$2,030,156,000
HONDA AUTO RECEIVABLES 2002-1 OWNER TRUST
$559,000,000 1.82% ASSET BACKED NOTES, CLASS A-1
$472,000,000 2.55% ASSET BACKED NOTES, CLASS A-2
$696,000,000 3.50% ASSET BACKED NOTES, CLASS A-3
$303,156,000 4.22% ASSET BACKED NOTES, CLASS A-4
AMERICAN HONDA RECEIVABLES CORP.
UNDERWRITING AGREEMENT
January 23, 2002
Salomon Smith Barney Inc.,
as Representative of the Several Underwriters
390 Greenwich Street, 6th Floor
New York, NY 10013
Ladies and Gentlemen:
1. Introductory. American Honda Receivables Corp., a California
corporation (the "Company"), proposes, subject to the terms and conditions
stated herein, to cause the Honda Auto Receivables 2002-1 Owner Trust (the
"Trust") to issue and sell $559,000,000 aggregate principal amount of 1.82%
Asset Backed Notes, Class A-1 (the "Class A-1 Notes"), $472,000,000 aggregate
principal amount of 2.55% Asset Backed Notes, Class A-2 (the "Class A-2 Notes"),
$696,000,000 aggregate principal amount of 3.50% Asset Backed Notes, Class A-3
(the "Class A-3 Notes") and $303,156,000 aggregate principal amount of 4.22%
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"). The Notes
will be issued pursuant to the Indenture, to be dated as of January 1, 2002 (the
"Indenture"), between the Trust and JPMorgan Chase Bank (the "Indenture
Trustee").
Concurrently with the issuance and sale of the Notes as contemplated
herein, the Trust will issue $52,055,927.51 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, to be dated January 29, 2002 (the "Trust Agreement"), between the
Company, U.S. Bank National Association, as owner trustee (the "Owner Trustee")
and U.S. Bank Trust National Association, as Delaware Trustee (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 and conditional sale contracts secured by new and used
Honda and Acura motor vehicles (the "Receivables"), with respect to Actuarial
Receivables, certain monies due thereunder on or after January 1, 2002 (the
"Cutoff Date"), and with respect to Simple Interest Receivables, certain
monies due or received thereunder on or after the Cutoff Date, such Receivables
to be sold to the Trust by the Company and to be serviced for the Trust by
American Honda Finance Corporation ("AHFC" or, in its capacity as servicer, the
"Servicer"). Capitalized terms used but not defined herein have the meanings
ascribed thereto in the Sale and Servicing Agreement, to be dated as of January
1, 2002 (the "Sale and Servicing Agreement"), by and among the Trust, the
Company and the Servicer or, if not defined therein, in the Indenture, the Trust
Agreement or the Receivables Purchase Agreement, to be dated as of January 1,
2002 between AHFC and the Company (the "Receivables Purchase Agreement"), as the
case may be. As used herein, "Basic Documents" shall have the meaning specified
in the Sale and Servicing Agreement. The Company hereby agrees with the several
Underwriters named in Schedule A hereto (collectively, the "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 S-3 (No. 333-71022),
including a prospectus, relating to the Notes has been filed with the
Securities and Exchange Commission (the "Commission") and has become
effective. Such registration statement, as amended as of the date of
the Agreement is hereinafter referred to as the "Registration
Statement," and the prospectus included in such Registration Statement,
as supplemented to reflect the terms of the Notes as first filed with
the Commission after the date of this Agreement pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act of
1933, as amended (the "Act"), including all material incorporated by
reference therein, is hereinafter referred to as the "Prospectus."
(b) On the effective date of the Registration Statement relating
to the Notes, such Registration Statement conformed in all respects to
the requirements of the Act and the rules and regulations of the
Commission promulgated under the Act (the "Rules and Regulations") and
did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and on the date of this
Agreement, the Registration Statement conforms, and at the time of the
filing of the Prospectus in accordance with Rule 424(b), the
Registration Statement and the Prospectus will conform in all respects
to the requirements of the Act and the Rules and Regulations, and
neither of such documents includes or will include any untrue statement
of a material fact or omits or will omit to state any material fact
required to be stated therein or necessary to make the statements
therein not misleading. The preceding sentence does not apply to
statements in or omissions from the Registration Statement or the
Prospectus based upon written information furnished to the Company by
any Underwriter through the Representative specifically for use
therein, it being understood and agreed that the only such information
is that described as such in Section 7(b).
(c) The Notes are "asset backed securities" within the meaning
of, and satisfy the requirements for use of, Form S-3 under the Act.
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(d) The documents incorporated by reference in the Registration
Statement and Prospectus, at the time they were or hereafter are filed
with the Commission, complied and will comply in all material respects
with the requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations of the
Commission thereunder.
(e) The Company has caused to be filed with the Commission on
January 25, 2002 the Current Report on Form 8-K with respect to the
Term Sheet dated January 22, 2002 relating to the Notes (the "Term
Sheet").
(f) Each of the Company and AHFC has been duly incorporated and
is an existing corporation in good standing under the laws of the State
of California, with power and authority (corporate and other) to own
its properties and conduct its business as described in the Prospectus;
and each of the Company and AHFC is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification.
(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 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 in violation of its Articles
of Incorporation or By-laws or 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 which could have a material
adverse effect on the transactions contemplated herein or in the Basic
Documents. The execution, delivery and performance of this Agreement
and the Basic Documents by the Company and AHFC, and the issuance of
the Notes and the Certificates and the sale by the Company of the 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
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, and the Company has full power and authority
to authorize the
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issuance of the Notes and the Certificates and to sell the 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.
(i) 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.
(j) 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 and sale of the 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.
(k) As of the Closing Date, the representations and warranties of
the Company and AHFC contained in the Basic Documents will be true and
correct.
(l) This Agreement has been duly authorized, executed and
delivered by each of the Company and AHFC.
(m) The Company has authorized the conveyance of the Receivables
to the Trust, and, as of the Closing Date, the Company has directed the
Trust to execute and issue the Notes and the Certificates and to sell
the Notes.
(n) The Company's assignment and delivery of the Receivables to
the Trust as of the Closing Date will vest in the Trust all of the
Company's right, title and interest therein, subject to no prior lien,
mortgage, security interest, pledge, adverse claim, charge or other
encumbrance.
(o) 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.
(p) The computer tape of the Receivables created as of January 1,
2002, and made available to the Representative by the Servicer was
complete and accurate as of the date thereof and includes an
identifying description of the Receivables that are listed on Schedule
A to the Sale and Servicing Agreement.
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(q) 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.
(r) 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.
(s) The Company is not and, after giving effect to the issuance
of the Certificates and the offering and sale of the 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").
(t) In connection with the offering of the Notes in the State of
Florida, the Company and AHFC hereby certify that they have complied
with all provisions of Section 517.075 of the Florida Securities and
Investor Protection Act.
3. Purchase, Sale and Delivery of 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 sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Company, at a purchase price of, in the case of (i) the Class A-1
Notes, 99.87000% of the principal amount thereof; (ii) the Class A-2 Notes,
99.82074% of the principal amount thereof; (iii) the Class A-3 Notes, 99.77673%
of the principal amount thereof; and (iv) the Class A-4 Notes, 99.73501% of the
principal amount thereof, the respective principal amounts of each Class of the
Notes set forth opposite the names of the Underwriters in Schedule A hereto.
The Company will deliver against payment of the purchase price, the
Notes of each Class in the form of one or more permanent global securities in
definitive form (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 Notes shall be made by the
Underwriters in Federal (same day) funds by official check or checks or wire
transfer to an account in New York previously designated to the Representative
by the Company at a bank acceptable to the Representative at the offices of
Dewey Ballantine LLP, New York, New York at 10:00 A.M., New York City time, on
January 29, 2002, or at such other time not later than seven full business days
thereafter as the Representative 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 Notes.
The Global Notes will be
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made available for checking at the above office of Dewey Ballantine LLP at least
24 hours prior to the Closing Date.
The Company will deliver the Certificates to the above office of Dewey
Ballantine LLP on the Closing Date. The certificate for the Certificates so 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 Dewey Ballantine LLP at least 24 hours prior to the Closing
Date.
Pursuant to Rule 15c6-1(d) under the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), the parties hereto have agreed that the Closing
Date will be not later than January 29, 2002, unless otherwise agreed to as
described above.
4. Offering by Underwriters. It is understood that, the several
Underwriters propose to offer the 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: (i) it has not offered
or sold and will not offer or sell, prior to the date six months after their
date of issuance, any Notes to persons in the United Kingdom, except to persons
whose ordinary activities involve them in acquiring, holding, managing or
disposing of investments (as principal or agent) for the purposes of their
businesses or otherwise in circumstances which have not resulted in and will not
result in an offer to the public in the United Kingdom within the meaning of the
Public Offers of Securities Regulations 1995; (ii) it has complied and will
comply with all applicable provisions of the Financial Services and Markets Act
2000 (the "FSMA") with respect to anything done by it in relation to the Notes
in, from or otherwise involving the United Kingdom; and (iii) it will only
communicate or cause to be communicated an invitation or inducement to engage in
investment activities (within the meaning of Section 21 of the FSMA) received by
it in connection with the issue or sale of the Notes in circumstances in which
Section 21(1) of the FSMA does not apply to the Issuer.
5. Certain Agreements of the Company. The Company agrees with the
several Underwriters:
(a) The Company will file the Prospectus, properly completed,
with the Commission pursuant to and in accordance with subparagraph (2)
(or, if applicable and if consented to by the Representative,
subparagraph (5)) of Rule 424(b) no later than the second business day
following the date it is first used. The Company will advise the
Representative promptly of any such filing pursuant to Rule 424(b).
(b) The Company will advise the Representative 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 the Representative's reasonable consent; and
the Company will also advise the Representative 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.
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(c) If, at any time when a prospectus relating to the 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 Representative of such event and
will promptly prepare and file with the Commission (subject to the
Representative's prior review pursuant to Section 5(b)), 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 Representative's 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.
(d) The Company will cause the Trust to make generally available
to Noteholders, as soon as practicable, but no later than sixteen
months after the date hereof, an earnings statement of the Trust
covering a period of at least twelve consecutive months beginning after
the later of (i) the effective date of the registration statement
relating to the Notes and (ii) the effective date of the most recent
post-effective amendment to the Registration Statement to become
effective prior to the date of this Agreement and, in each case,
satisfying the provisions of Section 11(a) of the Act (including Rule
158 promulgated thereunder).
(e) The Company will furnish to the Underwriters copies of the
Prospectus, the Registration Statement and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as the Representative reasonably requests. The
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.
(f) The Company will arrange for the qualification of the Notes
for offering and sale and the determination of their eligibility for
investment under the laws of such jurisdictions as the Representative
may reasonably designate and will continue such qualifications in
effect so long as required for the distribution of the 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.
(g) For a period from the date of this Agreement until the
retirement of the Notes (i) the Company will furnish to the
Representative and, upon request, to each of the other Underwriters,
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 Indenture Trustee pursuant to
Section 3.12 of the Sale and Servicing Agreement, by first-class mail
as soon as
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practicable after such statements and reports are furnished to the
Indenture Trustee, and (ii) 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.
(h) So long as any Note is outstanding, the Company will furnish
to the Representative by first-class mail as soon as practicable, (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 the
Representative from time to time may reasonably request.
(i) Subject to the provisions of Section 9 hereof, the Company
will pay 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 Notes for sale in jurisdictions
that the Representative may designate pursuant to Section 5(f) hereof
and determination of their eligibility for investment under the laws of
such jurisdictions as the Representative reasonably designates and the
printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the 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 Notes and for
expenses incurred in distributing the Term Sheets and the Prospectus
(including any amendments and supplements thereto).
(j) To the extent, if any, that the rating provided with respect
to the Notes by Moody's Investors Service, Inc. ("Moody's"), Standard &
Poor's, a division of The McGraw-Hill Companies, Inc. ("Standard &
Poor's"), and Fitch, Inc. ("Fitch" and, together with Standard & Poor's
and Moody's, the "Rating Agencies") 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.
(k) On or before the Closing Date, the Company and AHFC shall
annotate and indicate unambiguously in the computer records of the
Company and AHFC relating to the Receivables to show the Trust's
absolute ownership of the Receivables, and from and after the Closing
Date neither the Company nor AHFC shall take any action inconsistent
with the Trust's ownership of such Receivables, other than as permitted
by the Sale and Servicing Agreement.
6. Conditions of the Obligations of the Underwriters. The obligations
of the several Underwriters to purchase and pay for the 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:
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(a) The Representative shall have received a letter, dated the
date hereof or the Closing Date, of KPMG Peat Marwick LLP, in form and
substance satisfactory to the Representative 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 Term Sheet and the
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.
(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 Representative, 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 Representative),
materially impairs the investment quality of each Class of the Notes or
makes it impractical or inadvisable to proceed with completion of the
public offering or the sale of and payment for each Class of the 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 Representative), 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 each
Class of the Notes.
(d) The Representative shall have received an opinion of Dewey
Ballantine LLP, special counsel to the Company and AHFC, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of California, with full corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; the Company is duly qualified to do business and is
in good standing in each jurisdiction in which its ownership or
lease of property or the conduct of its business requires such
qualification, except where the failure
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to be so qualified and in good standing would not have a material
adverse effect on its obligations under the Basic Documents;
(ii) AHFC has been duly incorporated and is an existing
corporation in good standing under the laws of the State of
California, with corporate power and authority to own its
properties and conduct its business as described in the
Prospectus; AHFC is duly qualified to do business and is in good
standing in each jurisdiction in which its ownership or lease of
property or the conduct of its business requires such
qualification, except where the failure to be so qualified and in
good standing would not have a material adverse effect on its
obligations under the Basic Documents;
(iii) each of the direction by the Company to the Indenture
Trustee to authenticate the Notes and the direction by the
Company to the Owner Trustee to execute the Notes has been duly
authorized by the Company and, when the Notes have been duly
executed and delivered by the Owner Trustee and, when
authenticated by the Indenture Trustee in accordance with the
terms of the Indenture and delivered to and paid for by the
Underwriters pursuant to this Agreement, will be duly and validly
issued and outstanding and will be entitled to the benefits of
the Indenture;
(iv) the direction by the Company to the Owner Trustee to
authenticate and execute the Certificates has been duly
authorized by the Company;
(v) each Basic Document to which the Company or AHFC is a
party has been duly authorized, executed and delivered by the
Company and AHFC, respectively;
(vi) no consent, approval, authorization or order of, or
filing with any governmental agency or body or any court is
required for the execution, delivery and performance by the
Company of this Agreement and the Basic Documents to which it is
a party, for the execution, delivery and performance by AHFC of
the Basic Documents to which it is a party or for the
consummation of the transactions contemplated by this Agreement
or the Basic Documents, except for (A) such as have been obtained
and made under the Act, (B) such as may be required under state
securities laws and (C) such authorizations, approvals or
consents specified in such opinion as are in full force and
effect as of the Effective Date and the Closing Date;
(vii) the execution, delivery and performance of this
Agreement and the Basic Documents by the Company and the
execution, delivery and performance of the Basic Documents by
AHFC 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 or imposition of any lien, charge or encumbrance
upon any of the property or assets of AHFC or the Company
pursuant to the terms of the Certificate of Incorporation or the
By-Laws of AHFC or the Company or, to the best of such counsel's
knowledge and information, any statute, rule, regulation or
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order of any governmental agency or body, or any court having
jurisdiction over AHFC or the Company or their respective
properties, or any agreement or instrument known to such counsel
after due investigation to which AHFC or the Company is a party
or by which AHFC or the Company or any of their respective
properties is bound;
(viii) such counsel has no reason to believe that the
Registration Statement or any amendment thereto, as of its
effective date or as of such Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading, or that the Prospectus or any
amendment or supplement thereto, as of its issue date or as of
such Closing Date, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated
therein or necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; the Registration Statement and the Prospectus
complies in all material respects with the requirements of the
Act and the rules and regulations promulgated thereunder; and
such counsel does not know of any legal or governmental
proceedings required to be described in the Registration
Statement or the Prospectus which are not described as required
or of any contracts or documents of a character required to be
described in the Registration Statement or the Prospectus or to
be filed as exhibits to the Registration Statement which are not
described and filed as required; it being understood that such
counsel need express no opinion as to the financial statements or
other financial, numerical, statistical and quantitative
information contained in the Registration Statement or the
Prospectus;
(ix) the statements in the Registration Statement under the
heading "CERTAIN LEGAL ASPECTS OF THE RECEIVABLES", to the extent
they constitute statements of matters of law or legal conclusions
with respect thereto, are correct in all material respects;
(x) such counsel is familiar with AHFC's standard operating
procedures relating to AHFC's acquisition of a perfected first
priority security interest in the vehicles financed by AHFC
pursuant to retail installment sale contracts in the ordinary
course of AHFC's business; assuming that AHFC's standard
procedures are followed with respect to the perfection of
security interests in the Financed Vehicles (and such counsel has
no reason to believe that AHFC has not or will not continue to
follow its standard procedures in connection with the perfection
of security interests in the Financed Vehicles), AHFC has
acquired or will acquire a perfected first priority security
interest in the Financed Vehicles;
(xi) assuming that the Receivables are in substantially one
of the forms attached to such opinion, the Receivables are
"chattel paper" as defined in the UCC as in effect in the States
of New York and California; and
-11-
(xii) immediately prior to the sale of Receivables by AHFC
to the Company pursuant to the Receivables Purchase Agreement,
AHFC was the sole owner of all right, title and interest in, to
and under the Receivables and the other property to be
transferred by it to the Company. AHFC has full power and
authority to sell and assign the property to be sold and assigned
to the Company pursuant to the Receivables Purchase Agreement and
has duly authorized such sale and assignment to the Company by
all necessary corporate action.
(e) The Representative shall have received an opinion of Dewey
Ballantine LLP, special counsel to the Company and AHFC, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Receivables Purchase Agreement either (A) transfers
an ownership interest in the Receivables and the proceeds thereof
(subject to Section 9-315 of the UCC as in effect in the State of
California (the "California UCC")) from AHFC to the Company or
(B) creates a valid security interest in AHFC's rights in the
Receivables and the proceeds thereof (subject to Section 9-315 of
the California UCC) as security for the obligations of AHFC
thereunder;
(ii) the Sale and Servicing Agreement either (A) transfers
an ownership interest in the Receivables and the proceeds thereof
(subject to Section 9-315 of the California UCC) from the Company
to the Trust or (B) creates a valid security interest in the
Company's rights in the Receivables and the proceeds thereof
(subject to Section 9-315 of the California UCC) as security for
the obligations of the Company thereunder;
(iii) the Indenture creates a valid security interest in
the Trust's rights in the Receivables and the proceeds thereof
(subject to Section 9-315 of the California UCC) as security for
the obligations of the Trust thereunder;
(iv) the financing statement on Form UCC-1 naming AHFC as
debtor is in appropriate form for filing in the relevant filing
office under the California UCC. Upon the filing of such
financing Statement in the relevant filing office, the security
interest in favor of the Company in the Receivables and proceeds
thereof will be perfected, and no other security interest of any
other creditor of AHFC will be equal or prior to such security
interest;
(v) the financing statement on Form UCC-1 naming the
Company as debtor is in appropriate form for filing in the
relevant filing office under the California UCC. Upon the filing
of such financing statement in the relevant filing office, the
security interest in favor of the Owner Trustee in the
Receivables and proceeds thereof will be perfected, and no other
security interest of any other creditor of the Company will be
equal or prior to such security interest;
-12-
(vi) the provisions of the Indenture are effective to
create in favor of the Indenture Trustee, a valid security
interest (as such term is defined in Section 1-201 of the
California UCC) in the Receivables and proceeds thereof to secure
payment of the Notes;
(vii) the Trust Agreement is not required to be qualified
under the Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act");
(viii) the Indenture has been duly qualified under the
Trust Indenture Act;
(ix) the Registration Statement was declared effective
under the Act as of the date specified in such opinion, the
Prospectus either was filed with the Commission pursuant to the
subparagraph of Rule 424(b) specified in such opinion on the date
specified therein or was included in the Registration Statement,
and, to the best of the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement or any
part thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the
Act, and the Registration Statement and the Prospectus, and each
amendment or supplement thereof, as of their respective effective
or issue dates, complies as to form in all material respects with
the requirements of the Act and the Rules and Regulations;
(x) each of the Receivables Purchase Agreement, the Control
Agreement, the Sale and Servicing Agreement and the
Administration Agreement constitutes the legal, valid and binding
agreement of the Company and AHFC, in each case as to those
documents to which it is a party, enforceable against the Company
and AHFC in accordance with their terms (subject to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other similar laws affecting creditors' rights
generally from time to time in effect, and subject, as to
enforceability, to general principles of equity, regardless of
whether such enforceability is considered in a proceeding in
equity or at law) except, as applicable, that such counsel need
not express an opinion with respect to indemnification or
contribution provisions which may be deemed to be in violation of
the public policy underlying any law or regulation;
(xi) assuming due authorization, execution and delivery by
the Indenture Trustee and the Owner Trustee, the Indenture
constitutes the legal, valid and binding agreement of the Trust,
enforceable against the Trust in accordance with its terms
(subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles
of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law) except, as
applicable, that such counsel need not express an opinion with
respect to indemnification or contribution provisions which may
be deemed to be in violation of the public policy underlying any
law or regulation;
-13-
(xii) neither the Trust nor the Company is and, after
giving effect to the issuance and sale of the Notes and the
Certificates and the application of the proceeds thereof, as
described in the Prospectus, neither the Trust nor the Company
will be, an "investment company" as defined in the Investment
Company Act; and
(xiii) this Agreement has been duly authorized, executed
and delivered by the Company and AHFC.
(f) The Representative shall have received an opinion of Dewey
Ballantine LLP, special tax counsel for the Company, dated the Closing
Date and satisfactory in form and substance to the Representative and
counsel for the Underwriters, to the effect that for federal income tax
purposes (i) the Notes will be characterized as indebtedness of the
Trust that is secured by the Receivables, (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 Prospectus
under the headings "SUMMARY--ERISA Considerations", "ERISA
CONSIDERATIONS", "SUMMARY--Tax Status", "MATERIAL INCOME TAX
CONSEQUENCES" and Annex A to the Prospectus, "Global Clearance,
Settlement and Tax Documentation Procedures-Certain U.S. Federal Income
Tax Documentation Requirements", to the extent such statements
constitute matters of law or legal conclusions with respect thereto,
are correct in all material respects.
(g) The Representative shall have received an opinion of Dewey
Ballantine LLP, special tax counsel for the Company, dated the Closing
Date and satisfactory in form and substance to the Representative and
counsel for the Underwriters, to the effect that for California state
franchise and California state income tax purposes (i) the Notes will
be characterized as debt and (ii) the Trust will not be classified as
an association (or publicly traded partnership) taxable as a
corporation.
(h) The Representative shall have received from Stroock & Stroock
& Lavan LLP, counsel for the Underwriters, such opinion or opinions,
dated the Closing Date, with respect to the validity of the Notes, the
Registration Statement, the Prospectus and other related matters as the
Representative 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.
(i) The Representative shall have received a certificate, dated
the Closing Date, of the Chairman of the Board, the President or any
Vice-President and a principal financial or accounting officer 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
-14-
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 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.
(j) The Representative shall have received an opinion of Thacher
Proffitt & Wood, counsel to the Indenture Trustee, dated the Closing
Date and satisfactory in form and substance to the Representative and
counsel for the Underwriters, substantially to the effect that:
(i) the Indenture Trustee is a banking corporation validly
existing under the laws of the State of New York;
(ii) the Indenture Trustee has the requisite power and
authority to execute and deliver the Indenture, the Sale and
Servicing Agreement, the Control Agreement and the Administration
Agreement and perform its obligations under each of the
Agreements, and has taken all necessary action to authorize the
execution and delivery of the Indenture, the Sale and Servicing
Agreement, the Control Agreement and the Administration Agreement
and performance by it of each of the Agreements;
(iii) no approval, authorization or other action by or
filing with any governmental authority of the United States of
America, or of the State of New York, having jurisdiction over
the banking or trust powers of the Indenture Trustee is required
in connection with the execution and delivery by the Indenture
Trustee of the Indenture, the Sale and Servicing Agreement, the
Control Agreement and the Administration Agreement;
(iv) the execution and delivery of the Indenture, the Sale
and Servicing Agreement, the Control Agreement and the
Administration Agreement and the performance by the Indenture
Trustee of the respective terms of the Agreements, do not
conflict with or result in a violation of the Articles of
Incorporation or By-Laws of the Indenture Trustee or the
applicable federal laws of the United States of America or of the
State of New York having jurisdiction over the banking or trust
powers of the Indenture Trustee;
(v) each of the Indenture, the Sale and Servicing
Agreement, the Control Agreement and the Administration Agreement
has been duly executed and delivered by the Indenture Trustee and
each of the Agreements constitutes a legal, valid and binding
obligation of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with its respective terms, except
that certain of such obligations may be enforceable solely
against the Trust Estate and except
-15-
that such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium, liquidation, or other similar laws
affecting the enforcement of creditors' rights generally, and by
general principles of equity, including, without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing (regardless of whether such enforceability is considered
in a proceeding in equity or at law);
(vi) the Notes delivered on the date hereof have been duly
authenticated by the Indenture Trustee in accordance with the
terms of the Indenture.
(k) The Representative shall have received an opinion of
Richards, Layton & Finger, counsel to the Owner Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Owner Trustee has been duly incorporated and is
validly existing as a banking corporation under the laws of the
United States of America;
(ii) the Owner Trustee has the power and authority to
execute, deliver and perform its obligations under the Trust
Agreement;
(iii) the Trust Agreement has been duly authorized,
executed and delivered by the Owner Trustee and constitutes the
legal, valid and binding obligation of the Owner Trustee,
enforceable against the Owner Trustee in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles
of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) the execution and delivery by the Owner Trustee of the
Trust Agreement and the performance by the Owner Trustee of its
obligations thereunder do not conflict with, result in a breach
or violation of, or constitute a default under the Articles of
Association or By-laws of the Owner Trustee or of any law,
governmental rule or regulation of the State of Delaware or of
the United States of America governing the banking or trust
powers of the Owner Trustee; and
(v) the execution, delivery and performance by the Owner
Trustee of the Trust Agreement does not require any consent,
approval or authorization of, or any registration or filing with,
any Delaware or United States federal governmental authority
having jurisdiction over the banking or trust powers of the Owner
Trustee, other than those consents, approvals or authorizations
as have been obtained and the filing of the Certificate of Trust
with the Secretary of State of the State of Delaware, which have
been duly filed.
-16-
(l) The Representative shall have received an opinion of
Richards, Layton & Finger, counsel to the Delaware Trustee, dated the
Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Delaware Trustee has been duly formed and is
validly existing as a national banking association under the
federal laws of the United States of America;
(ii) the Delaware Trustee has the power and authority to
execute, deliver and perform its obligations under the Trust
Agreement;
(iii) the Trust Agreement has been duly authorized,
executed and delivered by the Delaware Trustee and constitutes
the legal, valid and binding obligation of the Delaware Trustee,
enforceable against the Delaware Trustee in accordance with its
terms (subject to applicable bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and other similar laws
affecting creditors' rights generally from time to time in
effect, and subject, as to enforceability, to general principles
of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law);
(iv) neither the execution, delivery and performance by the
Delaware Trustee of the Trust Agreement, nor the consummation of
any of the transactions by the Delaware Trustee contemplated
thereby, is in violation of the articles of organization or
bylaws of the Delaware Trustee or of any law, governmental rule
or regulation of the State of Delaware or of the United States of
America governing the banking or trust powers of the Delaware
Trustee; and
(v) neither the execution, delivery and performance by the
Delaware Trustee of the Trust Agreement, nor the consummation of
any of the transactions by the Delaware Trustee contemplated
thereby, requires the consent or approval of, the withholding of
objection on the part of, the giving of notice to, the filing,
registration or qualification with, or the taking of any other
action in respect of, any governmental authority or agency under
the laws of the State of Delaware or the federal laws of the
United States of America governing the banking or trust powers of
the Delaware Trustee.
(m) The Representative shall have received one or more opinions
of Richards, Layton & Finger, special Delaware counsel to the Trust,
dated the Closing Date and satisfactory in form and substance to the
Representative and counsel for the Underwriters, to the effect that:
(i) the Trust has been duly formed and is validly existing
and in good standing as a business trust under the Delaware
Business Trust Act, 12 Del. C.ss.3801, et seq. (the "Delaware
Act");
(ii) the Trust has the power and authority under the
Delaware Act and the Trust Agreement to execute and deliver the
Basic Documents to which the
-17-
Trust is a party, to issue the Notes and the Certificates, to
grant the Collateral (as such term is defined in the Indenture)
to the Indenture Trustee as security for the Notes and to perform
its obligations under each of said documents;
(iii) the Trust has duly authorized and executed the
Certificates and the Notes, the Owner Trustee has duly
authenticated the Certificates on behalf of the Trust, and when
the Certificates are delivered upon the order of the Depositor in
accordance with the Trust Agreement, the Certificates will be
validly issued and entitled to the benefits of the Trust
Agreement;
(iv) to the extent that Article 9 of the Uniform Commercial
Code as in effect in the State of Delaware (the "Delaware UCC")
is applicable (without regard to conflicts of laws principles),
and assuming that the security interest created by the Indenture
in the Collateral has been duly created and has attached, upon
the filing of the financing statements set forth in such opinion
(the "Delaware Financing Statements") with the Office of the
Secretary of State (Uniform Commercial Code Division) (the
"Division"), the Indenture Trustee will have a perfected security
interest in the Trust's rights in that portion of the Collateral
described in the Delaware Financing Statements that may be
perfected by the filing of a UCC financing statement with the
Division (the "Filing Collateral") and the proceeds thereof (as
defined in Section 9-102(a)(64) of the Delaware UCC);
(v) the search report referenced in such opinion will set
forth the proper filing office and the proper debtor necessary to
identify those persons who under the Delaware UCC have on file
financing statements against the Trust covering the Filing
Collateral as of the Closing Date. Such search report identifies
no secured party who has filed with the Division a financing
statement naming the Trust as debtor, and describing the Filing
Collateral prior to the Closing Date;
(vi) no refiling or other action is necessary under the
Delaware UCC in order to maintain the perfection of such security
interest except for the filing of continuation statements at five
year intervals;
(vii) assuming for federal income tax purposes that the
Trust will not be classified as an association or a publicly
traded partnership taxable as a corporation, and that the Notes
will be characterized as indebtedness for federal income tax
purposes, then the Trust will not be subject to any franchise or
income tax under the laws of the State of Delaware, and the Notes
will also be characterized as indebtedness for Delaware tax
purposes;
(viii) the Trust Agreement is the legal, valid and binding
obligation of the parties thereto, enforceable against such
parties, in accordance with its terms (subject to such exclusions
and exceptions as are customary in opinions of this type);
-18-
(ix) under the Delaware Act, the Trust is a separate legal
entity and, assuming that the Sale and Servicing Agreement
conveys good title to the Trust property to the Trust as a true
sale and not as a security arrangement, the Trust rather than the
Certificateholders will hold whatever title to the Trust property
as may be conveyed to it from time to time pursuant to the Sale
and Servicing Agreement, except to the extent that the Trust has
taken action to dispose of or otherwise transfer or encumber any
part of the Trust property;
(x) under 3805(b) of the Delaware Act, no creditor of any
Certificateholder (as defined in the Trust Agreement) shall have
any right to obtain possession of, otherwise exercise legal or
equitable remedies with respect to, the property of the Trust
except in accordance with the terms of the Trust Agreement;
(xi) under 3805(c) of the Delaware Act, except to the
extent otherwise provided in the Trust Agreement, a
Certificateholder (including the Company in its capacity as
Depositor under the Trust Agreement) has no interest in specific
Receivables;
(xii) under 3808(a) and (b) of the Delaware Act, the Trust
may not be terminated or revoked by any Certificateholder, and
the dissolution, termination or bankruptcy of any
Certificateholder shall not result in the termination or
dissolution of the Trust, except to the extent otherwise provided
in the Trust Agreement.
(n) The Representative shall have received an opinion of Dewey
Ballantine LLP, counsel to the Company, dated the Closing Date and
satisfactory in form and substance to the Representative and 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") and the Company would
not otherwise properly be a debtor in a case under the Bankruptcy Code,
and if the matter were properly briefed and presented to a court
exercising bankruptcy jurisdiction, the court, exercising reasonable
judgment after full consideration of all relevant factors, should not
order, over the objection of the Certificate holders or the
Noteholders, the substantive consolidation of the assets and
liabilities of the Company with those of AHFC and such opinion shall be
in substantially the form previously discussed with the Representative
and counsel for the Underwriters and in any event satisfactory in form
and in substance to the Representative and counsel for the
Underwriters.
(o) The 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
Secretary of State of the state of (i) California reflecting the
transfer of the interest of AHFC in the Receivables and the proceeds
thereof to the Company and the transfer of the interest of the Company
in the Receivables and the proceeds thereof to the Trust and (ii)
Delaware reflecting the grant of the security interest by the Trust in
the Receivables and the proceeds thereof to the Indenture Trustee.
-19-
(p) The Representative shall have received an opinion of Dewey
Ballantine LLP, special counsel to the Company, dated the Closing Date
and satisfactory in form and substance to the Representative and the
counsel for the Underwriters to the effect that (i) the provisions of
the Indenture are effective to create a valid security interest in
favor of the Indenture Trustee, to secure payment of the Notes, in all
"securities entitlements" (as defined in Section 8-102(a)(17) of the
New York UCC) with respect to "financial assets" (as defined in Section
8-102(a)(9) of the New York UCC) now or hereafter credited to the
Reserve Account (such securities entitlements, the "Securities
Entitlements"), (ii) the provisions of the control agreement for
purposes of Article 8 of the New York UCC are effective to perfect the
security interest of the Indenture Trustee in the Securities
Entitlements and (iii) no security interest of any other creditor of
the Trust will be prior to the security interest of the Indenture
Trustee in such Securities Entitlements.
(q) Each Class of the Notes shall have been rated in the highest
rating category by each of Moody's, Fitch and Standard & Poor's.
(r) On or prior to the Closing Date, the Certificates shall have
been issued to the Company.
(s) The Representative shall have received from Dewey Ballantine
LLP and each other counsel for the Company, a letter dated the Closing
Date to the effect that the Underwriters may rely upon each opinion
rendered by such counsel to either Standard & Poor's, Moody's or Fitch
in connection with the rating of any Class of the Notes, as if each
such opinion were addressed to the Underwriters.
(t) The Representative shall have received an opinion of Scott
Shea, Esq., counsel to the Company and AHFC, dated the Closing Date, to
the effect that, to the best knowledge of such counsel after due
inquiry, there are 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, (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 FEDERAL INCOME TAX
CONSEQUENCES".
The Company will furnish the Representative with such conformed copies
of such opinions, certificates, letters and documents as the Representative
reasonably requests.
The Representative may, in its sole discretion, waive on behalf of the
Underwriters compliance with any conditions to the obligations of the
Underwriters hereunder.
-20-
7. Indemnification and Contribution.
--------------------------------
(a) The Company and AHFC will, jointly and severally, indemnify and
hold harmless each Underwriter 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, the Term Sheet, the Prospectus, or
any amendment or supplement thereto 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 written information furnished to the Company or AHFC by any
Underwriter through the Representative specifically for use therein, it being
understood and agreed that the only such information furnished by any
Underwriter consists of the information described as such in subsection (b)
below; and provided, further that with respect to any untrue statement or
omission or alleged untrue statement or omission made in the Term Sheet, the
indemnity agreement contained in this subsection (a) shall not inure to the
benefit of any Underwriter from whom the person asserting any such losses,
claims, damages or liabilities purchased the Notes concerned, to the extent that
the untrue statement or omission or alleged untrue statement or omission was
eliminated or remedied in the Prospectus, which Prospectus was required to be
delivered by such Underwriter under the Act to such person and was not so
delivered if the Company or AHFC had previously furnished copies thereof to such
Underwriter.
(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, the 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 Representative
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
-21-
information in the Prospectus furnished on behalf of each Underwriter: the
concession and reallowance figures appearing in the third paragraph under the
caption "Underwriting" and the information contained in the third paragraph, the
second sentence of the fifth paragraph, and the seventh paragraph under the
caption "Underwriting".
(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. 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 an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(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 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
-22-
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 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.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Notes hereunder on the Closing Date and the
aggregate principal amount of Notes that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
principal amount of Notes that the Underwriters are obligated to purchase on
such Closing Date, the Representative may make arrangements satisfactory to the
Company for the purchase of such Notes by other persons, including any of the
Underwriters, but if no such arrangements are made by such Closing Date, the
nondefaulting Underwriters shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the 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
Notes with respect to which such default or defaults occur exceeds 10% of the
total principal amount of Notes that the Underwriters are obligated to purchase
on such Closing Date and arrangements satisfactory to the Representative and the
Company for the purchase of such 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 9. 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.
-23-
9. 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 Notes. If this Agreement is
terminated pursuant to Section 8 or if for any reason the purchase of the 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 5 and the
respective obligations of the Company, AHFC and the Underwriters pursuant to
Section 7 shall remain in effect. If the purchase of the Notes by the
Underwriters is not consummated for any reason other than solely because of the
termination of this Agreement pursuant to Section 8 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 Notes.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or sent by facsimile and
confirmed to the Representative at 390 Greenwich Street, 6th Floor, New York,
New York, 10013, Attention: General Counsel, (facsimile: (212) 723-8591), or, if
sent to the Company, will be mailed, delivered or sent by facsimile transmission
and confirmed to it at 700 Van Ness Avenue, Torrance, California 90501,
Attention: John I. Weisickle, (facsimile: (310) 787-3910), and if to AHFC, will
be mailed, delivered or sent by facsimile transmission and confirmed to it at
700 Van Ness Avenue, Torrance, California 90501, Attention: John I. Weisickle,
(facsimile: (310) 787-3910); provided that any notice to an Underwriter pursuant
to Section 7 will be mailed, delivered or telecopied and confirmed to such
Underwriter.
11. 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.
12. 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 7, and no other
person will have any right or obligation hereunder.
13. Representation of Underwriters. The Representative will act for the
several Underwriters in connection with this
financing, and any action under this Agreement taken by the Representative will
be binding upon all the Underwriters.
14. 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.
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15. Applicable Law; Submission to Jurisdiction.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.
(b) Each of the Company and AHFC hereby submits to the nonexclusive
jurisdiction of the Federal and state courts in the Borough of Manhattan in The
City of New York in any suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby.
-25-
If the foregoing is in accordance with the Representative's
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 CORP.
By: /s/ Y. Kohama
------------------------------
Name: Y. Kohama
Title: President
AMERICAN HONDA
FINANCE CORPORATION
By: /s/ Y. Kohama
------------------------------
Name: Y. Kohama
Title: President
The foregoing Underwriting Agreement is hereby confirmed and accepted as of the
date first above written:
SALOMON SMITH BARNEY INC., acting on behalf of itself
and as the Representative of the several Underwriters
By: /s/ Christopher Hawke
------------------------------
Name: Christopher Hawke
Title: Vice President
SCHEDULE A
- ------------------------------------------------------------------------------------------------------------------------
Amount of Amount of Amount of Amount of
Class A-1 Class A-2 Class A-3 Class A-4
Underwriter Notes Notes Notes Notes
- ------------------------------------------------------------------------------------------------------------------------
Salomon Smith Barney Inc. $195,500,000 $165,000,000 $244,000,000 $106,104,000
- ------------------------------------------------------------------------------------------------------------------------
Banc One Capital Markets, Inc. 195,500,000 165,000,000 244,000,000 106,104,000
- ------------------------------------------------------------------------------------------------------------------------
Banc of America Securities LLC 42,000,000 35,500,000 52,000,000 22,737,000
- ------------------------------------------------------------------------------------------------------------------------
Barclays Capital Inc. 42,000,000 35,500,000 52,000,000 22,737,000
- ------------------------------------------------------------------------------------------------------------------------
Deutsche Banc Alex. Brown Inc. 42,000,000 35,500,000 52,000,000 22,737,000
- ------------------------------------------------------------------------------------------------------------------------
J.P. Morgan Securities Inc. 42,000,000 35,500,000 52,000,000 22,737,000
---------- ---------- ---------- ----------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
Total: $559,000,000 $472,000,000 $696,000,000 $303,156,000
=========== =========== =========== ===========
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