1
Exhibit 1.1
EXECUTION COPY
AFG RECEIVABLES TRUST 1997-A
$73,703,000 CLASS A 6.35% ASSET BACKED NOTES
$18,701,000 CLASS B 6.65% ASSET BACKED NOTES
$11,000,000 CLASS C 7.20% ASSET BACKED NOTES
AUTOFINANCE GROUP, INC.
(Subservicer)
KEY CONSUMER ACCEPTANCE CORPORATION
(Seller)
KEY BANK USA, NATIONAL ASSOCIATION
(Servicer)
UNDERWRITING AGREEMENT
June 13, 1997
CREDIT SUISSE FIRST
BOSTON CORPORATION,
As Representative of the
Underwriters Listed in
Schedule I
(the "Representative")
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Ladies and Gentlemen:
Key Consumer Acceptance Corporation, a Delaware corporation (the
"SELLER") and a wholly owned limited-purpose subsidiary of KeyCorp, an Ohio
corporation ("KEYCORP"), proposes to sell to the Underwriters listed in Schedule
I hereto (the "Underwriters") $73,703,000 aggregate principal amount of Class A
6.35% Asset Backed Notes (the "CLASS A NOTES"), $18,701,000 aggregate principal
amount of Class B 6.65% Asset Backed Notes (the "CLASS B NOTES") and $11,000,000
aggregate principal amount of Class C 7.20% Asset Backed Notes (the "CLASS C
NOTES," and, together with the Class A Notes and the Class B Notes, the "NOTES")
as set forth in Schedule I hereof. The Notes are issued by the AFG Receivables
Trust 1997-A (the
UNDERWRITING AGREEMENT
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"TRUST"). The Trust also will issue $6,601,944.94 aggregate principal amount of
certificates (the "CERTIFICATES" and, together with the Notes, the
"SECURITIES"). Each Certificate will represent a fractional undivided interest
in the Trust. Each Note will be secured by the assets of the Trust pursuant to
the Indenture (as hereinafter defined).
The assets of the Trust include, among other things, a pool of retail
installment sale contracts secured by new and used automobiles and light trucks
(the "RECEIVABLES") and certain monies received under the Receivables after May
31, 1997 (the "CUTOFF DATE"), such Receivables to be serviced for the Trust by
Key Bank USA, National Association (the "BANK") in its capacity as servicer (in
such capacity, the "SERVICER").
The Receivables will be sold to the Seller by AutoFinance Group, Inc.,
an Ohio corporation ("AFG" or the "ORIGINATOR") pursuant to a Purchase
Agreement, dated as of the Closing Date (the "PURCHASE AGREEMENT") between the
Seller and AFG. The Receivables will be conveyed by the Seller to the Trust
pursuant to a Sale and Servicing Agreement dated as of the Closing Date (the
"SALE AND SERVICING AGREEMENT") among the Seller, the Servicer and Bankers Trust
Company, as indenture trustee (the "INDENTURE TRUSTEE").
The Notes will be issued pursuant to an Indenture to be dated as of the
Closing Date (the "INDENTURE"), between the Trust and the Indenture Trustee. The
Servicer will agree to perform certain administrative tasks pursuant to an
Administration Agreement to be dated as of the Closing Date (the "ADMINISTRATION
AGREEMENT"). The Certificates will be issued pursuant to a Trust Agreement to be
dated as of the Closing Date (the "TRUST AGREEMENT") between Seller and Chase
Manhattan Bank Delaware, as owner trustee (the "TRUSTEE").
The Seller has prepared in conformity in all material respects with the
provisions of the Securities Act of 1933, as amended (the "ACT"), and the rules
and regulations of the Commission thereunder (the "RULES AND REGULATIONS"), and
filed with the Securities and Exchange Commission (the "COMMISSION") a
registration statement (Reg. No. 333-12431), including a prospectus, relating to
the Securities. The registration statement as amended at the time it became
effective, or, if any post-effective amendment has been filed with respect
thereto, as amended by the most recent post-effective amendment at the time of
its effectiveness, is referred to as the "REGISTRATION STATEMENT;" the form of
base prospectus included in the Registration Statement as most recently filed
with the Commission is referred to as the "BASE PROSPECTUS" and the form of the
prospectus which includes the Base Prospectus and a prospectus supplement
describing the Notes and the offering thereof (the "PROSPECTUS SUPPLEMENT"),
which prospectus is first filed on or after the date of this Agreement in
accordance with Rule 424(b) is referred to in this Agreement as the
"PROSPECTUS".
The terms which follow, when used in this Agreement, shall have the
meanings indicated. "EFFECTIVE DATE" shall mean the latest of the dates that the
Registration Statement or the most recent post-effective amendment thereto
became effective. "EXECUTION TIME" shall mean the date and time that this
Agreement is executed and delivered by the parties hereto. "RULE 424" refers to
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such rule under the Act. "BASIC DOCUMENTS" shall mean the Purchase Agreement,
the Sale and Servicing Agreement, the Indenture, the Trust Agreement, the
Administration Agreement, this Agreement, the Securities and the Note Depository
Agreement. "PARTICIPATING ENTITY" means each of AFG, the Servicer and the
Seller. "SECURITYHOLDER" means any Noteholder and any Certificateholder and
"SECURITY OWNER" means the beneficial owner of any Note or Certificate. To the
extent not defined herein, capitalized terms used herein have the meanings
assigned to such terms in APPENDIX X to the Sale and Servicing Agreement.
The Participating Entities agree (severally and not jointly, except as
otherwise expressly provided herein) with the Underwriters as follows:
1. The Seller agrees to sell and deliver to the Underwriters as
hereinafter provided, and each Underwriter, upon the basis of the
representations and warranties herein contained, but subject to the conditions
hereinafter stated, agrees to purchase, severally (and not jointly), from the
Seller, the respective aggregate principal amounts and classes of Notes set
forth opposite such Underwriter's name in Schedule I hereto. The purchase price
for Notes of any class will be the applicable percentage set forth on SCHEDULE I
hereto of the aggregate principal amount of such class purchased.
2. The Seller understands that the Underwriters intend (i) to make a
public offering of the Notes purchased by the Underwriters hereunder as soon
after this Agreement has become effective as in the judgment of the Seller and
the Representative is advisable and (ii) initially to offer the Notes purchased
by the Underwriters hereunder upon the terms set forth in the Prospectus.
3. Payment for the Notes purchased by the Underwriters hereunder shall
be made to the Seller or to its order by wire transfer of same day funds at the
office of Xxxxx Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000
at 10:00 A.M., Chicago, Illinois time on June 20, 1997, or at such other time on
the same or such other date, not later than the fifth Business Day thereafter,
as the Representative and the Seller may agree upon in writing (the "CLOSING
DATE"). As used herein, the term "BUSINESS DAY" means any day other than a day
on which banks generally are permitted or required to be closed in New York, New
York, Chicago, Illinois or Cleveland, Ohio.
Payment for the Notes purchased by the Underwriters hereunder shall be
made against delivery to the Representative for the respective accounts of the
Underwriters on the Closing Date of such Notes in definitive form registered in
the name of Cede & Co. as nominee of The Depository Trust Company and in such
denominations, as permitted by the Basic Documents, as the Representative shall
request in writing not later than a reasonable time prior to the Closing Date,
with any transfer taxes payable in connection with the transfer to the
Underwriters of the Notes duly paid by the Seller. The Seller shall make such
definitive certificates representing the Notes available for inspection by the
Representative at the office of Xxxxx, Brown & Xxxxx, 190
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South LaSalle Street, Chicago, Illinois 60603 not later than 1:00 P.M., Chicago,
Illinois time, on the Business Day prior to the Closing Date.
4. Each Participating Entity represents and warrants (severally and
not jointly) to and agrees with each Underwriter that:
(a) The Registration Statement, including amendments thereto
as may have been required on or prior to the date hereof, relating to
the Notes, has been filed with the Commission and such Registration
Statement as amended has become effective. The conditions to the use by
the Seller of a 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 Registration Statement and the Prospectus.
(b) 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 such Participating
Entity, threatened by the Commission, and (i) on the Effective Date of
the Registration Statement, the Registration Statement conformed in all
material respects to the requirements of the Act and 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, in light of the
circumstances under which they were made, not misleading, (ii) on the
date of this Agreement, the Prospectus conforms in all material
respects to the requirements of the Act and the Rules and Regulations,
and does 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, in light of the circumstances under which
they were made, not misleading, and (iii) at the time of filing of the
Prospectus pursuant to Rule 424(b) and on the Closing Date the
Registration Statement and the Prospectus will conform in all material
respects to the requirements of the Act and the Rules and Regulations,
and neither of such documents will 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, in light of the
circumstances under which they were made, 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 furnished to the Participating Entities in writing by any
Underwriter through the Representative expressly for use in the
Registration Statement or the Prospectus (collectively, "UNDERWRITER
INFORMATION"). Each Participating Entity hereby agrees with the
Underwriters that, for all purposes of this Agreement, the only
Underwriter Information furnished consists of (1) the statements with
respect to the terms of the offering on the cover page of the
Prospectus Supplement in the penultimate paragraph, (2) the capitalized
paragraph with respect to stabilizing transactions in secondary markets
in the Notes on page S-2 of the Prospectus Supplement, and (3) the
statements in the third paragraph and the portion of the first sentence
in the fourth paragraph following the comma, under the caption
"Underwriting" in the Prospectus Supplement.
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(c) The computer tapes with respect to the Receivables to be
sold to the Trust created as of the Cutoff Date (the "COMPUTER TAPES"),
and made available to the Representative by AFG, were complete and
accurate in all material respects as of the date thereof.
(d) Such Participating Entity is either a corporation or
national bank that is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization, with power
and authority to own its properties and conduct its business as now
conducted by it and had at all relevant times, and has, full power,
authority and legal right to acquire, own and sell the Receivables and
the other Trust Property. Such Participating Entity has the power,
authority and legal right to execute, deliver and perform this
Agreement and each of the other Basic Documents to which it is a party
and to carry out their respective terms and to sell and assign the
respective property to be sold and assigned to and deposited with the
Trustee as Trust Property.
(e) The Securities have been duly authorized, and, when issued
and delivered pursuant to the Basic Documents and duly executed and
authenticated by the Trustee and the Indenture Trustee, as applicable,
will be duly and validly issued, authenticated and delivered and
entitled to the benefits provided by the Basic Documents. The
execution, delivery and performance by such Participating Entity of
each of the Basic Documents to which it is a party and the consummation
of the transactions contemplated hereby and thereby have been duly
authorized by such Participating Entity by all necessary corporate
action. The Basic Documents to which such Participating Entity is a
Party have been duly executed and delivered by such Participating
Entity and, when executed and delivered by such Participating Entity
and the other parties thereto, each of such Basic Documents will
constitute a legal, valid and binding obligation of such Participating
Entity, enforceable against such Participating Entity in accordance
with its respective terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, moratorium, conservatorship,
receivership, liquidation and other similar laws affecting enforcement
of the rights of creditors generally and to equitable limitations on
the availability of specific remedies. The Securities and the Basic
Documents conform to the descriptions thereof in the Prospectus in all
material respects. The Notes and the Indenture have been duly executed
and delivered by the Trust and, when the Indenture is executed and the
Notes are authenticated by the Indenture Trustee, the Indenture and the
Notes will constitute legal, valid and binding obligations of the
Trust, enforceable in accordance with their respective terms, subject,
as to enforceability, to applicable bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership, liquidation
and other similar laws affecting enforcement of the rights of creditors
generally and to equitable limitations on the availability of specific
remedies.
(f) No consent, approval, authorization, license or other
order or action of, or filing or registration with, any court or
governmental authority, bureau or agency is required in connection with
the execution, delivery or performance by such Participating
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Entity of any of the Basic Documents to which it is a party or the
consummation of the transactions contemplated hereby or thereby except
such as have been obtained and made under the Act and the Rules and
Regulations or state securities laws and any filings of UCC financing
statements.
(g) Such Participating Entity is not in violation of its
articles or certificate of incorporation, articles of association, code
of regulations or bylaws or in default in the performance or observance
of any material obligation, agreement, covenant or condition contained
in any agreement or instrument to which it is a party or by which it is
bound which violation or default would have a material adverse effect
on the transactions contemplated herein or in the Basic Documents. The
execution, delivery and performance by such Participating Entity of the
Basic Documents to which it is a party, the consummation of the
transactions contemplated hereby and thereby and the compliance with
the terms and provisions hereof and thereof will not materially
conflict with or result in a material breach or violation of any of the
terms and provisions of, constitute (with or without notice or lapse of
time or both) a material default under or result in the creation or
imposition of any Lien (other than as contemplated by the Basic
Documents) upon any of its properties pursuant to the terms of, (A) the
articles or certificate of incorporation, articles of association, code
of regulations or bylaws of such Participating Entity, (B) any material
indenture, contract, lease, mortgage, deed of trust or other instrument
or agreement to which such Participating Entity is a party or by which
such Participating Entity is bound, which violation or default would
have a material adverse effect on the transactions contemplated herein
or in the Basic Documents or (C) any law, order, rule or regulation
applicable to such Participating Entity of any regulatory body, any
court, administrative agency or other governmental instrumentality
having jurisdiction over such Participating Entity.
(h) There are no proceedings or investigations pending, or, to
the knowledge of such Participating Entity threatened, to which such
Participating Entity is a party before any court, regulatory body,
administrative agency or other tribunal or governmental instrumentality
(i) that are required to be disclosed in the Registration Statement or
the Prospectus and are not so disclosed, (ii) asserting the invalidity
of this Agreement or any of the Basic Documents, (iii) seeking to
prevent the issuance of the Securities or the consummation of any of
the transactions contemplated by this Agreement or any of the Basic
Documents, (iv) seeking any determination or ruling that might
materially and adversely affect the performance by such Participating
Entity of its obligations under, or the validity or enforceability of,
this Agreement or any of the Basic Documents, (v) that may materially
and adversely affect the federal or state income, excise, franchise or
similar tax attributes of any of the Securities, or (vi) which, if
determined adversely, could individually or in the aggregate reasonably
be expected to materially adversely affect the interests of the holders
of any of the Securities or the marketability of any of the Securities.
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(i) There are no contracts or other documents of a character
required to be filed as an exhibit to the Registration Statement or
required to be described in the Registration Statement or the
Prospectus pursuant to the Act and the Rules and Regulations which are
not filed or described as required.
(j) The representations and warranties of such Participating
Entity contained in the Basic Documents to which it is a party are true
and correct as of the dates of the respective Basic Documents in all
material respects.
(k) By assignment and delivery of each of the Receivables of
the Originator to the Seller as of the Closing Date, the Originator
will transfer title in such Receivables to the Seller, subject to no
Lien prior or equal to the ownership interest granted to the Seller. By
assignment and delivery of each of the Receivables to the Trust as of
the Closing Date, the Seller will transfer title in such Receivables to
the Trust, subject to no Lien prior or equal to the ownership or
security interest granted to the Trust.
(l) Ernst & Xxxxx are independent public accountants with
respect to the Participating Entities within the meaning of the Act and
the Rules and Regulations.
5. Each Participating Entity covenants and agrees (severally and not
jointly) with the Underwriters that:
(a) Prior to the termination of the offering of the Notes, the
Seller will not file or cause to be filed any amendment of the
Registration Statement or supplement to the Prospectus without first
furnishing to the Representative a copy of the proposed amendment or
supplement and giving the Representative a reasonable opportunity to
review the same. Subject to the foregoing sentence, the Seller will
cause the Prospectus, properly completed, and any supplement thereto,
to be filed with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed and will provide evidence
satisfactory to the Representative of such timely filing. The Seller
will promptly advise the Representative (i) when the Prospectus, and
any supplement thereto, shall have been filed with the Commission
pursuant to Rule 424(b), (ii) when any amendment to the Registration
Statement shall have become effective, (iii) of any request by the
Commission for any amendment of the Registration Statement or
supplement to the Prospectus or for any additional information, (iv) of
the receipt by the Seller of notification with respect to 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 (v) of the receipt by the Seller of
notification with respect to the suspension of the qualification of the
Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose. Such Participating
Entity will use its reasonable efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof. The receipt by the Representative of
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any amendment or supplement to the Registration Statement or
Prospectus, as applicable, shall not be deemed a waiver of any
condition set forth in SECTION 7 hereof.
(b) The Seller will deliver, at its expense, to the
Representative two signed copies of the Registration Statement (as
originally filed) and each amendment thereto, in each case including
exhibits, and, during the period mentioned in paragraph (e) below, to
each Underwriter as many copies of the Prospectus (including all
amendments and supplements thereto) as the Representative may
reasonably request. The Seller will furnish or cause to be furnished to
the Representative copies of all reports on Form SR required by Rule
463 under the Act.
(c) If during such period of time after the first date of the
public offering of the Notes as in the opinion of counsel for the
Representative a prospectus relating to the Notes is required by law to
be delivered in connection with sales by an Underwriter or a dealer,
any event shall occur as a result of which it is necessary to amend or
supplement the Prospectus in order to make the statements therein, in
the light of the circumstances when the Prospectus is delivered to a
purchaser, not materially misleading, or it is necessary to amend or
supplement the Prospectus to comply with applicable law, the Seller
will forthwith prepare and furnish, at the expense of the Seller, to
the Representative and to the dealers (whose names and addresses the
Representative will furnish to the Seller) to which Notes may have been
sold by the Representative on behalf of the Underwriters and upon
request by the Representative to any other dealers identified by the
Representative, such amendments or supplements to the Prospectus as may
be necessary so that the statements in the Prospectus as so amended or
supplemented will not, in the light of the circumstances when the
Prospectus is delivered to a purchaser, be materially misleading or so
that the Prospectus will comply with applicable law. Neither your
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 7.
(d) The Seller will endeavor to qualify the Notes for offer
and sale under the securities or Blue Sky laws of such jurisdictions as
the Representative shall reasonably request and will continue such
qualification in effect so long as reasonably required for distribution
of the Notes and will pay all reasonable fees and expenses (including
fees and disbursements of counsel to the Representative to the extent
provided in SECTION 6(iii) hereof) incurred in connection with such
qualification and in connection with the determination of the
eligibility of the Notes for investment under the laws of such
jurisdictions as the Representative may designate; PROVIDED, HOWEVER,
that the Seller shall not be obligated to qualify to do business in any
jurisdiction in which it is not currently so qualified; and PROVIDED
FURTHER that the Seller shall not be required to file a general consent
to service of process in any jurisdiction.
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(e) The Seller will cause the Trust to make generally
available to Securityholders and to the Representative all financial
information required to be sent to Securityholders pursuant to the
Basic Documents.
(f) For the period from the date of this Agreement until the
retirement of all of the Securities the Servicer will furnish to the
Representative (i) copies of each Servicer's Certificate and the annual
statements of compliance delivered to the Trustee or Indenture Trustee
pursuant to the Basic Documents and the annual independent certified
public accountant's servicing reports furnished to the Trustee or
Indenture Trustee pursuant to the Basic Documents, by first-class mail
at the same time such statements and reports are furnished to the
Trustee or Indenture Trustee, (ii) copies of each amendment to any of
the Basic Documents, (iii) copies of all other reports and
communications to any Securityholders or Security Owners, or to or from
the Trustee, Indenture Trustee, the Clearing Agency, any Rating Agency
or the Commission relating to the Trust or the Securities, (iv) copies
of each Opinion of Counsel and Officer's Certificate delivered pursuant
to the Basic Documents, as soon as available, and (v) from time to
time, such other information concerning the Trust or the Participating
Entities as the Representative may reasonably request.
(g) If required, the Seller will register the Notes pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), prior to April 30, 1998.
(h) To the extent, if any, that the ratings provided with
respect to the Notes by the Rating Agencies are conditional upon the
furnishing of documents or the taking of any other action by any
Participating Entity, such Participating Entity shall furnish or cause
to be furnished such documents and use reasonable efforts to take any
such other action.
6. The Participating Entities will pay all costs and expenses incident
to the performance of their respective obligations under this Agreement,
including, without limiting the generality of the foregoing, all costs and
expenses (i) incident to the preparation, issuance, execution, authentication
and delivery of the Notes, (ii) incident to the preparation, printing (or
otherwise reproducing), filing and delivery under the Act of the Registration
Statement, the Prospectus and any preliminary prospectus (including in each case
all exhibits, amendments and supplements thereto), (iii) incurred in connection
with the registration or qualification and determination of eligibility for
investment of the Notes under the laws of such jurisdictions as the
Representative may designate (including fees and disbursements of counsel for
the Underwriters with respect thereto, other than a portion of such fees and
disbursements to be agreed between Seller and the Representative), (iv) related
to any filing with the National Association of Securities Dealers, Inc., (v) in
connection with the printing (including word processing and duplication costs)
and delivery of this Agreement, the Basic Documents and any Blue Sky Memorandum
and the furnishing to the Underwriters and dealers of copies of the Registration
Statement, any preliminary prospectus and the Prospectus (including exhibits,
amendments and supplements thereto) as herein provided, (vi) the fees and
disbursements of the counsel of the Participating Entities and accountants and
all
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fees and disbursements of Underwriters' counsel other than a portion of such
fees and disbursements to be agreed between Seller and the Representative, (vii)
any fees and expenses payable to the Clearing Agency, (viii) any fees and
expenses payable to the Rating Agencies in connection with the rating of the
Notes and (ix) any fees and expenses of the Trustee and the Indenture Trustee.
7. The obligations of the Underwriters to purchase and pay for the
Notes will be subject to the accuracy in all material respects, as of the date
hereof and the Closing Date, of the representations and warranties on the part
of the Participating Entities herein, to the accuracy of the statements of
officers of the Participating Entities made in any writing delivered on the
Closing Date pursuant to the provisions hereof, to the performance by each of
the Participating Entities of its obligations hereunder and to the following
additional conditions precedent:
(a) At each of the time this Agreement is executed and
delivered by the Participating Entities and at the Closing Date, Xxxxx
& Xxxxx 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 and otherwise in form and substance
satisfactory to the Representative and Ernst & Xxxxx.
(b) The form of prospectus used to confirm sales of Notes
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; 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
Participating Entities, contemplated 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
reasonable satisfaction of the Representative.
(c) The Representative shall have received officer's
certificates, dated the Closing Date, signed by any Vice President or
more senior officer of each Participating Entity, representing and
warranting that, as of the Closing Date, the representations and
warranties of such Participating Entity in this Agreement and the Basic
Documents are true and correct, that such Participating Entity has
complied with all agreements and satisfied all conditions on its part
to be performed or satisfied hereunder or under the Basic Documents 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
such officer's knowledge, contemplated by the Commission, and that
since December 31, 1996, there has been no material adverse change, or
any development involving a material adverse change, in or affecting
particularly the Originator's portfolio of Motor Vehicle Loans or the
business or properties of the Trust, any Participating Entity or
KeyCorp which materially impairs the investment quality of the Notes.
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(d) Subsequent to the execution and delivery of this
Agreement, there shall not have occurred (i) any material adverse
change, or any development involving a material adverse change, in or
affecting the business, operations, financial condition or properties
of the Trust, any Participating Entity or KeyCorp which, in the
reasonable judgment of the Representative, materially impairs the
investment quality of the Notes or makes it impractical or inadvisable
to proceed with completion of the sale of and payment for the Notes,
(ii) any downgrading in the rating of any debt securities of KeyCorp or
any Participating Entity 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 no implication of a possible downgrading, of
such rating).
(e) Xxxxxxx X. Xxxxxxx, Esq., General Counsel of the Bank,
shall have furnished to the Representative his written opinion, dated
the Closing Date, in form and substance satisfactory to the
Representative, to the effect that:
(i) Each Participating Entity has been duly organized
and is validly existing and in good standing under the laws of
its jurisdiction of organization. Each Participating Entity
has corporate power and authority (a) to own its properties
and conduct its business as now conducted by it; (b) to own,
sell, assign and, in the case of the Servicer and AFG, service
the Receivables and the other Trust Property; (c) in the case
of the Seller, to establish the Trust and sell the Notes as
contemplated by this Agreement and the Basic Documents; and
(d) to execute and deliver this Agreement and the Basic
Documents to which it is a party and to carry out their
respective terms.
(ii) The execution, delivery, and performance of each
of this Agreement and the Basic Documents and the consummation
of the transactions contemplated hereby and thereby have been
duly authorized by each Participating Entity that is a party
thereto by all necessary corporate action. This Agreement and
the Basic Documents have been duly executed and delivered by,
and each constitutes a legal, valid and binding obligation of
each Participating Entity that is a party thereto enforceable
against such Participating Entity in accordance with its
respective terms, subject to the General Qualifications (as
defined in SCHEDULE II).
(iii) The execution, delivery and performance by each
Participating Entity of this Agreement and the Basic Documents
to which it is a party, the consummation of the transactions
contemplated hereby and thereby and the compliance with the
terms and provisions hereof and thereof will not materially
conflict with or result in a material breach of any of the
terms or provisions of, or constitute (with or without notice
or lapse of time or both) a material default under or result
in the creation or imposition of any Lien (other than as
contemplated by the Basic
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Documents) upon any of its properties pursuant to the terms
of, (A) the certificate of incorporation, articles of
association or bylaws of such Participating Entity, (B) to the
actual knowledge of such counsel, any material indenture,
contract, lease, mortgage, deed of trust or other instrument
or agreement to which such Participating Entity is a party or
by which such Participating Entity is bound, which breach or
default would reasonably be expected to have a material
adverse impact on such Participating Entity or the
transactions contemplated by the Basic Documents, (C) any
Court Order (as defined in Schedule II) actually known to me,
or (D) applicable provisions of statutory law or regulations.
(iv) No consent, approval, authorization, license or other
order or action of, or filing or registration with, any court
or governmental authority, bureau or agency is required in
connection with the execution, delivery or performance by any
Participating Entity of this Agreement and the Basic Documents
to which it is a party, or the consummation of the
transactions contemplated hereby or thereby, except as may be
required under the Act and the Rules and Regulations and state
securities laws and any filings of UCC financing statements.
(v) The Seller has duly authorized, executed and delivered
the written order to each of the Trustee and Indenture Trustee
to execute and authenticate the applicable Securities. When
the Receivables have been transferred to the Trust, the Basic
Documents have been executed, the Securities have been
authenticated by the Trustee and Indenture Trustee, as
applicable in accordance with the Basic Documents, the
Certificates have been issued to the Seller and the Notes have
been delivered and paid for pursuant to this Agreement, the
Securities will be validly issued and outstanding and entitled
to the benefits provided by the Basic Documents, subject to
the General Qualifications, and the Indenture and the Notes
will constitute legal, valid and binding obligations of the
Trust, enforceable in accordance with their respective terms,
subject, as to enforceability, to the General Qualifications.
(vi) There are no proceedings or investigations pending
or, to my actual knowledge, threatened to which any
Participating Entity is a party before any court, regulatory
body, administrative agency or other tribunal or governmental
instrumentality having jurisdiction over any Participating
Entity, (A) that are required to be disclosed in the
Registration Statement or the Prospectus, other than those
disclosed therein, (B) asserting the invalidity of this
Agreement or any of the Basic Documents, (C) seeking to
prevent the issuance of the Securities or the consummation of
any of the transactions contemplated by this Agreement or any
of the Basic Documents, (D) seeking any determination or
ruling that could materially and adversely affect the
performance of any Participating Entity's obligations under,
or the validity or enforceability of, this Agreement or any of
the Basic Documents to which it is a party, (E) that may
affect materially and
-12- UNDERWRITING AGREEMENT
13
adversely the federal or state income, excise, franchise or
similar tax attributes of any of the Securities, or (F) that
would reasonably be expected to materially adversely affect
the interests of the holders of any of the Securities.
(vii) Such counsel is generally familiar with the standard
operating procedures relating to the Originator's acquisition
of a perfected security interest in the vehicles financed by
the Originator pursuant to retail installment sale contracts
in the ordinary course of the Originator's business. Assuming
that the Originator's standard procedures are followed with
respect to the perfection of security interests in the
Financed Vehicles, the Originator has acquired or will
acquire a perfected security interest in the Financed
Vehicles.
(viii) To such counsel's actual knowledge, there are
no contracts or other documents to which a Participating
Entity is a party of a character required to be filed as an
exhibit to the Registration Statement or required to be
described in the Registration Statement or the Prospectus
which are not filed or described as required.
Such opinion may be made subject to (i) the qualifications
that the enforceability of the terms of the Basic Documents may be
subject to the General Qualifications and (ii) the assumptions and
limitations set forth in SCHEDULE III.
(f) Xxxxxxxx Xxxx & Xxxxx LLP, special counsel to the
Participating Entities, shall have furnished to the Representative its
written opinion, dated the Closing Date, in form and substance
satisfactory to the Representative, to the effect that:
(i) The Receivables are "CHATTEL PAPER" as defined in the
UCC.
(ii) All filings necessary under applicable law to perfect
(A) the transfer of the Receivables by the Originator to the
Seller, (B) the transfer of the Receivables by the Seller to
the Trust and (C) the security interest granted by the Trust
in the Receivables to the Indenture Trustee, have been made
and, provided that the Participating Entities and the Trust do
not relocate their respective principal places of business and
that the Trustee maintains the list of Receivables for
inspection by interested parties, no other filings (other than
the filing of continuation statements) need be made to
maintain such perfection, and the interest of the Seller, the
Trust and the Indenture Trustee, respectively, will constitute
a perfected security or ownership interest prior to any other
security or ownership interest that may be perfected by the
filing of a financing statement under the UCC. No consent,
approval, authorization, license or other order or action of,
or filing or registration with, any court or governmental
authority, bureau or agency is required (including filings of
UCC financing statements) under the Act, the Rules and
Regulations or the UCC in connection with the execution,
delivery or performance by any
-13- UNDERWRITING AGREEMENT
14
Participating Entity of this Agreement and the Basic Documents
to which it is a party, or the consummation of the
transactions contemplated hereby or thereby, except such as
have been obtained or made.
(iii) The statements in the Registration Statement and the
Prospectus under the headings "Description of the Notes,"
"Description of the Certificates," "Certain Information
Regarding the Securities" and "Description of the Transfer and
Servicing Agreements," to the extent they purport to summarize
the provisions of the Basic Documents, constitute a fair
summary of such documents. The statements in the Registration
Statement and the Prospectus under the headings "Summary of
Terms - Tax Status," "Summary of Terms - ERISA
Considerations," "Federal Income Tax Consequences," "State
Tax Consequences" and "ERISA Considerations" accurately
describe the material Federal income tax, Ohio corporation
franchise tax and ERISA consequences to Noteholders and Note
Owners and, to the extent they constitute descriptions of
matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and are
correct in all material respects.
(iv) Except as described in the Prospectus, the Trust will
not be subject to income or franchise taxation in Ohio and the
Trust will not be subject to the Ohio dealer intangibles tax.
(v) Noteholders who are not residents of, or domiciled in,
or otherwise subject to taxation in Ohio will not be subject
to Ohio income or Ohio franchise taxation in such state solely
by reason of being Noteholders.
(vi) The Trust will not be classified as an association
taxable as a corporation, and the Notes will be characterized
as debt for federal and Ohio income and franchise tax
purposes.
(vii) The Trust Agreement is not required to be qualified
and the Indenture has been duly 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.
(viii) The Registration Statement has become effective
under the Act and no stop order suspending the effectiveness
of the Registration Statement has been issued and no
proceeding for that purpose has been initiated or, to the best
of such counsel's knowledge, threatened by the Commission. The
Registration Statement and the Prospectus (other than the
accounting, financial and statistical data contained in the
Registration Statement or the Prospectus, or omitted
therefrom, as to which such counsel need express no opinion)
comply as to form in all material respects with the
requirements of the Act and the Rules and Regulations.
-14- UNDERWRITING AGREEMENT
15
(ix) The Securities and the Basic Documents each conforms
in all material respects with the descriptions thereof
contained in the Registration Statement and the Prospectus.
(x) Nothing has come to such counsel's attention that
would cause it to believe that as of the date of the
Prospectus and at the Closing Date (x) the Registration
Statement, the Prospectus and any amendments and supplements
thereto (other than the financial statements and other
accounting, statistical and financial information contained
therein or omitted therefrom, as to which such counsel need
express no belief) contained or contain any untrue statement
of a material fact or omitted or omit to state any material
fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under
which they were made, not misleading and (y) the descriptions
therein of laws, rules, regulations, governmental proceedings,
legal matters, contracts and documents are not accurate in all
material respects or do not fairly present the information
required to be shown therein.
Such opinion may be made subject to the qualifications that
the enforceability of the terms of the Basic Documents may be subject
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting enforcement of the rights of creditors of national banks
generally and to equitable limitations on the availability of specific
remedies.
(g) (i) Xxxxxxxx Xxxx & Xxxxx LLP, special counsel to the
Participating Entities, shall have furnished its written opinion, dated
the Closing Date, with respect to (A) nonconsolidation under the
Bankruptcy Code of the assets and liabilities of the Seller on the one
hand, and those of either KeyCorp, AFG or any other Affiliate subject
to the Bankruptcy Code on the other, in the event KeyCorp, AFG or any
such Affiliate were to become subject of a case under the Bankruptcy
Code and (B) the characterization of the transfer of the Receivables
from the Originator to the Seller and from the Seller to the Trust and
perfection of the Trust's and the Indenture Trustee's interest in the
Receivables. (ii) Xxxxxx & Xxxxxxx, special counsel to the
Participating Entities, shall have furnished its written opinion, dated
the Closing Date, to the effect that the Trust and the Indenture
Trustee will have a first priority perfected security interest in the
Financed Vehicles located in the State of North Carolina. Each of such
opinions shall be in substantially the forms previously agreed with the
Representative and its counsel and in any event satisfactory in form
and in substance to the Representative and its counsel.
(h) The Representative shall have received an opinion of
Xxxxx, Xxxxx & Xxxxx, counsel to the Underwriters dated the Closing
Date, with respect to the validity of the Securities and such other
related matters as the Representative shall require and the
Participating Entities shall have furnished or caused to be furnished
to such counsel such
-15- UNDERWRITING AGREEMENT
16
documents as they may reasonably request for the purpose of enabling
them to pass upon such matters.
(i) The Representative shall have received an opinion
addressed to the Underwriters of 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 organized and is
validly existing and in good standing under the laws of its
jurisdiction of organization. The Trustee has full power,
authority and legal right to execute, deliver and perform the
Basic Documents to which it is a party and to carry out their
respective terms.
(ii) The execution, delivery and performance by the
Trustee of each of the Basic Documents to which the Trustee or
the Trust is a party and the consummation of the transactions
contemplated thereby, have been duly authorized by the Trustee
by all necessary action. The Basic Documents to which the
Trustee is a party have been duly executed and delivered by
the Trustee, and, when executed and delivered by the other
parties thereto, such Basic Documents will constitute legal,
valid and binding obligations of the Trustee enforceable
against the Trustee in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws affecting enforcement of
the rights of creditors generally and to equitable limitations
on the availability of specific remedies. The Basic Documents
to which the Trust is a party have been duly executed and
delivered by the Trust, and when executed and delivered by the
other parties thereto, such Basic Documents will constitute
legal, valid and binding obligations of the Trust enforceable
against the Trust in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws affecting enforcement of
the rights of creditors generally and to equitable limitations
on the availability of specific remedies.
(iii) No consent, approval, authorization, license or
other order or action of, or filing or registration with, any
court or governmental authority, bureau or agency is required
in connection with the execution, delivery or performance by
the Trustee or the Trust of the Basic Documents to which it is
a party or the consummation of the transactions contemplated
thereby except such as have been obtained and made under the
Act and the Rules and Regulations or state securities laws and
the filing of any UCC financing statements required to perfect
the Trust's interest in the Receivables.
(iv) The execution, delivery and performance by the
Trustee of the Basic Documents to which it is a party, the
consummation of the transactions
-16- UNDERWRITING AGREEMENT
17
contemplated thereby and the compliance with the terms and
provisions thereof will not conflict with or result in a
breach or violation of any of the terms and provisions of,
constitute (with or without notice or lapse of time or both) a
default under or result in the creation or imposition of any
Lien upon any of its properties pursuant to the terms of, (A)
the articles of association or bylaws of the Trustee, (B) any
indenture, contract, lease, mortgage, deed of trust or other
instrument or agreement to which the Trustee is a party or by
which the Trustee is bound or any of its properties are
subject, or (C) any law, order, rule or regulation applicable
to the Trustee or its properties, of any regulatory body, any
court, administrative agency or other governmental
instrumentality having jurisdiction over the Trustee or any of
its properties.
(v) The Certificates have been duly executed,
authenticated and delivered by the Trustee.
(vi) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge,
threatened against the Trustee before any court, or by or
before any federal, state, municipal or other governmental
department, commission, board, bureau or governmental agency
or instrumentality, or arbitrator which would, if adversely
determined, affect in any material respect the consummation,
validity or enforceability against the Trustee of any of the
Basic Documents.
(vii) The Trust has been duly formed and is validly
existing as a statutory business trust under the laws of the
State of Delaware, with full power and authority to execute,
deliver and perform its obligations under the Basic Documents
to which it is a party.
(j) The Representative shall have received from counsel for the
Indenture Trustee a favorable opinion, dated the Closing Date and
satisfactory in form and substance to the Representative and its
counsel to the effect that:
(i) The Indenture Trustee is duly organized, validly
existing and in good standing under the laws of its
jurisdiction of organization. The Indenture Trustee has full
power, authority and legal right to execute, deliver and
perform the Basic Documents to which it is a party and carry
out their respective terms.
(ii) The execution, delivery and performance by the
Indenture Trustee of the Basic Documents to which it is a
party and the consummation of the transactions contemplated
thereby have been duly authorized by the Indenture Trustee by
all necessary action. The Basic Documents to which it is a
party have been duly executed and delivered by the Indenture
Trustee, and when executed and delivered by the other parties
thereto, will constitute legal, valid and binding
-17- UNDERWRITING AGREEMENT
18
obligations of the Indenture Trustee, enforceable against the
Indenture Trustee in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership,
liquidation or other similar laws affecting the enforcement of
rights of creditors generally and to equitable limitations on
the availability of specific remedies.
(iii) The Notes have been duly authenticated and
delivered by the Indenture Trustee.
(iv) No consent, approval, authorization, license or
other order or action of, or filing or registration with, any
court or governmental authority, bureau or agency is required
in connection with the execution, delivery or performance of
the Basic Documents to which it is a party by the Indenture
Trustee or the consummation of the transactions contemplated
thereby.
(v) The execution, delivery and performance of the
Basic Documents to which it is a party by the Indenture
Trustee, the consummation of the transactions contemplated
thereby and compliance with the terms and provisions thereof
will not conflict with or result in a breach or violation of
any of the terms and provisions of, constitute (with or
without notice or lapse of time or both) a default under or
result in the creation or imposition of any Lien upon any of
its properties pursuant to the terms of, (A) the charter,
articles of association or bylaws of the Indenture Trustee,
(B) any indenture, contract, lease, mortgage, deed of trust or
other instrument or agreement to which the Indenture Trustee
is a party or by which the Indenture Trustee is bound or any
of its properties are subject, or (C) any law, order, rule or
regulation applicable to the Indenture Trustee or its
properties, of any regulatory body, any court, administrative
agency or other governmental instrumentality having
jurisdiction over the Indenture Trustee or any of its
properties.
(vi) There are no actions, suits or proceedings
pending or, to the best of such counsel's knowledge,
threatened against the Indenture Trustee before any court, or
by or before any federal, state, municipal or other
governmental department, commission, board, bureau or
governmental agency or instrumentality, or arbitrator which
would, if adversely determined, affect in any material respect
the consummation, validity or enforceability against the
Indenture Trustee of the Indenture.
(vii) If the Indenture Trustee were acting as
Servicer under the Basic Documents as of the date of this
Agreement, the Indenture Trustee would have the corporate
power and authority to perform the obligations of the
Servicer as provided in the Basic Documents.
-18- UNDERWRITING AGREEMENT
19
(k) If any Rating Agency shall have requested any legal
opinion, officer's certificate or other document not required by this
Agreement, the Representative also shall have received such legal
opinion, officer's certificate or other document together with a letter
from the party delivering such opinion, certificate or document
allowing the Underwriters to rely on such opinion, certificate or
document as if it were addressed to the Underwriters.
(l) The Class A Notes shall have been rated in the highest
rating category by at least two of the Rating Agencies, the Class B
Notes shall have been rated in at least the third highest rating
category by at least two of the Rating Agencies, and the Class C
Notes shall have been rated in at least the fourth highest rating
category by at least two of the Rating Agencies.
(m) On the Closing Date, the representations and warranties of
the Participating Entities in the Basic Documents will be true and
correct in all material respects.
(n) Any taxes, fees and other governmental charges which are
due and payable in connection with the execution, delivery and
performance of this Agreement and the Basic Documents shall have been
paid by the Seller at or prior to the Closing Date.
(o) The Seller shall have made or caused to be made a deposit
in the Reserve Account in the amount of the Reserve Account Initial
Deposit.
(p) The Representative shall have received evidence
satisfactory to it that, on or before the Closing Date, UCC-1 financing
statements have been filed in the offices of the Secretaries of State
of Ohio, Illinois and Delaware and Cuyahoga County, Ohio reflecting the
interest of each of the Seller, the Trust and the Indenture Trustee in
the Receivables, the other Trust Property and the proceeds thereof.
8. Each Participating Entity jointly and severally (except as
otherwise set forth at the conclusion of this paragraph) agrees to
indemnify and hold harmless each Underwriter and each person, if any,
who controls any Underwriter within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act, from and against any and all
losses, claims, damages and liabilities (including, without limitation,
the legal fees and other expenses reasonably incurred in connection
with investigating, preparing or defending any suit, action or
proceeding or any claim asserted), incurred by such Underwriter or such
controlling person and caused by any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement or
the Prospectus (as amended or supplemented if the Seller shall have
furnished such amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which
-19- UNDERWRITING AGREEMENT
20
they were made, not misleading, except insofar as such losses, claims,
damages or liabilities are caused by any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in
conformity with the Underwriter Information; PROVIDED that the
foregoing indemnity with respect to any untrue statement or omission in
any preliminary prospectus shall not inure to the benefit of any
Underwriter (or to the benefit of any person controlling such
Underwriter) from whom the person asserting any losses, claims or
damages purchased Securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary
prospectus is eliminated or remedied in the Prospectus (as amended or
supplemented if the Seller shall have furnished any amendments or
supplements thereto) and a copy of the Prospectus (as so amended or
supplemented) shall not have been furnished to such person at or prior
to the written confirmation of the sale of such Securities to such
person to the extent required by law, and, PROVIDED FURTHER, that to
the extent that any such losses, claims, damages or liabilities
incurred by such Underwriter or such controlling person shall have been
caused by such an untrue statement or alleged untrue statement (i)
relating to Receivables originated by AFG in its capacity as the
Originator or as to any such Receivables assigned and sold by AFG to
the Seller, (ii) with respect to AFG as the Subservicer of such
Receivables or relating to any such Receivables subserviced by AFG, or
(iii) with respect to AFG as the purchaser of any such Receivables from
the Seller or the Trust upon a breach of a representation, warranty or
covenant or as to any Receivables so purchased, in each case as
provided by the applicable Basic Documents, then and in each such event
AFG and the Seller shall be solely and severally liable to such
Underwriter and such controlling persons for all such losses, claims,
damages and liabilities incurred by each of them in accordance with the
terms and provisions of this SECTION 8, and the Bank shall not have any
liability whatsoever to such Underwriter or such controlling person for
or to the extent of any such losses, claims, damages or liabilities.
Each Underwriter agrees, severally and not jointly, to indemnify and
hold harmless the Participating Entities, each director and officer of the
Participating Entities and each person who controls any Participating Entity
within the meaning of Section 15 of the Act or Section 20 of the Exchange Act to
the same extent as the foregoing indemnity from the Participating Entities to
each Underwriter, but only with reference to Underwriter Information delivered
by such Underwriter.
If any suit, action, proceeding (including any governmental or
regulatory investigation), claim or demand shall be brought or asserted against
any person in respect of which indemnity may be sought pursuant to either of the
two preceding paragraphs, such person (the "INDEMNIFIED PERSON") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PERSON") in writing, and the Indemnifying Person shall retain counsel reasonably
satisfactory to the Indemnified Person to represent the Indemnified Person and
any others the Indemnifying Person may designate in such proceeding and shall
pay the reasonable fees and expenses of such counsel related to such proceeding;
PROVIDED that the failure of the Indemnified Person to give notice shall not
relieve the Indemnifying Person of its obligations under this
-20- UNDERWRITING AGREEMENT
21
SECTION 8 except to the extent (if any) that the Indemnifying Person shall have
been prejudiced thereby. In any such proceeding, any Indemnified Person shall
have the right to retain its own counsel, but the fees and expenses of such
counsel shall be at the expense of such Indemnified Person unless (i) the
Indemnifying Person and the Indemnified Person shall have mutually agreed to the
contrary, (ii) the Indemnifying Person has failed within a reasonable time to
retain counsel reasonably satisfactory to the Indemnified Person or (iii) the
named parties in any such proceeding (including any impleaded parties) include
both the Indemnifying Person and the Indemnified Person and representation of
both parties by the same counsel would be inappropriate due to actual or
potential differing interests between them. It is understood that the
Indemnifying Person shall not, in connection with any proceeding or related
proceeding in the same jurisdiction, be liable for the fees and expenses of more
than one separate firm (in addition to any local counsel) for all Indemnified
Persons, and that all such fees and expenses shall be reimbursed as they are
incurred promptly following submission of a documented request for such
reimbursement. Any such separate firm for the Underwriters and such control
persons of the Underwriters shall be designated in writing by the Representative
and any such separate firm for the Participating Entities, their directors,
officers and control persons shall be designated in writing by the Seller. The
Indemnifying Person shall not be liable for any settlement of any claim or
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the Indemnifying
Person agrees to indemnify any Indemnified Person from and against any loss or
liability by reason of such settlement or judgment. Notwithstanding the
foregoing sentence, if at any time an Indemnified Person shall have made two
requests of an Indemnifying Person to reimburse the Indemnified Person for fees
and expenses of counsel as contemplated by the third sentence of this paragraph,
the Indemnifying Person agrees that it shall be liable for any settlement of any
proceeding effected without its written consent if (i) such settlement is
entered into more than 30 days after receipt by such Indemnifying Person of the
second aforesaid request and (ii) such Indemnifying Person shall not have
reimbursed the Indemnified Person in accordance with such requests prior to the
date of such settlement. No Indemnifying Person shall, without the prior written
consent of the Indemnified Person, effect any settlement of any pending or
threatened proceeding in respect of which any Indemnified Person is or could
have been a party and indemnity could have been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are the subject matter
of such proceeding.
If the indemnification provided for in the first and second paragraphs
of this SECTION 8 is determined by a court to be unavailable to an Indemnified
Person in respect of any losses, claims, damages or liabilities referred to
therein, then each Indemnifying Person under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall contribute to the amount
paid or payable by such Indemnified Person as a result of such losses, claims,
damages or liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received by the Participating Entities on the one hand and the
Underwriters on the other hand from the offering of the Securities 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 Participating
Entities on the one hand and the Underwriters on the other in connection with
the statements or omissions that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Participating Entities on the one hand and the
Underwriters
-21- UNDERWRITING AGREEMENT
22
on the other shall be deemed to be in the same respective proportions as the net
proceeds from the offering (before deducting expenses) received by the
Participating Entities and the total underwriting discounts and the commissions
received by the Underwriters, bear to the aggregate public offering price of the
Securities. The relative fault of the Participating Entities on the one hand and
the Underwriters on the other 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 Participating Entities or by any of the Underwriters and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Participating Entities and the Underwriters agree that it would not
be just and equitable if contribution pursuant to this SECTION 8 were determined
by PRO RATA allocation or by any other method of allocation that does not take
account of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an Indemnified Person as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraph shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses incurred by such Indemnified Person in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this SECTION 8, in no event shall an
Underwriter 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 that
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 to contribute
pursuant to this Section 8 are several in proportion to the respective aggregate
principal amount of Notes set forth opposite their names in Schedule I hereto,
and not joint.
The indemnity and contribution agreements contained in this SECTION 8
are in addition to any liability which the Indemnifying Persons may otherwise
have to the Indemnified Persons referred to above.
The indemnity and contribution agreements contained in this SECTION 8
and the representations and warranties of the Participating Entities set forth
in this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of any Underwriter or any person controlling any Underwriter or by or on
behalf of any Participating Entity or any of their officers or directors or any
other person controlling any Participating Entity and (iii) acceptance of and
payment for any of the Securities.
-22- UNDERWRITING AGREEMENT
23
9. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Representative, by notice given to
the Seller, if after the execution and delivery of this Agreement and prior to
the Closing Date (i) trading generally shall have been suspended or materially
limited on or by, as the case may be, the New York Stock Exchange or the
American Stock Exchange, or there shall have been any setting of minimum prices
for trading on either such exchange; (ii) trading of any securities of or
guaranteed by KeyCorp or any Participating Entity shall have been suspended on
any exchange or in any over-the-counter market; (iii) a moratorium on commercial
banking activities in New York or Ohio shall have been declared by either
federal, New York or Ohio authorities; or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis that, in the judgment of the Representative is material and
adverse and which, in the judgment of the Representative, makes it impracticable
to market the Notes on the terms and in the manner contemplated in the
Prospectus.
10. This Agreement shall become effective upon the later of (x)
execution and delivery hereof by the parties hereto and (y) release of
notification of the effectiveness of the Registration Statement (or, if
applicable, any post-effective amendment) by the Commission.
11. If on the Closing Date (i) any Underwriter shall fail or refuse to
purchase any Notes which it has agreed to purchase hereunder on such date, (ii)
such failure or refusal shall constitute a default in the performance of such
Underwriter's obligations hereunder, and (iii) the aggregate principal amount of
Notes which such defaulting Underwriter agreed but failed or refused to purchase
is not more than one-tenth of the aggregate principal amount of the Notes to be
purchased by the Underwriters on such date, the other Underwriters shall be
obligated to purchase Notes which such defaulting Underwriter agreed but failed
or refused to purchase on such date. If on the Closing Date (i) any Underwriter
shall fail or refuse to purchase Notes which it has agreed to purchase hereunder
on such date, (ii) such failure or refusal shall constitute a default in the
performance of such Underwriter's obligations hereunder, (iii) the aggregate
principal amount of Notes with respect to which such default occurs is more than
one-tenth of the aggregate principal amount of Notes to be purchased by the
Underwriters on such date, and (iv) arrangements satisfactory to the
non-defaulting Underwriters and the Seller for the purchase of such Notes are
not made within 36 hours after such default, this Agreement shall terminate
without liability on the part of any non-defaulting Underwriter or any
Participating Entity. In any such case either the Representative or the Seller
shall have the right to postpone the Closing Date, but in no event for longer
than seven business days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. Any action taken under this paragraph shall not
relieve any defaulting Underwriter from liability in respect of any default of
such Underwriter under this Agreement.
12. If this Agreement shall be terminated by the Underwriters, or any
one of them, because of any failure or refusal on the part of any Participating
Entity to comply with the terms or to fulfill any of the conditions of this
Agreement, or if for any reason any Participating Entity shall be unable to
perform its obligations under this Agreement or any condition of the
-23- UNDERWRITING AGREEMENT
24
Underwriter's obligations cannot be fulfilled, the Participating Entities agree
to reimburse the Underwriters, severally, or such Underwriter which has so
terminated this Agreement with respect to itself, for all out-of-pocket expenses
(including the fees and expenses of their counsel) reasonably incurred by such
Underwriter(s) in connection with this Agreement or the offering contemplated
thereunder.
13. Any action by the Underwriters hereunder may be taken by the
Representative alone on behalf of the Underwriters, and any such action taken by
the Representative alone shall be binding upon the Underwriters. All notices and
other communications hereunder shall be in writing and shall be deemed to have
been duly given if mailed, delivered by hand or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be given to the
Representative, c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (Facsimile No: (000) 000-0000), Attention:
Investment Banking-- Transactions Advisory Group. Notices to the Participating
Entities shall be given to them at Key Tower, 000 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxxx
00000 (Facsimile No.: (000) 000-0000), Attention: Xxxxx X. Xxxxx.
14. This Agreement shall inure to the benefit of and be binding upon
the Participating Entities, the Underwriters, any controlling persons referred
to herein and their respective successors and assigns. Nothing expressed or
mentioned in this Agreement is intended or shall be construed to give any other
person, firm or corporation any legal or equitable right, remedy or claim under
or in respect of this Agreement or any provision herein contained. No purchaser
of Notes from any Underwriter shall be deemed to be a successor by reason merely
of such purchase.
15. This Agreement may be signed in counterparts, each of which shall
be an original and all of which together shall constitute one and the same
instrument. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAWS PROVISIONS THEREOF.
[SIGNATURE PAGES FOLLOW]
-24- UNDERWRITING AGREEMENT
25
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to us the enclosed duplicate hereof, whereupon
it will become a binding agreement among the Participating Entities and the
Underwriters in accordance with its terms.
Very truly yours,
KEY CONSUMER ACCEPTANCE CORPORATION
By: /S/ XXXXX X. XXXXX
---------------------------------
Name: Xxxxx X. Xxxxx
Title: President and Chief Executive Officer
S-1 UNDERWRITING AGREEMENT
26
KEY BANK USA, NATIONAL ASSOCIATION
By: /s/ XXXXX X. XXXXX
--------------------------------
Name: Xxxxx X. Xxxxx
Title: Senior Vice President
S-2 UNDERWRITING AGREEMENT
27
AUTOFINANCE GROUP, INC.
By: /s/ XXXXX X. XXXXX
----------------------------
Name: Xxxxx X. Xxxxx
Title: Chief Financial Officer
S-3 UNDERWRITING AGREEMENT
28
The foregoing Underwriting
Agreement is hereby confirmed
and accepted as of the
date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION, As Representative
of the Underwriters
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
S-4 UNDERWRITING AGREEMENT
29
SCHEDULE I
Initial Initial Initial
Principal Amount Principal Amount Principal Amount
of Class A of Class B of Class C
Asset-Backed Asset-Backed Asset-Backed
Notes Notes Notes Total
------- ------- ------- ------
Credit Suisse First $36,852,000 $9,351,000 $5,500,000 $51,703,000
Boston Corporation
Key Capital Markets, $36,851,000 $9,350,000 $5,500,000 $51,703,000
Inc.
Total: $73,703,000 $18,701,000 $11,000,000 $103,404,000
Purchase Price: 99.5843750% 99.4531250% 99.2031250% $102,907,744
I-1 UNDERWRITING AGREEMENT
30
SCHEDULE II
CERTAIN DEFINED TERMS
---------------------
A. GENERAL QUALIFICATIONS. As used in the Opinion Letter, the term
"GENERAL QUALIFICATIONS" shall mean and include, without limitation:
(1) the effect of bankruptcy, insolvency, reorganization,
receivership, moratorium, and similar laws affecting the
rights and remedies of creditors generally, including, without
limitation, (a) the Federal Bankruptcy Code; (b) all other
Federal and state bankruptcy, insolvency, reorganization,
receivership, moratorium, arrangement, and assignment for the
benefit of creditors laws that affect the rights and remedies
of creditors generally or that have reference to or affect
generally only creditors of specific types of debtors, and
state laws of like character affecting generally only
creditors of financial institutions; (c) state fraudulent
transfer and conveyance laws; (d) judicially developed
doctrines relevant to any of the foregoing laws, such as
substantive consolidation of entities;
(2) the effect of general principles of equity, whether applied by
a court of law or equity, including, without limitation,
principles: (a) governing the availability of specific
performance, injunctive relief, or other equitable remedies,
including those principles which may place the award of such
remedies, subject to certain guidelines, in the discretion of
the court to which application for such relief is made; (b)
affording equitable defenses against a party seeking
enforcement; (c) requiring good faith and fair dealing in the
performance and enforcement of a contract by the party seeking
its enforcement; (d) requiring reasonableness in the
performance and enforcement of an agreement by the party
seeking enforcement of the contract; (e) requiring
consideration of the materiality of a breach and the
consequences of the breach to the party seeking enforcement;
(f) requiring consideration of the impracticability or
impossibility of performance at the time of attempted
enforcement; (g) affording defenses based upon the
unconscionability of the enforcing party's conduct after the
parties have entered into the contract; and
(3) the effect of other generally applicable rules of law that:
(a) limit or affect the enforcement of provisions of a
contract that purport to require waiver of the obligations of
good faith, fair dealing, diligence and reasonableness; (b)
provide that forum selection clauses in contracts are not
necessarily binding on the court(s) in the forum selected; (c)
limit the availability of a remedy under certain circumstances
where another remedy has been elected; (d) limit the right of
a creditor to use force or cause a breach of the peace in
enforcing rights; (e) relate to the sale or disposition of
collateral or the requirements of a commercially reasonable
sale; (f) limit the enforceability of provisions releasing,
exculpating or
II-1 UNDERWRITING AGREEMENT
31
exempting a party from, or requiring indemnification of a
party for, liability for its own action or inaction, to the
extent the action or inaction involves gross negligence,
recklessness, willful misconduct or unlawful conduct; (g) may,
where less than all of a contract may be unenforceable, limit
the enforceability of the balance of the contract to
circumstances in which the unenforceable portion is not an
essential part of the agreed exchange; (h) govern and afford
judicial discretion regarding the determination of damages and
entitlement to attorneys' fees and other costs; (i) may, in
the absence of a waiver or consent, discharge a guarantor to
the extent that (1) action by a creditor impairs the value of
collateral securing guaranteed debt to the detriment of the
guarantor, or (2) guaranteed debt is materially modified; (j)
may permit a party who has materially failed to render or
offer performance required by the contract to cure that
failure unless (1) permitting a cure would unreasonably hinder
the aggrieved party from making substitute arrangements for
performance, or (2) it was important in the circumstances to
the aggrieved party that performance occur by the date stated
in the contract.
B. ACTUAL KNOWLEDGE. The phrases "ACTUALLY KNOWN TO ME," "MY ACTUAL
KNOWLEDGE" or similar phrases shall mean the conscious awareness of
facts or other information by me or by any lawyer in the KeyCorp Law
Group in Cleveland, Ohio.
C. COURT ORDERS. The term "COURT ORDERS" shall mean judicial
administrative orders, writs, judgments, and decrees that name the any
Participating Entity, are specifically directed to a Participating
Entity or its respective property, and are issued by a court of
competent jurisdiction.
II-2 UNDERWRITING AGREEMENT
32
SCHEDULE III
ASSUMPTIONS AND QUALIFICATIONS
------------------------------
For purposes of this opinion, I have assumed that (i) with respect to
the opinions expressed in paragraphs (ii) and (iii), AFG holds the requisite
title and rights to the Receivables, (ii) the Underwriting Agreements and the
Basic Documents have been duly executed and delivered by all parties thereto
(other than the Participating Entities) and are valid and binding upon and
enforceable against such parties, subject to the General Qualifications, (iii)
there has been no mutual mistake of fact or misunderstanding, fraud, duress, or
undue influence, (iv) all statutes, judicial and administrative decisions, and
rules and regulations constituting Federal law and the laws of the State of Ohio
are generally available to lawyers practicing in the State of Ohio and are in a
format that make legal research reasonably feasible, and (v) Court Orders and
agreements to which any Participating is a party or by which it or its
properties are bound would be enforced as written.
The opinions expressed herein are limited to matters of Federal law and
the laws of the State of Ohio, without giving effect to principles of conflicts
of laws. This Opinion Letter addresses only the specific legal issues addressed
herein and does not, by implication or otherwise, address any other legal
issues, including without limitation: federal securities (except as to paragraph
(viii) of this Opinion Letter) and tax laws; state securities, "blue-sky", or
tax laws; the characterization of the transfer of the Receivables by AFG to
Seller or by Seller to the Trust as a sale of such Receivables or a transfer of
a security interest therein, or the form, sufficiency or other legal
requirements for such sale or transfer of a security interest (including the
attachment and perfection thereof); laws, rules, and regulations of
municipalities or other political subdivisions of the State of Ohio; and federal
and state laws (such as ERISA and RICO) that in my reasonable judgment do not
relate to the opinions expressed herein.
III-1 UNDERWRITING AGREEMENT
