff Date.
“Secretary of State” means the Secretary of State of the State of Delaware.
“Section 385 Controlled Partnership” shall have the meaning set forth in Treasury Regulation section 1.385-1(c)(1) for a “controlled partnership”.
“Section 385 Expanded Group” shall have the meaning set forth in Treasury Regulation section 1.385-1(c)(4) for an “expanded group”.
“Securities” means the Notes and the Trust Certificates.
“Securities Act” means the Securities Act of 1933, as amended.
“Securities Intermediary” means Citibank, N.A.
“Security Entitlement” shall have the meaning specified in Section 8-102(a)(17) of the UCC.
“Securityholders” means the Noteholders and the Certificateholders.
“Seller” means AHR, in its capacity as Seller of the Receivables under the Sale and Servicing Agreement, and each successor thereto (in the same capacity) pursuant to Section 5.03 of the Sale and Servicing Agreement.
“Seller Certificate” means a certificate of transfer delivered in connection with the transfer of a Trust Certificate pursuant to Section 3.04(a) of the Trust Agreement, substantially in the form of Exhibit B to the Trust Agreement.
“Servicer” means AHFC, in its capacity as servicer of the Receivables pursuant to the Sale and Servicing Agreement, and each successor thereto (in the same capacity) pursuant to Section 6.03 of the Sale and Servicing Agreement.
“Servicer Default” shall have the meaning specified in Section 7.01 of the Sale and Servicing Agreement.
“Servicer’s Certificate” shall have the meaning specified in Section 3.10 of the Sale and Servicing Agreement.
“Servicing Criteria” means the “servicing criteria” set forth in Item 1122(d) of Regulation AB, as such may be amended from time to time.
“Servicing Fee Rate” means 1.00% per annum.
“Similar Law” means a law that is similar to the fiduciary or prohibited transaction provisions of Title I of ERISA or Section 4975 of the Code.
| App A-23 |
“Specified Reserve Fund Balance” means, on the Closing Date, $3,373,939.34, and with respect to any Payment Date, 0.25% of the initial aggregate principal balance of the Receivables as of the Cutoff Date.
“Sponsor” means American Honda Finance Corporation, in its capacity as sponsor under the Sale and Servicing Agreement, and any successor Sponsor thereunder.
“State” means any one of the 50 states of the United States or the District of Columbia.
“Statutory Trust Statute” means Chapter 38 of Title 12 of the Delaware Code, 12 Del.C. § 3801 et seq., as the same may be amended from time to time.
“Subcontractor” means any vendor, subcontractor or other Person that is not responsible for the overall servicing (as “servicing” is commonly understood by participants in the asset-backed securities market) of the Receivables but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to the Receivables under the direction or authority of the Servicer or a Subservicer; unless separate statements of compliance and assessment of compliance and accountant’s attestation of such vendor, subcontractor or other Person are not required to be included in the Issuer’s Form 10-K as provided by Item 17.06 of the SEC Division of Corporation Finance’s Manual of Publicly Available Telephone Interpretations relating to Regulation AB and Related Rules or such other rule or interpretation of Regulation AB from time to time in effect or other applicable rule or regulation.
“Subject Receivables” means, for any Asset Representations Review, all Receivables outstanding and held by the Issuer that are more than 60 days delinquent as of the first day on which the Review Conditions are satisfied.
“Subservicer” means any Person that services Receivables on behalf of the Servicer or any Subservicer and is responsible for the performance (whether directly or through Subservicers or Subcontractors) of a substantial portion of the material servicing functions required to be performed by the Servicer under this Agreement that are identified in Item 1122(d) of Regulation AB.
“Successor Servicer” means any entity appointed as a successor to the Servicer pursuant to Section 7.02 of the Sale and Servicing Agreement.
“Supplemental Servicing Fee” means any interest earned on investment of the monies on deposit in the Collection Account during a Collection Period, net of any investment expenses and losses from such investments, plus all late fees, prepayment charges and other administrative fees and expenses or similar charges allowed by applicable law with respect to the Receivables.
“Tax Information” means information and/or properly completed and signed tax certifications sufficient to eliminate the imposition of or to determine the amount of any withholding of tax, including FATCA Withholding Tax.
“Total Servicing Fee” means the sum of the Basic Servicing Fee and the Supplemental Servicing Fee.
| App A-24 |
“Treasury Regulations” means regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations.
“Trust” means the Issuer.
“Trust Agreement” means the Initial Trust Agreement.
“Trust Certificate” means a certificate evidencing the beneficial interest of an Owner in the Trust, substantially in the form of Exhibit A to the Trust Agreement.
“Trust Fees and Expenses” means all accrued and unpaid Trustees’ fees, any amounts due to the Trustees for reimbursement of expenses or in respect of indemnification and other administrative fees of the Trust.
“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939 as in force on the date hereof, unless otherwise specifically provided.
“Trustee” means any of the Delaware Trustee, the Owner Trustee or the Indenture Trustee as the context requires.
“Trustees” means the Delaware Trustee, the Owner Trustee and the Indenture Trustee.
“UCC” means, unless the context otherwise requires, the Uniform Commercial Code, as in effect in the relevant jurisdiction, as amended from time to time.
“United States” means the United States of America.
“United States Person” means a United States person as defined in Section 7701(a)(30) of the Code.
“Vice President” of any Person means any vice president of such Person, whether or not designated by a number or words before or after the title “Vice President,” who is a duly elected officer of such Person.
“Warranty Purchase Payment” means, with respect to a Payment Date and to a Warranty Receivable repurchased by the RPA Seller as of the end of the related Collection Period, the sum of (a) the unpaid principal balance owed by the related Obligor in respect of such Receivable and (b) interest on such unpaid principal balance at a rate equal to the APR of the related Receivable from the date of last payment by such Obligor to the last day of such Collection Period.
“Warranty Receivable” means a Receivable which the RPA Seller is required to repurchase pursuant to Section 2.03(c) of the Receivables Purchase Agreement or Section 2.04 of the Sale and Servicing Agreement.
“Yield Supplement Account” means the account designated as such, and established and maintained pursuant to Section 4.01 of the Sale and Servicing Agreement.
| App A-25 |
“Yield Supplement Account Deposit” means the initial deposit of cash in the amount of $118,935,752.05 made by or on behalf of the Seller into the Yield Supplement Account on the Closing Date.
“Yield Supplement Amount” means, with respect to any Collection Period and the related Deposit Date, the aggregate amount by which one month’s interest on the Principal Balance as of the first day of such Collection Period of each Discount Receivable (other than a Discount Receivable that is a Defaulted Receivable) at a rate equal to the Required Rate, exceeds one month’s interest on such Principal Balance at the APR of each such Receivable.
“Yield Supplement Withdrawal Amount” means, with respect to any Collection Period and the related Deposit Date, the lesser of (a) the amount on deposit in the Yield Supplement Account and (b) the sum of (i) the Yield Supplement Amount and (ii) after giving effect to the withdrawal of the Yield Supplement Amount, the amount by which the amount on deposit in the Yield Supplement Account exceeds the Maximum Yield Supplement Amount.
II. Rules of Construction
For all purposes of any Basic Document, except as otherwise expressly provided or unless the context otherwise requires, (i) terms used therein 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 that Basic Document as a whole and not to any particular part, article or section within such Basic Document, (iii) references to a schedule, appendix or section such as “Section 1.01” and the like shall refer to the applicable schedule, appendix or section of such Basic Document, (iv) the term “include” and all variations thereof shall mean “include without limitation,” (v) the term “or” is not exclusive and shall include “and/or,” (vi) words in the singular include the plural and words in the plural include the singular, (vii) unless “Business Days” is specified, any reference to a number of days shall be a reference to that number of consecutive calendar days, (viii) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein, (ix) the term “proceeds” shall have the meaning set forth in the applicable UCC and (x) accounting terms not defined in such Basic Document or in any such certificate or other document, and accounting terms partly defined in such Basic Document 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. 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 generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.
| App A-26 |
SCHEDULE A
ADDRESSES FOR NOTICES
| 1. | If to AHFC, in its individual capacity or as RPA Seller, Servicer, Sponsor or Administrator: |
American Honda Finance Corporation
20800 Madrona Avenue
Torrance, CA 90503
Attention: Treasury Manager
| 2. | If to AHR, in its individual capacity or as Seller or Depositor: |
American Honda Receivables LLC
20800 Madrona Avenue
Torrance, CA 90503
Attention: Treasury Manager
| 3. | If to the Issuer: |
Honda Auto Receivables 2018-2
c/o The Bank of New York Mellon
101 Barclay Street, Floor 7 West, New York, NY 10286
Attention: Asset Backed Securities Unit – Honda Auto Receivables 2018-2
with a copy to:
American Honda Finance Corporation
20800 Madrona Avenue
Torrance, CA 90503
Attention: Treasury Manager
| 4. | If to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee, located at: |
Citibank, N.A.
388 Greenwich Street
New York, New York 10013
Attention: HAROT 2018-2
Email: louis.a.piscitelli@citi.com
| 5. | If to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee, located at: |
The Bank of New York Mellon
101 Barclay Street, Floor 7 West, New York, NY 10286
Attention: Asset Backed Securities Unit – Honda Auto Receivables 2018-2
| Sch A-1 |
| 6. | If to the Delaware Trustee: |
BNY Mellon Trust of Delaware
301 Bellevue Parkway, 3rd Floor
Wilmington, Delaware 19809, Attention: Corporate Trust Administration
| 7. | If to Fitch: |
Fitch Ratings, Inc.
33 Whitehall Street
New York, New York 10004
Attention: Auto ABS Surveillance Department
Email: surveillance-abs-auto@fitchratings.com
| 8. | If to S&P: |
S&P Global Ratings
55 Water Street, 40th Floor
New York, New York 10004
Attention: Auto ABS Surveillance Department
Email: servicer_reports@sandp.com
| Sch A-2 |
EXHIBIT A
FORM OF REDEMPTION NOTICE
Via Federal Express
[DATE]
[ADDRESS]
[ADDRESS]
[ADDRESS]
[ADDRESS]
[ADDRESS]
[ADDRESS]
| Re: | Notice of Election to Purchase All Receivables Honda Auto Receivables 2018-2 Owner Trust |
Dear Sir/Madam,
Reference is made to the Sale and Servicing Agreement, dated as of May 30, 2018 (“Sale and Servicing Agreement”), among American Honda Receivables LLC (“AHR”), as Seller, American Honda Finance Corporation (“AHFC”), as Servicer, and Honda Auto Receivables 2018-2 Owner Trust (the “Trust”). Pursuant to Section 8.01 of the Sale and Servicing Agreement, notice is hereby given that on [________] (the “Redemption Date”), AHFC shall purchase the Owner Trust Estate.
Reference is made to the Indenture, dated as of May 30, 2018 (“Indenture”), between the Trust and Citibank, N.A., as Indenture Trustee. Pursuant to Section 10.01 of the Indenture, notice is hereby given that on the Redemption Date, AHFC elects to have the Notes redeemed in exchange for the Redemption Price.
On the Redemption Date, AHFC shall pay to the Indenture Trustee all agreed upon amounts due, representing the Owner Trust Estate under the Sale and Servicing Agreement as of such date. Pursuant to Section 8.04(b) of the Indenture, the Issuer hereby requests that on the Redemption Date, upon (i) the redemption of the Notes pursuant to Section 10.01 of the Indenture and (ii) the delivery of the Officer’s Certificate and Opinion of Counsel required by Section 8.04(b) of the Indenture, the Indenture Trustee release any remaining portion of the Owner Trust Estate from the lien of the Indenture and release any funds on deposit in the Accounts in accordance with Section 8.04(b) of the Indenture. Pursuant to Section 1.02(a) of the Administration Agreement dated as of May 30, 2018 among the Issuer, AHFC, AHR and the Indenture Trustee, AHFC as Administrator is making this Issuer Request on behalf of the Issuer.
| A-1 |
After the purchase of the Owner Trust Estate by AHFC on the Redemption Date, the Trust shall terminate in accordance with the terms of the Trust Agreement, and AHFC hereby requests that the Owner Trustee (i) cancel the Certificate of Trust by filing a certificate of cancellation with the Secretary of State (pursuant to Section 9.01(e) of the Amended and Restated Trust Agreement) and (ii) inform the Certificateholder of such action and specify the date on which the Certificateholder shall surrender such Trust Certificates for final payment and cancellation, pursuant to Section 9.01(c) of the Amended and Restated Trust Agreement.
In addition, AHFC requests that the Indenture Trustee (i) provide notice to the Noteholders pursuant to Section 10.01 of the Indenture, which notice shall contain the information required by Section 10.02 of the Indenture, and (ii) provide notice to DTC pursuant to item 6 in Schedule A of the DTC Letter of Representations, dated as of May 30, 2018.
Terms having their initial letters capitalized which are not otherwise defined herein have the meanings ascribed to them in the Sale and Servicing Agreement or the Indenture.
| Very Truly Yours, | ||
| American Honda Finance Corporation, | ||
| as Servicer and Administrator | ||
| By: | ||
| Name: | [__________] | |
| Title: | [__________] | |
| cc: | [Rating Agencies] |
| A-2 |
EXHIBIT B
FORM
OF OFFICER’S CERTIFICATE
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST
Officer’s Certificate
Reference is hereby made to the Indenture dated as of May 30, 2018 (the “Indenture”) between Honda Auto Receivables 2018-2 Owner Trust, as Issuer (the “Issuer”), and Citibank, N.A., as Indenture Trustee (the “Indenture Trustee”), and to the Sale and Servicing Agreement dated as of May 30, 2018 (the “Sale and Servicing Agreement”) among the Issuer, American Honda Receivables LLC, as seller, and American Honda Finance Corporation, as servicer (in such capacity the “Servicer”). Capitalized terms used and not otherwise defined herein have the meanings provided in the Indenture.
In connection with the satisfaction and discharge of the Indenture pursuant to Section 4.01 of the Indenture and the release of the Owner Trust Estate pursuant to Section 8.04 of the Indenture the undersigned certifies that:
1. As required by Section 8.01 of the Sale and Servicing Agreement and Section 10.01 of the Indenture:
| a. | [___________] (the “Redemption Date”) is a Payment Date following the last day of a Collection Period as of which the aggregate Pool Balance was 10% or less of the Original Pool Balance. |
| b. | The Servicer deposited into the Collection Account, and it is the undersigned’s understanding that the Indenture Trustee transferred into the Note Distribution Account an amount equal to the Redemption Price. The deposit was made in immediately available funds by 8:00 A.M., Los Angeles time on such Payment Date. |
2. Notice of redemption of the Notes was delivered by the Servicer to the Indenture Trustee pursuant to Section 10.01 of the Indenture. Such notice was furnished not later than the number of days prior to the Redemption Date required by Section 10.01 of the Indenture.
3. The Indenture and the Sale and Servicing Agreement have not been amended, modified, terminated or superseded and remain in full force and effect.
4. All conditions precedent provided for in the Indenture to the satisfaction and discharge of the Indenture have been complied with, and
5. All conditions precedent provided for in the Indenture to the release of the Owner Trust Estate pursuant to Section 8.04 of the Indenture have been complied with.
| B-1 |
The undersigned has read or caused to be read the applicable conditions and the definitions in the Indenture relating thereto, including without limitation Section 11.01 of the Indenture, and has obtained and reviewed copies of the notices, certificates and opinions referred to therein. With respect to paragraphs 4 and 5, the undersigned has relied on the opinion of counsel of [_____________], dated [__________] to identify the notices, certificates and opinions required to be delivered to satisfy the conditions set forth in the Indenture. In the opinion of the undersigned, the undersigned has made such examination or investigation as is necessary to enable the undersigned to express an informed opinion as to whether or not such conditions have been complied with. This Officer’s Certificate is also being delivered to [____________] with the understanding that it will be relied upon with respect to paragraphs 1 through 3 and may be attached to the legal opinion to be given by said firm on or about the date hereof in connection with the Servicer’s purchase of the Owner Trust Estate pursuant to Section 8.01 of the Sale and Servicing Agreement.
This Officer’s Certificate is delivered by an Authorized Officer of the Administrator pursuant to Section 1.02 of the Administration Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Officer’s Certificate as of the [___] day of [_______].
| AMERICAN HONDA FINANCE CORPORATION | ||
| By: | ||
| Name: | ||
| Title: | ||
| B-2 |
EXHIBIT C
FORM OF SARBANES CERTIFICATE
I, [____________], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of Honda Auto Receivables 2018-2 Owner Trust (the “Exchange Act periodic reports”);
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the servicer and based on my knowledge and the compliance review conducted in preparing the servicer compliance statement required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the servicer has fulfilled its obligations under the servicing agreement in all material respects; and
5. All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have been disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: [_____________]
Date: [____________]
| By: | ||
| Name: | [_________] | |
| Title: | [_________] |
| C-1 |
EXHIBIT D
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Servicer, shall address, at a minimum, the criteria identified as below as “Applicable Servicing Criteria”:
| Reference | Criteria | |||
| General Servicing Considerations | ||||
| 1122(d)(1)(i) | Policies and procedures are instituted to monitor any performance or other triggers and events of default in accordance with the transaction agreements. | X | ||
| 1122(d)(1)(ii) | If any material servicing activities are outsourced to third parties, policies and procedures are instituted to monitor the third party’s performance and compliance with such servicing activities. | X | ||
| 1122(d)(1)(iii) | Any requirements in the transaction agreements to maintain a back-up servicer for the pool assets are maintained. | |||
| 1122(d)(1)(iv) | A fidelity bond and errors and omissions policy is in effect on the party participating in the servicing function throughout the reporting period in the amount of coverage required by and otherwise in accordance with the terms of the transaction agreements. | |||
| 1122(d)(1)(v) | Aggregation of information, as applicable, is mathematically accurate and the information conveyed accurately reflects the information. | X | ||
| Cash Collection and Administration | ||||
| 1122(d)(2)(i) | Payments on pool assets are deposited into the appropriate custodial bank accounts and related bank clearing accounts no more than two business days of receipt, or such other number of days specified in the transaction agreements. | X | ||
| 1122(d)(2)(ii) | Disbursements made via wire transfer on behalf of an obligor or to an investor are made only by authorized personnel. | X | ||
| 1122(d)(2)(iii) | Advances of funds or guarantees regarding collections, cash flows or distributions, and any interest or other fees charged for such advances, are made, reviewed and approved as specified in the transaction agreements. | X | ||
| 1122(d)(2)(iv) | The related accounts for the transaction, such as cash reserve accounts or accounts established as a form of over-collateralization, are separately maintained (e.g., with respect to commingling of cash) as set forth in the transaction agreements. | X | ||
| 1122(d)(2)(v) | Each custodial account is maintained at a federally insured depository institution as set forth in the transaction agreements. For purposes of this criterion, “federally insured depository institution” with respect to a foreign financial institution means a foreign financial institution that meets the requirements of Rule 240.13K-1(b)(1) of this Chapter. | X | ||
| 1122(d)(2)(vi) | Unissued checks are safeguarded so as to prevent unauthorized access. | |||
| 1122(d)(2)(vii) | Reconciliations are prepared on a monthly basis for all asset-backed securities related bank accounts, including custodial accounts and related bank clearing accounts. These reconciliations: (A) are mathematically accurate; (B) are prepared within 30 calendar days after the bank statement cutoff date, or such other number of days specified in the transaction agreements; (C) are reviewed and approved by someone other than the person who prepared the reconciliation; and (D) contain explanations for reconciling items. These reconciling items are resolved within 90 calendar days of their original identification, or such other number of days specified in the transaction agreements. | X |
| D-1 |
| Reference | Criteria | |||
| Investor Remittances and Reporting | ||||
| 1122(d)(3)(i) | Reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports: (A) are prepared in accordance with timeframes and other terms set forth in the transaction agreements; (B) provide information calculated in accordance with the terms specified in the transaction agreements; (C) are filed with the Commission as required by its rules and regulations; and (D) agree with investors’ or the trustee’s records as to the total unpaid principal balance and number of pool assets serviced by the Servicer. | X | ||
| 1122(d)(3)(ii) | Amounts due to investors are allocated and remitted in accordance with timeframes, distribution priority and other terms set forth in the transaction agreements. | X | ||
| 1122(d)(3)(iii) | Disbursements made to an investor are posted within two business days to the Servicer’s investor records, or such other number of days specified in the transaction agreements. | X | ||
| 1122(d)(3)(iv) | Amounts remitted to investors per the investor reports agree with cancelled checks, or other form of payment, or custodial bank statements. | X | ||
| Pool Asset Administration | ||||
| 1122(d)(4)(i) | Collateral or security on pool assets is maintained as required by the transaction agreements or related pool asset documents. | X | ||
| 1122(d)(4)(ii) | Pool assets and related documents are safeguarded as required by the transaction agreements. | X | ||
| 1122(d)(4)(iii) | Any additions, removals or substitutions to the asset pool are made, reviewed and approved in accordance with any conditions or requirements in the transaction agreements. | X | ||
| 1122(d)(4)(iv) | Payments on pool assets, including any payoffs, made in accordance with the related pool asset documents are posted to the applicable Servicer’s obligor records maintained no more than two business days after receipt, or such other number of days specified in the transaction agreements, and allocated to principal, interest or other items (e.g., escrow) in accordance with the related pool asset documents. | X | ||
| 1122(d)(4)(v) | The Servicer’s records regarding the pool assets agree with the Servicer’s records with respect to an obligor’s unpaid principal balance. | X | ||
| 1122(d)(4)(vi) | Changes with respect to the terms or status of an obligor’s pool assets (e.g., loan modifications or re-agings) are made, reviewed and approved by authorized personnel in accordance with the transaction agreements and related pool asset documents. | X | ||
| 1122(d)(4)(vii) | Loss mitigation or recovery actions (e.g., forbearance plans, modifications and deeds in lieu of foreclosure, foreclosures and repossessions, as applicable) are initiated, conducted and concluded in accordance with the timeframes or other requirements established by the transaction agreements. | X | ||
| 1122(d)(4)(viii) | Records documenting collection efforts are maintained during the period a pool asset is delinquent in accordance with the transaction agreements. Such records are maintained on at least a monthly basis, or such other period specified in the transaction agreements, and describe the entity’s activities in monitoring delinquent pool assets including, for example, phone calls, letters and payment rescheduling plans in cases where delinquency is deemed temporary (e.g., illness or unemployment). | X | ||
| 1122(d)(4)(ix) | Adjustments to interest rates or rates of return for pool assets with variable rates are computed based on the related pool asset documents. |
| D-2 |
| Reference | Criteria | |||
| 1122(d)(4)(x) | Regarding any funds held in trust for an obligor (such as escrow accounts): (A) such funds are analyzed, in accordance with the obligor’s pool asset documents, on at least an annual basis, or such other period specified in the transaction agreements; (B) interest on such funds is paid, or credited, to obligors in accordance with applicable pool asset documents and state laws; and (C) such funds are returned to the obligor within 30 calendar days of full repayment of the related pool asset, or such other number of days specified in the transaction agreements. | |||
| 1122(d)(4)(xi) | Payments made on behalf of an obligor (such as tax or insurance payments) are made on or before the related penalty or expiration dates, as indicated on the appropriate bills or notices for such payments, provided that such support has been received by the servicer at least 30 calendar days prior to these dates, or such other number of days specified in the transaction agreements. | |||
| 1122(d)(4)(xii) | Any late payment penalties in connection with any payment to be made on behalf of an obligor are paid from the servicer’s funds and not charged to the obligor, unless the late payment was due to the obligor’s error or omission. | |||
| 1122(d)(4)(xiii) | Disbursements made on behalf of an obligor are posted within two business days to the obligor’s records maintained by the servicer, or such other number of days specified in the transaction agreements. | |||
| 1122(d)(4)(xiv) | Delinquencies, charge-offs and uncollectable accounts are recognized and recorded in accordance with the transaction agreements. | X | ||
| 1122(d)(4)(xv) | Any external enhancement or other support, identified in Item 1114(a)(1) through (3) or Item 1115 of this Regulation AB, is maintained as set forth in the transaction agreements. |
| D-3 |
Exhibit 10.3
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST,
as Issuer,
AMERICAN HONDA FINANCE CORPORATION,
as Sponsor and Administrator,
AMERICAN HONDA RECEIVABLES LLC,
as Depositor,
and
CITIBANK, N.A.
as Indenture Trustee
ADMINISTRATION AGREEMENT
Dated May 30, 2018
Table of Contents
| Page | ||
| Section 1.01 | Capitalized Terms; Interpretive Provisions | 2 |
| Section 1.02 | Duties of the Administrator | 2 |
| Section 1.03 | Records | 8 |
| Section 1.04 | Compensation | 9 |
| Section 1.05 | Additional Information to be Furnished to the Issuer | 9 |
| Section 1.06 | Independence of the Administrator | 9 |
| Section 1.07 | No Joint Venture | 9 |
| Section 1.08 | Other Activities of Administrator | 9 |
| Section 1.09 | Term of Agreement; Resignation and Removal of Administrator | 9 |
| Section 1.10 | Action Upon Termination, Resignation or Removal | 11 |
| Section 1.11 | Notices | 11 |
| Section 1.12 | Amendments | 11 |
| Section 1.13 | Successors and Assigns | 12 |
| Section 1.14 | Governing Law; Submission to Jurisdiction; Waiver of Jury Trial | 13 |
| Section 1.15 | Headings | 13 |
| Section 1.16 | Counterparts | 13 |
| Section 1.17 | Severability | 13 |
| Section 1.18 | Limitation of Liability of Owner Trustee and Indenture Trustee | 13 |
| Section 1.19 | Third-Party Beneficiary | 14 |
| Section 1.20 | Rights of the Indenture Trustee | 14 |
| Section 1.21 | Additional Requirements of the Administrator | 14 |
EXHIBITS
| Exhibit A - Form of Power of Attorney | A-1 |
| Exhibit B - Form of Annual Certification | B-1 |
| -i- |
This Administration Agreement, dated May 30, 2018 (this “Agreement”), is among Honda Auto Receivables 2018-2 Owner Trust, as issuer (the “Issuer”), American Honda Finance Corporation (“AHFC”), as sponsor (in such capacity, the “Sponsor”) and administrator (in such capacity, the “Administrator”), American Honda Receivables LLC (“AHR”), as depositor (in such capacity, the “Depositor”), and Citibank, N.A., as indenture trustee (the “Indenture Trustee”).
WHEREAS, the Issuer was created pursuant to the Trust Agreement and is governed pursuant to the Amended and Restated Trust Agreement, dated as of the date hereof, among the Depositor, the Owner Trustee and the Delaware Trustee;
WHEREAS, the Issuer is issuing 2.35000% Asset Backed Notes, Class A-1, 2.66% Asset Backed Notes, Class A-2, 3.01% Asset Backed Notes, Class A-3 and 3.16% Asset Backed Notes, Class A-4 (collectively, the “Notes”) pursuant to an Indenture, dated as of the date hereof (the “Indenture”), between the Issuer and the Indenture Trustee;
WHEREAS, the Issuer has entered into certain agreements in connection with the issuance of the Notes and of certain beneficial ownership interests of the Issuer, including (i) the Indenture, (ii) a Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), among the Issuer, AHR, as transferor (in such capacity, the “Seller”), and AHFC, as servicer (in such capacity, the “Servicer”), (iii) an Asset Representations Review Agreement, dated as of the date hereof (the “Asset Representations Review Agreement”), among the Issuer, AHFC, as sponsor and Servicer, and Clayton Fixed Income Services LLC, as asset representations reviewer, and (iv) a Letter of Representations, dated as of the date hereof (the “Note Depository Agreement”) between the Issuer and the Indenture Trustee in favor of The Depository Trust Company (collectively with this Agreement, the Indenture, the Sale and Servicing Agreement, the Asset Representations Review Agreement and the Amended and Restated Trust Agreement, the “Related Documents”);
WHEREAS, pursuant to the Related Documents, the Issuer and the Owner Trustee are required to perform certain duties in connection with (i) the Notes and the collateral therefor pledged pursuant to the Indenture (the “Collateral”) and (ii) the beneficial ownership interests in the Issuer (the registered holders of such interests being referred to herein as the “Owners”);
WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator perform certain duties of the Issuer and the Owner Trustee referred to in the preceding clause and to provide such additional services consistent with the terms of this Agreement and the other Related Documents as the Issuer and the Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services required hereby and is willing to perform such services for the Issuer and the Owner Trustee on the terms set forth 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:
Section 1.01 Capitalized Terms; Interpretive Provisions.
(a) Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto or incorporated by reference in the Sale and Servicing Agreement
(b) 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) the term “include” and all variations thereof shall mean “include without limitation”, (v) the term “or” shall include “and/or” and (vi) the term “proceeds” shall have the meaning ascribed to such term in the UCC.
Section 1.02 Duties of the Administrator.
(a) The Administrator agrees to perform all its duties as Administrator and, except as specifically excluded herein, agrees to perform all the duties of the Issuer and the Owner Trustee under the Related Documents. In addition, the Administrator shall consult with the Owner Trustee regarding the duties of the Issuer or the Owner Trustee under the Related Documents. The Administrator shall monitor the performance of the Issuer and shall advise the Owner Trustee when action is necessary to comply with the respective duties of the Issuer and the Owner Trustee under the Related Documents. The Administrator shall prepare for execution by the Issuer or the Owner Trustee, or shall cause the preparation by other appropriate persons of, all such documents, reports, notices, filings, instruments, certificates and opinions that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or deliver pursuant to the Related Documents. In furtherance of the foregoing, the Administrator shall take (or, in the case of the immediately preceding sentence, cause to be taken) all appropriate action that the Issuer or the Owner Trustee is required to take pursuant to the Indenture including, without limitation, such of the foregoing as are required with respect to the following matters under the Indenture (references are to Sections of the Indenture):
(i) the preparation of or obtaining of the documents and instruments required for execution and authentication of the Notes and delivery of the same to the Indenture Trustee (Section 2.02);
(ii) the duty to cause the Note Register to be kept and to give the Indenture Trustee notice of any appointment of a new Note Registrar and the location, or change in location, of the Note Register (Section 2.04);
(iii) the notification to the Noteholders and the Rating Agencies of the final principal payment on the Notes and termination of the Trust (Section 2.07(b));
(iv) the fixing or causing to be fixed of any special record date and the notification of the Indenture Trustee and Noteholders with respect to special payment dates, if any (Section 2.07(c));
| 2 |
(v) the preparation of Definitive Notes in accordance with the instructions of the Clearing Agency (Section 2.11);
(vi) the preparation, obtaining or filing of the instruments, opinions and certificates and other documents required for the release of collateral (Section 2.12);
(vii) the duty to cause newly appointed Paying Agents, if any, to deliver to the Indenture Trustee the instrument specified in the Indenture regarding funds held in trust (Section 3.03);
(viii) the direction to the Indenture Trustee to deposit monies with Paying Agents, if any, other than the Indenture Trustee (Section 3.03);
(ix) the obtaining and preserving of the Issuer’s qualification to do business in each jurisdiction in which any such qualification is or will be necessary to protect the validity and enforceability of the Receivables, the Indenture, the Notes and the Noteholders’ interest in the Collateral (Section 3.04);
(x) the preparation of all supplements and amendments to the Indenture and all financing statements, continuation statements, instruments of further assurance and other instruments and the taking of such other action as are necessary or advisable to protect the Owner Trust Estate (Section 3.05);
(xi) the delivery to the Indenture Trustee of the Opinion of Counsel on the Closing Date and the annual delivery to the Indenture Trustee of Opinions of Counsel as to the Owner Trust Estate, and the annual delivery of the Officer’s Certificate and certain other statements as to compliance with the Indenture (Sections 3.06 and 3.09);
(xii) the identification to the Indenture Trustee in an Officer’s Certificate of a Person with whom the Issuer has contracted to perform its duties under the Indenture (Section 3.07(b));
(xiii) the notification to the Indenture Trustee, and with respect to each Rating Agency the responsibility of making such notice available, of each Servicer Default and, if such Servicer Default arises from the failure of the Servicer to perform any of its duties or obligations under the Sale and Servicing Agreement with respect to the Receivables, the taking of all reasonable steps available to remedy such failure (Section 3.07(d));
(xiv) the preparation and obtaining of documents and instruments required for the release of the Issuer from its obligations upon the merger or consolidation of the Issuer under the Indenture and the obtaining of the Opinion of Counsel and the Officer’s Certificate relating thereto (Section 3.10);
(xv) the duty to cause the Servicer to comply with Sections 3.10, 3.11, 3.12, 4.10 and Article Eight of the Sale and Servicing Agreement (Section 3.14);
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(xvi) if the Delinquency Percentage for any Payment Date exceeds the Delinquency Trigger for that Payment Date, the duty to direct the Servicer to include notice of such occurrence in the monthly distribution report filed by the Depositor on Form 10-D, which notice shall (a) state that the Delinquency Percentage has exceeded the Delinquency Trigger in respect of that Collection Period (including reasonably detailed calculations thereof) and (b) describe the rights of the Investors regarding an Asset Representations Review of all of the Subject Receivables pursuant to the Asset Representations Review Agreement;
(xvii) the delivery of written notice to the Indenture Trustee and each Rating Agency of each Event of Default and each default by the Servicer or the Seller of its obligations under the Sale and Servicing Agreement (Section 3.19);
(xviii) the monitoring of the Issuer’s obligations as to the satisfaction and discharge of the Indenture and the preparation of an Officer’s Certificate and the obtaining of the Opinion of Counsel and the Independent Certificate relating thereto (Section 4.01);
(xix) the preparation and delivery of written notice in the form of an Officer’s Certificate to a Responsible Officer of the Indenture Trustee of any Event of Default, the status of such Event of Default and what action the Issuer is taking or proposes to take with respect thereto (Section 5.01);
(xx) the compliance with Section 5.04 of the Indenture with respect to the sale of the Owner Trust Estate in a commercially reasonable manner if an Event of Default shall have occurred and be continuing (Section 5.04);
(xxi) the preparation and delivery of notice to Noteholders of the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee (Section 6.08);
(xxii) the preparation and delivery to each Noteholder such information as may be required to enable such holder to prepare its federal and state income tax returns (Section 6.06);
(xxiii) the preparation of any written instruments required to confirm more fully the authority of any co-trustee or separate trustee and any written instruments necessary in connection with the resignation or removal of the Indenture Trustee or any co-trustee or separate trustee (Sections 6.08 and 6.10);
(xxiv) the delivery to the Indenture Trustee with the names and addresses of Noteholders during any period when the Indenture Trustee is not the Note Registrar (Section 7.01);
(xxv) the preparation and, after execution by the Issuer, the filing with the Commission, any applicable state agencies and the Indenture Trustee of documents required to be filed on a periodic basis with, and summaries thereof as may be required by rules and regulations prescribed by, the Commission and any applicable state agencies and the transmission of such summaries, as necessary, to the Noteholders (Section 7.03);
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(xxvi) the opening of one or more accounts in the Issuer’s name and the taking of all other actions necessary with respect to investment and reinvestment of funds in the Accounts (Sections 8.02 and 8.03);
(xxvii) the preparation of an Issuer Request and Officer’s Certificate and the obtaining of an Opinion of Counsel and Independent Certificates, if necessary, for the release of the Owner Trust Estate (Sections 8.04 and 8.05);
(xxviii) the preparation of Issuer Requests, the obtaining of Opinions of Counsel and the certification to the Indenture Trustee with respect to the execution of supplemental indentures and the mailing to the Noteholders, and with respect to the Rating Agencies the duty to make available to each Rating Agency, of notices with respect to such supplemental indentures (Sections 9.01 and 9.02);
(xxix) the execution and delivery of new Notes conforming to any supplemental indenture (Section 9.06);
(xxx) the duty to notify the Indenture Trustee, and with respect to each Rating Agency the duty to make such notice available to each Rating Agency, of redemption of the Notes and to cause the Indenture Trustee to provide such notification to the Noteholders (Sections 10.01 and 10.02);
(xxxi) the preparation and delivery of all Officer’s Certificates, Opinions of Counsel and Independent Certificates with respect to any requests by the Issuer to the Indenture Trustee to take any action under the Indenture (Section 11.01(a));
(xxxii) the preparation and delivery of Officer’s Certificates and the obtaining of Independent Certificates, if necessary, for the release of property from the Lien of the Indenture (Section 11.01(b));
(xxxiii) the notification to each Rating Agency of any request, demand, authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by the Indenture, upon the failure of the Issuer, the Owner Trustee or the Indenture Trustee to give such notification (Section 11.04); and
(xxxiv) the recording of the Indenture, if applicable (Section 11.15).
(b) The Administrator shall:
(i) pay, on behalf of the Issuer, from time to time reasonable compensation to (A) the Indenture Trustee for all services rendered by the Indenture Trustee under the Basic Documents and (B) the Owner Trustee and the Delaware Trustee for all services rendered under the Trust Agreement (in each case which compensation shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust);
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(ii) except as otherwise expressly provided in the Indenture, reimburse, on behalf of the Issuer, the Indenture Trustee upon its request for all reasonable expenses (including in connection with the removal and/or resignation of the Indenture Trustee in accordance with the Indenture), disbursements and advances incurred or made by the Indenture Trustee in accordance with any provision of the Basic Documents (including the reasonable compensation, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its willful misconduct, negligence or bad faith;
(iii) except as otherwise expressly provided in the third sentence of Section 7.01 of the Trust Agreement, reimburse, on behalf of the Issuer, the Owner Trustee and the Delaware Trustee upon either party’s request for all reasonable expenses (including in connection with the removal and/or resignation of the Owner Trustee or the Delaware Trustee, as applicable, in accordance with the Trust Agreement), disbursements and advances incurred or made by the Owner Trustee or the Delaware Trustee in accordance with any provision of the Trust Agreement (including reasonable compensation, expenses and disbursements of its agents and counsel), except any such expense, disbursement or advance as may be attributable to its willful misconduct, gross negligence or bad faith; and
(iv) indemnify, on behalf of the Issuer, the Indenture Trustee, the Owner Trustee and the Delaware Trustee and their respective agents for, and hold them harmless against, any loss, liability or expense incurred without negligence (or, in the case of the Owner Trustee or the Delaware Trustee only, gross negligence), willful misconduct or bad faith on their part, arising out of or in connection with the acceptance or administration of the transactions contemplated by the Basic Documents, as the case may be, including the reasonable costs and expenses of defending themselves against any claim or liability in connection with the exercise or performance of any of their powers or duties thereunder.
The obligations of the Administrator under this Section 1.02(b) shall survive the termination of this agreement.
(c) The Administrator shall make available to each Rating Agency (i) notice of the occurrence and continuation of any Servicer Default and shall specify in such notice the action, if any, being taken in respect of such default pursuant to Section 3.07(d) of the Indenture; (ii) notice of each Event of Default and each default by the Servicer or the Seller of its obligations under the Sale and Servicing Agreement pursuant to 3.19 of the Indenture; (iii) notice of any merger, consolidation or conversion of the Indenture Trustee pursuant to Section 6.09 of the Indenture; (iv) notice of any supplemental indenture pursuant to Section 9.01 and 9.02 of the Indenture; (v) notice of any redemption of the Notes pursuant to Section 10.01 of the Indenture; (vi) any Servicer’s Certificate pursuant to Section 3.10 and in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (vii) any annual statement of compliance of the Servicer pursuant to Section 3.11(a) and in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (viii) any Officer’s Certificate specifying the nature and status of any event which would become a Servicer Default pursuant to Section 3.11(b) and in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (ix) any assessment of compliance and annual accountants’ report pursuant to Section 3.12 and in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (x) any statement to Securityholders pursuant to Section 4.10 and in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (xi) any other report it may receive in connection the Sale and Servicing Agreement, the Trust Agreement or the Indenture in accordance with Section 3.15(b) of the Sale and Servicing Agreement; (xii) notice of any merger, consolidation or assumptions of obligations of the Servicer pursuant to Section 6.03 of the Sale and Servicing Agreement; (xiii) notice of any Servicer Default and termination of the rights and obligations of the Servicer pursuant to Sections 7.01 and 7.03 of the Sale and Servicing Agreement; (xiv) notice of any amendment or consent pursuant to Section 9.01 of the Sale and Servicing Agreement; (xv) notice of the final payment of the Trust Certificates pursuant to Section 9.01(c) of the Trust Agreement; (xvi) any acceptance of appointment of a successor Owner Trustee pursuant to Section 10.02 and 10.03 of the Trust Agreement; (xvii) any merger, conversion or consolidation of the Owner Trustee pursuant to Section 10.04 of the Trust Agreement; (xviii) notice of any amendment or consent and the substance of such amendment or consent pursuant to Section 11.01 of the Trust Agreement; in the case of each of (i) through (xviii), promptly upon the Administrator being notified thereof by the Indenture Trustee, Owner Trustee or the Servicer, as applicable.
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(d) Notwithstanding anything in this Agreement or the Basic Documents to the contrary, in each instance in which notice must be made available to the Rating Agencies for purpose of satisfying the Rating Agency Condition, such notice shall be made available by the Administrator and, to the extent such notice is only provided through a website post, the Administrator shall inform or cause each Rating Agency to be informed in writing (including by electronic email) that a notice has been posted.
(e) In addition to the duties set forth in Sections 1.02(a), (b), (c) and (d), the Administrator shall perform such calculations and shall prepare or shall cause the preparation by other appropriate Persons of, and shall execute on behalf of the Issuer, all such documents, notices, reports, filings, instruments, certificates and opinions that the Issuer or the Owner Trustee are required to prepare, file or deliver pursuant to the Related Documents, and at the request of the Owner Trustee shall take all appropriate action that the Issuer or the Owner Trustee are required to take pursuant to the Related Documents. In furtherance thereof, the Issuer shall execute and deliver to the Administrator and to each successor Administrator appointed pursuant to the terms hereof, one or more powers of attorney substantially in the form of Exhibit A hereto, appointing the Administrator the attorney-in-fact of the Issuer for the purpose of executing on behalf of the Issuer all such documents, reports, filings, instruments, certificates and opinions. Subject to Section 1.06, and in accordance with the directions of the Owner Trustee, the Administrator shall administer, perform or supervise the performance of such other activities in connection with the Collateral (including the Related Documents) as are not covered by any of the foregoing provisions and as are expressly requested by the Owner Trustee and are reasonably within the capability of the Administrator.
(f) Notwithstanding anything in this Agreement or the Related Documents to the contrary, the Administrator shall be responsible for promptly notifying the Owner Trustee in the event that any withholding tax is imposed on the Issuer’s payments (or allocations of income) to a Trust Certificateholder as contemplated in Section 5.02(c) of the Trust Agreement. Any such notice shall specify the amount of any withholding tax required to be withheld by the Owner Trustee pursuant to such provision.
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(g) Notwithstanding anything in this Agreement or the Related Documents to the contrary, the Administrator shall be responsible for performance of the duties of the Owner Trustee set forth in Section 5.05 of the Trust Agreement with respect to, among other things, accounting and reports to Owners; provided, however, that the Owner Trustee shall retain responsibility for the distribution of the Internal Revenue Service Schedule K-1’s, necessary to enable each Owner to prepare its federal and state income tax returns; provided further, that such Internal Revenue Service Schedule K-1’s have been prepared by the Administrator and delivered to the Owner Trustee.
(h) The Administrator shall perform any duties expressly required to be performed by the Administrator under the Trust Agreement or the Indenture.
(i) In carrying out the foregoing duties or any of its other obligations under this Agreement, the Administrator may enter into transactions or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Issuer and shall be, in the Administrator’s opinion, no less favorable to the Issuer than would be available from unaffiliated parties.
(j) With respect to matters that in the reasonable judgment of the Administrator are non-ministerial, the Administrator shall not take any action unless within a reasonable time before the taking of such action, the Administrator shall have notified the Owner Trustee of the proposed action and the Owner Trustee shall not have withheld consent or provided an alternative direction. For the purpose of the preceding sentence, “non-ministerial matters” shall include:
(i) the initiation of any claim or lawsuit by the Issuer and the compromise of any action, claim or lawsuit brought by or against the Issuer (other than in connection with the collection of the Receivables);
(ii) the appointment of successor Note Registrars, successor Paying Agents and successor Indenture Trustees pursuant to the Indenture or the appointment of successor Administrators or successor Servicers, or the consent to the assignment by the Note Registrar, any Paying Agent or Indenture Trustee of its obligations under the Indenture; and
(iii) the removal of the Indenture Trustee.
(k) Notwithstanding anything to the contrary in this Agreement, the Administrator shall not be obligated to, and shall not, (i) make any payments to the Noteholders under the Related Documents, (ii) sell the Owner Trust Estate pursuant to Section 5.04 of the Indenture, (iii) take any other action that the Issuer directs the Administrator not to take on its behalf or (iv) take any other action which may be construed as having the effect of varying the investment of the Trust Certificateholders.
Section 1.03 Records. The Administrator shall maintain appropriate books of account and records relating to services performed hereunder, which books of account and records shall be accessible for inspection by the Issuer and the Depositor at any time during normal business hours.
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Section 1.04 Compensation. As compensation for the performance of the Administrator’s obligations under this Agreement and as reimbursement for its expenses related thereto, the Administrator shall be entitled to an annual payment of compensation which shall be solely an obligation of the Depositor.
Section 1.05 Additional Information to be Furnished to the Issuer. The Administrator shall furnish to the Issuer from time to time such additional information regarding the Collateral as the Issuer shall reasonably request.
Section 1.06 Independence of the Administrator. For all purposes of this Agreement, the Administrator shall be an independent contractor and shall not be subject to the supervision of the Issuer or the Owner Trustee with respect to the manner in which it accomplishes the performance of its obligations hereunder. Unless expressly authorized by the Issuer, the Administrator shall have no authority to act for or represent the Issuer or the Owner Trustee in any way and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
Section 1.07 No Joint Venture. Nothing contained in this Agreement (i) shall constitute the Administrator and either the Issuer or the Owner Trustee as members of any partnership, joint venture, association, syndicate, unincorporated business or other separate entity, (ii) shall be construed to impose any liability as such on any of them or (iii) shall be deemed to confer on any of them any express, implied or apparent authority to incur any obligation or liability on behalf of the others.
Section 1.08 Other Activities of Administrator. Nothing herein shall prevent the Administrator or its Affiliates from engaging in other businesses or, in its sole discretion, from acting in a similar capacity as an administrator for any other Person or entity, even though such person or entity may engage in business activities similar to those of the Issuer, the Owner Trustee or the Indenture Trustee.
Section 1.09 Term of Agreement; Resignation and Removal of Administrator. This Agreement shall continue in force until the dissolution of the Issuer, upon which event this Agreement shall automatically terminate.
(a) Subject to Sections 1.09(d) and 1.09(e), the Administrator may resign its duties hereunder by providing the Issuer with at least sixty (60) days’ prior written notice.
(b) Subject to Sections 1.09(d) and 1.09(e), the Issuer may remove the Administrator without cause by providing the Administrator with at least sixty (60) days’ prior written notice.
(c) Subject to Sections 1.09(d) and 1.09(e), at the sole option of the Issuer, the Administrator may be removed immediately upon written notice of termination from the Issuer to the Administrator if any of the following events shall occur:
(i) the Administrator shall default in the performance of any of its duties under this Agreement and, after notice of such default, shall not cure such default within ten (10) Business Days (or, if such default cannot be cured in such time, shall not give within ten (10) Business Days such assurance of cure as shall be reasonably satisfactory to the Issuer);
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(ii) 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 Administrator 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 Administrator or of any substantial part of its property, or ordering the winding up or liquidation of the affairs of the Administrator 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 ninety (90) consecutive calendar days;
(iii) the commencement by the Administrator of a voluntary case under the federal bankruptcy laws, as now or hereafter in effect, or the consent by the Administrator to the appointment of or taking of possession by a receiver, liquidator, assignee, trustee, custodian, sequestrator or other similar official of the Administrator or of any substantial part of its property or the making by the Administrator of an assignment for the benefit of creditors or the failure by the Administrator generally to pay its debts as such debts become due or the taking of corporate action by the Administrator in furtherance of any of the foregoing; or
(iv) any failure by the Administrator to deliver any information, report, certification, compliance certificate, attestation or accountants’ letter when and as required under Section 1.21 which continues unremedied for fifteen (15) days after the date on which such information, report, certification, compliance certificate, attestation or accountants’ letter was required to be delivered.
The Administrator agrees that if any of the events specified in clauses (ii) or (iii) above shall occur, it shall give written notice thereof to the Issuer and the Indenture Trustee within ten (10) Business Days after the occurrence of such event.
(d) No resignation or removal of the Administrator pursuant to this Section shall be effective until (i) a successor Administrator shall have been appointed by the Issuer, (ii) such successor Administrator shall have agreed in writing to be bound by the terms of this Agreement in the same manner as the Administrator is bound hereunder and (iii) such successor Administrator shall have agreed to coordinate with the Depositor or AHFC regarding communications to the Rating Agencies.
(e) The appointment of any successor Administrator shall be effective only after satisfaction of the Rating Agency Condition with respect to the proposed appointment.
(f) Subject to Sections 1.09(d) and 1.09(e), the Administrator acknowledges that upon the appointment of a successor Servicer pursuant to the Sale and Servicing Agreement, the Administrator shall immediately resign and such successor Servicer shall automatically become the Administrator under this Agreement.
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Section 1.10 Action Upon Termination, Resignation or Removal. Promptly upon the effective date of termination of this Agreement pursuant to the first sentence of Section 1.09 or the resignation or removal of the Administrator pursuant to Section 1.09(a), (b) or (c), respectively, the Administrator shall be entitled to be paid all fees and reimbursable expenses accruing to it to the date of such termination, resignation or removal. The Administrator shall forthwith upon such termination pursuant to the first sentence of Section 1.09 deliver to the Issuer all property and documents of or relating to the Collateral then in the custody of the Administrator. In the event of the resignation or removal of the Administrator pursuant to Section 1.09(a), (b) or (c), respectively, the Administrator shall cooperate with the Issuer and take all reasonable steps requested to assist the Issuer in making an orderly transfer of the duties of the Administrator.
Section 1.11 Notices. (a) All demands, notices and communications hereunder shall be in writing and shall be delivered or mailed by United States mail, postage prepaid, hand delivery, overnight delivery service or by electronic mail (if an address therefore has been provided by the respective party in writing), and addressed to each party to this Agreement at the address set forth on Schedule A to the Sale and Servicing Agreement, or to such other address as any party shall have provided to the other parties in writing.
(b) (i) Notices required to be given to each Rating Agency by the Administrator shall be in writing, personally delivered or mailed by certified mail, return receipt requested, electronic mail (if an address therefore has been provided by the respective party in writing) or overnight delivery service to the address set forth for such Rating Agency on Schedule A to the Sale and Servicing Agreement, or at such other address (including electronic mail addresses) as shall be designated by written notice to the party or parties providing notice under this paragraph.
(ii) Notwithstanding Section 1.11(b)(i) above, notices required to be given to each Rating Agency under this Agreement may be made available by the Administrator through a website post, provided that the Administrator shall inform or cause each Rating Agency to be informed in writing (including by electronic mail) that a notice has been posted.
Section 1.12 Amendments.
(a) Any term or provision of this Agreement may be amended by the Sponsor, the Administrator, the Issuer and the Depositor, with the consent of the Indenture Trustee, but without the consent of any Securityholders, the Issuer or any other Person subject to the satisfaction of one of the following conditions:
(i) the Sponsor or the Depositor delivers an Opinion of Counsel to the Indenture Trustee to the effect that such amendment will not materially and adversely affect the interests of any Noteholders; or
(ii) the Rating Agency Condition is satisfied with respect to such amendment and the Sponsor or the Administrator notifies the Indenture Trustee in writing that the Rating Agency Condition is satisfied with respect to such amendment;
provided, that in the event that any Trust Certificates are then held by anyone other than the Depositor or any of its Affiliates, this Agreement may only be amended by the Sponsor, the Administrator, the Issuer and the Depositor, with the consent of the Indenture Trustee if, in addition, (i) the Certificateholders evidencing a majority of the Certificate Balance of the Trust Certificates consent to such amendment or (ii) such amendment shall not, as evidenced by an Officer’s Certificate of the Administrator or the Depositor or an Opinion of Counsel delivered to the Owner Trustee, materially and adversely affect the interests of the Certificateholders.
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(b) This Agreement may also be amended from time to time by the Sponsor, the Administrator and the Depositor, with the consent of the Indenture Trustee, the written consent of the Noteholders evidencing not less than a majority of the Outstanding Amount of the Notes and the consent of the Certificateholders evidencing not less than a majority of all the percentage interests evidenced by the Certificates, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Securityholders.
(c) Any term or provision of this Agreement may also be amended from time to time by the Sponsor, the Administrator and the Depositor, for the purpose of conforming the terms of this Agreement to the description thereof in the Prospectus, without the consent of any Securityholders, the Issuer or any other Person.
(d) Promptly after the execution of any such amendment, the Administrator shall furnish written notification of the substance of such amendment to the Indenture Trustee and each Rating Agency. It shall not be necessary for the consent of Securityholders pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents and of evidencing the authorization of Certificateholders of the execution thereof shall be subject to such reasonable requirements as the Owner Trustee may require.
(e) Prior to its execution of any amendment to this Agreement, the Owner Trustee and the Indenture Trustee shall be entitled to receive and rely upon an Opinion of Counsel, provided at the expense of the party requesting such amendment, that such amendment is authorized and permitted by this Agreement. No amendment that adversely affects the Trustees shall be effective without the prior written consent of the party adversely affected. The Trustees may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s, the Delaware Trustee’s or the Indenture Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.
Section 1.13 Successors and Assigns. This Agreement may not be assigned by the Administrator unless such assignment is previously consented to in writing by the Issuer and the Owner Trustee and subject to the satisfaction of the Rating Agency Condition in respect thereof. An assignment with such consent and satisfaction, if accepted by the assignee, shall bind the assignee hereunder in the same manner as the Administrator is bound hereunder. Notwithstanding the foregoing, this Agreement may be assigned by the Administrator without the consent of the Issuer or the Owner Trustee to a corporation or other organization that is a successor (by merger, consolidation or purchase of assets) to the Administrator; provided, that such successor organization executes and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an agreement, in form and substance reasonably satisfactory to the Owner Trustee and the Indenture Trustee, in which such corporation or other organization agrees to be bound hereunder by the terms of said assignment in the same manner as the Administrator is bound hereunder. Subject to the foregoing, this Agreement shall bind any successors or permitted assigns of the parties hereto.
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Section 1.14 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Each of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this agreement.
Section 1.15 Headings. The headings of the various Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 1.16 Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 1.17 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
Section 1.18 Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this instrument has been countersigned by The Bank of New York Mellon, in its capacity as Owner Trustee of the Issuer and in no event shall The Bank of New York Mellon, in its individual capacity, or any beneficial owner of the Issuer have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder, as to all of which recourse shall be had solely to the assets of the Issuer. For all purposes of this Agreement, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of Articles Six, Seven and Eight of the Trust Agreement as if specifically set forth herein.
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(b) Notwithstanding anything contained herein to the contrary, this Agreement has been executed by Citibank, N.A., in its capacity as Indenture Trustee under the Indenture and in no event shall Citibank, N.A., in its individual capacity, have any liability for the representations, warranties, covenants, agreements or other obligations of the Issuer hereunder or in any of the certificates, notices or agreements delivered pursuant hereto, as to all of which recourse shall be had solely to the assets of the Issuer.
Section 1.19 Third-Party Beneficiary. The Owner Trustee and the Delaware Trustee and other indemnitees hereunder are third-party beneficiaries to this Agreement and are entitled to the rights and benefits hereunder and may enforce the provisions hereof as if they were parties hereto.
Section 1.20 Rights of the Indenture Trustee. The Indenture Trustee shall be afforded the same rights, protections, immunities and indemnities set forth in the Indenture as if specifically set forth herein.
Section 1.21 Additional Requirements of the Administrator.
(a) Reporting Requirements.
(i) If so requested by the Issuer for the purpose of satisfying its reporting obligation under the Exchange Act with respect to any class of asset-backed securities, the Administrator shall (i) notify the Issuer in writing of any material litigation or governmental proceedings pending against the Administrator and (ii) provide to the Issuer a description of such proceedings.
(ii) As a condition to the succession to Administrator as administrator by any Person as permitted by Section 1.09 hereof the Administrator shall provide to the succeeding Administrator, on behalf of the Issuer, at least ten (10) Business Days prior to the effective date of such succession or appointment, (x) written notice of such succession or appointment and (y) in writing all information in order to comply with its reporting obligation under Item 6.02 of Form 8-K with respect to any class of asset-backed securities.
(iii) In addition to such information as the Administrator, as administrator, is obligated to provide pursuant to other provisions of this Agreement, if so requested by the Issuer, the Administrator shall provide such information regarding the performance or servicing of the Receivables as is reasonably required to facilitate preparation of distribution reports in accordance with Item 1121 of Regulation AB.
(b) Administrator Compliance Statement. On or before ninety (90) days after the end of each fiscal year, commencing with the fiscal year ended March 31st immediately following the Closing Date, the Administrator shall deliver to the Issuer a statement of compliance addressed to the Issuer and signed by an authorized officer of the Administrator to the effect that (i) a review of the Administrator’s activities during the immediately preceding reporting year (or applicable portion thereof) and of its performance under this Agreement during such period has been made under such officer’s supervision, and (ii) to the best of such officer’s knowledge, based on such review, the Administrator has fulfilled all of its obligations under this Agreement in all material respects throughout such reporting year (or applicable portion thereof) or, if there has been a failure to fulfill any such obligation in any material respect, specifically identifying each such failure known to such officer and the nature and the status thereof. If the Administrator is the same party as the Servicer, such party’s compliance with Section 3.11(a) of the Sale and Servicing Agreement will satisfy the Administrator’s obligations set forth in this Section 1.21(b).
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(c) Report on Assessment of Compliance and Attestation. On or before ninety (90) days after the end of each fiscal year during which the Issuer is required to file a report on Form 10-K with the Securities and Exchange Commission, commencing with the fiscal year ended March 31st immediately following the Closing Date, the Administrator shall:
(i) deliver to the Issuer and Owner Trustee a report (in form and substance reasonably satisfactory to the Issuer) regarding the Administrator’s assessment of compliance with the Servicing Criteria during the immediately preceding reporting year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB. Such report shall be addressed to the Issuer and the Owner Trustee and signed by an authorized officer of the Administrator, and shall address each of the Servicing Criteria applicable to the Administrator;
(ii) deliver to the Issuer and the Owner Trustee a report of a registered public accounting firm reasonably acceptable to the Issuer that attests to, and reports on, the assessment of compliance made by the Administrator and delivered pursuant to the preceding paragraph. Such attestation shall be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act; and
(iii) deliver to the Issuer and the Owner Trustee and any other Person that will be responsible for signing the certification a Sarbanes Certification on behalf of an asset-backed issuer with respect to a securitization transaction a certification in the form attached hereto as Exhibit B.
The Administrator acknowledges that the parties identified in clause (a)(iii) above may rely on the certification provided by the Administrator pursuant to such clause in signing a Sarbanes Certification and filing such with the Commission. The Issuer will not request delivery of a certification under clause (a)(iii) above unless the Depositor is required under the Exchange Act to file an annual report on Form 10-K with respect to an issuing entity whose asset pool includes the Receivables.
If the Administrator is the same party as the Servicer, such party’s compliance with Section 3.12 of the Sale and Servicing Agreement will satisfy the Administrator’s obligations set forth in this Section 1.21(c).
(d) Intent of the Parties; Reasonableness. The Issuer and the Administrator acknowledge and agree that the purpose of Section 1.21 of this Agreement is to facilitate compliance by the Issuer with the provisions of Regulation AB and related rules and regulations of the Commission.
| 15 |
Neither the Issuer nor the Administrator shall exercise its right to request delivery of information or other performance under these provisions other than in good faith, or for purposes other than compliance with the federal securities laws, including the Securities Act, the Exchange Act and the rules and regulations of the Commission thereunder (or the provision in a private offering of disclosure comparable to that required under the Securities Act). The Administrator acknowledges that the requirements of, and that the interpretations of the requirements of Regulation AB may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, amendments to the regulation, or otherwise, and agrees to comply with requests made by the Indenture Trustee, the Servicer or any other party to the Transaction Documents in good faith for delivery of information under these provisions on the basis of evolving interpretations and rules of Regulation AB. In connection therewith, the Administrator shall deliver to the Issuer (including any of its assignees or designees), any and all statements, reports, certifications, records and any other information necessary in the good faith determination of the Issuer, to permit the Issuer to comply with the provisions of Regulation AB.
The Issuer (including any of its assignees or designees) shall provide timely notice of requests for information under these provisions and reasonably limit such requests to information required to comply with Regulation AB.
| 16 |
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.
| HONDA AUTO RECEIVABLES 2018-2 | |
| OWNER TRUST, as Issuer |
| By: | THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Owner Trustee | |
| By: | ||
| Name: | ||
| Title: |
| AMERICAN HONDA RECEIVABLES LLC, | |
| as Depositor |
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Treasurer |
| CITIBANK, N.A., | |
| not in its individual capacity but solely | |
| as Indenture Trustee |
| By: | ||
| Name: | ||
| Title: |
| AMERICAN HONDA FINANCE CORPORATION, as Administrator |
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Vice President and Assistant Secretary | ||
| S-1 | HAROT 2018-2 Administration Agreement |
EXHIBIT A
POWER OF ATTORNEY PURSUANT TO
SECTION 1.02(c) OF ADMINISTRATION AGREEMENT
KNOW ALL MEN BY THESE PRESENTS, that Honda Auto Receivables 2018-2 Owner Trust, a Delaware statutory trust (the “Grantor”), does hereby appoint American Honda Finance Corporation, a California corporation (the “Grantee”), located at 20800 Madrona Avenue, Torrance, California 90503, 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, to take the following actions from time to time with respect to the duties of the Administrator under the Administration Agreement, dated May 30, 2018 (the “Administration Agreement”), among the Grantor, the Administrator, American Honda Receivables LLC, as depositor, and Citibank, N.A., as indenture trustee, for the purpose of executing on behalf of the Grantor all such documents, reports, filings, instruments, certificates and opinions required pursuant to the Related Documents:
The Grantee is hereby empowered to do any and all lawful acts necessary or desirable to effect the performance of the duties under the Administration Agreement and the Grantor hereby ratifies and confirms any and all lawful acts 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 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 Amended and Restated Trust Agreement, dated May 30, 2018 (the “Trust Agreement”), among American Honda Receivables LLC, as depositor, The Bank of New York Mellon, as owner trustee and BNY Mellon Trust of Delaware, as Delaware trustee, or (ii) the termination of the Administration Agreement, as each may be amended, restated or supplemented from time to time. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Trust Agreement or the Administration Agreement, as the case may be.
This Power of Attorney shall be created under and governed and construed under the internal laws of the State of New York.
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.
| A-1 |
Dated this ___ day of ______________.
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST, as Issuer |
| By: | THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Owner Trustee |
| By: | ||
| Name: | ||
| Title: |
Signed and delivered in the presence of.
| Address: |
[Unofficial Witness]
| A-2 |
EXHIBIT B
FORM OF SARBANES CERTIFICATE
I, [____________], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D required to be filed in respect of the period covered by this report on Form 10-K of Honda Auto Receivables 2018-2 Owner Trust (the “Exchange Act periodic reports”);
2. Based on my knowledge, the Exchange Act periodic reports, taken as a whole, do not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other information required to be provided under Form 10-D for the period covered by this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the servicer and based on my knowledge and the compliance review conducted in preparing the servicer compliance statement required in this report under Item 1123 of Regulation AB, and except as disclosed in the Exchange Act periodic reports, the servicer has fulfilled its obligations under the servicing agreement in all material respects; and
5. All of the reports on assessment of compliance with servicing criteria for asset-backed securities and their related attestation reports on assessment of compliance with servicing criteria for asset-backed securities required to be included in this report in accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this report, except as otherwise disclosed in this report. Any material instances of noncompliance described in such reports have been disclosed in this report on Form 10-K.
In giving the certifications above, I have reasonably relied on information provided to me by the following unaffiliated parties: [_____________]
Date: [____________]
| By: |
| Name: | [__________] | |
| Title: | [__________] |
| B-1 |
Exhibit 10.4
AMERICAN HONDA RECEIVABLES LLC,
as Depositor,
THE BANK OF NEW YORK MELLON,
as Owner Trustee
and
BNY MELLON TRUST OF DELAWARE,
as Delaware Trustee
AMENDED AND RESTATED
TRUST AGREEMENT
Dated May 30, 2018
TABLE OF CONTENTS
| Page | ||
| ARTICLE One | ||
| DEFINITIONS | ||
| Section 1.01. | General Definitions | 1 |
| Section 1.02. | Other Definitional Provisions | 1 |
| Section 1.03. | Interpretive Provisions | 1 |
| ARTICLE Two | ||
| ORGANIZATION | ||
| Section 2.01. | Name | 1 |
| Section 2.02. | Office | 2 |
| Section 2.03. | Purposes and Powers | 2 |
| Section 2.04. | Appointment of Owner Trustee and the Delaware Trustee | 3 |
| Section 2.05. | Initial Capital Contribution of Owner Trust Estate | 3 |
| Section 2.06. | Declaration of Trust | 3 |
| Section 2.07. | Liability of Certificateholders | 3 |
| Section 2.08. | Title to Trust Property | 4 |
| Section 2.09. | Situs of Issuer | 4 |
| Section 2.10. | Representations and Warranties of the Depositor | 4 |
| ARTICLE Three | ||
| TRUST CERTIFICATES AND TRANSFER OF INTERESTS | ||
| Section 3.01. | Initial Ownership | 5 |
| Section 3.02. | The Trust Certificates | 5 |
| Section 3.03. | Authentication and Delivery of Trust Certificates | 6 |
| Section 3.04. | Registration of Transfer and Exchange of Trust Certificates | 6 |
| Section 3.05. | Mutilated, Destroyed, Lost or Stolen Trust Certificates | 8 |
| Section 3.06. | Persons Deemed Certificateholders | 9 |
| Section 3.07. | Access to List of Certificateholders’ Names and Addresses | 9 |
| Section 3.08. | Maintenance of Office or Agency | 9 |
| Section 3.09. | Appointment of Paying Agent | 10 |
| Section 3.10. | Definitive Trust Certificates | 10 |
| Section 3.11. | Repayment of Trust Certificates | 10 |
| ARTICLE Four | ||
| ACTIONS BY OWNER TRUSTEE | ||
| Section 4.01. | Prior Notice to Certificateholders with Respect to Certain Matters | 10 |
i
| Section 4.02. | Action by Certificateholders with Respect to Certain Matters | 11 |
| Section 4.03. | Action by Certificateholders with Respect to Bankruptcy | 11 |
| Section 4.04. | Restrictions on Certificateholders’ Power | 11 |
| Section 4.05. | Majority Control | 11 |
| ARTICLE Five | ||
| APPLICATION OF TRUST FUNDS; CERTAIN DUTIES | ||
| Section 5.01. | Establishment of Trust Account | 12 |
| Section 5.02. | Application of Trust Funds | 12 |
| Section 5.03. | Method of Payment | 13 |
| Section 5.04. | No Segregation of Monies; No Interest | 13 |
| Section 5.05. | Accounting and Reports to Certificateholders, Internal Revenue Service and Others | 13 |
| Section 5.06. | Audit Procedure | 14 |
| ARTICLE Six | ||
| AUTHORITY AND DUTIES OF OWNER TRUSTEE | ||
| Section 6.01. | General Authority | 15 |
| Section 6.02. | General Duties | 15 |
| Section 6.03. | Action Upon Instruction | 15 |
| Section 6.04. | No Duties Except as Specified in this Agreement or in Instructions | 16 |
| Section 6.05. | No Action Except Under Specified Documents or Instructions | 16 |
| Section 6.06. | Restrictions | 17 |
| Section 6.07. | Covenants for Reporting of Repurchase Demands due to Breaches of Representations and Warranties | 17 |
| ARTICLE Seven | ||
| CONCERNING THE OWNER TRUSTEE AND THE DELAWARE TRUSTEE | ||
| Section 7.01. | Acceptance of Trusts and Duties | 18 |
| Section 7.02. | Furnishing of Documents | 19 |
| Section 7.03. | Representations and Warranties of the Owner Trustee and the Delaware Trustee | 19 |
| Section 7.04. | Reliance, Advice of Counsel | 21 |
| Section 7.05. | Not Acting in Individual Capacity | 21 |
| Section 7.06. | Owner Trustee and Delaware Trustee Not Liable for Trust Certificates or Receivables | 22 |
| Section 7.07. | Owner Trustee or Delaware Trustee May Own Trust Certificates and Notes | 22 |
ii
| Section 7.08. | Duties of the Delaware Trustee | 22 |
| ARTICLE Eight | ||
| compensation of owner trustee and the delaware trustee | ||
| Section 8.01. | Owner Trustee’s and Delaware Trustee’s Fees and Expenses | 23 |
| Section 8.02. | Indemnification | 23 |
| Section 8.03. | Payments to the Owner Trustee and to the Delaware Trustee | 23 |
| ARTICLE Nine | ||
| TERMINATION OF TRUST AGREEMENT | ||
| Section 9.01. | Termination of Trust Agreement | 24 |
| ARTICLE Ten | ||
| SUCCESSOR AND ADDITIONAL OWNER TRUSTEES | ||
| Section 10.01. | Eligibility Requirements for Owner Trustee and Delaware Trustee | 25 |
| Section 10.02. | Resignation or Removal of Owner Trustee or Delaware Trustee | 25 |
| Section 10.03. | Successor Owner Trustee or Delaware Trustee | 26 |
| Section 10.04. | Merger or Consolidation of Owner Trustee or Delaware Trustee | 27 |
| Section 10.05. | Appointment of Co-Trustee or Separate Trustee | 27 |
| ARTICLE Eleven | ||
| MISCELLANEOUS | ||
| Section 11.01. | Amendments | 28 |
| Section 11.02. | No Legal Title to the Owner Trust Estate for the Certificateholder | 30 |
| Section 11.03. | Limitations on Rights of Others | 30 |
| Section 11.04. | Notices | 30 |
| Section 11.05. | Severability | 31 |
| Section 11.06. | Separate Counterparts | 31 |
| Section 11.07. | Successors and Assigns | 31 |
| Section 11.08. | No Petition | 31 |
| Section 11.09. | No Recourse | 31 |
| Section 11.10. | Headings | 32 |
| Section 11.11. | Governing Law; Submission to Jurisdiction | 32 |
| Section 11.12. | Trust Certificates Nonassessable and Fully Paid | 32 |
| Section 11.13. | Depositor Payment Obligation | 32 |
| Section 11.14. | Tax Treatment | 32 |
| Section 11.15. | Waiver of Jury Trial | 32 |
| Section 11.16. | Communications with Rating Agencies | 33 |
iii
EXHIBITS
| Exhibit A - Form of Trust Certificate | A-1 |
| Exhibit B - Form of Seller Certificate | B-1 |
| Exhibit C - Form of Investment Letter | C-1 |
| Exhibit D - Form of Rule 144A Letter | D-1 |
| Exhibit E - Form of Monthly 15Ga-1 Report | E-1 |
iv
This Amended and Restated Trust Agreement (the “Agreement”), dated May 30, 2018 is among American Honda Receivables LLC, a Delaware limited liability company, as depositor (the “Depositor”), The Bank of New York Mellon, a New York banking corporation, as owner trustee (the “Owner Trustee”), and BNY Mellon Trust of Delaware, a Delaware banking corporation, as Delaware trustee (the “Delaware Trustee”);
The parties to this Agreement wish to amend and restate in its entirety the original trust agreement (the “Initial Trust Agreement”), dated as of April 6, 2018, among the Depositor, the Owner Trustee and the Delaware Trustee.
ARTICLE One
DEFINITIONS
Section 1.01. General Definitions. Whenever used herein, unless the context otherwise requires, defined terms shall have the meanings set forth in the Sale and Servicing Agreement.
Section 1.02. Other Definitional Provisions. All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein.
Section 1.03. Interpretive 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”, (v) the term “or” shall include “and/or” and (vi) the term “proceeds” shall have the meaning set forth in the applicable UCC.
(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. 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 generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control.
ARTICLE Two
ORGANIZATION
Section 2.01. Name. The trust created hereby shall be known as the “Honda Auto Receivables 2018-2 Owner Trust”, in which name the Owner Trustee may conduct the business of the Issuer, make and execute contracts and other instruments and sue and be sued, to the extent herein provided.
Section 2.02. Office. The Delaware office of the Issuer shall be in care of the Delaware Trustee at the address set forth on Schedule A to the Sale and Servicing Agreement, or at such other address in the State of Delaware as the Delaware Trustee may designate by written notice to the Certificateholders and the Depositor. The New York, New York office of the Issuer shall be in care of the Owner Trustee at its Corporate Trust Office or at such other address in New York as the Owner Trustee may designate by written notice to the Certificateholders and the Depositor.
Section 2.03. Purposes and Powers.
(a) The sole purpose of the Issuer is to conserve the Owner Trust Estate and collect and disburse the periodic income therefrom for the use and benefit of the Certificateholders, and in furtherance of such purpose to engage in the following ministerial activities:
(i) to issue the Notes pursuant to the Indenture and the Trust Certificates pursuant to this Agreement and to sell the Notes and the Trust Certificates;
(ii) with the proceeds of the sale of the Notes and the Trust Certificates, to purchase the Receivables, to fund the Reserve Fund and the Yield Supplement Account, to pay the organizational, start-up and transactional expenses of the Trust and to pay the balance to the Depositor pursuant to the Sale and Servicing Agreement;
(iii) to assign, grant, transfer, pledge and convey the Owner Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Certificateholders pursuant to the Sale and Servicing Agreement any portion of the Owner Trust Estate released from the Lien of, and remitted to the Trust pursuant to, the Indenture;
(iv) to enter into and perform its obligations under the Basic Documents to which it is to be a party;
(v) to engage in those activities, including entering into agreements, that are necessary to accomplish the foregoing or are incidental thereto or connected therewith, including entering into interest rate swap agreements, interest rate cap agreements and other derivative instruments; and
(vi) subject to compliance with the Basic Documents, to engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions to the Certificateholders and the Noteholders.
(b) The Issuer shall not engage in any activities, including, without limitation, assuming or incurring any indebtedness (with the exception of the Notes), other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the other Basic Documents.
| 2 |
Section 2.04. Appointment of Owner Trustee and the Delaware Trustee. The Depositor hereby appoints the Owner Trustee as trustee of the Issuer effective as of the date hereof, to have all the rights, powers and duties set forth herein, and the Owner Trustee hereby accepts such appointment. The Depositor hereby appoints the Delaware Trustee as a trustee of the Issuer effective as of the date hereof, for the sole purpose of satisfying Section 3807(a) of the Statutory Trust Statute, and the Delaware Trustee hereby accepts such appointment. The Owner Trustee may engage, in the name of the Issuer or in its own name on behalf of the Issuer, in the activities of the Issuer, make and execute contracts on behalf of the Issuer and sue on behalf of the Issuer.
Section 2.05. Initial Capital Contribution of Owner Trust Estate. The Depositor hereby reaffirms its sale, assignment, transfer and conveyance to the Owner Trustee, on or about the date of the Initial Trust Agreement, the sum of $1,000.00 (the “Original Contribution Amount”). The Owner Trustee hereby reaffirms its receipt in trust from the Depositor, as of the date of the Initial Trust Agreement, of the Original Contribution Amount, which constituted the initial Owner Trust Estate and shall be on or before the date hereof deposited in the Certificate Distribution Account. On the date hereof the Owner Trustee is hereby directed to withdraw the Original Contribution Amount from the Certificate Distribution Account and transfer such sums to the Depositor via wire transfer to the Depositor’s account from which the Original Contribution Amount was received. The Depositor shall pay organizational expenses of the Issuer as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that it will hold the Owner Trust Estate in trust upon and subject to the conditions set forth herein for the sole purpose of conserving the Owner Trust Estate and collecting and disbursing the periodic income therefrom for the use and benefit of the Certificateholders, subject to the obligations of the Issuer under the Basic Documents. It is the intention of the parties hereto that the Issuer constitute a statutory trust under the Statutory Trust Statute and that this Agreement constitute the governing instrument of such statutory trust. It is the intention of the parties hereto that, solely for income and franchise tax purposes, (i) so long as there is a sole Certificateholder, the Issuer shall be disregarded as an entity separate from the owner, with the assets of the Issuer being the Receivables and other assets held by the Issuer, the owner of the Receivables being the sole Certificateholder and the Notes being non-recourse debt of the sole Certificateholder and (ii) if there is more than one Certificateholder, the Issuer shall be treated as a partnership for income and franchise tax purposes, with the assets of the partnership being the Receivables and other assets held by the Issuer and with the partners of the partnership being the Certificateholders and the Notes being debt of the partnership. The parties agree that, unless otherwise required by appropriate tax authorities, the Issuer will file or cause to be filed annual or other necessary returns, reports and other forms consistent with the characterization of the Issuer as provided in the preceding sentence for such tax purposes. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute for the sole purpose and to the extent necessary to accomplish the purpose of the Issuer as set forth in Section 2.03(a).
Section 2.07. Liability of Certificateholders. The Certificateholders shall be entitled to the same limitation of personal liability extended to stockholders of private corporations for profit organized under the general corporation law of the State of Delaware.
| 3 |
Section 2.08. Title to Trust Property. Legal title to the Owner Trust Estate shall be vested at all times in the Issuer as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee, a co-trustee and/or a separate trustee, as the case may be.
Section 2.09. Situs of Issuer. The Issuer will be located in the State of Delaware. All bank accounts maintained by the Owner Trustee on behalf of the Issuer shall be located in the states of Delaware or New York. The Issuer shall not have any employees in any state other than Delaware; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware. Payments will be received by the Issuer only in, and payments will be made by the Issuer only from, the states of Delaware or New York. The Issuer’s principal offices will be at the Corporate Trust Office of the Owner Trustee and at the office of the Delaware Trustee, located at the address set forth on Schedule A to the Sale and Servicing Agreement.
Section 2.10. Representations and Warranties of the Depositor. The Depositor hereby represents and warrants to the Owner Trustee and Delaware Trustee that:
(a) The Depositor has been duly organized and is validly existing as a limited liability company in good standing under the laws of the State of Delaware, and had at all relevant times, and has, power, authority and legal right to acquire, own and sell the Receivables and to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(b) The Depositor is duly qualified to do business as a foreign limited liability company in good standing, and has obtained all necessary licenses and approvals, in each jurisdiction where any such failure to do so would materially and adversely affect the Depositor’s ability to perform its obligations under and consummate the transactions contemplated by the Basic Documents.
(c) The Depositor has the power and authority to execute and deliver this Agreement and to carry out its terms; the Depositor has full power and authority to sell and assign the property to be sold and assigned to and deposited with the Owner Trustee as part of the Owner Trust Estate and the Depositor has duly authorized such sale and assignment and deposit to the Issuer by all necessary corporate action; and the execution, delivery and performance of this Agreement have been duly authorized by the Depositor by all necessary corporate action.
(d) This Agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable in accordance with its terms, except as such 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.
| 4 |
(e) The execution, delivery and performance by the Depositor of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the certificate of formation or limited liability company agreement of the Depositor, or conflict with or violate any of the material terms or provisions of, or constitute (with or without notice or lapse of time) a default under, any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor, to the best of the Depositor’s knowledge, violate any law or any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties; which breach, default, conflict, lien or violation would have a material adverse effect on the earnings, business affairs or business prospects of the Depositor.
(f) There are no proceedings or investigations pending or, to the Depositor’s knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (i) asserting the invalidity of this Agreement, (ii) seeking to prevent the issuance of the Trust Certificates or the consummation of any of the transactions contemplated by this Agreement or (iii) seeking any determination or ruling that might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement.
ARTICLE Three
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
Section 3.01. Initial Ownership. Upon the formation of the Issuer by the contribution by the Depositor pursuant to Section 2.05 and until the issuance of the Trust Certificates, the Depositor shall be the sole beneficiary of the Issuer.
Section 3.02. The Trust Certificates. The Trust Certificates shall be issued in minimum denominations of $100,000 and integral multiples thereof; provided, however, that one Trust Certificate may be issued in such denomination as required to include any residual amount. The Trust Certificates shall be executed by the Owner Trustee on behalf of the Issuer by manual or facsimile signature (which signature may be a scanned electronic version) of an authorized officer of the Owner Trustee and shall have deemed to have been validly issued when so executed and authenticated (as set forth in Section 3.03 below). Trust Certificates bearing the manual or facsimile signatures (which signature may be a scanned electronic version) of individuals who were, at the time when such signatures were affixed, authorized to sign on behalf of the Owner Trustee, shall be validly issued and binding obligations of the Issuer and entitled to the benefit of this Agreement, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Trust Certificates or did not hold such offices at the date of authentication and delivery of such Trust Certificates.
| 5 |
A transferee of a Trust Certificate shall become a Certificateholder and shall be entitled to the rights and subject to the obligations of a Certificateholder hereunder upon such transferee’s acceptance of a Trust Certificate duly registered in such transferee’s name pursuant to Section 3.04.
Section 3.03. Authentication and Delivery of Trust Certificates. On the Closing Date, the Owner Trustee shall cause to be authenticated and delivered upon the order of the Depositor, in exchange for the Receivables and the other assets of the Issuer, simultaneously with the sale, assignment and transfer to the Issuer of the Receivables, and the constructive delivery to the Issuer of the Receivable Files and the other assets of the Issuer, Trust Certificates duly authenticated by the Owner Trustee, in authorized denominations equaling in the aggregate the Original Certificate Balance and evidencing the entire ownership of the Issuer. No Trust Certificate shall entitle its Certificateholder to any benefit under this Agreement, or be valid for any purpose, unless there shall appear on such Trust Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or the Trust’s Authenticating Agent, by manual signature; and such authentication shall constitute conclusive evidence that such Trust Certificate shall have been duly authenticated and delivered hereunder. All Trust Certificates shall be dated the date of their authentication. Upon issuance, authentication and delivery pursuant to the terms hereof, the Trust Certificates will be entitled to the benefits of this Agreement. Whenever, in any Basic Document, a reference is made to authentication by the Owner Trustee, such reference shall include authentication by the Owner Trustee and/or authentication by a party appointed to act as the Authenticating Agent of the Owner Trustee.
Section 3.04. Registration of Transfer and Exchange of Trust Certificates.
(a) The Certificate Registrar shall keep or cause to be kept, at the office or agency maintained pursuant to Section 3.08, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, it shall provide for the registration of Trust Certificates and of transfers and exchanges of Trust Certificates as herein provided. The Owner Trustee shall act as initial Certificate Registrar. The Owner Trustee may appoint an agent to act as Certificate Registrar. Upon any resignation of the Certificate Registrar, the Owner Trustee shall promptly appoint a successor thereto.
The Trust Certificates have not been registered under the Securities Act or listed on any securities exchange. No transfer of a Trust Certificate shall be made unless such transfer is made pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or is exempt from the registration requirements under the Securities Act and such state securities laws. In the event that a transfer is to be made in reliance upon an exemption from the Securities Act and state securities laws, in order to assure compliance with the Securities Act and such laws, the Certificateholder desiring to effect such transfer and such Certificateholder’s prospective transferee shall each certify to the Issuer in writing the facts surrounding the transfer in the form of a Seller Certificate and Investment Letter or a Rule 144A Letter. Except in the case of a transfer as to which the proposed transferee has provided a Rule 144A Letter, there shall also be delivered to the Issuer an Opinion of Counsel that such transfer may be made pursuant to an exemption from the Securities Act and an Opinion of Counsel or memorandum of law that such transfer may be made pursuant to an exemption from state securities laws, which Opinion(s) of Counsel and memorandum of law shall not be an expense of the Issuer or the Owner Trustee. The Depositor shall provide to any Certificateholder of a Trust Certificate and any prospective transferee designated by any such Certificateholder, information regarding the Trust Certificates and the Receivables and such other information as shall be necessary to satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer of any such Trust Certificate without registration thereof under the Securities Act pursuant to the registration exemption provided by Rule 144A. Each Certificateholder desiring to effect such a transfer shall, and does hereby agree to, indemnify the Issuer, the Owner Trustee and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with federal and state securities laws. The Owner Trustee on behalf of the Issuer shall cause each Trust Certificate to contain a legend in the form set forth on the form of Trust Certificate attached hereto as Exhibit A.
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(b) Upon surrender for registration of transfer of any Trust Certificate at the office of the Certificate Registrar and subject to the satisfaction of the preceding paragraph, the Owner Trustee shall execute, authenticate and deliver (or shall cause its Authenticating Agent to authenticate and deliver), in the name of the designated transferee or transferees, one or more new Trust Certificates in authorized denominations of a like aggregate original certificate balance dated the date of authentication by the Owner Trustee or any Authenticating Agent; provided that prior to such execution, authentication and delivery, the Owner Trustee shall have received an Opinion of Counsel to the effect that the proposed transfer will not cause the Issuer to be characterized as an association (or a publicly traded partnership) taxable as a corporation or alter the tax characterization of the Notes for U.S. federal income tax purposes. At the option of a Certificateholder, Trust Certificates may be exchanged for other Trust Certificates of authorized denominations of a like aggregate original certificate balance upon surrender of the Trust Certificates to be exchanged at the office or agency maintained pursuant to Section 3.08.
(c) At the option of a Certificateholder, Trust Certificates may be exchanged for other Trust Certificates in authorized denominations of a like aggregate original certificate balance upon surrender of the Trust Certificates to be exchanged at the office of the Certificate Registrar. Whenever any Trust Certificates are so surrendered for exchange, the Owner Trustee on behalf of the Issuer shall execute, authenticate and deliver (or shall cause its Authenticating Agent to authenticate and deliver) the Trust Certificates that the Certificateholder making the exchange is entitled to receive. Every Trust Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Certificateholder or such Certificateholder’s attorney duly authorized in writing.
(d) No service charge shall be made for any registration of transfer or exchange of Trust Certificates, but the Owner Trustee (or the Paying Agent) may require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Trust Certificates.
(e) The Trust Certificates may not be acquired or held by or for the account of a Benefit Plan Investor, a Plan that is subject to Similar Law or a person who is not a United States Person within the meaning of Section 7701(a)(30) of the Code. No transfer of a Trust Certificate shall be made unless the prospective transferee has certified to the Issuer in writing that it is not a Benefit Plan Investor or a Plan that is subject to Similar Law.
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(f) All Trust Certificates surrendered for registration of transfer or exchange, if surrendered to the Issuer or any agent of the Owner Trustee or the Issuer under this Agreement, shall be delivered to the Owner Trustee and promptly cancelled by it, or, if surrendered to the Owner Trustee, shall be promptly cancelled by it, and no Trust Certificates shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Owner Trustee shall dispose of cancelled Trust Certificates in accordance with its normal practice.
(g) The preceding provisions of this Section notwithstanding, the Owner Trustee shall not make, and the Certificate Registrar shall not register transfers or exchanges of, Trust Certificates for a period of fifteen (15) days preceding the due date for any payment with respect to the Trust Certificates.
(h) No transfer of a Trust Certificate (or interest therein) shall be permitted (nor shall a Trust Certificate be so held) if (i) it causes the Issuer to be a Section 385 Controlled Partnership (i.e., 80 percent or more of the Issuer’s ownership interests are owned, directly or indirectly, by one or more members of a Section 385 Expanded Group) that has an expanded group partner (within the meaning of Treasury Regulation section 1.385-3(g)(12)) which is a Domestic Corporation and (ii) either (x) a member of such Section 385 Expanded Group owns any Notes or (y) a Section 385 Controlled Partnership of such Section 385 Expanded Group owns any Notes (in the case of clause (x), unless such member, or in the case of clause (y), unless each member of the Section 385 Expanded Group that is a partner in such Section 385 Controlled Partnership is a member of the consolidated group (as described in Treasury Regulation section 1.1502-1(h)) which includes such Domestic Corporation). No transfer of a Trust Certificate (or interest therein) shall be permitted (nor shall a Trust Certificate be so held) if (i) it results in the Issuer becoming disregarded as an entity separate from a Domestic Corporation for U.S. federal income tax purposes and (ii) either (x) a member of a Section 385 Expanded Group that includes such Domestic Corporation owns any Notes or (y) a Section 385 Controlled Partnership of such Section 385 Expanded Group owns any Notes (in the case of clause (x), unless such member, or in the case of clause (y), unless each member of the Section 385 Expanded Group that is a partner in such Section 385 Controlled Partnership is a member of the consolidated group (as described in Treasury Regulation section 1.1502-1(h)) which includes such Domestic Corporation).
Section 3.05. Mutilated, Destroyed, Lost or Stolen Trust Certificates. If (i) any mutilated Trust Certificate is surrendered to the Certificate Registrar, or the Certificate Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Trust Certificate and (ii) there is delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then, in the absence of notice to a Responsible Officer of the Owner Trustee that such Trust Certificate has been acquired by a bona fide purchaser, the Owner Trustee on behalf of the Issuer shall execute and the Owner Trustee or its Authenticating Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Trust Certificate, a new Trust Certificate in an authorized denomination and of a like original certificate balance. In connection with the issuance of any new Trust Certificate under this Section, the Owner Trustee may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Trust Certificate issued pursuant to this Section shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the lost, stolen or destroyed Trust Certificate shall be found at any time.
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Section 3.06. Persons Deemed Certificateholders. Prior to due presentation of a Trust Certificate for registration of transfer, the Owner Trustee, the Certificate Registrar, any Paying Agent and any of their respective agents may treat the Person in whose name any Trust Certificate is registered as the owner of such Trust Certificate for the purpose of receiving distributions pursuant to Section 5.02 and for all other purposes whatsoever, and none of the Owner Trustee, the Certificate Registrar, any Paying Agent or any of their respective agents shall be affected by any notice to the contrary.
Section 3.07. Access to List of Certificateholders’ Names and Addresses. The Certificate Registrar shall furnish or cause to be furnished to the Servicer and the Depositor, within fifteen (15) days after receipt by the Certificate Registrar of a written request therefor from the Servicer or the Depositor, a list, in such form as the Servicer or the Depositor may reasonably require, of the names and addresses of the Certificateholders as of the most recent Record Date. If three or more Certificateholders, or one or more Certificateholders evidencing not less than 51% of the Percentage Interests of the Trust Certificates (hereinafter referred to as the “Applicants”), apply in writing to the Certificate Registrar, and such application states that the Applicants desire to communicate with other Certificateholders with respect to their rights under this Agreement or under the Trust Certificates, then the Certificate Registrar shall, within five (5) Business Days after the receipt of such application, afford such Applicants access during normal business hours to the current list of Certificateholders. Each Certificateholder, by receiving and holding a Trust Certificate, shall be deemed to have agreed not to hold any of the Depositor, the Certificate Registrar or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived.
Section 3.08. Maintenance of Office or Agency. The Trust shall maintain an office or offices or agency or agencies where Trust Certificates may be surrendered for registration of transfer or exchange and where notices and demands to or upon the Owner Trustee or its agent in respect of the Trust Certificates and the Basic Documents may be served. The Owner Trustee initially designates its Corporate Trust Office as its office for such purposes. The Owner Trustee shall give prompt written notice to the Depositor and to the Certificateholders of any change in the location of the Certificate Register or any such office or agency.
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Section 3.09. Appointment of Paying Agent. The Paying Agent shall make distributions to Certificateholders from the Certificate Distribution Account pursuant to Sections 5.02 and 5.03 and shall report the amounts of such distributions to the Owner Trustee. Any Paying Agent shall have the revocable power to withdraw funds from the Certificate Distribution Account for the purpose of making the distributions referred to above. The Owner Trustee may revoke such power and remove the Paying Agent if the Owner Trustee determines in its sole discretion that the Paying Agent shall have failed to perform its obligations under this Agreement in any material respect. The Owner Trustee shall act as the initial Paying Agent. Each Paying Agent shall be permitted to resign as Paying Agent upon thirty (30) days’ written notice to the Owner Trustee. In the event that the Owner Trustee shall no longer be the Paying Agent, the Owner Trustee shall appoint a successor to act as Paying Agent (which shall be a bank or trust company). The Owner Trustee shall cause such successor Paying Agent or any additional Paying Agent appointed by the Owner Trustee to execute and deliver to the Owner Trustee an instrument in which such successor Paying Agent or additional Paying Agent shall agree with the Owner Trustee that, as Paying Agent, such successor Paying Agent or additional Paying Agent will hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such Certificateholders. The Paying Agent shall return all unclaimed funds to the Owner Trustee and upon removal of a Paying Agent such Paying Agent shall also return all funds in its possession to the Owner Trustee. The provisions of Sections 7.01, 7.03, 7.04, 8.01 and 8.02 shall apply to the Owner Trustee also in its role as Paying Agent, for so long as the Owner Trustee shall act as Paying Agent and, to the extent applicable, to any other paying agent appointed hereunder. Any reference in this Agreement to the Paying Agent shall include any co-paying agent unless the context requires otherwise.
Section 3.10. Definitive Trust Certificates. The Trust Certificates, upon original issuance, will be issued in definitive, fully registered form.
Section 3.11. Repayment of Trust Certificates. In the event of an optional purchase pursuant to Section 8.01(a) of the Sale and Servicing Agreement, the Trust Certificates will be prepaid in whole, but not in part, at an aggregate prepayment price equal to the aggregate Certificate Balance of all the Trust Certificates plus accrued interest thereon at the Certificate Rate.
ARTICLE Four
ACTIONS BY OWNER TRUSTEE
Section 4.01. Prior Notice to Certificateholders with Respect to Certain Matters. Subject to the provisions and limitations of Section 4.04, with respect to the following matters, the Owner Trustee shall not take action unless at least thirty (30) days before the taking of such action, the Owner Trustee shall have notified the Certificateholders in writing of the proposed action and the Certificateholders shall not have notified the Owner Trustee in writing prior to the 30th day after such notice is given that such Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any claim or lawsuit by the Issuer (except claims or lawsuits brought in connection with the collection of the Receivables) and the compromise of any action, claim or lawsuit brought by or against the Issuer (except with respect to the aforementioned claims or lawsuits for collection of the Receivables);
(b) the election by the Issuer to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute);
(c) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is required;
(d) the amendment of the Indenture by a supplemental indenture in circumstances where the consent of any Noteholder is not required and such amendment materially adversely affects the interests of the Certificateholders;
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(e) the amendment, change or modification of the Administration Agreement, except to cure any ambiguity or to amend or supplement any provision in a manner or add any provision that would not materially adversely affect the interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a successor Note Registrar, paying agent for the Notes or Indenture Trustee or pursuant to this Agreement of a successor Certificate Registrar, or the consent to the assignment by the Note Registrar, Paying Agent, Indenture Trustee or Certificate Registrar of its obligations under the Indenture or this Agreement, as applicable.
Section 4.02. Action by Certificateholders with Respect to Certain Matters. Subject to the provisions and limitations of Section 4.04, the Owner Trustee shall not have the power, except upon the direction of the Certificateholders, to (i) remove the Administrator pursuant to Section 1.09 of the Administration Agreement, (ii) appoint a successor Administrator pursuant to Section 1.09 of the Administration Agreement, (iii) remove the Servicer pursuant to Section 7.01 of the Sale and Servicing Agreement, (iv) except as expressly provided in the Basic Documents, sell the Receivables after the termination of the Indenture, or (v) authorize the merger or consolidation of the Issuer with or into any other statutory trust or entity (other than in accordance with Section 3.10 of the Indenture). The Owner Trustee shall take the actions referred to in the preceding sentence only upon written instructions signed by the Certificateholders.
Section 4.03. Action by Certificateholders with Respect to Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary proceeding in bankruptcy relating to the Issuer without the unanimous prior approval of all Certificateholders (including the Depositor, if the Depositor is a Certificateholder) and the delivery to the Owner Trustee by each such Certificateholder of a certificate certifying that such Certificateholder reasonably believes that the Issuer is insolvent.
Section 4.04. Restrictions on Certificateholders’ Power. The Certificateholders shall not direct the Owner Trustee to take or to refrain from taking any action if such action or inaction would be contrary to any obligation of the Issuer or the Owner Trustee under this Agreement or any of the other Basic Documents or would be contrary to the purpose of the Issuer as set forth in Section 2.03, nor shall the Owner Trustee be obligated to follow any such direction, if given.
Section 4.05. Majority Control. Except as expressly provided herein, any action that may be taken by the Certificateholders under this Agreement may be taken by the Certificateholders evidencing not less than a majority of the Percentage Interests evidenced by the Trust Certificates. Except as expressly provided herein, any written notice of the Certificateholders delivered pursuant to this Agreement shall be effective if signed by Certificateholders evidencing not less than a majority of the Percentage Interests evidenced by the Trust Certificates at the time of the delivery of such notice.
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ARTICLE Five
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
Section 5.01. Establishment of Trust Account. The Owner Trustee, for the benefit of the Certificateholders, shall establish and maintain (or shall cause to be established and maintained) in the name of the Issuer an Eligible Account (the “Certificate Distribution Account”), bearing a designation clearly indicating that the funds deposited therein are held for the benefit of the Certificateholders.
The Issuer shall possess all right, title and interest in funds on deposit from time to time in the Certificate Distribution Account and in the proceeds thereof. Except as otherwise expressly provided herein, the Certificate Distribution Account shall be under the sole dominion and control of the Owner Trustee for the benefit of the Certificateholders. If, at any time, the Owner Trustee ceases to be an Eligible Institution, the Owner Trustee (or the Depositor on behalf of the Owner Trustee, if the Certificate Distribution Account is not then held by the Owner Trustee or an Affiliate thereof) shall cause the Certificate Distribution Account to be moved to an Eligible Institution and shall transfer any cash to such new Certificate Distribution Account. All amounts held in the Certificate Distribution Account will not be invested.
Section 5.02. Application of Trust Funds.
(a) On each Payment Date, the Paying Agent will distribute to Certificateholders, on the basis of the Percentage Interest evidenced by their Trust Certificates, amounts deposited in the Certificate Distribution Account pursuant to Section 4.06 of the Sale and Servicing Agreement with respect to such Payment Date.
(b) On each Payment Date, the Paying Agent shall send to each Certificateholder the statement or statements provided to the Owner Trustee by the Servicer pursuant to Section 4.10 of the Sale and Servicing Agreement with respect to such Payment Date.
(c) In the event that any withholding tax is imposed on the Issuer’s payment (or allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to the Certificateholder in accordance with this Section. The Paying Agent will retain from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Issuer (but such authorization shall not prevent the Owner Trustee or the Paying Agent from contesting any such tax in appropriate proceedings and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings) upon the written direction of the Depositor. The amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Issuer and remitted to the appropriate taxing authority. If there is a possibility that withholding tax is payable with respect to a distribution, the Paying Agent may in its sole discretion withhold such amounts in accordance with this paragraph (c).
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Section 5.03. Method of Payment. Subject to Section 9.01(c) respecting the final payment upon retirement of each Trust Certificate, distributions required to be made to Certificateholders on any Payment Date shall be made to each Certificateholder of record on the related Record Date by (i) wire transfer, in immediately available funds, to the account of such Certificateholder at a bank or other entity having appropriate facilities therefor, if such Certificateholder shall have provided to the Certificate Registrar appropriate written instructions at least five (5) Business Days prior to such Payment Date, or (ii) if not, by check mailed to such Certificateholder at the address of such Certificateholder appearing in the Certificate Register.
Section 5.04. No Segregation of Monies; No Interest. Subject to Sections 5.01 and 5.02, monies received by the Owner Trustee or the Paying Agent hereunder need not be segregated in any manner except to the extent required by law or the Sale and Servicing Agreement and may be deposited under such general conditions as may be prescribed by law, and neither the Owner Trustee nor the Paying Agent shall be liable for any interest thereon.
Section 5.05. Accounting and Reports to Certificateholders, Internal Revenue Service and Others. The Owner Trustee shall maintain (or cause to be maintained) the books of the Issuer on a fiscal year basis ending March 31 of each year and the accrual method of accounting. In addition, the Issuer shall deliver to each Certificateholder such information, reports or statements prepared by the Administrator as may be required by the Code and applicable Treasury Regulations and as may be required to enable each Certificateholder to prepare its federal and state income tax returns and make such elections as from time to time may be required or appropriate under any applicable state or federal statute or any rule or regulation thereunder so as to maintain the Issuer’s characterization for U.S. federal income tax purposes as (i) disregarded as a separate entity from the Certificateholder or, (ii) if there is more than one Certificate Owner for U.S. federal income tax purposes, a partnership. Consistent with the Issuer’s characterization for U.S. federal income tax purposes as disregarded as an entity separate from the Certificateholder, no U.S. federal income tax return shall be filed on behalf of the Issuer unless (i) there is more than one Certificate Owner for U.S. federal income tax purposes, (ii) the Owner Trustee shall receive an Opinion of Counsel that, based on a change in applicable law occurring after the date hereof, the Code requires such a filing or (iii) the Internal Revenue Service shall determine that the Issuer is required to file such a return. Neither the Owner Trustee nor any Certificateholder will, under any circumstances, or at any time, make an election on IRS Form 8832 or otherwise, to classify the Trust as an association taxable as a corporation for federal, state or any other applicable tax purposes. In the event that the Issuer is required to file tax returns, the Owner Trustee shall, to the extent not undertaken by the Administrator pursuant to the Administration Agreement, prepare or shall cause to be prepared any tax returns required to be filed by the Issuer and shall remit such returns to the Depositor (or if the Depositor no longer owns any Certificates, the Certificateholder designated for such purpose by the Depositor to the Owner Trustee in writing) at least five (5) days before such returns are due to be filed. The Depositor (or such designee Certificateholder, as applicable) shall promptly sign such returns and deliver such returns after signature to the Owner Trustee and such returns shall be filed by the Owner Trustee with the appropriate tax authorities. In no event shall the Owner Trustee or the Depositor (or such designee Certificateholder, as applicable) be liable for any liabilities, costs or expenses of the Issuer or the Noteholders arising out of the application of any tax law, including federal, state, foreign or local income or excise taxes or any other tax imposed on or measured by income (or any interest, penalty or addition with respect thereto or arising from a failure to comply therewith) except for any such liability, cost or expense attributable to any act or omission by the Owner Trustee or the Depositor (or such designee Certificateholder, as applicable), as the case may be, in breach of its obligations under this Agreement.
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The Depositor is authorized and directed to execute on behalf of the Issuer, and after execution to deliver to the Administrator for filing with the Commission, all documents and forms required to be filed in accordance with applicable law or the rules and regulations prescribed by the Commission.
Section 5.06. Audit Procedure.
(a) In the event that the Issuer is classified as a partnership for U.S. federal income tax purposes, the Depositor (or a U.S. affiliate of the Depositor if the Depositor is ineligible) is hereby designated as the partnership representative under Section 6223(a) of the Amended Partnership Audit Rules to the extent allowed under the law (including working with the Depositor to designate any designated individual required under the law). The Issuer shall (or the Depositor shall cause the Issuer to, or the Depositor shall instruct the Owner Trustee on behalf of the Issuer to), to the extent eligible, make the election under Section 6221(b) of the Amended Partnership Audit Rules with respect to determinations of adjustments at the partnership level and take any other action such as disclosures and notifications necessary to effectuate such election. If the election described in the preceding sentence is not available, to the extent applicable, the Issuer shall (or the Depositor shall cause the Issuer to, or the Depositor shall instruct the Owner Trustee on behalf of the Issuer to) make the election under Section 6226(a) of the Amended Partnership Audit Rules with respect to the alternative to payment of imputed underpayment by partnership and take any other action such as filings, disclosures and notifications necessary to effectuate such election. Notwithstanding the foregoing, the Issuer and Depositor are each authorized, each in its sole discretion, to make any available election related to Sections 6221 through 6241 of the Amended Partnership Audit Rules and take any action it deems necessary or appropriate to comply with the requirements of the Code and conduct the Issuer's affairs under Sections 6221 through 6241 of the Amended Partnership Audit Rules. Each Certificateholder and, if different, each Certificate Owner shall promptly provide the Issuer, Depositor and Owner Trustee any requested information, documentation or material to enable the Issuer to make any of the elections described in this clause (c) and otherwise comply with Sections 6221 through 6241 of the Amended Partnership Audit Rules. Each Certificate Owner shall hold the Issuer and its affiliates harmless for any expenses or losses (i) resulting from a Certificate Owner not properly taking into account or paying its allocated adjustment or liability under Section 6226 of the Amended Partnership Audit Rules and (ii) it may suffer attributable to the management or defense of an audit under the Amended Partnership Audit Rules or otherwise suffered due to actions it takes with respect to and to comply with the rules under Sections 6221 through 6241 of the Amended Partnership Audit Rules.
(b) Certificateholder Information. (A) Each Certificateholder shall provide to the Owner Trustee and the Depositor any further information required by the Issuer to comply with the Amended Partnership Audit Rules, including Section 6226(a) of the Amended Partnership Audit Rules and (B) if the Certificateholder is not the Certificate Owner, the Certificate Owner shall provide to the Owner Trustee and the Depositor any further information required by the Issuer to comply with the Amended Partnership Audit Rules, including Section 6226(a) of the Amended Partnership Audit Rules and, to the extent the Issuer determines such appointment necessary for it to make an election under Section 6226(a) of the Amended Partnership Audit Rules, hereby appoints the Depositor as its agent for purposes of receiving any notifications or information pursuant to the notice requirements under Section 6226(a)(2) of the Amended Partnership Audit Rules.
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ARTICLE Six
AUTHORITY AND DUTIES OF OWNER TRUSTEE
Section 6.01. General Authority. Subject to the provisions and limitations of Sections 2.03 and 2.06, the Owner Trustee is authorized and directed to execute and deliver the Basic Documents to which the Issuer is to be a party and each certificate or other document attached as an exhibit to or contemplated by the Basic Documents to which the Issuer is to be a party and any amendment or other agreement, as evidenced conclusively by the Owner Trustee’s execution thereof. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Issuer pursuant to the Basic Documents. The Owner Trustee is further authorized from time to time to take such action as the Administrator recommends with respect to the Basic Documents.
Section 6.02. General Duties. Subject to the provisions and limitations of Sections 2.03 and 2.06, it shall be the duty of the Owner Trustee to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this Agreement and the other Basic Documents to which the Issuer is a party and to administer the Issuer in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the provisions of this Agreement. Notwithstanding the foregoing, the Owner Trustee shall be deemed to have discharged its duties and responsibilities hereunder and under the other Basic Documents to the extent the Administrator has agreed in the Administration Agreement to perform any act or to discharge any duty of the Owner Trustee hereunder or under any Basic Document, and the Owner Trustee shall not be held liable for the default or failure of the Administrator to carry out its obligations under the Administration Agreement.
Section 6.03. Action Upon Instruction.
(a) Subject to Article Four, in accordance with the terms of the Basic Documents, the Certificateholders may by written instruction direct the Owner Trustee in the management of the Issuer. Such direction may be exercised at any time by written instruction of the Certificateholders pursuant to Article Four.
(b) The Owner Trustee shall not be required to take any action hereunder or under any other Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any other Basic Document or is otherwise contrary to law.
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(c) Whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms of this Agreement or under any other Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Certificateholders received, the Owner Trustee shall not be liable on account of such action to any Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Agreement and the other Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.
(d) In the event that the Owner Trustee is unsure as to the application of any provision of this Agreement or any other Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to any Person for such action or inaction.
Section 6.04. No Duties Except as Specified in this Agreement or in Instructions. The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, any document contemplated hereby to which the Owner Trustee is a party, except as expressly provided by the terms of this Agreement or in any document or written instruction received by the Owner Trustee pursuant to Section 6.03; and no implied duties or obligations shall be read into this Agreement or any other Basic Document against the Owner Trustee. The Owner Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it hereunder or to prepare or file any Commission filing for the Issuer or to record this Agreement or any other Basic Document. The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens (other than the lien of the Indenture) on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee that are not related to the ownership or the administration of the Owner Trust Estate.
Section 6.05. No Action Except Under Specified Documents or Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of or otherwise deal with any part of the Owner Trust Estate except in accordance with (i) the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) the Basic Documents and (iii) any document or instruction delivered to the Owner Trustee pursuant to Section 6.03.
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Section 6.06. Restrictions. The Owner Trustee shall not take any action (i) that is inconsistent with the purposes of the Issuer set forth in Section 2.03 or (ii) that, to the actual knowledge of the Owner Trustee, would result in the Issuer’s becoming taxable as a corporation for federal or state income tax purposes. The Certificateholders shall not direct the Owner Trustee to take action that would violate the provisions of this Agreement.
Section 6.07. Covenants for Reporting of Repurchase Demands due to Breaches of Representations and Warranties. The Owner Trustee shall, no later than the third Business Day after the last day of each calendar month, provide notice to American Honda Finance Corporation and American Honda Receivables LLC (each, a “Honda Party,” and together, the “Honda Parties”) in the form set forth as Exhibit E hereto (or such other form or format as the Honda Parties may otherwise specify) of the request or any requests of (i) all demands communicated to the Owner Trustee for the repurchase or replacement of any Receivable for breach of the representations and warranties concerning such Receivable relating to the Issuer and (ii) any actions taken by the Owner Trustee with respect to such demand communicated to the Owner Trustee in respect of any Receivables. In addition, the Owner Trustee shall, upon written request of either Honda Party, at any time they reasonably feel necessary, provide notification to the Honda Parties with respect to any actions taken by the Owner Trustee as soon as practicable and in any event within five (5) Business Days of receipt of such request. Such notices shall be provided to the Honda Parties in accordance with Section 11.04(iv) of the Indenture. The Owner Trustee and the Issuer acknowledge and agree that the purpose of this Section 6.07 is to facilitate compliance by the Honda Parties with Rule 15Ga-1 under the Securities Exchange Act of 1934, as amended, and Items 1104(e), 1121(c) and 1125 of Regulation AB (the “Repurchase Rules and Regulations”). The Owner Trustee acknowledges that interpretations of the requirements of the Repurchase Rules and Regulations may change over time, whether due to interpretive guidance provided by the Commission or its staff, consensus among participants in the asset-backed securities markets, advice of counsel, or otherwise, and agrees to comply with reasonable written requests (including email in PDF format) made by the Honda Parties in good faith for delivery of information in its possession under these provisions on the basis of evolving interpretations of the Repurchase Rules and Regulations. The Owner Trustee shall cooperate fully with the Honda Parties to deliver any and all records and any other information in its possession and necessary in the good faith determination of the Honda Parties to permit them to comply with the provisions of Repurchase Rules and Regulations. In no event shall the Owner Trustee have any responsibility or liability in connection with any filing required to be made by a securitizer under the Repurchase Rules and Regulations.
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ARTICLE Seven
CONCERNING THE OWNER TRUSTEE AND THE DELAWARE TRUSTEE
Section 7.01. Acceptance of Trusts and Duties. Each of the Owner Trustee and the Delaware Trustee accepts the trusts hereby created and each agrees to perform its duties hereunder with respect to such trusts, but only upon the terms of this Agreement. The Owner Trustee also agrees to disburse all monies actually received by it constituting part of the Owner Trust Estate upon the terms of this Agreement and the other Basic Documents. Neither the Owner Trustee nor the Delaware Trustee shall be answerable or accountable hereunder or under any other Basic Document under any circumstances, except (i) for its own willful misconduct, bad faith or gross negligence or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 7.03 expressly made by the Owner Trustee or the Delaware Trustee, as applicable. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence):
(a) neither the Owner Trustee nor the Delaware Trustee shall be liable for any error of judgment made in good faith by the Owner Trustee or the Delaware Trustee;
(b) neither the Owner Trustee nor the Delaware Trustee shall be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Administrator or any Certificateholder or Certificateholders;
(c) no provision of this Agreement or any other Basic Document shall require the Owner Trustee or the Delaware Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any other Basic Document if the Owner Trustee or the Delaware Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee or the Delaware Trustee be liable for indebtedness evidenced by or arising under any Basic Document, including the principal of and interest on the Notes or the Trust Certificates;
(e) neither the Owner Trustee nor the Delaware Trustee shall be responsible for or in respect of the validity or sufficiency of this Agreement or for the due execution hereof by the Depositor or for the form, character, genuineness, sufficiency, value or validity of any of the Owner Trust Estate, or for or in respect of the validity or sufficiency of the Basic Documents, other than the certificate of authentication on the Trust Certificates, and neither the Owner Trustee nor the Delaware Trustee shall in any event assume or incur any liability, duty or obligation to any Noteholder or to any Certificateholder, other than as expressly provided for in the Basic Documents;
(f) neither the Owner Trustee nor the Delaware Trustee shall be liable for the default or misconduct of the Administrator, the Seller, the Depositor, the Indenture Trustee or the Servicer under any Basic Document or otherwise, and neither the Owner Trustee nor the Delaware Trustee shall have any obligation or liability to perform the obligations of the Issuer under this Agreement or the other Basic Documents that are required to be performed by the Administrator under the Administration Agreement, the Indenture Trustee under the Indenture or the Servicer or the Seller under the Sale and Servicing Agreement or any other Person under any of the Basic Documents;
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(g) neither the Owner Trustee nor the Delaware Trustee shall be under any obligation to exercise any of the rights or powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any other Basic Document, at the request, order or direction of any of the Certificateholders, unless such Certificateholders have offered to the Owner Trustee or the Delaware Trustee, as applicable, security or indemnity satisfactory to it against the costs, expenses and liabilities that may be incurred by the Owner Trustee or the Delaware Trustee, as applicable, therein or thereby; the right of the Owner Trustee and the Delaware Trustee to perform any discretionary act enumerated in this Agreement or in any other Basic Document shall not be construed as a duty, and neither the Owner Trustee nor the Delaware Trustee shall be answerable for other than its gross negligence, bad faith or willful misconduct in the performance of any such act;
(h) in no event shall the Owner Trustee or the Delaware Trustee be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, by Force Majeure; it being understood that the Owner Trustee or the Delaware Trustee, as applicable, shall use reasonable efforts which are consistent with accepted practices in the banking industry to resume performance as soon as practicable under the circumstances; and
(i) in no event shall the Owner Trustee be responsible or liable for special, indirect, punitive or consequential loss or damage (including, but not limited to, loss of profit).
Section 7.02. Furnishing of Documents.
The Owner Trustee shall furnish to the Certificateholders, promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial statements and any other instruments furnished to the Owner Trustee under the Basic Documents.
Section 7.03. Representations and Warranties of the Owner Trustee and the Delaware Trustee. (1) The Owner Trustee hereby represents and warrants to the Depositor and the Certificateholders, that:
(a) it is a New York banking corporation duly organized and validly existing under the laws of the State of New York; it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(b) it has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf; and
(c) neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby, nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware law, governmental rule or regulation governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or bylaws; and
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(d) this Agreement constitutes a legal, valid and binding obligation of the Owner Trustee, enforceable against the Owner Trustee in accordance with its terms, except as such 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; and
(e) the execution, delivery and performance by the Owner Trustee of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the charter documents or bylaws of the Owner Trustee; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); and
(f) there are no proceedings or investigations pending or, to the Owner Trustee’s actual knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Owner Trustee or its properties: (i) asserting the invalidity of this Agreement or (ii) seeking any determination or ruling that might materially and adversely affect the validity or enforceability of this Agreement.
(2) The Delaware Trustee hereby represents and warrants to the Depositor and the Certificateholders that:
(a) it is a Delaware banking corporation duly organized and validly existing under the laws of the State of Delaware; it has all requisite corporate power and authority to execute, deliver and perform its obligations under this Agreement;
(b) it has taken all corporate action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf; and
(c) neither the execution nor the delivery by it of this Agreement, nor the consummation by it of the transactions contemplated hereby, nor compliance by it with any of the terms or provisions hereof will contravene any federal or Delaware law, governmental rule or regulation governing the banking or trust powers of the Delaware Trustee or any judgment or order binding on it, or constitute any default under its charter documents or bylaws; and
(d) this Agreement constitutes a legal, valid and binding obligation of the Delaware Trustee, enforceable against the Delaware Trustee in accordance with its terms, except as such 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; and
(e) the execution, delivery and performance by the Delaware Trustee of this Agreement and the consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, nor constitute (with or without notice or lapse of time) a default under, the charter documents or bylaws of the Delaware Trustee; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); and
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(f) there are no proceedings or investigations pending or, to the Delaware Trustee’s actual knowledge, threatened, before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Delaware Trustee or its properties: (i) asserting the invalidity of this Agreement or (ii) seeking any determination or ruling that might materially and adversely affect the performance by the Delaware Trustee of its obligations under, or the validity or enforceability of, this Agreement.
Section 7.04. Reliance, Advice of Counsel.
(a) The Owner Trustee and the Delaware Trustee shall incur no liability to anyone in acting upon any signature, instrument, notice, resolution, request, consent, order, certificate, report, opinion, bond or other document or paper believed by it to be genuine and believed by it to be signed by the proper party or parties. The Owner Trustee or the Delaware Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and effect. As to any fact or matter the method of determination of which is not specifically prescribed herein, the Owner Trustee or the Delaware Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer or other authorized officers of the relevant party, as to such fact or matter, and such certificate shall constitute full protection to the Owner Trustee or the Delaware Trustee, for any action taken or omitted to be taken by it in good faith in reliance thereon.
(b) In the exercise or administration of the trusts hereunder and in the performance of its duties and obligations under this Agreement and the other Basic Documents, the Owner Trustee and the Delaware Trustee (i) may act directly or through its respective agents or attorneys pursuant to agreements entered into with any of them, and the Owner Trustee and the Delaware Trustee, as applicable, shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee or the Delaware Trustee, as applicable, with reasonable care, and (ii) may consult with counsel, accountants and other skilled persons to be selected with reasonable care and employed by it. The Owner Trustee and the Delaware Trustee shall not be liable for anything done, suffered or omitted in good faith by it in accordance with the written opinion or advice of any such counsel, accountants or other such persons and not contrary to this Agreement or any other Basic Document.
Section 7.05. Not Acting in Individual Capacity. Except as otherwise provided in this Article, in accepting the trusts hereby created, each of The Bank of New York Mellon and BNY Mellon Trust of Delaware is acting solely as Owner Trustee and Delaware Trustee, respectively, hereunder and not in its individual capacity, and all Persons having any claim against the Owner Trustee or the Delaware Trustee by reason of the transactions contemplated by this Agreement or any other Basic Document shall look only to the Owner Trust Estate for payment or satisfaction thereof.
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Section 7.06. Owner Trustee and Delaware Trustee Not Liable for Trust Certificates or Receivables. The recitals contained herein and in the Trust Certificates (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificates) shall be taken as the statements of the Depositor, and the Owner Trustee and the Delaware Trustee assume no responsibility for the correctness thereof. The Owner Trustee and the Delaware Trustee make no representations as to the validity or sufficiency of this Agreement, any other Basic Document or the Trust Certificates (other than the signature of the Owner Trustee and the certificate of authentication on the Trust Certificates and the representations and warranties in Section 7.03) or the Notes, or of any Receivable or related documents. The Owner Trustee and the Delaware Trustee shall at no time have any responsibility or liability for or with respect to the legality, validity and enforceability of any Receivable, or the perfection and priority of any security interest created by any Receivable in any Financed Vehicle or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Owner Trust Estate or its ability to generate the payments to be distributed to Certificateholders under this Agreement or the Noteholders under the Indenture, including, without limitation, the existence, condition and ownership of any Financed Vehicle; the existence and enforceability of any insurance thereon; the existence and contents of any Receivable on any computer or other record thereof; the validity of the assignment of any Receivable to the Issuer or of any intervening assignment; the completeness of any Receivable; the performance or enforcement of any Receivable; the compliance by the Depositor or the Servicer with any warranty or representation made under any Basic Document or in any related document or the accuracy of any such warranty or representation, or any action of the Administrator, the Indenture Trustee or the Servicer or any subservicer taken in the name of the Owner Trustee or the Delaware Trustee.
Section 7.07. Owner Trustee or Delaware Trustee May Own Trust Certificates and Notes. Each of the Owner Trustee and the Delaware Trustee in its individual or any other capacity may become the owner or pledgee of Trust Certificates or Notes and may deal with the Depositor, the Administrator, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee or the Delaware Trustee, respectively.
Section 7.08. Duties of the Delaware Trustee. The Delaware Trustee is appointed to serve as the trustee of the Trust in the State of Delaware for the sole purpose of satisfying the requirement of Section 3807(a) of the Statutory Trust Statute 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 that the Delaware Trustee shall have none of the duties or liabilities of the Owner Trustee. The duties of the Delaware Trustee shall be limited to (a) accepting legal process served on the Trust in the State of Delaware and (b) the execution of any certificates required to be filed with the Secretary of State of the State of Delaware which the Delaware Trustee is required to execute under Section 3811 of the Statutory Trust Statute. To the extent that, at law or in equity, the Delaware Trustee has duties (including fiduciary duties) and liabilities relating thereto to the Trust, the beneficial owners thereof or any other person, it is hereby understood and agreed by the other parties hereto that such duties and liabilities are replaced by the duties and liabilities of the Delaware Trustee expressly set forth in this Section 7.08. The Delaware Trustee shall have all the rights, privileges and immunities of the Owner Trustee.
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ARTICLE Eight
compensation of owner trustee and the delaware trustee
Section 8.01. Owner Trustee’s and Delaware Trustee’s Fees and Expenses. Each of the Owner Trustee and the Delaware Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Depositor and the Owner Trustee and the Depositor and the Delaware Trustee, respectively, and upon the formation of the Issuer, each of the Owner Trustee and the Delaware Trustee shall be entitled to be reimbursed by the Issuer for its other reasonable expenses hereunder, including the reasonable compensation, expenses and disbursements of such agents, representatives, experts and counsel as each of the Owner Trustee and the Delaware Trustee may employ in connection with the exercise and performance of its rights and its duties hereunder.
Section 8.02. Indemnification. The Issuer shall, or shall cause the Administrator to, indemnify each of the Owner Trustee, the Delaware Trustee, the Paying Agent, the Certificate Registrar, any Authenticating Agent and any co-trustee and their respective officers, directors, employees and agents (each, an “Indemnified Party”) against any and all loss, liability or expense (including reasonable attorney’s fees and expenses) incurred by such Indemnified Party in connection with the administration of the Issuer and the performance of its duties hereunder not resulting from its own willful misconduct, gross negligence or bad faith. Any Indemnified Party seeking indemnity in respect of any such claim shall notify the Issuer and the Administrator promptly of such claim. The indemnities contained in this Section shall survive the resignation or termination of the Owner Trustee, the Delaware Trustee or the termination of this Agreement. In the event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Owner Trustee’s or the Delaware Trustee’s choice of legal counsel shall be subject to the approval of the Depositor (or if the Depositor is no longer an owner, the designee of the Depositor), which approval shall not be unreasonably withheld. Neither the Issuer nor the Administrator need reimburse any expense or indemnify against any loss, liability or expense incurred by any Indemnified Party (1) through such party’s own willful misconduct, gross negligence or bad faith or (2) in the case of the inaccuracy of any representation or warranty contained in Sections 7.03 expressly made by the Owner Trustee or the Delaware Trustee, as applicable. The Indemnified Parties’ right to indemnification shall include any reasonable legal fees, costs and expenses incurred in connection with any enforcement (including any action, claim, suit, arbitration or mediation brought) by an Indemnified Party of any indemnification or other obligation of the Issuer, the Servicer, the Administrators, the Noteholders or the Note Owners.
Section 8.03. Payments to the Owner Trustee and to the Delaware Trustee. Any amounts paid to the Owner Trustee and to the Delaware Trustee pursuant to this Article shall be deemed not to be a part of the Owner Trust Estate immediately after such payment. Any amounts owing to the Owner Trustee under this Agreement or the other Basic Documents shall constitute a claim against the Owner Trust Estate.
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ARTICLE Nine
TERMINATION OF TRUST AGREEMENT
Section 9.01. Termination of Trust Agreement.
(a) The Issuer shall dissolve immediately prior to the earlier to occur of (i) the purchase on any Payment Date by the Servicer, or any successor Servicer, at its option, pursuant to Section 8.01(a) of the Sale and Servicing Agreement, of the Owner Trust Estate other than the Accounts and the Certificate Distribution Account, (ii) the final distribution by the Owner Trustee of all monies or other property or proceeds of the Owner Trust Estate in accordance with the terms of the Indenture, the Sale and Servicing Agreement and Article Five, or (iii) the Payment Date next succeeding the month which is one year after the maturity or other liquidation of the last Receivable and the disposition of any amount received upon liquidation of any property remaining in the Owner Trust Estate. The bankruptcy, liquidation, dissolution, death or incapacity of any Certificateholder shall not (i) operate to terminate this Agreement or the Issuer, (ii) entitle such Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Issuer or Owner Trust Estate or (iii) otherwise affect the rights, obligations and liabilities of the parties hereto. The Issuer shall be entitled to deduct from the final distribution to Certificateholders any amounts required to pay any other claims against and obligations of the Issuer in accordance with Section 3808(e) of the Statutory Trust Statute.
(b) Except as provided in Section 9.01(a), neither of the Depositor nor any Certificateholder shall be entitled to revoke or terminate the Issuer.
(c) The outstanding Trust Certificates are subject to redemption in whole, but not in part, pursuant to Section 8.01 of the Sale and Servicing Agreement; provided that the Issuer has available funds sufficient to pay the aggregate Certificate Balance of all the Trust Certificates, together with accrued interest at the Certificate Rate to but excluding the Payment Date. Notice of any termination of the Issuer, specifying the Payment Date upon which Certificateholders shall surrender their Trust Certificates to the Paying Agent for payment of the final distribution and cancellation, shall be given by the Owner Trustee by letter to Certificateholders mailed within five (5) Business Days of receipt of notice of such termination from the Servicer given pursuant to Section 8.01(b) of the Sale and Servicing Agreement, stating (i) the Payment Date upon or with respect to which final payment of the Trust Certificates shall be made upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Trust Certificates at the office of the Paying Agent therein specified. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Paying Agent (if other than the Owner Trustee) at the time such notice is given to Certificateholders. Upon presentation and surrender of the Trust Certificates, the Paying Agent shall cause to be distributed to Certificateholders amounts distributable on such Payment Date pursuant to Section 5.02. The Owner Trustee shall promptly notify the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement) upon the final payment of the Trust Certificates.
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(d) In the event that all of the Certificateholders shall not surrender their Trust Certificates for cancellation within six months after the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to the remaining Certificateholders to surrender their Trust Certificates for cancellation and receive the final distribution with respect thereto. If within one year after the second notice all the Trust Certificates shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders concerning surrender of their Trust Certificates, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement. Subject to applicable escheat laws, any funds remaining in the Issuer after exhaustion of such remedies shall be distributed by the Owner Trustee to the Depositor, in its capacities as Depositor and as Certificateholder.
(e) Upon the winding up of the Issuer, the Owner Trustee shall, upon the direction and at the expense of the Depositor, cause the Certificate of Trust to be cancelled by filing a certificate of cancellation with the Secretary of State in accordance with Section 3810 of the Statutory Trust Statute. Upon the filing of the certificate of cancellation, the Issuer and this Agreement (other than Article 8) shall terminate and be of no further force or effect.
ARTICLE Ten
SUCCESSOR AND ADDITIONAL OWNER TRUSTEES
Section 10.01. Eligibility Requirements for Owner Trustee and Delaware Trustee. The Owner Trustee shall at all times (i) maintain its principal place of business in the State of New York or such other location within the United States to which the Depositor shall consent in writing, (ii) be authorized to exercise corporate trust powers, (iii) have a combined capital and surplus of at least $50,000,000, (iv) be subject to supervision or examination by federal or state authorities and (v) have the Required Rating. If such person shall publish reports of condition at least annually pursuant to law or to the requirements of the aforesaid supervising or examining authority, then for the purpose of this Section, the combined capital and surplus of such person shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. The Delaware Trustee shall at all times be a Person satisfying the provisions of Section 3807(a) of the Statutory Trust Statute. In case at any time the Owner Trustee or the Delaware Trustee, as applicable, shall cease to be eligible in accordance with the provisions of this Section, the Owner Trustee or the Delaware Trustee, as applicable, shall resign immediately in the manner and with the effect specified in Section 10.02.
Section 10.02. Resignation or Removal of Owner Trustee or Delaware Trustee. The Owner Trustee or Delaware Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Administrator. Upon receiving such notice of resignation, the Administrator shall promptly appoint a successor Owner Trustee or Delaware Trustee, as applicable, by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner Trustee or Delaware Trustee, as applicable, and one copy to the successor Owner Trustee or Delaware Trustee, as applicable. If no successor Owner Trustee or Delaware Trustee, as applicable, shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation, the resigning Owner Trustee or Delaware Trustee, as applicable, may petition at the Issuer’s expense any court of competent jurisdiction for the appointment of a successor Owner Trustee or Delaware Trustee, as applicable.
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If at any time the Owner Trustee or Delaware Trustee, as applicable, shall cease to be eligible in accordance with Section 10.01 and shall fail to resign after 31 days prior written request therefor by the Administrator, or if at any time the Owner Trustee or Delaware Trustee, as applicable, shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or Delaware Trustee, as applicable, of either of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or Delaware Trustee or of either of their property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Administrator may remove the Owner Trustee or Delaware Trustee, as applicable. If the Administrator shall remove the Owner Trustee or Delaware Trustee, as applicable, under the authority of the immediately preceding sentence, the Administrator shall promptly appoint a successor Owner Trustee or Delaware Trustee, as applicable, by written instrument, in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee or Delaware Trustee, as applicable, so removed and one copy to the successor Owner Trustee or Delaware Trustee, as applicable, and shall pay all fees and expenses owed to the outgoing Owner Trustee or Delaware Trustee, as applicable.
Any resignation or removal of the Owner Trustee or Delaware Trustee, as applicable, and appointment of a successor Owner Trustee or Delaware Trustee, as applicable, pursuant to any of the provisions of this Section shall not become effective until acceptance of appointment by the successor Owner Trustee or Delaware Trustee, as applicable, pursuant to Section 10.03 and payment of all fees and expenses owed to the outgoing Owner Trustee or Delaware Trustee, as applicable. The Administrator shall provide notice of such resignation or removal of the Owner Trustee or Delaware Trustee, as applicable, to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement.
Section 10.03. Successor Owner Trustee or Delaware Trustee. Any successor Owner Trustee or Delaware Trustee, as applicable, appointed pursuant to Section 10.02 shall execute, acknowledge and deliver to the Administrator and to its predecessor Owner Trustee or Delaware Trustee, as applicable, an instrument accepting such appointment under this Agreement, and thereupon the resignation or removal of the predecessor Owner Trustee or Delaware Trustee, as applicable, shall become effective, and such successor Owner Trustee or Delaware Trustee, as applicable, without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee or Delaware Trustee, as applicable. The predecessor Owner Trustee or Delaware Trustee, as applicable, shall upon payment of its fees and expenses deliver to the successor Owner Trustee or Delaware Trustee, as applicable, all documents and statements and monies held by it under this Agreement and the Administrator and the predecessor Owner Trustee or Delaware Trustee, as applicable, shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming in the successor Owner Trustee or Delaware Trustee, as applicable, all such rights, powers, duties and obligations.
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No successor Owner Trustee or Delaware Trustee, as applicable, shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee or Delaware Trustee, as applicable, shall be eligible pursuant to Section 10.01.
Upon acceptance of appointment by a successor Owner Trustee or Delaware Trustee, as applicable, pursuant to this Section, the Administrator shall mail notice thereof to all Certificateholders, the Indenture Trustee and the Noteholders; and, in the case of each Rating Agency, shall make such notice available pursuant to Section 1.02(c) of the Administration Agreement. If the Administrator shall fail to mail such notice within ten (10) days after acceptance of such appointment by the successor Owner Trustee or Delaware Trustee, as applicable, the successor Owner Trustee or Delaware Trustee, as applicable, shall cause such notice to be mailed at the expense of the Administrator.
Section 10.04. Merger or Consolidation of Owner Trustee or Delaware Trustee. Any Person into which the Owner Trustee or Delaware Trustee, as applicable, may be merged or converted or with which it may be consolidated, or any Person resulting from any merger, conversion or consolidation to which the Owner Trustee or Delaware Trustee, as applicable, shall be a party, or any Person succeeding to all or substantially all of the corporate trust business of the Owner Trustee or Delaware Trustee, as applicable, shall be the successor of the Owner Trustee or Delaware Trustee, as applicable, hereunder, 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; provided, that such Person shall be eligible pursuant to Section 10.01 and, provided, further, that the Owner Trustee or Delaware Trustee, as applicable, shall mail notice of such merger or consolidation to the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement).
Section 10.05. Appointment of Co-Trustee or Separate Trustee. Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate or any Financed Vehicle may at the time be located, the Administrator and the Owner Trustee acting jointly shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Administrator and Owner Trustee to act as co-trustee, jointly with the Owner Trustee, or as separate trustee or separate trustees, of all or any part of the Owner Trust Estate, and to vest in such Person, in such capacity, such title to the Trust or any part thereof and, subject to the other provisions of this Section, such powers, duties, obligations, rights and trusts as the Administrator and the Owner Trustee may consider necessary or desirable. If the Administrator shall not have joined in such appointment within fifteen (15) days after the receipt by it of a request to do so, the Owner Trustee alone shall have the power to make such appointment. The Owner Trustee agrees that upon receipt of a written request from the Administrator to appoint a co-trustee, it will, at the expense of the Issuer, either (i) promptly provide evidence reasonably satisfactory to the Administrator that such co-trustee is not required or (ii) cooperate fully to ensure a co-trustee is appointed with any required timeframe. No co-trustee or separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor Owner Trustee pursuant to Section 10.01, except that such co-trustee or successor trustee shall have the Required Rating, and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to Section 10.03.
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Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions:
(a) all rights, powers, duties and obligations conferred or imposed upon the Owner Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the 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 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 Owner 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 Owner Trustee;
(b) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this Agreement; and
(c) the Administrator and the 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 Owner Trustee shall be deemed to have been given to each of the then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article. Each separate trustee and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor co-trustee or separate trustee.
ARTICLE Eleven
MISCELLANEOUS
Section 11.01. Amendments.
(a) Any term or provision of this Agreement may be amended by the parties hereto but without the consent of any Securityholders, the Issuer or any other Person if the Depositor delivers an Opinion of Counsel to the Indenture Trustee and the Owner Trustee to the effect that such amendment will not materially and adversely affect the interests of the Securityholders whose written consent has not been obtained.
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(b) This Agreement may also be amended from time to time by the parties hereto, with prior notice to the Indenture Trustee, the written consent of the Certificateholders evidencing not less than a majority of the Percentage Interests evidenced by the Trust Certificates and, if such amendment materially and adversely affects the interests of the Noteholders, with the consent of Noteholders (as such term is defined in the Indenture) evidencing not less than a majority of the Outstanding Amount of the Notes, for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, that no such amendment shall (i) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on Receivables or distributions that shall be required to be made for the benefit of the Noteholders or the Certificateholders, (ii) increase or reduce any Interest Rate or Certificate Rate or (iii) reduce the aforesaid percentage of the Outstanding Amount of the Notes or of the Percentage Interests evidenced by the Trust Certificates required to consent to any such amendment, without the consent of the Noteholders and Certificateholders of all the outstanding Notes and Trust Certificates affected thereby.
(c) Any term or provision of this Agreement may also be amended from time to time by the Depositor, for the purpose of conforming the terms of this Agreement to the description thereof in the Prospectus, without the consent of the Trustees, any Securityholders, the Issuer or any other Person.
(d) Promptly after the execution of any such amendment, the Depositor shall furnish written notification of the substance of such amendment to the Indenture Trustee and the Administrator (who shall make such notice available to each Rating Agency pursuant to Section 1.02(c) of the Administration Agreement). It shall not be necessary for the consent of Securityholders or Trustees pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of Certificateholders provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe.
(e) No amendment that adversely affects the Trustees shall be effective without the prior written consent of the party adversely affected. The Trustees may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s, the Delaware Trustee’s or the Indenture Trustee’s, as applicable, own rights, duties or immunities under this Agreement or otherwise.
(f) Promptly after the execution of any such amendment, the Owner Trustee shall furnish written notification of the substance of such amendment or consent to each Certificateholder. Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State.
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(g) In connection with the execution of any amendment to this Agreement or any other basic Document to which the Issuer is a party and for which amendment the Owner Trustee’s or the Delaware Trustee’s consent is sought, the Owner Trustee and the Delaware Trustee shall be entitled to receive and rely upon an Opinion of Counsel to the effect that the execution of such amendment is authorized or permitted by this Agreement or such other Basic Document, as the case may be, and that all conditions precedent in this Agreement or such other Basic Document, as the case may be, for the execution and delivery thereof by the Issuer or the Owner Trustee, as the case may be, have been satisfied.
Section 11.02. No Legal Title to the Owner Trust Estate for the Certificateholder. The Certificateholder shall not have legal title to any part of the Owner Trust Estate. The Certificateholders shall be entitled to receive distributions with respect to their undivided ownership interest therein only in accordance with Articles Five and Nine. No transfer, by operation of law or otherwise, of any right, title or interest of the Certificateholders to and in their ownership interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate.
Section 11.03. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Delaware Trustee, the Indemnified Parties, the Depositor, the Certificateholders, the Administrator and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein.
Section 11.04. Notices.
(a) Unless otherwise expressly specified or permitted by the terms hereof, all demands, notices and communications under this Agreement shall be in writing, personally delivered, mailed by electronic mail (if an address therefore has been provided by the respective party in writing), mailed by certified mail, return receipt requested, delivered by overnight delivery service, or sent as a scanned image or sent via facsimile transmission and shall be deemed to have been duly given upon receipt at the address for such party set forth on Schedule A to the Sale and Servicing Agreement or at such other address as shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a Certificateholder shall be given by overnight delivery or first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice.
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(c) The Owner Trustee hereby agrees to accept and act upon instructions or directions pursuant to this Agreement sent by unsecured e-mail, pdf, facsimile transmission or other similar unsecured electronic methods, provided, however, that the Owner Trustee shall have received an incumbency certificate listing persons designated to give such instructions or directions and containing specimen signatures of such designated persons, which such incumbency certificate shall be amended and replaced whenever a person is to be added or deleted from the listing. If such party sending such instruction or direction elects to give the Owner Trustee e-mail or facsimile instructions (or instructions by a similar electronic method) and the Owner Trustee in its discretion elects to act upon such instructions, the Owner Trustee’s understanding of such instructions shall be deemed controlling. The Owner Trustee shall not be liable for any losses, costs or expenses arising directly or indirectly from the Owner Trustee’s reliance upon and compliance with such instructions notwithstanding such instructions conflict or are inconsistent with a subsequent written instruction. The party sending such instruction or direction agrees to assume all risks arising out of the use of such electronic methods to submit instructions and directions to the Owner Trustee, including without limitation the risk of the Owner Trustee acting on unauthorized instructions, and the risk of interception and misuse by third parties.
Section 11.05. 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 covenants, agreements, provisions or terms of this Agreement or of the Trust Certificates or the rights of the Certificateholders.
Section 11.06. Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument.
Section 11.07. Successors and Assigns. All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, each of the Depositor and its permitted assigns, the Owner Trustee and its successors, the Delaware Trustee and its successors, and each Certificateholder and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder.
Section 11.08. No Petition. The Owner Trustee and the Delaware Trustee, by entering into this Agreement, each Certificateholder, by accepting a Trust Certificate, and the Indenture Trustee and each Noteholder, by accepting the benefits of this Agreement, each hereby covenants and agrees that it will not at any time institute against the Depositor or the Issuer, or join in any institution against the Depositor or the Issuer of, any bankruptcy proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, this Agreement or any other Basic Document.
Section 11.09. No Recourse. Each Certificateholder by accepting a Trust Certificate acknowledges that such Certificateholder’s Trust Certificates represent beneficial interests in the Issuer only and do not represent interests in or obligations of the Depositor, the Seller, the Servicer, the Administrator, the Owner Trustee, the Delaware Trustee, the Indenture Trustee or any of their respective Affiliates and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in the Trust Certificates, this Agreement or any other Basic Document.
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Section 11.10. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof.
Section 11.11. Governing Law; Submission to Jurisdiction. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Each of the parties hereto hereby submits to the jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Section 11.12. Trust Certificates Nonassessable and Fully Paid. Certificateholders shall not be personally liable for obligations of the Issuer. The interests represented by the Trust Certificates shall be nonassessable for any losses or expenses of the Issuer or for any reason whatsoever, and, upon the authentication thereof by the Owner Trustee pursuant to Section 3.03, 3.04 or 3.05, the Trust Certificates are and shall be deemed fully paid.
Section 11.13. Depositor Payment Obligation. The Depositor shall be responsible for payment of the Administrator’s compensation under the Administration Agreement and shall reimburse the Administrator for all expenses and liabilities of the Administrator incurred thereunder. In addition, the Depositor shall be responsible for the payment of all fees and expenses of the Issuer and the Trustees paid by any of them in connection with any of their obligations under the Basic Documents to obtain or maintain any required license.
Section 11.14. Tax Treatment. Notwithstanding the foregoing or anything herein to the contrary, all persons (and their respective employees, representatives or other agents) may disclose to any and all persons, without limitation of any kind, the tax treatment and tax structure of the transaction described herein and all materials of any kind (including opinions or other tax analyses) that are provided to the recipient relating to such tax treatment and tax structure.
Section 11.15. Waiver of Jury Trial. Each of the parties hereto irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to the transaction contemplated hereby.
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Section 11.16. Communications with Rating Agencies. If the Owner Trustee or the Delaware Trustee shall receive any written or oral communications from any Rating Agency (or any of their respective officers, directors or employees) with respect to the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, the Owner Trustee or the Delaware Trustee, as applicable, agrees to coordinate with the Administrator with respect to any communication received from a Rating Agency and further agrees that in no event shall the Owner Trustee or the Delaware Trustee, as applicable, engage in any oral communication with respect to the substance of the transactions contemplated hereby or under the Basic Documents or in any way relating to the Notes, with any Rating Agency (or any of their respective officers, directors or employees) without the participation of the Administrator.
Neither the Owner Trustee nor the Delaware Trustee will be responsible for delays attributable to the Administrator’s failure to deliver any information related to any communication with a Rating Agency (with respect to this section, the “Information”), defects in the Information supplied to the Rating Agency or Administrator or other circumstances beyond the control of the Owner Trustee or the Delaware Trustee, as applicable. In addition, neither the Owner Trustee nor the Delaware Trustee shall be under any obligation to make any determination as to the veracity or applicability of any Information provided to it, or whether any such Information is required to be maintained on a website or other public medium.
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IN WITNESS WHEREOF, the parties hereto have caused this Amended and Restated Trust Agreement to be duly executed by their respective officers as of the day and year first above written.
| AMERICAN HONDA RECEIVABLES LLC, | |||
|
as Depositor
| |||
| By: | |||
| Name: Paul C. Honda | |||
| Title: Treasurer | |||
| THE BANK OF NEW YORK MELLON, | |||
|
as Owner Trustee
| |||
| By: | |||
| Name: | |||
| Title: | |||
| BNY MELLON TRUST OF DELAWARE, | |||
|
as Delaware Trustee
| |||
| By: | |||
| Name: | |||
| Title: | |||
| S-1 | HAROT 2018-2 | |
A&R Trust Agreement |
EXHIBIT A
FORM OF TRUST CERTIFICATE
THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION THEREFROM. IN ADDITION, THE TRANSFER OF THIS CERTIFICATE IS SUBJECT TO CERTAIN RESTRICTIONS AND CONDITIONS SET FORTH IN SECTION 3.04 OF THE TRUST AGREEMENT UNDER WHICH THIS CERTIFICATE ISSUED (A COPY OF WHICH TRUST AGREEMENT IS AVAILABLE FROM THE OWNER TRUSTEE UPON REQUEST), INCLUDING RECEIPT BY THE OWNER TRUSTEE OF AN INVESTMENT LETTER IN WHICH THE TRANSFEREE MAKES CERTAIN REPRESENTATIONS.
| NUMBER: R-1 Initial Certificate Balance: $33,739,737.54 |
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST |
| 0.00% ASSET BACKED CERTIFICATE |
evidencing a fractional undivided interest in the Issuer, as defined below, the property of which includes a pool of retail installment sale or conditional sale contracts secured by new and used Honda and Acura motor vehicles (including automobiles and light-duty trucks).
(This Trust Certificate does not represent an interest in or obligation of American Honda Receivables LLC, American Honda Finance Corporation or any of their respective affiliates.)
THIS CERTIFIES THAT American Honda Receivables LLC is the registered owner of a 100 percent nonassessable, fully-paid, undivided interest in the Honda Auto Receivables 2018-2 Owner Trust (the “Issuer”), formed by American Honda Receivables LLC, a Delaware limited liability company (the “Depositor”).
The Issuer was created pursuant to a Trust Agreement dated as of April 6, 2018 as amended and restated by an Amended and Restated Trust Agreement dated May 30, 2018 (as amended or supplemented from time to time, the “Trust Agreement”), among the Depositor, The Bank of New York Mellon, as owner trustee (the “Owner Trustee”), and BNY Mellon Trust of Delaware, as Delaware trustee (the “Delaware Trustee”) a summary of certain of the pertinent provisions of which is set forth below. Capitalized terms used herein that are not otherwise defined shall have the meanings ascribed thereto in the Trust Agreement.
| A-1 |
This Trust Certificate is one of the duly authorized certificates designated as “Asset Backed Certificates” (the “Trust Certificates”). Issued under an Indenture dated May 30, 2018 (the “Indenture”), between the Issuer and Citibank, N.A., as indenture trustee, are four classes of Notes designated as “Class A-1 2.35000% Asset Backed Notes,” “Class A-2 2.66% Asset Backed Notes”, “Class A-3 3.01% Asset Backed Notes” and “Class A-4 3.16% Asset Backed Notes” (collectively, the “Notes”). This Trust Certificate is issued under and is subject to terms, provisions and conditions of the Trust Agreement, to which Trust Agreement the Certificateholder of this Trust Certificate, by virtue of its acceptance thereof, assents and by which such Certificateholder is bound. The property of the Issuer includes, among other things, a pool of retail installment sale or conditional sale contracts for new and used Honda and Acura motor vehicles (including automobiles and light-duty trucks) (collectively, the “Receivables”), all monies received on or in respect of the Receivables on or after May 1, 2018, security interests in the vehicles financed thereby, certain bank accounts and the proceeds thereof, proceeds from claims on certain insurance policies and certain other rights under the Trust Agreement and the Sale and Servicing Agreement and all proceeds of the foregoing.
It is the intent of the Depositor, the Servicer and the Certificateholder that, solely for purposes of U.S. federal income, state and local income tax and any other income taxes, the Issuer will be treated as a disregarded entity not separate from the sole Certificateholder. The purchaser hereof, by acceptance of the Trust Certificates, agrees to take no action inconsistent with the above treatment for so long as it is the sole Certificateholder.
Solely in the event the Trust Certificates are held by more than a single Certificateholder, it is the intent of the Depositor, the Servicer and the Certificateholders that, solely for purposes of U.S. federal income, state and local income and single business tax and any other income taxes, the Issuer will be treated as a partnership and the Certificateholders will be treated as partners in the partnership. The purchaser hereof and the other Certificateholders, by acceptance of a Trust Certificate, agree to treat, and to take no action inconsistent with the treatment of, the Trust Certificates for such tax purposes as partnership interests in the Issuer.
Each Certificateholder, by its acceptance of a Trust Certificate, covenants and agrees that such Certificateholder will not at any time institute against the Depositor, or join in any institution against the Depositor of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Trust Certificates, the Notes, the Trust Agreement or any other Basic Document.
Distributions on this Trust Certificate will be made as provided in the Trust Agreement by the Owner Trustee by wire transfer or check mailed to the Certificateholder of record in the Certificate Register without the presentation or surrender of this Trust Certificate or the making of any notation hereon. Except as otherwise provided in the Trust Agreement and notwithstanding the above, the final distribution on this Trust Certificate will be made after due notice by the Owner Trustee of the pendency of such distribution and only upon presentation and surrender of this Trust Certificate at the office or agency maintained for the purpose by the Owner Trustee.
Reference is hereby made to the further provisions of this Trust Certificate set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.
| A-2 |
Unless the certificate of authentication hereon shall have been executed by an authorized officer of the Owner Trustee or the authenticating agent, by manual signature, this Trust Certificate shall not entitle the Certificateholder hereof to any benefit under the Trust Agreement or the Sale and Servicing Agreement or be valid for any purpose.
THIS TRUST CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
IN WITNESS WHEREOF, the Owner Trustee, on behalf of the Issuer and not in its individual capacity, has caused this Trust Certificate to be duly executed.
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST | ||
| By: |
THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Owner Trustee on behalf of the Trust
| |
| By: | ||
| Authorized Signatory | ||
OWNER TRUSTEE’S OR AUTHENTICATING AGENT’S CERTIFICATE OF AUTHENTICATION
This is one of the Trust Certificates referred to in the within-mentioned Trust Agreement.
|
THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Authenticating Agent on behalf of the Trust
|
THE BANK OF NEW YORK MELLON, not in its individual capacity but solely as Owner Trustee on behalf of the Trust
| |||
| By: | OR | By: | ||
| Authorized Signatory | Authorized Signatory | |||
| A-3 |
[REVERSE OF TRUST CERTIFICATE]
The Trust Certificates do not represent an obligation of, or an interest in, the Depositor, the Servicer, the Owner Trustee or any of their respective affiliates and no recourse may be had against such parties or their assets, except as expressly set forth or contemplated herein or in the Trust Agreement or the other Basic Documents. In addition, this Trust Certificate is not guaranteed by any governmental agency or instrumentality and is limited in right of payment to certain collections and recoveries with respect to the Receivables (and certain other amounts), all as more specifically set forth herein and in the Sale and Servicing Agreement. A copy of each of the Sale and Servicing Agreement and the Trust Agreement may be examined by any Certificateholder upon written request during normal business hours at the principal office of the Depositor and at such other places, if any, designated by the Depositor.
The Trust Agreement permits, with certain exceptions therein provided, the amendment thereof and the modification of the rights and obligations of the Depositor and the rights of the Certificateholders under the Trust Agreement at any time by the parties thereto with the consent of the Certificateholders and Noteholders, each voting as a class, evidencing not less than a majority of the Percentage Interests evidenced by the outstanding Trust Certificates, or a majority of the outstanding principal balance of the Notes of each such class. Any such consent by the Certificateholder of this Trust Certificate shall be conclusive and binding on such Certificateholder and on all future Certificateholders of this Trust Certificate and of any Trust Certificate issued upon the transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent is made upon this Trust Certificate. The Trust Agreement also permits the amendment thereof, in certain limited circumstances, without the consent of the Certificateholders of any of the Trust Certificates.
As provided in the Trust Agreement and subject to certain limitations therein set forth, the transfer of this Trust Certificate is registrable in the Certificate Register upon surrender of this Trust Certificate for registration of transfer at the offices or agencies of the Certificate Registrar maintained by the Owner Trustee, accompanied by a written instrument of transfer in form satisfactory to the Owner Trustee and the Certificate Registrar duly executed by the Certificateholder hereof or such Certificateholder’s attorney duly authorized in writing, and thereupon one or more new Trust Certificates evidencing the same original certificate balance in the Issuer will be issued to the designated transferee.
Except as provided in the Trust Agreement, the Trust Certificates are issuable only as registered Trust Certificates. As provided in the Trust Agreement and subject to certain limitations therein set forth, Trust Certificates are exchangeable for new Trust Certificates evidencing the same aggregate original certificate balance, as requested by the Certificateholder surrendering the same. No service charge will be made for any such registration of transfer or exchange, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental charge payable in connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of the Owner Trustee or the Certificate Registrar may treat the Person in whose name this Trust Certificate is registered as the owner hereof for all purposes, and none of the Owner Trustee, the Certificate Registrar or any such agent shall be affected by any notice to the contrary.
| A-4 |
The obligations and responsibilities created by the Trust Agreement and the Issuer created thereby shall terminate upon the payment to Certificateholders of all amounts required to be paid to them pursuant to the Trust Agreement and the Sale and Servicing Agreement and the disposition of all property held as part of the Owner Trust Estate. The Servicer of the Receivables may at its option purchase the Owner Trust Estate at a price specified in the Sale and Servicing Agreement, and such purchase of the Receivables and other property of the Issuer will effect early retirement of the Trust Certificates; provided, however, such right of purchase is exercisable only as of the last day of any Collection Period as of which the Pool Balance is less than or equal to 10% of the Original Pool Balance.
The Trust Certificates may not be acquired or held by a Benefit Plan Investor, a Plan that is subject to Similar Law or a person who is not a United States Person within the meaning of Section 7701(a)(30) of the Code. By accepting and holding this Trust Certificate, the Certificateholder hereof shall be required to have represented and warranted that it is not a Benefit Plan Investor or a Plan that is subject to Similar Law.
| A-5 |
ASSIGNMENT
| FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers unto |
| PLEASE INSERT SOCIAL SECURITY OR |
| OTHER IDENTIFYING NUMBER OF ASSIGNEE |
| (Please print or type name and address, including postal zip code, of assignee) |
| the within Trust Certificate, and all rights thereunder, any hereby irrevocably constitutes and appoints __________________, attorney, to transfer said Trust Certificate on the books of the Certificate Registrar, with full power of substitution in the premises. |
| Signature Guaranteed: | |
NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Trust Certificate in every particular, without alteration, enlargement or any change whatsoever. Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Certificate Registrar, which requirements include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Certificate Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
| A-6 |
EXHIBIT B
FORM OF SELLER CERTIFICATE
_______________, ____
HONDA AUTO RECEIVABLES 2018-2
OWNER TRUST
c/o THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
| Re: | Honda Auto Receivables 2018-2 Owner Trust | ||
| Asset Backed Certificates | |||
Dear Sirs:
In connection with our disposition of the above-referenced Asset Backed Certificates (the “Certificates”) we certify that (i) we understand that the Certificates have not been registered under the Securities Act of 1933, as amended (the “Act”), and are being transferred by us in a transaction that is exempt from the registration requirements of the Act and (ii) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action which would result in, a violation of Section 5 of the Act.
| Very truly yours, | ||
| [NAME OF SELLER] | ||
| By | ||
| Authorized Officer | ||
| B-1 |
EXHIBIT C
FORM OF INVESTMENT LETTER
_______________, ___
HONDA AUTO RECEIVABLES 2018-2
OWNER TRUST
c/o THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
| Re: | Honda Auto Receivables 2018-2 Owner Trust | ||
| Asset Backed Certificates | |||
Dear Sirs:
In connection with our acquisition of the above-referenced Asset Backed Certificates (the “Certificates”) we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we are an “accredited investor,” as defined in Regulation D under the Act, and have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Seller concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d) we are acquiring the Certificates for investment for our own account and not with a view to any distribution of such Certificates (but without prejudice to our right at all times to sell or otherwise dispose of the Certificates in accordance with clause (f) below), (e) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, or taken any other action that would result in a violation of Section 5 of the Act or any state securities laws, (f) we are not a Benefit Plan Investor or a Plan that is subject to Similar Law and (g) we will not sell, or otherwise dispose of any Certificates unless (i) such sale, transfer or other disposition is made pursuant to an effective registration statement under the Act and in compliance with any state securities laws or is exempt from such registration requirements and, if requested, we will at our expense provide an Opinion of Counsel satisfactory to the addresses of this certificate that such sale, transfer or other disposition may be made pursuant to an exemption from the Act, (ii) the purchaser or transferee of such Certificate has executed and delivered to you a certificate to substantially the same effect as this certificate and (iii) the purchaser or transferee has otherwise complied with any conditions for transfer set forth in the Amended and Restated Trust Agreement dated May 30, 2018 among American Honda Receivables LLC, as depositor, The Bank of New York Mellon, as owner trustee, and BNY Mellon Trust of Delaware, as Delaware trustee.
| C-1 |
| Very truly yours, | ||
| [NAME OF TRANSFEREE] | ||
| By | ||
| Authorized Officer | ||
| C-2 |
EXHIBIT D
FORM OF RULE 144A LETTER
_______________, 20__
HONDA AUTO RECEIVABLES 2018-2
OWNER TRUST
c/o THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
THE BANK OF NEW YORK MELLON
101 Barclay Street, Floor 7 West
New York, New York 10286
Attention: Asset Backed Securities Unit – HAROT 2018-2
| Re: | Honda Auto Receivables 2018-2 Owner Trust | ||
| Asset Backed Certificates | |||
Dear Sirs:
In connection with our acquisition of the above-referenced Asset Backed Certificates (the “Certificates”) we certify that (a) we understand that the Certificates are not being registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and are being transferred to us in a transaction that is exempt from the registration requirements of the Act and any such laws, (b) we have such knowledge and experience in financial and business matters that we are capable of evaluating the merits and risks of investments in the Certificates, (c) we have had the opportunity to ask questions of and receive answers from the Seller concerning the purchase of the Certificates and all matters relating thereto or any additional information deemed necessary to our decision to purchase the Certificates, (d) we have not, nor has anyone acting on our behalf, offered, transferred, pledged, sold or otherwise disposed of the Certificates or an interest in the Certificates, or solicited any offer to buy, transfer, pledge or otherwise dispose of the Certificates or any interest in the Certificates from any person in any manner or made any general solicitation by means of general advertising or in any other manner, taken any other action that would constitute a distribution of the Certificates under the Act or that would render the disposition of the Certificates a violation of Section 5 of the Act or any state securities laws or require registration pursuant thereto, and we will not act, or authorize any person to act, in such manner with respect to the Certificates, (e) we are not a Benefit Plan Investor or a Plan that is subject to Similar Law and (f) we are a “qualified institutional buyer” as that term is defined in Rule 144A under the Act. We are aware that the sale to us is being made in reliance on Rule 144A. We are acquiring the certificates for our own account or for resale pursuant to Rule 144A and understand that such certificates may be resold, pledged or transferred only (i) to a person reasonably believed to be a qualified institutional buyer that purchases for its own account or for the account of a qualified institutional buyer to whom notice is given that the resale, pledge or transfer is being made in reliance on Rule 144A or (ii) pursuant to another exemption from registration under the Act.
| D-1 |
| Very truly yours, | ||
| [NAME OF TRANSFEREE] | ||
| By | ||
| Authorized Officer | ||
| D-2 |
EXHIBIT E
Form of Monthly Rule 15Ga-1 Asset Repurchase Activity Report
Reporting Period: ____________
Name of Issuing Entity: HAROT 2018-2
Trustee: The Bank of New York Mellon
¨ Check here if the Trustee has no activity to report during Reporting Period indicated above
Name of Issuing |
Check if Registered |
Name of Originator |
Total Assets in ABS by Originator1 |
Assets
That Were Demand |
Assets That Were Repurchased or Replaced |
Assets
Pending Replacement (within cure period) |
Demand in Dispute | Demand Withdrawn | Demand Rejected | |||||||||||||||||||||||||||||||||||||
| (a) | (b) | (c) | (#) (d) |
($) (e) |
(%
of (f) |
(#) (g) |
($) (h) |
(%
of (i) |
(#) (j) |
($) (k) |
(%
of (l) |
(#) (m) |
($) (n) |
(%
of (o) |
(#) (p) |
($) (q) |
(%
of (r) |
(#) (s) |
($) (t) |
(%
of (u) |
(#) (v) |
($) (w) |
(%
of (x) | |||||||||||||||||||||||
| Asset Class X | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuing Entity A CIK # | X | Originator 1 | ||||||||||||||||||||||||||||||||||||||||||||
| Originator 2 | ||||||||||||||||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||
| Asset Class Y | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuing Entity B | Originator 3 | |||||||||||||||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||
| Total | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | # | $ | ||||||||||||||||||||||||||||||||
1 Owner Trustee to provide if such information is available.
| E-1 |
Exhibit 10.5
ASSET REPRESENTATIONS REVIEW AGREEMENT
among
HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST,
as Issuer,
AMERICAN HONDA FINANCE CORPORATION,
as Sponsor and Servicer
and
CLAYTON FIXED INCOME SERVICES LLC,
as Asset Representations Reviewer
Dated as of May 30, 2018
Table of Contents
| Page | ||
| ARTICLE I USAGE AND DEFINITIONS | 1 | |
| Section 1.1. | Usage and Definitions | 1 |
| Section 1.2. | Additional Definitions | 2 |
| ARTICLE II ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER | 2 | |
| Section 2.1. | Engagement; Acceptance | 2 |
| Section 2.2. | Confirmation of Scope | 2 |
| ARTICLE III ASSET REPRESENTATIONS REVIEW PROCESS | 2 | |
| Section 3.1. | Review Notices | 2 |
| Section 3.2. | Identification of Subject Receivables | 3 |
| Section 3.3. | Review Materials | 3 |
| Section 3.4. | Performance of Reviews | 3 |
| Section 3.5. | Review Reports | 4 |
| Section 3.6. | Limitations on Review Obligations | 5 |
| ARTICLE IV ASSET REPRESENTATIONS REVIEWER | 5 | |
| Section 4.1. | Representations and Warranties | 5 |
| Section 4.2. | Covenants | 6 |
| Section 4.3. | Fees, Expenses and Indemnities | 7 |
| Section 4.4. | Limitation on Liability | 7 |
| Section 4.5. | Indemnification by Asset Representations Reviewer | 8 |
| Section 4.6. | Indemnification of Asset Representations Reviewer | 8 |
| Section 4.7. | Inspections of Asset Representations Reviewer | 9 |
| Section 4.8. | Delegation of Obligations | 9 |
| Section 4.9. | Confidential Information | 9 |
| Section 4.10. | Personally Identifiable Information | 11 |
| ARTICLE V RESIGNATION AND REMOVAL; SUCCESSOR ASSET REPRESENTATIONS REVIEWER | 13 | |
| Section 5.1. | Eligibility Requirements for Asset Representations Reviewer | 13 |
| Section 5.2. | Resignation and Removal of Asset Representations Reviewer | 13 |
| Section 5.3. | Successor Asset Representations Reviewer | 13 |
| Section 5.4. | Merger, Consolidation or Succession | 14 |
| ARTICLE VI OTHER AGREEMENTS | 14 | |
| Section 6.1. | Independence of Asset Representations Reviewer | 14 |
| Section 6.2. | No Petition | 15 |
| Section 6.3. | Limitation of Liability of Owner Trustee | 15 |
| i |
Table of Contents
(continued)
| Page | ||
| Section 6.4. | Termination of Agreement | 15 |
| ARTICLE VII MISCELLANEOUS PROVISIONS | 15 | |
| Section 7.1. | Amendments | 15 |
| Section 7.2. | Assignment; Benefit of Agreement; Third Party Beneficiaries | 15 |
| Section 7.3. | Notices | 16 |
| Section 7.4. | Governing Law; Submission to Jurisdiction; Waiver of Jury Trial | 16 |
| Section 7.5. | No Waiver; Remedies | 17 |
| Section 7.6. | Severability | 17 |
| Section 7.7. | Headings | 17 |
| Section 7.8. | Counterparts | 17 |
| Schedule A | Representations and Warranties, Review Materials and Tests |
| ii |
ASSET REPRESENTATIONS REVIEW AGREEMENT, dated as of May 30, 2018 (this “Agreement”), among HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST, a Delaware statutory trust, as Issuer (the “Issuer”), AMERICAN HONDA FINANCE CORPORATION, a California corporation (“AHFC”), as Sponsor and Servicer, and CLAYTON FIXED INCOME SERVICES LLC, a Delaware limited liability company, as Asset Representations Reviewer (the “Asset Representations Reviewer”).
BACKGROUND
WHEREAS, in the regular course of its business, AHFC acquires certain motor vehicle retail installment sale contracts secured by new and used automobiles (including light-duty trucks) from motor vehicle dealers.
WHEREAS, in connection with a securitization transaction sponsored by AHFC, AHFC sold a pool of Receivables consisting of retail installment sale contracts to American Honda Receivables, LLC (the “Depositor”), who sold them to the Issuer.
WHEREAS, the Issuer has granted a security interest in the pool of Receivables to the Indenture Trustee, for the benefit of the Holders of Notes, as security for the Notes issued by the Issuer under the Indenture.
WHEREAS, the Issuer desires to engage the Asset Representations Reviewer to perform reviews of certain Receivables for compliance with the representations and warranties made by AHFC about the Receivables in the pool.
NOW, THEREFORE, in consideration of the foregoing, other good and valuable consideration, and the mutual terms and conditions contained herein, the parties hereto agree as follows.
ARTICLE I
USAGE AND DEFINITIONS
Section 1.1. Usage and Definitions. (a) Except as otherwise specified herein or if the context may otherwise require, capitalized terms not defined in this Agreement shall have the respective meanings assigned such terms set forth in Appendix A to the Sale and Servicing Agreement, dated as of the date hereof (the “Sale and Servicing Agreement”), by and among the Depositor, as seller, AHFC, as servicer, RPA seller and sponsor, and Honda Auto Receivables 2018-2 Owner Trust, as issuer.
(b) With respect to all terms in this Agreement, the singular includes the plural and the plural the singular; words importing any gender include the other genders; references to “writing” include printing, typing, lithography and other means of reproducing words in a visible form; references to agreements and other contractual instruments include all subsequent amendments, amendments and restatements, and supplements thereto or changes therein entered into in accordance with their respective terms and not prohibited by this Agreement; references to Persons include their permitted successors and assigns; references to laws include their amendments and supplements, the rules and regulations thereunder and any successors thereto; the term “including” means “including without limitation;” and the term “or” is not exclusive.
Section 1.2. Additional Definitions. The following terms have the meanings given below:
“Asset Review” means the performance by the Asset Representations Reviewer of the testing procedures for each Test and each Subject Receivable according to Section 3.4.
“Confidential Information” has the meaning stated in Section 4.9(b).
“Information Recipients” has the meaning stated in Section 4.9(a).
“Issuer PII” has the meaning stated in Section 4.10(a).
“Personally Identifiable Information” or “PII” has the meaning stated in Section 4.10(a).
“Review Fee” has the meaning stated in Section 4.3(b).
“Review Materials” means, for an Asset Review and a Subject Receivable, the documents and other materials for each Test listed under “Review Materials” in Schedule A.
“Review Report” means, for an Asset Review, the report of the Asset Representations Reviewer prepared according to Section 3.5.
“Test” has the meaning stated in Section 3.4(a).
“Test Complete” has the meaning stated in Section 3.4(c).
“Test Fail” has the meaning stated in Section 3.4(a).
“Test Incomplete” has the meaning stated in Section 3.4(a).
“Test Pass” has the meaning stated in Section 3.4(a).
ARTICLE II
ENGAGEMENT OF ASSET REPRESENTATIONS REVIEWER
Section 2.1. Engagement; Acceptance. The Issuer engages Clayton Fixed Income Services LLC to act as the Asset Representations Reviewer for the Issuer. Clayton Fixed Income Services LLC accepts the engagement and agrees to perform the obligations of the Asset Representations Reviewer on the terms in this Agreement.
Section 2.2. Confirmation of Scope. The parties confirm that the Asset Representations Reviewer is not responsible for determining whether noncompliance with the representations or warranties constitutes a breach of the Basic Documents.
ARTICLE III
ASSET REPRESENTATIONS REVIEW PROCESS
Section 3.1. Review Notices. On receipt of a review notice from the Indenture Trustee in accordance with Section 7.05 of the Indenture, the Asset Representations Reviewer will start an Asset Review. The Asset Representations Reviewer will have no obligation to start an Asset Review until a review notice is received.
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Section 3.2. Identification of Subject Receivables. Within ten (10) Business Days after receipt of a review notice, the Servicer will deliver to the Asset Representations Reviewer a list of the Subject Receivables.
Section 3.3. Review Materials.
(a) Access to Review Materials. The Servicer will give the Asset Representations Reviewer access to the Review Materials for all of the Subject Receivables within sixty (60) calendar days after receipt of the review notice in one or more of the following ways in the Servicer’s reasonable discretion: (i) by electronic posting of Review Materials to a password-protected website to which the Asset Representations Reviewer has access, (ii) by providing originals or photocopies of documents relating to the Subject Receivables at one of the properties of the Servicer or (iii) in another manner agreed by the Servicer and the Asset Representations Reviewer. The Servicer may redact or remove PII from the Review Materials so long as all information in the Review Materials necessary for the Asset Representations Reviewer to complete the Asset Review remains intact and unchanged.
(b) Missing or Insufficient Review Materials. The Asset Representations Reviewer will review the Review Materials to determine if any Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test. If the Asset Representations Reviewer reasonably determines that any of the Review Materials are missing or insufficient for the Asset Representations Reviewer to perform any Test, the Asset Representations Reviewer will notify the Servicer promptly, and in any event no less than twenty (20) calendar days before completing the Review, and the Servicer will use reasonable efforts to provide the Asset Representations Reviewer access to such missing Review Materials or other documents or information to correct the insufficiency within fifteen (15) calendar days. If the missing or insufficient Review Materials have not been provided by the Servicer within sixty (60) calendar days, the parties agree that the Subject Receivable will have a Test Incomplete for the related Test(s) and the Review Report will indicate the reason for the Test Incomplete.
Section 3.4. Performance of Reviews.
(a) Test Procedures. For an Asset Review, the Asset Representations Reviewer will perform for each Subject Receivable the procedures listed under “Tests” in Schedule A for each representation and warranty (each, a “Test”), using the Review Materials listed for each such Test in Schedule A. For each Test and Subject Receivable, the Asset Representations Reviewer will determine in its reasonable judgment if the Test has been satisfied (a “Test Pass”), or if the Test has not been satisfied (a “Test Fail”), or if the Test could not be concluded as a result of missing or incomplete Review Materials (a “Test Incomplete”). The Asset Representations Reviewer will use such determination for all Subject Receivables that are subject to the same Test.
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(b) Review Period. The Asset Representations Reviewer will complete the Review of all of the Subject Receivables within sixty (60) calendar days after receiving access to the Review Materials under Section 3.3(a). However, if missing or additional Review Materials are provided to the Asset Representations Reviewer under Section 3.3(b), the review period will be extended for an additional thirty (30) calendar days.
(c) Completion of Review for Certain Subject Receivables. Following the delivery of the list of the Subject Receivables and before the delivery of the Review Report by the Asset Representations Reviewer, the Servicer may notify the Asset Representations Reviewer if a Subject Receivable is paid in full by the Obligor or purchased from the Issuer by the Sponsor, the Depositor or the Servicer according to the applicable Basic Document. On receipt of notice, the Asset Representations Reviewer will immediately terminate all Tests of such Receivables and the Review of such Receivables will be considered complete (a “Test Complete”). In this case, the Review Report will indicate a Test Complete for the Receivables and the related reason.
(d) Previously Reviewed Receivable: Duplicative Tests. If any Subject Receivable was included in a prior Asset Review, the Asset Representations Reviewer will not perform the same Tests on it, but will include the results of the previous Tests in the Review Report for the current Asset Review.
(e) Duplicative Tests. If the same Test is required for more than one representation or warranty listed on Schedule A, the Asset Representations Reviewer will only perform the Test once for each Review Receivable but will report the results of the Test for each applicable representation or warranty on the Review Report.
(f) Termination of Review. If an Asset Review is in process and the Notes will be paid in full on the next Distribution Date, the Servicer will notify the Asset Representations Reviewer and the Indenture Trustee no less than ten (10) calendar days before that Distribution Date. On receipt of notice, the Asset Representations Reviewer will terminate the Asset Review immediately and will have no obligation to deliver a Review Report.
Section 3.5. Review Reports. (a) Within ten (10) calendar days after the end of the Asset Review period under Section 3.4(b), the Asset Representations Reviewer will deliver to the Issuer, the Sponsor, the Servicer and the Indenture Trustee a Review Report indicating for each Subject Receivable whether there was a Test Pass or a Test Fail for each Test, or whether the Subject Receivable was a Test Complete and the related reason. The Review Report will contain a summary of the findings and conclusions of the Asset Representations Reviewer with respect to the Asset Review to be included in the Issuer’s Form 10-D report for the Collection Period in which the Review Report is received. The Asset Representations Reviewer will ensure that the Review Report does not contain any Issuer PII. On the reasonable request of the Servicer or the Indenture Trustee, acting solely on behalf of the Noteholders, the Asset Representations Reviewer will provide additional details on the Test results.
(b) Questions About Review. The Asset Representations Reviewer will make appropriate personnel available to respond in writing to written questions or requests for clarification of any Review Report from the Servicer or the Indenture Trustee, acting solely on behalf of the Noteholders, until the earlier of (i) payment in full of the Notes and (ii) one year after the delivery of the Review Report. The Asset Representations Reviewer will have no obligation to respond to questions or requests for clarification from Noteholders or any Person other than the Servicer or the Indenture Trustee, acting solely on behalf of the Noteholders, and will direct such Persons to submit written requests to the Servicer.
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Section 3.6. Limitations on Review Obligations.
(a) Review Process Limitations. The Asset Representations Reviewer will have no obligation:
(i) to determine whether a Delinquency Trigger has occurred or whether the required percentage of Noteholders has voted to direct an Asset Review under the Indenture, and may rely on the information in any review notice delivered by the Indenture Trustee;
(ii) to determine which Receivables are subject to an Asset Review, and may rely on the lists of Subject Receivables provided by the Servicer;
(iii) to obtain or confirm the validity of the Review Materials and no liability for any errors in the Review Materials and may rely on the accuracy and completeness of the Review Materials;
(iv) to obtain missing or insufficient Review Materials from any party or any other source; or
(v) to take any action or cause any other party to take any action under any of the Basic Documents or otherwise to enforce any remedies against any Person for breaches of representations or warranties about the Subject Receivables.
ARTICLE IV
ASSET REPRESENTATIONS REVIEWER
Section 4.1. Representations and Warranties. The Asset Representations Reviewer represents and warrants to the Issuer as of the Closing Date:
(a) Organization and Qualification. The Asset Representations Reviewer is duly organized and validly existing as a limited liability company in good standing under the laws of the State of Delaware. The Asset Representations Reviewer is qualified as a foreign limited liability company in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its properties or the conduct of its activities requires the qualification, license or approval, unless the failure to obtain the qualifications, licenses or approvals would not reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.
(b) Power, Authority and Enforceability. The Asset Representations Reviewer has the power and authority to execute, deliver and perform its obligations under this Agreement. The Asset Representations Reviewer has authorized the execution, delivery and performance of this Agreement. This Agreement is the legal, valid and binding obligation of the Asset Representations Reviewer enforceable against the Asset Representations Reviewer, except as may be limited by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles.
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(c) No Conflicts and No Violation. The completion of the transactions contemplated by this Agreement and the performance of the Asset Representations Reviewer’s obligations under this Agreement will not (A) conflict with, or be a breach or default under, any indenture, loan agreement, guarantee or other agreement or instrument under which the Asset Representations Reviewer is a debtor or guarantor, (B) result in the creation or imposition of any Lien on any of the properties or assets of the Asset Representations Reviewer under the terms of any indenture, loan agreement, guarantee or other agreement or instrument, (C) violate the organizational documents of the Asset Representations Reviewer or (D) violate any law or any order, rule or regulation of a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties that applies to the Asset Representations Reviewer, which, in each case, would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under this Agreement.
(d) No Proceedings. There are no proceedings or investigations pending or, to the knowledge of the Asset Representations Reviewer, threatened in writing before a federal or State court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Asset Representations Reviewer or its properties (A) asserting the invalidity of this Agreement, (B) seeking to prevent the completion of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that would reasonably be expected to have a material adverse effect on the Asset Representations Reviewer’s ability to perform its obligations under, or the validity or enforceability of, this Agreement.
(e) Eligibility. The Asset Representations Reviewer meets the eligibility requirements in Section 5.1 and will notify the Issuer and the Servicer promptly if it no longer meets, or reasonably expects that it will no longer meet, the eligibility requirements in Section 5.1.
Section 4.2. Covenants. The Asset Representations Reviewer covenants and agrees that:
(a) Eligibility. It will notify the Issuer and the Servicer promptly if it no longer meets the eligibility requirements in Section 5.1.
(b) Review Systems; Personnel. It will maintain business process management and/or other systems necessary to ensure that it can perform each Test and, on execution of this Agreement, will load each Test into these systems. The Asset Representations Reviewer will ensure that these systems allow for each Subject Receivable and the related Review Materials to be individually tracked and stored as contemplated by this Agreement. The Asset Representations Reviewer will maintain adequate staff that is properly trained to conduct Asset Reviews as required by this Agreement.
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(c) Maintenance of Review Materials. It will maintain copies of any Review Materials, Review Reports and other documents relating to an Asset Review, including internal correspondence and work papers, for a period of two years after the termination of this Agreement or repayment of the Notes in full, whichever comes first.
Section 4.3. Fees, Expenses and Indemnities.
(a) Annual Fee. The Sponsor will pay the Asset Representations Reviewer, as compensation for agreeing to act as the Asset Representations Reviewer under this Agreement, an annual fee equal to $5,000. The annual fee will be paid as agreed in Section 4.3(d) by the Sponsor until this Agreement is terminated.
(b) Review Fee. Following the completion of an Asset Review and the delivery to the Indenture Trustee, the Sponsor and the Servicer of the Review Report, or the termination of an Asset Review according to Section 3.4(e), and the delivery to the Sponsor of a detailed invoice, the Asset Representations Reviewer will be entitled to a fee of up to $250 for each Account containing a Subject Receivable (the “Review Fee”). However, no Review Fee will be charged for any Tests that were performed in a prior Asset Representations Review or for any Asset Representations Review in which no Tests were completed prior to the Asset Representations Reviewer being notified of a termination of the Asset Representations Review in accordance with Section 3.4(e). The Sponsor will pay the Review Fee to the Asset Representations Reviewer in accordance with the terms of Section 4.3(d) of this Agreement. If an Asset Review is terminated according to Section 3.4(e), the Asset Representations Reviewer must submit its invoice for the Review Fee for the terminated Asset Review no later than five Business Days before the final Payment Date to be reimbursed no later than the final Payment Date.
(c) Reimbursement of Travel Expenses. If the Servicer provides access to the Review Materials at one of its properties, the Sponsor will reimburse the Asset Representations Reviewer for its reasonable travel expenses incurred in connection with the Asset Review upon receipt of a detailed invoice.
(d) Payment of Fees and Indemnities. The Asset Representations Reviewer shall submit reasonably detailed invoices to the Sponsor for any amounts owed to it under this Agreement. To the extent not paid by the Sponsor within sixty (60) calendar days following the receipt of a detailed invoice, the fees provided for in this Section 4.3 and the indemnities provided for in Section 4.6(a) shall be paid by the Issuer pursuant to Section 4.06(c) of the Sale and Servicing Agreement; provided, that prior to any such payment pursuant to the Sale and Servicing Agreement, the Asset Representations Reviewer shall notify the Sponsor in writing that such payments have been outstanding for at least sixty (60) calendar days. For the avoidance of doubt, to the extent that such owed amounts are not paid in full by the Sponsor or any other party, upon receipt of a detailed invoice, the Asset Representations Reviewer shall be entitled to payment by the Sponsor of incurred but otherwise unpaid amounts.
Section 4.4. Limitation on Liability. The Asset Representations Reviewer will not be liable to any Person for any action taken, or not taken, in good faith under this Agreement or for errors in judgment. However, the Asset Representations Reviewer will be liable for its willful misconduct, bad faith, breach of this Agreement or negligence in performing its obligations under this Agreement. In no event will the Asset Representations Reviewer be liable for special, indirect or consequential losses or damages (including lost profit), even if the Asset Representations Reviewer has been advised of the likelihood of the loss or damage and regardless of the form of action.
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Section 4.5. Indemnification by Asset Representations Reviewer. The Asset Representations Reviewer will indemnify each of the Issuer, the Depositor, the Servicer, the Sponsor, the Owner Trustee and the Indenture Trustee (each, an “Indemnified Party”) and their respective directors, officers, employees and agents for all costs, expenses, losses, damages and liabilities (including any reasonable legal fees and expenses incurred by an Indemnified Party in connection with the enforcement of any indemnification or other obligation of the Asset Representations Reviewer) resulting from (a) the willful misconduct, bad faith or negligence of the Asset Representations Reviewer in performing its obligations under this Agreement, (b) the Asset Representations Reviewer’s failure to comply with the requirements of applicable federal, state or local laws and regulations in the performance of its duties hereunder or (c) the Asset Representations Reviewer’s breach of any of its representations, warranties, covenants or other obligations in this Agreement. The Asset Representations Reviewer’s obligations under this Section 4.5 will survive the termination of this Agreement, the termination of the Issuer and the permitted resignation or removal of the Asset Representations Reviewer.
Section 4.6. Indemnification of Asset Representations Reviewer.
(a) Indemnification. The Sponsor will indemnify the Asset Representations Reviewer and its officers, directors, employees and agents (each, an “Indemnified Person”), for all costs, expenses, losses, damages and liabilities resulting from the performance of the Asset Representations Reviewer’s obligations under this Agreement (including the costs and expenses of defending itself against any loss, damage or liability), but excluding any cost, expense, loss, damage or liability resulting from (i) the Asset Representations Reviewer’s willful misconduct, bad faith or negligence, (ii) the Asset Representations Reviewer’s failure to comply with the requirements of applicable federal, state and local laws and regulations in the performance of its duties hereunder or (iii) the Asset Representations Reviewer’s breach of any of its representations, warranties, covenants or other obligations in this Agreement.
(b) Proceedings. Promptly on receipt by an Indemnified Person of notice of a Proceeding against it, the Indemnified Person will, if a claim is to be made under Section 4.6(a), notify the Sponsor of the Proceeding. The Sponsor may participate in and assume the defense and settlement of a Proceeding at its expense. If the Sponsor notifies the Indemnified Person of its intention to assume the defense of the Proceeding with counsel reasonably satisfactory to the Indemnified Person, and the Sponsor will not be liable for legal expenses of counsel to the Indemnified Person unless there is a conflict between the interests of the Sponsor, and an Indemnified Person. If there is a conflict, the Sponsor will pay for the reasonable fees and expenses of separate counsel to the Indemnified Person. No settlement of a Proceeding may be made without the approval of the Sponsor and the Indemnified Person, which approval will not be unreasonably withheld.
(c) Survival of Obligations. The Issuer’s obligations under this Section 4.6 will survive the permitted resignation or removal of the Asset Representations Reviewer and the termination of this Agreement.
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(d) Repayment. If the Sponsor makes any payment under this Section 4.6 and the Indemnified Person later collects any of the amounts for which the payments were made to it from others, the Indemnified Person will promptly repay the amounts to the Sponsor.
Section 4.7. Inspections of Asset Representations Reviewer. The Asset Representations Reviewer agrees that, with reasonable prior notice not more than once during any year, it will permit authorized representatives of the Issuer, the Servicer or the Sponsor, during the Asset Representations Reviewer’s normal business hours, to examine and review the books of account, records, reports and other documents and materials of the Asset Representations Reviewer relating to (a) the performance of the Asset Representations Reviewer’s obligations under this Agreement, (b) payments of fees and expenses of the Asset Representations Reviewer for its performance and (c) a claim made by the Asset Representations Reviewer under this Agreement. In addition, the Asset Representations Reviewer will permit the Issuer’s, the Servicer’s or the Sponsor’s representatives to make copies and extracts of any of those documents and to discuss them with the Asset Representations Reviewer’s officers and employees. Each of the Issuer, the Servicer and the Sponsor will, and will cause its authorized representatives to, hold in confidence any proprietary confidential information of the Asset Representations Reviewer except if disclosure may be required by law or if the Issuer, the Servicer or the Sponsor reasonably determines that it is required to make the disclosure under this Agreement or the other Basic Documents. Except as described in Section 4.2(c), the Asset Representations Reviewer will maintain all relevant books, records, reports and other documents and materials for a period of at least two years after the termination of its obligations under this Agreement.
Section 4.8. Delegation of Obligations. The Asset Representations Reviewer may not delegate or subcontract its obligations under this Agreement to any Person without the consent of the parties to this Agreement.
Section 4.9. Confidential Information.
(a) Treatment. The Asset Representations Reviewer agrees to hold and treat Confidential Information given to it under this Agreement in confidence and under the terms and conditions of this Section 4.9, and will implement and maintain safeguards to further assure the confidentiality of the Confidential Information. The Confidential Information will not, without the prior consent of the Issuer, the Sponsor and the Servicer, be disclosed or used by the Asset Representations Reviewer, or its officers, directors, employees, agents, representatives or affiliates, including legal counsel (collectively, the “Information Recipients”) other than for the purposes of performing Asset Reviews of Subject Receivables or performing its obligations under this Agreement. The Asset Representations Reviewer agrees that it will not, and will cause its Affiliates to not (i) purchase or sell securities issued by AHFC or its Affiliates or special purpose entities on the basis of Confidential Information or (ii) use the Confidential Information for the preparation of research reports, newsletters or other publications or similar communications.
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(b) Definition. “Confidential Information” means oral, written and electronic materials (irrespective of its source or form of communication) furnished before, on or after the date of this Agreement to the Asset Representations Reviewer for the purposes contemplated by this Agreement, including:
(i) lists of Subject Receivables and any related Review Materials;
(ii) origination and servicing guidelines, policies and procedures and form contracts; and
(iii) notes, analyses, compilations, studies or other documents or records prepared by the Sponsor or the Servicer, which contain information supplied by or on behalf of the Sponsor or the Servicer or their representatives.
However, Confidential Information will not include information that (A) is or becomes generally available to the public other than as a result of disclosure by the Information Recipients, (B) was available to, or becomes available to, the Information Recipients on a non-confidential basis from a Person or entity other than the Issuer, the Sponsor or the Servicer before its disclosure to the Information Recipients who, to the knowledge of the Information Recipient is not bound by a confidentiality agreement with the Issuer, the Sponsor or the Servicer and is not prohibited from transmitting the information to the Information Recipients, (C) is independently developed by the Information Recipients without the use of the Confidential Information, as shown by the Information Recipients’ files and records or other evidence in the Information Recipients’ possession or (D) the Issuer, the Sponsor or the Servicer provides permission to the applicable Information Recipients to release.
(c) Protection. The Asset Representations Reviewer will use reasonable measures to protect the secrecy of and avoid disclosure and unauthorized use of Confidential Information, including those measures that it takes to protect its own confidential information and not less than a reasonable standard of care. The Asset Representations Reviewer acknowledges that Personally Identifiable Information is also subject to the additional requirements in Section 4.9.
(d) Disclosure. If the Asset Representations Reviewer is required by applicable law, regulation, rule or order issued by an administrative, governmental, regulatory or judicial authority to disclose part of the Confidential Information, it may disclose the Confidential Information. However, before a required disclosure, the Asset Representations Reviewer, if permitted by law, regulation, rule or order, will use its reasonable efforts to provide the Issuer, the Sponsor and the Servicer with notice of the requirement and will cooperate, at the Sponsor’s expense, in the Issuer’s and the Sponsor’s pursuit of a proper protective order or other relief for the disclosure of the Confidential Information. If the Issuer or the Sponsor is unable to obtain a protective order or other proper remedy by the date that the information is required to be disclosed, the Asset Representations Reviewer will disclose only that part of the Confidential Information that it is advised by its legal counsel it is legally required to disclose.
(e) Responsibility for Information Recipients. The Asset Representations Reviewer will be responsible for a breach of this Section 4.9 by its Information Recipients.
(f) Violation. The Asset Representations Reviewer agrees that a violation of this Agreement may cause irreparable injury to the Issuer, the Sponsor and the Servicer and the Issuer, the Sponsor and the Servicer may seek injunctive relief in addition to legal remedies. If an action is initiated by the Issuer or the Servicer to enforce this Section 4.9, the prevailing party will be reimbursed for its fees and expenses, including reasonable attorney’s fees, incurred for the enforcement.
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Section 4.10. Personally Identifiable Information.
(a) Definitions. “Personally Identifiable Information” or “PII” means information in any format about an identifiable individual, including, name, address, phone number, e-mail address, account number(s), identification number(s), vehicle identification number(s) or “VIN(s)”, any other actual or assigned attribute associated with or identifiable to an individual and any information that when used separately or in combination with other information could identify an individual. “Issuer PII” means PII furnished by the Issuer, the Servicer or their Affiliates to the Asset Representations Reviewer and PII developed or otherwise collected or acquired by the Asset Representations Reviewer in performing its obligations under this Agreement.
(b) Use of Issuer PII. The Issuer does not grant the Asset Representations Reviewer any rights to Issuer PII. None of the Issuer, the Sponsor or the Servicer intend to share, provide or supply any Issuer PII to the Asset Representations Reviewer. However, if the Asset Representations Reviewer receives any Issuer PII, the Asset Representations Reviewer will promptly (i) notify the Servicer and (ii) delete and destroy such Issuer PII in accordance with Section 4.10(c). Notwithstanding the foregoing, the Asset Representations Reviewer must comply with all laws applicable to PII, Issuer PII and the Asset Representations Reviewer’s business, including any legally required codes of conduct, including those relating to privacy, security and data protection. The Asset Representations Reviewer will implement and maintain reasonable and appropriate practices, procedures and systems, including administrative, technical and physical safeguards designed to (i) protect the security, confidentiality and integrity of Issuer PII, (ii) ensure against anticipated threats or hazards to the security or integrity of Issuer PII, (iii) protect against unauthorized access to or use of Issuer PII and (iv) otherwise comply with its obligations under this Agreement. These safeguards include a written data security plan, employee training, information access controls, restricted disclosures, systems protections (e.g., intrusion protection, data storage protection and data transmission protection) and physical security measures.
(c) Additional Limitations. In addition to the use and protection requirements described in Section 4.10(b), the Asset Representations Reviewer’s disclosure of Issuer PII is also subject to the following requirements:
(i) The Asset Representations Reviewer will not disclose Issuer PII to its personnel or allow its personnel access to Issuer PII except (A) for the Asset Representations Reviewer personnel who require Issuer PII to perform an Asset Review, (B) with the prior consent of the Issuer or (C) as required by applicable law. When permitted, the disclosure of or access to Issuer PII will be limited to the specific information necessary for the individual to complete the assigned task. The Asset Representations Reviewer will inform personnel with access to Issuer PII of the confidentiality requirements in this Agreement and train its personnel with access to Issuer PII on the proper use and protection of Issuer PII.
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(ii) The Asset Representations Reviewer will not sell, disclose, provide or exchange Issuer PII with or to any third party without the prior consent of the Issuer.
(d) Notice of Breach. The Asset Representations Reviewer will notify the Issuer promptly in the event of an actual or reasonably suspected security breach, unauthorized access, misappropriation or other compromise of the security, confidentiality or integrity of Issuer PII and, where applicable, immediately take action to prevent any further breach.
(e) Return or Disposal of Issuer PII. Except where return or disposal is prohibited by applicable law, promptly on the earlier of the completion of the Asset Review or the request of the Issuer, all Issuer PII in any medium in the Asset Representations Reviewer’s possession or under its control will be (i) destroyed in a manner that prevents its recovery or restoration or (ii) if so directed by the Issuer, returned to the Issuer without the Asset Representations Reviewer retaining any actual or recoverable copies, in both cases, without charge to the Issuer. Where the Asset Representations Reviewer retains Issuer PII, the Asset Representations Reviewer will limit the Asset Representations Reviewer’s further use or disclosure of Issuer PII to that required by applicable law.
(f) Compliance; Modification. The Asset Representations Reviewer will cooperate with and provide information to the Issuer regarding the Asset Representations Reviewer’s compliance with this Section 4.10. The Asset Representations Reviewer and the Issuer agree to modify this Section 4.10 as necessary from time to time for either party to comply with applicable law.
(g) Affiliates and Third Parties. If the Asset Representations Reviewer processes the PII of the Issuer’s Affiliates or a third party when performing an Asset Review, and if such Affiliate or third party is identified to the Asset Representations Reviewer, such Affiliate or third party is an intended third-party beneficiary of this Section 4.10, and this Agreement is intended to benefit the Affiliate or third party. The Affiliate or third party will be entitled to enforce the PII related terms of this Section 4.10 against the Asset Representations Reviewer as if each were a signatory to this Agreement.
(h) Audit of Asset Representations Reviewer. The Asset Representations Reviewer will permit the Issuer and its authorized representatives to audit the Asset Representations Reviewer’s compliance with this Agreement during the Asset Representations Reviewer’s normal business hours on reasonable advance notice to the Asset Representations Reviewer, and not more than once during any year unless circumstances necessitate additional audits. The Issuer agrees to make reasonable efforts to schedule any audit described in this Section 4.10 with the inspections described in Section 4.7. The Asset Representations Reviewer will also permit the Issuer and its authorized representatives during normal business hours on reasonable advance written notice to audit any service providers used by the Asset Representations Reviewer with the Sponsor’s prior written consent to fulfill the Asset Representations Reviewer’s obligations under this Agreement.
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ARTICLE V
RESIGNATION AND REMOVAL;
SUCCESSOR ASSET REPRESENTATIONS REVIEWER
Section 5.1. Eligibility Requirements for Asset Representations Reviewer. The Asset Representations Reviewer must be a Person who (a) is not Affiliated with the Sponsor, the Depositor, the Servicer, the Indenture Trustee, the Owner Trustee or any of their Affiliates and (b) was not, and is not Affiliated with a Person that was, engaged by the Sponsor or any Underwriter to perform any due diligence on the Receivables prior to the Closing Date.
Section 5.2. Resignation and Removal of Asset Representations Reviewer.
(a) No Resignation of Asset Representations Reviewer. The Asset Representations Reviewer will not resign as Asset Representations Reviewer unless (a) the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1 or (b) upon determination that the performance of its duties under this Agreement is no longer permissible under applicable law. The Asset Representations Reviewer will notify the Issuer and the Servicer of its resignation as soon as practicable after it determines it is required to resign and stating the resignation date and including an Opinion of Counsel supporting its determination.
(b) Removal of Asset Representations Reviewer. If any of the following events occur, the Sponsor, by notice to the Asset Representations Reviewer, may remove the Asset Representations Reviewer and terminate its rights and obligations under this Agreement:
(i) the Asset Representations Reviewer no longer meets the eligibility requirements in Section 5.1;
(ii) the Asset Representations Reviewer breaches of any of its representations, warranties, covenants or obligations in this Agreement; or
(iii) an Insolvency Event of the Asset Representations Reviewer occurs.
(c) Notice of Resignation or Removal. The Sponsor will notify the Issuer, the Owner Trustee and the Indenture Trustee of any resignation or removal of the Asset Representations Reviewer.
(d) Continue to Perform After Resignation or Removal. No resignation or removal of the Asset Representations Reviewer will be effective, and the Asset Representations Reviewer will continue to perform its obligations under this Agreement, until a successor Asset Representations Reviewer has accepted its engagement according to Section 5.3(b).
Section 5.3. Successor Asset Representations Reviewer.
(a) Engagement of Successor Asset Representations Reviewer. Following the resignation or removal of the Asset Representations Reviewer, the Sponsor will appoint a successor Asset Representations Reviewer who meets the eligibility requirements of Section 5.1.
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(b) Effectiveness of Resignation or Removal. No resignation or removal of the Asset Representations Reviewer will be effective until the successor Asset Representations Reviewer has executed and delivered to the Issuer and the Servicer an agreement accepting its engagement and agreeing to perform the obligations of the Asset Representations Reviewer under this Agreement or entered into a new agreement with the Issuer on substantially the same terms as this Agreement.
(c) Transition and Expenses. If the Asset Representations Reviewer resigns or is removed, the Asset Representations Reviewer will cooperate with the Issuer and take all actions reasonably requested to assist the Issuer in making an orderly transition of the Asset Representations Reviewer’s rights and obligations under this Agreement to the successor Asset Representations Reviewer. The Asset Representations Reviewer will pay the reasonable expenses (including the fees and expenses of counsel) of transitioning the Asset Representations Reviewer’s obligations under this Agreement and preparing the successor Asset Representations Reviewer to take on such obligations on receipt of an invoice with reasonable detail of the expenses from the Issuer or the successor Asset Representations Reviewer.
Section 5.4. Merger, Consolidation or Succession. Any Person (a) into which the Asset Representations Reviewer is merged or consolidated, (b) resulting from any merger or consolidation to which the Asset Representations Reviewer is a party or (c) succeeding to the business of the Asset Representations Reviewer, if that Person meets the eligibility requirements in Section 5.1, will be the successor to the Asset Representations Reviewer under this Agreement. Such Person will execute and deliver to the Issuer and the Servicer an agreement to assume the Asset Representations Reviewer’s obligations under this Agreement (unless the assumption happens by operation of law).
ARTICLE VI
OTHER AGREEMENTS
Section 6.1. Independence of Asset Representations Reviewer. The Asset Representations Reviewer will be an independent contractor and will not be subject to the supervision of the Issuer, the Owner Trustee or the Indenture Trustee for the manner in which it accomplishes the performance of its obligations under this Agreement. Unless authorized by the Issuer, the Owner Trustee, or the Indenture Trustee, respectively, the Asset Representations Reviewer will have no authority to act for or represent the Issuer, the Owner Trustee or the Indenture Trustee and will not be considered an agent of the Issuer, the Owner Trustee or the Indenture Trustee. None of the Issuer, the Owner Trustee or the Indenture Trustee will be responsible for monitoring the performance of the Asset Representations Reviewer or liable to any Person for the failure of the Asset Representations Reviewer to perform its obligations hereunder. Nothing in this Agreement will make the Asset Representations Reviewer and any of the Issuer, the Owner Trustee or the Indenture Trustee members of any partnership, joint venture or other separate entity or impose any liability as such on any of them.
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Section 6.2. No Petition. Each of the parties, by entering into this Agreement, agrees that, before the date that is one year and one day (or, if longer, any applicable preference period) after payment in full of (a) all securities issued by the Depositor or by a trust for which the Depositor was a depositor (including, without limitation, the Issuer) or (b) the Notes, it will not start or pursue against, or join any other Person in starting or pursuing against (i) the Depositor or (ii) the Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other proceedings under any bankruptcy or similar law. This Section 6.2 will survive the termination of this Agreement.
Section 6.3. Limitation of Liability of Owner Trustee. This Agreement has been signed on behalf of the Issuer by The Bank of New York Mellon not in its individual capacity but solely in its capacity as Owner Trustee of the Issuer. In no event will The Bank of New York Mellon in its individual capacity or a beneficial owner of the Issuer be liable for the Issuer’s obligations under this Agreement. For all purposes under this Agreement, the Owner Trustee will be subject to, and entitled to the benefits of, the Trust Agreement.
Section 6.4. Termination of Agreement. This Agreement will terminate, except for the obligations under Section 4.5 or as otherwise stated in this Agreement, on the earlier of (a) the payment in full of all outstanding Notes and the satisfaction and discharge of the Indenture and (b) the date the Issuer is terminated under the Trust Agreement.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Amendments.
(a) This Agreement can be modified in a written document executed by the parties hereto without the consent of the Noteholders or any other Person; provided, that, except with respect to amendments (i) to clarify an ambiguity, correct an error or correct or supplement any term of this Agreement that may be defective or inconsistent with the other terms of this Agreement or to provide for, or facilitate the acceptance of this Agreement by, a successor Asset Representations Reviewer or (ii) to convert or supplement any provision in a manner consistent with the intent of this Agreement, either (a) such amendment shall not, as evidenced by an opinion of counsel or officer’s certificate, materially and adversely affect the interests of the holders of any outstanding Note or (b) the Rating Agency Condition is satisfied with respect to such amendment. With respect to any amendment for which clauses (a) or (b) of the immediately preceding sentence cannot be satisfied, this Agreement can be amended with the consent of the Noteholders of a majority of the Outstanding Principal Balance of the Notes of each adversely affected Series.
(b) Notice of Amendments. The Servicer will notify the Rating Agencies in advance of any amendment. Promptly after the execution of an amendment, the Servicer will deliver a copy of the amendment to the Rating Agencies and the Indenture Trustee.
Section 7.2. Assignment; Benefit of Agreement; Third Party Beneficiaries.
(a) Assignment. Except as stated in Section 5.4, this Agreement may not be assigned by the Asset Representations Reviewer without the consent of the parties to this Agreement.
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(b) Benefit of Agreement; Third-Party Beneficiaries. This Agreement is for the benefit of and will be binding on the parties and their permitted successors and assigns. The Owner Trustee and the Indenture Trustee, for the benefit of the Noteholders, will be third-party beneficiaries of this Agreement and entitled to enforce this Agreement against the Asset Representations Reviewer. No other Person will have any right or obligation under this Agreement.
Section 7.3. Notices.
(a) Delivery of Notices. All notices, requests, demands, consents, waivers or other communications to or from the parties must be in writing and will be considered given:
(i) For overnight mail, on delivery or, for a letter mailed by registered first class mail, postage prepaid, three days after deposit in the mail;
(ii) for a fax, when receipt is confirmed by telephone, reply email or reply fax from the recipient;
(iii) for an email, when receipt is confirmed by telephone or reply email from the recipient; and
(iv) for an electronic posting to a password-protected website to which the recipient has access, on delivery (without the requirement of confirmation of receipt) of an email to that recipient stating that the electronic posting has occurred.
(b) Notice Addresses. Any notice, request, demand, consent, waiver or other communication will be delivered or addressed to: (i) (a) in the case of the Sponsor and the Servicer, to American Honda Finance Corporation, 20800 Madrona Avenue, Torrance, CA 90503, Attention: Program Services & Investor Relations, (b) in the case of the Issuer or the Owner Trustee, to Honda Auto Receivables 2018-2 Owner Trust, c/o The Bank of New York Mellon, 101 Barclay Street, Floor 7 West, New York, NY 10286, Attention: Asset Backed Securities Unit – Honda Auto Receivables 2018-2, (c) in the case of the Indenture Trustee, to Citibank, N.A., 388 Greenwich Street, New York, New York, 10013, Attention: Agency & Trust, HAROT 2018-2, and (d) in the case of the Asset Representations Reviewer via electronic mail to ARRNotices@clayton.com, and to Clayton Fixed Income Services LLC, 2638 South Falkenburg Road, Riverview, FL 33578, Attention: SVP; with a copy to Clayton Fixed Income Services LLC, c/o Clayton Holdings LLC, 1500 Market Street, West Tower Suite 2050, Philadelphia, PA 19102, Attention: General Counsel or, (ii) as to each party, at such other address or email as shall be designated by such party in a written notice to each other party.
Section 7.4. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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Each of the parties hereto hereby submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State court sitting in New York City for purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. Each of the parties hereto hereby further irrevocably waives any claim that any such courts lack jurisdiction over such party, and agrees not to plead or claim, in any legal action or proceeding with respect to this Agreement in any of the aforesaid courts, that any such court lacks jurisdiction over such party. Each of the parties hereto irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum.
Each party hereto hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any litigation directly or indirectly arising out of, under or in connection with this agreement.
Section 7.5. No Waiver; Remedies. No party’s failure or delay in exercising a power, right or remedy under this Agreement will operate as a waiver. No single or partial exercise of a power, right or remedy will preclude any other or further exercise of the power, right or remedy or the exercise of any other power, right or remedy. The powers, rights and remedies under this Agreement are in addition to any powers, rights and remedies under law.
Section 7.6. Severability. If a part of this Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the remaining Agreement and will not affect the validity, legality or enforceability of the remaining Agreement.
Section 7.7. Headings. The headings in this Agreement are included for convenience and will not affect the meaning or interpretation of this Agreement.
Section 7.8. Counterparts. This Agreement may be executed in multiple counterparts. Each counterpart will be an original and all counterparts will together be one document.
[Remainder of Page Left Blank]
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EXECUTED BY:
| HONDA AUTO RECEIVABLES 2018-2 OWNER TRUST, | |
| as Issuer |
| By: | The Bank of New York Mellon, not in its | |
| individual capacity, but solely as Owner Trustee | ||
| By: | ||
| Name: | ||
| Title: |
| AMERICAN HONDA FINANCE CORPORATION, | |
| as Sponsor and Servicer |
| By: | |||
| Name: | Paul C. Honda | ||
| Title: | Vice President and Assistant Secretary | ||
| CLAYTON FIXED INCOME SERVICES LLC, | |
| as Asset Representations Reviewer |
| By: | ||
| Name: | ||
| Title: |
| S-1 | HAROT 2018-2 ARR Agreement |
Schedule A
Representations and Warranties, Review Materials and Tests
| Representations and Warranty | Review Materials and Tests | |
|
(i) Characteristics of Receivables. Each Receivable (a) was originated by a Dealer located in the United States for the sale of the related Financed Vehicle, fully executed by the Obligor thereto, purchased by AHFC from such Dealer under an existing agreement with AHFC, assigned by such Dealer to the RPA Seller and subsequently sold by the RPA Seller to the Purchaser pursuant to the Receivables Purchase Agreement, (b) has created or shall create a first priority security interest in favor of the RPA Seller in the related Financed Vehicle, which security interest has been assigned by the RPA Seller to the Purchaser and shall be assignable, and shall be so assigned, by the Purchaser to the Issuer, (c) contains provisions that permit the repossession and sale of the Financed Vehicle upon a default under the Receivable by the Obligor, (d) except as otherwise provided in this Agreement, provides, at the time of origination, for level Monthly Payments (provided that the first and last payments in the life of the Receivable may be different from but in no event more than two times the level payment) that fully amortize the Amount Financed over its original term, (e) allows for prepayment, (f) is not listed on the Servicer’s records as a federal, state or local governmental entity and (g) is a retail installment sales contract. |
Review Materials: (a) Title documents (b) Installment sales contract (c) Receivable Files (d) Servicer’s Records/Data file Tests: (a) Origination i. Review the contract and confirm that the Dealer address is a United States address. ii. Review the contract and confirm that it was signed by the Obligor. iii. Review the contract and confirm that AHFC (or an acceptable variation of the name) is listed as an assignee within the assignment section. iv. Review the contract and confirm the Vehicle Identification Number (VIN) on the contract matches the VIN on the Certificate of Title or Application for Title. v. Confirm the Dealer signed the assignment section of the contract. (b) Security Interest Enforcement i. Review the Receivable File and confirm that the security interest has not been subordinated and the Receivable maintains an enforceable security interest in favor of AHFC for the Financed Vehicle. (c) Repossession i. Review the contract and confirm that it contains language permitting the repossession and sale of the Financed Vehicle upon default by the Obligor. (d) Fully Amortizing Payment Schedule i. Review the contract and confirm that all payments are equivalent with the possible exception of the first and last payments, which may be two times the level payment. ii. Review the Truth-in-Lending section of the contract and calculate the product of the Amount of Payments with the Number of Payments and confirm that this amount is equal to the Total of Payments. (e) Prepayments i. Review the contract and confirm that the terms conform to the representation. (f) No governmental obligors i. Review the contract and confirm that the Obligor does not appear to be a governmental entity and that the Servicer’s records do not otherwise indicate that the Obligor is a governmental entity. |
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(g) Retail installment sale contract i. Review the contract and confirm that the contract terms conform to the representation. (h) If (a) through (g) are confirmed, then Test Pass. | ||
| (ii) Compliance with Law. At the time it was originated, the Receivable complied in all material respects with all requirements of law in effect at the time and applicable to such Receivable. |
Review Materials: (a) Installment sales contract (b) AHFC’s list of approved contract forms. Tests: (a) Review the contract form number and revision date and confirm that they are both on AHFC’s list of approved contract forms. (b) If (a) is confirmed, then Test Pass. | |
| (iii) Binding Obligation. Each Receivable is on a form contract that includes the legal and binding payment obligation in writing of the related Obligor, enforceable by the holder thereof, except as enforceability may be subject to or limited by bankruptcy, insolvency, reorganization, moratorium, liquidation or other laws affecting the enforcement of creditors’ rights and by general principles of equity, consumer protection laws and the Servicemembers Civil Relief Act. |
Review Materials: (a) Installment sales contract (b) AHFC’s list of approved contract forms. Tests: (a) Review the contract form number and revision date and confirm that they are both on AHFC’s list of approved contract forms. (b) Confirm the Obligor signed the contract. (c) If (a) and (b) are confirmed, then Test Pass. | |
| (iv) Receivables in Force. According to the Servicer’s Receivables system, the Receivable shall not have been satisfied, subordinated or rescinded, nor shall the Financed Vehicle have been released in whole or in part from the lien granted by the related Receivable on the Cutoff Date. |
Review Materials: (a) Receivable Files (b) Title documents (c) Servicer’s Records/Data file Tests: (a) Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Receivable was subordinated or rescinded. (b) Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Receivable was satisfied prior to the Cut-off Date. (c) Confirm that there is no indication in the Servicer’s Records or Receivable Files that the Financed Vehicle has been released from the lien in whole or in part. (d) If (a) through (c) are confirmed, then Test Pass. | |
| (v) No Defenses. To the RPA Seller’s knowledge, no right of rescission, setoff, counterclaim or defense has been asserted or threatened in writing by any Obligor against the Receivable. |
Review Materials: (a) Receivable Files (b) Receivable system Tests: (a) Review the Receivable Files and confirm that there is no indication the Receivable is subject to rescission, setoff, counterclaim or defense that would cause the Receivable to become invalid, or, if so, confirm such indications were not present as of the Cut-off Date. (b) If (a) is confirmed, then Test Pass. | |
| (vi) No Defaults. Except for payment delinquencies that, as of the Cutoff Date, were not more than thirty (30) days, according to the accounting records of the RPA Seller, no payment default existed under the terms of any Receivable as of the Cutoff Date. |
Review Materials: (a) Servicer’s Records/Data file Tests: (a) Confirm that there is no indication of a payment default, other than payment delinquencies of not more than thirty (30) days, or if so, confirm such defaults were not present as of the Cut-off Date. (b) If (a) is confirmed, then Test Pass. |
| (vii) Insurance. Each Obligor of a Receivable has been required to obtain physical damage insurance covering the related Financed Vehicle and is required under the terms of the related Receivable to maintain such insurance. |
Review Materials: (a) Installment sale contract Tests: (a) Confirm that the contract contains language that requires the Obligor to obtain and maintain insurance against physical damage to the Financed Vehicle. (b) If (a) is confirmed, then Test Pass.
| |
| (viii) Lawful Assignment. The terms of the Receivable do not limit the right of the owner of the Receivable to sell the Receivable. |
Review Materials: (a) Installment sale contract Tests: (a) Review the contract and confirm that there is no language present that limits the rights of the owner of the Receivable to sell the Receivable. (b) If (a) is confirmed, then Test Pass. | |
| (ix) Chattel Paper. The Receivable is either “tangible chattel paper” or “electronic chattel paper” within the meaning of the applicable UCC and there is only one original authenticated copy of the Receivable. |
Review Materials: (a) Installment sale contract (b) AHFC’s list of approved contract forms (c) Title documents Tests: (a) Review the contract form number and revision date and confirm that it is on AHFC’s list of approved contract forms. (b) Confirm there is a signature under the each of the Obligor’s and seller’s name within the contract. (c) Confirm there is no indication the contract was voided or is otherwise not the original authenticated copy. (d) If (a) through (c) are confirmed, then Test Pass. | |
| (x) Security Interest. The RPA Seller has, or the Servicer has, started procedures that will result in the RPA Seller having a perfected, first priority security interest in the Financed Vehicle within then (10) days of the Closing Date, which security interest was validly created and is assignable by the RPA Seller to the Purchaser. |
Review Materials: (a) Installment sales contract (b) Title documents Tests: (a) Confirm the Title documents report AHFC (or an acceptable variation of the name) as the first lien holder. (b) Confirm that the Obligor name on the contract matches the name on the title documents. (c) Confirm that the Vehicle Identification Number (VIN) on the contract matches the vehicle identification number as reported on the title documents. (d) If (a) through (c) are confirmed, then Test Pass. | |
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(xi) Individual Characteristics. Each Receivable has the following individual characteristics as of the Cutoff Date: (a) is not listed on the Servicer’s records as the subject of a pending bankruptcy proceeding; (b) had an original maturity of not greater than 72 payments; (c) provides for the payment of a finance charge or shall yield interest calculated on the basis of a Contract Rate of at least 0.50%; (d) has a Scheduled Payment that is not more than thirty (30) days past due; (e) the Financed Vehicle to which the Receivable relates is a new or used Honda or Acura automobile or light-duty truck; and |
Review Materials: (a) Installment sales contract (b) Servicer’s Records/Data file (c) Receivable Files Tests: (a) Bankruptcy i. Review the Servicer’s records and confirm that the Obligor was not the subject of a bankruptcy proceeding as of the Cutoff Date. (b) Original Maturity i. Confirm that the number of payments as stated within the contract does not exceed 72 payments. (c) Contract Rate i. Confirm that the Contract Rate stated within the contract is greater than or equal to 0.50% as of the Cutoff Date. |
| (f) the Obligor under each Receivable had a billing address in the United States or its territories or possessions, according to the records of the Servicer. |
(d) Past Due i. Review the Servicer’s records and confirm that the Receivable was not more than thirty (30) days past due as of the Cutoff Date. (e) New or Used Honda or Acura i. Confirm the Financed Vehicle is a new or used automobile or light-duty truck as stated within the New/Used section of the contract. (f) Billing Address i. Confirm the Receivable Files indicate that the Obligor’s address is located within the United States or its territories or possessions as of the Cutoff Date. (g) If (a) through (f) are confirmed, then Test Pass. |
Exhibit 36.1
CERTIFICATION
| 1. | I have reviewed the prospectus dated May 22, 2018, relating to the Class A-1 Notes, Class A-2 Notes, Class A-3 Notes and Class A-4 Notes of Honda Auto Receivables 2018-2 Owner Trust (the “securities”) and am familiar with, in all material respects, the following: The characteristics of the securitized assets underlying the offering (the “securitized assets”), the structure of the securitization, and all material underlying transaction agreements as described in the prospectus; |
| 2. | Based on my knowledge, the prospectus does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading; |
| 3. | Based on my knowledge, the prospectus and other information included in the registration statement of which it is a part fairly present, in all material respects, the characteristics of the securitized assets, the structure of the securitization and the risks of ownership of the securities, including the risks relating to the securitized assets that would affect the cash flows available to service payments or distributions on the securities in accordance with their terms; and |
| 4. | Based on my knowledge, taking into account all material aspects of the characteristics of the securitized assets, the structure of the securitization, and the related risks as described in the prospectus, there is a reasonable basis to conclude that the securitization is structured to produce, but is not guaranteed by this certification to produce, expected cash flows at times and in amounts to service scheduled payments of interest and the ultimate repayment of principal on the securities (or other scheduled or required distributions on the securities, however denominated) in accordance with their terms as described in the prospectus. |
| 5. | The foregoing certifications are given subject to any and all defenses available to me under the federal securities laws, including any and all defenses available to an executive officer that signed the registration statement of which the prospectus referred to in this certification is part. |
| By: | /s/ Hideo Moroe |
| Name: | Hideo Moroe | |
| Title: | Chief Executive Officer of American Honda Receivables LLC | |
| Date: | May 22, 2018 |