EXHIBIT 1.1
HONDA AUTO RECEIVABLES 1997-B GRANTOR TRUST
____% ASSET BACKED CERTIFICATES, CLASS A
AMERICAN HONDA RECEIVABLES CORP.
(SELLER)
AMERICAN HONDA FINANCE CORPORATION
(SERVICER)
UNDERWRITING AGREEMENT
October __, 1997
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
As Representative of the Several Underwriters
World Financial Center
North Tower - 15th Floor
New York, New York 10281-1315
Dear Sirs:
1. INTRODUCTORY. American Honda Receivables Corp., a California
corporation (the "Seller"), proposes to sell $________________ principal amount
of ____% Asset Backed Certificates, Class A (the "Class A Certificates"), issued
by the Honda Auto Receivables 1997-B Grantor Trust (the "Trust"). Each Class A
Certificate will represent a fractional undivided interest in the Trust. The
assets of the Trust will include, among other things, a pool of retail
installment sale and conditional sale contracts secured by the new Honda and
Acura automobiles and sport utility vehicles and Honda minivans financed thereby
(the "Receivables") and certain monies due or received thereunder on or after
October 1, 1997 (the "Cutoff Date"), such Receivables to be sold to the Trust by
the Seller and to be serviced for the Trust by American Honda Finance
Corporation, a California corporation (the "Servicer"). The Class A
Certificates will be issued in an aggregate principal amount of
$________________, which is equal to _____% of the aggregate principal balance
of the Receivables as of the Cutoff Date. Simultaneously with the issuance and
sale of the Class A Certificates as contemplated herein, the Trust will also
issue the Asset Backed Certificates, Class B (the "Class B Certificates", and
together with the Class A Certificates, the "Certificates"), evidencing an
undivided ownership interest of ____% in the Trust, payments in
respect of which are, to the extent specified in the Pooling and Servicing
Agreement (as defined below), subordinated to the rights of the holders of the
Class A Certificates. The Certificates will be issued pursuant to a Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement") to be dated as of
October 1, 1997, among the Seller, the Servicer and Bank of Tokyo-Mitsubishi
Trust Company, as trustee (the "Trustee"). Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated shall be the representative of the
Underwriters (the "Representative").
Capitalized terms used herein and not otherwise defined shall have the
meanings given them in the Pooling and Servicing Agreement.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER. The Seller represents
and warrants to and agrees with the several underwriters named in Schedule I
hereto (the "Underwriters") that:
(a) The Seller has prepared and filed with the Securities and Exchange
Commission (the "Commission") in accordance with the provisions of the
Securities Act of 1933, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "Act"), a registration statement on
Form S-3 (No. 333-35413; 333-35413-01), including a form of prospectus, relating
to the Certificates. The registration statement as amended has been declared
effective by the Commission. If any post-effective amendment has been filed
with respect thereto, prior to the execution and delivery of this Agreement, the
most recent such amendment has been declared effective by the Commission. Such
registration statement, as amended at the time of effectiveness, including all
material incorporated by reference therein and including all information (if
any) deemed to be part of the registration statement at the time of
effectiveness pursuant to Rule 430A under the Act, is referred to in this
Agreement as the "Registration Statement." The Seller proposes to file with the
Commission pursuant to Rule 424(b) ("Rule 424(b)") under the Act a form of the
prospectus included in the Registration Statement relating to the Class A
Certificates and the method of distribution thereof, such prospectus in the form
in which it is filed pursuant to Rule 424(b) being hereinafter referred to as
the "Prospectus."
(b) The Registration Statement on Form S-3, including such amendments
thereto as may be required, relating to the Certificates, has been filed with
the Commission and such Registration Statement as amended has become effective.
The conditions to the use of a shelf registration statement on Form S-3 under
the Act, as set forth in the General Instructions to Form S-3, have been
satisfied with respect to the Seller and the Registration Statement;
(c) No stop order suspending the effectiveness of the Registration
Statement has been issued and no proceeding for that purpose has been instituted
or, to the knowledge of the Seller, threatened by the Commission, and on the
effective date of the Registration Statement, the Registration Statement and the
Prospectus conformed in all respects to the requirements of the Act and the
rules and regulations of the Commission under the Act (the "Rules and
Regulations"), and did not include any untrue statement of a material fact or
omit
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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 filing of the Prospectus
pursuant to Rule 424(b) such documents will conform in all respects to the
requirements of the Act and the Rules and Regulations, and on the Closing Date
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 will include on the date of this Agreement and on the Closing Date 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;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with information
relating to any Underwriter furnished to the Seller in writing by such
Underwriter through the Representative expressly for use therein.
(d) The consummation of the transactions contemplated by this Agreement,
the Receivables Purchase Agreement and the Pooling and Servicing Agreement, and
the fulfillment of the terms 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 Seller or the Servicer pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing
agreement, or other agreement or instrument under which the Seller or the
Servicer is a debtor or guarantor or to which any of their respective property
or assets may be subject.
(e) No consent, approval, authorization or order of, or filing with, any
court or governmental agency or body is required to be obtained or made by the
Seller or the Servicer for the consummation of the transactions contemplated by
this Agreement except such as have been obtained and made under the Act or the
Rules and Regulations, such as may be required under state securities laws and
filing of any financing statements required to perfect the transfer of the
Receivables.
(f) Neither the Seller nor the Servicer 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, in the Receivables Purchase Agreement or in the Pooling and Servicing
Agreement.
(g) The execution, delivery and performance of this Agreement, the
Receivables Purchase Agreement and the Pooling and Servicing Agreement and the
issuance and sale of the Certificates and compliance with the terms and
provisions 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 having jurisdiction over
the Seller or the Servicer or any of their respective properties or any
agreement or instrument to which the Seller or the Servicer is a party or by
which the Seller or the Servicer is bound or to which any of their
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respective properties is subject, or with the articles of incorporation or
by-laws of the Seller or the Servicer, and each of the Seller and the Servicer
has full corporate power and authority to enter into this Agreement, the
Receivables Purchase Agreement and the Pooling and Servicing Agreement and to
consummate the transactions contemplated hereby and thereby.
(h) Each of this Agreement and the Pooling and Servicing Agreement has
been duly authorized, executed and delivered by the Seller and the Servicer.
(i) This Agreement constitutes a valid and binding obligation of, each of
the Seller and the Servicer, enforceable against each of the Seller and the
Servicer in accordance with its terms, except as enforcement thereof may be
subject to or limited by (x) bankruptcy, insolvency, moratorium, reorganization
or other similar laws relating to or affecting the enforcement of creditors'
rights generally, (y) general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (z) rights
to indemnification and contribution which may be limited by applicable law or
equitable principles or otherwise unenforceable as against public policy.
3. PURCHASE, SALE, AND DELIVERY OF CLASS A CERTIFICATES. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Seller agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Seller, the aggregate principal amounts of the Class A Certificates set
forth opposite the names of the Underwriters in Schedule I hereto. The Class A
Certificates are to be purchased at the purchase price of _____% of the
aggregate principal amount thereof plus accrued interest at the Pass-Through
Rate calculated from (and including) October 15, 1997, to (but excluding) the
Closing Date.
Against payment of the purchase price in immediately available funds drawn
to the order of the Seller, the Seller will deliver the Class A Certificates to
the Representative, for the account of the Underwriters, at the office of Brown
& Wood LLP, 555 California Street, San Francisco, CA 94104, on October __, 1997,
at 10:00 a.m., California time, or at such other time not later than seven full
business days thereafter as the Representative and the Seller determine, such
time being herein referred to as the "Closing Date." The Class A Certificates
to be so delivered will be initially represented by one or more Class A
Certificates (the "DTC Certificates") registered in the name of Cede & Co., the
nominee of The Depository Trust Company ("DTC") and one certificate in
definitive form representing the remaining portion of the Original Class A
Certificate Balance shall be registered in the name of and delivered to the
Seller. The interests of beneficial owners of the DTC Certificates will be
represented by book entries on the records of DTC and participating members
thereof. Definitive Certificates will be available only under the limited
circumstances set forth in the Pooling and Servicing Agreement. The
Certificates will be made available for checking at the above office of Brown &
Wood 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 Trust, the Seller and the Underwriters have agreed that the Closing
Date will be not less than five business days following the date hereof.
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4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Class A Certificates for sale to the public as
set forth in the Prospectus.
5. COVENANTS OF THE SELLER. The Seller covenants and agrees with the
several Underwriters that:
(a) The Seller will transmit the Prospectus to the Commission pursuant to
Rule 424(b) by a means reasonably calculated to result in the timely filing of
such Prospectus with the Commission pursuant to Rule 424(b).
(b) Before filing any amendment or supplement to the Registration
Statement or the Prospectus, whether before or after the time the Registration
Statement becomes effective, the Seller will furnish to the Representative a
copy of the proposed amendment or supplement for review and will not file any
such proposed amendment or supplement to which the Representative reasonably
objects.
(c) The Seller will advise the Representative promptly, and will confirm
such advice in writing, (i) when any amendment to the Registration Statement
shall have become effective, (ii) of any request by the Commission for any
amendment to the Registration Statement or any amendment or supplement to the
Prospectus or for any additional information, (iii) of the issuance by the
Commission of any stop order suspending the effectiveness of the Registration
Statement or the initiation or threatening of any proceeding for that purpose,
and (iv) of the receipt by the Seller of any notification with respect to any
suspension of the qualification of the Certificates for offer and sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose; and to use its best efforts to prevent the issuance of any such stop
order or notification and, if issued, to obtain as soon as possible the
withdrawal thereof.
(d) The Seller will arrange for the qualification of the Class A
Certificates for offering and sale under the securities laws of such
jurisdictions in the United States as the Representative may reasonably
designate and to continue such qualifications in effect so long as necessary
under such laws for the distribution of such Class A Certificates, provided that
in connection therewith the Seller 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 jurisdiction.
(e) If, at any time when the delivery of a prospectus shall be required by
law in connection with sales of any Class A Certificates, either (i) any event
shall have occurred as a result of which the Prospectus would include any 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 (ii) for any other reason it shall be
necessary to amend or supplement the Prospectus, the Seller will promptly notify
the Representative and will promptly prepare and file with the Commission, at
its own expense, an amendment or a supplement to the Prospectus which will
correct such statement or omission or effect such compliance. Neither your
consent to, nor the Underwriters'
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delivery of, any such amendment or supplement shall constitute a waiver of any
of the conditions set forth in Section 6 hereof.
(f) The Seller will cause the Trust to make generally available to Class A
Certificateholders, as soon as practicable, but no later than sixteen months
after the Effective Date, an earnings statement of the Trust covering a period
of at least twelve consecutive months beginning after such Effective Date and
satisfying the provisions of Section 11(a) of the Act (including Rule 158
promulgated thereunder).
(g) The Seller will furnish to you copies of the Registration Statement
(one of which will be signed and include all exhibits), each related preliminary
prospectus, the Prospectus and all amendments and supplements to such documents,
in each case as soon as available and in such quantities as the Representative
may from time to time reasonably request.
(h) So long as any of the Class A Certificates are outstanding, the Seller
will furnish to the Representative copies of all reports or other communications
(financial or otherwise) furnished or made available to Class A
Certificateholders, and deliver to the Representative during such same period,
(i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission and (ii) such additional
information concerning the business and financial condition of the Seller as the
Representative may from time to time reasonably request.
(i) Whether or not the transactions contemplated by this Agreement are
consummated, the Seller, subject to the provisions of Section 8 hereof, will pay
or cause to be paid all costs and expenses incident to the performance of its
obligations hereunder, including (i) any filing fees, (ii) any fees charged by
Moody's Investors Service ("Moody's") and Standard & Poor's Ratings Services, a
Division of the McGraw-Hill Companies, Inc. ("Standard & Poor's" and, together
with Moody's, the "Rating Agencies") for the rating of the Class A Certificates,
(iii) the expenses incurred in printing, reproducing and distributing the
registration statement as filed, the Registration Statement, preliminary
prospectuses and the Prospectus (including any amendments and supplements
thereto required pursuant to Section 5(d) hereof) and (iv) the reasonable
expenses of the Representative, including the reasonable fees and disbursements
of counsel to the Representative, in connection with the initial qualification
of the Class A Certificates for sale in the jurisdictions that the
Representative may designate pursuant to Section 5(c) hereof.
(j) On or before the Closing Date, the Seller shall cause its and the
Servicer's computer records relating to the Receivables to be marked to show the
Trust's absolute ownership of the Receivables, and from and after the Closing
Date neither the Seller nor the Servicer shall take any action inconsistent with
the Trust's ownership of such Receivables, other than as permitted by the
Pooling and Servicing Agreement.
(k) To the extent, if any, that the rating provided with respect to the
Class A Certificates by either Rating Agency is conditional upon the furnishing
of documents or the
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taking of any other actions by the Seller, the Seller shall furnish such
documents and take any such other actions.
(l) On or before the Closing Date, the Seller shall furnish or make
available to the Underwriters or their counsel such additional documents and
information regarding the Seller and the Servicer and their affairs as the
Underwriters may from time to time reasonably request, including any and all
documentation reasonably requested in connection with their due diligence
efforts regarding information in the Prospectus and in order to evidence the
accuracy or completeness of any of the conditions contained in this Agreement.
6. CONDITIONS OF THE OBLIGATIONS OF THE UNDERWRITERS. The obligations of
the several Underwriters to purchase and pay for the Class A Certificates will
be subject to the accuracy of the representations and warranties on the part of
the Seller, to the accuracy of the statements of officers of the Seller made
pursuant to the provisions hereof, to the performance by the Seller of its
obligations hereunder and to the following additional conditions precedent:
(a) At the time this Agreement is executed and delivered by the Seller and
at the Closing Date, KPMG Peat Marwick shall have furnished to the
Representative letters dated, respectively, as of the date of this Agreement and
as of the Closing Date substantially in the forms of the drafts to which the
Representative previously agreed.
(b) The Prospectus shall have been filed with the Commission pursuant to
Rule 424(b) within the applicable time period prescribed for such filing by the
Rules and Regulations and in accordance with Section 5(a) of this Agreement;
and, as of the Closing Date, no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for such purpose
shall be pending before or, to the knowledge of the Seller, threatened by the
Commission; and all requests for additional information from the Commission with
respect to the Registration Statement shall have been complied with to the
satisfaction of the Representative.
(c) You shall have received an officer's certificate, dated the Closing
Date, signed by the Chairman of the Board or the President and by a principal
financial or accounting officer of the Seller representing and warranting that,
as of the Closing Date, the representations and warranties of the Seller in this
Agreement are true and correct, that the Seller 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, that no stop order suspending the effectiveness
of the Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the best of their knowledge, are
contemplated by the Commission.
(d) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Seller, Honda Motor Co. Ltd., American Honda Motor Co., Inc. ("AHMC") or the
Servicer which, in the judgment of a
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majority in interest of the Underwriters including the Representative,
materially impairs the investment quality of the Class A Certificates or makes
it impractical or inadvisable to proceed with completion of the sale of and
payment for the Class A Certificates; (ii) any downgrading in the rating of any
debt securities of AHMC or any of its direct or indirect subsidiaries by any
"nationally recognized statistical rating organization" (as defined for purposes
of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any such debt
securities (other than an announcement with positive implications of a possible
upgrading, and no implication of a possible downgrading, of such rating); (iii)
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;
(iv) any banking moratorium declared by Federal, California or New York
authorities; or (v) any outbreak or escalation of major hostilities in which the
United States is involved, any declaration of war by Congress or any other
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 sale of
and payment for the Class A Certificates.
(e) Brown & Wood LLP will have furnished to the Representative their
written opinion, dated the Closing Date, to the effect that:
(i) Each of the Seller and the Servicer has been duly incorporated and
is validly existing as a 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; and is
duly qualified to transact business and is in good standing in each
jurisdiction in which the conduct of its business or the ownership of its
property 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 this Agreement, the Receivables Purchase Agreement or
the Pooling or Servicing Agreement.
(ii) The Pooling and Servicing Agreement and the Receivables Purchase
Agreement have been duly authorized, executed and delivered by, and,
assuming the due authorization, execution and delivery thereof by the
Trustee, each constitutes a valid and binding obligation of, each of the
Seller and the Servicer, enforceable against each of the Seller and the
Servicer in accordance with their respective terms, except as enforcement
thereof may be subject to or limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws relating to or affecting the
enforcement of creditors' rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(iii) The execution, delivery and performance of this Agreement, the
Pooling and Servicing Agreement and the Receivables Purchase Agreement by
each of the Seller and the Servicer will not conflict with or result in a
breach of any of the
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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
properties or assets of the Seller or the Servicer pursuant to the terms of
the Articles of Incorporation or the By-Laws of the Seller or the Servicer,
or to the best of such counsel's knowledge and information, any statute,
any rule, regulation or order of any governmental agency or body or any
court having jurisdiction over the Seller or the Servicer or any of their
respective properties or, to the best of their knowledge and information,
any agreement or instrument to which the Seller or the Servicer is a party
or by which either the Seller or the Servicer or any of their respective
properties is bound.
(iv) No authorization, approval or consent of, any court or
governmental agency or authority is necessary in connection with the
execution, delivery and performance by the Seller or the Servicer of this
Agreement, the Pooling and Servicing Agreement or the Receivables Purchase
Agreement, except for (x) such as may be required under the Act or the
Rules and Regulations, (y) such as may be required under state securities
laws, and (z) except for 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.
(v) The Class A Certificates have been duly authorized and, when
executed and authenticated by the Trustee in accordance with the Pooling
and Servicing Agreement and delivered and paid for pursuant to this
Agreement will be validly issued and outstanding and entitled to the
benefits provided by the Pooling and Servicing Agreement.
(vi) The Registration Statement has become effective under the Act and
the Prospectus has been filed with the Commission, pursuant to Rule 424(b)
promulgated under the Act; to the best of such counsel's knowledge, no stop
order suspending the effectiveness of the Registration Statement 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 (other than the financial and statistical information
therein as to which such counsel express no opinion), as of their
respective effective date or date of issuance, complied as to form in all
material respects with the requirements of the Act and the rules and
regulations promulgated thereunder; such counsel has no reason to believe
that the Registration Statement 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, included or includes an untrue statement of a material fact
or omitted or omits to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; it being understood that such counsel need express no
opinion as to the financial, numerical, statistical and quantitative
information contained in the Registration Statement or the Prospectus.
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(vii) Such counsel does not know of any contracts or documents of a
character required to be described in the Registration Statement or the
Prospectus which are not described and filed as required.
(viii) To the best of their knowledge, there are no legal or
governmental proceedings pending to which the Seller or the Servicer is a
party or of which any property of the Seller or the Servicer is the
subject, and no such proceedings are known by such counsel to be threatened
or contemplated by governmental authorities or threatened by others, in
each case (A) that are required to be disclosed in the Registration
Statement or the Prospectus or (B) (1) asserting the invalidity of all or
part of this Agreement, the Receivables Purchase Agreement, the Pooling and
Servicing Agreement or the Certificates, (2) seeking to prevent the
issuance of the Certificates, (3) that could materially and adversely
affect the Seller's or the Servicer's obligations under this Agreement, the
Receivables Purchase Agreement or the Pooling and Servicing Agreement or
(4) seeking to affect adversely the income tax attributes of the Trust or
the Class A Certificates.
(ix) Immediately prior to the transfer of Receivables by the Servicer
pursuant to the Receivables Purchase Agreement, the Servicer was the sole
owner of all right, title and interest in the Receivables and the other
property to be transferred by it to the Seller. The Servicer has full
power and authority to sell and assign the property to be sold and assigned
to the Seller pursuant to the Receivables Purchase Agreement and has duly
authorized such sale and assignment to the Seller by all necessary
corporate action.
(x) 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.
(xi) Such counsel is familiar with the Servicer's standard operating
procedures relating to the Servicer's acquisition of a perfected first
priority security interest in the vehicles financed by the Servicer
pursuant to retail installment sale contracts in the ordinary course of the
Servicer's business. Assuming that the Servicer'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 the
Servicer has not or will not continue to follow its standard procedures in
connection with the perfection of security interests in the Financed
Vehicles), the Servicer has acquired or will acquire a perfected first
priority security interest in the Financed Vehicles.
(xii) The Seller has full power and authority to sell and assign the
property to be sold and assigned to the Trust pursuant to the Pooling and
Servicing Agreement and has duly authorized such sale and assignment to the
Trust by all necessary corporate action.
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(xiii) This Agreement has been duly authorized, executed and delivered
by the Seller and the Servicer.
(xiv) The statements in the Prospectus under the captions "Certain
Legal Aspects of the Receivables," to the extent they constitute matters of
law or legal conclusions, have been reviewed by such counsel and are
correct in all material respects.
(xv) The Pooling and Servicing Agreement is not required to be
qualified under the Trust Indenture Act of 1939, as amended, and the Trust
is not required to be registered as an "investment company" under the
Investment Company Act of 1940, as amended.
(xvi) The Class A Certificates, the Pooling and Servicing Agreement,
the Receivables Purchase Agreement and this Agreement each conform in all
material respects with the descriptions thereof contained in the
Registration Statement and the Prospectus.
(xvii) The Trust created by the Pooling and Servicing Agreement will
not be classified as an association (or publically traded partnership)
taxable as a corporation for federal income tax purposes and, instead,
under subpart E, part I, of subchapter J of the Internal Revenue Code of
1986, as amended, the Trust will be treated as a grantor trust and, subject
to possible recharacterization of certain fees paid by the Trust, each
Class A Certificateholder will be treated as the owner of an undivided
interest in the income and corpus attributable to the Trust.
(xviii) The Trust will not be classified as a separate entity subject
to California or New York income, franchise or other taxes measured by
income, profits, capital, or receipts.
(xix) Class A Certificateholders who would not otherwise be subject to
tax imposed by California or New York will not be subject to California or
New York income or franchise taxes with respect to interest or other
amounts (including payments from the Yield Supplement Account) which are
allocable to such Class A Certificateholders solely as a result of such
Class A Certificateholders' beneficial ownership of a Class A Certificate.
(xx) The statements in the Registration Statement and Prospectus under
the heading "ERISA Considerations" and "Federal Income Tax Consequences,"
to the extent that they constitute matters of law or legal conclusions with
respect thereto, have been prepared or reviewed by such counsel and are
correct in all material respects.
Such opinion may be made subject to the qualifications that the
enforceability of the terms of the Pooling and Servicing Agreement and the
Receivables Purchase
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Agreement may be subject to or limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws relating to or affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(f) Brown & Wood LLP shall have furnished their written opinion, dated the
Closing Date, with respect to the characterization as a sale of the transfer of
the Receivables by the Servicer to the Seller and from the Seller to the Trust
and such opinion shall be in substantially the form previously discussed with
the Representative and its counsel and in any event satisfactory in form and in
substance to the Representative and its counsel.
(g) You shall have received an opinion of Skadden, Arps, Slate, Meagher &
Flom LLP, dated the Closing Date, with respect to the validity of the Class A
Certificates and such other related matters as the Representative shall require
and the Seller shall have furnished or caused to be furnished to such counsel
such documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.
(h) You shall have received an opinion addressed to you, the Seller and
the Servicer of Pryor, Cashman, Sherman & Flynn, counsel to the Trustee, dated
the Closing Date and satisfactory in form and substance to the Representative
and its counsel, to the effect that:
(i) The Trustee has been duly incorporated and is validly existing as
a corporation in good standing under the laws of the State of New York with
full corporate trust power and authority to enter into and perform its
obligations under the Pooling and Servicing Agreement.
(ii) The Pooling and Servicing Agreement has been duly authorized,
executed and delivered by the Trustee, and assuming authorization,
execution and delivery thereof by the Seller and the Servicer, the Pooling
and Servicing Agreement constitutes a legal, valid and binding obligation
of the Trustee, enforceable against the Trustee in accordance with its
terms, except (1) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights, and (2) the remedy of
specific performance and injunctive and other forms of equitable relief may
be subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(iii) The execution and delivery by the Trustee of the Pooling and
Servicing Agreement and the performance by the Trustee of its duties
thereunder do not conflict with or result in a violation of (a) any law or
regulation of the United States of America or the State of New York, (b)
the charter or by-laws of the Trustee, (c) any order, writ, judgment or
decree or (d) any agreement, instrument, order, writ judgment or decree
known to such counsel to which the Trustee is a party or is subject.
12
(iv) The Class A Certificates have been duly executed, authenticated
and delivered by the Trustee.
(v) No consent, approval or authorization of, or registration,
declaration or filing with, any court or governmental agency or body of the
United States of America or the State of New York having jurisdiction over
the trust powers of the Trustee is required for the consummation on the
part of the Trustee of any of the transactions contemplated in the Pooling
and Servicing Agreement, except such as have been obtained.
(vi) If the Trustee were acting as Servicer under the Pooling and
Servicing Agreement at the date of this Agreement, the Trustee would have
the power and authority to perform the obligations of the Servicer as
provided in the Pooling and Servicing Agreement.
(i) Sheppard, Mullin, Richter & Hampton shall have furnished to the
Representative their written opinion, dated the Closing Date, to the effect that
the blank forms of contracts reviewed by such counsel comply, or complied when
in use, in all respects with all applicable disclosure requirements under the
Federal Consumer Credit Protection Act, 15 U.S.C. Sections 1601 ET SEQ., and
Regulation Z issued pursuant thereto, as interpreted in the Official Staff
Commentary, and applicable California disclosure laws.
(j) The Representative shall have received an officer's certificate dated
the Closing Date of the Chairman of the Board, the President or any Vice
President and by a principal financial or accounting officer of each of the
Seller and the Servicer in which each such officer shall state that, to the best
of such officer's knowledge after reasonable investigation, the representations
and warranties of the Seller or the Servicer, as applicable, contained in the
Pooling and Servicing Agreement and the representations and warranties of the
Seller or the Servicer, as applicable, contained in the Receivables Purchase
Agreement are true and correct in all material respects and that the Seller or
the Servicer, 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 in all material respects.
(k) The Representative shall have received a letter or letters from each
counsel delivering any written opinion to any Rating Agency in connection with
the transaction described herein which is not otherwise described in this
Agreement allowing the Underwriters to rely on such opinion as if it were
addressed to the Underwriters.
(l) The Class A Certificates shall have been rated in the highest rating
category by Moody's and Standard & Poor's.
(m) The Seller 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.
13
7. INDEMNIFICATION AND CONTRIBUTION.(a) The Seller and the Servicer
will, jointly and severally, indemnify and hold each Underwriter harmless
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 in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, or any related preliminary 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 Seller nor the
Servicer 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 Seller 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.
(b) Each Underwriter, severally and not jointly, will indemnify and hold
harmless the Seller and the Servicer against any losses, claims, damages or
liabilities to which the Seller or the Servicer 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 in the Registration
Statement, the Prospectus or any amendment or supplement thereto, or any related
preliminary prospectus, 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 Seller by such Underwriter
through the Representative specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Seller or the Servicer in
connection with investigating or defending any such action or claim as such
expenses are incurred; it being understood and agreed that the only such
information furnished by any Underwriters consists of the following information
in the Prospectus furnished on behalf of the Underwriters: the last paragraph at
the bottom of the cover page concerning the terms of the offering by the
Underwriters, the legend concerning stabilizing on inside front cover page and
the third paragraph appearing under the caption "Underwriting".
(c) Promptly after receipt by an indemnified party under this Section of
written 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
14
party otherwise than under such subsection. 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
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 and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on 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 Seller on the one hand and the Underwriters on the other from the offering
of the Class A Certificates or (ii) if the allocation provided by the
immediately preceding clause (i) is not permitted by applicable law, then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only such
relative benefits referred to in clause (i) above but also the relative fault of
the Seller on the one hand and the Underwriters on the other in connection with
the statement or omission which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The
relative benefits received by the Seller 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 Seller 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
Seller or by 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).
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.
15
(e) The obligations of the Seller and the Servicer under this Section
shall be in addition to any liability which the Seller or the Servicer 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 Seller or
the Servicer, to each officer of the Seller who has signed the Registration
Statement and to each person, if any, who controls the Seller or the Servicer
within the meaning of the Act.
8. SURVIVAL OF CERTAIN REPRESENTATIONS AND OBLIGATIONS. The respective
indemnities, agreements, representations, warranties and other statements of the
Seller or the Servicer or any of their officers and of the 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, the Seller or the Servicer or any of
their respective representatives, officers or directors or any controlling
person, and will survive delivery of and payment for the Class A Certificates.
If this Agreement is terminated pursuant to Section 9 or if for any reason the
purchase of the Class A Certificates by the Underwriters is not consummated, the
Seller shall remain responsible for the expenses to be paid or reimbursed by it
pursuant to Section 5 hereof and the respective obligations of the Seller, the
Servicer and the Underwriters pursuant to Section 7 hereof shall remain in
effect. If the purchase of the Class A Certificates 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 (iii), (iv) or (v) of Section 6(d) hereof, the Seller and the Servicer
will reimburse the Underwriters for all out-of-pocket expenses (including the
reasonable fees and disbursements of counsel) reasonably incurred by them in
connection with the offering of the Class A Certificates.
9. FAILURE TO PURCHASE THE CLASS A CERTIFICATES. If any Underwriter or
Underwriters default on its obligations to purchase Class A Certificates
hereunder on the Closing Date and the aggregate principal amount of Certificates
that such defaulting Underwriter or Underwriters agreed but failed to purchase
does not exceed 10% of the total principal amount of Certificate that the
Underwriters are obligated to purchase on such Closing Date, the Representative
may make arrangements satisfactory to the Seller for the purchase of such
Certificates 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 Certificates 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 Certificates with respect to which
such default or defaults exceeds 10% of the total principal amount of
Certificates that the Underwriters are obligated to purchase on such Closing
Date and arrangements satisfactory to the Representative and the Seller for the
purchase of such Certificates 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 Seller, except as provided in Section
8. As used in this Agreement, the term "Underwriter" includes
16
any person substituted for an Underwriter under this Section. Nothing herein
will relieve a defaulting Underwriter or Underwriters from liability for its
default.
10. NOTICES. All communications hereunder will be in writing and, if sent
to the Representative or the Underwriters, will be mailed, delivered or sent by
facsimile transmission and confirmed to Merrill Lynch & Co., Merrill Lynch,
Pierce, Fenner & Smith Incorporated, World Financial Center, North Tower - 15th
Floor, New York, New York 10281-1315, Attention: Asset Backed Securities Group
(facsimile number (212) 449-9015); if sent to the Seller, will be mailed,
delivered or sent by facsimile transmission and confirmed to it at American
Honda Receivables Corp., 700 Van Ness Avenue, Torrance, California 90501,
attention of John I. Weisickle (facsimile number (310) 787-3910); and if sent to
the Servicer, will be mailed, delivered or sent by facsimile transmission and
confirmed to it at American Honda Finance Corporation, 700 Van Ness Avenue,
Torrance, California 90501, attention of John I. Weisickle (facsimile number
(310) 787-3910).
11. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the Underwriters, the Seller and the Servicer 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 obligations hereunder.
12. REPRESENTATIONS OF UNDERWRITERS. The Representative will act for the
several Underwriters in connection with the transactions described in this
Agreement, and any action taken by the Representative under this Agreement will
be binding upon all the Underwriters.
13. APPLICABLE LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York. The Seller and the Servicer
each submit to the non-exclusive 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.
14. COUNTERPARTS. This agreement may be executed by each of the parties
hereto in any number of counterparts, and by each of the parties hereto on
separate counterparts, each of which counterparts, when so executed and
delivered, shall be deemed to be an original, but all such counterparts shall
together constitute but one and the same instrument.
17
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us a counterpart hereof, whereupon it will become a
binding agreement among the Seller, the Servicer and the several Underwriters in
accordance with its terms.
Very truly yours,
AMERICAN HONDA RECEIVABLES CORP.,
By:
------------------------------------
Name: Y. Kohama
Title: President
AMERICAN HONDA FINANCE CORPORATION
By:
---------------------------------------
Name: Y. Kohama
Title: President
Accepted in New York, New York,
as of the date hereof:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:
-----------------------------------
Name:
Title:
Acting on behalf of itself and
as the Representative of the
several Underwriters.
SCHEDULE I
Principal Amount
of Class A
Underwriter Certificates
- ----------- -----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated . . . . . . . . . . . . . . . . . . _____________
Credit Suisse First Boston Corporation . . . . . . . . . . . _____________
J.P. Morgan & Co . . . . . . . . . . . . . . . . . . . . . . _____________
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $
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