<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) October 31, 1997
FORD CREDIT AUTO OWNER TRUST Series 1997-B
(Ford Credit Auto Receivables Two L.P. - Originator)
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-1245 38-3295857
- -------- --------- ----------
(State or other juris- (Commission File Number) (IRS Employer
diction of incorporation I.D. No.)
The American Road, Dearborn, Michigan 48121
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code 313-322-3000
<PAGE> 2
Item 5. Other Events
In connection with the registration under the Securities Act of 1933,
as amended, by Ford Credit Auto Receivables Two L.P. ("FCARTLP") of
$5,000,000,000 aggregate principal amount of Asset Backed Securities and the
issuance by Ford Credit Auto Owner Trust 1997-B (the "Trust") of
$1,700,006,978.96 aggregate principal amount of such Asset Backed Securities
designated as $490,000,000 Class A-1 5.748% Asset Backed Notes, $388,000,000
Class A-2 5.95% Asset Backed Notes, $514,000,000 Class A-3 6.05% Asset Backed
Notes, $189,004,978.96 Class A-4 6.15% Asset Backed Notes, $93,501,000 Class B
6.40% Asset Backed Notes and $25,501,000 6.65% Asset Backed Certificates
pursuant to the Prospectus dated October 24, 1997 and the Prospectus Supplement
dated October 24, 1997 filed with the Securities and Exchange Commission
pursuant to its Rule 424(b)(2), FCARTLP is filing as exhibits to this Current
Report on Form 8-K, (i) a conformed copy of Indenture dated as of October 1,
1997 between the Trust and The Chase Manhattan Bank ("Indenture Trustee"), (ii)
a conformed copy of the Amended and Restated Trust Agreement dated as of
October 1, 1997 between FCARTLP and PNC Bank, Delaware, (iii) a conformed copy
of Purchase Agreement dated as of October 1, 1997 between Ford Motor Credit
Company ("Ford Credit") and FCARTLP, (iv) opinion of Skadden, Arps, Slate,
Meagher & Flom LLP with respect to certain federal income tax matters, (v)
opinion of J. D. Bringard, General Counsel of Ford Credit, relating to certain
Michigan tax matters, (vi) a conformed copy of the Sale and Servicing Agreement
dated as of October 1, 1997 among FCARTLP, Ford Credit and the Trust, (vii) a
conformed copy of Administration Agreement dated as of October 1, 1997 among
the Trust, Ford Credit, as administrator, and the Indenture Trustee and (viii)
the Appendix A - Defined Terms. Such exhibits are incorporated herein by
reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
EXHIBITS
<TABLE>
<CAPTION>
Designation Description Method of
Filing
- ----------- ------------ ----------------
<S> <C> <C>
Exhibit 4.1 Conformed copy of the Indenture Filed with
dated as of October 1, 1997 between this Report.
the Trust and Indenture Trustee.
Exhibit 4.2 Conformed copy of the Amended and Filed with
Restated Trust Agreement dated as this Report.
of October 1, 1997 between FCARTLP
and PNC Bank, Delaware.
Exhibit 8.1 Opinion of Skadden, Arps, Slate, Filed with
Meagher & Flom LLP with respect to this Report.
certain federal income tax matters.
</TABLE>
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<TABLE>
<CAPTION>
Designation Description Method of
Filing
- ----------- ------------ --------------
<S> <C> <C>
Exhibit 8.2 Opinion of J. D. Bringard, General Filed with
Counsel of Ford Credit relating to this Report.
certain Michigan tax matters.
Exhibit 23.1 Consent of Skadden, Arps, Slate,
Meagher & Flom LLP (included as part
of Exhibit 8.1).
Exhibit 23.2 Consent of J.D. Bringard, General
Counsel of Ford Credit (included
as part of Exhibit 8.2).
Exhibit 99.1 Conformed copy of the Sale and Filed with
Servicing Agreement dated as of this Report.
October 1, 1997 among FCARTLP,
Ford Credit and the Trust.
Exhibit 99.2 Conformed copy of the Administration Filed with
Agreement dated as of October 1, 1997 this Report.
among Ford Credit, as administrator,
the Indenture Trustee and the Trust.
Exhibit 99.3 Conformed copy of the Purchase Filed with
Agreement dated as of October 1, 1997 this Report.
between Ford Credit and FCARTLP.
Exhibit 99.4 Appendix A - Defined Terms. Filed with
this Report.
</TABLE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized on the date indicated.
Ford Credit Auto Receivables Two L.P.
(Registrant)
By: Ford Credit Auto Receivables
Two, Inc., General Partner
Date: November 4, 1997 By:/s/R. P. Conrad
----------------------------------------
Assistant Secretary
<PAGE> 4
EXHIBIT INDEX
<TABLE>
<CAPTION>
Designation Description
- ----------- -----------
<S> <C>
Exhibit 4.1 Conformed copy of the Indenture
dated as of October 1, 1997 between
the Trust and Indenture Trustee.
Exhibit 4.2 Conformed copy of the Amended and
Restated Trust Agreement dated as of
October 1, 1997 between FCARTLP and PNC
Bank, Delaware.
Exhibit 8.1 Opinion of Skadden, Arps, Slate,
Meagher & Flom LLP with respect to
certain federal income tax matters.
Exhibit 8.2 Opinion of J. D. Bringard, General
Counsel of Ford Credit, relating to
certain Michigan tax matters.
Exhibit 23.1 Consent of Skadden, Arps, Slate,
Meagher & Flom LLP (included as part
of Exhibit 8.1).
Exhibit 23.2 Consent of J.D. Bringard, General
Counsel of Ford Credit (included
as part of Exhibit 8.2).
Exhibit 99.1 Conformed copy of the Sale and Servicing
Agreement dated as of October 1, 1997
among FCARTLP, Ford Credit and the
Trust.
Exhibit 99.2 Conformed copy of the Administration
Agreement dated as of October 1, 1997
among Ford Credit, as administrator,
the Indenture Trustee and the Trust.
Exhibit 99.3 Conformed copy of the Purchase Agreement
dated as of October 1, 1997 between
Ford Credit and FCARTLP.
Exhibit 99.4 Appendix A - Defined Terms.
</TABLE>
<PAGE> 1
EXHIBIT 4.1
=========================================================================
INDENTURE
between
FORD CREDIT AUTO OWNER TRUST 1997-B,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of October 1, 1997
=========================================================================
<PAGE> 2
CROSS REFERENCE TABLE(1)
TIA Indenture
Section Section
---------- ---------
310 (a)(1)...................................... 6.11
(a)(2)...................................... 6.11
(a)(3)...................................... 6.10
(a)(4)...................................... N.A.(2)
(a)(5)...................................... 6.11
(b) ...................................... 6.8;6.11
(c) ...................................... N.A.
311 (a) ...................................... 6.12
(b) ...................................... 6.12
(c) ...................................... N.A.
312 (a) ...................................... 7.1
(b) ...................................... 7.2
(c) ...................................... 7.2
(d) ...................................... 7.4
313 (a) 7.4
(b)(1) ..................................... 7.4
(b)(2) ..................................... 11.5
(c) ..................................... 7.4
(d) ..................................... 7.3
314 (a) ..................................... 11.15
(b) ..................................... 11.1
(c)(1) ..................................... 11.1
(c)(2) ..................................... 11.1
(c)(3) ..................................... 11.1
(d) ..................................... 11.1
(e) ..................................... 11.1
(f) ..................................... 11.1
315 (a) ..................................... 6.1
(b) ..................................... 6.5;11.5
(c) ..................................... 6.1
(d) ..................................... 6.1
(e) ..................................... 5.13
316 (a) (last sentence)......................... 2.8
(a)(1)(A)................................... 5.11
(a)(1)(B)................................... 5.12
(a)(2) ................................... N.A.
(b) ..................................... 5.7
(c) ..................................... N.A.
317 (a)(1) ..................................... 5.3
(a)(2) .................................... 5.3
(b) ..................................... 3.3
318 (a) ..................................... 11.7
_______________________
1 Note: This Cross Reference Table shall not, for any purpose, be deemed
to be part of this Indenture.
2 N.A. means Not Applicable.
<PAGE> 3
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE 3
SECTION 1.1. Definitions and Usage....................................... 3
SECTION 1.2. Incorporation by Reference of Trust Indenture Act........... 3
ARTICLE II
THE NOTES............................................ 4
SECTION 2.1. Form........................................................ 4
SECTION 2.2. Execution, Authentication and Delivery...................... 4
SECTION 2.3. Temporary Notes............................................. 5
SECTION 2.4. Tax Treatment............................................... 6
SECTION 2.5. Registration; Registration of Transfer and
Exchange.................................................... 6
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes.................. 9
SECTION 2.7. Persons Deemed Owners....................................... 11
SECTION 2.8. Payment of Principal and Interest; Defaulted
Interest.................................................... 11
SECTION 2.9. Cancellation................................................ 13
SECTION 2.10. Release of Collateral....................................... 13
SECTION 2.11. Book-Entry Notes............................................ 13
SECTION 2.12. Notices to Clearing Agency.................................. 15
SECTION 2.13. Definitive Notes............................................ 15
SECTION 2.14. Authenticating Agents....................................... 16
ARTICLE III
COVENANTS............................................ 17
SECTION 3.1. Payment of Principal and Interest........................... 17
SECTION 3.2. Maintenance of Office or Agency............................. 17
SECTION 3.3. Money for Payments To Be Held in Trust...................... 17
SECTION 3.4. Existence................................................... 20
SECTION 3.5. Protection of Indenture Trust Estate........................ 20
SECTION 3.6. Opinions as to Indenture Trust Estate....................... 21
</TABLE>
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<TABLE>
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SECTION 3.7. Performance of Obligations; Servicing of Receivables............ 22
SECTION 3.8. Negative Covenants.............................................. 24
SECTION 3.9. Annual Statement as to Compliance............................... 25
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms............. 26
SECTION 3.11. Successor or Transferee......................................... 28
SECTION 3.12. No Other Business............................................... 29
SECTION 3.13. No Borrowing.................................................... 29
SECTION 3.14. Servicer's Obligations.......................................... 29
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities............... 29
SECTION 3.16. Capital Expenditures............................................ 29
SECTION 3.17. Further Instruments and Acts.................................... 29
SECTION 3.18. Restricted Payments............................................. 30
SECTION 3.19. Notice of Events of Default..................................... 30
SECTION 3.20. Removal of Administrator........................................ 30
ARTICLE IV
SATISFACTION AND DISCHARGE...................................... 31
SECTION 4.1. Satisfaction and Discharge of Indenture......................... 31
SECTION 4.2. Satisfaction, Discharge and Defeasance of Notes................. 32
SECTION 4.3. Application of Trust Money...................................... 34
SECTION 4.4. Repayment of Monies Held by Note Paying Agent................... 34
ARTICLE V
REMEDIES................................................ 35
SECTION 5.1. Events of Default............................................... 35
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.............. 37
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee............................................... 38
SECTION 5.4. Remedies; Priorities............................................ 41
SECTION 5.5. Optional Preservation of the Receivables........................ 44
SECTION 5.6. Limitation of Suits............................................. 45
SECTION 5.7. Unconditional Rights of Noteholders To Receive
Principal and Interest......................................... 46
SECTION 5.8. Restoration of Rights and Remedies.............................. 46
</TABLE>
ii
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<TABLE>
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SECTION 5.9. Rights and Remedies Cumulative............................. 46
SECTION 5.10. Delay or Omission Not a Waiver............................. 46
SECTION 5.11. Control by Noteholders..................................... 47
SECTION 5.12. Waiver of Past Defaults.................................... 48
SECTION 5.13. Undertaking for Costs...................................... 48
SECTION 5.14. Waiver of Stay or Extension Laws........................... 49
SECTION 5.15. Action on Notes............................................ 49
SECTION 5.16. Performance and Enforcement of Certain Obligations......... 49
ARTICLE VI
THE INDENTURE TRUSTEE................................ 51
SECTION 6.1. Duties of Indenture Trustee................................ 51
SECTION 6.2. Rights of Indenture Trustee................................ 52
SECTION 6.3. Individual Rights of Indenture Trustee..................... 54
SECTION 6.4. Indenture Trustee's Disclaimer............................. 54
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of Depositor
or General Partner....................................... 54
SECTION 6.6. Reports by Indenture Trustee to
Noteholders................................................ 55
SECTION 6.7. Compensation and Indemnity................................. 55
SECTION 6.8. Replacement of IndentureTrustee............................ 56
SECTION 6.9. Successor Indenture Trustee by Merger...................... 58
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee......................................... 58
SECTION 6.11. Eligibility; Disqualification.............................. 60
SECTION 6.12. Preferential Collection of Claims Against Issuer........... 61
ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS........................... 63
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses
of Noteholders.............................................. 63
SECTION 7.2. Preservation of Information;
Communications to Noteholders............................... 63
SECTION 7.3. Reports by Issuer........................................... 64
SECTION 7.4. Reports by Indenture Trustee................................ 64
</TABLE>
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<TABLE>
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES............... 66
SECTION 8.1. Collection of Money........................................ 66
SECTION 8.2. Trust Accounts and Payahead Account........................ 66
SECTION 8.3. General Provisions Regarding Accounts...................... 69
SECTION 8.4. Release of Indenture Trust Estate.......................... 71
SECTION 8.5. Opinion of Counsel......................................... 72
ARTICLE IX
SUPPLEMENTAL INDENTURES..................... 73
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders..... 73
SECTION 9.2. Supplemental Indentures with Consent of Noteholders........ 75
SECTION 9.3. Execution of Supplemental Indentures....................... 77
SECTION 9.4. Effect of Supplemental Indenture........................... 78
SECTION 9.5. Conformity with Trust Indenture Act........................ 78
SECTION 9.6. Reference in Notes to Supplemental Indentures.............. 78
ARTICLE X
REDEMPTION OF NOTES....................... 79
SECTION 10.1. Redemption................................................ 79
SECTION 10.2. Form of Redemption Notice................................. 79
SECTION 10.3. Notes Payable on Redemption Date.......................... 80
ARTICLE XI
MISCELLANEOUS.......................... 81
SECTION 11.1. Compliance Certificates and Opinions, etc.................. 81
SECTION 11.2. Form of Documents Delivered to Indenture Trustee........... 83
SECTION 11.3. Acts of Noteholders........................................ 84
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies................................................... 85
SECTION 11.5. Notices to Noteholders; Waiver............................. 86
SECTION 11.6. Alternate Payment and Notice Provisions.................... 87
SECTION 11.7. Conflict with Trust Indenture Act.......................... 87
</TABLE>
iv
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<TABLE>
<CAPTION>
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<S> <C> <C>
SECTION 11.8. Effect of Headings and Table of Contents............. 88
SECTION 11.9. Successors and Assigns............................... 88
SECTION 11.10. Separability......................................... 88
SECTION 11.11. Benefits of Indenture................................ 88
SECTION 11.12. Legal Holidays....................................... 88
SECTION 11.13. Governing Law........................................ 88
SECTION 11.14. Counterparts......................................... 89
SECTION 11.15. Recording of Indenture............................... 89
SECTION 11.16. Trust Obligation..................................... 89
SECTION 11.17. No Petition.......................................... 90
SECTION 11.18. Inspection........................................... 90
EXHIBIT A-1 Form of Class A-1 Note............................ A-1-1
EXHIBIT A-2 Form of Class A-2 Note............................ A-2-1
EXHIBIT A-3 Form of Class A-3 Note............................ A-3-1
EXHIBIT A-4 Form of Class A-4 Note............................ A-4-1
EXHIBIT A-5 Form of Class B Note.............................. A-5-1
EXHIBIT B Form of Note Depository Agreement................. B-1
EXHIBIT C Form of Investment Letter......................... C-1
SCHEDULE A Schedule of Receivables........................... SA-1
APPENDIX A Definitions and Usage............................. AA-1
</TABLE>
v
<PAGE> 8
INDENTURE, dated as of October 1, 1997, (as from time to time amended,
supplemented or otherwise modified and in effect, this "Indenture") between
FORD CREDIT AUTO OWNER TRUST 1997-B, a Delaware business trust, as Issuer, and
THE CHASE MANHATTAN BANK, a New York corporation, as trustee and not in its
individual capacity (in such capacity, the "Indenture Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the holders of the Issuer's Class A-1 5.748%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 5.95% Asset Backed Notes
(the "Class A-2 Notes"), Class A-3 6.05% Asset Backed Notes (the "Class A-3
Notes"), Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes,
the "Class A Notes") and Class B 6.40% Asset Backed Notes (the "Class B Notes"
and, together with the Class A Notes, the "Notes"):
GRANTING CLAUSE
The Issuer hereby Grants to the Indenture Trustee at the Closing Date, as
Indenture Trustee for the benefit of the Noteholders, all of the Issuer's
right, title and interest in, to and under, whether now owned or existing or
hereafter acquired or arising, (a) the Receivables; (b) with respect to
Precomputed Receivables, monies due thereunder on or after the Cutoff Date
(including Payaheads) and, with respect to Simple Interest Receivables, monies
due or received thereunder on or after the Cutoff Date (including in each case
any monies received prior to the Cutoff Date that are due on or after the
Cutoff Date and were not used to reduce the principal balance of the
Receivable); (c) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Issuer in
the Financed Vehicles; (d) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (e) Dealer
Recourse; (f) all of the Seller's rights to the Receivable Files; (g) the Trust
Accounts and all amounts, securities, investments and other property deposited
in or credited to any of the foregoing and all proceeds thereof; (h) the Sale
and Servicing Agreement; (i) all of the Seller's rights under the Purchase
<PAGE> 9
Agreement, including the right of the Seller to cause Ford Credit to repurchase
Receivables from the Seller; (j) payments and proceeds with respect to the
Receivables held by the Servicer; (k) all property (including the right to
receive Liquidation Proceeds) securing a Receivable (other than a Receivable
repurchased by the Servicer or purchased by the Seller); (l) rebates of premiums
and other amounts relating to insurance policies and other items financed under
the Receivables in effect as of the Cutoff Date; and (m) all present and future
claims, demands, causes of action and choses in action in respect of any or all
of the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all
proceeds of the conversion thereof, voluntary or involuntary, into cash or other
liquid property, all cash proceeds, accounts, accounts receivable, notes,
drafts, acceptances, chattel paper, checks, deposit accounts, insurance
proceeds, condemnation awards, rights to payment of any and every kind and other
forms of obligations and receivables, instruments and other property which at
any time constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Notes, equally
and ratably without prejudice, priority or distinction, and to secure
compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the Noteholders,
acknowledges such Grant, accepts the trusts under this Indenture in accordance
with the provisions of this Indenture and agrees to perform its duties required
in this Indenture to the best of its ability to the end that the interests of
the Noteholders may be adequately and effectively protected.
2
<PAGE> 10
ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1. Definitions and Usage. Except as otherwise specified
herein or as the context may otherwise require, capitalized terms used but not
otherwise defined herein are defined in Appendix A hereto, which also contains
rules as to usage that shall be applicable herein.
SECTION 1.2. Incorporation by Reference of Trust Indenture Act
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" shall mean the Notes.
"indenture security holder" shall mean a Noteholder.
"indenture to be qualified" shall mean this Indenture.
"indenture trustee" or "institutional trustee" shall mean the Indenture
Trustee.
"obligor" on the indenture securities shall mean the Issuer and any other
obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in the TIA,
defined by TIA reference to another statute or defined by Commission rule have
the meaning assigned to them by such definitions.
3
<PAGE> 11
ARTICLE II
THE NOTES
SECTION 2.1. Form. (a) The Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B Notes, together
with the Indenture Trustee's certificates of authentication, shall be in
substantially the form set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3,
Exhibit A-4 and Exhibit A-5, respectively, with such appropriate insertions,
omissions, substitutions and other variations as are required or permitted by
this Indenture, and may have such letters, numbers or other marks of
identification and such legends or endorsements placed thereon as may,
consistently herewith, be determined by the officers executing such Notes, as
evidenced by their execution thereof. Any portion of the text of any Note may
be set forth on the reverse thereof, with an appropriate reference thereto on
the face of the Note.
(b) The definitive Notes shall be typewritten, printed, lithographed or
engraved or produced by any combination of these methods (with or without steel
engraved borders), all as determined by the officers executing such Notes, as
evidenced by their execution of such Notes.
(c) Each Note shall be dated the date of its authentication. The terms
of the Notes set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4
and Exhibit A-5 are part of the terms of this Indenture and are incorporated
herein by reference.
SECTION 2.2. Execution, Authentication and Delivery (a) The Notes shall
be executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Notes may be manual or
facsimile.
(b) Notes bearing the manual or facsimile signature of individuals who
were at any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Notes or did not hold
such offices at the date of such Notes.
4
<PAGE> 12
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
$490,000,000.00, Class A-2 Notes for original issue in an aggregate principal
amount of $388,000,000.00, Class A-3 Notes for original issue in an aggregate
principal amount of $514,000,000.00, Class A-4 Notes for original issue in an
aggregate principal amount of $189,004,978.96 and Class B Notes for original
issue in an aggregate principal amount of $93,501,000.00. The aggregate
principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class
A-4 Notes and Class B Notes outstanding at any time may not exceed those
respective amounts except as provided in Section 2.6.
(d) The Notes shall be issuable as registered Notes in minimum
denominations of $1,000 and in integral multiples of $1,000 in excess thereof,
provided that a single Class A-4 Note may be issued in a denomination equal to
the aggregate initial principal amount of the Class A-4 Notes less the
aggregate denominations of all other Class A-4 Notes or a denomination of less
than $1,000.
(e) No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication substantially in the form provided for herein
executed by the Indenture Trustee by the manual signature of one of its
authorized signatories, and such certificate upon any Note shall be conclusive
evidence, and the only evidence, that such Note has been duly authenticated and
delivered hereunder.
SECTION 2.3. Temporary Notes. (a) Pending the preparation of
definitive Notes, the Issuer may execute, and upon receipt of an Issuer Order
the Indenture Trustee shall authenticate and deliver, temporary Notes that are
printed, lithographed, typewritten, mimeographed or otherwise produced,
substantially of the tenor of the definitive Notes in lieu of which they are
issued and with such variations not inconsistent with the terms of this
Indenture as the officers executing the temporary Notes may determine, as
evidenced by their execution of such temporary Notes.
5
<PAGE> 13
If temporary Notes are issued, the Issuer shall cause definitive Notes to
be prepared without unreasonable delay. After the preparation of definitive
Notes, the temporary Notes shall be exchangeable for definitive Notes upon
surrender of the temporary Notes at the office or agency of the Issuer to be
maintained as provided in Section 3.2, without charge to the Noteholder. Upon
surrender for cancellation of any one or more temporary Notes, the Issuer shall
execute, and the Indenture Trustee shall authenticate and deliver in exchange
therefor, a like principal amount of definitive Notes of authorized
denominations. Until so exchanged, the temporary Notes shall in all respects
be entitled to the same benefits under this Indenture as definitive Notes.
SECTION 2.4. Tax Treatment The Issuer has entered into this Indenture,
and the Notes shall be issued, with the intention that, for federal, State and
local income and franchise tax purposes, the Notes shall qualify as indebtedness
of the Issuer secured by the Indenture Trust Estate. The Issuer, by entering
into this Indenture, and each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of an interest in the applicable Book-Entry Note),
agree to treat the Notes for federal, State and local income and franchise tax
purposes as indebtedness of the Issuer.
SECTION 2.5. Registration; Registration of Transfer and
Exchange. (a) The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the registration of Notes and the registration of
transfers of Notes. The Indenture Trustee initially shall be the "Note
Registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. Upon any resignation of any Note Registrar, the Issuer shall promptly
appoint a successor or, if it elects not to make such an appointment, assume the
duties of Note Registrar. If a Person other than the Indenture Trustee is
appointed by the Issuer as Note Registrar, (i) the Issuer shall give the
Indenture Trustee prompt written notice of the appointment of such Note
Registrar and of the location, and any change in the location, of the Note
Register, (ii) the Indenture Trustee shall have the right to inspect the Note
Register at all reasonable times and to obtain copies thereof, and (iii) the
Indenture Trustee shall have the right to rely
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upon a certificate executed on behalf of the Note Registrar by an Executive
Officer thereof as to the names and addresses of the Noteholders and the
principal amounts and number of such Notes.
(b) No transfer of any Class B Note shall be permitted, recognized or
recorded unless the prospective transferee of such Class B Note shall provide a
letter in the form of Exhibit C to the Issuer, the Indenture Trustee and the
Note Registrar, in which such prospective transferee shall represent the
following:
(i) It is not, and each account (if any) for which it is
purchasing the Class B Notes is not, (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA,
(B) a plan described in Section 4975(e)(1) of the Code, (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, State or local law which is, to a material extent, similar to
the provisions of Section 406 of ERISA or Section 4975 of the Code, (D)
an entity whose underlying assets include plan assets by reason of a
plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101) or (E) a person
investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account,
but excluding any entity registered under the Investment Company Act of
1940, as amended).
(ii) It is, and each account (if any) for which it is purchasing
the Class B Notes is, a Person who is (A) a citizen or resident of the
United States, (B) a corporation or partnership organized in or under
the laws of the United States or any political subdivision thereof, (C)
an estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, (D) a trust if a U.S.
court is able to exercise primary supervision over the administration of
such trust and one or more Persons meeting the conditions of this
paragraph (ii) has the authority to control all substantial decisions of
the trust or (E) a Person not described in clauses (A) through (D) above
whose ownership of the Class B Notes is effectively connected with such
Person's conduct of
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a trade or business within the United States (within the meaning of the
Code) and who provides the Indenture Trustee and the Issuer with an IRS
Form 4224 (and such other certifications, representations, or opinions of
counsel as may be requested by the Indenture Trustee or the Issuer).
(iii) It understands that any purported transfer of any Class B
Note (or any interest therein) to any Person who does not meet the
conditions of paragraphs (i) and (ii) above shall be null and void, and
the purported transferee in any such purported transfer shall not be
recognized by the Trust or any other Person as a Noteholder of a Class B
Note for any purpose.
(iv) It agrees that if it determines to transfer any of the Class
B Notes it will cause its proposed transferee to provide to the Issuer,
the Indenture Trustee and the Note Registrar a letter substantially in
the form of Exhibit C hereof or such other written statement as the
Indenture Trustee shall prescribe.
(c) Upon surrender for registration of transfer of any Note at the office
or agency of the Issuer to be maintained as provided in Section 3.2, if the
requirements of Section 8-401(1) of the UCC are met the Issuer shall execute,
and the Indenture Trustee shall authenticate and the Noteholder shall obtain
from the Indenture Trustee, in the name of the designated transferee or
transferees, one or more new Notes of the same Class in any authorized
denomination, of a like aggregate principal amount.
(d) At the option of the Noteholder, Notes may be exchanged for other
Notes of the same Class in any authorized denominations, of a like aggregate
principal amount, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, if the
requirements of Section 8-401(1) of the UCC are met, the Issuer shall execute,
the Indenture Trustee shall authenticate, and the Noteholder shall obtain from
the Indenture Trustee, the Notes which the Noteholder making such exchange is
entitled to receive.
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(e) All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture as the Notes surrendered
upon such registration of transfer or exchange.
(f) Every Note presented or surrendered for registration of transfer or
exchange shall be (i) duly endorsed by, or be accompanied by a written
instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Noteholder thereof or such Noteholder's attorney duly
authorized in writing, with such signature guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar and (ii)
accompanied by such other documents or evidence as the Indenture Trustee may
require.
(g) No service charge shall be made to a Noteholder for any registration
of transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes, other than
exchanges pursuant to Section 2.3 or 9.6 not involving any transfer.
(h) The preceding provisions of this Section 2.5 notwithstanding, the
Issuer shall not be required to make and the Note Registrar need not register
transfers or exchanges of Notes selected for redemption or of any Note for a
period of fifteen (15) days preceding the Distribution Date for any payment
with respect to such Note.
SECTION 2.6. Mutilated, Destroyed, Lost or Stolen Notes. (a) If (i) any
mutilated Note is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Note, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Note Registrar or
the Indenture Trustee that such Note has been acquired by a protected purchaser,
as defined in Section 8-303 of the UCC, and provided that the requirements of
Section 8-405 of the UCC are met, the
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Issuer shall execute, and upon Issuer Request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a replacement Note of the same Class; provided,
however, that if any such destroyed, lost or stolen Note, but not a mutilated
Note, shall have become or within seven (7) days shall be due and payable, or
shall have been called for redemption, instead of issuing a replacement Note,
the Issuer may pay such destroyed, lost or stolen Note when so due or payable or
upon the Redemption Date without surrender thereof. If, after the delivery of
such replacement Note or payment of a destroyed, lost or stolen Note pursuant to
the proviso to the preceding sentence, a protected purchaser of the original
Note in lieu of which such replacement Note was issued presents for payment such
original Note, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Note (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Note from such Person to whom such
replacement Note was delivered or any assignee of such Person, except a
protected purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Indenture Trustee in connection therewith.
(b) Upon the issuance of any replacement Note under this Section 2.6, the
Issuer may require the payment by the Noteholder of such Note of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other reasonable expenses (including the fees and
expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.6 in
replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall preclude
(to the extent lawful) all
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other rights and remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Notes.
SECTION 2.7. Persons Deemed Owners. Prior to due presentment for
registration of transfer of any Note, the Issuer, the Indenture Trustee and any
agent of the Issuer or the Indenture Trustee may treat the Person in whose name
any Note is registered (as of the day of determination) as the owner of such
Note for the purpose of receiving payments of principal of and interest, if any,
on such Note and for all other purposes whatsoever, whether or not such Note be
overdue, and none of the Issuer, the Indenture Trustee or any agent of the
Issuer or the Indenture Trustee shall be affected by notice to the contrary.
SECTION 2.8. Payment of Principal and Interest; Defaulted Interest. (a)
The Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes and the Class B Notes shall accrue interest at the Class A-1 Rate, the
Class A-2 Rate, the Class A-3 Rate, the Class A-4 Rate and the Class B Rate,
respectively, as set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit A-4
and Exhibit A-5, respectively, and such interest shall be due and payable on
each Distribution Date as specified therein, subject to Section 3.1. Any
installment of interest or principal, if any, payable on any Note that is
punctually paid or duly provided for by the Issuer on the applicable
Distribution Date shall be paid to the Person in whose name such Note (or one or
more Predecessor Notes) is registered on the Record Date either by wire transfer
in immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners pursuant to Section 2.13, with
respect to Notes registered on the Record Date in the name of the nominee of the
Clearing Agency (initially, such nominee to be Cede & Co.), payment shall be
made by wire transfer in immediately available funds to the account
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designated by such nominee, and except for the final installment of principal
payable with respect to such Note on a Distribution Date, Redemption Date or the
applicable Final Scheduled Distribution Date, which shall be payable as provided
below. The funds represented by any such checks returned undelivered shall be
held in accordance with Section 3.3.
(b) The principal of each Note shall be payable in installments on each
Distribution Date as provided in the forms of Notes set forth in Exhibit A-1,
Exhibit A-2, Exhibit A-3, Exhibit A-4 and Exhibit A-5 hereto. Notwithstanding
the foregoing, the entire unpaid principal amount of each Class of Notes shall
be due and payable, if not previously paid, on the date on which an Event of
Default shall have occurred and be continuing, if the Indenture Trustee or the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2. All principal payments on
each Class of Notes shall be made pro rata to the Noteholders of such Class
entitled thereto. The Indenture Trustee shall notify the Person in whose name
a Note is registered at the close of business on the Record Date preceding the
Distribution Date on which the Issuer expects that the final installment of
principal of and interest on such Note shall be paid. Such notice shall be
mailed or transmitted by facsimile prior to such final Distribution Date and
shall specify that such final installment shall be payable only upon
presentation and surrender of such Note and shall specify the place where such
Note may be presented and surrendered for payment of such installment. Notices
in connection with redemption of Notes shall be mailed to Noteholders as
provided in Section 10.2.
(c) If the Issuer defaults in a payment of interest on the Notes, the
Issuer shall pay defaulted interest (plus interest on such defaulted interest to
the extent lawful) at the applicable Note Interest Rate on the Distribution Date
following such default. The Issuer shall pay such defaulted interest to the
Persons who are Noteholders on the Record Date for such following Distribution
Date.
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SECTION 2.9. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Indenture Trustee, be delivered to the Indenture Trustee
and shall be promptly cancelled by the Indenture Trustee. The Issuer may at any
time deliver to the Indenture Trustee for cancellation any Notes previously
authenticated and delivered hereunder which the Issuer may have acquired in any
manner whatsoever, and all Notes so delivered shall be promptly cancelled by the
Indenture Trustee. No Notes shall be authenticated in lieu of or in exchange
for any Notes cancelled as provided in this Section 2.9, except as expressly
permitted by this Indenture. All cancelled Notes may be held or disposed of by
the Indenture Trustee in accordance with its standard retention or disposal
policy as in effect at the time unless the Issuer shall direct by an Issuer
Order that they be destroyed or returned to it and so long as such Issuer Order
is timely and the Notes have not been previously disposed of by the Indenture
Trustee.
SECTION 2.10. Release of Collateral. Subject to Section 11.1 and the
terms of the Basic Documents, the Indenture Trustee shall release property from
the lien of this Indenture only upon receipt of an Issuer Request accompanied by
an Officer's Certificate, an Opinion of Counsel and Independent Certificates in
accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion of Counsel in
lieu of such Independent Certificates to the effect that the TIA does not
require any such Independent Certificates. If the Commission shall issue an
exemptive order under TIA Section 304(d) modifying the Owner Trustee's
obligations under TIA Sections 314(c) and 314(d)(1), subject to Section 11.1 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture in accordance with the conditions and procedures
set forth in such exemptive order.
SECTION 2.11. Book-Entry Notes. The Class A-1 Notes, the Class A-2
Notes and the Class A-3 Notes, upon original issuance, shall be issued in the
form of typewritten Notes representing the Book-Entry Notes, to be delivered to
The Depository Trust Company, the initial Clearing Agency, by, or on behalf of,
the Issuer. The Book-Entry Notes shall be registered initially on the Note
Register in the name of Cede & Co., the nominee of the initial Clearing Agency,
and no Note Owner thereof
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shall receive a Definitive Note (as defined below) representing such Note
Owner's interest in such Note, except as provided in Section 2.13. Unless and
until definitive, fully registered Notes (the "Definitive Notes") have been
issued to such Note Owners pursuant to Section 2.13:
(i) the provisions of this Section 2.11 shall be in full
force and effect;
(ii) the Note Registrar and the Indenture Trustee shall be
entitled to deal with the Clearing Agency for all purposes of
this Indenture (including the payment of principal of and
interest on the Book-Entry Notes and the giving of instructions
or directions hereunder) as the sole Noteholder, and shall have
no obligation to the Note Owners;
(iii) to the extent that the provisions of this Section
2.11 conflict with any other provisions of this Indenture, the
provisions of this Section 2.11 shall control;
(iv) the rights of Note Owners shall be exercised only
through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and the
Clearing Agency and/or the Clearing Agency Participants pursuant
to the Note Depository Agreement. Unless and until Definitive
Notes are issued to Note Owners pursuant to Section 2.13, the
initial Clearing Agency shall make book-entry transfers among the
Clearing Agency Participants and receive and transmit payments of
principal of and interest on the Book-Entry Notes to such
Clearing Agency Participants; and
(v) whenever this Indenture requires or permits actions to
be taken based upon instructions or directions of Noteholders of
Notes evidencing a specified percentage of the principal amount
of the Notes Outstanding, the Clearing Agency shall be deemed to
represent such percentage only to the extent that it has received
instructions to such effect from Note Owners and/or Clearing
Agency Participants
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owning or representing, respectively, such required percentage of
the beneficial interest in the Notes Outstanding and has delivered
such instructions to the Indenture Trustee.
SECTION 2.12. Notices to Clearing Agency. Whenever a notice or other
communication to the Noteholders of Book-Entry Notes is required under
this Indenture, unless and until Definitive Notes shall have been issued to the
Note Owners pursuant to Section 2.13, the Indenture Trustee shall give all such
notices and communications specified herein to be given to Noteholders of
Book-Entry Notes to the Clearing Agency, and shall have no obligation to such
Note Owners.
SECTION 2.13. Definitive Notes. The Class A-4 Notes and the Class B Notes
shall be issued in the form of one or more typewritten Notes
representing Definitive Notes, to be delivered to the purchasers thereof or
their respective nominees, by, or on behalf of, the Issuer. If (i) the
Administrator advises the Indenture Trustee in writing that the Clearing Agency
is no longer willing or able to properly discharge its responsibilities with
respect to the Book-Entry Notes and the Administrator is unable to locate a
qualified successor, (ii) the Administrator, at its option, advises the
Indenture Trustee in writing that it elects to terminate the book-entry system
through the Clearing Agency or (iii) after the occurrence of an Event of
Default or an Event of Servicing Termination, Note Owners of Book-Entry Notes
evidencing beneficial interests aggregating not less than a majority of the
principal amount of the Book-Entry Notes Outstanding advise the Indenture
Trustee and the Clearing Agency in writing that the continuation of a
book-entry system through the Clearing Agency is no longer in the best
interests of the Note Owners, then the Clearing Agency shall notify all Note
Owners and the Indenture Trustee of the occurrence of such event and of the
availability of Definitive Notes to Note Owners requesting the same. Upon
surrender to the Indenture Trustee of the typewritten Notes representing the
Book-Entry Notes by the Clearing Agency, accompanied by registration
instructions, the Issuer shall execute and the Indenture Trustee shall
authenticate the Definitive Notes in accordance with the instructions of the
Clearing Agency. None of the Issuer, the Note Registrar or the Indenture
Trustee shall be liable for any delay in delivery of such instructions and
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may conclusively rely on, and shall be protected in relying on, such
instructions. Upon the issuance of Definitive Notes to Note Owners, the
Indenture Trustee shall recognize the holders of such Definitive Notes as
Noteholders.
SECTION 2.14. Authenticating Agents. (a) The Indenture Trustee may
appoint one or more Persons (each, an "Authenticating Agent") with
power to act on its behalf and subject to its direction in the authentication
of Notes in connection with issuance, transfers and exchanges under Sections
2.2, 2.3, 2.5, 2.6 and 9.6, as fully to all intents and purposes as though each
such Authenticating Agent had been expressly authorized by those Sections to
authenticate such Notes. For all purposes of this Indenture, the
authentication of Notes by an Authenticating Agent pursuant to this Section
2.14 shall be deemed to be the authentication of Notes "by the Indenture
Trustee."
(b) Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of any Authenticating Agent, shall be the
successor of such Authenticating Agent hereunder, without the execution or
filing of any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving written
notice of resignation to the Indenture Trustee and the Owner Trustee. The
Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
(d) The Administrator agrees to pay to each Authenticating Agent from
time to time reasonable compensation for its services. The provisions of
Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
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ARTICLE III
COVENANTS
SECTION 3.1. Payment of Principal and Interest. The Issuer shall duly
and punctually pay the principal of and interest, if any, on the Notes in
accordance with the terms of the Notes and this Indenture. Without limiting the
foregoing and subject to Section 8.2, on each Distribution Date the Issuer shall
cause to be paid all amounts on deposit in the Collection Account and the
Principal Distribution Account with respect to the Collection Period preceding
such Distribution Date and deposited therein pursuant to the Sale and Servicing
Agreement. Amounts properly withheld under the Code by any Person from a
payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2. Maintenance of Office or Agency. The Issuer shall maintain
in the Borough of Manhattan, The City of New York, an office or agency where
Notes may be surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3. Money for Payments To Be Held in Trust. (a) As provided
in Sections 8.2 and 5.4(b), all payments of amounts due and payable with respect
to any Notes that are to be made from amounts withdrawn from the Trust Accounts
and the Payahead Account shall be made on behalf of the Issuer by the Indenture
Trustee or by another Note Paying Agent, and no amounts so withdrawn from the
Trust Accounts and the Payahead Account for pay-
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ments of Notes shall be paid over to the Issuer, except as provided in this
Section 3.3.
(b) On or before each Distribution Date and Redemption Date, the Issuer
shall deposit or cause to be deposited in the Collection Account an aggregate
sum sufficient to pay the amounts then becoming due under the Notes, such sum
to be held in trust for the benefit of the Persons entitled thereto, and
(unless the Note Paying Agent is the Indenture Trustee) shall promptly notify
the Indenture Trustee of its action or failure so to act.
(c) The Issuer shall cause each Note Paying Agent other than the
Indenture Trustee to execute and deliver to the Indenture Trustee an instrument
in which such Note Paying Agent shall agree with the Indenture Trustee (and if
the Indenture Trustee acts as Note Paying Agent, it hereby so agrees), subject
to the provisions of this Section 3.3, that such Note Paying Agent shall:
(i) hold all sums held by it for the payment of amounts due
with respect to the Notes in trust for the benefit of the Persons
entitled thereto until such sums shall be paid to such Persons or
otherwise disposed of as herein provided and pay such sums to
such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default by
the Issuer (or any other obligor upon the Notes) of which it has
actual knowledge in the making of any payment required to be made
with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in trust
by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it ceases to meet
the standards required to be met by a Note Paying Agent at the
time of its appointment; and
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(v) comply with all requirements of the Code and any State
or local tax law with respect to the withholding from any
payments made by it on any Notes of any applicable withholding
taxes imposed thereon and with respect to any applicable
reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Note Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held
by such Note Paying Agent; and upon such payment by any Note Paying Agent to
the Indenture Trustee, such Note Paying Agent shall be released from all
further liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of funds, any
money held by the Indenture Trustee or any Note Paying Agent in trust for the
payment of any amount due with respect to any Note and remaining unclaimed for
two (2) years after such amount has become due and payable shall be discharged
from such trust and be paid to the Issuer on Issuer Request; and the Noteholder
of such Note shall thereafter, as an unsecured general creditor, look only to
the Issuer for payment thereof (but only to the extent of the amounts so paid to
the Issuer), and all liability of the Indenture Trustee or such Note Paying
Agent with respect to such trust money shall thereupon cease; provided, however,
that the Indenture Trustee or such Note Paying Agent, before being required to
make any such repayment, shall at the expense and direction of the Issuer cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in The
City of New York, notice that such money remains unclaimed and that, after a
date specified therein, which shall not be less than thirty (30) days from the
date of such publication, any unclaimed balance of such money then remaining
shall be repaid to the Issuer. The Indenture Trustee shall also adopt and
employ, at the expense and direction of the Issuer, any other reasonable means
of notification of such repayment (including, but not limited to, mailing notice
of such
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repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Note Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.4. Existence. The Issuer shall keep in full effect its
existence, rights and franchises as a business trust under the laws of
the State of Delaware (unless it becomes, or any successor Issuer hereunder is
or becomes, organized under the laws of any other State or of the United States
of America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.5. Protection of Indenture Trust Estate. The Issuer shall
from time to time execute and deliver all such supplements and amendments hereto
and all such financing statements, continuation statements, instruments of
further assurance and other instruments, and shall take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security interest
(and the priority thereof) of this Indenture or carry out more
effectively the purposes hereof;
(ii) perfect, publish notice of or protect the validity of
any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust
Estate and the rights of the Indenture Trustee and the
Noteholders in such Indenture Trust Estate against the claims of
all Persons.
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The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5; provided,
however, that the Indenture Trustee shall be under no obligation to file any
such financing statement, continuation statement or other instrument required to
be executed pursuant to this Section 3.5.
SECTION 3.6. Opinions as to Indenture Trust Estate. (a) On the Closing
Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and
continuation statements, as are necessary to perfect and make effective the
lien and security interest of this Indenture and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in 1998, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel either
stating that, in the opinion of such counsel, such action has been taken with
respect to the recording, filing, re-recording and refiling of this Indenture,
any indentures supplemental hereto and any other requisite documents and with
respect to the execution and filing of any financing statements and
continuation statements and any other action that may be required by law as is
necessary to maintain the lien and security interest created by this Indenture
and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the recording, filing,
re-recording and refiling of this Indenture, any indentures supplemental hereto
and any other requisite documents and the execution and filing of any financing
statements and continuation statements that shall, in the opinion of such
counsel, be required to maintain the lien and security interest of this
Indenture until April 30 in the following calendar year.
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SECTION 3.7. Performance of Obligations; Servicing of Receivables.
(a) The Issuer shall not take any action and shall use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture and the other Basic
Documents.
(b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer. Initially, the Issuer has
contracted with the Servicer and the Administrator to assist the Issuer in
performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture Trust
Estate, including, but not limited to, filing or causing to be filed all
financing statements and continuation statements required to be filed under the
UCC by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority of the principal amount of the Notes
Outstanding.
(d) If the Issuer shall have knowledge of the occurrence of an Event of
Servicing Termination under the Sale and Servicing Agreement, the Issuer shall
promptly notify the Indenture Trustee and the Rating Agencies thereof and shall
specify in such notice the action, if any, the Issuer is taking in respect of
such default. If an Event of Servicing Termination shall arise from the
failure of the Servicer to perform any of its duties or obligations under the
Sale and Servicing Agreement with
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respect to the Receivables, the Issuer shall take all reasonable steps available
to it to remedy such failure.
(e) As promptly as possible after the giving of notice of termination to
the Servicer of the Servicer's rights and powers pursuant to Section 8.1 of
the Sale and Servicing Agreement or the Servicer's resignation in accordance
with the terms of the Sale and Servicing Agreement, the Issuer shall appoint a
successor servicer (the "Successor Servicer") meeting the requirements of the
Sale and Servicing Agreement, and such Successor Servicer shall accept its
appointment by a written assumption in a form acceptable to the Indenture
Trustee. In the event that a Successor Servicer has not been appointed at the
time when the Servicer ceases to act as Servicer, the Indenture Trustee without
further action shall automatically be appointed the Successor Servicer. If the
Indenture Trustee shall be legally unable to act as Successor Servicer, it may
appoint, or petition a court of competent jurisdiction to appoint, a Successor
Servicer. The Indenture Trustee may resign as the Servicer by giving written
notice of such resignation to the Issuer and in such event shall be released
from such duties and obligations, such release not to be effective until the
date a new servicer enters into a servicing agreement with the Issuer as
provided below. Upon delivery of any such notice to the Issuer, the Issuer shall
obtain a new servicer as the Successor Servicer under the Sale and Servicing
Agreement. Any Successor Servicer (other than the Indenture Trustee) shall (i)
be an established institution having a net worth of not less than $100,000,000
and whose regular business shall include the servicing of automotive receivables
and (ii) enter into a servicing agreement with the Issuer having substantially
the same provisions as the provisions of the Sale and Servicing Agreement
applicable to the Servicer. If, within thirty (30) days after the delivery of
the notice referred to above, the Issuer shall not have obtained such a new
servicer, the Indenture Trustee may appoint, or may petition a court of
competent jurisdiction to appoint, a Successor Servicer. In connection with any
such appointment, the Indenture Trustee may make such arrangements for the
compensation of such successor as it and such successor shall agree, subject to
the limitations set forth below and in the Sale and Servicing Agreement, and, in
accordance with Section 8.2 of the Sale and Servicing Agreement, the Issuer
shall enter into
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an agreement with such successor for the servicing of the Receivables (such
agreement to be in form and substance satisfactory to the Indenture Trustee).
If the Indenture Trustee shall succeed to the Servicer's duties as servicer of
the Receivables as provided herein, it shall do so in its individual capacity
and not in its capacity as Indenture Trustee and, accordingly, the provisions
of Article VI hereof shall be inapplicable to the Indenture Trustee in its
duties as the successor to the Servicer and the servicing of the Receivables.
In case the Indenture Trustee shall become successor to the Servicer under the
Sale and Servicing Agreement, the Indenture Trustee shall be entitled to
appoint as Servicer any one of its Affiliates; provided that the Indenture
Trustee, in its capacity as the Servicer, shall be fully liable for the actions
and omissions of such Affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers pursuant to
the Sale and Servicing Agreement, the Issuer shall promptly notify the
Indenture Trustee. As soon as a Successor Servicer is appointed by the Issuer,
the Issuer shall notify the Indenture Trustee of such appointment, specifying
in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the assignment granted
to the Indenture Trustee under this Indenture or the rights of the Indenture
Trustee hereunder, the Issuer hereby agrees that it shall not, without the
prior written consent of the Indenture Trustee or the Noteholders of Notes
evidencing not less than a majority in principal amount of the Notes
Outstanding, amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, supplement, termination, waiver or surrender
of, the terms of any Collateral (except to the extent otherwise provided in the
Sale and Servicing Agreement or the other Basic Documents).
SECTION 3.8. Negative Covenants. So long as any Notes are Outstanding,
the Issuer shall not:
(i) except as expressly permitted by this Indenture, the
Trust Agreement, the Purchase Agreement or the Sale and Servicing
Agreement, sell, transfer, exchange or other-
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wise dispose of any of the properties or assets of the Issuer,
including those included in the Indenture Trust Estate, unless
directed to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from the
principal or interest payable in respect of, the Notes (other
than amounts properly withheld from such payments under the Code)
or assert any claim against any present or former Noteholder by
reason of the payment of the taxes levied or assessed upon the
Trust or the Indenture Trust Estate;
(iii) dissolve or liquidate in whole or in part; or
(iv) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture to
be amended, hypothecated, subordinated, terminated or discharged,
or permit any Person to be released from any covenants or
obligations with respect to the Notes under this Indenture except
as may be expressly permitted hereby, (B) permit any lien,
charge, excise, claim, security interest, mortgage or other
encumbrance (other than the lien of this Indenture) to be created
on or extend to or otherwise arise upon or burden the assets of
the Issuer, including those included in the Indenture Trust
Estate, or any part thereof or any interest therein or the
proceeds thereof (other than tax liens, mechanics' liens and
other liens that arise by operation of law, in each case on any
of the Financed Vehicles and arising solely as a result of an
action or omission of the related Obligor) or (C) permit the lien
of this Indenture not to constitute a valid first priority (other
than with respect to any such tax, mechanics' or other lien)
security interest in the Indenture Trust Estate.
SECTION 3.9. Annual Statement as to Compliance. The Issuer shall
deliver to the Indenture Trustee, within 120 days after the end of each calendar
year (commencing with the year 1998), an Officer's Certificate
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stating, as to the Authorized Officer signing such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such
year and of its performance under this Indenture has been made
under such Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge,
based on such review, the Issuer has complied with all conditions
and covenants under this Indenture throughout such year, or, if
there has been a default in its compliance with any such
condition or covenant, specifying each such default known to such
Authorized Officer and the nature and status thereof.
SECTION 3.10. Issuer May Consolidate, etc., Only on Certain Terms.
(a) The Issuer shall not consolidate or merge with or into any other Person,
unless:
(i) the Person (if other than the Issuer) formed by or
surviving such consolidation or merger shall be a Person
organized and existing under the laws of the United States of
America or any State and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Indenture
Trustee, in form satisfactory to the Indenture Trustee, the due
and punctual payment of the principal of and interest on all Notes
and the performance or observance of every agreement and covenant
of this Indenture on the part of the Issuer to be performed or
observed, all as provided herein;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered
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copies thereof to the Indenture Trustee) to the effect that such
transaction will not have any material adverse tax consequence to
the Issuer, any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been taken;
and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such consolidation or merger and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange
Act).
(b) Other than as specifically contemplated by the Basic Documents, the
Issuer shall not convey or transfer any of its properties or assets, including
those included in the Indenture Trust Estate, to any Person, unless:
(i) the Person that acquires by conveyance or transfer the
properties and assets of the Issuer the conveyance or transfer of
which is hereby restricted shall (A) be a United States citizen
or a Person organized and existing under the laws of the United
States of America or any State, (B) expressly assumes, by an
indenture supplemental hereto, executed and delivered to the
Indenture Trustee, in form satisfactory to the Indenture Trustee,
the due and punctual payment of the principal of and interest on
all Notes and the performance or observance of every agreement
and covenant of this Indenture on the part of the Issuer to be
performed or observed, all as provided herein, (C) expressly
agrees by means of such supplemental indenture that all right,
title and interest so conveyed or transferred shall be subject
and subordinate to the rights of Noteholders, (D) unless
otherwise provided in such supplemental indenture, expressly
agrees to indemnify, defend and hold harmless the
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Issuer against and from any loss, liability or expense arising
under or related to this Indenture and the Notes, and (E)
expressly agrees by means of such supplemental indenture that such
Person (or if a group of Persons, then one specified Person) shall
make all filings with the Commission (and any other
appropriate Person) required by the Exchange Act in connection
with the Notes;
(ii) immediately after giving effect to such transaction,
no Default or Event of Default shall have occurred and be
continuing;
(iii) the Rating Agency Condition shall have been satisfied
with respect to such transaction;
(iv) the Issuer shall have received an Opinion of Counsel
(and shall have delivered copies thereof to the Indenture
Trustee) to the effect that such transaction will not have any
material adverse tax consequence to the Issuer, any Noteholder or
any Certificateholder;
(v) any action that is necessary to maintain the lien and
security interest created by this Indenture shall have been
taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each
stating that such conveyance or transfer and such supplemental
indenture comply with this Article III and that all conditions
precedent herein provided for relating to such transaction have
been complied with (including any filing required by the Exchange
Act).
SECTION 3.11. Successor or Transferee. (a) Upon any consolidation
or merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
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(b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.10(b), the Issuer shall be released from every
covenant and agreement of this Indenture to be observed or performed on the
part of the Issuer with respect to the Notes immediately upon the delivery of
written notice to the Indenture Trustee stating that the Issuer is to be so
released.
SECTION 3.12. No Other Business. The Issuer shall not engage in any
business other than financing, acquiring, owning and pledging the Receivables in
the manner contemplated by this Indenture and the Basic Documents and activities
incidental thereto.
SECTION 3.13. No Borrowing. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Certificates.
SECTION 3.14. Servicer's Obligations. The Issuer shall cause the
Servicer to comply with the Sale and Servicing Agreement, including Sections
3.9, 3.10, 3.11, 3.12, 3.13 and 4.9 and Article VII thereof.
SECTION 3.15. Guarantees, Loans, Advances and Other Liabilities.
Except as contemplated by this Indenture and the other Basic Documents, the
Issuer shall not make any loan or advance or credit to, or guarantee (directly
or indirectly or by an instrument having the effect of assuring another's
payment or performance on any obligation or capability of so doing or
otherwise), endorse or otherwise become contingently liable, directly or
indirectly, in connection with the obligations, stocks or dividends of, or own,
purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16. Capital Expenditures. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).
SECTION 3.17. Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such
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further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.18. Restricted Payments. The Issuer shall not, directly or
indirectly, (i) make any distribution (by reduction of capital or otherwise),
whether in cash, property, securities or a combination thereof, to the Owner
Trustee or any owner of a beneficial interest in the Issuer or otherwise with
respect to any ownership or equity interest or security in or of the Issuer or
to the Servicer or the Administrator, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set
aside or otherwise segregate any amounts for any such purpose; provided,
however, that the Issuer may make, or cause to be made, (x) payments to the
Servicer, the Administrator, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Certificateholders as contemplated by, and to the extent
funds are available for such purpose under, this Indenture and the other Basic
Documents and (y) payments to the Indenture Trustee pursuant to Section 2(a)(ii)
of the Administration Agreement. The Issuer shall not, directly or indirectly,
make payments to or distributions from the Collection Account or the Principal
Distribution Account except in accordance with this Indenture and the other
Basic Documents.
SECTION 3.19. Notice of Events of Default. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and of each default on the part of any party to the Sale and
Servicing Agreement or the Purchase Agreement with respect to any of the
provisions thereof.
SECTION 3.20. Removal of Administrator. For so long as any Notes are
Outstanding, the Issuer shall not remove the Administrator without cause unless
the Rating Agency Condition shall have been satisfied in connection therewith.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture. This Indenture
shall cease to be of further effect with respect to the Notes except as
to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities
of the Indenture Trustee hereunder (including the rights of the Indenture
Trustee under Section 6.7 and the obligations of the Indenture Trustee under
Section 4.3), and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered (other
than (i) Notes that have been destroyed, lost or stolen and that
have been replaced or paid as provided in Section 2.6 and (ii)
Notes for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Issuer and
thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 3.3) have been delivered to the Indenture
Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture Trustee
for cancellation have become due and payable and the Issuer has
irrevocably deposited or caused to be irrevocably deposited
with the Indenture Trustee cash or direct obligations of or
obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust
for such purpose, in an amount sufficient without reinvestment to
pay and discharge the
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entire indebtedness on such Notes not theretofore delivered to the
Indenture Trustee for cancellation when due to the applicable
Final Scheduled Distribution Date or Redemption Date (if Notes
shall have been called for redemption pursuant to Section
10.1(a)), as the case may be, and all fees due and payable to the
Indenture Trustee;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under any of the other Basic Documents by
the Issuer;
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required by
the TIA or the Indenture Trustee) an Independent Certificate from
a firm of certified public accountants, each meeting the
applicable requirements of Section 11.1(a) and, subject to
Section 11.2, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this
Indenture have been complied with; and
(D) the Issuer has delivered to the Indenture Trustee an Opinion
of Counsel to the effect that the satisfaction and discharge of
the Notes pursuant to this Section 4.1 will not cause any
Noteholder to be treated as having sold or exchanged any of its
Notes for purposes of Section 1001 of the Code.
Upon the satisfaction and discharge of the Indenture pursuant to this Section
4.1, at the request of the Owner Trustee, the Indenture Trustee shall deliver
to the Owner Trustee a certificate of a Trustee Officer stating that all
Noteholders have been paid in full and stating whether, to the best knowledge of
such Trustee Officer, any claims remain against the Issuer in respect of the
Indenture and the Notes.
SECTION 4.2. Satisfaction, Discharge and Defeasance of Notes.
(a) Upon satisfaction of the conditions set forth in subsection (b)
below, the Issuer shall be deemed
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to have paid and discharged the entire indebtedness on all the outstanding
Notes, and the provisions of this Indenture, as it relates to such Notes, shall
no longer be in effect (and the Indenture Trustee, at the expense of the Issuer,
shall execute proper instruments acknowledging the same), except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.2, 3.3, 3.4, 3.5,
3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
Section 6.7 and the obligations of the Indenture Trustee under Section 4.3), and
(vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them.
(b) The satisfaction, discharge and defeasance of the Notes pursuant to
subsection (a) of this Section 4.2 is subject to the satisfaction of all of the
following conditions:
(i) the Issuer has deposited or caused to be deposited irrevocably
(except as provided in Section 4.4) with the Indenture Trustee as trust
funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the Noteholders, which, through the payment of
interest and principal in respect thereof in accordance with
their terms will provide, not later than one day prior to the due date
of any payment referred to below, money in an amount sufficient, in the
opinion of a nationally recognized firm of independent certified public
accountants expressed in a written certification thereof delivered to
the Indenture Trustee, to pay and discharge the entire indebtedness on
the outstanding Notes, for principal thereof and interest thereon to the
date of such deposit (in the case of Notes that have become due and
payable) or to the maturity of such principal and interest, as the case
may be;
(ii) such deposit will not result in a breach or violation of, or
constitute an event of default under, any other agreement or instrument
to which the Issuer is bound;
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(iii) no Event of Default with respect to the Notes shall have
occurred and be continuing on the date of such deposit or on the
ninety-first (91st) day after such date;
(iv) the Issuer has delivered to the Indenture Trustee an Opinion
of Counsel to the effect that the satisfaction, discharge and defeasance
of the Notes pursuant to this Section 4.2 will not cause any Noteholder
to be treated as having sold or exchanged any of its Notes for purposes
of Section 1001 of the Code; and
(v) the Issuer has delivered to the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the defeasance contemplated by this Section 4.2
have been complied with.
SECTION 4.3. Application of Trust Money. All monies deposited with the
Indenture Trustee pursuant to Sections 4.1 and 4.2 shall be held in trust and
applied by it, in accordance with the provisions of the Notes and this
Indenture, to the payment, either directly or through any Note Paying Agent, as
the Indenture Trustee may determine, to the Noteholders of the particular Notes
for the payment or redemption of which such monies have been deposited with the
Indenture Trustee, of all sums due and to become due thereon for principal and
interest, but such monies need not be segregated from other funds except to the
extent required herein or in the Sale and Servicing Agreement or required by
law.
SECTION 4.4. Repayment of Monies Held by Note Paying Agent. In
connection with the satisfaction and discharge of this Indenture with respect to
the Notes, all monies then held by any Note Paying Agent other than the
Indenture Trustee under the provisions of this Indenture with respect to such
Notes shall, upon demand of the Issuer, be paid to the Indenture Trustee to be
held and applied according to Section 3.3 and thereupon such Note Paying Agent
shall be released from all further liability with respect to such monies.
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ARTICLE I
REMEDIES
SECTION 5.1. Events of Default. "Event of Default," wherever used
herein, means the occurrence of any one of the following events (whatever the
reason for such Event of Default and whether it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) default in the payment of any interest on any Note when
the same becomes due and payable on each Distribution Date, and
such default shall continue for a period of five (5) days or
more; provided that a default in the payment of interest on the
Class B Notes shall not be an Event of Default until the
principal amount of the outstanding Class A-4 Notes has been
reduced to zero; or
(ii) default in the payment of the principal of or any
installment of the principal of any Note when the same becomes
due and payable; or
(iii) default in the observance or performance of any
material covenant or agreement of the Issuer made in this
Indenture (other than a covenant or agreement, a default in the
observance or performance of which is elsewhere in this Section
5.1 specifically dealt with), or any representation or warranty
of the Issuer made in this Indenture or in any certificate or
other writing delivered pursuant hereto or in connection herewith
proving to have been incorrect in any material respect as of the
time when the same shall have been made, and such default shall
continue or not be cured, or the circumstance or condition in
respect of which such misrepresentation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of
sixty (60) days or in the case of a materially incorrect
representation and warranty thirty (30) days, after
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there shall have been given, by registered or certified mail, to
the Issuer by the Indenture Trustee or to the Issuer and the
Indenture Trustee by the Noteholders of Notes evidencing not less
than 25% of the principal amount of the Notes Outstanding, a
written notice specifying such default or incorrect representation
or warranty and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(iv) the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or
any substantial part of the Indenture Trust Estate in an
involuntary case under any applicable federal or State
bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Indenture Trust Estate,
or ordering the winding-up or liquidation of the Issuer's
affairs, and such decree or order shall remain unstayed and in
effect for a period of sixty (60) consecutive days; or
(v) the commencement by the Issuer of a voluntary case
under any applicable federal or State bankruptcy, insolvency or
other similar law now or hereafter in effect, or the consent by
the Issuer to the entry of an order for relief in an involuntary
case under any such law, or the consent by the Issuer to the
appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of
the Issuer or for any substantial part of the Indenture Trust
Estate, or the making by the Issuer of any general assignment for
the benefit of creditors, or the failure by the Issuer generally
to pay its debts as such debts become due, or the taking of any
action by the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence thereof, written
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notice in the form of an Officer's Certificate of any event which with the
giving of notice and the lapse of time would become an Event of Default under
clause (iii) above, its status and what action the Issuer is taking or proposes
to take with respect thereto.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment. (a)
If an Event of Default should occur and be continuing, then and in
every such case the Indenture Trustee or the Noteholders of Notes evidencing
not less than a majority of the principal amount of the Notes Outstanding may
declare all the Notes to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon
any such declaration the unpaid principal amount of such Notes, together with
accrued and unpaid interest thereon through the date of acceleration, shall
become immediately due and payable.
(b) At any time after a declaration of acceleration of maturity has been
made and before a judgment or decree for payment of the amount due has been
obtained by the Indenture Trustee as hereinafter provided in this Article V,
the Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding, by written notice to the Issuer and the
Indenture Trustee, may rescind and annul such declaration and its consequences
if:
(i) the Issuer has paid or deposited with the Indenture
Trustee a sum sufficient to pay:
(A) all payments of principal of and interest on all Notes
and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such
acceleration had not occurred; and
(B) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Indenture Trustee and its
agents and counsel; and
(ii) all Events of Default, other than the nonpayment of
the principal of the Notes
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that has become due solely by such acceleration, have been cured
or waived as provided in Section 5.12.
No such rescission shall affect any subsequent default or impair any right
consequent thereto.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Indenture Trustee. (a) The Issuer covenants that if (i) default is made in
the payment of any interest on any Note when the same becomes due and payable,
and such default continues for a period of five (5) days, or (ii) default is
made in the payment of the principal of or any installment of the principal of
any Note when the same becomes due and payable, the Issuer shall, upon demand
of the Indenture Trustee, pay to the Indenture Trustee, for the benefit of the
Noteholders, the whole amount then due and payable on such Notes for principal
and interest, with interest upon the overdue principal and, to the extent
payment at such rate of interest shall be legally enforceable, upon overdue
installments of interest at the applicable Note Interest Rate borne by the
Notes and in addition thereto such further amount as shall be sufficient to
cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Indenture Trustee and
its agents, attorneys and counsel.
(b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, may institute a Proceeding for the collection of the sums so due and
unpaid, and may prosecute such Proceeding to judgment or final decree, and may
enforce the same against the Issuer or other obligor upon such Notes and
collect in the manner provided by law out of the property of the Issuer or
other obligor upon such Notes, wherever situated, the monies adjudged or
decreed to be payable.
(c) If an Event of Default occurs and is continuing, the Indenture
Trustee may, as more particularly provided in Section 5.4, in its discretion,
proceed to protect and enforce its rights and the rights of the Noteholders, by
such appropriate Proceedings as the Indenture Trustee shall deem most effective
to protect and enforce any such rights, whether for the specific
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enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy or
legal or equitable right vested in the Indenture Trustee by this Indenture or by
law.
(d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Notes or any Person having or claiming an ownership interest
in the Indenture Trust Estate, Proceedings under Title 11 of the United States
Code or any other applicable federal or State bankruptcy, insolvency or other
similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of
the Notes and to file such other papers or documents as may be
necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances and disbursements made, by the
Indenture Trustee and each predecessor Indenture Trustee, except
as a result of negligence or bad faith) and of the Noteholders
allowed in such Proceedings;
(ii) unless prohibited by applicable law and regulations,
to vote on behalf of the Noteholders in any election of a
trustee, a
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standby trustee or Person performing similar functions
in any such Proceedings;
(iii) to collect and receive any monies or other property
payable or deliverable on any such claims and to pay all amounts
received with respect to the claims of the Noteholders and of the
Indenture Trustee on their behalf; and
(iv) to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the
claims of the Indenture Trustee or the Noteholders allowed in any
judicial proceedings relative to the Issuer, its creditors and
its property;
and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Noteholders to make
payments to the Indenture Trustee and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Noteholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances and disbursements made, by the Indenture
Trustee and each predecessor Indenture Trustee, except as a result of
negligence or bad faith, and any other amounts due the Indenture Trustee
pursuant to Section 6.7.
(e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Noteholder any plan of reorganization, arrangement, adjustment or
composition affecting the Notes or the rights of any Noteholder or to authorize
the Indenture Trustee to vote in respect of the claim of any Noteholder in any
such proceeding except, as aforesaid, to vote for the election of a trustee in
bankruptcy or similar Person.
(f) All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Indenture Trustee without the
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possession of any of the Notes or the production thereof in any trial or other
Proceedings relative thereto, and any such action or Proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, shall be
for the ratable benefit of the Noteholders in respect of which such judgment
has been recovered.
(g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Noteholders, and it shall not be necessary to make
any Noteholder a party to any such Proceedings.
SECTION 5.4. Remedies; Priorities. (a) If an Event of Default shall
have occurred and be continuing, the Indenture Trustee may do one or
more of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as trustee of
an express trust for the collection of all amounts then payable
on the Notes or under this Indenture with respect thereto,
whether by declaration or otherwise, enforce any judgment
obtained, and collect from the Issuer and any other obligor upon
such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to
the Indenture Trust Estate;
(iii) exercise any remedies of a secured party under the
UCC and take any other appropriate action to protect and enforce
the rights and remedies of the Indenture Trustee and the
Noteholders; and
(iv) sell the Indenture Trust Estate or any portion thereof
or rights or interest
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therein, at one or more public or private sales called and
conducted in any manner permitted by law;
provided, however, that the Indenture Trustee may not sell or otherwise
liquidate the Indenture Trust Estate following an Event of Default, other than
an Event of Default described in Section 5.1(i) or (ii) and other than if
required to sell the Indenture Trust Estate pursuant to the Trust Agreement as
a result of the occurrence of an Insolvency Event or a dissolution with respect
to the Seller or the General Partner, unless (A) the Noteholders of Notes
evidencing 100% of the principal amount of the Notes Outstanding consent
thereto, (B) the proceeds of such sale or liquidation are sufficient to pay in
full the principal of and the accrued interest on the outstanding Notes or (C)
the Indenture Trustee determines (but shall have no obligation to make such
determination) that the Indenture Trust Estate will not continue to provide
sufficient funds for the payment of principal of and interest on the Notes as
they would have become due if the Notes had not been declared due and payable,
and the Indenture Trustee obtains the consent of Noteholders of Notes
evidencing not less than 66-2/3% of the principal amount of the Notes
Outstanding. In determining such sufficiency or insufficiency with respect to
clauses (B) and (C) above, the Indenture Trustee may, but need not, obtain and
rely upon an opinion of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Indenture Trust Estate for such purpose.
(b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:
(i) first, to the Indenture Trustee for amounts due under
Section 6.7;
(ii) second, to the Servicer for due and unpaid Servicing
Fees;
(iii) third, to Noteholders of the Class A Notes for
amounts due and unpaid on the Class A Notes in respect of
interest, ratably, without preference or priority of any kind,
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according to the amounts due and payable on the Class A Notes
for interest;
(iv) fourth, to Noteholders of the Class A-1 Notes for
amounts due and unpaid on the Class A-1 Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class A-1 Notes for principal,
until the principal amount of the outstanding Class A-1 Notes is
reduced to zero;
(v) fifth, to Noteholders of the Class A-2 Notes for
amounts due and unpaid on the Class A-2 Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class A-2 Notes for principal,
until the principal amount of the outstanding Class A-2 Notes is
reduced to zero;
(vi) sixth, to Noteholders of the Class A-3 Notes for
amounts due and unpaid on the Class A-3 Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class A-3 Notes for principal,
until the principal amount of the outstanding Class A-3 Notes is
reduced to zero;
(vii) seventh, to Noteholders of the Class A-4 Notes for
amounts due and unpaid on the Class A-4 Notes for principal,
ratably, without preference or priority of any kind, according to
the amounts due and payable on the Class A-4 Notes for principal,
until the principal amount of the outstanding Class A-4 Notes is
reduced to zero;
(viii) eighth, to Noteholders of the Class B Notes for
amounts due and unpaid on the Class B Notes in respect of
interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Class B Notes for
interest;
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(ix) ninth, to Noteholders of the Class B Notes for amounts
due and unpaid on the Class B Notes for principal, ratably,
without preference or priority of any kind, according to the
amounts due and payable on the Class B Notes for principal, until
the principal amount of the outstanding Class B Notes is reduced
to zero; and
(x) tenth, to the Issuer for amounts required to be
distributed to the Certificateholders pursuant to the Trust
Agreement and the Sale and Servicing Agreement.
The Indenture Trustee may fix a record date and payment date for any payment to
Noteholders pursuant to this Section 5.4. At least fifteen (15) days before
such record date, the Issuer shall mail to each Noteholder and the Indenture
Trustee a notice that states the record date, the payment date and the amount
to be paid.
SECTION 5.5. Optional Preservation of the Receivables. If the Notes have
been declared to be due and payable under Section 5.2 following an
Event of Default, and such declaration and its consequences have not been
rescinded and annulled, the Indenture Trustee may, but need not, elect to
maintain possession of the Indenture Trust Estate and apply proceeds as if
there had been no declaration of acceleration; provided, however, that funds on
deposit in the Collection Account (including funds, if any, deposited therein
from the Reserve Account and the Payahead Account) shall be applied in
accordance with such declaration of acceleration in the manner specified in
Section 4.6(c) of the Sale and Servicing Agreement. It is the desire of the
parties hereto and the Noteholders that there be at all times sufficient funds
for the payment of principal of and interest on the Notes, and the Indenture
Trustee shall take such desire into account when determining whether or not to
maintain possession of the Indenture Trust Estate. In determining whether to
maintain possession of the Indenture Trust Estate, the Indenture Trustee may,
but need not, obtain and rely upon an opinion of an Independent investment
banking or accounting firm of national reputation as to the feasibility of such
proposed action and as to the sufficiency of the Indenture Trust Estate for
such purpose.
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SECTION 5.6. Limitation of Suits. No Noteholder shall have any right to
institute any Proceeding, judicial or otherwise, with respect to this
Indenture or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless:
(a) such Noteholder has previously given written notice to
the Indenture Trustee of a continuing Event of Default;
(b) the Noteholders of Notes evidencing not less than 25%
of the principal amount of the Notes Outstanding have made
written request to the Indenture Trustee to institute such
Proceeding in respect of such Event of Default in its own name as
Indenture Trustee hereunder;
(c) such Noteholder or Noteholders have offered to the
Indenture Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in complying with such
request;
(d) the Indenture Trustee for sixty (60) days after its
receipt of such notice, request and offer of indemnity has failed
to institute such Proceedings; and
(e) no direction inconsistent with such written request
has been given to the Indenture Trustee during such sixty-day
period by the Noteholders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding.
It is understood and intended that no one or more Noteholders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Noteholders or to obtain or to seek to obtain priority or preference over any
other Noteholders or to enforce any right under this Indenture, except in the
manner herein provided.
In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Noteholders,
each evidencing
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less than a majority of the principal amount of the Notes Outstanding, the
Indenture Trustee in its sole discretion may determine what action, if any,
shall be taken, notwithstanding any other provisions of this Indenture.
SECTION 5.7. Unconditional Rights of Noteholders To Receive Principal and
Interest Notwithstanding any other provisions in this Indenture, any
Noteholder shall have the right, which is absolute and unconditional, to
receive payment of the principal of and interest, if any, on its Note on or
after the respective due dates thereof expressed in such Note or in this
Indenture (or, in the case of redemption, on or after the Redemption Date) and
to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Noteholder.
SECTION 5.8. Restoration of Rights and Remedies. If the Indenture Trustee
or any Noteholder has instituted any Proceeding to enforce any right or
remedy under this Indenture and such Proceeding has been discontinued or
abandoned for any reason or has been determined adversely to the Indenture
Trustee or to such Noteholder, then and in every such case the Issuer, the
Indenture Trustee and the Noteholders shall, subject to any determination in
such Proceeding, be restored severally and respectively to their former
positions hereunder, and thereafter all rights and remedies of the Indenture
Trustee and the Noteholders shall continue as though no such Proceeding had
been instituted.
SECTION 5.9. Rights and Remedies Cumulative. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the
Noteholders is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 5.10. Delay or Omission Not a Waiver. No delay or omission of the
Indenture Trustee or any Noteholder to exercise any right or remedy
accruing upon any Default or Event of Default shall impair any such
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right or remedy or constitute a waiver of any such Default or Event of Default
or any acquiescence therein. Every right and remedy given by this Article V or
by law to the Indenture Trustee or to the Noteholders may be exercised from time
to time, and as often as may be deemed expedient, by the Indenture Trustee or by
the Noteholders, as the case may be.
SECTION 5.11. Control by Noteholders. The Noteholders of Notes evidencing
not less than a majority of the principal amount of the Notes
Outstanding shall have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee
with respect to the Notes or exercising any trust or power conferred on the
Indenture Trustee; provided that:
(a) such direction shall not be in conflict with any rule
of law or with this Indenture;
(b) subject to the express terms of Section 5.4, any
direction to the Indenture Trustee to sell or liquidate the
Indenture Trust Estate shall be by Noteholders of Notes
evidencing not less than 100% of the principal amount of the
Notes Outstanding;
(c) if the conditions set forth in Section 5.5 have been
satisfied and the Indenture Trustee elects to retain the
Indenture Trust Estate pursuant to such Section 5.5, then any
direction to the Indenture Trustee by Noteholders of Notes
evidencing less than 100% of the principal amount of the Notes
Outstanding to sell or liquidate the Indenture Trust Estate shall
be of no force and effect; and
(d) the Indenture Trustee may take any other action deemed
proper by the Indenture Trustee that is not inconsistent with
such direction.
Notwithstanding the rights of Noteholders set forth in this Section 5.11,
subject to Section 6.1, the Indenture Trustee need not take any action that it
determines might involve it in costs or expenses for which it would not be
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adequately indemnified or expose it to personal liability or might materially
adversely affect or unduly prejudice the rights of any Noteholders not
consenting to such action.
SECTION 5.12. Waiver of Past Defaults. Prior to the declaration of the
acceleration of the maturity of the Notes as provided in Section 5.2,
the Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding may waive any past Default or Event of Default
and its consequences except a Default (a) in the payment of principal of or
interest on any of the Notes or (b) in respect of a covenant or provision
hereof that cannot be amended, supplemented or modified without the consent of
each Noteholder. In the case of any such waiver, the Issuer, the Indenture
Trustee and the Noteholders shall be restored to their former positions and
rights hereunder, respectively; but no such waiver shall extend to any
subsequent or other Default or impair any right consequent thereto.
Upon any such waiver, such Default shall cease to exist and be deemed to
have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereto.
SECTION 5.13. Undertaking for Costs. All parties to this Indenture agree,
and each Noteholder by such Noteholder's acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Indenture Trustee for any action taken, suffered or omitted by
it as Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Noteholder or group of
Noteholders, in each case holding in the aggregate more
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than 10% of the principal amount of the Notes Outstanding or (c) any suit
instituted by any Noteholder for the enforcement of the payment of principal of
or interest on any Note on or after the respective due dates expressed in such
Note and in this Indenture (or, in the case of redemption, on or after the
Redemption Date).
SECTION 5.14. Waiver of Stay or Extension Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it shall not at any time
insist upon, or plead or in any manner whatsoever, claim or take the benefit or
advantage of, any stay or extension law wherever enacted, now or at any time
hereafter in force, that may affect the covenants or the performance of this
Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that
it shall not hinder, delay or impede the execution of any power herein granted
to the Indenture Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
SECTION 5.15. Action on Notes. The Indenture Trustee's right to seek and
recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be
impaired by the recovery of any judgment by the Indenture Trustee against the
Issuer or by the levy of any execution under such judgment upon any portion of
the Indenture Trust Estate or upon any of the assets of the Issuer. Any money
or property collected by the Indenture Trustee shall be applied in accordance
with Section 5.4(b).
SECTION 5.16. Performance and Enforcement of Certain Obligations.
(a) Promptly following a request from the Indenture Trustee to do so,
and at the Administrator's expense, the Issuer shall take all such lawful
action as the Indenture Trustee may request to compel or secure the performance
and observance by the Seller and the Servicer, as applicable, of each of their
obligations to the Issuer under or in connection with the Sale and Servicing
Agreement, or by the Seller and Ford Credit, as applicable, of each of their
obligations under or in connection with the Purchase Agreement, and to
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exercise any and all rights, remedies, powers and privileges lawfully available
to the Issuer under or in connection with the Sale and Servicing Agreement and
the Purchase Agreement, as the case may be, to the extent and in the manner
directed by the Indenture Trustee, including the transmission of notices of
default on the part of the Seller, the Servicer or Ford Credit thereunder and
the institution of legal or administrative actions or proceedings to compel or
secure performance by the Seller or the Servicer of each of their obligations
under the Sale and Servicing Agreement or by the Seller or Ford Credit of each
of their obligations under the Purchase Agreement.
(b) If an Event of Default has occurred and is continuing, the Indenture
Trustee may, and at the direction (which direction shall be in writing or by
telephone, confirmed in writing promptly thereafter) of the Noteholders of
Notes evidencing not less than 66-2/3% of the principal amount of the Notes
Outstanding shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Servicer under or in connection with
the Sale and Servicing Agreement, or against the Seller or Ford Credit under or
in connection with the Purchase Agreement, including the right or power to take
any action to compel or secure performance or observance by the Seller, the
Servicer or Ford Credit, as the case may be, of each of their obligations to
the Issuer thereunder and to give any consent, request, notice, direction,
approval, extension, or waiver under the Sale and Servicing Agreement or the
Purchase Agreement, as the case may be, and any right of the Issuer to take such
action shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1. Duties of Indenture Trustee. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of
care and skill in their exercise as a prudent Person would exercise or use
under the circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event of Default:
(i) the Indenture Trustee undertakes to perform such duties
and only such duties as are specifically set forth in this
Indenture and no implied covenants or obligations shall be read
into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the Indenture
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon
certificates or opinions furnished to the Indenture Trustee and,
if required by the terms of this Indenture, conforming to the
requirements of this Indenture; provided, however, that the
Indenture Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:
(i) this paragraph does not limit the
effect of paragraph (b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Trustee Officer unless
it is proved
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that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith in
accordance with a direction received by it pursuant to Section
5.11.
(d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.
(e) Money held in trust by the Indenture Trustee need not be segregated
from other funds except to the extent required by law or the terms of this
Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(h) The Indenture Trustee shall not be charged with knowledge of any
Event of Default unless either (1) a Trustee Officer shall have actual
knowledge of such Event of Default or (2) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
SECTION 6.2. Rights of Indenture Trustee. (a) The Indenture Trustee
may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture or other paper or
document believed by it to be genuine and to have been signed or presented by
the
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proper Person. The Indenture Trustee need not investigate any fact or matters
stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys or a custodian or nominee, and the Indenture Trustee shall
not be responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent, attorney, custodian or nominee appointed with
due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; provided, however, that such action or omission by the
Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the advice or
opinion of counsel with respect to legal matters relating to this Indenture and
the Notes shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder
in good faith and in accordance with the advice or opinion of such counsel.
(f) The Indenture Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture or to honor the request or
direction of any of the Noteholders pursuant to this Indenture unless such
Noteholders shall have offered to the Indenture Trustee reasonable security or
indemnity against the reasonable costs, expenses, disbursements, advances and
liabilities which might be incurred by it, its agents and its counsel in
compliance with such request or direction.
(g) Any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request.
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SECTION 6.3. Individual Rights of Indenture Trustee. The Indenture
Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-paying agent hereunder may do
the same with like rights.
SECTION 6.4. Indenture Trustee's Disclaimer. The Indenture Trustee (i)
shall not be responsible for, and makes no representation as to, the
validity or adequacy of this Indenture or the Notes and (ii) shall not be
accountable for the Issuer's use of the proceeds from the Notes, or responsible
for any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes (all of which shall be
taken as statements of the Issuer) other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults; Insolvency or Dissolution of
Depositor or General Partner. (a) If a Default occurs and is continuing and
if it is known to a Trustee Officer of the Indenture Trustee, the Indenture
Trustee shall mail to each Noteholder notice of such Default within ninety (90)
days after it occurs. Except in the case of a Default in payment of principal
of or interest on any Note (including payments pursuant to the mandatory
redemption provisions of such Note), the Indenture Trustee may withhold the
notice if and so long as a committee of its Trustee Officers in good faith
determines that withholding the notice is in the interests of Noteholders.
(b) If the Indenture Trustee receives notice from the Owner Trustee of
the occurrence of an Insolvency Event or a dissolution with respect to the
Depositor or the General Partner pursuant to Section 9.2 of the Trust
Agreement, the Indenture Trustee shall give prompt written notice to the
Noteholders of the occurrence of such event. If the Indenture Trustee receives
notice from the Owner Trustee pursuant to such Section 9.2 that the requisite
percentages of Noteholders, Certificateholders and holders of interests, if
any, in the Reserve Account disapprove of the liquidation of the Receivables
and termination of the Trust pursuant to such Section 9.2, the Indenture
Trustee, at the expense of the Issuer,
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shall (i) appoint an entity acceptable to Ford Credit to acquire an interest in
the Trust and to act as substitute "general partner" of the Trust for federal
income tax purposes and (ii) obtain an Opinion of Counsel that the Trust will
not thereafter be classified as an association (or publicly traded partnership)
taxable as a corporation for federal income tax and Applicable Tax State
purposes. If the Indenture Trustee is unable to locate such an entity or obtain
such Opinion of Counsel within ninety (90) days after the date of the applicable
Insolvency Event or dissolution, the Indenture Trustee shall so notify the Owner
Trustee promptly in writing. Upon termination of the Trust pursuant to such
Section 9.2, the Indenture Trustee shall, if so directed by the Owner Trustee,
sell the assets of the Trust (other than the Trust Accounts and the Certificate
Distribution Account) in a commercially reasonable manner and on commercially
reasonable terms. The proceeds of such a sale of the assets of the Trust shall
be treated as collections of Receivables under the Sale and Servicing Agreement
and deposited in the Collection Account and the Notes and Certificates shall be
paid in accordance with Section 4.6 of the Sale and Servicing Agreement.
SECTION 6.6. Reports by Indenture Trustee to Noteholders. Upon delivery
to the Indenture Trustee by the Servicer of such information prepared
by the Servicer pursuant to Section 3.9 of the Sale and Servicing Agreement as
may be required to enable each Noteholder to prepare its federal and State
income tax returns, the Indenture Trustee shall deliver such information to the
Noteholders.
SECTION 6.7. Compensation and Indemnity. (a) The Issuer shall, or
shall cause the Administrator to, pay to the Indenture Trustee from
time to time reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall, or shall cause the Administrator to,
reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to the
compensation for its services. Such expenses shall include the reasonable
compensation and expenses, disbursements and advances of the Indenture
Trustee's agents, counsel, accountants and experts. The Issuer shall, or shall
cause the Administrator to, indem-
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nify the Indenture Trustee for, and to hold it harmless against, any and all
loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The Indenture Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Administrator
shall not relieve the Issuer or the Administrator of its obligations hereunder.
The Issuer shall, or shall cause the Administrator to, defend any such claim,
and the Indenture Trustee may have separate counsel and the Issuer shall, or
shall cause the Administrator to, pay the fees and expenses of such counsel.
Neither the Issuer nor the Administrator need reimburse any expense or indemnity
against any loss, liability or expense incurred by the Indenture Trustee through
the Indenture Trustee's own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee pursuant to
this Section 6.7 shall survive the resignation or removal of the Indenture
Trustee and the discharge of this Indenture. When the Indenture Trustee incurs
expenses after the occurrence of a Default specified in Section 5.1(iv) or (v)
with respect to the Issuer, the expenses are intended to constitute expenses of
administration under Title 11 of the United States Code or any other applicable
federal or State bankruptcy, insolvency or similar law.
SECTION 6.8. Replacement of Indenture Trustee. (a) No resignation or
removal of the Indenture Trustee, and no appointment of a successor
Indenture Trustee, shall become effective until the acceptance of appointment
by the successor Indenture Trustee pursuant to this Section 6.8 and payment in
full of all sums due to the Indenture Trustee pursuant to Section 6.7. The
Indenture Trustee may resign at any time by so notifying the Issuer. The
Noteholders of Notes evidencing not less than a majority in principal amount of
the Notes Outstanding may remove the Indenture Trustee without cause by so
notifying the Indenture Trustee and the Issuer and may appoint
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a successor Indenture Trustee. The Issuer shall remove the Indenture Trustee
if:
(i) the Indenture Trustee fails to comply with Section
6.11;
(ii) an Insolvency Event occurs with respect to the
Indenture Trustee;
(iii) a receiver or other public officer takes charge of
the Indenture Trustee or its property; or
(iv) the Indenture Trustee otherwise becomes incapable of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee.
(b) Any successor Indenture Trustee shall deliver a written acceptance of
its appointment to the retiring Indenture Trustee and to the Issuer.
Thereupon, if all sums due the retiring Indenture Trustee pursuant to Section
6.7 have been paid in full, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the Indenture Trustee under
this Indenture. The successor Indenture Trustee shall mail a notice of its
succession to Noteholders. If all sums due the retiring Indenture Trustee
pursuant to Section 6.7 have been paid in full, the retiring Indenture Trustee
shall promptly transfer all property held by it as Indenture Trustee to the
successor Indenture Trustee.
(c) If a successor Indenture Trustee does not take office within sixty
(60) days after the retiring Indenture Trustee resigns or is removed, the
retiring Indenture Trustee, the Issuer or the Noteholders of Notes evidencing
not less than a majority in principal amount of the Notes Outstanding may
petition any court of competent jurisdiction for the appointment of a successor
Indenture Trustee. If the Indenture Trustee fails to
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comply with Section 6.11, any Noteholder who has been a bona fide Noteholder for
at least six (6) months may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee pursuant to
this Section 6.8, the obligations of the Issuer and the Administrator under
Section 6.7 shall continue for the benefit of the retiring Indenture Trustee.
SECTION 6.9. Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies with prior written notice
of any such transaction.
(b) In case at the time such successor or successors by merger,
conversion or consolidation to the Indenture Trustee shall succeed to the
trusts created by this Indenture any of the Notes shall have been authenticated
but not delivered, any such successor to the Inden ture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such Notes
so authenticated; and in case at that time any of the Notes shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. In all such cases such certificates shall
have the full force which it is anywhere in the Notes or in this Indenture
provided that the certificate of the Indenture Trustee shall have.
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate Indenture
Trustee. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Indenture Trust Estate may at the time be located, the
Indenture Trustee
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shall have the power and may execute and deliver an instrument to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title
to the Indenture Trust Estate, or any part hereof, and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Indenture Trustee shall be conferred or imposed
upon and exercised or performed by the Indenture Trustee and such
separate trustee or co-trustee jointly (it being understood that
such separate trustee or co-trustee shall not be authorized to act
separately without the Indenture Trustee joining in such act),
except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such act or
acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Indenture Trust Estate or
any portion thereof in any such jurisdiction) shall be exercised
and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Indenture Trustee;
(ii) no trustee hereunder shall be personally liable by
reason of any act or omission of any other trustee hereunder; and
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(iii) the Indenture Trustee may at any time accept the
resignation of or remove any separate trustee or co-trustee.
(c) Any notice, request or other writing given to the Indenture Trustee
shall be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Indenture and
the conditions of this Article VI. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed
with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time constitute the
Indenture Trustee its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
SECTION 6.11. Eligibility; Disqualification. The Indenture Trustee
shall at all times satisfy the requirements of TIA Section 310(a). The
Indenture Trustee or its parent shall have a combined capital and surplus of at
least $50,000,000 as set forth in its most recent published annual report of
condition and shall have a long-term debt rating of investment grade by each of
the Rating Agencies or shall otherwise be acceptable to each of the Rating
Agencies. The Indenture Trustee shall comply with TIA Section 310(b).
Within ninety (90) days after ascertaining the occurrence of an Event of
Default which shall not have been cured or waived, unless authorized by the
Commis-
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sion, the Indenture Trustee shall resign with respect to the Class A
Notes and/or the Class B Notes in accordance with Section 6.8 of this
Indenture, and the Issuer shall appoint a successor Indenture Trustee for one
or both of such Classes, as applicable, so that there will be separate
Indenture Trustees for the Class A Notes and the Class B Notes. In the event
the Indenture Trustee fails to comply with the terms of the preceding sentence,
the Indenture Trustee shall comply with clauses (ii) and (iii) of TIA Section
310(b).
In the case of the appointment hereunder of a successor Indenture Trustee
with respect to any Class of Notes pursuant to this Section 6.11, the Issuer,
the retiring Indenture Trustee and the successor Indenture Trustee with respect
to such Class of Notes shall execute and deliver an indenture supplemental
hereto wherein each successor Indenture Trustee shall accept such appointment
and which (i) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, the successor Indenture Trustee all
the rights, powers, trusts and duties of the retiring Indenture Trustee with
respect to the Notes of the Class to which the appointment of such successor
Indenture Trustee relates, (ii) if the retiring Indenture Trustee is not
retiring with respect to all Classes of Notes, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Indenture Trustee with respect to the Notes of
each Class as to which the retiring Indenture Trustee is not retiring shall
continue to be vested in the Indenture Trustee and (iii) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Indenture
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Indenture Trustees co-trustees of the same trust
and that each such Indenture Trustee shall be a trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Indenture Trustee; and upon the removal of the retiring Indenture
Trustee shall become effective to the extent provided herein.
SECTION 6.12. Preferential Collection of Claims Against Issuer. The
Indenture Trustee shall comply with TIA Section 311(a), excluding any creditor
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relationship listed in TIA Section 311(b). An Indenture Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and Addresses of
Noteholders. The Issuer shall furnish or cause to be furnished to the
Indenture Trustee (a) not more than five (5) days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the
names and addresses of the Noteholders as of such Record Date and (b) at such
other times as the Indenture Trustee may request in writing, within thirty (30)
days after receipt by the Issuer of any such request, a list of similar form
and content as of a date not more than ten (10) days prior to the time such
list is furnished; provided, however, that (i) so long as the Indenture Trustee
is the Note Registrar, no such list shall be required to be furnished and (ii)
no such list shall be required to be furnished with respect to Noteholders of
Book-Entry Notes.
SECTION 7.2. Preservation of Information; Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of the Noteholders contained in
the most recent list furnished to the Indenture Trustee as provided in Section
7.1 and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy
any list furnished to it as provided in such Section 7.1 upon receipt of a new
list so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b) with other
Noteholders with respect to their rights under this Indenture or under the
Notes. Upon receipt by the Indenture Trustee of any request by three or more
Noteholders or by one or more Noteholders of Notes evidencing not less than 25%
of the Notes Outstanding to receive a copy of the current list of Noteholders
(whether or not made pursuant to TIA Section 312(b)), the Indenture Trustee
shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
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(c) The Issuer, the Indenture Trustee and the Note Registrar shall have
the protection of TIA Section 312(c).
SECTION 7.3. Reports by Issuer. (a) The Issuer shall:
(i) file with the Indenture Trustee, within fifteen (15)
days after the Issuer is required to file the same with the
Commission, copies of the annual reports and of the information,
documents and other reports (or copies of such portions of any of
the foregoing as the Commission may from time to time by rules
and regulations prescribe) that the Issuer may be required to
file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act;
(ii) file with the Indenture Trustee and the Commission in
accordance with the rules and regulations prescribed from time to
time by the Commission such additional information, documents and
reports with respect to compliance by the Issuer with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(iii) supply to the Indenture Trustee (and the Indenture
Trustee shall transmit by mail to all Noteholders described in
TIA Section 313(c)) such summaries of any information, documents
and reports required to be filed by the Issuer pursuant to
clauses (i) and (ii) of this Section 7.3(a) and by rules and
regulations prescribed from time to time by the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall correspond to the calendar year.
SECTION 7.4. Reports by Indenture Trustee. (a) If required by TIA
Section 313(a), within sixty (60) days after each May 15, beginning
with May 15, 1998, the Indenture Trustee shall mail to each Noteholder as
required by TIA Section 313(c) a brief report dated as of
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such date that complies with TIA Section 313(a). The Indenture Trustee also
shall comply with TIA Section 313(b).
(b) A copy of each report at the time of its mailing to Noteholders shall
be filed by the Indenture Trustee with the Commission and each stock exchange,
if any, on which the Notes are listed. The Issuer shall notify the Indenture
Trustee if and when the Notes are listed on any stock exchange.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1. Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery
of, and shall receive and collect, directly and without intervention or
assistance of any fiscal agent or other intermediary, all money and other
property payable to or receivable by the Indenture Trustee pursuant to this
Indenture and the Sale and Servicing Agreement. The Indenture Trustee shall
apply all such money received by it as provided in this Indenture and the Sale
and Servicing Agreement. Except as otherwise expressly provided in this
Indenture, if any default occurs in the making of any payment or performance
under any agreement or instrument that is part of the Indenture Trust Estate,
the Indenture Trustee may take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate Proceedings. Any such action shall be without prejudice to any
right to claim a Default or Event of Default under this Indenture and any right
to proceed thereafter as provided in Article V.
SECTION 8.2. Trust Accounts and Payahead Account. (a) On or prior to
the Closing Date, the Issuer shall cause the Servicer to establish and
maintain the Trust Accounts and the Payahead Account as provided in Sections
4.1 and 4.7 of the Sale and Servicing Agreement.
(b) On or before each Distribution Date, the Servicer shall deposit all
Available Collections with respect to the Collection Period preceding such
Distribution Date in the Collection Account as provided in Sections 4.2, 4.3,
4.4 and 4.5 of the Sale and Servicing Agreement. On or before each
Distribution Date, all amounts required to be withdrawn from the Reserve
Account and deposited in the Collection Account pursuant to Section 4.5 of the
Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee from
the Reserve Account and deposited to the Collection Account.
(c) On each Distribution Date, the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or before the
related Determination Date pursuant to Section 3.9 of the Sale
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and Servicing Agreement) shall make the following withdrawals from the
Collection Account and make deposits, distributions and payments, to the extent
of funds on deposit in the Collection Account with respect to the Collection
Period preceding such Distribution Date (including funds, if any, deposited
therein from the Reserve Account and the Payahead Account), in the following
order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Noteholders of Class A Notes, the Accrued
Class A Note Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class A Note Interest,
the amounts available shall be applied to the payment of such interest
on the Class A Notes on a pro rata basis;
(iii) third, to the Principal Distribution Account, the First
Priority Principal Distribution Amount;
(iv) fourth, to the Noteholders of Class B Notes, the Accrued
Class B Note Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class B Note Interest,
the amounts available shall be applied to the payment of such interest
on the Class B Notes on a pro rata basis;
(v) fifth, to the Principal Distribution Account, the Second
Priority Principal Distribution Amount;
(vi) sixth, to the Certificate Distribution Account, the Accrued
Certificate Interest;
(vii) seventh, to the Reserve Account, the amount, if any,
required to reinstate the amount in the Reserve Account up to the
Specified Reserve Balance;
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(viii) eighth, to the Principal Distribution Account, the Third
Priority Principal Distribution Amount; and
(ix) ninth, to the Seller, any funds remaining on deposit in the
Collection Account with respect to the Collection Period preceding such
Distribution Date.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of
the Notes or following an Insolvency Event or a dissolution with respect to the
Seller or the General Partner, the Indenture Trustee shall transfer the funds
on deposit in the Collection Account remaining after the application of clauses
(i) and (ii) above to the Principal Distribution Account to the extent
necessary to reduce the principal amount of all the Notes to zero, and the
Certificateholders will not receive any distributions of principal or interest
until the principal amount and accrued interest on all the Notes has been paid
in full.
(d) On each Distribution Date, the Indenture Trustee (based on the
information contained in the Servicer's Certificate delivered on or before the
related Determination Date pursuant to Section 3.9 of the Sale and Servicing
Agreement) shall withdraw the funds on deposit in the Principal Distribution
Account with respect to the Collection Period preceding such Distribution Date
and make distributions and payments in the following order of priority:
(i) first, to the Noteholders of the Class A-1 Notes in reduction
of principal until the principal amount of the outstanding Class A-1
Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-1
Notes in full, the amounts available shall be applied to the payment of
principal on the Class A-1 Notes on a pro rata basis;
(ii) second, to the Noteholders of the Class A-2 Notes in reduction
of principal until the principal amount of the outstanding Class A-2
Notes has been paid in full; provided that if there are
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not sufficient funds available to pay the principal amount of the
outstanding Class A-2 Notes in full, the amounts available shall be
applied to the payment of principal on the Class A-2 Notes on a pro
rata basis;
(iii) third, to the Noteholders of the Class A-3 Notes in reduction
of principal until the principal amount of the outstanding Class A-3
Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-3
Notes in full, the amounts available shall be applied to the payment of
principal on the Class A-3 Notes on a pro rata basis;
(iv) fourth, to the Noteholders of the Class A-4 Notes in reduction
of principal until the principal amount of the outstanding Class A-4
Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-4
Notes in full,the amounts available shall be applied to the payment of
principal on the Class A-4 Notes on a pro rata basis;
(v) fifth, to the Noteholders of the Class B Notes in reduction of
principal until the principal amount of the outstanding Class B Notes has
been paid in full; provided that if there are not sufficient funds
available to pay the principal amount of the outstanding Class B Notes in
full,the amounts available shall be applied to the payment of principal
on the Class B Notes on a pro rata basis;
(vi) sixth, to the Certificate Distribution Account, in reduction
of the Certificate Balance, until the Certificate Balance has been
reduced to zero; and
(vii) seventh, to the Seller, any funds remaining on deposit in the
Principal Distribution Account.
SECTION 8.3. General Provisions Regarding Accounts. (a) So long as no
Default or Event of Default shall have occurred and be continuing, all or a
portion
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of the funds in the Collection Account, the Payahead Account and the Reserve
Account shall be invested by the Indenture Trustee at the direction of the
Servicer in Permitted Investments as provided in Sections 4.1 and 4.7 of the
Sale and Servicing Agreement. All income or other gain (net of losses and
investment expenses) from investments of monies deposited in the Collection
Account, the Payahead Account and the Reserve Account shall be withdrawn by the
Indenture Trustee from such accounts (but only under the circumstances set forth
in the Sale and Servicing Agreement in the case of the Reserve Account) and
distributed as provided in Sections 4.1 and 4.7 of the Sale and Servicing
Agreement. The Servicer shall not direct the Indenture Trustee to make any
investment of any funds or to sell any investment held in any of the Trust
Accounts unless the security interest Granted and perfected in such account will
continue to be perfected in such investment or the proceeds of such sale, in
either case without any further action by any Person, and, in connection with
any direction to the Indenture Trustee to make any such investment or sale, if
requested by the Indenture Trustee, the Issuer shall deliver to the Indenture
Trustee an Opinion of Counsel, acceptable to the Indenture Trustee, to such
effect.
(b) Subject to Section 6.1(c), the Indenture Trustee shall not in any way
be held liable by reason of any insufficiency in any of the Trust Accounts or
in the Payahead Account resulting from any loss on any Permitted Investment
included therein, except for losses attributable to the Indenture Trustee's
failure to make payments on such Permitted Investments issued by the Indenture
Trustee, in its commercial capacity as principal obligor and not as trustee, in
accordance with their terms.
(c) If (i) the Servicer shall have failed to give investment directions
for any funds on deposit in the Collection Account, the Payahead Account or the
Reserve Account to the Indenture Trustee by 11:00 a.m. New York Time (or such
other time as may be agreed by the Issuer and Indenture Trustee) on the
Business Day preceding each Distribution Date or (ii) to the knowledge of a
Trustee Officer of the Indenture Trustee, a Default or Event of Default shall
have occurred and be continuing with respect to the Notes but the Notes shall
not have been declared due and
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payable pursuant to Section 5.2 or (iii) if such Notes shall have been declared
due and payable following an Event of Default, amounts collected or receivable
from the Indenture Trust Estate are being applied in accordance with Section 5.4
as if there had not been such a declaration, then the Indenture Trustee shall,
to the fullest extent practicable, invest and reinvest funds in the Collection
Account, the Payahead Account or the Reserve Account, as the case may be, in one
or more Permitted Investments described in clause (b) of the definition thereof.
SECTION 8.4. Release of Indenture Trust Estate. (a) Subject to the
payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no Notes
Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7 have
been paid in full, release any remaining portion of the Indenture Trust Estate
that secured the Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Accounts. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
(c) Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, acknowledges that from
time to time the Indenture Trustee shall release the lien of this Indenture on
any Receivable to be sold to (i) the Seller in accordance with Section 2.3 of
the Sale and Servicing Agreement and (ii) to the Servicer in accor-
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dance with Section 3.7 of the Sale and Servicing Agreement.
SECTION 8.5. Opinion of Counsel. The Indenture Trustee shall receive at
least seven (7) days notice when requested by the Issuer to take any
action pursuant to Section 8.4(a), accompanied by copies of any instruments
involved, and the Indenture Trustee shall also require, except in connection
with any action contemplated by Section 8.4(c), as a condition to such action,
an Opinion of Counsel, in form and substance satisfactory to the Indenture
Trustee, stating the legal effect of any such action, outlining the steps
required to complete the same, and concluding that all conditions precedent to
the taking of such action have been complied with and such action will not
materially and adversely impair the security for the Notes or the rights of the
Noteholders in contravention of the provisions of this Indenture; provided,
however, that such Opinion of Counsel shall not be required to express an
opinion as to the fair value of the Indenture Trust Estate. Counsel rendering
any such opinion may rely, without independent investigation, on the accuracy
and validity of any certificate or other instrument delivered to the Indenture
Trustee in connection with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures Without Consent of Noteholders.
(a) Without the consent of the Noteholders but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by
an Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any property
at any time subject to the lien of this Indenture, or better to
assure, convey and confirm unto the Indenture Trustee any
property subject or required to be subjected to the lien of this
Indenture, or to subject to the lien of this Indenture additional
property;
(ii) to evidence the succession, in compliance with the
applicable provisions hereof, of another Person to the Issuer,
and the assumption by any such successor of the covenants of the
Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Noteholders, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge any
property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct
or supplement any provision herein or in any supplemental
indenture that may be inconsistent with any other provision
herein or in any supplemental indenture or to make any other
provisions with respect to matters or questions arising under
this Indenture or under any sup-
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plemental indenture which shall not be inconsistent with
the provisions of the Indenture; provided that such action shall
not materially adversely affect the interests of the
Noteholders;
(vi) to evidence and provide for the acceptance of the
appointment hereunder by a successor trustee with respect to the
Notes and to add to or change any of the provisions of this
Indenture as shall be necessary to facilitate the administration
of the trusts hereunder by more than one trustee, pursuant to the
requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions of this
Indenture to such extent as shall be necessary to affect the
qualification of this Indenture under the TIA or under any
similar federal statute hereafter enacted and to add to this
Indenture such other provisions as may be expressly required by
the TIA.
The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Order, may, also without the consent of any of the Noteholders but with prior
notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner (other than the modifications set forth in
Section 9.2) the rights of the Noteholders under this Indenture; provided,
however, that (i) such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any Noteholder, (ii)
the Rating Agency Condition shall have been satisfied with respect to such
action and (iii) such action shall not, as evidenced by an Opinion of Counsel,
cause the Issuer to be characterized for federal or any then Applicable Tax
State income tax purposes as an association taxable as a corporation or
otherwise have any material adverse impact on the federal or any then
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Applicable Tax State income taxation of any Notes Outstanding or outstanding
Certificates or any Noteholder or Certificateholder.
SECTION 9.2. Supplemental Indentures with Consent of Noteholders. The
Issuer and the Indenture Trustee, when authorized by an Issuer Order,
also may, with prior notice to the Rating Agencies and with the consent of the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding, by Act of such Noteholders delivered to the
Issuer and the Indenture Trustee, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or modifying
in any manner the rights of the Noteholders under this Indenture; provided,
however, that (i) the Rating Agency Condition shall have been satisfied with
respect to such action and (ii) such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuer to be characterized for federal or any
then Applicable Tax State income tax purposes as an association taxable as a
corporation or otherwise have any material adverse impact on the federal or any
then Applicable Tax State income taxation of any Notes Outstanding or
outstanding Certificates or any Noteholder or Certificateholder; and provided,
further, that no such supplemental indenture shall, without the consent of the
Noteholder of each Outstanding Note affected thereby:
(i) change the Final Scheduled Distribution Date or the
date of payment of any installment of principal of or interest on
any Note, or reduce the principal amount thereof, the interest
rate thereon or the Redemption Price with respect thereto, change
the provisions of this Indenture relating to the application of
collections on, or the proceeds of the sale of, the Indenture
Trust Estate to payment of principal of or interest on the Notes,
or change any place of payment where, or the coin or currency in
which, any Note or the interest thereon is payable, or impair the
right to institute suit for the enforcement of the provisions of
this Indenture requiring the application of funds available
therefor, as provided in Article V, to the payment of any
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such amount due on the Notes on or after the respective due dates
thereof (or, in the case of redemption, on or after the
Redemption Date);
(ii) reduce the percentage of the principal amount of the
Notes Outstanding, the consent of the Noteholders of which is
required for any such supplemental indenture, or the consent of
the Noteholders of which is required for any waiver of compliance
with certain provisions of this Indenture or certain Defaults or
Events of Default hereunder and their consequences provided for
in this Indenture;
(iii) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(iv) reduce the percentage of the principal amount of the
Notes Outstanding required to direct the Indenture Trustee to
sell or liquidate the Indenture Trust Estate pursuant to Section
5.4 if the proceeds of such sale or liquidation would be
insufficient to pay the principal amount and accrued but unpaid
interest on the Notes and the Certificates;
(v) modify any provision of this Indenture specifying a
percentage of the aggregate principal amount of the Notes
necessary to amend this Indenture or the other Basic Documents
except to increase any percentage specified herein or to provide
that certain additional provisions of this Indenture or the other
Basic Documents cannot be modified or waived without the consent
of the Noteholder of each Outstanding Note affected thereby;
(vi) modify any of the provisions of this Indenture in such
manner as to affect the calculation of the amount of any payment
of interest or principal due on any Note on any Distribution Date
(including the calculation of any of the individual components of
such calculation) or to affect the rights of the Noteholders to
the benefit of any provisions
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for the mandatory redemption of the Notes contained herein; or
(vii) permit the creation of any lien ranking prior to or
on a parity with the lien of this Indenture with respect to any
part of the Indenture Trust Estate or, except as otherwise
permitted or contemplated herein, terminate the lien of this
Indenture on any such collateral at any time subject hereto or
deprive any Noteholder of the security provided by the lien of
this Indenture.
The Indenture Trustee may in its discretion or upon receipt of an Opinion of
Counsel determine whether or not any Notes would be affected by any
supplemental indenture and any such determination shall be conclusive upon the
Noteholders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such
determination made in good faith.
It shall not be necessary for any Act of Noteholders under this Section
9.2 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Indenture Trustee of
any supplemental indenture pursuant to this Section 9.2, the Indenture Trustee
shall mail to the Noteholders of the Notes to which such amendment or
supplemental indenture relates a notice setting forth in general terms the
substance of such supplemental indenture. Any failure of the Indenture Trustee
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.3. Execution of Supplemental Indentures. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.1 and 6.2, shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental
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indenture is authorized or permitted by this Indenture and that all conditions
precedent to the execution and delivery of such supplemental indenture have been
satisfied. The Indenture Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Indenture Trustee's own rights,
duties, liabilities or immunities under this Indenture or otherwise.
SECTION 9.4. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and shall be deemed to be modified and amended in accordance therewith
with respect to the Notes affected thereby, and the respective rights,
limitations of rights, obligations, duties, liabilities and immunities under
this Indenture of the Indenture Trustee, the Issuer and the Noteholders shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modifications and amendments, and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.5. Conformity with Trust Indenture Act. Every amendment of
this Indenture and every supplemental indenture executed pursuant to this
Article IX shall conform to the requirements of the Trust Indenture Act as then
in effect so long as this Indenture shall then be qualified under the Trust
Indenture Act.
SECTION 9.6. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption. (a) The Class A-4 Notes and the Class B
Notes are subject to redemption in whole, but not in part, at the direction of
the Servicer pursuant to Section 9.1 of the Sale and Servicing Agreement, on any
Distribution Date on which the Servicer exercises its option to purchase the
assets of the Issuer pursuant to such Section 9.1, and the amount paid by the
Servicer shall be treated as collections of Receivables and applied to pay the
unpaid principal amount of the Notes and the Certificate Balance of the
Certificates plus accrued and unpaid interest thereon. The Servicer or the
Issuer shall furnish the Rating Agencies and the Noteholders notice of such
redemption. If the Class A-4 Notes and the Class B Notes are to be redeemed
pursuant to this Section 10.1(a), the Servicer or the Issuer shall furnish
notice of such election to the Indenture Trustee not later than forty (40) days
prior to the Redemption Date and the Issuer shall deposit by 10:00 a.m. (New
York City time) on the Redemption Date with the Indenture Trustee in the
Collection Account the Redemption Price of the Class A-4 Notes and the Class B
Notes to be redeemed, whereupon all such Class A-4 Notes and Class B Notes shall
be due and payable on the Redemption Date.
(b) In the event that the assets of the Issuer are sold pursuant to
Section 9.2 of the Trust Agreement, all amounts on deposit in the Collection
Account and the Principal Distribution Account shall be paid to the Noteholders
up to an amount equal to the unpaid principal amount of the Notes and all
accrued and unpaid interest thereon. If the amounts in the Collection Account
and the Principal Distribution Account are to be paid to Noteholders pursuant
to this Section 10.1(b), the Servicer or the Issuer shall, to the extent
practicable, furnish notice of such event to the Indenture Trustee not later
than forty (40) days prior to the Redemption Date, whereupon all such amounts
shall be payable on the Redemption Date.
SECTION 10.2. Form of Redemption Notice. Notice of redemption under
Section 10.1(a) shall be given by the Indenture Trustee by first-class mail,
postage prepaid, or by facsimile mailed or transmitted promptly
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following receipt of notice from the Issuer or Servicer pursuant to Section
10.1(a), but not later than thirty (30) days prior to the applicable Redemption
Date, to each Noteholder as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Noteholder's address or
facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where such Notes are to be surrendered
for payment of the Redemption Price (which shall be the office
or agency of the Issuer to be maintained as provided in Section
3.2); and
(iv) that on the Redemption Date, the Redemption Price
will become due and payable upon each such Note and that
interest thereon shall cease to accrue for and after said date.
Notice of redemption of the Notes shall be given by the Indenture Trustee in
the name and at the expense of the Issuer. Failure to give notice of
redemption, or any defect therein, to any Noteholder shall not impair or affect
the validity of the redemption of any other Note.
SECTION 10.3. Notes Payable on Redemption Date. The Notes to be redeemed
shall, following notice of redemption as required by Section 10.2 (in the case
of redemption pursuant to Section 10.1(a)), shall on the Redemption Date become
due and payable at the Redemption Price and (unless the Issuer shall default in
the payment of the Redemption Price) no interest shall accrue on the Redemption
Price for any period after the date to which accrued interest is calculated for
purposes of calculating the Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Compliance Certificates and Opinions, etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with, (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with and (iii)
(if required by the TIA) an Independent Certificate from a firm of certified
public accountants meeting the applicable requirements of this Section 11.1,
except that, in the case of any such application or request as to which the
furnishing of such documents is specifically required by any provision of this
Indenture, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or opinion
has read or has caused to be read such covenant or condition and the
definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(C) a statement that, in the opinion of each such signatory, such
signatory has made such examination or investigation as is necessary to
enable such signatory to express an informed opinion as to whether or
not such covenant or condition has been complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
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(b)(i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture,
the Issuer shall, in addition to any obligation imposed in Section 11.1(a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such deposit) to
the Issuer of the Collateral or other property or securities to be so
deposited.
(ii) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating
the opinion of any signer thereof as to the matters described in
clause (i) above, the Issuer shall also deliver to the Indenture
Trustee an Independent Certificate as to the same matters, if the
fair value to the Issuer of the securities to be so deposited and
of all other such securities made the basis of any such
withdrawal or release since the commencement of the then-current
fiscal year of the Issuer, as set forth in the certificates
delivered pursuant to clause (i) above and this clause (ii), is
ten percent (10%) or more of the principal amount of the Notes
Outstanding, but such a certificate need not be furnished with
respect to any securities so deposited, if the fair value thereof
to the Issuer as set forth in the related Officer's Certificate
is less than $25,000 or less than one percent (1%) of the
principal amount of the Notes Outstanding.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of such
release) of the property or securities proposed to be released
and stating that in the opinion of such person the proposed
release will not im-
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pair the security under this Indenture in contravention of the
provisions hereof.
(iv) Whenever the Issuer is required to furnish to the
Indenture Trustee an Officer's Certificate certifying or stating
the opinion of any signer thereof as to the matters described in
clause (iii) above, the Issuer shall also furnish to the
Indenture Trustee an Independent Certificate as to the same
matters if the fair value of the property or securities and of
all other property, other than property as contemplated by clause
(v) below or securities released from the lien of this Indenture
since the commencement of the then-current calendar year, as set
forth in the certificates required by clause (iii) above and this
clause (iv), equals ten percent (10%) or more of the principal
amount of the Notes Outstanding, but such certificate need not be
furnished in the case of any release of property or securities if
the fair value thereof as set forth in the related Officer's
Certificate is less than $25,000 or less than one percent (1%) of
the principal amount of the Notes Outstanding.
(v) Notwithstanding Section 2.10 or any other provisions of
this Section 11.1, the Issuer may, without compliance with the
requirements of the other provisions of this Section 11.1, (A)
collect, liquidate, sell or otherwise dispose of Receivables and
Financed Vehicles as and to the extent permitted or required by
the Basic Documents and (B) make cash payments out of the Trust
Accounts and the Payahead Account as and to the extent permitted
or required by the Basic Documents.
SECTION 11.2. Form of Documents Delivered to Indenture Trustee. (a) In
any case where several matters are required to be certified by, or covered by an
opinion of, any specified Person, it is not necessary that all such matters be
certified by, or covered by the opinion of, only one such Person, or that they
be so certified or covered by only one document, but one such Person may certify
or give an opinion with respect to some matters and one or more other such
Persons as to
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other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.
(b) Any certificate or opinion of an Authorized Officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which such officer's
certificate or opinion is based are erroneous. Any such certificate of an
Authorized Officer or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Administrator or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Servicer, the Seller, the Administrator or the Issuer, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two or more
applications, requests, comments, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consoli
dated and form one instrument.
(d) Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of
the facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however,
be construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.
SECTION 11.3. Acts of Noteholders (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Noteholders may be embodied in
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and evidenced by one or more instruments of substantially similar tenor signed
by such Noteholders in person or by agents duly appointed in writing; and except
as herein otherwise expressly provided such action shall become effective when
such instrument or instruments are delivered to the Indenture Trustee, and,
where it is hereby expressly required, to the Issuer. Such instrument or
instruments (and the action embodied herein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Noteholders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.1) conclusive in favor of the Indenture Trustee and
the Issuer, if made in the manner provided in this Section 11.3.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved in any manner that the Indenture Trustee
deems sufficient.
(c) The ownership of Notes shall be proved by the Note Register.
(d) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Noteholder of any Notes shall bind the Noteholder
of every Note issued upon the registration thereof or in exchange therefor or
in lieu thereof, in respect of anything done, omitted or suffered to be done by
the Indenture Trustee or the Issuer in reliance thereon, whether or not
notation of such action is made upon such Note.
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies. Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture shall be in writing and if such request, demand, authorization,
direction, notice, consent, waiver or Act of Noteholders is to be made upon,
given or furnished to or filed with:
(i) the Indenture Trustee by any Noteholder, the Servicer,
the Administrator or the Issuer shall be sufficient for every
purpose hereunder if made, given, furnished or
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filed in writing to or with the Indenture Trustee at its
Corporate Trust office; or
(ii) the Issuer by the Indenture Trustee or by any
Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed first-class, postage prepaid to the Issuer
addressed to: Ford Credit Auto Owner Trust 1997-B, in care of
PNC Bank, Delaware, 222 Delaware Avenue, Wilmington, Delaware
19801, Attention: Michael B. McCarthy, with a copy to the
Administrator at The American Road, Dearborn, Michigan 48121,
Attention: Secretary, or at any other address previously
furnished in writing to the Indenture Trustee by the Issuer or the
Administrator. The Issuer shall promptly transmit any notice
received by it from the Noteholders to the Indenture Trustee.
Notices required to be given to the Rating Agencies by the
Issuer, the Indenture Trustee or the Owner Trustee shall be in writing,
personally delivered, telecopied or mailed by certified mail, return receipt
requested, to (i) in the case of Moody's, at the following address: Moody's
Investors Service, Inc., ABS Monitoring Department, 99 Church Street, New York,
New York 10007, (ii) in case of Standard & Poor's, at the following address:
Standard & Poor's Ratings Services, 26 Broadway (15th Floor), New York, New York
10004, Attention: Asset Backed Surveillance Department and (iii) in the case of
Fitch, at the following address: Fitch Investors Service, L.P., 1201 East 7th
Street, Powell, Wyoming 82435, Attention: Asset Backed Surveillance.
SECTION 11.5. Notices to Noteholders; Waiver. (a) Where this Indenture
provides for notice to Noteholders of any event, such notice shall be
sufficiently given (unless otherwise herein expressly provided) if in writing
and mailed, first-class, postage prepaid to each Noteholder affected by such
event, at his address as it appears on the Note Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the giving
of such notice. In any case where notice to Noteholders is given by mail,
neither the failure to mail such notice nor any defect in any notice so mailed
to any particular Noteholder shall affect the sufficiency of such notice with
respect to
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other Noteholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given.
(b) Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee but such filing shall not be a condition precedent to the validity of
any action taken in reliance upon such a waiver.
(c) In case, by reason of the suspension of regular mail service as a
result of a strike, work stoppage or similar activity, it shall be impractical
to mail notice of any event to Noteholders when such notice is required to be
given pursuant to any provision of this Indenture, then any manner of giving
such notice as shall be satisfactory to the Indenture Trustee shall be deemed
to be a sufficient giving of such notice.
(d) Where this Indenture provides for notice to the Rating Agencies,
failure to give such notice shall not affect any other rights or obligations
created hereunder, and shall not under any circumstance constitute a Default or
Event of Default.
SECTION 11.6. Alternate Payment and Notice Provisions.
Notwithstanding any provision of this Indenture or any of the Notes to the
contrary, the Issuer may enter into any agreement with any Noteholder providing
for a method of payment, or notice by the Indenture Trustee or any Note Paying
Agent to such Noteholder, that is different from the methods provided for in
this Indenture for such payments or notices. The Issuer shall furnish to the
Indenture Trustee a copy of each such agreement and the Indenture Trustee shall
cause payments to be made and notices to be given in accordance with such
agreements.
SECTION 11.7. Conflict with Trust Indenture Act. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required or
deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, such required or deemed provision shall control.
87
<PAGE> 95
The provisions of TIA Sections 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.
SECTION 11.8. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 11.9. Successors and Assigns. All covenants and agreements in
this Indenture and the Notes by the Issuer shall bind its successors and
assigns, whether so expressed or not. All agreements of the Indenture Trustee
in this Indenture shall bind its successors, co-trustees and agents.
SECTION 11.10. Separability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.
SECTION 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, and the Noteholders, and any other party
secured hereunder, and any other Person with an ownership interest in any part
of the Indenture Trust Estate, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 11.12. Legal Holidays. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Notes or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the
88
<PAGE> 96
State of New York, without reference to its conflict of law provisions.
SECTION 11.14. Counterparts. This Indenture may be executed in any
number of counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but one and the
same instrument.
SECTION 11.15. Recording of Indenture. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
(which may be counsel to the Indenture Trustee or any other counsel reasonably
acceptable to the Indenture Trustee) to the effect that such recording is
necessary either for the protection of the Noteholders or any other Person
secured hereunder or for the enforcement of any right or remedy granted to the
Indenture Trustee under this Indenture.
SECTION 11.16. Trust Obligation. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Notes or under this Indenture or any certificate
or other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in their individual capacities, (ii) any
owner of a beneficial interest in the Issuer or (iii) any partner, owner,
beneficiary, agent, officer, director, employee or agent of the Indenture
Trustee or the Owner Trustee in their individual capacities, any holder of a
beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee
or of any successor or assign of the Indenture Trustee or the Owner Trustee in
their individual capacities, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee
have no such obligations in their individual capacities), and except that any
such partner, owner or beneficiary shall be fully liable, to the extent
provided by applicable law, for any unpaid consideration for stock, unpaid
capital contribution or failure to pay any installment or call owing to such
entity. For all purposes of this Indenture, in the performance of any duties
or obligations of the Issuer hereunder, the Owner Trustee shall be subject to,
and
89
<PAGE> 97
entitled to the benefits of, the terms and provisions of Article VI, VII
and VIII of the Trust Agreement.
SECTION 11.17. No Petition. The Indenture Trustee, by entering into
this Indenture, and each Noteholder or Note Owner, by accepting a Note or, in
the case of a Note Owner, a beneficial interest in a Note, hereby covenant and
agree that they will not at any time institute against the Seller, the General
Partner or the Issuer, or join in any institution against the Seller, the
General Partner or the Issuer of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or State bankruptcy or similar law in connection with any
obligations relating to the Notes, this Indenture or any of the other Basic
Documents.
SECTION 11.18. Inspection. The Issuer agrees that, with reasonable
prior notice, it will permit any representative of the Indenture Trustee,
during the Issuer's normal business hours, to examine all the books of account,
records, reports and other papers of the Issuer, to make copies and extracts
therefrom, to cause such books to be audited by Independent certified public
accountants, and to discuss the Issuer's affairs, finances and accounts with
the Issuer's officers, employees, and Independent certified public accountants,
all at such reasonable times and as often as may be reasonably requested. The
Indenture Trustee shall and shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.
90
<PAGE> 98
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have caused this
Indenture to be duly executed by their respective officers, thereunto duly
authorized and duly attested, all as of the day and year first above written.
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1997-B
By: \s\ Michael B. McCarthy
--------------------------
Name: Michael B. McCarthy
Title: Vice President
THE CHASE MANHATTAN BANK,
not in its individual
capacity but solely as
Indenture Trustee
By: \s\ Michael A Smith
--------------------------
Name: Michael A. Smith
Title: Vice President
<PAGE> 99
EXHIBIT A-1
[FORM OF CLASS A-1 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $490,000,000.00
No. R-1 CUSIP NO. 34527RAL7
FORD CREDIT AUTO OWNER TRUST 1997-B
CLASS A-1 5.748% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of FOUR HUNDRED NINETY MILLION DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $490,000,000.00 (the
original face amount of this Note) and the denominator of which is
$490,000,000.00 by (ii) the aggregate amount, if any, payable to Noteholders of
Class A-1 Notes on such Distribution Date from the Principal Distribution
Account in respect of principal on the Class A-1 Notes pursuant to Section 3.1
of the Indenture dated as of
A-1-1
<PAGE> 100
October 1, 1997 (as from time to time amended, supplemented or otherwise
modified and in effect, the "Indenture"), between the Issuer and The Chase
Manhattan Bank, a New York corporation, as Indenture Trustee (in such capacity
the "Indenture Trustee"); provided, however, that the entire unpaid principal
amount of this Note shall be due and payable on the October 1998 Distribution
Date (the "Class A-1 Final Scheduled Distribution Date"). Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the previous
Distribution Date on which interest has been paid (or, in the case of the
initial Distribution Date, from the Closing Date) to but excluding such
Distribution Date. Interest will be computed on the basis of actual days
elapsed and a 360-day year. Such principal of and interest on this Note shall
be paid in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
A-1-2
<PAGE> 101
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-1-3
<PAGE> 102
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: October 31, 1997
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By: ___________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-1 Notes designated above and referred to in the
within-mentioned Indenture.
Date: October 31, 1997
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By: ___________________________
Authorized Officer
<PAGE> 103
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 5.748% Asset Backed Notes (the "Class A-1 Notes")
which, together with the Issuer's Class A-2 5.95% Asset Backed Notes (the
"Class A-2 Notes"), Class A-3 6.05% Asset Backed Notes (the "Class A-3 Notes"),
Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes" and, together with
the Class A-1 Notes , the Class A-2 Notes and the Class A-3 Notes, the "Class A
Notes") and Class B 6.40% Asset Backed Notes (the "Class B Notes" and, together
with the Class A Notes, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Noteholders. The Notes are subject to all terms
of the Indenture.
The Class A-1 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class A-1 Notes are senior in right of payment to the Class A-2 Notes, the
Class A-3 Notes, the Class A-4 Notes and the Class B Notes, each as and to the
extent provided in the Indenture.
Principal of the Class A-1 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-1 Final Scheduled
Distribution Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-1 Notes shall be made pro rata to the
Noteholders entitled thereto.
A-1-5
<PAGE> 104
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
A-1-6
<PAGE> 105
The Issuer shall pay interest on overdue installments of interest at the
Class A-1 Rate to the extent lawful.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for
A-1-7
<PAGE> 106
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding. The Indenture also
contains provisions permitting the Noteholders of Notes evidencing specified
percentages of the principal amount
A-1-8
<PAGE> 107
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) shall be
conclusive and binding upon such Noteholder and upon all future Noteholders of
this Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof whether or not notation of such consent or
waiver is made upon this Note. The Indenture also permits the Indenture
Trustee to amend or waive certain terms and conditions set forth in the
Indenture without the consent of the Noteholders.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, PNC Bank, Delaware, in its individual capacity, any owner
of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had
A-1-9
<PAGE> 108
to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by
his acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-1-10
<PAGE> 109
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- -----------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
-----------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
-------------------- --------------------
Signature Guaranteed
*/
--------------------
- -------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
A-1-11
<PAGE> 110
EXHIBIT A-2
[FORM OF CLASS A-2 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $388,000,000.00
No. R-1 CUSIP NO. 34527RAM5
FORD CREDIT AUTO OWNER TRUST 1997-B
CLASS A-2 5.95% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of THREE HUNDRED EIGHTY-EIGHT MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is
$388,000,000.00 (the original face amount of this Note) and the denominator of
which is $388,000,000.00 by (ii) the aggregate amount, if any, payable to
Noteholders of Class A-2 Notes on such Distribution Date from the Principal
Distribution Account in respect of principal on the Class A-2 Notes pursuant to
Section 3.1 of the Indenture
A-2-1
<PAGE> 111
dated as of October 1, 1997 (as from time to time amended, supplemented or
otherwise modified and in effect, the "Indenture"), between the Issuer and The
Chase Manhattan Bank, a New York corporation, as Indenture Trustee (in such
capacity the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the January 2000
Distribution Date (the "Class A-2 Final Scheduled Distribution Date").
Capitalized terms used but not defined herein are defined in Article I of the
Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the fifteenth day of
the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
A-2-2
<PAGE> 112
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-2-3
<PAGE> 113
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: October 31, 1997
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By: ___________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-2 Notes designated above and referred to in the
within-mentioned Indenture.
Date: October 31, 1997
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By: ___________________________
Authorized Officer
<PAGE> 114
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 5.95% Asset Backed Notes (the "Class A-2 Notes")
which, together with the Issuer's Class A-1 5.748% Asset Backed Notes (the
"Class A-1 Notes"), Class A-3 6.05% Asset Backed Notes (the "Class A-3 Notes"),
Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class A
Notes") and Class B 6.40% Asset Backed Notes (the "Class B Notes" and, together
with the Class A Notes, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Noteholders. The Notes are subject to all terms
of the Indenture.
The Class A-2 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class A-2 Notes are subordinated in right of payment to the Class A-1 Notes and
senior in right of payment to the Class A-3 Notes, the Class A-4 Notes and the
Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-2 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-2 Final Scheduled
Distribution Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-2 Notes shall be made pro rata to the
Noteholders entitled thereto.
A-2-5
<PAGE> 115
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payment will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
A-2-6
<PAGE> 116
The Issuer shall pay interest on overdue installments of interest at the
Class A-2 Rate to the extent lawful.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for
A-2-7
<PAGE> 117
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders of Notes evidencing not less than a
majority of the principal amount
A-2-8
<PAGE> 118
of the Notes Outstanding. The Indenture also contains provisions permitting
the Noteholders of Notes evidencing specified percentages of the principal
amount of the Notes Outstanding, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Noteholder and upon all future
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, PNC Bank, Delaware, in its individual capacity, any owner
of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had
A-2-9
<PAGE> 119
to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by
his acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-2-10
<PAGE> 120
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- ----------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
-------------------- --------------------
Signature Guaranteed
-------------------- */
- -------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
A-2-11
<PAGE> 121
EXHIBIT A-3
[FORM OF CLASS A-3 NOTE]
UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $514,000,000.00
No. R-1 CUSIP NO. 34527RAN3
FORD CREDIT AUTO OWNER TRUST 1997-B
CLASS A-3 6.05% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to CEDE & CO., or
registered assigns, the principal sum of FIVE HUNDRED FOURTEEN MILLION DOLLARS
payable on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $514,000,000.00 (the
original face amount of this Note) and the denominator of which is
$514,000,000.00 by (ii) the aggregate amount, if any, payable to Noteholders of
Class A-3 Notes on such Distribution Date from the Principal Distribution
Account in respect of principal on the Class A-3 Notes pursuant to Section 3.1
of the Indenture
A-3-1
<PAGE> 122
dated as of October 1, 1997 (as from time to time amended, supplemented or
otherwise modified and in effect, the "Indenture"), between the Issuer and The
Chase Manhattan Bank, a New York corporation, as Indenture Trustee (in such
capacity the "Indenture Trustee"); provided, however, that the entire unpaid
principal amount of this Note shall be due and payable on the April 2001
Distribution Date (the "Class A-3 Final Scheduled Distribution Date").
Capitalized terms used but not defined herein are defined in Article I of the
Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the fifteenth day of
the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of
this Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
A-3-2
<PAGE> 123
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-3-3
<PAGE> 124
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: October 31, 1997
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By: _________________________
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-3 Notes designated above and referred to in the
within-mentioned Indenture.
Date: October 31, 1997
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By: ___________________________
Authorized Officer
<PAGE> 125
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 6.05% Asset Backed Notes (the "Class A-3 Notes")
which, together with the Issuer's Class A-1 5.748% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.95% Asset Backed Notes (the "Class A-2 Notes"),
Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Class A
Notes") and Class B 6.40% Asset Backed Notes (the "Class B Notes" and, together
with the Class A Notes, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Noteholders. The Notes are subject to all terms
of the Indenture.
The Class A-3 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class A-3 Notes are subordinated in right of payment to the Class A-1 Notes and
the Class A-2 Notes and are senior in right of payment to the Class A-4 Notes
and the Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-3 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-3 Final Scheduled
Distribution Date. Notwithstanding the foregoing, the entire unpaid principal
amount of the Notes shall be due and payable on the date on which an Event of
Default shall have occurred and be continuing and the Indenture Trustee or the
Noteholders of Notes evidencing not less than a majority of the principal
amount of the Notes Outstanding have declared the Notes to be immediately due
and payable in the manner provided in Section 5.2 of the Indenture. All
principal payments on the Class A-3 Notes shall be made pro rata to the
Noteholders entitled thereto.
A-3-5
<PAGE> 126
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
A-3-6
<PAGE> 127
The Issuer shall pay interest on overdue installments of interest at the
Class A-3 Rate to the extent lawful.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in authorized
denominations and in the same aggregate principal amount will be issued to the
designated transferee or transferees. No service charge will be charged for
any registration of transfer or exchange of this Note, but the transferor may
be required to pay a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any such registration of transfer
or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such Person may
have expressly agreed and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution for
A-3-7
<PAGE> 128
stock, unpaid capital contribution or failure to pay any installment or call
owing to such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding. The Indenture also
contains provisions permitting the Noteholders of Notes evidencing specified
percentages of the principal amount
A-3-8
<PAGE> 129
of the Notes Outstanding, on behalf of all Noteholders, to waive compliance by
the Issuer with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Noteholder of this Note (or any one or more Predecessor Notes) registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, PNC Bank, Delaware, in its individual capacity, any owner
of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had
A-3-9
<PAGE> 130
to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by
his acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-3-10
<PAGE> 131
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
___________________________
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
_________________________________________________________
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
_________________ ____________________
Signature Guaranteed
____________________*/
______________________________
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
A-3-11
<PAGE> 132
EXHIBIT A-4
[FORM OF CLASS A-4 NOTE]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $189,004,978.96
No. R-1 CUSIP NO. 34527RAP8
FORD CREDIT AUTO OWNER TRUST 1997-B
CLASS A-4 6.15% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to STATE STREET BANK AND
TRUST COMPANY, AS COLLATERAL AGENT UNDER THE SECURITY AGREEMENT, DATED AS OF
DECEMBER 31, 1996, BETWEEN FCAR OWNER TRUST AND SAID COLLATERAL AGENT, or
registered assigns, the principal sum of ONE HUNDRED EIGHTY-NINE MILLION FOUR
THOUSAND NINE HUNDRED SEVENTY-EIGHT DOLLARS AND NINETY-SIX CENTS payable on
each Distribution Date in an amount equal to the result obtained by multiplying
(i) a fraction the numerator of which is $189,004,978.96 (the original face
amount of this Note) and the denominator of which is $189,004,978.96 by (ii)
the aggregate amount, if any, payable to Noteholders of Class A-4 Notes on such
Distribution Date from the Principal Distribution Account in respect of
principal on the Class A-4 Notes pursuant to Section 3.1 of the Indenture dated
as of October 1, 1997 (as from time to time amended, supplemented or otherwise
modified and in effect, the "Indenture"), between the Issuer and The Chase
Manhattan Bank, a New York corporation, as Indenture Trustee (in
such capacity the "Indenture Trustee"); provided, however, that the entire
unpaid principal amount of this Note shall be due and payable on the earlier of
the October 2001 Distribution Date (the "Class A-4 Final Scheduled Distribution
Date") and the Redemption Date, if any,
A-4-1
<PAGE> 133
pursuant to Section 10.1(a) of the Indenture. Capitalized terms used but not
defined herein are defined in Article I of the Indenture, which also contains
rules as to construction that shall be applicable herein.
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the fifteenth day of
the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-4-2
<PAGE> 134
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: October 31, 1997
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By:
------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-4 Notes designated above and referred to in the
within-mentioned Indenture.
Date: October 31, 1997
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By: ___________________________
Authorized Officer
<PAGE> 135
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 6.15% Asset Backed Notes (the "Class A-4 Notes")
which, together with the Issuer's Class A-1 5.748% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.95% Asset Backed Notes (the "Class A-2 Notes"),
Class A-3 6.05% Asset Backed Notes (the "Class A-3 Notes" and, together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-4 Notes, the "Class A
Notes") and Class B 6.40% Asset Backed Notes (the "Class B Notes" and, together
with the Class A Notes, the "Notes"), are issued under the Indenture, to which
Indenture and all indentures supplemental thereto reference is hereby made for
a statement of the respective rights and obligations thereunder of the Issuer,
the Indenture Trustee and the Noteholders. The Notes are subject to all terms
of the Indenture.
The Class A-4 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class A-4 Notes are subordinated in right of payment to the Class A-1 Notes,
the Class A-2 Notes and the Class A-3 Notes and are senior in right of payment
to the Class B Notes, each as and to the extent provided in the Indenture.
Principal of the Class A-4 Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the Class A-4 Final
Scheduled Distribution Date and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing
and the Indenture Trustee or the Noteholders of Notes evidencing not less than
a majority of the principal amount of the Notes Outstanding have declared the
Notes to be immediately due and payable in the manner provided in Section 5.2
of the Indenture. All principal payments
A-4-4
<PAGE> 136
on the Class A-4 Notes shall be made pro rata to the Noteholders entitled
thereto.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
A-4-5
<PAGE> 137
The Issuer shall pay interest on overdue installments of interest at the
Class A-4 Rate to the extent lawful.
As provided in the Indenture, the Class A-4 Notes and the Class B Notes
may be redeemed, in whole but not in part, in the manner and to the extent
described in the Indenture and the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in the same
Class in authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the
case of a Note Owner, a beneficial interest in a Note, covenants and agrees
that no recourse may be taken, directly or indirectly, with respect to the
obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the
Notes or under the Indenture or any certificate or other writing delivered in
connection therewith, against (i) the Indenture Trustee or the Owner Trustee,
each in its individual capacity, (ii) any owner of a beneficial interest in the
Issuer or (iii) any partner, owner, beneficiary, agent, officer, director or
employee of the Indenture Trustee or the Owner Trustee, each in its individual
capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee
or the Indenture Trustee or of any successor or assign of the Indenture Trustee
or the Owner Trustee, each in its individual capacity, except as any such
A-4-6
<PAGE> 138
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders of
A-4-7
<PAGE> 139
Notes evidencing not less than a majority of the principal amount of the Notes
Outstanding. The Indenture also contains provisions permitting the Noteholders
of Notes evidencing specified percentages of the principal amount of the Notes
Outstanding, on behalf of all Noteholders, to waive compliance by the Issuer
with certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Noteholder
of this Note (or any one or more Predecessor Notes) shall be conclusive and
binding upon such Noteholder and upon all future Noteholders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof whether or not notation of such consent or waiver is
made upon this Note. The Indenture also permits the Indenture Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of the Noteholders.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, PNC Bank, Delaware, in its individual capacity,
A-4-8
<PAGE> 140
any owner of a beneficial interest in the Issuer, or any of their respective
partners, beneficiaries, agents, officers, directors, employees or successors
or assigns shall be personally liable for, nor shall recourse be had to any of
them for, the payment of principal or of interest on this Note or performance
of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by
his acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-4-9
<PAGE> 141
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
-------------------- --------------------
Signature Guaranteed
*/
--------------------
- ---------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
A-4-10
<PAGE> 142
EXHIBIT A-5
[FORM OF CLASS B NOTE]
THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN.
ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
REGISTERED $________________
No. R-____ CUSIP NO. 34527RAQ6
FORD CREDIT AUTO OWNER TRUST 1997-B
CLASS B 6.40% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1997-B, a business trust organized and
existing under the laws of the State of Delaware (herein referred to as the
"Issuer"), for value received, hereby promises to pay to ____________, or
registered assigns, the principal sum of ___________ DOLLARS payable on each
Distribution Date in an amount equal to the result obtained by multiplying (i)
a fraction the numerator of which is $__________ (the original face amount of
this Note) and the denominator of which is $93,501,000.00 by (ii) the aggregate
amount, if any, payable to Noteholders of Class B Notes on such Distribution
Date from the Principal Distribution Account in respect of principal on the
Class B Notes pursuant to Section 3.1 of the Indenture dated as of October 1,
1997 (as from time to time amended, supplemented or otherwise modified and in
effect, the "Indenture"), between the Issuer and The Chase Manhattan Bank, a
New York corporation, as Indenture Trustee (in such capacity the "Indenture
Trustee"); provided, however, that the entire unpaid principal amount of this
Note shall be due and payable on the earlier of the May 2002 Distribution Date
(the "Class B Final Scheduled Distribution Date") and the Redemption
Date, if any, pursuant to Section 10.1(a) of the Indenture. Capitalized terms
used but not defined herein are defined in Article I of the Indenture, which
also contains rules as to construction that shall be applicable herein.
A-5-1
<PAGE> 143
The Issuer shall pay interest on this Note at the rate per annum shown
above on each Distribution Date until the principal of this Note is paid or
made available for payment, on the principal amount of this Note outstanding on
the preceding Distribution Date (after giving effect to all payments of
principal made on the preceding Distribution Date), subject to certain
limitations contained in Section 3.1 of the Indenture. Interest on this Note
will accrue for each Distribution Date from and including the fifteenth day of
the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set forth on the
reverse hereof, which shall have the same effect as though fully set forth on
the face of this Note.
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-5-2
<PAGE> 144
IN WITNESS WHEREOF, the Issuer has caused this instrument to be signed,
manually or in facsimile, by its Authorized Officer, as of the date set forth
below.
Date: October 31, 1997
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee under the Trust
Agreement
By:
------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class B Notes designated above and referred to in the
within-mentioned Indenture.
Date: October 31, 1997
THE CHASE MANHATTAN BANK,
not in its individual capacity but solely as
Indenture Trustee
By: ___________________________
Authorized Officer
<PAGE> 145
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B 6.40% Asset Backed Notes (the "Class B Notes" and,
together with the Class A Notes referred to below, the "Notes") which, together
with the Issuer's Class A-1 5.748% Asset Backed Notes (the "Class A-1 Notes"),
Class A-2 5.95% Asset Backed Notes (the "Class A-2 Notes"), Class A-3 6.05%
Asset Backed Notes (the "Class A-3 Notes") and Class A-4 6.15% Asset Backed
Notes (the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class
A-2 Notes and the Class A-3 Notes, the "Class A Notes"), are issued under the
Indenture, to which Indenture and all indentures supplemental thereto reference
is hereby made for a statement of the respective rights and obligations
thereunder of the Issuer, the Indenture Trustee and the Noteholders. The Notes
are subject to all terms of the Indenture.
The Class B Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The
Class B Notes are subordinated in right of payment to the Class A Notes as and
to the extent provided in the Indenture.
Principal of the Class B Notes will be payable on each Distribution Date
in an amount described on the face hereof. "Distribution Date" means the
fifteenth day of each month, or, if any such day is not a Business Day, the
next succeeding Business Day, commencing November 17, 1997.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the earlier of the Class B Final
Scheduled Distribution Date and the Redemption Date, if any, pursuant to
Section 10.1(a) of the Indenture. Notwithstanding the foregoing, the entire
unpaid principal amount of the Notes shall be due and payable on the date on
which an Event of Default shall have occurred and be continuing and the
Indenture Trustee or the Noteholders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding have declared the
Notes to be immediately due and payable in the manner provided in Section 5.2
of the Indenture. All principal payments
A-5-4
<PAGE> 146
on the Class B Notes shall be made pro rata to the Noteholders entitled
thereto.
Payments of interest on this Note on each Distribution Date, together with
the installment of principal, if any, to the extent not in full payment of this
Note, shall be made to the Person whose name appears as the Registered
Noteholder of the Note (or one or more Predecessor Notes) on the Note Register
as of the close of business on each Record Date either by wire transfer in
immediately available funds, to the account of such Noteholder at a bank or
other entity having appropriate facilities therefor, if such Noteholder shall
have provided to the Note Registrar appropriate written instructions at least
five (5) Business Days prior to such Distribution Date and such Noteholder's
Notes in the aggregate evidence a denomination of not less than $1,000,000, or,
if not, by check mailed first-class postage prepaid to such Person's address as
it appears on the Note Register on such Record Date; provided that, unless
Definitive Notes have been issued to Note Owners, with respect to Notes
registered on the Record Date in the name of the nominee of the Clearing Agency
(initially, such nominee to be Cede & Co.), payments will be made by wire
transfer in immediately available funds to the account designated by such
nominee. Such payments will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of
this Note (or any one or more Predecessor Notes) effected by any payments made
on any Distribution Date shall be binding upon all future Noteholders of this
Note and of any Note issued upon the registration of transfer hereof or in
exchange hereof or in lieu hereof, whether or not noted hereon. If funds are
expected to be available, as provided in the Indenture, for payment in full of
the then remaining unpaid principal amount of this Note on a Distribution Date,
then the Indenture Trustee, in the name of and on behalf of the Issuer, will
notify the Person who was the Registered Noteholder hereof as of the Record
Date preceding such Distribution Date by notice mailed or transmitted by
facsimile prior to such Distribution Date, and the amount then due and payable
shall be payable only upon presentation and surrender of this Note at the
Indenture Trustee's principal Corporate Trust Office or at the office of the
Indenture Trustee's agent appointed for such purposes located in The City of
New York.
A-5-5
<PAGE> 147
The Issuer shall pay interest on overdue installments of interest at the
Class B Rate to the extent lawful.
As provided in the Indenture, the Class A-4 Notes and the Class B Notes
may be redeemed, in whole but not in part, in the manner and to the extent
described in the Indenture and the Sale and Servicing Agreement.
As provided in the Indenture, and subject to certain limitations set forth
therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency
designated by the Issuer pursuant to the Indenture, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Indenture Trustee duly executed by, the Noteholder hereof or such Noteholder's
attorney duly authorized in writing, with such signature guaranteed by an
"eligible guarantor institution" meeting the requirements of the Note
Registrar, and thereupon one or more new Notes of the same Class in the same
Class in authorized denominations and in the same aggregate principal amount
will be issued to the designated transferee or transferees. No service charge
will be charged for any registration of transfer or exchange of this Note, but
the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such
registration of transfer or exchange.
Each Noteholder or Note Owner, by its acceptance of a Note or, in the case
of a Note Owner, a beneficial interest in a Note, covenants and agrees that no
recourse may be taken, directly or indirectly, with respect to the obligations
of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under
the Indenture or any certificate or other writing delivered in connection
therewith, against (i) the Indenture Trustee or the Owner Trustee, each in its
individual capacity, (ii) any owner of a beneficial interest in the Issuer or
(iii) any partner, owner, beneficiary, agent, officer, director or employee of
the Indenture Trustee or the Owner Trustee, each in its individual capacity,
any holder of a beneficial interest in the Issuer, the Owner Trustee or the
Indenture Trustee or of any successor or assign of the Indenture Trustee or the
Owner Trustee, each in its individual capacity, except as any such
A-5-6
<PAGE> 148
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law,
for any unpaid consideration for stock, unpaid capital contribution for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in the case of
a Note Owner, a beneficial interest in a Note, covenants and agrees by
accepting the benefits of the Indenture that such Noteholder or Note Owner will
not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is issued with the
intention that, for federal, State and local income, and franchise tax
purposes, the Notes will qualify as indebtedness of the Issuer secured by the
Indenture Trust Estate. Each Noteholder, by its acceptance of a Note (and each
Note Owner by its acceptance of a beneficial interest in a Note), will be
deemed to agree to treat the Notes for federal, State and local income, single
business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of this Note,
the Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Noteholders under the Indenture at any time by the
Issuer with the consent of the Noteholders of
A-5-7
<PAGE> 149
Notes evidencing not less than a majority of the principal amount of the Notes
Outstanding. The Indenture also contains provisions permitting the
Noteholders of Notes evidencing specified percentages of the principal amount
of the Notes Outstanding, on behalf of all Noteholders, to waive
compliance by the Issuer with certain provisions of the Indenture and certain
past defaults under the Indenture and their consequences. Any such consent or
waiver by the Noteholder of this Note (or any one or more Predecessor Notes)
shall be conclusive and binding upon such Noteholder and upon all future
Noteholders of this Note and of any Note issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof whether or not notation
of such consent or waiver is made upon this Note. The Indenture also permits
the Indenture Trustee to amend or waive certain terms and conditions set forth
in the Indenture without the consent of the Noteholders.
The term "Issuer", as used in this Note, includes any successor to the
Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain circumstances, to
merge or consolidate, subject to the rights of the Indenture Trustee and the
Noteholders under the Indenture.
The Notes are issuable only in registered form in denominations as
provided in the Indenture, subject to certain limitations therein set forth.
This Note and the Indenture shall be governed by, and construed in
accordance with the laws of the State of New York, without reference to its
conflicts of law provisions.
No reference herein to the Indenture, and no provision of this Note or of
the Indenture, shall alter or impair the obligation of the Issuer, which is
absolute and unconditional, to pay the principal of and interest on this Note
at the times, place and rate, and in the coin or currency herein prescribed.
The Class B Notes may not be acquired by or on behalf of (A) an employee
benefit plan, as defined in Section 3(3) of ERISA, that is subject to Title I
of ERISA, (B) a plan described in Section 4975(e)(1) of the
A-5-8
<PAGE> 150
Code, (C) a governmental plan, as defined in Section 3(32) of ERISA, subject to
any federal, State or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29 C.F.R.
Section 2510.3-101) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any insurance
company general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
In addition, the Class B Notes may not be acquired by or on behalf of a
Person other than (A) a citizen or resident of the United States, (B) a
corporation or partnership organized in or under the laws of the
United States or any political subdivision thereof, (C) an estate the income of
which is includible in gross income for United States tax purposes, regardless
of its source, (D) a trust if a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more Persons
meeting the conditions of this paragraph (ii) has the authority to control all
substantial decisions of the trust or (E) a Person not described in clauses (A)
through (D) above whose ownership of the Class B Notes is effectively connected
with such Person's conduct of a trade or business within the United States
(within the meaning of the Code) and who provides the Indenture Trustee and the
Issuer with an IRS Form 4224 (and such other certifications, representations,
or opinions of counsel as may be requested by the Indenture Trustee or the
Issuer).
Anything herein to the contrary notwithstanding, except as expressly
provided in the Basic Documents, none of The Chase Manhattan Bank, in its
individual capacity, PNC Bank, Delaware, in its individual capacity, any owner
of a beneficial interest in the Issuer, or any of their respective partners,
beneficiaries, agents, officers, directors, employees or successors or assigns
shall be personally liable for, nor shall recourse be had to any of them for,
the payment of principal or of interest on this Note or performance of, or
omission to perform, any of the covenants, obligations or indemnifications
contained in the Indenture. The Noteholder of this Note, by his acceptance
hereof, agrees that, except
A-5-9
<PAGE> 151
as expressly provided in the Basic Documents, in the case of an Event of
Default under the Indenture, the Noteholder shall have no claim against any of
the foregoing for any deficiency, loss or claim therefrom; provided, however,
that nothing contained herein shall be taken to prevent recourse to, and
enforcement against, the assets of the Issuer for any and all liabilities,
obligations and undertakings contained in the Indenture or in this Note.
A-5-10
<PAGE> 152
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints _________________, attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
-------------------- ----------------------
Signature Guaranteed
*/
----------------------
- ----------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change whatever.
Such signature must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Note Registrar.
A-5-11
<PAGE> 153
EXHIBIT B
[FORM OF NOTE DEPOSITORY AGREEMENT]
B-1
<PAGE> 154
EXHIBIT C
[FORM OF INVESTMENT LETTER]
[Date]
Ford Credit Auto Owner Trust 1997-B,
as Issuer
The Chase Manhattan Bank,
as Indenture Trustee and
as Note Registrar
450 West 33rd Street
New York, New York 10001
Ladies and Gentlemen:
In connection with our proposed purchase of the Class B 6.40% Asset Backed
Notes (the "Class B Notes") of Ford Credit Auto Owner Trust 1997-B (the
"Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P., we confirm
that:
1. We are not, and each account (if any) for which we are purchasing the
Class B Notes is not, (A) an employee benefit plan (as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"))
that is subject to Title I of ERISA, (B) a plan described in Section 4975(e)(1)
of the Internal Revenue Code of 1986, as amended (the "Code"), (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29 C.F.R.
Section 2510.3-101) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any insurance
company general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
2. We are, and each account (if any) for which we are purchasing the
Class B Notes is, a person who is (A) a citizen or resident of the United
States, (B) a corporation or partnership organized in or under the laws of the
United States or any political subdivision there-
C-1
<PAGE> 155
of, (C) an estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, (D) a trust if a U.S. court is
able to exercise primary supervision over the administration of such trust and
one or more Persons meeting the conditions of this paragraph 2 has the
authority to control all substantial decisions of the trust or (E) a Person not
described in clauses (A) through (D) above whose ownership of the Class B Notes
is effectively connected with such Person's conduct of a trade or business
within the United States (within the meaning of the Code) and who provides the
Indenture Trustee and the Issuer with an IRS Form 4224 (and such other
certifications, representations, or opinions of counsel as may be requested by
the Indenture Trustee or the Issuer).
3. We understand that any purported transfer of any Class B Note (or any
interest therein) to any person who does not meet the conditions of paragraphs
1 and 2 above shall be null and void, and the purported transferee in any such
purported transfer shall not be recognized by the Issuer or any other person as
a Noteholder of a Class B Note for any purpose.
4. We agree that if we determine to transfer any of the Class B Notes we
will cause our proposed transferee to provide to the Indenture Trustee, the
Note Registrar and the Issuer a letter substantially in the form of this
letter.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:_________________________
Name:
Title:
Securities To Be Purchased:
$ principal amount of Class B Notes
C-2
<PAGE> 156
Annex A attached hereto lists the name of the account and principal amount of
Class B Notes purchased for each account (if any) for which we are purchasing
Class B Notes.
C-3
<PAGE> 157
SCHEDULE A
Schedule of Receivables
[Provided to the Indenture Trustee at the Closing]
SA-1
<PAGE> 158
APPENDIX A
Definitions and Usage
AA-1
<PAGE> 1
EXHIBIT 4.2
================================================================================
AMENDED AND RESTATED
TRUST AGREEMENT
between
FORD CREDIT AUTO RECEIVABLES TWO L.P.
as Depositor,
and
PNC BANK, DELAWARE,
as Owner Trustee
Dated as of October 1, 1997
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND USAGE
ARTICLE II
ORGANIZATION OF THE TRUST
<S> <C> <C>
SECTION 2.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.3. Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.5. Capital Contribution of Owner Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.7. Liability of the Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.8. Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.10. Representations and Warranties of the Depositor . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.11. Federal Income Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2. Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.4. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.5. Registration of Certificates; Transfer and Exchange of Certificates . . . . . . . . . . . . . . 11
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 3.7. Persons Deemed Owners of Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3.8. Access to List of Certificateholders' Names and Addresses . . . . . . . . . . . . . . . . . . . 14
SECTION 3.9. Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.10. Appointment of Certificate Paying Agent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 3.11. Certain Rights of Depositor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with Respect to Certain Matters . . . . . . . . . . . . . . . 17
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.3. Action by Certificateholders with Respect to Bankruptcy . . . . . . . . . . . . . . . . . 18
SECTION 4.4. Restrictions on Certificateholders' Power . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 4.5. Majority Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution Account . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.2. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.3. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
SECTION 5.4. No Segregation of Monies; No Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.5. Accounting and Reports to Noteholders, Certificateholders, Internal Revenue Service and
Others. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.6. Signature on Returns; Tax Matters Partner. . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.2. General Duties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
SECTION 6.3. Action upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 6.4. No Duties Except as Specified in this Agreement or in Instructions . . . . . . . . . . . 26
SECTION 6.5. No Action Except Under Specified Documents or Instructions. . . . . . . . . . . . . . . . 27
SECTION 6.6. Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.2. Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.3. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.4. Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.5. Not Acting in Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 7.6. Owner Trustee Not Liable for Certificates or Receivables. . . . . . . . . . . . . . . . . 31
SECTION 7.7. Bank May Own Certificates and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
</TABLE>
ii
<PAGE> 4
<TABLE>
ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
<S> <C> <C>
SECTION 8.1. Owner Trustee's Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 8.2. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 8.3. Payments to Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 9.2. Dissolution upon Insolvency or Dissolution of Depositor or General Partner . . . . . . . . . . . 37
SECTION 9.3. Prepayment of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.2. Resignation or Removal of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 10.3. Successor Owner Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 10.4. Merger or Consolidation of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 43
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
SECTION 11.2. No Legal Title to Owner Trust Estate in Certificateholders . . . . . . . . . . . . . . . . . . . 48
SECTION 11.3. Limitation on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 11.4. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.5. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.6. Separate Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.8. No Petition. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 11.9. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
SECTION 11.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
EXHIBIT A Form of Certificate
EXHIBIT B Form of Certificate of Trust
EXHIBIT C Form of Investment Letter
APPENDIX A Definitions and Usage
</TABLE>
iii
<PAGE> 5
AMENDED AND RESTATED TRUST AGREEMENT, dated as of October 1, 1997 (as
from time to time amended, supplemented or otherwise modified and in effect,
this "Agreement"), between FORD CREDIT AUTO RECEIVABLES TWO L.P., a Delaware
limited partnership, as Depositor, having its principal executive office at The
American Road, Dearborn, Michigan 48121; and PNC BANK, DELAWARE, a Delaware
banking corporation (the "Bank"), not in its individual capacity but solely as
trustee under this Agreement (in such capacity, the "Owner Trustee"), having its
principal corporate trust office at 222 Delaware Avenue, Wilmington, Delaware
19801.
WHEREAS, the parties hereto intend to amend and restate that certain
Trust Agreement, dated as of October 1, 1997, between the Depositor and the
Owner Trustee, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the receipt and sufficiency of which are hereby acknowledged,
the Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
<PAGE> 6
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust created hereby shall be known
as "Ford Credit Auto Owner Trust 1997-B", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and sue and be sued.
SECTION 2.2. Office. The office of the Trust shall be in
care of the Owner Trustee at the Corporate Trust Office or at such other
address in the State of Delaware as the Owner Trustee may designate by written
notice to the Certificateholders and the Depositor.
SECTION 2.3. Purposes and Powers. (a) The purpose of the
Trust is, and the Trust shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture, and the
Certificates pursuant to this Agreement, and to sell the Notes and the
Certificates upon the written order of the Depositor;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to fund the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust, and to pay the
balance to the Depositor pursuant to the Sale and Servicing Agreement;
(iii) to pay interest on and principal of the Notes and
distributions on the Certificates;
(iv) to Grant the Owner Trust Estate (other than the
Certificate Distribution Account and the proceeds thereof) to the
Indenture Trustee pursuant to the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
2
<PAGE> 7
(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Capital Contribution of Owner Trust Estate. As
of October 1, 1997, the Depositor sold, assigned, transferred, conveyed and set
over to the Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges
receipt in trust from the Depositor, as of such date, of the foregoing
contribution, which shall constitute the initial Owner Trust Estate and shall
be deposited in the Certificate Distribution Account. The Depositor shall pay
the organizational expenses of the Trust as they may arise or shall, upon the
request of the Owner Trustee, promptly reimburse the Owner Trustee for any such
expenses paid by the Owner Trustee. On the Closing Date, the Depositor shall
convey to the Trust the Trust Property and the Owner Trustee shall convey to
the Depositor the Notes and the Certificates.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that (i) the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such business
3
<PAGE> 8
trust and (ii) for income and franchise tax purposes, the Trust shall be
treated as a partnership, with the assets of the partnership being the
Receivables and other assets held by the Trust, the partners of the partnership
being the Certificateholders and the Depositor and the Notes constituting
indebtedness of the partnership. The parties agree that, unless otherwise
required by the appropriate tax authorities, the Depositor, on behalf of the
Trust, will file or cause to be filed annual or other necessary returns,
reports and other forms consistent with the characterization of the Trust as a
partnership for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have the rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee has filed the Certificate of Trust with the Secretary of
State.
SECTION 2.7. Liability of the Depositor. (a)
Notwithstanding Section 3803 of the Business Trust Statute, the Depositor in
its capacity as the holder of the interests described in Section 3.11 shall be
liable directly to, and will indemnify each injured party for, all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent that the assets of the Trust that would remain if all of the Notes
were paid in full would be insufficient to pay any such losses, claims,
damages, liabilities or expenses, or to the extent that such losses, claims,
damages, liabilities and expenses in fact are not paid out of the Owner Trust
Estate) that the Depositor would be liable for if the Trust were a partnership
under the Limited Partnership Act in which the Depositor were a general
partner; provided, however, that the Depositor shall not be liable to or
indemnify Noteholders or Note Owners for any losses incurred by Noteholders or
Note Owners in their capacity as holders of or beneficial owners of interests
in limited recourse debt secured by the Owner Trust Estate or be liable to or
indemnify Certificateholders for any losses incurred by the Certificateholders
if such losses would nevertheless have been incurred if the Certificates were
limited recourse debt secured by the Owner Trust Estate. In addition, any
third-party creditors of the Trust, or the arrangement between the Depositor
and the Trust (other than in connection with the obligations described in the
preceding sentence for which the Depositor shall
4
<PAGE> 9
not be liable), shall be deemed third-party beneficiaries of this paragraph.
(b) No Certificateholder other than the Depositor to the
extent set forth in paragraph (a) of this Section 2.7, shall have any personal
liability for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property. Legal title to the
entirety of the Owner Trust Estate shall be vested at all times in the Trust as
a separate legal entity, except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a trustee
or trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
SECTION 2.9. Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. The Trust shall not have any employees in any state
other than the State of Delaware; provided, however, that nothing herein shall
restrict or prohibit the Bank or the Owner Trustee from having employees within
or without the State of Delaware. Payments will be received by the Trust only
in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in the State of Delaware.
SECTION 2.10. Representations and Warranties of the
Depositor. The Depositor hereby represents and warrants to the Owner Trustee
that:
(a) The Depositor is duly organized and validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted.
(b) The Depositor is duly qualified to do business as a
foreign limited partnership in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
5
<PAGE> 10
of property or the conduct of its business shall require such qualifications.
(c) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the Depositor has full
power and authority to sell and assign the property to be sold and assigned to,
and deposited with, the Trust, and the Depositor has duly authorized such sale
and assignment and deposit to the Trust; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor.
(d) This Agreement constitutes a legal, valid, and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the Certificate of
Limited Partnership or the Limited Partnership Agreement, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound; nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law
or, to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) There are no proceedings or investigations pending or, to
the Depositor's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
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Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or (iv) which might adversely affect the
federal income tax attributes, or Applicable Tax State franchise or income tax
attributes, of the Notes and the Certificates.
(g) The representations and warranties of the Depositor in
Section 3.1 of the Purchase Agreement are true and correct.
SECTION 2.11. Federal Income Tax Matters. The
Certificateholders acknowledge that it is their intent and that they understand
it is the intent of the Depositor and the Servicer that, for purposes of
federal income, state and local income and franchise tax and any other income
taxes, the Trust will be treated as a partnership and the Certificateholders
and the Depositor will be treated as partners in that partnership. The
Depositor hereby agrees and the Certificateholders by acceptance of a
Certificate agree to such treatment and each agrees to take no action
inconsistent with such treatment. For purposes of federal income, State and
local income and franchise tax and any other income taxes each month:
(a) amounts paid to any Certificateholder pursuant to
Section 5.2(a)(i) shall be treated as a guaranteed payment within the
meaning of Section 707(c) of the Code;
(b) to the extent the characterization provided for in
paragraph (a) of this Section 2.11 is not respected, gross ordinary
income of the Trust for such month as determined for federal income
tax purposes shall be allocated among the Certificateholders as of the
Record Date occurring within such month, in proportion to their
ownership of the aggregate Certificate Balance on such date, in an
amount up to the sum of (i) the Accrued Certificate Interest for such
month, (ii) the portion of the market discount on the Receivables
accrued during such month that is allocable to the excess, if any,
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of the aggregate Initial Certificate Balance of the Certificates over
their initial aggregate issue price and (iii) any amount expected to be
distributed to the Certificateholders pursuant to Sections 4.6(c) and
(d) of the Sale and Servicing Agreement (to the extent not previously
allocated pursuant to this paragraph (b)) to the extent necessary to
reverse any net loss previously allocated to Certificateholders (to the
extent not previously reversed pursuant to this clause (iii)); and
(c) thereafter all remaining net income of the Trust (subject to
the modifications set forth below) for such month as determined for
federal income tax purposes (and each item of income, gain, credit, loss
or deduction entering into the computation thereof) shall be allocated
to the Depositor, to the extent thereof.
If the gross ordinary income of the Trust for any month is insufficient for the
allocations described in paragraph (b) above, subsequent gross ordinary income
shall first be allocated to make up such shortfall before any allocation
pursuant to paragraph (c) above. Net losses of the Trust, if any, for any
month as determined for federal income tax purposes (and each item of income,
gain, credit, loss or deduction entering into the computation thereof) shall be
allocated to the Depositor to the extent the Depositor, in its capacity as
"general partner," is reasonably expected to bear the economic burden of such
net losses, and any remaining net losses shall be allocated among the
Certificateholders as of the Record Date occurring within such month in
proportion to their ownership of the aggregate Certificate Balance on such
Record Date. The Depositor is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Depositor or the Certificateholders or as otherwise required by the Code.
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<PAGE> 13
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership. Upon the
formation of the Trust by the contribution by the Depositor pursuant to Section
2.5 and until the issuance of the Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.2. Capital Accounts. (a) The Owner Trustee shall
establish and maintain a separate bookkeeping account (a "Capital Account") for
the Depositor and each Certificateholder. The initial balance of the Capital
Account for (i) each Certificateholder shall be the amount initially paid for
the Certificate and (ii) the Depositor shall be (x) the fair market value of
the Receivables minus (y) the proceeds of the sale of Notes and Certificates
net of the Reserve Initial Deposit. The Capital Account of the Depositor or
each Certificateholder shall also be increased by (i) the dollar amount of any
additional cash contributions made by the Depositor or such Certificateholder,
as the case may be, (ii) the fair market value of any property (other than
cash) contributed to the Trust by the Depositor or such Certificateholder, as
the case may be (net of any liabilities to which the property is subject), and
(iii) allocations to the Depositor or such Certificateholder, as the case may
be, of income and gain (including income exempt from tax). The Capital Account
of the Depositor or each Certificateholder shall be decreased by (i) the dollar
amount of any cash distributions made to the Depositor or such
Certificateholder, as the case may be, (ii) the fair market value of any
property (other than cash) distributed to the Depositor or such
Certificateholder, as the case may be (net of any liabilities to which the
property is subject), (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of loss or deductions (or items
thereof), and (iv) any allocations of expenditures of the Trust described in
Section 705(a)(2)(B) of the Code.
(b) Notwithstanding any other provision of this
Agreement to the contrary, the foregoing provisions of this Section 3.2
regarding the maintenance of Capital Accounts shall be construed so as to
comply with the provisions of the Treasury Regulations promulgated
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pursuant to Section 704 of the Code. The Depositor is hereby authorized to
modify these provisions to the minimum extent necessary to comply with such
regulations.
SECTION 3.3. The Certificates. The Certificates shall be
issued in one or more registered, definitive, physical certificates, in the
form set forth in Exhibit A, in denominations of at least $20,000 and in
integral multiples of $1,000 in excess thereof. No Certificate may be sold,
transferred, assigned, participated, pledged, or otherwise disposed of (any
such act, a "Transfer") to any Person except in accordance with the provisions
of Section 3.5 and any attempted Transfer in violation of Section 3.5 shall be
null and void (each a "Void Transfer").
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefits of this Agreement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates.
If Transfer of the Certificates is permitted pursuant to
Section 3.5, a transferee of a Certificate shall become a Certificateholder,
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.5.
SECTION 3.4. Authentication of Certificates. Concurrently
with the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Certificates, in an
aggregate principal balance equal to the Initial Certificate Balance, to be
executed on behalf of the Trust, authenticated and delivered to or upon the
written order of the Depositor, signed by the chairman of the board, the
president, any executive vice president, any vice president, the secretary, any
assistant secretary, the trea-
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surer or any assistant treasurer of the General Partner, without further action
by the Depositor, in authorized denominations. No Certificate shall entitle
its Certificateholder to any benefit under this Agreement, or shall be valid
for any purpose, unless there shall appear on such Certificate a certificate of
authentication substantially in the form set forth in Exhibit A attached hereto
executed by the Owner Trustee by manual signature; such authentication shall
constitute conclusive evidence that such Certificate shall have been duly
authenticated and delivered hereunder. All Certificates shall be dated the
date of their authentication.
SECTION 3.5. Registration of Certificates; Transfer and
Exchange of Certificates. (a) The Certificate Registrar shall keep or cause
to be kept, at the office or agency maintained pursuant to Section 3.9, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trust shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. The Bank shall be
the initial Certificate Registrar. No Transfer of a Certificate shall be
recognized except upon registration of such Transfer in the Certificate
Register.
(b) No Transfer of any Certificate shall be permitted,
recognized or recorded unless the prospective transferee of such Certificate
shall provide a letter in the form of Exhibit C to the Trust, the Owner Trustee
and the Certificate Registrar, in which such prospective transferee shall
represent the following:
(i) It is not, and each account (if any) for which it is
purchasing the Certificates is not, (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA,
(B) a plan described in Section 4975(e)(1) of the Code, (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to
any federal, State or local law which is, to a material extent,
similar to the provisions of Section 406 of ERISA or Section 4975 of
the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of
Department of Labor Regulation 29 C.F.R. Section 2510.3-101) or (E) a
person investing "plan assets" of any such plan (including without
limitation, for purposes of this
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clause (E), any insurance company general account, but excluding any
entity registered under the Investment Company Act of 1940, as
amended).
(ii) It is, and each account (if any) for which it is
purchasing the Certificates is, a Person who is (A) a citizen or
resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (C) an estate the income of which is includible
in gross income for United States tax purposes, regardless of its
source, (D) a trust if a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more
Persons meeting the conditions of this paragraph (ii) has the
authority to control all substantial decisions of the trust or (E) a
Person not described in clauses (A) through (D) above whose ownership
of the Certificates is effectively connected with such Person's
conduct of a trade or business within the United States (within the
meaning of the Code) and who provides the Owner Trustee and the
Depositor with an IRS Form 4224 (and such other certifications,
representations, or opinions of counsel as may be requested by the
Owner Trustee or the Depositor).
(iii) It understands that any purported Transfer of any
Certificate (or any interest therein) to any Person who does not meet
the conditions of paragraphs (i) and (ii) above shall be a Void
Transfer, and the purported transferee in a Void Transfer shall not be
recognized by the Trust or any other Person as a Certificateholder for
any purpose.
(iv) It agrees that if it determines to Transfer any of the
Certificates it will cause its proposed transferee to provide to the
Trust, the Owner Trustee and the Certificate Registrar a letter
substantially in the form of Exhibit C hereof or such other written
statement as the Depositor shall prescribe.
(c) Upon surrender for registration of Transfer of any
Certificate at the office or agency maintained pursuant to Section 3.9, the
Owner Trustee shall execute, authenticate and deliver, in the name of the
designated
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transferee or transferees, one or more new Certificates in authorized
denominations of a like aggregate amount dated the date of authentication by
the Owner Trustee or any authenticating agent. At the option of a
Certificateholder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of the
Certificates to be exchanged at the office or agency maintained pursuant to
Section 3.9.
Every Certificate presented or surrendered for registration of
Transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar, duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by a member firm of the New York Stock Exchange
or a commercial bank or trust company. Each Certificate surrendered for
registration of Transfer or exchange shall be cancelled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of
Transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any Transfer or
exchange of Certificates.
The preceding provisions of this Section 3.5 notwithstanding,
the Owner Trustee shall not make and the Certificate Registrar need not
register any Transfer or exchange of Certificates for a period of fifteen (15)
days preceding any Distribution Date for any payment with respect to the
Certificates.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Certificate and
(b) there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice that such Certificate shall have been
acquired by a protected purchaser, the Owner Trustee on behalf of the Trust
shall
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execute and the Owner Trustee shall authenticate and deliver, in exchange for,
or in lieu of, any such mutilated, destroyed, lost or stolen Certificate a new
Certificate of like tenor and denomination. In connection with the issuance of
any new Certificate under this Section 3.6, the Owner Trustee or the
Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Certificate issued pursuant to this Section 3.6 shall constitute
conclusive evidence of ownership in the Trust, as if originally issued, whether
or not the lost, stolen or destroyed Certificate shall be found at any time.
SECTION 3.7. Persons Deemed Owners of Certificates. Prior to
due presentation of a Certificate for registration of Transfer, the Owner
Trustee, the Certificate Registrar and any Certificate Paying Agent may treat
the Person in whose name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes whatsoever,
and none of the Owner Trustee, the Certificate Registrar or any Certificate
Paying Agent shall be bound by any notice to the contrary.
SECTION 3.8. Access to List of Certificateholders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, or to the Indenture Trustee, within fifteen (15)
days after receipt by the Owner Trustee of a written request therefor from the
Servicer or the Depositor, or the Indenture Trustee, as the case may be, a
list, in such form as the requesting party may reasonably require, of the names
and addresses of the Certificateholders as of the most recent Record Date. If
three or more Certificateholders or one or more Certificateholders of
Certificates evidencing not less than 25% of the Certificate Balance apply in
writing to the Owner Trustee, and such application states that the applicants
desire to communicate with other Certificateholders with respect to their
rights under this Agreement or under the Certificates and such application is
accompanied by a copy of the communication that such applicants propose to
transmit, then the Owner Trustee shall, within five (5) Business Days after the
receipt of such application, afford such applicants access during normal
business hours to the current list
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of Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.9. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the State of Delaware, an office or offices or agency
or agencies where Certificates may be surrendered for registration of Transfer
or exchange and where notices and demands to or upon the Owner Trustee in
respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates PNC Bank, Delaware, 222 Delaware Avenue,
Wilmington, Delaware 19801, Attention: Michael B. McCarthy as its principal
corporate trust office for such purposes. The Owner Trustee shall give prompt
written notice to the Depositor and to the Certificateholders of any change in
the location of the Certificate Registrar or any such office or agency.
SECTION 3.10. Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from
the Certificate Distribution Account pursuant to Section 5.2 and shall report
the amounts of such distributions to the Owner Trustee. Any Certificate Paying
Agent shall have the revocable power to withdraw funds from the Certificate
Distribution Account for the purpose of making the distributions referred to
above. The Owner Trustee may revoke such power and remove the Certificate
Paying Agent if the Owner Trustee determines in its sole discretion that the
Certificate Paying Agent shall have failed to perform its obligations under
this Agreement in any material respect. The Certificate Paying Agent shall
initially be the Owner Trustee, and any co-paying agent chosen by the Owner
Trustee. The Owner Trustee shall be permitted to resign as Certificate Paying
Agent upon thirty (30) days' written notice to the Owner Trustee. In the event
that the Bank shall no longer be the Certificate Paying Agent, the Owner
Trustee shall appoint a successor to act as Certificate Paying Agent (which
shall be a bank or trust company). The Owner Trustee shall cause such
successor Certificate Paying Agent or any additional Certificate Paying Agent
appointed by the
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Owner Trustee to execute and deliver to the Owner Trustee an instrument in
which such successor Certificate Paying Agent or additional Certificate Paying
Agent shall agree with the Owner Trustee that as Certificate Paying Agent, such
successor Certificate Paying Agent or additional Certificate Paying Agent will
hold all sums, if any, held by it for payment to the Certificateholders in
trust for the benefit of the Certificateholders entitled thereto until such
sums shall be paid to such Certificateholders. The Certificate Paying Agent
shall return all unclaimed funds to the Owner Trustee and upon removal of a
Certificate Paying Agent such Certificate Paying Agent shall also return all
funds in its possession to the Owner Trustee. The provisions of Sections 7.1,
7.3, 7.4 and 8.1 shall apply to the Owner Trustee also in its role as
Certificate Paying Agent, for so long as the Owner Trustee shall act as
Certificate Paying Agent and, to the extent applicable, to any other paying
agent appointed hereunder. Any reference in this Agreement to the Certificate
Paying Agent shall include any co-paying agent unless the context requires
otherwise.
SECTION 3.11. Certain Rights of Depositor. The Depositor
shall be entitled to any amounts not needed on any Distribution Date to make
payments on the Notes or the Certificates or to make deposits to the Reserve
Account pursuant to Section 4.6 of the Sale and Servicing Agreement, and to
receive amounts remaining in the Reserve Account following the payment in full
of the aggregate principal amount of the Notes and the Certificate Balance and
of all other amounts owing or to be distributed hereunder or under the
Indenture or the Sale and Servicing Agreement to Noteholders and
Certificateholders and the termination of the Trust. The Depositor may not
Transfer any such rights unless it shall have received an Opinion of Counsel
that such Transfer shall not cause the Trust to be classified as an association
(or publicly traded partnership) taxable as a corporation.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action unless, (I) at least thirty (30) days before the taking
of such action, the Owner Trustee shall have notified the Certificateholders
and the Rating Agencies in writing of the proposed action and (II)
Certificateholders holding not less than a majority of the aggregate
Certificate Balance shall not have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by
the Trust (except claims or lawsuits brought by the Servicer in
connection with the collection of the Receivables) and the settlement
of any material action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits
for collection by the Servicer of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interests
of the Certificateholders;
(e) the amendment, change or modification of the Sale and
Servicing Agreement or the Administration Agreement, except to cure
any ambiguity or to amend or supplement any provision in a manner or
to add any provision that would not materially adverse-
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ly affect the interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Note Paying Agent or Indenture Trustee, or
pursuant to this Agreement of a successor Certificate Registrar, or
the consent to the assignment by the Note Registrar, Note Paying Agent
or Indenture Trustee or Certificate Registrar of its obligations under
the Indenture or this Agreement, as applicable.
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee may not, except upon the occurrence of an
Event of Servicing Termination subsequent to the payment in full of the Notes
and in accordance with the written direction of Certificateholders holding not
less than a majority of the aggregate Certificate Balance, (a) remove the
Servicer under the Sale and Servicing Agreement pursuant to Article VIII
thereof, (b) appoint a successor Servicer pursuant to Article VIII of the Sale
and Servicing Agreement, (c) remove the Administrator under the Administration
Agreement pursuant to Section 9 thereof or (d) appoint a successor
Administrator pursuant to Section 9 of the Administration Agreement.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust unless the Notes have been paid
in full and each Certificateholder (other than the Depositor) approves of such
commencement in advance and delivers to the Owner Trustee a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement or any of the
other Basic Documents or would be contrary to Section 2.3, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
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SECTION 4.5. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Certificateholders of Certificates evidencing not
less than a majority of the Certificate Balance. Except as expressly provided
herein, any written notice of the Certificateholders delivered pursuant to this
Agreement shall be effective if signed by Certificateholders of Certificates
evidencing not less than a majority of the Certificate Balance at the time of
the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution
Account. Pursuant to Section 4.1(c) of the Sale and Servicing Agreement, there
has been established and there shall be maintained a segregated trust account
in the name of "PNC Bank, Delaware, as Owner Trustee" at a Qualified
Institution or Qualified Trust Institution (which shall initially be the
corporate trust department of the Bank), which shall be designated as the
"Certificate Distribution Account." Except as expressly provided in Section
3.10, the Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee. All monies deposited from time to time in the
Certificate Distribution Account pursuant to the Sale and Servicing Agreement
shall be applied as provided in the Basic Documents. In the event that the
Certificate Distribution Account is no longer to be maintained at the corporate
trust department of the Bank, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be moved
to a Qualified Institution or a Qualified Trust Institution within ten (10)
Business Days (or such longer period not to exceed thirty (30) calendar days as
to which each Rating Agency may consent). The Certificate Distribution Account
will be established and maintained pursuant to an account agreement which
specifies New York law as the governing law.
SECTION 5.2. Application of Trust Funds. (a) On each
Distribution Date, the Owner Trustee (if other than the Certificate Paying
Agent) shall, based on the information contained in the Servicer's Certificate
delivered on the relevant Determination Date pursuant to Section 3.9 of the
Sale and Servicing Agreement, transfer the amounts deposited in the Certificate
Distribution Account pursuant to Sections 4.6(c) and (d) of the Sale and
Servicing Agreement on or prior to such Distribution Date to the Certificate
Paying Agent, or the Certificate Paying Agent, based upon such information,
shall withdraw from the Certificate Distribution Account, for distribution to
the Certificateholders as of the related Record Date on a pro rata basis, to
the extent of funds available, in the following order of priority:
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<PAGE> 25
(i) first, an amount equal to the Accrued
Certificate Interest; and
(ii) second, any funds remaining on deposit in the
Certificate Distribution Account, in reduction of the
Certificate Balance.
(b) On each Distribution Date, the Owner Trustee shall, or
shall cause the Certificate Paying Agent to, send to each Certificateholder as
of the related Record Date the statement provided to the Owner Trustee by the
Servicer pursuant to Section 4.9 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.2. The Owner Trustee and each Certificate
Paying Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
such withholding tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution (such as a distribution to a
non-U.S. Certificateholder), the Owner Trustee may, in its sole discretion,
withhold such amounts in accordance with this paragraph (c). In the event that
a Certificateholder wishes to apply for a refund of any such withholding tax,
the Owner Trustee shall reasonably cooperate with such Certificateholder in
making such claim so long as such Certificateholder agrees to reimburse the
Owner Trustee for any out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to
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each Certificateholder of record on the preceding Record Date either by wire
transfer, in immediately available funds, to the account of such
Certificateholder at a bank or other entity having appropriate facilities
therefor, if (i) such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five (5) Business Days
prior to such Distribution Date and such Certificateholder's Certificates in
the aggregate evidence a denomination of not less than $1,000,000, or (ii) such
Certificateholder is the Depositor or, if not, by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate (whether on the Final Scheduled Distribution Date or
otherwise) will be payable only upon presentation and surrender of such
Certificate at the office or agency maintained for that purpose by the Owner
Trustee pursuant to Section 3.9.
SECTION 5.4. No Segregation of Monies; No Interest. Subject
to Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law, the
Indenture or the Sale and Servicing Agreement, and may be deposited under such
general conditions as may be prescribed by law, and the Owner Trustee shall not
be liable for any interest thereon.
SECTION 5.5. Accounting and Reports to Noteholders,
Certificateholders, Internal Revenue Service and Others. The Owner Trustee
shall, based on information provided by or on behalf of the Depositor, (a)
maintain (or cause to be maintained) the books of the Trust on a calendar year
basis on the accrual method of accounting, (b) deliver (or cause to be
delivered) to each Certificateholder, as may be required by the Code and
applicable Treasury Regulations, such information as may be required (including
Schedule K-1) to enable each Certificateholder to prepare its federal and State
income tax returns, (c) file (or cause to be filed) such tax returns relating
to the Trust (including a partnership information return, IRS Form 1065), and
make such elections as may from time to time be required or appropriate under
any applicable State or federal statute or rule or regulation thereunder so as
to maintain the Trust's characterization as a partnership for federal income
tax
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purposes, (d) cause such tax returns to be signed in the manner required by law
and (e) collect (or cause to be collected) any withholding tax as described in
and in accordance with Section 5.2(c) with respect to income or distributions
to Certificateholders. The Owner Trustee shall elect under Section 1278 of the
Code to include in income currently any market discount that accrues with
respect to the Receivables. The Owner Trustee shall not make the election
provided under Section 754 of the Code.
SECTION 5.6. Signature on Returns; Tax Matters Partner. (a)
The Depositor, as general partner for income tax purposes, shall prepare (or
cause to be prepared) and sign, on behalf of the Trust, the tax returns of the
Trust.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party and any amendment or other agreement, in each case, in such form as the
Depositor shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof and the Depositor's execution of this Agreement, and to
direct the Indenture Trustee to authenticate and deliver (i) Class A-1 Notes in
the aggregate principal amount of $490,000,000.00, (ii) Class A-2 Notes in the
aggregate principal amount of $388,000,000.00, (iii) Class A-3 Notes in the
aggregate principal amount of $514,000,000.00, (iv) Class A-4 Notes in the
aggregate principal amount of $189,004,978.96 and (v) Class B Notes in the
aggregate principal amount of $93,501,000.00. In addition to the foregoing,
the Owner Trustee is authorized to take all actions required of the Trust
pursuant to the Basic Documents. The Owner Trustee is further authorized from
time to time to take such action on behalf of the Trust as is permitted by the
Basic Documents and which the Servicer or the Administrator recommends with
respect to the Basic Documents, except to the extent that this Agreement
expressly requires the consent of Certificateholders for such action.
SECTION 6.2. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, subject to the lien of the Indenture and in
accordance with the provisions of this Agreement and the other Basic Documents.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator is required in the Administration
Agreement to perform any act or to discharge such duty of the Owner Trustee or
the Trust hereunder or under any other Basic Document, and the Owner Trustee
shall not be held liable for the default or failure of the Administrator to
carry
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out its obligations under the Administration Agreement. Except as expressly
provided in the Basic Documents, the Owner Trustee shall have no obligation to
administer, service or collect the Receivables or to maintain, monitor or
otherwise supervise the administration, servicing or collection of the
Receivables.
SECTION 6.3. Action upon Instruction. (a) Subject to
Article IV, and in accordance with the terms of the Basic Documents, the
Certificateholders may, by written instruction, direct the Owner Trustee in the
management of the Trust.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by the terms of
this Agreement or any other Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten (10)
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it shall deem
to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Basic Document or
any such provision is ambiguous as to its application, or is, or appears to be,
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in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten (10) days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or
may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this
Agreement or the other Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee or the Trust is a party, except as expressly
provided by the terms of this Agreement or in any document or written
instruction received by the Owner Trustee pursuant to Section 6.3; and no
implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any lien
(other than the lien of the Indenture) on any part of the Owner Trust Estate
that results from actions by,
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or claims against, the Owner Trustee that are not related to the ownership or
the administration of the Owner Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the other
Basic Documents to which the Trust or the Owner Trust is a party and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
(i) affect the treatment of the Notes as indebtedness for federal income or
Applicable Tax State income or franchise tax purposes, (ii) be deemed to cause
a taxable exchange of the Notes for federal income or Applicable Tax State
income or franchise tax purposes or (iii) cause the Trust or any portion
thereof to be taxable as an association (or publicly traded partnership)
taxable as a corporation for federal income or Applicable Tax State income or
franchise tax purposes. The Certificateholders shall not direct the Owner
Trustee to take action that would violate the provisions of this Section 6.6.
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ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Owner Trust Estate upon the terms of
this Agreement to which the Trust or Owner Trustee is a party and the other
Basic Documents. The Owner Trustee shall not be answerable or accountable
hereunder or under any other Basic Document under any circumstances, except (i)
for its own willful misconduct, bad faith or negligence or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.3
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error
of judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of any Certificateholder, the Indenture Trustee, the
Depositor, the Administrator or the Servicer;
(c) no provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any other Basic Document if
the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes or
amounts distributable on the Certificates;
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(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the
other Basic Documents, other than the certificate of authentication on
the Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Servicer, the Administrator, the Depositor or the
Indenture Trustee under any of the Basic Documents or otherwise and
the Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic
Documents that are required to be performed by the Administrator under
the Administration Agreement, the Servicer under the Sale and
Servicing Agreement or the Indenture Trustee under the Indenture; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this Agreement
or otherwise or in relation to this Agreement or any other Basic
Document, at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have offered to the
Owner Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee to perform
any discretionary act enumerated in this Agreement or in any other
Basic Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its willful misconduct, bad
faith or negligence in the performance of any such act.
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SECTION 7.2. Furnishing of Documents. The Owner Trustee
shall furnish to the Certificateholders, promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware State law, governmental rule
or regulation governing the banking or trust powers of the Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. Reliance; Advice of Counsel. (a) The Owner
Trustee may rely upon, shall be protected in relying upon, and shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
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certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact
or matter and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the other Basic Documents, the Owner Trustee (i) may act directly
or through its agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled Persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
Persons and not contrary to this Agreement or any other Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created, the Bank
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any other Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor, and the Owner Trustee
assumes no responsibility for the
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correctness thereof. The Owner Trustee makes no representations as to the
validity or sufficiency of this Agreement, of any other Basic Document or of
the Certificates (other than the signature and countersignature of the Owner
Trustee on the Certificates) or the Notes, or of any Receivable or related
documents. The Owner Trustee and the Bank shall at no time have any
responsibility or liability for or with respect to the legality, validity and
enforceability of any Receivable, or the perfection and priority of any
security interest created by any Receivable in any Financed Vehicle or the
maintenance of any such perfection and priority, or for or with respect to the
sufficiency of the Owner Trust Estate or its ability to generate the payments
to be distributed to Certificateholders under this Agreement or the Noteholders
under the Indenture, including, without limitation: the existence, condition
and ownership of any Financed Vehicle; the existence and enforceability of any
insurance thereon; the existence and contents of any Receivable on any computer
or other record thereof; the validity of the assignment of any Receivable to
the Trust or any intervening assignment; the completeness of any Receivable;
the performance or enforcement of any Receivable; the compliance by the
Depositor or the Servicer with any warranty or representation made under any
Basic Document or in any related document, or the accuracy of any such warranty
or representation or any action of the Indenture Trustee, the Administrator or
the Servicer or any subservicer taken in the name of the Owner Trustee.
SECTION 7.7. Bank May Own Certificates and Notes. The Bank,
in its individual or any other capacity, may become the owner or pledgee of
Certificates or Notes and may deal with the Depositor, the Servicer, the
Administrator and the Indenture Trustee in banking transactions with the same
rights as it would have if it were not Owner Trustee.
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ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to and
reimbursed by the Depositor for its other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. Such amounts shall be treated for tax purposes as having been
contributed to the Trust by the Depositor and the tax deduction for such
amounts shall be allocated to the Depositor.
SECTION 8.2. Indemnification. The Depositor shall be liable
as prime obligor for, and shall indemnify the Owner Trustee, the Bank and their
respective successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and
expenses) of any kind and nature whatsoever (collectively, "Expenses") which
may at any time be imposed on, incurred by, or asserted against the Owner
Trustee, the Bank or any Indemnified Party in any way relating to or arising
out of this Agreement, the other Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee hereunder; provided that the Depositor shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from (i) the Indemnified Party's own willful misconduct, bad faith or
negligence, or (ii) the inaccuracy of any representation or warranty contained
in Section 7.3 expressly made by the Indemnified Party. The indemnities
contained in this Section 8.2 shall survive the resignation or termination of
the Owner Trustee or the termination of this Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
Section 8.2, the Owner Trustee's
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choice of legal counsel shall be subject to the approval of the Depositor,
which approval shall not be unreasonably withheld.
SECTION 8.3. Payments to Owner Trustee. Any amounts paid to
the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement. (a) This
Agreement (other than the provisions of Article VIII) shall terminate and be of
no further force or effect and the Trust shall dissolve, (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation, (ii) upon the payment
to the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the terms of the Indenture, the Sale and Servicing
Agreement and Article V or (iii) at the time provided in Section 9.2. Any
Insolvency Event, liquidation, dissolution, death or incapacity with respect to
any Certificateholder, other than the Depositor as described in Section 9.2,
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of all or any part of the Trust or Owner Trust Estate nor (z) otherwise affect
the rights, obligations and liabilities of the parties hereto. Upon
dissolution of the Trust, the Owner Trustee shall wind up the business and
affairs of the Trust as required by Section 3808 of the Business Trust Statute.
(b) Except as provided in Section 9.1(a), neither the
Depositor nor any Certificateholder shall be entitled to revoke or terminate
the Trust.
(c) Notice of any termination of the Trust, specifying
the Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of notice of
such termination from the Servicer, stating (i) the Distribution Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment
(after reservation of sums sufficient to pay all claims and obligations, if
any, known to
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the Owner Trustee and payable by the Trust) and (iii) that the Record Date
otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Certificate Paying Agent therein specified. The Owner Trustee
shall give such notice to the Certificate Registrar (if other than the Owner
Trustee) and the Certificate Paying Agent at the time such notice is given to
Certificateholders. Upon presentation and surrender of the Certificates, the
Certificate Paying Agent shall cause to be distributed to Certificateholders
amounts distributable on such Distribution Date pursuant to Section 5.2. Upon
the satisfaction and discharge of the Indenture, and receipt of a certificate
from the Indenture Trustee stating that all Noteholders have been paid in full
and that the Indenture Trustee is aware of no claims remaining against the
Trust in respect of the Indenture and the Notes, the Owner Trustee, in the
absence of actual knowledge of any other claim against the Trust, shall be
deemed to have made reasonable provision to pay all claims and obligations
(including conditional, contingent or unmatured obligations) for purposes of
Section 3808(e) of the Business Trust Statute.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six (6) months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of
their Certificates and the cost thereof shall be paid out of the funds and
other assets that shall remain subject to this Agreement. Subject to
applicable escheat laws, any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Owner Trustee to the Depositor.
(d) Upon final distribution of any funds remaining in the
Trust, the Owner Trustee shall cause the Certificate of Trust to be cancelled
by filing a certificate of cancellation with the Secretary of State in
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accordance with the provisions of Section 3810(c) of the Business Trust
Statute.
SECTION 9.2. Dissolution upon Insolvency or Dissolution of
Depositor or General Partner. Notwithstanding the provisions of Section 3808
of the Business Trust Statute, in the event that an Insolvency Event or a
dissolution shall occur with respect to the Depositor or the General Partner,
the Receivables shall be sold and this Agreement and the Trust shall be
terminated in accordance with Section 9.1 ninety (90) days after the date of
such Insolvency Event or the event giving rise to such dissolution, unless,
before the end of such 90-day period, the Owner Trustee shall have received
written instructions from (a) Certificateholders (other than the Depositor) of
Certificates evidencing not less than a majority of the Certificate Balance and
a majority of the right to receive distributions in respect of interest on the
Certificate Balance (including in each case the Certificate Balance of
Certificates owned by the Servicer and any of its Affiliates other than the
Depositor), (b) the Noteholders (other than the Depositor) of each Class of
Notes evidencing not less than a majority of the principal amount of the
outstanding Notes of such Class and a majority of the right to receive interest
on the outstanding Notes of such Class (including in each case the Notes owned
by the Servicer and any of its Affiliates other than the Depositor), with each
of the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4
Notes and the Class B Notes treated as a separate Class of Notes for this
purpose, and (c) holders of other interests, if any (the existence of which
interests the Administrator will have advised the Owner Trustee in writing), in
the Reserve Account (other than the Depositor) having interests with a value
not less than a majority of the value of all interests in the Reserve Account
(other than any such interests held by the Depositor), to the effect that each
such party disapproves of the liquidation of the Receivables and termination of
the Trust and in connection therewith the Indenture Trustee (i) appoints an
entity acceptable to Ford Credit to acquire an interest in the Trust and to act
as substitute "general partner" of the Trust for federal income tax purposes
and (ii) obtains an Opinion of Counsel that the Trust will not thereafter be
classified as an association (or publicly traded partnership) taxable as a
corporation for federal income tax and Applicable Tax State purposes.
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Promptly after the occurrence of any Insolvency Event or dissolution with
respect to the Depositor or the General Partner, (A) the Depositor shall give
the Indenture Trustee and the Owner Trustee written notice of such Insolvency
Event, (B) the Owner Trustee shall, upon the receipt of such written notice
from the Depositor, give prompt written notice to the Certificateholders,
holders of interests, if any, in the Reserve Account and the Indenture Trustee,
of the occurrence of such event, (C) the Indenture Trustee shall, upon receipt
of written notice of such Insolvency Event or dissolution from the Owner
Trustee or the Depositor, give prompt written notice to the Noteholders of the
occurrence of such event, and (D) the Owner Trustee shall, upon receipt of
written instructions from the applicable percentages of Noteholders,
Certificateholders and holders of interests, if any, in the Reserve Account
disapproving of liquidation and termination, give prompt written notice thereof
to the Indenture Trustee; provided, however, that any failure to give a notice
required by this sentence shall not prevent or delay, in any manner, a
termination of the Trust pursuant to the first sentence of this Section 9.2.
Upon a termination pursuant to this Section 9.2, the Owner Trustee shall direct
the Indenture Trustee promptly to sell the assets of the Trust (other than the
Trust Accounts and the Certificate Distribution Account) in a commercially
reasonable manner and on commercially reasonable terms. The proceeds of such a
sale of the assets of the Trust shall be treated as collections of Receivables
under the Sale and Servicing Agreement and deposited in the Collection Account
and the Notes and Certificates shall be paid in accordance with Section 4.6 of
the Sale and Servicing Agreement.
SECTION 9.3. Prepayment of Certificates. (a) The
Certificates shall be prepaid in whole, but not in part, at the direction of
the Servicer pursuant to Section 9.1 of the Sale and Servicing Agreement, on
any Distribution Date on which the Servicer exercises its option to purchase
the assets of the Trust pursuant to said Section 9.1, and the amount paid by
the Servicer shall be treated as collections of Receivables and applied to pay
the unpaid principal amount of the Notes and the Certificate Balance plus
accrued and unpaid interest (including any overdue interest) thereon. The
Servicer shall furnish the Rating Agencies and the Certificateholders notice of
such prepayment. If the Certificates are to be
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prepaid pursuant to this Section 9.3(a), the Servicer shall furnish notice of
such election to the Owner Trustee not later than twenty (20) days prior to the
Prepayment Date and the Trust shall deposit by 10:00 A.M. (New York City time)
on the Prepayment Date in the Certificate Distribution Account the Prepayment
Price of the Certificates to be redeemed, whereupon all such Certificates shall
be due and payable on the Prepayment Date.
(b) Notice of prepayment under Section 9.3(a) shall be given
by the Owner Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted immediately following receipt of notice from the Trust or
Servicer pursuant to Section 9.3(a), but not later than ten (10) days prior to
the applicable Prepayment Date, to each Certificateholder as of the close of
business on the Record Date preceding the applicable Prepayment Date, at such
Certificateholder=s address or facsimile number appearing in the Certificate
Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where such Certificates are to be
surrendered for payment of the Prepayment Price
(which shall be the office or agency of the Owner
Trustee to be maintained as provided in Section 3.9).
Notice of prepayment of the Certificates shall be given by the Owner Trustee in
the name and at the expense of the Trust. Failure to give notice of
prepayment, or any defect therein, to any Certificateholder shall not impair or
affect the validity of the prepayment of any other Certificate.
(c) Following notice of prepayment as required by Section
9.3(b), the Certificates shall on the Prepayment Date be paid by the Trust at
the Prepayment Price and (unless the Trust shall default in the payment of the
Prepayment Price) no interest shall accrue on the Prepayment Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Prepayment Price. Following payment in full of the
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Prepayment Price, this Agreement and the Trust shall
terminate.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times (i) be a corporation satisfying the
provisions of Section 3807(a) of the Business Trust Statute; (ii) be authorized
to exercise corporate trust powers; (iii) have a combined capital and surplus
of at least $50,000,000 and shall be subject to supervision or examination by
federal or state authorities; and (iv) shall have (or shall have a parent that
has) a long-term debt rating of investment grade by each of the Rating Agencies
or be otherwise acceptable to the Rating Agencies. If such corporation shall
publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purpose of this Section 10.1, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 10.1, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the
giving of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning Owner
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment.
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<PAGE> 46
If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or if at any time an Insolvency Event
with respect to the Owner Trustee shall have occurred and be continuing, then
the Administrator may remove the Owner Trustee. If the Administrator shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee, and shall pay all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section 10.2 shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 10.3, payment of all fees and
expenses owed to the outgoing Owner Trustee and the filing of a certificate of
amendment to the Certificate of Trust if required by the Business Trust
Statute. The Administrator shall provide notice of such resignation or removal
of the Owner Trustee to the Certificateholders, the Indenture Trustee, the
Noteholders and each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement. Upon the resignation or
removal of the predecessor Owner Trustee becoming effective pursuant to Section
10.2, such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties, and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall, upon
payment of its fees and expenses, deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement, and the
Administrator and the predecessor Owner Trustee shall execute and deliver such
instruments and do such
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<PAGE> 47
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties, and
obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section 10.3 unless, at the time of such acceptance, such
successor Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.3, the Administrator shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within ten (10) days after acceptance of appointment
by the successor Owner Trustee, the successor Owner Trustee shall cause such
notice to be mailed at the expense of the Administrator.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, be the successor of the Owner
Trustee hereunder; provided that such corporation shall be eligible pursuant to
Section 10.1; and provided further, that the Owner Trustee shall mail notice of
such merger or consolidation to the Rating Agencies not less than fifteen (15)
days prior to the effective date thereof.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate
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<PAGE> 48
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person, in such capacity, such title to the Owner Trust Estate, or any
part thereof, and, subject to the other provisions of this Section 10.5, such
powers, duties, obligations, rights and trusts as the Administrator and the
Owner Trustee may consider necessary or desirable. If the Administrator shall
not have joined in such appointment within fifteen (15) days after the receipt
by it of a request so to do, the Owner Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties,
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co- trustee, but solely
at the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
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<PAGE> 49
Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article X. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Owner Trustee. Each such instrument shall
be filed with the Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments. (a) This
Agreement may be amended by the Depositor and the Owner Trustee, with prior
written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement inconsistent with any other
provision of this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel satisfactory to the Owner Trustee and the Indenture Trustee adversely
affect in any material respect the interests of any Noteholder or
Certificateholder; and provided further that an Opinion of Counsel shall be
furnished to the Indenture Trustee and the Owner Trustee to the effect that
such amendment (A) will not materially adversely affect the federal or any
Applicable Tax State income or franchise taxation of any outstanding Note or
Certificate, or any Noteholder or Certificateholder and (B) will not cause the
Trust to be taxable as a corporation for federal or any Applicable Tax State
income or franchise tax purposes.
(b) This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the principal amount of the Notes Outstanding and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or of
modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
the Noteholders or the Certificateholders, or (ii) reduce the aforesaid
percentage of the principal amount of the Notes Outstanding and the Certificate
Bal-
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<PAGE> 51
ance required to consent to any such amendment, without the consent of all the
Noteholders and Certificateholders affected thereby; and provided further, that
an Opinion of Counsel shall be furnished to the Indenture Trustee and the Owner
Trustee to the effect that such amendment (A) will not materially adversely
affect the federal or any Applicable Tax State income or franchise taxation of
any outstanding Note or Certificate, or any Noteholder or Certificateholder and
(B) will not cause the Trust to be taxable as a corporation for federal or any
Applicable Tax State income or franchise tax purposes.
(c) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies.
(d) It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section 11.1 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(f) Prior to the execution of any amendment to this Agreement
or the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
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(g) In connection with the execution of any amendment to this
Agreement or any amendment to any other agreement to which the Trust is a
party, the Owner Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the Basic
Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their beneficial interests therein only
in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Certificateholders to and in
their beneficial interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. Limitation on Rights of Others. Except for
Section 2.7, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Administrator, the Certificateholders, the
Servicer and, to the extent expressly provided herein, the Indenture Trustee
and the Noteholders, and nothing in this Agreement (other than Section 2.7),
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt by the intended recipient or three (3)
Business Days after mailing if mailed by certified mail, postage prepaid
(except that notice to the Owner Trustee shall be deemed given only upon actual
receipt by the Owner Trustee), if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Depositor, addressed to
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<PAGE> 53
Ford Credit Auto Receivables Two L.P. at the address of its principal executive
office first above written; or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforce-ability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.7. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Owner Trustee and its successors and each Certificateholder
and its successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8. No Petition. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not, until after the Notes have been paid in
full, institute against the Depositor,
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<PAGE> 54
the General Partner or the Trust, or join in any institution against the
Depositor, the General Partner or the Trust of, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or other proceedings under
any United States federal or State bankruptcy or similar law in connection with
any obligations relating to the Certificates, the Notes, this Agreement or any
of the other Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder, by
accepting a Certificate, acknowledges that such Certificateholder's
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the General Partner,
the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee or
any Affiliate thereof, and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificates or the other Basic Documents.
SECTION 11.10. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Delaware and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES
TWO L.P., as Depositor
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: \s\ R. P. Conrad
------------------------------
Name: R. P. Conrad
Title: Assistant Secretary
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: \s\ Michael B. McCarthy
---------------------------------
Name: Michael B. McCarthy
Title: Vice President
<PAGE> 56
EXHIBIT A
[FORM OF CERTIFICATE]
NUMBER $________
R-_____ CUSIP NO. 34527RAR4
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE TRUST
AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO OWNER TRUST 1997-B
6.65% ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined
below, which property includes a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed
thereby, conveyed to Ford Credit Auto Receivables Two L.P. by Ford Motor Credit
Company and conveyed by Ford Credit Auto Receivables Two L.P. to the Trust.
The property of the Trust has been pledged to the Indenture Trustee pursuant to
the Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of Ford Motor
Credit Company, Ford Credit Auto Receivables Two L.P. or any of their
respective Affiliates, except to the extent described below.)
THIS CERTIFIES THAT __________ is the registered owner of
___________ DOLLARS nonassessable, fully-paid, beneficial interest in
Certificates of Ford Credit Auto Owner Trust 1997-B (the "Trust") formed by
Ford Credit Auto Receivables Two L.P., a Delaware limited partnership (the
"Depositor"). The Certificates have an aggregate Initial Certificate Balance
of $25,501,000.00 and bear interest at a rate of 6.65% per annum (the
"Certificate Rate").
A-1
<PAGE> 57
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Certificates referred to in the within-mentioned
Trust Agreement.
Dated: October 31, 1997
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:______________________
Authorized Officer
<PAGE> 58
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of October 1, 1997 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), by
and between the Depositor and PNC Bank, Delaware, not in its individual
capacity but solely as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "6.65% Asset Backed Certificates" (herein called the
"Certificates"). Also issued under the Indenture, dated as of October 1, 1997
(as from time to time amended, supplemented or otherwise modified and in
effect, the "Indenture"), between the Trust and The Chase Manhattan Bank, as
indenture trustee (in such capacity, the "Indenture Trustee"), are the Notes
designated as "Class A-1 5.748% Asset Backed Notes", "Class A-2 5.95% Asset
Backed Notes", "Class A-3 6.05% Asset Backed Notes", "Class A-4 6.15% Asset
Backed Notes" and "Class B 6.40% Asset Backed Notes" (collectively, the
"Notes"). This Certificate is issued under and is subject to the terms,
provisions and conditions of the Trust Agreement, to which Trust Agreement the
Certificateholder of this Certificate by virtue of the acceptance hereof
assents and by which such Certificateholder is bound. The property of the
Trust includes (i) a pool of motor vehicle retail installment sale contracts
for new and used automobiles and light trucks and certain rights and
obligations thereunder (the "Receivables"); (ii) with respect to Precomputed
Receivables, all monies due thereunder on or after the Cutoff Date and, with
respect to Simple Interest Receivables, all monies due or received thereunder
on or after the Cutoff Date; (iii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other interest
of the Trust in the Financed Vehicles; (iv) rights to proceeds from claims on
certain physical damage, credit life, credit disability or other insurance
policies, if any, covering Financed Vehicles or Obligors; (v) Dealer Recourse;
(vi) all of the Seller's rights to the Receivable Files; (vii) such amounts as
from time to time may be held in one or more accounts maintained pursuant to
the Sale and Servicing Agreement, dated as of October 1, 1997
A-3
<PAGE> 59
(as from time to time amended, supplemented or otherwise modified and in
effect, the "Sale and Servicing Agreement"), by and among the Trust, the
Depositor, as seller (in such capacity, the "Seller"), and Ford Motor Credit
Company, as servicer (the "Servicer"), including the Reserve Account; (viii)
the Seller's rights under the Sale and Servicing Agreement; (ix) the Seller's
rights under the Purchase Agreement; (x) payments and proceeds with respect to
the Receivables held by the Servicer; (xi) all property (including the right to
receive Liquidation Proceeds) securing a Receivable (other than a Receivable
repurchased by the Servicer or purchased by the Seller); (xii) rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cutoff Date; and (xiii) any
and all proceeds of the foregoing. THE RIGHTS OF THE OWNER TRUSTEE IN THE
FOREGOING PROPERTY OF THE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO
SECURE THE PAYMENT OF THE NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day,
the next Business Day (each, a "Distribution Date"), commencing November 17,
1997, to the Person in whose name this Certificate is registered at the close
of business on the last day of the preceding month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to
Certificateholders on such Distribution Date; provided, however, that principal
will be distributed to the Certificateholders on each Distribution Date on (to
the extent of funds remaining after all classes of the Notes have been paid in
full) and after the date on which all classes of the Notes have been paid in
full. Notwithstanding the foregoing, following the occurrence and during the
continuation of an event of default under the Indenture which has resulted in
an acceleration of the Notes or following certain events of insolvency or a
dissolution with respect to the Depositor or the General Partner, no
distributions of principal or interest will be made on the Certificates until
all principal and interest on the Notes has been paid in full.
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS
A-4
<PAGE> 60
OF THE NOTEHOLDERS AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT, THE
INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
franchise and income tax and any other income taxes, the Trust will be treated
as a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Certificate agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until after the
Notes have been paid in full, institute against the Depositor, the General
Partner or the Trust, or join in any institution against the Depositor, the
General Partner or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Certificates, the Trust Agreement or any
of the other Basic Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in Wilmington, Delaware.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
A-5
<PAGE> 61
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Certificateholder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
A-6
<PAGE> 62
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Certificate to be duly
executed.
FORD CREDIT AUTO OWNER
TRUST 1997-B
By: PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By:_____________________________
Authorized Officer
<PAGE> 63
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the General Partner, the Servicer, the
Administrator, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. A registration statement, which includes the Trust
Agreement as an exhibit thereto, has been filed with the Securities and
Exchange Commission with respect to the Notes and the Certificates.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Noteholders and the Certificateholders evidencing not less than
a majority of the principal amount of the Notes Outstanding and the Certificate
Balance, respectively. Any such consent by the Certificateholder of this
Certificate shall be conclusive and binding on such Certificateholder and on
all future Certificateholders of this Certificate and of any Certificate issued
upon the registration of Transfer hereof or in exchange herefor or in lieu
hereof whether or not notation of such consent is made upon this Certificate.
The Trust Agreement also permits the amendment thereof, in certain limited
circumstances, without the consent of any of the Certificateholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the Transfer of the Certificates are
registerable in the Certificate Register upon surrender of this Certificate for
registration of Transfer at the offices or agencies maintained by PNC Bank,
Delaware in its capacity as Certificate Registrar, or by any successor
Certificate Registrar, in Wilmington, Delaware, accompanied by a written
instrument
A-8
<PAGE> 64
of transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be
issued to the designated transferee.
The Certificates are issuable as registered Certificates
without coupons in denominations of at least $20,000 and in integral multiples
of $1,000 in excess thereof. Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the Certificateholder surrendering the same. No
service charge will be made for any such registration of Transfer or exchange,
but the Owner Trustee or the Certificate Registrar may require payment of a sum
sufficient to cover any tax or governmental charge payable in connection
therewith.
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or on behalf of (A) an
employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, (B) a plan described in Section 4975(e)(1) of the Code, (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29 C.F.R. '
2510.3-101) or (E) a person investing "plan assets" of any such plan (including
without limitation, for purposes of this clause (E), any insurance company
general account, but excluding any entity registered under the Investment
Company Act of 1940, as amended).
In addition, the Certificates may not be acquired by or on
behalf of a Person other than (A) a citi-
A-9
<PAGE> 65
zen or resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (C) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, (D) a trust if
a U.S. court is able to exercise primary supervision over the administration of
such trust and one or more Persons meeting the conditions of this paragraph has
the authority to control all substantial decisions of the trust or (E) a Person
not described in clauses (A) through (D) above whose ownership of the
Certificates is effectively connected with such Person's conduct of a trade or
business within the United States (within the meaning of the Code) and who
provides the Owner Trustee and the Depositor with an IRS Form 4224 (and such
other certifications, representations, or opinions of counsel as may be
requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation or (ii) upon the payment
to the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the Indenture, the Trust Agreement and the Sale and
Servicing Agreement, and upon such termination any remaining assets of the
Trust shall be distributed to the Depositor. The Servicer of the Receivables
may at its option purchase the assets of the Trust at a price specified in the
Sale and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Notes and the
Certificates; however, such right of purchase is exercisable only as of the
last day of any Collection Period as of which the Pool Balance is less than or
equal to 10% of the Initial Pool Balance.
A-10
<PAGE> 66
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
________________________________________________________________________________
(Please print or type name and address, including postal zip code, of assignee)
________________________________________________________________________________
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
___________________________________________________________________ Attorney to
transfer said Certificate on the books of the Certificate
Registrar, with full power of substitution in the premises.
Dated:
_________________________________*/
Signature Guaranteed:
____________________________*/
____________________________________
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-11
<PAGE> 67
EXHIBIT B
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
FORD CREDIT AUTO OWNER TRUST 1997-B
This Certificate of Trust of FORD CREDIT AUTO OWNER TRUST
1997-B (the "Trust"), dated as of October 1, 1997, is being duly executed and
filed by PNC Bank, Delaware, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby
is FORD CREDIT AUTO OWNER TRUST 1997-B.
2. Delaware Trustee. The name and business address of
the trustee of the Trust in the State of Delaware is PNC Bank, Delaware, 222
Delaware Avenue, Wilmington, Delaware 19801.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
PNC BANK, DELAWARE,
not in its individual capacity but
solely as owner trustee under a Trust
Agreement dated as of October 1, 1997
By:__________________________________
Name:
Title:
B-1
<PAGE> 68
EXHIBIT C
[FORM OF INVESTMENT LETTER]
[Date]
Ford Credit Auto Owner Trust 1997-B,
as Issuer
PNC Bank, Delaware,
as Owner Trustee and
as Certificate Registrar
222 Delaware Avenue
Wilmington, Delaware 19801
Ladies and Gentlemen:
In connection with our proposed purchase of the 6.65% Asset Backed
Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1997-B (the
"Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor" or "Seller"), we confirm that:
1. We are not, and each account (if any) for which we are
purchasing the Certificates is not, (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), (C) a
governmental plan, as defined in Section 3(32) of ERISA, subject to any
federal, state or local law which is, to a material extent, similar to the
provisions of Section 406 of ERISA or Section 4975 of the Code, (D) an entity
whose underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29 C.F.R.
Section 2510.3-101) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any insurance
company general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
2. We are, and each account (if any) for which we are
purchasing the Certificates is, a person who is (A) a citizen or resident of
the United States, (B) a corporation or partnership organized in or under the
laws of the United States or any political subdivision thereof, (C) an estate
the income of which is includible in gross income for United States tax
purposes, regardless of its source, (D) a trust if a U.S. court is able to
exercise primary supervision over the administration of such trust and one or
more Persons meeting the conditions
C-1
<PAGE> 69
of this paragraph 2 has the authority to control all substantial decisions of
the trust or (E) a Person not described in clauses (A) through (D) above whose
ownership of the Certificates is effectively connected with such Person's
conduct of a trade or business within the United States (within the meaning of
the Code) and who provides the Issuer and the Depositor with an IRS Form 4224
(and such other certifications, representations, or opinions of counsel as may
be requested by the Issuer or the Depositor).
3. We understand that any purported resale, transfer,
assignment, participation, pledge, or other disposal of (any such act, a
"Transfer") of any Certificate (or any interest therein) to any person who does
not meet the conditions of paragraphs 1 and 2 above shall be null and void
(each, a "Void Transfer"), and the purported transferee in a Void Transfer
shall not be recognized by the Issuer or any other person as a
Certificateholder for any purpose.
4. We agree that if we determine to Transfer any of the
Certificates we will cause our proposed transferee to provide to the Issuer and
the Certificate Registrar a letter substantially in the form of this letter.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:______________________________
Name:
Title:
Securities To Be Purchased:
$ principal balance of Certificates
Annex A attached hereto lists the name of the account and principal balance of
Certificates purchased for each account (if any) for which we are purchasing
Certificates.
C-2
<PAGE> 70
APPENDIX A
Definitions and Usage
AA-1
<PAGE> 1
EXHIBIT 8.1
October 31, 1997
Ford Credit Auto Receivables Two L.P.
The American Road
Dearborn, Michigan 48121
Re: Ford Credit Auto Owner Trust 1996-B
Ladies and Gentlemen:
We have acted as special tax counsel to Ford Credit Auto Receivables
Two L.P., as Seller (the "Seller"), in connection with the issuance of the
Class A-1 5.748% Asset Backed Notes (the "Class A-1 Notes"), the Class A-2
5.95% Asset Backed Notes (the "Class A-2 Notes"), the Class A-3 6.05% Asset
Backed Notes (the "Class A-3 Notes"), the Class A-4 6.15% Asset Backed
Notes (the "Class A-4 Notes" and, together with the Class A-1 Notes, the Class
A-2 Notes, and the Class A-3 Notes, the "Class A Notes"), the Class B 6.40%
Asset Backed Notes (the "Class B Notes" and, together with the Class A Notes,
the "Notes"), and the 6.65% Asset Backed Certificates (the "Certificates") by
Ford Credit Auto Owner Trust 1997-B (the "Trust") pursuant to the terms of,
(a) with respect to the Notes, an Indenture dated as of October 1, 1997 (the
"Indenture") between the Trust and The Chase Manhattan Bank, as Indenture
Trustee, and (b) with respect to the Certificates, an Amended and Restated
Trust Agreement dated as of October 1, 1997 (the "Trust Agreement") between
Ford Credit Auto Receivables Two L.P., as Depositor (the "Depositor") and PNC
Bank, Delaware, as Owner Trustee (the "Owner Trustee"). The Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes and the Class B Notes will be sold to
the underwriters (the "Note Underwriters") who are parties to an underwriting
agreement (the "Note Underwriting Agreement") between the Depositor and
Goldman, Sachs & Co. ("Goldman Sachs"), as representatives of the Note
Underwriters. The Certificates will be sold to Goldman Sachs as Certificate
Under-
<PAGE> 2
Ford Credit Auto Receivables Two L.P.
October 31, 1997
Page 2
writers (the "Certificate Underwriter") pursuant to an underwriting agreement
(the "Certificate Underwriting Agreement") between the Depositor and Goldman
Sachs.
In this connection, we have examined and relied upon the Registration
Statement on Form S-3, Registration No. 333-1245, filed with the Securities and
Exchange Commission (the "SEC") on February 28, 1996 and Amendments No. 1 and
No. 2 thereto (collectively, the "Registration Statement"), including the
prospectus dated October 24, 1997 as supplemented by the prospectus supplement
dated October 24, 1997 (the "Prospectus"), the Indenture, the Trust Agreement,
the Purchase Agreement, the Sale and Servicing Agreement, the Administration
Agreement, and such other documents as we have deemed necessary or appropriate
as a basis for the opinion set forth below, and we have assumed that such
documents will not be amended and that the parties to such documents will
comply with the terms thereof.
In our examination, we have assumed the genuineness of all signatures, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies and the authenticity of the originals of such latter documents. As to any
facts material to the opinions expressed herein which were not independently
established or verified, we have relied upon statements, representations, and
certifications of officers and other representatives of the Seller, the
Servicer, the Underwriters, and others, including, in particular, (i) certain
calculations performed by Goldman Sachs and (ii) a representation of the
Servicer regarding the reasonableness of certain fees payable to it.
In rendering our opinion, we have also considered and relied upon the
Internal Revenue Code of 1986, as amended, and administrative rulings, judicial
decisions, regulations, and such other authorities as we have deemed
appropriate, all as in effect as of the date hereof. The statutory provisions,
regulations, interpretations, and other authorities upon which our opinion is
based are subject to change, and such changes could apply
<PAGE> 3
Ford Credit Auto Receivables Two L.P.
October 31, 1997
Page 3
retroactively. In addition, there can be no assurance that positions contrary
to those stated in our opinion will not be taken by the Internal Revenue
Service.
We express no opinions as to the laws of any jurisdiction other than
the federal laws of the United States of America to the extent specifically
referred to herein.
Based upon and subject to the foregoing, we are of the opinion that the
statements in the Prospectus under the heading "Summary--Tax Status" to the
extent they relate to federal income tax matters and under the heading "Certain
Federal Income Tax Consequences," subject to the qualifications set forth
therein, accurately describe the material federal income tax consequences to
holders of Notes and Certificates, under existing law and the assumptions
stated therein.
We consent to the reference to Skadden, Arps, Slate, Meagher & Flom LLP
under the captions "Certain Federal Income Tax Consequences" and "Legal
Opinions" in the Prospectus.
Very truly yours,
/s/ Skadden, Arps, Slate,
Meagher & Flom LLP
<PAGE> 1
EXHIBIT 8.2
[FORD LOGO]
Ford Motor Credit Company Legal Office
The American Road
Jerry D. Bringard P. O. Box 6044
Vice President - General Counsel Dearborn, Michigan 48121-6044
October 31, 1997
Ford Credit Auto Receivables Two L.P.
The American Road
Dearborn, Michigan 48121
Re: Ford Credit Auto Owner Trust 1997-B
Ladies and Gentlemen:
The undersigned, J. D. Bringard, Vice President-General Counsel of Ford
Motor Credit Company (the "Company") has acted as counsel to Ford Credit Auto
Receivables Two L.P. (the "Limited Partnership") in connection with (i) the
proposed sale by the Company to the Limited Partnership of the property
described in Section 2.1(a) of the Purchase Agreement dated as of October 1,
1997 between the Company and the Limited Partnership, (ii) the establishment by
the Limited Partnership of the Ford Credit Auto Owner Trust 1997-B (the
"Trust") pursuant to the terms of the Amended and Restated Trust Agreement
dated as of October 1, 1997 (the "Trust Agreement") between the Limited
Partnership and PNC Bank, Delaware, (iii) the proposed assignment by the
Limited Partnership to the Trust of the property described in Section 2.1 of
the Sale and Servicing Agreement dated as of October 1, 1997 among the Trust,
the Limited Partnership and the Company, (iv) the registration by the Limited
Partnership under the Securities Act of 1933, as amended, of $5,000,000,000
aggregate principal amount of Asset Backed Securities to be issued by various
trusts, (v) the proposed sale by the Trust of a portion of the Asset Backed
Securities designated as $490,000,000 Class A-1 5.748% Asset Backed Notes (the
"Class A-1 Notes"), $388,000,000 Class A-2 5.95% Asset-Backed Notes (the
"Class A-2 Notes), $514,000,000 Class A-3 6.05% Asset-Backed Notes (the "Class
A-3 Notes"), $189,004,978.96 Class A-4 6.15% Asset-Backed Notes (the "Class
A-4 Notes") and $93,501,000 Class B 6.40% Asset-Backed Notes (the "Class B
Notes") (collectively, the "Notes"), to be issued under an Indenture dated as
of October 1, 1997 (the "Trust Indenture") between the Trust and The Chase
Manhattan Bank (the "Indenture Trustee"), to the several Underwriters referred
to below in the case of the Class A-1 Notes, the Class A-2 Notes, the Class
A-3 Notes and the Class B Notes, pursuant to the Note Underwriting Agreement
(the "Note Underwriting Agreement") dated October 24, 1997 between the Limited
Partnership and Goldman, Sachs & Co., as Representatives of the Underwriters
named therein and, in the case of the Class A-4 Notes, to the FCAR Owner Trust
referred to in the Purchase Agreement (the "FAB Purchase Agreement") dated as
of October 31, 1997, between the Limited Partnership and FCAR Owner Trust, (vi)
the agreements of the Company and the Underwriters set forth in the Note
Indemnification Agreement (the "Note Indemnification Agreement") dated October
24, 1997 between the Company and Goldman, Sachs & Co., as Representatives of
the Underwriters, (vii) the proposed sale by the Trust of a portion of the
Asset Backed Securities designated as $25,501,000 6.65% Asset Backed
Certificates (the "Certificates"), to be issued under the Trust Agreement to
Goldman, Sachs & Co., as Certificate Underwriter (the "Certificate
Underwriter"), pursuant to the Underwriting Agreement (the "Certificate
Underwriting Agreement") dated October 24, 1997 between the Limited Partnership
and the Certificate Underwriter and (viii) the agreements of the
<PAGE> 2
2
Company and the Certificate Underwriter set forth in the Certificate
Indemnification Agreement (the "Certificate Indemnification Agreement") dated
October 24, 1997 between the Company and the Certificate Underwriter.
In this connection I have examined, or cause to be examined, the
following:
(a) Signed copies of Registration Statement No. 333-1245 on Form S-3
filed by the Company with the Securities and Exchange Commission (the
"Commission") on February 28, 1996 and Amendment Nos. 1 and 2 thereto filed
with the Commission on April 29, 1996 and May 16, 1996, respectively; and
(b) Copies of the prospectus included in such Registration Statement and
Amendment Nos. 1 and 2 thereto and the Prospectus dated October 24, 1997 as
supplemented by the Prospectus Supplement dated October 24, 1997 as filed with
the Commission pursuant to Rule 424(b)(2) issued under the Act.
I am admitted to the State Bar of Michigan and I express no opinion as to
the laws of any other jurisdiction except the laws of the United States of
America and the State of Michigan to the extent specifically referred to
herein.
I hereby confirm that the statements set forth in the Prospectus and the
Prospectus Supplement forming a part of the Registration Statement under the
caption "Summary--Tax Status" as they relate to Michigan state tax matters and
in the Prospectus Supplement under the caption "Certain State Tax
Consequences," to the extent they constitute matters of law or legal
conclusions with respect thereto, have been prepared, reviewed or caused to be
reviewed by me and are correct in all material respects.
I consent to the reference to me under the captions "Certain State Tax
Consequences" in the Prospectus Supplement and "Legal Opinions" in the
Prospectus and the Prospectus Supplement.
Very truly yours,
/s/ J. D. Bringard
<PAGE> 1
EXHIBIT 99.1
-------------------------------------------------------
SALE AND SERVICING AGREEMENT
by and among
FORD CREDIT AUTO OWNER TRUST 1997-B,
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO L.P.,
as Seller
and
FORD MOTOR CREDIT COMPANY,
as Servicer
Dated as of October 1, 1997
-------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND USAGE 1
ARTICLE II
TRUST PROPERTY 2
SECTION 2.1. Conveyance of Trust Property 2
SECTION 2.2. Representations and Warranties of the
Seller as to the Receivables 2
SECTION 2.3. Repurchase upon Breach 7
SECTION 2.4. Custody of Receivable Files 7
SECTION 2.5. Duties of Servicer as Custodian 8
SECTION 2.6. Instructions; Authority to Act 10
SECTION 2.7. Custodian's Indemnification 10
SECTION 2.8. Effective Period and Termination 10
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY 12
SECTION 3.1. Duties of Servicer 12
SECTION 3.2. Collection of Receivable Payments 13
SECTION 3.3. Realization Upon Receivables 13
SECTION 3.4. [Reserved] 13
SECTION 3.5. Maintenance of Security Interests in Financed Vehicles 14
SECTION 3.6. Covenants of Servicer 14
SECTION 3.7. Purchase of Receivables Upon Breach 14
SECTION 3.8. Servicer Fee 15
SECTION 3.9. Servicer's Certificate 15
SECTION 3.10. Annual Statement as to Compliance;
Notice of Event of Servicing
Termination 16
SECTION 3.11. Annual Independent Certified Public
Accountant's Report 17
SECTION 3.12. Access to Certain Documentation and
Information Regarding Receivables 17
SECTION 3.13. Servicer Expenses 18
i
<PAGE> 3
Page
----
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS 19
SECTION 4.1. Accounts 19
SECTION 4.2. Collections 22
SECTION 4.3. Application of Collections 24
SECTION 4.4. Advances 24
SECTION 4.5. Additional Deposits 26
SECTION 4.6. Distributions 26
SECTION 4.7. Reserve Account 31
SECTION 4.8. Net Deposits 33
SECTION 4.9. Statements to Noteholders and
Certificateholders 33
ARTICLE V
[Intentionally Omitted]
ARTICLE VI
THE SELLER 36
SECTION 6.1. Representations and Warranties of
Seller 36
SECTION 6.2. Liability of Seller; Indemnities 38
SECTION 6.3. Merger or Consolidation of, or Assump-
tion of the Obligations of, Seller 39
SECTION 6.4. Limitation on Liability of Seller and
Others 40
SECTION 6.5. Seller May Own Notes or Certificates 40
ARTICLE VII
THE SERVICER 42
SECTION 7.1. Representations of Servicer 42
SECTION 7.2. Indemnities of Servicer 43
SECTION 7.3. Merger or Consolidation of, or Assump-
tion of the Obligations of, Servicer 46
SECTION 7.4. Limitation on Liability of Servicer
and Others 46
SECTION 7.5. Delegation of Duties 47
SECTION 7.6. Ford Credit Not to Resign as Servicer 47
ii
<PAGE> 4
Page
----
SECTION 7.7. Servicer May Own Notes or Certificates 48
ARTICLE VIII
SERVICING TERMINATION 49
SECTION 8.1. Events of Servicing Termination 49
SECTION 8.2. Appointment of Successor Servicer 51
SECTION 8.3. Repayment of Advances 52
SECTION 8.4. Notification to Noteholders and
Certificateholders 52
SECTION 8.5. Waiver of Past Events of Servicing
Termination 52
ARTICLE IX
TERMINATION 54
SECTION 9.1. Optional Purchase of All Receivables 54
SECTION 9.2. Succession Upon Satisfaction and
Discharge of Indenture 54
ARTICLE X
MISCELLANEOUS PROVISIONS 55
SECTION 10.1. Amendment 55
SECTION 10.2. Protection of Title to Trust 57
SECTION 10.3. Governing Law 60
SECTION 10.4. Notices 60
SECTION 10.5. Severability of Provisions 61
SECTION 10.6. Assignment 61
SECTION 10.7. Further Assurances 61
SECTION 10.8. No Waiver; Cumulative Remedies 61
SECTION 10.9. Third-Party Beneficiaries 62
SECTION 10.10. Actions by Noteholders or Certifi-
cateholders 62
SECTION 10.11. Agent for Service 62
SECTION 10.12. No Bankruptcy Petition. 63
SECTION 10.13. Limitation of Liability of Owner
Trustee and Indenture Trustee 63
SECTION 10.14. Third-Party Beneficiary 64
SECTION 10.15. Savings Clause 64
iii
<PAGE> 5
Page
----
SCHEDULE A Schedule of Receivables SA-1
SCHEDULE B Location of Receivable Files SB-1
APPENDIX A Definitions and Usage AA-1
iv
<PAGE> 6
SALE AND SERVICING AGREEMENT, dated as of October 1, 1997 (as from time
to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), by and among FORD CREDIT AUTO OWNER TRUST 1997-B (the "Issuer"), a
Delaware business trust, FORD CREDIT AUTO RECEIVABLES TWO L.P., a Delaware
limited partnership, as seller (the "Seller"), and FORD MOTOR CREDIT COMPANY, a
Delaware corporation, as servicer (the "Servicer").
WHEREAS, the Issuer desires to acquire a portfolio of receivables
arising in connection with motor vehicle retail installment sale contracts
generated by Ford Motor Credit Company in the ordinary course of its business
and conveyed to the Seller;
WHEREAS, the Seller is willing to convey such receivables to the
Issuer; and
WHEREAS, Ford Motor Credit Company is willing to service such
receivables on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
<PAGE> 7
ARTICLE II
TRUST PROPERTY
SECTION 2.1. Conveyance of Trust Property. In consideration of the
Issuer's delivery to, or upon the order of, the Seller of the Notes and the
Certificates in an aggregate principal amount equal to the Initial Pool Balance,
the Seller does hereby irrevocably transfer, assign and otherwise convey to the
Issuer without recourse (subject to the obligations herein) all right, title and
interest of the Seller, whether now owned or hereafter acquired, in and to the
Trust Property. The transfer, assignment and conveyance made hereunder shall
not constitute and is not intended to result in an assumption by the Issuer of
any obligation of the Seller to the Obligors, the Dealers or any other Person in
connection with the Receivables and the other Trust Property or any agreement,
document or instrument related thereto.
SECTION 2.2. Representations and Warranties of the Seller as to the
Receivables. The Seller makes the following representations and warranties as
to the Receivables on which the Issuer shall be deemed to have relied in
accepting the Receivables. Such representations and warranties speak as of the
execution and delivery of this Agreement, but shall survive the transfer,
assignment and conveyance of the Receivables to the Issuer and the pledge
thereof to the Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (a) shall have
been originated in the United States of America by a Dealer for the retail sale
of a Financed Vehicle in the ordinary course of such Dealer's business, shall
have been fully and properly executed by the parties thereto, shall have been
purchased by the Seller from Ford Credit, which in turn shall have purchased
such Receivable from such Dealer under an existing dealer agreement with Ford
Credit, and shall have been validly assigned by such Dealer to Ford Credit,
which in turn shall have been validly assigned by Ford Credit to the Seller in
accordance with its terms, (b) shall have created or shall create a valid,
subsisting, and enforceable first priority security interest in favor of Ford
Credit in the Financed Vehicle, which security interest
2
<PAGE> 8
has been assigned by Ford Credit to the Seller, which in turn shall be
assignable by the Seller to the Issuer, (c) shall contain customary and
enforceable provisions such that the rights and remedies of the holder thereof
shall be adequate for realization against the collateral of the benefits of the
security, (d) shall provide for level monthly payments (provided that the
payment in the first or last month in the life of the Receivable may be
minimally different from the level payment) that fully amortize the Amount
Financed by maturity and yield interest at the Annual Percentage Rate, (e)
shall provide for, in the event that such contract is prepaid, a prepayment
that fully pays the Principal Balance, and (f) is a Precomputed Receivable or a
Simple Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables shall be true and correct in all material respects as of
the opening of business on the Cutoff Date, and no selection procedures believed
to be adverse to the Noteholders or the Certificateholders shall have been
utilized in selecting the Receivables from those receivables which meet the
criteria contained herein. The computer tape or other listing regarding the
Receivables made available to the Issuer and its assigns (which computer tape or
other listing is required to be delivered as specified herein) is true and
correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of the
Financed Vehicle shall have complied at the time it was originated or made and
at the execution of this Agreement shall comply in all material respects with
all requirements of applicable federal, State, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Magnuson-Moss Warranty Act, the Federal Reserve Board's
Regulations B and Z, and State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the genuine,
legal, valid, and binding payment obligation in writing of the Obligor,
enforceable
3
<PAGE> 9
by the holder thereof in accordance with its terms subject to the effect of
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally.
(v) No Government Obligor. None of the Receivables shall be due from
the United States of America or any State or from any agency, department, or
instrumentality of the United States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately prior to the
transfer, assignment and conveyance thereof, each Receivable shall be secured by
a validly perfected first security interest in the Financed Vehicle in favor of
Ford Credit as secured party or all necessary and appropriate actions shall have
been commenced that would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of Ford Credit as secured party.
(vii) Receivables in Force. No Receivable shall have been satisfied,
subordinated, or rescinded, nor shall any Financed Vehicle have been released
from the lien granted by the related Receivable in whole or in part.
(viii) No Waiver. No provision of a Receivable shall have been
waived.
(ix) No Defenses. No right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims shall have been filed for work, labor, or materials relating to a
Financed Vehicle that shall be liens prior to, or equal or coordinate with, the
security interest in the Financed Vehicle granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a period
of not more than thirty (30) days as of the Cutoff Date, no default, breach,
violation, or event permitting acceleration under the terms of any Receivable
shall have occurred; and no continuing condition that with notice or the lapse
of time would constitute a default, breach, violation, or event permitting
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acceleration under the terms of any Receivable shall have arisen; and Ford
Credit shall not waive any of the foregoing.
(xii) Insurance. Ford Credit, in accordance with its customary
procedures, shall have determined that the Obligor has obtained or agreed to
obtain physical damage insurance covering the Financed Vehicle.
(xiii) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute an absolute transfer of the
Receivables from the Seller to the Issuer and that the beneficial interest in
and title to the Receivables not be part of the Seller's estate in the event of
the filing of a bankruptcy petition by or against the Seller under any
bankruptcy law. No Receivable has been conveyed, transferred, assigned, or
pledged by the Seller to any Person other than the Issuer. Immediately prior to
the transfer and assignment herein contemplated, the Seller had good and
marketable title to each Receivable free and clear of all Liens, encumbrances,
security interests, and rights of others and, immediately upon the transfer
thereof, the Issuer shall have good and marketable title to each Receivable,
free and clear of all Liens, encumbrances, security interests, and rights of
others; and the transfer has been perfected under the UCC.
(xiv) Valid Assignment. No Receivable shall have been originated in,
or shall be subject to the laws of, any jurisdiction under which the transfer,
assignment and conveyance of such Receivable under this Agreement or pursuant to
transfers of the Notes or the Certificates shall be unlawful, void, or
voidable. The Seller has not entered into any agreement with any account
debtor that prohibits, restricts or conditions the assignment of any portion of
the Receivables.
(xv) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Receivables, and to give the Indenture Trustee a first
perfected security interest therein, shall have been made.
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the UCC.
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(xvii) One Original. There shall be only one original executed copy
of each Receivable.
(xviii) New and Used Vehicles. Approximately 70.0% of the aggregate
Principal Balance of the Receivables, constituting 62.5% of the number of
Receivables, as of the Cutoff Date, represent vehicles financed at new vehicle
rates, and the remainder of the Receivables represent vehicles financed at used
vehicle rates.
(xix) Amortization Type. By aggregate Principal Balance as of the
Cutoff Date, approximately 38.1% of the Receivables constitute Precomputed
Receivables and 61.9% of the Receivables constitute Simple Interest Receivables.
(xx) Origination. Each Receivable shall have an origination date on
or after January 1, 1996.
(xxi) Maturity of Receivables. Each Receivable shall have an original
maturity of not greater than sixty (60) months.
(xxii) Minimum Annual Percentage Rate. Each Receivable shall have an
Annual Percentage Rate equal to or greater than 7.75%.
(xxiii) Scheduled Payments. Each Receivable shall have a first
Scheduled Payment due, in the case of Precomputed Receivables, or a first
scheduled due date, in the case of Simple Interest Receivables, on or prior to
October 31, 1997 and no Receivable shall have a payment that is more than thirty
(30) days overdue as of the Cutoff Date.
(xxiv) Location of Receivable Files. The Receivable Files shall be
kept at one or more of the locations listed in Schedule B hereto.
(xxv) No Extensions. The number of Scheduled Payments, in the case of
Precomputed Receivables, and the number of scheduled due dates, in the case of
Simple Interest Receivables, shall not have been extended on any Receivable on
or before the Cutoff Date.
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(xxvi) Rating Agencies. The rating agencies rating the Notes and the
Certificates are Moody's, Standard & Poor's and Fitch.
(xxvii) Agreement. The representations and warranties of the Seller
in Section 6.1 are true and correct.
(xxviii) No Receivables Originated in Alabama or Pennsylvania. No
Receivable shall have been originated in Alabama or Pennsylvania.
SECTION 2.3. Repurchase upon Breach. The Seller, the Servicer, the
Issuer or the Owner Trustee, as the case may be, shall inform the other parties
to this Agreement, the Indenture Trustee and Ford Credit promptly, in writing,
upon the discovery of any breach of the Seller's representations and warranties
made by the Seller pursuant to Section 2.2. Unless the breach shall have been
cured by the last day of the second Collection Period following the discovery,
the Indenture Trustee shall enforce the obligation of the Seller under this
Section 2.3, and, if necessary, the Seller or the Indenture Trustee shall
enforce the obligation of Ford Credit under the Purchase Agreement, to
repurchase any Receivable materially and adversely affected by the breach as of
such last day (or, at the Seller's option, the last day of the first Collection
Period following the discovery). In consideration of the purchase of the
Receivable, the Seller shall remit the Purchase Amount, in the manner specified
in Section 4.5. The sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders with respect to a breach of
the Seller's representations and warranties pursuant to Section 2.2 shall be to
require the Seller to repurchase Receivables pursuant to this Section 2.3 or to
enforce the obligation of Ford Credit to the Seller to repurchase such
Receivables pursuant to the Purchase Agreement. Neither the Owner Trustee nor
the Indenture Trustee shall have any duty to conduct an affirmative
investigation as to the occurrence of any condition requiring the repurchase of
any Receivable pursuant to this Section 2.3 or the eligibility of any Receivable
for purposes of this Agreement.
SECTION 2.4. Custody of Receivable Files. To assure uniform quality
in servicing the Receivables and
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to reduce administrative costs, the Issuer, upon the execution and delivery of
this Agreement, hereby revocably appoints the Servicer, and the Servicer hereby
accepts such appointment, to act as the agent of the Issuer and the Indenture
Trustee as custodian of the following documents or instruments, which are
hereby constructively delivered to the Indenture Trustee, as pledgee of the
Issuer pursuant to the Indenture, with respect to each Receivable:
(i) The original of the Receivable.
(ii) The original credit application fully executed by the
Obligor or a photocopy thereof or a record thereof on a computer file or
disc or on microfiche.
(iii) The original certificate of title or such documents that
the Servicer or Ford Credit shall keep on file, in accordance with its
customary procedures, evidencing the security interest of Ford Credit in
the Financed Vehicle.
(iv) Any and all other documents (including any computer file or
disc or microfiche) that the Servicer or the Seller shall keep on file, in
accordance with its customary procedures, relating to a Receivable, an
Obligor, or a Financed Vehicle.
The Servicer shall provide an Officer's Certificate to the Issuer and
the Indenture Trustee confirming that the Servicer has received on behalf of
the Issuer and the Indenture Trustee all the documents and instruments
necessary for the Servicer to act as the agent of the Issuer and the Indenture
Trustee for the purposes set forth in this Section 2.4, including the documents
referred to herein, and the Issuer and the Indenture Trustee are hereby
authorized to rely on such Officer's Certificate.
SECTION 2.5. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files for the
benefit of the Issuer and the Indenture Trustee and maintain such accurate and
complete accounts, records, and computer systems pertaining to each Receivable
File as shall enable the Servicer and the
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Issuer to comply with the terms and conditions of this Agreement, and the
Indenture Trustee to comply with the terms and conditions of the Indenture. In
performing its duties as custodian the Servicer shall act with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to the receivable files relating to all comparable automotive
receivables that the Servicer services for itself or others. In accordance
with its customary practices with respect to its retail installment sale
contracts, the Servicer shall conduct, or cause to be conducted, periodic
audits of the Receivable Files held by it under this Agreement, and of the
related accounts, records, and computer systems, in such a manner as shall
enable the Issuer or the Indenture Trustee to verify the accuracy of the
Servicer's record keeping. The Servicer shall promptly report to the Issuer
and the Indenture Trustee any failure on its part to hold the Receivable Files
and maintain its accounts, records, and computer systems as herein provided and
promptly take appropriate action to remedy any such failure. Nothing herein
shall be deemed to require an initial review or any periodic review by the
Issuer, the Owner Trustee or the Indenture Trustee of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain
each Receivable File at one of its offices specified in Schedule B to this
Agreement, or at such other office as shall be specified to the Issuer and the
Indenture Trustee by written notice not later than ninety (90) days after any
change in location. The Servicer shall make available to the Issuer and the
Indenture Trustee or their duly authorized representatives, attorneys, or
auditors a list of locations of the Receivable Files, the Receivable Files, and
the related accounts, records, and computer systems maintained by the Servicer
at such times as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer shall release any document in the Receivable
Files to the Indenture Trustee, the Indenture Trustee's agent or the Indenture
Trustee's designee, as the case may be, at such place or places as the
Indenture Trustee may designate, as soon thereafter as is practicable. Any
document so released shall be handled by the Indenture Trustee with
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due care and returned to the Servicer for safekeeping as soon as the Indenture
Trustee or its agent or designee, as the case may be, shall have no further
need therefor.
SECTION 2.6. Instructions; Authority to Act. All instructions from
the Indenture Trustee shall be in writing and signed by an Authorized Officer
of the Indenture Trustee, and the Servicer shall be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
such written instructions.
SECTION 2.7. Custodian's Indemnification. The Servicer as custodian
shall indemnify the Issuer, the Owner Trustee and the Indenture Trustee for any
and all liabilities, obligations, losses, compensatory damages, payments,
costs, or expenses of any kind whatsoever that may be imposed on, incurred, or
asserted against the Issuer, the Owner Trustee or the Indenture Trustee as the
result of any improper act or omission in any way relating to the maintenance
and custody by the Servicer as custodian of the Receivable Files; provided,
however, that the Servicer shall not be liable (i) to the Issuer for any
portion of any such amount resulting from the willful misfeasance, bad faith,
or negligence of the Indenture Trustee, the Owner Trustee or the Issuer, (ii)
to the Owner Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith, or negligence of the Indenture Trustee, the
Owner Trustee or the Issuer and (iii) to the Indenture Trustee for any portion
of any such amount resulting from the willful misfeasance, bad faith, or
negligence of the Indenture Trustee, the Owner Trustee or the Issuer.
SECTION 2.8. Effective Period and Termination. The Servicer's
appointment as custodian shall become effective as of the Cutoff Date and shall
continue in full force and effect until terminated pursuant to this Section
2.8. If Ford Credit shall resign as Servicer in accordance with the provisions
of this Agreement or if all of the rights and obligations of the Servicer shall
have been terminated under Section 8.1, the appointment of the Servicer as
custodian hereunder may be terminated by the Indenture Trustee, or by the
Noteholders of Notes evidencing not less than 25% of the principal amount of
the Notes Outstanding or, with the consent of Noteholders of Notes evidencing
not less than 25% of the principal amount of the Notes Outstanding, by the
Owner Trustee or
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by Certificateholders of Certificates evidencing not less than 25% of the
Certificate Balance, in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Servicer under
Section 8.1. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files and the related accounts and
records maintained by the Servicer to the Indenture Trustee or the Indenture
Trustee's agent at such place or places as the Indenture Trustee may reasonably
designate.
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ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1. Duties of Servicer. The Servicer shall manage, service,
administer, and make collections on the Receivables with reasonable care, using
that degree of skill and attention that the Servicer exercises with respect to
all comparable receivables that it services for itself or others. The
Servicer's duties shall include collection and posting of all payments,
responding to inquiries of Obligors on such Receivables, investigating
delinquencies, sending payment coupons to Obligors, reporting tax information
to Obligors, accounting for collections, furnishing monthly and annual
statements to the Owner Trustee and the Indenture Trustee with respect to
distributions, and making Advances pursuant to Section 4.4. The Servicer shall
follow its customary standards, policies, and procedures in performing its
duties as Servicer. Without limiting the generality of the foregoing, the
Servicer is hereby authorized and empowered to execute and deliver, on behalf
of itself, the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders, the Certificateholders, or any of them, any and all instruments of
satisfaction or cancellation, or partial or full release or discharge, and all
other comparable instruments, with respect to such Receivables or to the
Financed Vehicles securing such Receivables. If the Servicer shall commence a
legal proceeding to enforce a Receivable, the Owner Trustee (in the case of a
Receivable other than a Purchased Receivable) shall thereupon be deemed to have
automatically assigned, solely for the purpose of collection, such Receivable
to the Servicer. If in any enforcement suit or legal proceeding it shall be
held that the Servicer may not enforce a Receivable on the ground that it shall
not be a real party in interest or a holder entitled to enforce the Receivable,
the Owner Trustee shall, at the Servicer's expense and direction, take steps to
enforce the Receivable, including bringing suit in its name or the names of the
Indenture Trustee, the Noteholders, the Certificateholders, or any of them.
The Owner Trustee shall furnish the Servicer with any powers of attorney
and other documents reasonably necessary or appropriate to enable the Servicer
to carry out its servicing and administrative duties hereunder. The Servicer,
at its
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expense, shall obtain on behalf of the Issuer or the Owner Trustee all
licenses, if any, required by the laws of any jurisdiction to be held by the
Issuer or the Owner Trustee in connection with ownership of the Receivables,
and shall make all filings and pay all fees as may be required in connection
therewith during the term hereof.
SECTION 3.2. Collection of Receivable Payments. The Servicer shall
make reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
receivables that it services for itself or others. Subject to Sections
3.6(iii) and (iv), the Servicer may grant extensions, rebates, or adjustments
on a Receivable; provided, however, that if the Servicer extends the date for
final payment by the Obligor of any Receivable beyond the Final Scheduled
Maturity Date, it shall promptly purchase the Receivable in the manner provided
in Section 3.7. The Servicer may in its discretion waive any late payment
charge or any other fees that may be collected in the ordinary course of
servicing a Receivable.
SECTION 3.3. Realization Upon Receivables. On behalf of the Issuer,
the Servicer shall use reasonable efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of the
Financed Vehicle securing any Receivable as to which the Servicer shall have
determined eventual payment in full is unlikely. The Servicer shall follow
such customary and usual practices and procedures as it shall deem necessary or
advisable in its servicing of comparable receivables, which may include
reasonable efforts to realize upon any Dealer Recourse and selling the Financed
Vehicle at public or private sale. The foregoing shall be subject to the
provision that, in any case in which the Financed Vehicle shall have suffered
damage, the Servicer shall not expend funds in connection with the repair or
the repossession of such Financed Vehicle unless it shall determine in its
discretion that such repair and/or repossession will increase the Liquidation
Proceeds by an amount greater than the amount of such expenses.
SECTION 3.4. [Reserved].
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SECTION 3.5. Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures, take
such steps as are necessary to maintain perfection of the security interest
created by each Receivable in the related Financed Vehicle. The Issuer hereby
authorizes the Servicer to take such steps as are necessary to re-perfect such
security interest on behalf of the Issuer and the Indenture Trustee in the
event of the relocation of a Financed Vehicle or for any other reason.
SECTION 3.6. Covenants of Servicer. The Servicer shall not (i) release
the Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment
in full by or on behalf of the Obligor thereunder or repossession, (ii) impair
the rights of the Noteholders or the Certificateholders in the Receivables,
(iii) change the Annual Percentage Rate with respect to any Receivable, or (iv)
modify the Amount Financed or the total number of Scheduled Payments (in the
case of a Precomputed Receivable) or the total number of originally scheduled
due dates (in the case of a Simple Interest Receivable).
SECTION 3.7. Purchase of Receivables Upon Breach. The Seller, the
Servicer or the Owner Trustee, as the case may be, shall inform the other
parties to this Agreement promptly, in writing, upon the discovery of any
breach pursuant to Section 3.2, 3.5 or 3.6. Unless the breach shall have been
cured by the last day of the second Collection Period following such discovery
(or, at the Servicer's election, the last day of the first following Collection
Period), the Servicer shall purchase any Receivable materially and adversely
affected by such breach as determined by the Indenture Trustee (which shall
include any Receivable as to which a breach of Section 3.6 has occurred). In
consideration of the purchase of such Receivable, the Servicer shall remit the
Purchase Amount in the manner specified in Section 4.5. For purposes of this
Section 3.7, the Purchase Amount shall consist in part of a release by the
Servicer of all rights of reimbursement with respect to Outstanding Advances on
the Receivable. The sole remedy of the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders with respect to a
breach pursuant to Section 3.2, 3.5 or 3.6 shall be to
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require the Servicer to purchase Receivables pursuant to this Section 3.7.
SECTION 3.8. Servicer Fee. The Servicer shall be entitled to any
interest earned on the amounts deposited in the Collection Account and the
Payahead Account during each Collection Period plus all late fees, prepayment
charges (including, in the case of a Receivable that provides for payments
according to the "Rule of 78's" and that is prepaid in full, the difference
between the Principal Balance of such Receivable (plus accrued interest to the
date of prepayment) and the principal balance of such Receivable computed
according to the "Rule of 78's"), and other administrative fees and expenses or
similar charges allowed by applicable law with respect to Receivables during
each Collection Period (the "Supplemental Servicing Fee"). The Servicer also
shall be entitled to the Servicing Fee, as provided herein.
SECTION 3.9. Servicer's Certificate. (a) On or about the tenth day
of each calendar month, the Servicer shall deliver to the Owner Trustee, each
Note Paying Agent and Certificate Paying Agent, the Indenture Trustee and the
Seller, with a copy to the Rating Agencies, a Servicer's Certificate containing
all information (including all specific dollar amounts) necessary to make the
transfers and distributions pursuant to Sections 4.3, 4.4, 4.5, 4.6 and 4.7 for
the Collection Period preceding the date of such Servicer's Certificate,
together with the written statements to be furnished by the Owner Trustee to
Certificateholders pursuant to Section 4.9 and by the Indenture Trustee to the
Noteholders pursuant to Section 4.9 hereof and Section 6.6 of the Indenture.
Receivables purchased or to be purchased by the Servicer or the Seller shall be
identified by the Servicer by the Seller's account number with respect to such
Receivable (as specified in the Schedule of Receivables).
(b) On or about the fifth (but in no event later than the tenth)
calendar day of each calendar month, the Servicer shall deliver to the
respective underwriters of the Notes and the Certificates the Note Pool Factor
for each Class of Notes and the Certificate Pool Factor as of the close of
business on the Distribution Date occurring in that month.
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SECTION 3.10. Annual Statement as to Compliance; Notice of Event of
Servicing Termination. (a) The Servicer shall deliver to the Owner Trustee,
the Indenture Trustee and each Rating Agency on or before April 30 of each year
beginning April 30, 1998, an Officer's Certificate, dated as of December 31 of
the preceding calendar year, stating that (i) a review of the activities of the
Servicer during the preceding 12-month (or shorter) period and of its
performance under the Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature
and status thereof. A copy of such Officer's Certificate and the report
referred to in Section 3.11 may be obtained by any Certificateholder by a
request in writing to the Owner Trustee, or by any Noteholder or Person
certifying that it is a Note Owner by a request in writing to the Indenture
Trustee, in either case addressed to the applicable Corporate Trust Office.
Upon the telephone request of the Owner Trustee, the Indenture Trustee shall
promptly furnish the Owner Trustee a list of Noteholders as of the date
specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become an Event of Servicing Termination under
Section 8.1. The Seller shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter, written
notice in an Officer's Certificate of any event which with the giving of notice
or lapse of time, or both, would become an Event of Servicing Termination under
clause (ii) of Section 8.1
SECTION 3.11. Annual Independent Certified Public Accountant's Report.
The Servicer shall cause a firm of independent certified public accountants, who
may also render other services to the Servicer or to the
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Seller or to Ford Credit, to deliver to the Owner Trustee and the Indenture
Trustee on or before April 30 of each year beginning April 30, 1998 with respect
to the prior calendar year a report addressed to the Board of Directors of the
Servicer and to the Owner Trustee and the Indenture Trustee, to the effect that
such firm has audited the financial statements of the Servicer and issued its
report thereon and that such audit (1) was made in accordance with generally
accepted auditing standards, (2) included tests relating to automotive loans
serviced for others in accordance with the requirements of the Uniform Single
Attestation Program for Mortgage Bankers (the "Program"), to the extent the
procedures in such Program are applicable to the servicing obligations set forth
in this Agreement, and (3) except as described in the report, disclosed no
exceptions or errors in the records relating to automobile and light truck loans
serviced for others that such firm is required to report under the Program.
The report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the American
Institute of Certified Public Accountants.
SECTION 3.12. Access to Certain Documentation and Information
Regarding Receivables. The Servicer shall provide to the Certificateholders,
the Indenture Trustee and the Noteholders access to the Receivable Files in such
cases where the Certificateholders, the Indenture Trustee or the Noteholders
shall be required by applicable statutes or regulations to review such
documentation. Access shall be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section 3.12 shall affect the
obligation of the Servicer to observe any applicable law prohibiting disclosure
of information regarding the Obligors, and the failure of the Servicer to
provide access to information as a result of such obligation shall not
constitute a breach of this Section 3.12. The Servicer shall provide such
information with respect to the Receivables as the Rating Agencies may
reasonably request, including as soon as practicable a periodic report of the
aggregate principal balance of Receivables which become Liquidated Receivables
during each Collection Period.
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SECTION 3.13. Servicer Expenses. The Servicer shall be required to pay
all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of the Owner Trustee and the Indenture Trustee,
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Noteholders and Certificateholders.
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ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1. Accounts. (a) The Servicer shall, prior to the Closing
Date, establish and maintain a segregated trust account in the name "The Chase
Manhattan Bank as Indenture Trustee, as secured party from Ford Credit Auto
Owner Trust 1997-B", at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of The Chase Manhattan
Bank), which shall be designated as the "Collection Account". The Collection
Account shall be under the sole dominion and control of the Indenture Trustee;
provided, that the Servicer may make deposits to and direct the Indenture
Trustee in writing to make withdrawals from the Collection Account in accordance
with the terms of the Basic Documents. The Collection Account will be
established and maintained pursuant to an account agreement which specifies New
York law as the governing law. In addition, the Collection Account shall be
established and maintained at a Qualified Institution or Qualified Trust
Institution which agrees in writing that for so long as the Notes are
outstanding it will comply with entitlement orders (as defined in Article 8 of
the UCC) originated by the Indenture Trustee without further consent of the
Issuer. All monies deposited from time to time in the Collection Account shall
be held by the Indenture Trustee as secured party for the benefit of the
Noteholders and, after payment in full of the Notes, as agent of the Owner
Trustee and as part of the Trust Property. All deposits to and withdrawals from
the Collection Account shall be made only upon the terms and conditions of the
Basic Documents.
If the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2, all amounts held in the Collection Account shall, to
the extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Collection Account in Permitted Investments that mature not
later than the Business Day immediately prior to the Distribution Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income
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(net of losses and investment expenses) on funds on deposit in the Collection
Account shall be withdrawn from the Collection Account at the written direction
of the Servicer and shall be paid to the Servicer. In the event that the
Collection Account is no longer to be maintained at the corporate trust
department of The Chase Manhattan Bank, the Servicer shall, with the Indenture
Trustee's or Owner Trustee's assistance as necessary, cause the Collection
Account to be moved to a Qualified Institution or a Qualified Trust Institution
within ten (10) Business Days (or such longer period not to exceed thirty (30)
calendar days as to which each Rating Agency may consent).
(b) The Servicer shall, prior to the Closing Date, establish and
maintain an administrative subaccount within the Collection Account at the bank
or trust company then maintaining the Collection Account, which subaccount shall
be designated as the "Principal Distribution Account". The Principal
Distribution Account is established and maintained solely for administrative
purposes.
(c) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name "PNC Bank, Delaware as Owner
Trustee" at a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of PNC Bank, Delaware), which shall
be designated as the "Certificate Distribution Account". The Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee. All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the Owner
Trustee as part of the Trust Property and shall be applied as provided in the
Basic Documents. In the event that the Certificate Distribution Account is no
longer to be maintained at the corporate trust department of PNC Bank, Delaware,
the Servicer shall, with the Owner Trustee's assistance as necessary, cause the
Certificate Distribution Account to be moved to a Qualified Institution or a
Qualified Trust Institution within ten (10) Business Days (or such longer period
not to exceed thirty (30) calendar days as to which each Rating Agency may
consent). The Certificate Distribution Account will be established and
maintained pursuant to an account agreement which specifies New York law as the
governing law.
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(d) The Servicer shall, prior to the Closing Date, establish and
maintain a segregated trust account in the name of "The Chase Manhattan Bank as
Indenture Trustee" at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of The Chase Manhattan
Bank), which shall be designated as the "Payahead Account". The Payahead
Account shall be held in trust for the benefit of the Obligors. The Payahead
Account shall be under the sole dominion and control of the Indenture Trustee;
provided that the Servicer may make deposits to and direct the Indenture Trustee
in writing to make withdrawals from the Payahead Account in accordance with the
Basic Documents. The Payahead Account shall not be a part of the Trust
Property. All deposits to and withdrawals from the Payahead Account shall be
made only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2, all amounts held in the Payahead Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Payahead Account in Permitted Investments that mature not later
than the Business Day immediately prior to the Distribution Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Payahead Account shall be
withdrawn from the Payahead Account at the direction of the Servicer and shall
be paid to the Servicer. In the event that the Payahead Account is no longer to
be maintained at the corporate trust department of The Chase Manhattan Bank, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Payahead Account to be moved to a Qualified Institution or
a Qualified Trust Institution within ten (10) Business Days (or such longer
period not to exceed thirty (30) calendar days as to which each Rating Agency
may consent).
(e) Notwithstanding the provisions of clause (d) above and of Section
4.6(a)(ii), for so long as (i) Ford Credit is the Servicer, (ii) the rating of
Ford Credit's short-term unsecured debt is at least P-1 by Moody's, is at least
A-1 by Standard & Poor's and is at
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least F-1 by Fitch and (iii) no Event of Servicing Termination shall have
occurred (each, a "Monthly Remittance Condition"), Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be remitted to
and held by the Servicer. So long as each Monthly Remittance Condition is
satisfied, the Servicer shall not be required to segregate or otherwise hold
separate any Payaheads remitted to the Servicer as aforesaid but shall be
required to remit Payaheads to the Collection Account in accordance with Section
4.6(a)(i). At any time as any Monthly Remittance Condition is not satisfied,
the Servicer shall deposit in the Payahead Account the amount of any Payaheads
then held or received by it (which amount shall be at least equal to the
Payahead Balance as of the close of business on the last day of the immediately
preceding Collection Period). Notwithstanding the foregoing, if a Monthly
Remittance Condition is not satisfied the Servicer may utilize, with respect to
Payaheads, an alternative remittance schedule (which may include the remittance
schedule utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the Indenture
Trustee written confirmation from each Rating Agency that such alternative
remittance schedule will not result in the downgrading or withdrawal by such
Rating Agency of the ratings then assigned to the Notes and the Certificates.
The Owner Trustee and the Indenture Trustee shall not be deemed to have
knowledge of any event or circumstance under clause (iii) of the first sentence
of this Section 4.1(e) that would require remit tance of the Payaheads to the
Payahead Account unless the Owner Trustee or the Indenture Trustee has received
notice of such event or circumstance from the Seller or the Servicer in an
Officer's Certificate or from the Noteholders of Notes evidencing not less than
25% of the principal amount of the Notes Outstanding or from the
Certificateholders of Certificates evidencing not less than 25% of the
Certificate Balance or unless a Trustee Officer in the Corporate Trust Office
with knowledge hereof and familiarity herewith has actual knowledge of such
event or circumstance.
SECTION 4.2. Collections. The Servicer shall remit to the Collection
Account within two (2) Business Days of the receipt thereof (i) all payments by
or on behalf of the Obligors (including Payaheads on the Receivables and Rule of
78's Payments, but excluding Pur-
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chased Receivables) and (ii) all Liquidation Proceeds, both as collected during
the Collection Period. Ford Credit, so long as it is acting as the Servicer,
may make remittances of collections on a less frequent basis than that specified
in the immediately preceding sentence. It is understood that such less frequent
remittances may be made only on the specific terms and conditions set forth
below in this Section 4.2 and only for so long as such terms and conditions are
fulfilled. Accordingly, notwithstanding the provisions of the first sentence of
this Section 4.2, the Servicer shall remit collections received during a
Collection Period to the Collection Account in immediately available funds on
the Business Day preceding the related Distribution Date (or, with the prior
consent of the Rating Agencies, on the related Distribution Date) but only for
so long as each Monthly Remittance Condition is satisfied. Notwithstanding the
foregoing, if a Monthly Remittance Condition is not satisfied the Servicer may
utilize an alternative remittance schedule (which may include the remittance
schedule utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the Indenture
Trustee written confirmation from each Rating Agency that such alternative
remittance schedule will not result in the downgrading or withdrawal by such
Rating Agency of the ratings then assigned to the Notes and the Certificates.
The Owner Trustee or the Indenture Trustee shall not be deemed to have knowledge
of any event or circumstance under clause (iii) of the definition of Monthly
Remittance Condition that would require remittance by the Servicer to the
Collection Account within two Business Days of receipt as aforesaid unless the
Owner Trustee or the Indenture Trustee has received notice of such event or
circumstance from the Seller or the Servicer in an Officer's Certificate or from
the Noteholders of Notes evidencing not less than 25% of the principal amount of
the Notes Outstanding or from the Certificateholders of Certificates evidencing
not less than 25% of the Certificate Balance or a Trustee Officer in the
Corporate Trust Office with knowledge hereof or familiarity herewith has actual
knowledge of such event or circumstance. For purposes of this Article IV the
phrase "payments by or on behalf of Obligors" shall mean payments made by
Persons other than the Servicer or by other means.
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SECTION 4.3. Application of Collections. For the purposes of this
Agreement, as of the close of business on the last day of each Collection
Period, all collections for the Collection Period with respect to each
Receivable (other than a Purchased Receivable) shall be applied by the Servicer
as follows:
Payments by or on behalf of the Obligor which are not late fees, prepayment
charges, or other administrative fees and expenses, or similar charges which
constitute the Supplemental Servicing Fee shall be applied first to reduce
Outstanding Advances made with respect to such Receivable, as described in
Sections 4.4(a) and (b) below. Next, any excess shall be applied (i) in the
case of Simple Interest Receivables, to interest and principal on the
Receivable in accordance with the Simple Interest Method and (ii) in the
case of Precomputed Receivables, to the Scheduled Payment with respect to
such Receivable and any remaining excess (except for partial prepayments
which cause a reduction in the Obligor's periodic payment to below the
Scheduled Payment as of the Cutoff Date) shall be added to the Payahead
Balance, and shall be applied to prepay the Precomputed Receivable but only
if the sum of such excess and the previous Payahead Balance shall be
sufficient to prepay the Precomputed Receivable in full, otherwise such
excess shall constitute a Payahead, and shall increase the Payahead Balance.
SECTION 4.4. Advances. (a) As of the close of business on the last
day of each Collection Period, if the payments by or on behalf of the Obligor on
a Precomputed Receivable (other than a Purchased Receivable) after application
under Section 4.3 shall be less than the Scheduled Payment, whether as a result
of any extension granted to the Obligor or otherwise, the Payahead Balance, if
any, with respect to such Receivables shall be applied by the Indenture Trustee
to the extent of the shortfall, and such Payahead Balance shall be reduced
accordingly. Next, subject to the following sentence, the Servicer shall make
an advance of any remaining shortfall (such amount, a "Precomputed Advance").
The Servicer will be obligated to make a Precomputed Ad-
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vance in respect of a Precomputed Receivable only to the extent that the
Servicer, in its sole discretion, shall determine that the Precomputed Advance
shall be recoverable from subsequent collections or recoveries on any
Precomputed Receivable. With respect to each Precomputed Receivable, the
Precomputed Advance shall increase Outstanding Precomputed Advances.
Outstanding Precomputed Advances shall be reduced by subsequent payments by or
on behalf of the Obligor, collections of Liquidation Proceeds and payments of
the Purchase Amount.
If the Servicer shall determine that an Outstanding Precomputed Advance
with respect to any Precomputed Receivable shall not be recoverable, the
Servicer shall be reimbursed from any collections made on other Receivables in
the Trust, and Outstanding Precomputed Advances with respect to such Precomputed
Receivable shall be reduced accordingly.
(b) As of the close of business on the last day of each Collection
Period, the Servicer shall advance an amount equal to the amount of interest due
on the Simple Interest Receivables at their respective APRs for the related
Collection Period (assuming the Simple Interest Receivables pay on their
respective due dates) minus the amount of interest actually received on the
Simple Interest Receivables during the related Collection Period (such amount, a
"Simple Interest Advance"). With respect to each Simple Interest Receivable,
the Simple Interest Advance shall increase Outstanding Simple Interest
Advances. If such calculation results in a negative number, an amount equal to
such negative number shall be paid to the Servicer and the amount of
Outstanding Simple Interest Advances shall be reduced by such amount. In
addition, in the event that a Simple Interest Receivable becomes a Liquidated
Receivable, Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including interest
for the then current Collection Period) shall be paid to the Servicer to reduce
Outstanding Simple Interest Advances, but only to the extent of any Outstanding
Simple Interest Advances. The Servicer shall not make any advance in respect
of principal of Simple Interest Receivables.
If the Servicer shall determine that an Outstanding Simple Interest
Advance with respect to any
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Simple Interest Receivable shall not be recoverable, the Servicer shall be
reimbursed from any collections made on other Receivables in the Trust, but only
to the extent that such Outstanding Simple Interest Advance represents accrued
and unpaid interest on such Simple Interest Receivable. Outstanding Simple
Interest Advances with respect to such Simple Interest Receivable shall be
reduced by the amount of such reimbursement.
(c) In the event that an Obligor shall prepay a Receivable in full, if
the related contract did not require such Obligor to pay a full month's
interest, for the month of prepayment, at the APR, the Servicer shall make an
unreimbursable advance of the amount of such interest.
SECTION 4.5. Additional Deposits. (a) The Servicer shall deposit in
the Collection Account the aggregate Advances pursuant to Sections 4.4(a) and
(b) and the aggregate advances pursuant to Section 4.4(c). The Servicer and the
Seller shall deposit in the Collection Account the aggregate Purchase Amounts
with respect to Purchased Receivables and the Servicer shall deposit therein all
amounts to be paid under Section 9.1. All such deposits with respect to a
Collection Period shall be made, in immediately available funds, on the Business
Day preceding the Distribution Date (or, with the prior consent of the Rating
Agencies, on the Distribution Date) related to such Collection Period.
(b) The Indenture Trustee shall on the Distribution Date relating to
each Collection Period make withdrawals from the Reserve Account (i) first, in
an amount equal to the Reserve Account Release Amount, (ii) second, in an amount
equal to the amount (if positive) calculated by the Servicer pursuant to the
second sentence of Section 4.6(b) and (iii) third, in an amount equal to the
amount (if positive) calculated by the Servicer pursuant to the third sentence
of Section 4.6(b) and, in each case, shall deposit such funds into the
Collection Account.
SECTION 4.6. Distributions. (a) On each Distribution Date, the
Indenture Trustee shall cause to be made the following transfers and
distributions in the amounts set forth in the Servicer's Certificate for such
Distribution Date:
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(i) From the Payahead Account, or from the Servicer in the
event the provisions of Section 4.1(e) above are applicable, to the
Collection Account, in immediately available funds, (x) the portion of
Payaheads constituting Scheduled Payments or prepayments in full, required
by Sections 4.3 and 4.4(a), and (y) the Payahead Balance, if any, relating
to any Purchased Receivable.
(ii) From the Collection Account to the Payahead Account, or to
the Servicer in the event the provisions of Section 4.1(e) above are
applicable, in immediately available funds, the aggregate Payaheads required
by Section 4.3 for the Collection Period related to such Distribution Date.
(iii) From the Collection Account to the Servicer, in immediately
available funds, repayment of Outstanding Advances pursuant to Sections
4.4(a) and (b).
(b) Prior to each Distribution Date, the Servicer shall on or before
each Determination Date calculate the Available Collections, the Reserve Account
Release Amount, the Available Funds, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods, if any, the Accrued Class A Note Interest,
the First Priority Principal Distribution Amount, the Accrued Class B Note
Interest, the Second Priority Principal Distribution Amount, the Accrued
Certificate Interest and the Third Priority Principal Distribution Amount. In
addition, the Servicer shall calculate on or before each Determination Date the
difference, if any, between the Total Required Payment and the Available Funds
and, pursuant to Section 4.5(b), the Indenture Trustee shall withdraw funds from
the Reserve Account in the amount of such difference (if positive). On or
before the Determination Date immediately preceding the Final Scheduled
Distribution Date with respect to any Class of Notes or the Certificates, the
Servicer shall calculate the difference, if any, between (i) the amount required
to pay such Class of Notes or the Certificates in full in accordance with the
priorities set forth in Sections 4.6(c) and (d), and (ii) the sum of the
Available Funds plus the amount withdrawn from the Reserve Account in accordance
with the preceding sentence, and pursuant to Section 4.5(b), the Indenture
Trustee shall withdraw funds from
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the Reserve Account in the amount of such difference (if positive).
(c) On each Distribution Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on or before the related Determination Date pursuant to
Section 3.9), to make the following withdrawals from the Collection Account and
make deposits, distributions and payments, to the extent of funds on deposit in
the Collection Account with respect to the Collection Period preceding such
Distribution Date (including funds, if any, deposited therein from the Reserve
Account pursuant to Section 4.5(b) and from the Payahead Account pursuant to
this Section 4.6), in the following order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Noteholders of Class A Notes, the Accrued
Class A Note Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class A Note Interest, the
amounts available shall be applied to the payment of such interest on the
Class A Notes on a pro rata basis;
(iii) third, to the Principal Distribution Account, the First
Priority Principal Distribution Amount;
(iv) fourth, to the Noteholders of Class B Notes, the Accrued
Class B Note Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class B Note Interest, the
amounts available shall be applied to the payment of such interest on the
Class B Notes on a pro rata basis;
(v) fifth, to the Principal Distribution Account, the Second
Priority Principal Distribution Amount;
(vi) sixth, to the Certificate Distribution Account, the Accrued
Certificate Interest;
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(vii) seventh, to the Reserve Account, the amount, if any,
required to reinstate the amount in the Reserve Account up to the Specified
Reserve Balance;
(viii) eighth, to the Principal Distribution Account, the Third
Priority Principal Distribution Amount; and
(ix) ninth, to the Seller, any funds remaining on deposit in the
Collection Account with respect to the Collection Period preceding such
Distribution Date.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes or following an Insolvency Event or a dissolution with respect to the
Seller or the General Partner, the Servicer shall instruct the Indenture Trustee
to transfer the funds on deposit in the Collection Account remaining after the
application of clauses (i) and (ii) above to the Principal Distribution Account
to the extent necessary to reduce the principal amount of all the Notes to zero,
and the Certificateholders will not receive any distributions of principal or
interest until the principal amount and accrued interest on all the Notes has
been paid in full.
(d) On each Distribution Date, the Servicer shall instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on or before the related Determination Date pursuant to
Section 3.9), to withdraw the funds on deposit in the Principal Distribution
Account with respect to the Collection Period preceding such Distribution Date
and make distributions and payments in the following order of priority:
(i) first, to the Noteholders of the Class A-1 Notes in reduction
of principal until the principal amount of the outstanding Class A-1 Notes
has been paid in full; provided that if there are not sufficient funds
available to pay the principal amount of the outstanding Class A-1 Notes in
full, the amounts available shall be applied to the pay-
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ment of principal on the Class A-1 Notes on a pro rata basis;
(ii) second, to the Noteholders of the Class A-2 Notes in
reduction of principal until the principal amount of the outstanding Class
A-2 Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-2
Notes in full, the amounts available shall be applied to the payment of
principal on the Class A-2 Notes on a pro rata basis;
(iii) third, to the Noteholders of the Class A-3 Notes in
reduction of principal until the principal amount of the outstanding Class
A-3 Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-3
Notes in full, the amounts available shall be applied to the payment of
principal on the Class A-3 Notes on a pro rata basis;
(iv) fourth, to the Noteholders of the Class A-4 Notes in
reduction of principal until the principal amount of the outstanding Class
A-4 Notes has been paid in full; provided that if there are not sufficient
funds available to pay the principal amount of the outstanding Class A-4
Notes in full, the amounts available shall be applied to the payment of
principal on the Class A-4 Notes on a pro rata basis;
(v) fifth, to the Noteholders of the Class B Notes in reduction of
principal until the principal amount of the outstanding Class B Notes has
been paid in full; provided that if there are not sufficient funds available
to pay the principal amount of the outstanding Class B Notes in full, the
amounts available shall be applied to the payment of principal on the Class
B Notes on a pro rata basis;
(vi) sixth, to the Certificate Distribution Account, in reduction
of the Certificate Balance, until the Certificate Balance has been reduced
to zero; and
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(vii) seventh, to the Seller, any funds remaining on deposit in the
Principal Distribution Account.
SECTION 4.7. Reserve Account. (a) (i) The Seller shall, prior to the
Closing Date, establish and maintain an account in the name "The Chase Manhattan
Bank as Indenture Trustee, as secured party from Ford Credit Auto Owner Trust
1997-B" at a Qualified Institution or Qualified Trust Institution (which shall
initially be the corporate trust department of The Chase Manhattan Bank), which
shall be designated as the "Reserve Account" (the Reserve Account, together with
the Collection Account (including the Principal Distribution Account), the
"Trust Accounts"). The Reserve Account shall be under the sole dominion and
control of the Indenture Trustee; provided, that the Servicer may make deposits
to the Reserve Account in accordance with the Basic Documents. The Reserve
Account will be established and maintained pursuant to an account agreement
which specifies New York law as the governing law. In addition, the Reserve
Account shall be established and maintained at a Qualified Institution or
Qualified Trust Institution which agrees in writing that for so long as the
Notes are outstanding it will comply with entitlement orders (as defined in
Article 8 of the UCC) originated by the Indenture Trustee without further
consent of the Issuer. On the Closing Date, the Seller shall deposit the
Reserve Initial Deposit into the Reserve Account from the net proceeds of the
sale of the Notes and the Certificates. The Reserve Account and all amounts,
securities, investments, financial assets and other property deposited in or
credited to the Reserve Account (such amounts, the "Reserve Account Property")
shall be held by the Indenture Trustee as secured party for the benefit of the
Noteholders and, after payment in full of the Notes, as agent of the Owner
Trustee and as part of the Trust Property, and all deposits to and withdrawals
from therefrom shall be made only upon the terms and conditions of the Basic
Documents.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Seller, by the bank or trust company then maintaining the Reserve Account in
Permitted Investments that mature not later than the Business Day preceding the
next Distribution
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Date, and such Permitted Investments shall be held to maturity. All interest and
other income (net of losses and investment expenses) on funds on deposit in the
Reserve Account shall be deposited therein. In the event the Reserve Account is
no longer to be maintained at the corporate trust department of The Chase
Manhattan Bank, the Servicer shall, with the Indenture Trustee's or Owner
Trustee's assistance as necessary, cause the Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution within ten (10) Business
Days (or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
(ii) With respect to Reserve Account Property:
(A) any Reserve Account Property that is a
"financial asset" as defined in Section 8-102(a)(9) of the
UCC shall be physically delivered to, or credited to an
account in the name of, the Qualified Institution or
Qualified Trust Institution maintaining the Reserve Account
in accordance with such institution's customary procedures
such that such institution establishes a "securities
entitlement" in favor of the Indenture Trustee with respect
thereto; and
(B) any Reserve Account Property that is held in
deposit accounts shall be held solely in the name of the
Indenture Trustee at one or more depository institutions
having the Required Rating and each such deposit account
shall be subject to the exclusive custody and control of the
Indenture Trustee and the Indenture Trustee shall have sole
signature authority with respect thereto.
(iii) Except for any deposit accounts specified in clause (ii)(B)
above, the Reserve Account shall only be invested in securities or in other
assets which the Qualified Institution or Qualified Trust Institution
maintaining the Reserve Account agrees to treat as "financial assets" as
defined in Section 8-102(a)(9) of the UCC.
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(b) If the Servicer pursuant to Section 4.4 determines on or before
any Determination Date that it is required to make an Advance and does not do so
from its own funds, the Servicer shall promptly instruct the Indenture Trustee
in writing to withdraw funds, in an amount specified by the Servicer, from the
Reserve Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the Servicer
pursuant to Section 4.4 for purposes of making distributions pursuant to this
Agreement, but shall not otherwise satisfy the Servicer's obligation to deliver
the amount of the Advances to the Indenture Trustee, and the Servicer shall
within two Business Days replace any funds in the Reserve Account so used.
(c) Following the payment in full of the aggregate principal amount of
the Notes and the Certificate Balance and of all other amounts owing or to be
distributed hereunder or under the Indenture or the Trust Agreement to
Noteholders and Certificateholders and the termination of the Trust, any
remaining Reserve Account Property shall be distributed to the Seller.
SECTION 4.8. Net Deposits. For so long as (i) Ford Credit shall be
the Servicer, (ii) the Servicer shall be entitled pursuant to Section 4.2 to
remit collections on a monthly basis rather than within two Business Days of
receipt, and (iii) the Servicer shall be entitled pursuant to Section 4.1(e) to
retain Payaheads rather than deposit them in the Payahead Account, Ford Credit
may make the remittances pursuant to Sections 4.2 and 4.5 above, net of amounts
to be distributed to Ford Credit pursuant to Section 4.6(c). Nonetheless, the
Servicer shall account for all of the above described remittances and
distributions except for the Supplemental Servicing Fee in the Servicer's
Certificate as if the amounts were deposited and/or transferred separately.
SECTION 4.9. Statements to Noteholders and Certificateholders. On
each Distribution Date, the Servicer shall provide to the Indenture Trustee
(with copies to the Rating Agencies and each Note Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most
recent Record Date and to the Owner Trustee (with copies to the Rating Agencies
and to each Certificate Paying Agent) for the Owner Trustee to forward to each
Certificateholder of record as of the
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most recent Record Date a statement based on information in the Servicer's
Certificate furnished pursuant to Section 3.9, setting forth for the Collection
Period relating to such Distribution Date the following information as to the
Notes and the Certificates to the extent applicable:
(i) the amount of such distribution allocable to principal
allocable to the Notes and to the Certificates;
(ii) the amount of such distribution allocable to interest
allocable to the Notes and the Certificates;
(iii) the amount of such distribution allocable to draws from the
Reserve Account, if any;
(iv) the Pool Balance as of the close of business on the last day
of the preceding Collection Period;
(v) the Minimum Required Class A Note Overcollateralization
Amount, the Actual Class A Note Overcollateralization Amount, the Minimum
Required Class B Note Overcollateralization Amount, the Actual Class B Note
Overcollateralization Amount, the Specified Overcollateralization Amount and
the Specified Credit Enhancement Amount as of such Distribution Date;
(vi) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period and the amount of any unpaid
Servicing Fees and the change in such amount from that of the prior
Distribution Date;
(vii) the amounts of the Noteholders' Interest Carryover
Shortfall and the Certificateholders' Interest Carryover Shortfall, if any,
on such Distribution Date and the change in such amounts from the preceding
Distribution Date;
(viii) the aggregate outstanding principal amount of each Class
of Notes, the Note Pool Factor for each Class of Notes, the Certificate
Bal-
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ance and the Certificate Pool Factor as of such Distribution Date;
(ix) the balance of the Reserve Account on such Distribution
Date, after giving effect to distributions made on such Distribution Date
and the change in such balance from the preceding Distribution Date;
(x) the amount of the aggregate Realized Losses, if any, with
respect to the related Collection Period;
(xi) the aggregate Purchase Amount of Receivables repurchased by
the Seller or purchased by the Servicer, if any, with respect to the
related Collection Period; and
(xii) the amount of Advances, if any, on such Distribution Date
(stating separately the amount of Precomputed Advances and Simple Interest
Advances).
Each amount set forth on the Distribution Date statement pursuant to
clauses (i), (ii), (vi) or (vii) above shall be expressed as a dollar amount per
$1,000 of original principal amount or original Certificate Balance of a Note or
a Certificate, as applicable.
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ARTICLE V
[Intentionally Omitted]
ARTICLE VI
THE SELLER
SECTION 6.1. Representations and Warranties of Seller. The Seller
makes the following representations and warranties on which the Issuer is deemed
to have relied in acquiring the Trust Property. The representations and
warranties speak as of the execution and delivery of this Agreement and shall
survive the conveyance of the Trust Property to the Issuer and the pledge
thereof by the Issuer to the Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Seller shall have been duly
organized and shall be validly existing as a limited partnership in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at all
relevant times, and shall have, power, authority, and legal right to acquire and
own the Receivables.
(b) Due Qualification. The Seller shall be duly qualified to do
business as a foreign limited partnership in good standing, and shall have
obtained all necessary licenses and approvals in all jurisdictions in which the
ownership or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller shall have the power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms. The Seller shall have full
power and authority to convey and assign the property to be conveyed and
assigned to and deposited with the Issuer and has duly authorized such
conveyance and assignment to the Issuer by all necessary action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party
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shall have been duly authorized by the Seller by all necessary action.
(d) Valid Conveyance; Binding Obligation. This Agreement shall
evidence a valid transfer, assignment and conveyance of the Receivables and the
other Trust Property conveyed by the Seller to the Issuer hereunder, enforceable
against creditors of and purchasers from the Seller; and this Agreement and the
other Basic Documents to which the Seller is a party constitute legal, valid,
and binding obligations of the Seller, enforceable against the Seller in
accordance with their terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents to which the Seller is a party
and the fulfillment of the terms hereof and thereof will not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the Certificate of
Limited Partnership or Limited Partnership Agreement, any indenture, agreement,
or other instrument to which the Seller is a party or by which the Seller is
bound; nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement, or other
instrument; nor violate any law or, to the best of the Seller's knowledge, any
order, rule, or regulation applicable to the Seller of any federal or State
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic Docu-
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ments, (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates, or (iv) relating to the Seller
and which might adversely affect the federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes or the Certificates.
SECTION 6.2. Liability of Seller; Indemnities The Seller shall be
liable in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, and hereby agrees to the
following:
(a) The Seller shall indemnify, defend, and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to, and as of the
date of, the conveyance of the Receivables to the Issuer or the issuance and
original sale of the Notes and the Certificates, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or license
taxes (but, in the case of the Issuer, not including any taxes asserted with
respect to ownership of the Receivables or federal or other Applicable Tax State
income taxes arising out of the transactions contemplated by this Agreement and
the other Basic Documents) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend, and hold harmless the Issuer,
the Owner Trustee, the Inden ture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence (other
than errors in judgment) in the performance of its duties under this Agreement,
or by reason of reckless disregard of its obligations and duties under this
Agreement and (ii) the Seller's violation of federal or State securities laws in
connection with the registration or the sale of the Notes or the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee
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and their respective officers, directors, employees and agents from and against
all costs, expenses, losses, claims, damages and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained herein and in the Trust Agreement, in the case of the Owner
Trustee, and in the Indenture, in the case of the Indenture Trustee, except to
the extent that such cost, expense, loss, claim, damage or liability: (i) in
the case of the Owner Trustee, shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Owner Trustee or, in
the case of the Indenture Trustee, shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Indenture Trustee; or
(ii) in the case of the Owner Trustee shall arise from the breach by the Owner
Trustee of any of its representations or warranties set forth in Section 7.3 of
the Trust Agreement or (iii) in the case of the Indenture Trustee shall arise
from the breach by the Indenture Trustee of any of its representations and
warranties set forth in the Indenture.
(d) The Seller shall pay any and all taxes levied or assessed upon all
or any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of this Agreement and shall include, without limitation, reasonable
fees and expenses of counsel and expenses of litigation. If the Seller shall
have made any indemnity payments pursuant to this Section 6.2 and the Person to
or on behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall repay such amounts to the Seller, without
interest.
SECTION 6.3. Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Seller shall be a party, (iii) succeeding to the business of the
Seller, or (iv) more than 50% of the voting stock of which is owned directly or
indirectly by Ford Motor Company, which Person in any of the foregoing cases
executes an agreement of assumption to perform
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every obligation of the Seller under this Agreement, will be the successor to
the Seller under this Agreement without the execution or filing of any document
or any further act on the part of any of the parties to this Agreement;
provided, however, that (x) the Seller shall have delivered to the Owner Trustee
and the Indenture Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such merger, conversion, consolidation or succession and such
agreement of assumption comply with this Section 6.3 and that all conditions
precedent, if any, provided for in this Agreement relating to such transaction
have been complied with and (y) the Seller shall have delivered to the Owner
Trustee and the Indenture Trustee an Opinion of Counsel either (A) stating that,
in the opinion of such counsel, all financing statements and continuation
statements and amendments thereto have been executed and filed that are
necessary fully to preserve and protect the interest of the Issuer and the
Indenture Trustee, respectively, in the Receivables and the other Trust
Property, and reciting the details of such filings, or (B) stating that, in the
opinion of such counsel, no such action shall be necessary to preserve and
protect such interest. The Seller shall provide notice of any merger,
conversion, consolidation, or succession pursuant to this Section 6.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the execution
of the foregoing agreement of assumption and compliance with clauses (x) or (y)
above shall be conditions to the consummation of the transactions referred to in
clauses (i), (ii) or (iii) above.
SECTION 6.4. Limitation on Liability of Seller and Others. The
Seller and any officer or employee or agent of the Seller may rely in good faith
on the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute, or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 6.5. Seller May Own Notes or Certificates. The Seller, and
any Affiliate of the Seller, may in its individual or any other capacity become
the owner or pledgee of Notes or Certificates with the same rights as it would
have if it were not the Seller or an Affili-
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ate thereof, except as otherwise expressly provided herein or in the other Basic
Documents. Except as set forth herein or in the other Basic Documents, Notes
and Certificates so owned by or pledged to the Seller or any such Affiliate
shall have an equal and proportionate benefit under the provisions of this
Agreement and the other Basic Documents, without preference, priority, or
distinction as among all of the Notes and Certificates.
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ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Trust Property. The representations speak as of the execution and
delivery of this Agreement and shall survive the conveyance of the Trust
Property to the Issuer and the pledge thereof by the Issuer pursuant to the
Indenture:
(a) Organization and Good Standing. The Servicer shall have been duly
organized and shall be validly existing as a corporation in good standing under
the laws of the State of its incorporation, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire, own, sell, and
service the Receivables and to hold the Receivable Files as custodian on behalf
of the Issuer and the Indenture Trustee.
(b) Due Qualification. The Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing of the
Receivables as required by this Agreement) shall require such qualifications.
(c) Power and Authority. The Servicer shall have the power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms, and the execution, delivery
and performance of this Agreement and the other Basic Documents to which it is a
party shall have been duly authorized by the Servicer by all necessary corporate
action.
(d) Binding Obligation. This Agreement and the other Basic Documents
to which the Servicer is a party constitute legal, valid, and binding
obligations of the Servicer, enforceable against the Servicer in accordance with
their terms, subject, as to enforceability, to
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applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws and to general equitable
principles.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents to which the Servicer is a party
and the fulfillment of the terms hereof and thereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute (with
or without notice or lapse of time or both) a default under, the articles of
incorporation or by-laws of the Servicer, or any indenture, agreement, or other
instrument to which the Servicer is a party or by which it shall be bound, nor
result in the creation or imposition of any lien upon any of its properties
pursuant to the terms of any such indenture, agreement, or other instrument
(other than this Agreement); nor violate any law or, to the best of the
Servicer's knowledge, any order, rule, or regulation applicable to the Servicer
of any court or any federal or State regulatory body, administrative agency, or
other governmental instrumentality having jurisdiction over the Servicer or its
properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the Servicer's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the Notes
or the Certificates or the consummation of any of the transactions contemplated
by this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, or (iv) relating to the Servicer and
which might adversely affect the federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes or the Certificates.
SECTION 7.2. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to
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the extent of the obligations specifically undertaken by the Servicer under this
Agreement, and hereby agrees to the following:
(a) The Servicer shall defend, indemnify and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs, expenses,
losses, damages, claims and liabilities, arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate thereof of a
Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to the transactions
contemplated herein or in the other Basic Documents, if any, including, without
limitation, any sales, gross receipts, general corporation, tangible personal
property, privilege, or license taxes (but, in the case of the Issuer, not
including any taxes asserted with respect to, and as of the date of, the
conveyance of the Receivables to the Issuer or the issuance and original sale of
the Notes and the Certificates, or asserted with respect to ownership of the
Receivables, or federal or other Applicable Tax State income taxes arising out
of the transactions contemplated by this Agreement and the other Basic
Documents) and costs and expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was imposed upon any such
Person through, the negligence, willful misfeasance, or bad faith (other than
errors in judgment) of the Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party, or by reason of
reckless disregard of its obligations and duties under this Agreement or any
other Basic Document to which it is a party.
(d) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee and the Indenture Trust-
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ee, as applicable, from and against all costs, expenses, losses, claims,
damages, and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in the
other Basic Documents, if any, except to the extent that such cost, expense,
loss, claim, damage, or liability: (i) shall be due to the willful misfeasance,
bad faith, or negligence (except for errors in judgment) of the Owner Trustee or
the Indenture Trustee, as applicable; (ii) relates to any tax other than the
taxes with respect to which either the Seller or the Servicer shall be required
to indemnify the Owner Trustee or the Indenture Trustee, as applicable; (iii) in
the case of the Owner Trustee, shall arise from the Owner Trustee's breach of
any of its representations or warranties set forth in Section 7.3 of the Trust
Agreement or, in the case of the Indenture Trustee, from the Indenture Trustee's
breach of any of its representations or warranties set forth in the Indenture;
or (iv) in the case of the Indenture Trustee, shall arise out of or be incurred
in connection with the performance by the Indenture Trustee of the duties of a
successor Servicer hereunder.
For purposes of this Section 7.2, in the event of the termination of
the rights and obligations of Ford Credit (or any successor thereto pursuant to
Section 8.2) as Servicer pursuant to Section 8.1, or a resignation by such
Servicer pursuant to this Agreement, such Servicer shall be deemed to continue
to be the Servicer pending appointment of a successor Servicer (other than the
Indenture Trustee) pursuant to Section 8.2.
Indemnification under this Section 7.2 by Ford Credit (or any successor
thereto pursuant to Section 8.2) as Servicer, with respect to the period such
Person was (or was deemed to be) the Servicer, shall survive the termination of
such Person as Servicer or a resignation by such Person as Servicer as well as
the termination of this Agreement or the resignation or removal of the Owner
Trustee or the Indenture Trustee and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section 7.2 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest.
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SECTION 7.3. Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be merged
or consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Servicer shall be a party, (iii) succeeding to the business of the
Servicer, or (iv) so long as Ford Credit acts as Servicer, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by Ford
Motor Company, which Person in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Servicer under this Agreement,
will be the successor to the Servicer under this Agreement without the execution
or filing of any paper or any further act on the part of any of the parties to
this Agreement; provided, however, that (x) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Officer's Certificate and an
Opinion of Counsel each stating that such merger, conversion, consolidation, or
succession and such agreement of assumption comply with this Section 7.3 and
that all conditions precedent provided for in this Agreement relating to such
transaction have been complied with and (y) the Servicer shall have delivered to
the Owner Trustee and the Indenture Trustee an Opinion of Counsel either (A)
stating that, in the opinion of such counsel, all financing statements and
continuation statements and amendments thereto have been executed and filed that
are necessary fully to preserve and protect the interest of the Issuer and the
Indenture Trustee, respectively, in the Receivables, and reciting the details of
such filings, or (B) stating that, in the opinion of such counsel, no such
action shall be necessary to preserve and protect such interests. The Servicer
shall provide notice of any merger, conversion, consolidation or succession
pursuant to this Section 7.3 to the Rating Agencies. Notwithstanding anything
herein to the contrary, the execution of the foregoing agreement or assumption
and compliance with clauses (x) and (y) above shall be conditions to the
consummation of the transactions referred to in clauses (i), (ii), or (iii)
above.
SECTION 7.4. Limitation on Liability of Servicer and Others. (a)
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Issuer, the Noteholders or
the Certificateholders, except as provided under this Agreement, for any action
taken or for
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refraining from the taking of any action pursuant to this Agreement or for
errors in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability that would otherwise be
imposed by reason of willful misfeasance or bad faith in the performance of
duties or by reason of reckless disregard of obligations and duties under this
Agreement, or by reason of negligence in the performance of its duties under
this Agreement (except for errors in judgment). The Servicer and any director,
officer or employee or agent of the Servicer may rely in good faith on any
Opinion of Counsel or on any Officer's Certificate of the Seller or certificate
of auditors believed to be genuine and to have been signed by the proper party
in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be
under any obligation to appear in, prosecute, or defend any legal action that
shall not be incidental to its duties to service the Receivables in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties to this Agreement and the interests of the
Noteholders and Certificateholders under this Agreement. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Servicer.
SECTION 7.5. Delegation of Duties. So long as Ford Credit acts as
Servicer, the Servicer may at any time without notice or consent delegate
substantially all its duties under this Agreement to any corporation more than
50% of the voting stock of which is owned, directly or indirectly, by Ford Motor
Company. The Servicer may at any time perform specific duties as servicer under
the Agreement through sub-contractors; provided that no such delegation or
subcontracting shall relieve the Servicer of its responsibilities with respect
to such duties as to which the Servicer shall remain primarily responsible with
respect thereto.
SECTION 7.6. Ford Credit Not to Resign as Servicer. Subject to the
provisions of Section 7.3, Ford Credit shall not resign from the obligations and
duties
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hereby imposed on it as Servicer under this Agreement except upon determination
that the performance of its duties under this Agreement shall no longer be
permissible under applicable law. Notice of any such determination permitting
the resignation of Ford Credit shall be communicated to the Owner Trustee and
the Indenture Trustee at the earliest practicable time (and, if such
communication is not in writing, shall be confirmed in writing at the earliest
practicable time) and any such determination shall be evidenced by an Opinion of
Counsel to such effect delivered to the Owner Trustee and the Indenture Trustee
concurrently with or promptly after such notice. No such resignation shall
become effective until the Indenture Trustee or a successor Servicer shall have
(i) taken the actions required by the last paragraph of Section 8.1, (ii)
assumed the responsibilities and obligations of Ford Credit in accordance with
Section 8.2 and (iii) become the Administrator under the Administration
Agreement pursuant to Section 9 thereof.
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Servicer or an Affiliate thereof, except as
otherwise expressly provided herein or in the other Basic Documents. Except as
set forth herein or in the other Basic Documents, Notes and Certificates so
owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Notes and Certificates.
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ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination. (a) If any one of the
following events ("Events of Servicing Termination") occur and be continuing:
(i) Any failure by the Servicer or the Seller to deliver to the Owner
Trustee or the Indenture any proceeds or payment required to be so delivered
under the terms of the Notes and the Certificates and this Agreement that
shall continue unremedied for a period of three (3) Business Days after
written notice of such failure is received by the Servicer or the Seller, as
the case may be, from the Owner Trustee or the Indenture Trustee or after
discovery of such failure by an officer of the Servicer or the Seller, as
the case may be; or
(ii) Failure on the part of the Servicer or the Seller duly to observe
or to perform in any material respect any other covenants or agreements of
the Servicer or the Seller, as the case may be, set forth in the Notes, the
Certificates or in this Agreement, which failure shall (a) materially and
adversely affect the rights of Noteholders or Certificateholders and (b)
continue unremedied for a period of ninety (90) days after the date on which
written notice of such failure, requiring the same to be remedied, shall
have been given (1) to the Servicer by the Owner Trustee or the Indenture
Trustee, or (2) to the Owner Trustee, the Indenture Trustee, the Seller and
the Servicer by the Noteholders of Notes evidencing not less than 25% of the
principal amount of the Notes Outstanding or by the Certificateholders of
Certificates evidencing not less than 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Servicer or
the Seller in any insolvency, readjustment of debt, marshalling of assets
and liabilities, or similar proceedings, or for the winding up or
liquidation of its respective affairs, and the
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continuance of any such decree or order unstayed and in effect for a period
of sixty (60) consecutive days; or
(iv) The consent by the Servicer or the Seller to the appointment of
a conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of or
relating to the Servicer of or relating to substantially all of its
property; or the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntary suspend payment of its obligations;
then the Indenture Trustee shall promptly notify each Rating Agency, and in
each and every case, so long as an Event of Servicing Termination shall not
have been remedied, either the Indenture Trustee, or the Noteholders of Notes
evidencing not less than a majority of the principal amount of the Notes
Outstanding, by notice then given in writing to the Servicer (and to the
Indenture Trustee and the Owner Trustee if given by the Noteholders) (with a
copy to the Rating Agencies) may terminate all of the rights and obligations of
the Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the Trust
Property or otherwise, shall pass to and be vested in the Indenture Trustee or
such successor Servicer as may be appointed under Section 8.2; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement of the Receivables and related documents, or otherwise.
The predecessor Servicer shall cooperate with the Indenture Trustee,
the Owner Trustee and such successor Servicer in effecting the termination of
the responsibilities and rights of the predecessor Servicer under
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this Agreement, including the transfer to the Indenture Trustee or such
successor Servicer for administration of all cash amounts that shall at the time
be held by the predecessor Servicer for deposit, or shall thereafter be received
with respect to a Receivable and the delivery of the Receivable Files and the
related accounts and records maintained by the Servicer. All reasonable costs
and expenses (including attorneys' fees) incurred in connection with
transferring the Receivable Files to the successor Servicer and amending this
Agreement to reflect such succession as Servicer pursuant to this Section 8.1
shall be paid by the predecessor Servicer upon presentation of reasonable
documentation of such costs and expenses.
SECTION 8.2. Appointment of Successor Servicer. (a) Upon the
Servicer's receipt of notice of termination pursuant to Section 8.1 or the
Servicer's resignation in accordance with the terms of this Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation, until
the later of (x) the date 45 days from the delivery to the Trustee of written
notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in the
notice of resignation and accompanying Opinion of Counsel. In the event of the
Servicer's resignation or termination hereunder, the Trustee shall appoint a
successor Servicer, and the successor Servicer shall accept its appointment by a
written assumption in form acceptable to the Owner Trustee and the Indenture
Trustee (with a copy to each Rating Agency). In the event that a successor
Servicer has not been appointed at the time when the predecessor Servicer has
ceased to act as Servicer in accordance with this Section 8.2, the Indenture
Trustee without further action shall automatically be appointed the successor
Servicer. Notwithstanding the above, the Indenture Trustee, if it shall be
legally unable so to act, shall appoint, or petition a court of competent
jurisdiction to appoint, any established institution, having a net worth of not
less than $100,000,000 and whose regular business shall include the servicing
of
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automotive receivables, as the successor to the Servicer under this Agreement.
(b) Upon appointment, the successor Servicer shall be the successor in
all respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, by the terms and provisions of this
Agreement.
(c) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of such successor Servicer out of
payments on Receivables as it and such successor Servicer shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
predecessor Servicer under this Agreement. The Indenture Trustee and such
successor Servicer shall take such action, consistent with this Agreement, as
shall be necessary to effectuate any such succession.
SECTION 8.3. Repayment of Advances. If the identity of the Servicer
shall change, the predecessor Servicer shall be entitled to receive to the
extent of available funds reimbursement for Outstanding Advances pursuant to
Section 4.3 and 4.4, in the manner specified in Section 4.6, with respect to all
Advances made by the predecessor Servicer.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders, and the Owner Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses of record and to
each Rating Agency.
SECTION 8.5. Waiver of Past Events of Servicing Termination. The
Noteholders of Notes evidencing not less than a majority of the principal amount
of the Notes Outstanding or the Certificateholders of Certificates evidencing
not less than a majority of the Certificate Balance (in the case of an Event of
Servicing Termination which does not adversely affect the Indenture Trustee or
the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive
any Event of Servicing Termi-
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nation hereunder and its consequences, except an event resulting from the
failure to make any required deposits to or payments from any of the Trust
Accounts, the Certificate Distribution Account or the Payahead Account in
accordance with this Agreement. Upon any such waiver of a past Event of
Servicing Termination, such Event of Servicing Termination shall cease to exist,
and shall be deemed to have been remedied for every purpose of this Agreement.
No such waiver shall extend to any subsequent or other event or impair any right
consequent thereon. The Issuer shall provide written notice of any such waiver
to the Rating Agencies.
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ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables. On the last day of
any Collection Period as of which the Pool Factor shall be less than the
Optional Purchase Percentage, the Servicer shall have the option to purchase the
corpus of the Trust. To exercise such option, the Servicer shall deposit
pursuant to Section 4.5 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables, plus the appraised value of any
other property held by the Trust, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Collection Account pursuant
to the preceding sentence is greater than or equal to the sum of the outstanding
principal amount of the Notes and the Certificate Balance and all accrued but
unpaid interest (including any overdue interest) thereon. The amount deposited
in the Collection Account pursuant to this Section 9.1 shall be used on the next
Distribution Date to make payments in full to Noteholders and Certificateholders
in the manner set forth in Article IV.
SECTION 9.2. Succession Upon Satisfaction and Discharge of Indenture.
Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, to the extent permitted by
applicable law, the Indenture Trustee will continue to carry out its obligations
hereunder as agent for the Owner Trustee, including without limitation making
distributions from the Payahead Account and the Collection Account in accordance
with Section 4.6 and making withdrawals from the Reserve Account in accordance
with Section 4.5(b) and Section 4.7.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment. (a) This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee
and the Owner Trustee to the extent that their respective rights or obligations
may be affected thereby (which consent may not be unreasonably withheld), but
without the consent of any of the Noteholders or the Certificateholders, to cure
any ambiguity, to correct or supplement any provisions in this Agreement, or to
add any other provisions with respect to matters or questions arising under this
Agreement that shall not be inconsistent with the provisions of this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, adversely
affect in any material respect the interests of any Noteholder or
Certificateholder; and provided further that such action shall not, as evidenced
by an Opinion of Counsel, cause the Issuer to be characterized for federal or
any then Applicable Tax State income tax purposes as an association taxable as a
corporation.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee
and the Owner Trustee to the extent that their respective rights or obligations
may be affected thereby (which consent may not be unreasonably withheld) and
with the consent of (i) the Noteholders of Notes evidencing not less than a
majority of the principal amount of the Notes Outstanding and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Certificate Balance (which consent of any Noteholder of a Note or
Certificateholder of a Certificate given pursuant to this Section 10.1 or
pursuant to any other provision of this Agreement shall be conclusive and
binding on such Note or Certificate, as the case may be, and on all future
Noteholders of such Note or Certificateholders of such Certificate, as the case
may be, and of any Note or Certificate, as applicable, issued upon the transfer
thereof or in exchange thereof or in lieu thereof whether or not notation of
such consent is made upon such Note or the Certificate), for the purpose of
adding any provisions to or changing in any manner or eliminating any of
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<PAGE> 61
the provisions of this Agreement, or of modifying in any manner the rights of
the Noteholders or the Certificateholders; provided, however, that no such
amendment shall (a) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that shall be required
to be made on any Note or Certificate or change any Note Interest Rate or the
Certificate Rate or, without the prior consent of the Rating Agencies, the
Specified Reserve Balance, without the consent of all adversely affected
Noteholders or Certificateholders or (b) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the
Noteholders of all Notes and Certificateholders of all Certificates affected
thereby; and provided further that such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuer to be characterized for federal or any then
Applicable Tax State income tax purposes as an association taxable as a
corporation.
(c) Prior to the execution of any such amendment or consent the
Servicer will provide, and the Owner Trustee shall distribute, written
notification of the substance of such amendment or consent to each Rating
Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
Rating Agency. It shall not be necessary for the consent of Noteholders or the
Certificateholders pursuant to this Section 10.1 to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such consent
shall approve the substance thereof. The manner of obtaining such consents (and
any other consents of Noteholders and Certificateholders provided for in this
Agreement) and of evidencing the authorization of the execution thereof by
Noteholders and Certificateholders shall be subject to such reasonable
requirements as the Owner Trustee and the Indenture Trustee may prescribe,
including the establishment of record dates pursuant to paragraph number 2 of
the Note Depository Agreement.
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<PAGE> 62
(e) Prior to the execution of any amendment to this Agreement, the
Owner Trustee and the Indenture Trustee shall be entitled to receive and rely
upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 10.2(i)(1). The Owner Trustee or the Indenture Trustee may, but
shall not be obligated to, enter into any such amendment which affects such
Owner Trustee's or Indenture Trustee's own rights, duties or immunities under
this Agreement or otherwise.
SECTION 10.2. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer and the Indenture Trustee for the benefit of the Noteholders in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Owner Trustee and the Indenture Trustee file-stamped copies
of, or filing receipts for, any document filed as provided above, as soon as
available following such filing.
(b) Neither the Seller nor the Servicer shall change its name,
identity, or corporate structure in any manner that would, could, or might make
any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning of
Section 9-402(7) of the UCC, unless it shall have given the Owner Trustee and
the Indenture Trustee at least five (5) days' prior written notice thereof,
with a copy to the Rating Agencies, and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller and the Servicer shall give the Owner Trustee and the
Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such relocation,
the applicable provisions of the UCC would require the filing of any amendment
of any previously filed financing or continuation statement or of any new
financing statement and shall promptly file any such amendment or new financing
statement. The Servicer shall at all
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times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, the Payahead Account and the Reserve Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of conveyance under this Agreement of the Receivables to the
Issuer, the Servicer's master computer records (including any back-up archives)
that refer to a Receivable shall indicate clearly the interest of the Issuer and
the Indenture Trustee in such Receivable and that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee pursuant to the
Indenture. Indication of the Issuer's and the Indenture Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full or repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been conveyed to and is owned by
the Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Owner Trustee, the Indenture Trustee
and their respective agents at any time during normal business hours to inspect,
audit, and make copies of and abstracts from the Servicer's records regarding
any Receivable.
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(h) Upon request, the Servicer shall furnish to the Owner Trustee and
the Indenture Trustee, within twenty (20) Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (A) stating
that, in the opinion of such Counsel, all financing statements and
continuation statements have been executed and filed that are necessary
fully to preserve and protect the interest of the Issuer and the Indenture
Trustee in the Receivables, and reciting the details of such filings or
referring to prior Opinions of Counsel in which such details are given, or
(B) stating that, in the opinion of such Counsel, no such action shall be
necessary to preserve and protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three months
after the Cutoff Date, an Opinion of Counsel, dated as of a date during such
120-day period, either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements have been executed and
filed that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in which
such details are given, or (B) stating that, in the opinion of such Counsel,
no such action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above
shall specify any action necessary
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(as of the date of such opinion) to be taken in the following year to
preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law,
cause the Notes and the Certificates to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Securities Exchange Act of 1934 within the time periods specified in such
sections.
(k) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed in any
number of counterparts, each of which counterparts shall be deemed to be an
original, and all of which counterparts shall constitute but one and the
same instrument.
SECTION 10.3. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights,
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 10.4. Notices. Notices. All demands, notices, and
communications under this Agreement shall be in writing, personally delivered,
sent by telecopier, overnight courier or mailed by certified mail, return
receipt requested, and shall be deemed to have been duly given upon receipt (a)
in the case of the Seller or the Servicer, to the agent for service as specified
in Section 10.11 hereof, or at such other address as shall be designated by the
Seller or the Servicer in a written notice to the Owner Trustee and the
Indenture Trustee, (b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee, (c) in the case of the Indenture Trustee, at the
Corporate Trust Office of the Indenture Trustee, (d) in the case of Moody's
Investors Service, Inc., at the following address: Moody's Investors Service,
Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007, (e)
in the case of Standard & Poor's Ratings Services, at the following address:
Standard & Poor's Ratings Services, 25 Broadway, 20th Floor, New York, New York
10004, Attention: Asset Backed Surveillance Department and (f) in the case of
Fitch Investors Service, L.P., at the following address: Fitch Investors
Service, L.P., 1201 East 7th Street, Powell, Wyoming 82435, Attention: Asset
Backed Surveillance.
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Any notice required or permitted to be mailed to a Noteholder or
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Person as shown in the Note Register or the Certificate
Register, as applicable. Any notice so mailed within the time prescribed in
this Agreement shall be conclusively presumed to have been duly given, whether
or not the Noteholder or Certificateholder shall receive such notice.
SECTION 10.5. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes, the
Certificates or the rights of the holders thereof.
SECTION 10.6. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.3 and 8.2 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Indenture Trustee, the
Noteholders of Notes evidencing not less than 66-2/3% of the principal amount of
the Notes Outstanding and the Certificateholders of Certificates evidencing not
less than 66-2/3% of the Certificate Balance.
SECTION 10.7. Further Assurances. The Seller and the Servicer agree
to do and perform, from time to time, any and all acts and to execute any and
all further instruments required or reasonably requested by the Owner Trustee or
the Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
fSECTION 10.8. No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Owner Trustee, the Indenture
Trustee, the
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Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 10.9. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Noteholders, the
Certificateholders, and their respective successors and permitted assigns.
Except as otherwise provided in this Article X, no other Person will have any
right or obligation hereunder. The parties hereto hereby acknowledge and consent
to the pledge of this Agreement by the Issuer to the Indenture Trustee for the
benefit of the Noteholders pursuant to the Indenture.
SECTION 10.10. Actions by Noteholders or Certificateholders.
(a) Wherever in this Agreement a provision is made that an action may be taken
or a notice, demand, or instruction given by Noteholders or Certificateholders,
such action, notice, or instruction may be taken or given by any Noteholder or
Certificateholder, as applicable, unless such provision requires a specific
percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver, or other act by a Noteholder or Certificateholder shall bind such
Noteholder or Certificateholder and every subsequent holder of such Note or
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done by
the Owner Trustee, the Indenture Trustee or the Servicer in reliance thereon,
whether or not notation of such action is made upon such Note or Certificate.
SECTION 10.11. Agent for Service The agent for service of the Seller
and the Servicer in respect of this Agreement shall be J.D. Bringard, Esq., Ford
Motor Credit Company, The American Road, Dearborn, Michigan 48121.
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SECTION 10.12. No Bankruptcy Petition. The Owner Trustee, the
Indenture Trustee, the Issuer and the Servicer each cove nants and agrees that,
prior to the date which is one year and one day after the payment in full of all
securities issued by the Seller or by a trust for which the Seller was the
depositor which securities were rated by any nationally recognized statistical
rating organization it will not institute against, or join any other Person in
instituting against, the Seller or the General Partner any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or State bankruptcy or similar law. This Section
10.12 shall survive the resignation or removal of the Owner Trustee under the
Trust Agreement or the Indenture Trustee under the Indenture or the termination
of this Agreement.
SECTION 10.13. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by PNC Bank, Delaware not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall PNC Bank, Delaware in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder or in any of the certificates, notices
or agreements delivered pursuant hereto, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of its duties or obligations hereunder or in the performance of
any duties or obligations of the Issuer hereunder, the Owner Trustee shall be
subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by The Chase Manhattan Bank, not in its individual
capacity but solely as Indenture Trustee, and in no event shall The Chase
Manhattan Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursu-
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ant hereto, as to all of which recourse shall be had solely to the assets of the
Issuer.
SECTION 10.14. Third-Party Beneficiary. The Indenture Trustee is a
third-party beneficiary to this Agreement and is entitled to the rights and
benefits hereunder and may enforce the provisions hereof as if it were a party
hereto.
SECTION 10.15. Savings Clause. It is the intention of the Seller and
the Issuer that the transfer of the Trust Property contemplated herein
constitute an absolute transfer of the Trust Property, conveying good title to
the Trust Property from the Seller to the Issuer. However, in the event that
such transfer is deemed to be a pledge, the Seller hereby grants to the Issuer a
first priority security interest in all of the Seller's right, title and
interest in, to and under the Trust Property, and all proceeds thereof, to
secure a loan in an amount equal to all amounts payable under the Notes and the
Certificates, and in such event, this Agreement shall constitute a security
agreement under applicable law.
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IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES
TWO L.P.,
as Seller
By: FORD CREDIT AUTO
RECEIVABLES TWO, INC.,
as General Partner
By: \s\ R. P. Conrad
-------------------------------------
Name: R. P. Conrad
Title: Assistant Secretary
FORD CREDIT AUTO OWNER TRUST
1997-B,
as Issuer
By: PNC BANK, DELAWARE,
not in its individual
capacity but solely as Owner Trustee
By: \s\ Michael B. McCarthy
-------------------------------------
Name: Michael B. McCarthy
Title: Vice President
FORD MOTOR CREDIT COMPANY,
as Servicer
By: \s\ R. P. Conrad
-------------------------------------
Name: R. P. Conrad
Title: Assistant Secretary
<PAGE> 71
Accepted and agreed:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee
By: \s\ Michael A. Smith
--------------------------------
Name: Michael A. Smith
Title: Vice President
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: \s\ Michael B. McCarthy
--------------------------------
Name: Michael B. McCarthy
Title: Vice President
<PAGE> 72
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
<PAGE> 73
SCHEDULE B
LOCATION OF RECEIVABLE FILES
Akron
175 Montrose West Avenue
Crown Pointe Building
Suite 300
Copley, OH 44321
Albany
5 Pine West Plaza
Albany, NY 12205
Albuquerque
6100 Uptown Blvd., N.E.
Suite 300
Albuquerque, NM 87110
Amarillo
1616 S. Kentucky
Bldg. D, Suite 130
Amarillo, TX 79102
Anchorage
3201 C Street
Suite 303
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
Athens
3708 Atlanta Highway
Athens, GA 30604
Atlanta-North
North Park Town Center
Bldg. 400, Suite 180
1000 Abernathy Rd. N.E.
Atlanta, GA 30328
SB-1
<PAGE> 74
Atlanta-South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Atlanta/CL
1117 Perimeter Ctr. W
Suite 404 West
Atlanta, GA 30338
Atlantic Region District Office
14104 Newbrook Drive
Chantilly, VA 22021
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Baltimore-East
Campbell Corporate
Center One
4940 Campbell Blvd.
Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Boston-North
One Tech Drive
3rd Floor
Andover, MA 01810-2497
SB-2
<PAGE> 75
Boston-South
Southboro Place
2nd Floor
352 Turnpike Road
Southboro, MA 01772
Bristol
Landmark Center-
Suite A
113 Landmark Lane
Bristol, TN 37620
Buffalo
95 John Muir Drive
Suite 102
Amherst, NY 14228
Cape Girardeau
1409-C N. Mt. Auburn Rd.
Cape Girardeau, MO 63701
Charleston
Rivergate Center
Suite 150
4975 LaCross Road
North Charleston, SC 29418
Charlotte
6302 Fairview Road
Suite 500
Charlotte, NC 28210
Charlotte/CL
6302 Fairview Road
Suite 510
Charlotte, NC 28210
Chattanooga
6025 Lee Highway
Suite 443
Chattanooga, TN 37421
Cheyenne
6234 Yellowstone Road
Cheyenne, WY 82009
SB-3
<PAGE> 76
Chicago-East
One River Place
Suite A
Lansing, IL 60438
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Chicago-South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Chicago-West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195
Chicago/CL
745 McClintock Drive
Suite 300
Burr Ridge, IL 60521
Cincinnati
8805 Governors Hill Dr.
Suite 230
Cincinnati, OH 45249
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
SB-4
<PAGE> 77
Columbus
Metro V, Suite 470
655 Metro Place S
Dublin, OH 43017
Coral Springs-East
3111 N. University Dr.
Suite 800
Coral Springs, FL 33065
Corpus Christi
5350 South Staples
Suite 225
Corpus Christi, TX 78411
Dallas
Campbell Forum
Suite 600
801 E. Campbell Road
Richardson, TX 75081
Dallas
Campbell Forum
Suite 650
801 E. Campbell Road
Richardson, TX 75081
Davenport
Commerce Exch. Bldg.
2535 Tech Drive
Suite 300
Bettendorf, IA 52722
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
SB-5
<PAGE> 78
Des Moines
4200 Corporate Drive
Suite 107
W. Des Moines, IA 50266
Detroit-North
580 Kirts Boulevard
Suite 300
Troy, MI 48084
Detroit-West
One Parklane Blvd.
Suite 405E
Dearborn, MI 48126
Detroit/CL
One Parklane Blvd.
Suite 301E
Dearborn, MI 48126
Dothan
137 Clinic Drive
Dothan, AL 36303
El Paso
1200 Golden Key Circle
Suite 104
El Paso, TX 79925
Eugene
1600 Valley River Drive
Suite 190
Eugene, OR 97401
Falls Church
1420 Springhill Road
Suite 550
McLean, VA 22102
Fargo
3100 13th Ave. South
Suite 304
Fargo, ND 58103
SB-6
<PAGE> 79
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Findlay
3500 North Main Street
Findlay, OH 45840-1447
Ft. Myers
11935 Fairway Lakes Dr.
Fort Myers, FL 33913
Ft. Worth
Center Park Tower
Suite 400
2350 West Airport Frwy.
Bedford, TX 76022
Grand Junction
744 Horizon Court
Suite 330
Grand Junction, CO 81506
Grand Rapids
2851 Charlevoix Drive SE
Suite 300
Grand Rapids, MI 49546
Greensboro
1500 Pinecroft Rd.
Suite 220
Greensboro, NC 27407
Harlingen
1916 East Harrison
Harlingen, TX 78550
Harrisburg
4900 Ritter Road
Mechanicsburg, PA 17055
Henderson
618 North Green Street
Henderson, KY 42420
SB-7
<PAGE> 80
Honolulu
Ala Moano Pacific Center
Suite 922
1585 Kapiolani Blvd.
Honolulu, HI 96814
Houston-North
363 N. Sam Houston Pkwy. E.
Suite 700
Houston, TX 77060
Houston-West
820 Gessner
Suite 700
Houston, TX 77024
Huntington
3425 U.S. Route 60 East
Barboursville, WV 25504
Indianapolis
5875 Castle Creek Pkwy.
North Drive
Suite 240
Indianapolis, IN 46250
Jackson
Highland Village Center
Suite 292
4500 I-55 North
Jackson, MS 39211
Jacksonville
Suite 310
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
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Kansas City
8717 West 110th Street
Bldg. #14, Suite 550
Overland Park, KS 66210
Knoxville
5500 Lonas Drive
Suite 260
Knoxville, TN 37909
Lafayette
Saloom Office Park
Suite 350
100 Asma Boulevard
Lafayette, LA 70508
Lansing
2140 University Park Drive
Okemos, MI 48864
Las Vegas
500 N Rainbow Blvd.
Suite 312
Las Vegas, NV 89107
Little Rock
1701 Centerview Dr.
Suite 301
Little Rock, AR 72211
Long Island
972 Brush Hollow Road
5th Floor
Westbury, NY 11590-1740
Louisville
502 Executive Park
Louisville, KY 40207
Lubbock
4010 82nd Street
Suite 200
Lubbock, TX 79424
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Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Manchester
4 Bedford Farms
Bedford, NH 03110
Marshall
1408 North Michigan
Marshall, IL 62441
Memphis
6555 Quince Road
Suite 300
Memphis, TN 38119
Miami
6303 Blue Lagoon Drive
Suite 200
Miami, FL 33126
Milwaukee
10850 W. Park Place
Suite 110
Milwaukee, WI 53224
Minneapolis
One Southwest Crossing
Suite 308
11095 Viking Drive
Eden Prairie, MN 55344
Mobile
1201 Montlimar Dr.
Suite 700
Mobile, AL 36609-1718
Nashville
Highland Ridge
Suite 190
565 Marriott Drive
Nashville, TN 37214
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New Haven
35 Thorpe Ave.
Wallingford, CT 06492
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
New Jersey-North
103 Eisenhower Parkway
4th Floor
Roseland, NJ 07068
New Jersey-South
10000 MidAtlantic Dr.
Suite 401 West
Mt. Laurel, NJ 08054
New Orleans
Lakeway III
3838 N. Causeway Blvd.
Suite 3200
Metairie, LA 70002
Norfolk
Greenbrier Pointe
Suite 350
1401 Greenbrier Pkwy.
Chesapeake, VA 23320
Odessa
Ashford Park Office Center
Suite 201A
2626 John B. Sheprd Parkway
Odessa, TX 79762
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
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Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
Orange
765 The City Drive
Suite 400
Orange, CA 92668
Orange/CL
765 The City Drive
Suite 401
Orange, CA 92668
Orlando
1060 Maitland Ctr Commons
Suite 210
Maitland, FL 32751
Pasadena
225 S. Lake Avenue
Suite 1200
Pasadena, CA 91101
Pensacola
25 W. Cedar Street
Suite 316
Pensacola, Fl 32501
Philadelphia
Bay Colony Executive Park
Suite 100
575 E. Swedesford Rd.
Wayne, PA 19087
Philadelphia/CL
500 N. Gulph Rd.
Suite 110
King of Prussia, PA 19406
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Phoenix
4742 North 24th Street
Suite 215
Phoenix, AZ 85016
Pittsburgh
Foster Plaza 9
750 Holiday Drive
4th Floor, Suite 420
Pittsburgh, PA 15220
Portland
2401 Congress Street
Portland, ME 04102
Portland
10220 S.W. Greenburg Blvd.
Suite 415
Portland, OR 97223
Raleigh
3651 Trust Drive
Raleigh, NC 27604
Regional Opers Center
7090 Columbia Gateway Dr.
Columbia, MD 21046
Richmond
300 Arboretum Place
Suite 320
Richmond, VA 23236
Roanoke
5238 Valley Pointe Pkwy.
Suite 6
Roanoke, VA 24019
Sacramento
2720 Gateway Oaks Dr.
Suite 200
Sacramento, CA 95833
Saginaw
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
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Salt Lake City
310 E. 4500 S.
Suite 340
Murray, UT 84107
Santa Ana Central Collections
765 The City Drive
Suite 402
Orange, CA 92668
San Antonio
100 N.E. Loop 410
Suite 625
San Antonio, TX 78216-4742
San Bernardino
1615 Orange Tree Lane
Suite 215
Redlands, CA 92374
San Diego
3111 Camino Del Rio N.
Suite 1333
San Diego, CA 92108
San Francisco
4301 Hacienda Dr.
Suite 400
Pleasanton, CA 94588
San Francisco/CL
4900 Hopyard Road
Suite 220
Pleasanton, CA 94588
San Jose
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
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Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98006
Shreveport
South Pointe Centre
Suite 200
3007 Knight Street
Shreveport, LA 71105
South Bay
301 E. Ocean Boulevard
Suite 1900
Long Beach, CA 90802
South Bend
4215 Edison Lakes Parkway
Suite 140
Mishawaka, IN 46545
Spokane
901 North Monroe Ct.
Suite 350
Spokane, WA 99201-2148
Springfield
3275 E. Ridgeview
Springfield, MO 65804
St. Louis
4227 Earth City Expressway
Suite 100
Earth City, MO 63045
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
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Tulsa
9820 East 41st St.
Suite 300
Tulsa, OK 74145
Tupelo
One Mississippi Plaza
Tupelo, MS 38801
Tyler
821 East SE Loop 323
Suite 300
Tyler, TX 75701
Ventura
260 Maple Court
Suite 210
Ventura, CA 93003
Washington, D.C.
2440 Research Blvd.
Suite 150
Rockville, MD 20850
Westchester
660 White Plains Road
Tarrytown, NY 10591
Western Carolina
215 Thompson Street
Hendersonville, NC 28792
Wichita
7570 West 21st
Wichita, KS 67212
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APPENDIX A
Definitions and Usage
AA-1
<PAGE> 1
EXHIBIT 99.2
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, dated as of October 1, 1997 (as from time
to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), is by and among FORD CREDIT AUTO OWNER TRUST 1997-B, a Delaware
business trust (the "Issuer"), FORD MOTOR CREDIT COMPANY, a Delaware
corporation, as administrator (the "Administrator"), and THE CHASE MANHATTAN
BANK, a New York corporation, not in its individual capacity but solely as
Indenture Trustee (the "Indenture Trustee").
WHEREAS, the Issuer is issuing the Notes pursuant to the Indenture and the
Certificates pursuant to the Trust Agreement and has entered into certain
agreements in connection therewith, including (i) the Sale and Servicing
Agreement, (ii) the Note Depository Agreement and (iii) the Indenture (the Sale
and Servicing Agreement, the Note Depository Agreement and the Indenture being
referred to hereinafter collectively as the "Related Agreements");
WHEREAS, the Issuer and the Owner Trustee desire to have the Administrator
perform certain duties of the Issuer and the Owner Trustee under the Related
Agreements and to provide such additional services consistent with the terms of
this Agreement and the Related Agreements as the Issuer and the Owner Trustee
may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereto, intending to be legally bound,
agree as follows:
1. Definitions and Usage. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A hereto, which also contains rules as
to usage that shall be applicable herein.
<PAGE> 2
2. Duties of the Administrator. (a) Duties with Respect to the Indenture
and the Note Depository Agreement. (i) The Administrator agrees to perform
all its duties as Administrator and the duties of the Issuer under the Note
Depository Agreement. In addition, the Administrator shall consult with the
Owner Trustee regarding the duties of the Issuer under the Indenture and the
Note Depository Agreement. The Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee when action is necessary to
comply with the Issuer's duties under the Indenture and the Note Depository
Agreement. The Administrator shall prepare for execution by the Issuer, or
shall cause the preparation by other appropriate Persons of, all such
documents, reports, filings, instruments, certificates and opinions that it
shall be the duty of the Issuer to prepare, file or deliver pursuant to the
Indenture and the Note Depository Agreement. In furtherance of the foregoing,
the Administrator shall take all appropriate action that is the duty of the
Issuer to take pursuant to the Indenture including, without limitation, such of
the foregoing as are required with respect to the following matters under the
Indenture (references are to sections of the Indenture):
(A) the duty to cause the Note Register to be kept and to give the
Indenture Trustee notice of any appointment of a new Note Registrar and
the location, or change in location, of the Note Register (Section 2.5);
(B) the determination as to whether the requirements of UCC Section
8-401(1) are met and the preparation of an Issuer Request requesting the
Indenture Trustee to authenticate and deliver replacement Notes in lieu
of mutilated, destroyed, lost or stolen Notes (Section 2.6);
(C) the notification of Noteholders of the final principal payment
on their Notes (Section 2.8(b));
(D) the preparation of or obtaining of the documents and
instruments required for authentication of the Notes and delivery of the
same to the Indenture Trustee (Section 2.2);
(E) the preparation, obtaining or filing of the instruments, opinions
and certificates and
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<PAGE> 3
other documents required for the release of property from the lien of the
Indenture (Section 2.10);
(F) the preparation of Definitive Notes in accordance with the
instructions of the Clearing Agency (Section 2.13);
(G) the maintenance of an office in the Borough of Manhattan, The
City of New York, for registration of transfer or exchange of Notes if
the Indenture Trustee ceases to maintain such an office (Section 3.2);
(H) the duty to cause newly appointed Note Paying Agents, if any,
to deliver to the Indenture Trustee the instrument specified in the
Indenture regarding funds held in trust (Section 3.3);
(I) the direction to the Indenture Trustee to deposit monies with
Note Paying Agents, if any, other than the Indenture Trustee (Section
3.3);
(J) the obtaining and preservation of the Issuer's qualification to
do business in each jurisdiction in which such qualification is or shall
be necessary to protect the validity and enforceability of the Indenture,
the Notes, the Collateral and each other instrument or agreement included
in the Indenture Trust Estate (Section 3.4);
(K) the preparation of all supplements and amendments to the Indenture
and all financing statements, continuation statements, instruments of
further assurance and other instruments and the taking of such other
action as is necessary or advisable to protect the Indenture Trust Estate
(Sections 3.5 and 3.7(c));
(L) the delivery of the Opinion of Counsel on the Closing Date and the
annual delivery of Opinions of Counsel as to the Indenture Trust Estate,
and the annual delivery of the Officer's Certificate and certain other
statements as to compliance with the Indenture (Sections 3.6 and 3.9);
(M) the identification to the Indenture Trustee in an Officer's
Certificate of any Person with whom the Issuer has contracted to perform
its duties under the Indenture (Section 3.7(b));
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<PAGE> 4
(N) the notification of the Indenture Trustee and the Rating Agencies
of an Event of Servicing Termination under the Sale and Servicing
Agreement and, if such Event of Servicing Termination arises from the
failure of the Servicer to perform any of its duties under the Sale and
Servicing Agreement with respect to the Receivables, the taking of all
reasonable steps available to remedy such failure (Section 3.7(d));
(O) the preparation and obtaining of documents and instruments
required for the consolidation or merger of the Issuer with another
entity or the transfer by the Issuer of its properties or assets
(Section 3.10);
(P) the duty to cause the Servicer to comply with Sections 3.9,
3.10, 3.11, 3.12, 3.13 and 4.9 and Article VII of the Sale and Servicing
Agreement (Section 3.14);
(Q) the delivery of written notice to the Indenture Trustee and the
Rating Agencies of each Event of Default under the Indenture and each
default by the Servicer or the Seller under the Sale and Servicing
Agreement and by Ford Credit or the Seller under the Purchase Agreement
(Section 3.19);
(R) the monitoring of the Issuer's obligations as to the
satisfaction and discharge of the Indenture and the preparation of an
Officer's Certificate and the obtaining of the Opinions of Counsel and
the Independent Certificate relating thereto (Section 4.1);
(S) the monitoring of the Issuer's obligations as to the
satisfaction, discharge and defeasance of the Notes and the preparation
of an Officer's Certificate and the obtaining of an opinion of a
nationally recognized firm of independent certified public accountants,
a written certification thereof and the Opinions of Counsel relating
thereto (Section 4.2);
(T) the preparation of an Officer's Certificate to the Indenture
Trustee after the occurrence of any event which with the giving of
notice and the lapse of time would become an Event of Default under
Section 5.1(iii) of the Indenture, its status
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<PAGE> 5
and what action the Issuer is taking or proposes to take with respect
thereto (Section 5.1);
(U) the compliance with any written directive of the Indenture
Trustee with respect to the sale of the Indenture Trust Estate at one or
more public or private sales called and conducted in any manner
permitted by law if an Event of Default shall have occurred and be
continuing (Section 5.4);
(V) the preparation and delivery of notice to Noteholders of the
removal of the Indenture Trustee and the appointment of a successor
Indenture Trustee (Section 6.8);
(W) the preparation of any written instruments required to confirm
more fully the authority of any co-trustee or separate trustee and any
written instruments necessary in connection with the resignation or
removal of any co-trustee or separate trustee (Sections 6.8 and 6.10);
(X) the furnishing of the Indenture Trustee with the names and
addresses of Noteholders during any period when the Indenture Trustee is
not the Note Registrar (Section 7.1);
(Y) the preparation and, after execution by the Issuer, the filing
with the Commission, any applicable state agencies and the Indenture
Trustee of documents required to be filed on a periodic basis with, and
summaries thereof as may be required by rules and regulations prescribed
by, the Commission and any applicable state agencies and the
transmission of such summaries, as necessary, to the Noteholders
(Section 7.3);
(Z) the opening of one or more accounts in the Issuer's name, the
preparation and delivery of Issuer Orders, Officer's Certificates and
Opinions of Counsel and all other actions necessary with respect to
investment and reinvestment, to the extent permitted, of funds in such
accounts (Sections 8.2 and 8.3);
(AA) the preparation of an Issuer Request and Officer's Certificate
and the obtaining of an Opinion of Counsel and Independent Certificates,
if
5
<PAGE> 6
necessary, for the release of the Indenture Trust Estate (Sections 8.4
and 8.5);
(BB) the preparation of Issuer Orders and the obtaining of Opinions
of Counsel with respect to the execution of supplemental indentures and
the mailing to the Noteholders of notices with respect to such
supplemental indentures (Sections 9.1, 9.2 and 9.3);
(CC) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(DD) the notification of Noteholders of redemption of the Notes or
duty to cause the Indenture Trustee to provide such notification
(Section 10.2);
(EE) the preparation of all Officer's Certificates, Issuer Requests
and Issuer Orders and the obtaining of Opinions of Counsel and
Independent Certificates with respect to any requests by the Issuer to
the Indenture Trustee to take any action under the Indenture (Section
11.1 (a));
(FF) the preparation of Officer's Certificates and the obtaining of
Independent Certificates, if necessary, for the release of property from
the lien of the Indenture (Section 11.1(b));
(GG) the notification of the Rating Agencies, upon the failure of
the Indenture Trustee to give such notification, of the information
required pursuant to Section 11.4 of the Indenture (Section 11.4);
(HH) the preparation and delivery to Noteholders and the Indenture
Trustee of any agreements with respect to alternate payment and notice
provisions (Section 11.6); and
(II) the recording of the Indenture, if applicable (Section 11.15).
(ii) The Administrator will:
(A) pay the Indenture Trustee from time to time reasonable
compensation for all services ren-
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<PAGE> 7
dered by the Indenture Trustee under the Indenture (which compensation
shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust);
(B) except as otherwise expressly provided in the Indenture,
reimburse the Indenture Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Indenture
Trustee in accordance with any provision of the Indenture (including the
reasonable compensation, expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or bad faith;
(C) indemnify the Indenture Trustee and its agents for, and hold
them harmless against, any losses, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the transactions contemplated
by the Indenture, including the reasonable costs and expenses (including
reasonable attorneys' fees) of defending themselves against any claim or
liability in connection with the exercise or performance of any of their
powers or duties under the Indenture; and
(D) indemnify the Owner Trustee and its agents for, and hold them
harmless against, any losses, liability or expense incurred without
negligence or bad faith on their part, arising out of or in connection
with the acceptance or administration of the transactions contemplated
by the Trust Agreement, including the reasonable costs and expenses
(including reasonable attorneys' fees) of defending themselves against
any claim or liability in connection with the exercise or performance of
any of their powers or duties under the Trust Agreement.
(b) Additional Duties. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such
calculations and shall prepare or shall cause the preparation by other
appropriate persons of, and shall execute on behalf of the Issuer or the Owner
Trustee, all such documents, reports, filings, instruments, certificates and
opinions that it shall be the duty of the Issuer or the Owner
7
<PAGE> 8
Trustee to prepare, file or deliver pursuant to the Related Agreements, and at
the request of the Owner Trustee shall take all appropriate action that it is
the duty of the Issuer or the Owner Trustee to take pursuant to the Related
Agreements. Subject to Section 6 of this Agreement, and in accordance with the
directions of the Owner Trustee, the Administrator shall administer, perform or
supervise the performance of such other activities in connection with the
Collateral (including the Related Agreements) as are not covered by any of the
foregoing provisions and as are expressly requested by the Owner Trustee and
are reasonably within the capability of the Administrator.
(ii) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Administrator shall be responsible for performance of the
duties of the Owner Trustee set forth in Section 3.2 of the Trust Agreement
with respect to establishing and maintaining a Capital Account for each
Certificateholder.
(iii) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Administrator shall be responsible for promptly notifying
the Owner Trustee in the event that any withholding tax is imposed on the
Trust's payments (or allocations of income) to a Certificateholder as
contemplated in Section 5.2(c) of the Trust Agreement. Any such notice shall
specify the amount of any withholding tax required to be withheld by the Owner
Trustee pursuant to such provision.
(iv) Notwithstanding anything in this Agreement or the Related Agreements
to the contrary, the Administrator shall be responsible for performance of the
duties of the Trust or the Owner Trustee set forth in Section 5.5(a), (b), (c)
and (d), the penultimate sentence of Section 5.5 and Section 5.6(a) of the
Trust Agreement with respect to, among other things, accounting and reports to
Certificateholders.
(v) The Administrator will provide prior to November 17, 1997 a
certificate of an Authorized Officer in form and substance satisfactory to the
Owner Trustee as to whether any tax withholding is then required and, if
required, the procedures to be followed with respect thereto to comply with the
requirements of the Code. The Administrator shall be required to update the
letter
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<PAGE> 9
in each instance that any additional tax withholding is subsequently required
or any previously required tax withholding shall no longer be required.
(vi) The Administrator shall perform the duties of the Administrator
specified in Section 10.2 of the Trust Agreement required to be performed in
connection with the resignation or removal of the Owner Trustee, and any other
duties expressly required to be performed by the Administrator pursuant to the
Trust Agreement.
(vii) In carrying out the foregoing duties or any of its other obligations
under this Agreement, the Administrator may enter into transactions or
otherwise deal with any of its Affiliates; provided, however, that the terms of
any such transactions or dealings shall be in accordance with any directions
received from the Issuer and shall be, in the Administrator's opinion, no less
favorable to the Issuer than would be available from unaffiliated parties.
(c) Non-Ministerial Matters. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have withheld consent or
provided an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the Receivables
or Permitted Investments);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor Note
Paying Agents and successor Indenture Trustees pursuant to the Indenture
or the appointment of successor Administrators or Succes-
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sor Servicers, or the consent to the assignment by the Note Registrar,
Note Paying Agent or Indenture Trustee of its obligations under the
Indenture; and
(E) the removal of the Indenture Trustee.
(ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments
to the Noteholders under the Related Agreements, (y) sell the Indenture Trust
Estate pursuant to Section 5.4 of the Indenture or (z) take any other action
that the Issuer directs the Administrator not to take on its behalf.
3. Records. The Administrator shall maintain appropriate books of
account and records relating to services performed hereunder, which books of
account and records shall be accessible for inspection by the Issuer and the
Seller at any time during normal business hours.
4. Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement and, as reimbursement for its
expenses related thereto, the Administrator shall be entitled to $2,500
annually which shall be solely an obligation of the Seller.
5. Additional Information To Be Furnished to the Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request.
6. Independence of the Administrator. For all purposes of this Agreement,
the Administrator shall be an independent contractor and shall not be subject
to the supervision of the Issuer or the Owner Trustee with respect to the
manner in which it accomplishes the performance of its obligations hereunder.
Unless expressly authorized by the Issuer, the Administrator shall have no
authority to act for or represent the Issuer or the Owner Trustee in any way
and shall not otherwise be deemed an agent of the Issuer or the Owner Trustee.
7. No Joint Venture. Nothing contained in this Agreement (i) shall
constitute the Administrator and either of the Issuer or the Owner Trustee as
members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate entity, (ii)
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shall be construed to impose any liability as such on any of them or (iii)
shall be deemed to confer on any of them any express, implied or apparent
authority to incur any obligation or liability on behalf of the others.
8. Other Activities of Administrator. Nothing herein shall prevent the
Administrator or its Affiliates from engaging in other businesses or, in its
sole discretion, from acting in a similar capacity as an administrator for any
other person or entity even though such person or entity may engage in business
activities similar to those of the Issuer, the Owner Trustee or the Indenture
Trustee.
9. Term of Agreement; Resignation and Removal of Administrator. (a) This
Agreement shall continue in force until the termination of the Issuer in
accordance with Section 9.1 of the Trust Agreement, upon which event this
Agreement shall automatically terminate.
(b) Subject to Sections 9(e) and 9(f), the Administrator may resign its
duties hereunder by providing the Issuer with at least sixty (60) days' prior
written notice.
(c) Subject to Sections 9(e) and 9(f), at the sole option of the Issuer,
the Administrator may be removed immediately upon written notice of termination
from the Issuer to the Administrator if any of the following events shall
occur:
(i) the Administrator shall default in the performance of any of
its duties under this Agreement and, after notice of such default, shall
not cure such default within ten (10) days (or, if such default cannot
be cured in such time, shall not give within ten (10) days such
assurance of cure as shall be reasonably satisfactory to the Issuer);
(ii) a court having jurisdiction in the premises shall enter a
decree or order for relief, and such decree or order shall not have been
vacated within sixty (60) days, in respect of the Administrator in any
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or appoint a receiver,
liquidator, assignee, custodian, trustee, sequestrator or similar
official for the Administrator or any sub-
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stantial part of its property or order the winding-up or liquidation of
its affairs; or
(iii) the Administrator shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, shall consent to the appointment of
a receiver, liquidator, assignee, trustee, custodian, sequestrator or
similar official for the Administrator or any substantial part of its
property, shall consent to the taking of possession by any such official
of any substantial part of its property, shall make any general
assignment for the benefit of creditors or shall fail generally to pay
its debts as they become due.
The Administrator agrees that if any of the events specified in clauses
(ii) or (iii) of this Section 9(d) shall occur, it shall give written notice
thereof to the Issuer and the Indenture Trustee within seven (7) days after the
happening of such event.
(d) No resignation or removal of the Administrator pursuant to this
Section 9 shall be effective until (i) a successor Administrator shall have
been appointed by the Issuer and (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same manner
as the Administrator is bound hereunder. The Issuer shall provide written
notice of any such resignation or removal to the Indenture Trustee, with a copy
to the Rating Agencies.
(e) The appointment of any successor Administrator shall be effective only
after satisfaction of the Rating Agency Condition with respect to the proposed
appointment.
(f) Subject to Sections 9(e) and 9(f), the Administrator acknowledges that
upon the appointment of a successor Servicer pursuant to the Sale and Servicing
Agreement, the Administrator shall immediately resign and such successor
Servicer shall automatically become the Administrator under this Agreement.
10. Action upon Termination, Resignation or Removal. Promptly upon the
effective date of termination of this Agreement pursuant to Section 9(a) or the
resigna-
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tion or removal of the Administrator pursuant to Section 9(b) or (c),
respectively, the Administrator shall be entitled to be paid all fees and
reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon such
termination pursuant to Section 9(a) deliver to the Issuer all property and
documents of or relating to the Collateral then in the custody of the
Administrator. In the event of the resignation or removal of the Administrator
pursuant to Section 9(b) or (c), respectively, the Administrator shall
cooperate with the Issuer and take all reasonable steps requested to assist the
Issuer in making an orderly transfer of the duties of the Administrator.
11. Notices. Any notice, report or other communication given hereunder
shall be in writing and addressed as follows:
(a) if to the Issuer or the Owner Trustee, to:
Ford Credit Auto Owner Trust 1997-B
c/o PNC Bank, Delaware
222 Delaware Avenue
Wilmington, Delaware 19801
Attention: Michael B. McCarthy
Telephone: (302) 429-1546
Facsimile: (302) 429-7118
(b) if to the Administrator, to:
Ford Motor Credit Company
The American Road
Dearborn, Michigan 48121
Attention: Richard P. Conrad
Telephone: (313) 594-7765
Facsimile: (313) 248-7613
(c) If to the Indenture Trustee, to:
The Chase Manhattan Bank
Corporate Trust Administration
450 West 33rd Street, 15th floor
New York, New York 10001
Attention: Michael A. Smith
Telephone: (212) 946-3346
Facsimile: (212) 946-8158
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or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed
given if such notice is mailed by certified mail, postage prepaid, or
hand-delivered to the address of such party as provided above.
12. Amendments. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Issuer, the Administrator
and the Indenture Trustee, with the written consent of the Owner Trustee,
without the consent of the Noteholders and the Certificateholders, for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of the Noteholders or Certificateholders; provided that such amendment
will not, as set forth in an Opinion of Counsel satisfactory to the Indenture
Trustee and the Owner Trustee, materially and adversely affect the interest of
any Noteholder or Certificateholder. This Agreement may also be amended by the
Issuer, the Administrator and the Indenture Trustee with the written consent of
the Owner Trustee and the Noteholders of Notes evidencing not less than a
majority of the Notes Outstanding and the Certificateholders of Certificates
evidencing not less than a majority of the Certificate Balance for the purpose
of adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or of modifying in any manner the rights of
Noteholders or the Certificateholders; provided, however, that no such
amendment may (i) increase or reduce in any manner the amount of, or accelerate
or delay the timing of, collections of payments on Receivables or distributions
that are required to be made for the benefit of the Noteholders or
Certificateholders or (ii) reduce the aforesaid percentage of the Noteholders
and Certificateholders which are required to consent to any such amendment,
without the consent of the Noteholders of all the Notes Outstanding and
Certificateholders of Certificates evidencing all the Certificate Balance.
13. Successors and Assigns. This Agreement may not be assigned by the
Administrator unless such assignment is previously consented to in writing by
the Issuer and the Owner Trustee and subject to the satisfaction of the Rating
Agency Condition in respect thereof. An assignment with such consent and
satisfaction, if ac-
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cepted by the assignee, shall bind the assignee hereunder in the same manner as
the Administrator is bound hereunder. Notwithstanding the foregoing, this
Agreement may be assigned by the Administrator without the consent of the
Issuer or the Owner Trustee to a corporation or other organization that is a
successor (by merger, consolidation or purchase of assets) to the
Administrator; provided that such successor organization executes and delivers
to the Issuer, the Owner Trustee and the Indenture Trustee an agreement in
which such corporation or other organization agrees to be bound hereunder by
the terms of said assignment in the same manner as the Administrator is bound
hereunder. Subject to the foregoing, this Agreement shall bind any successors
or assigns of the parties hereto.
14. Governing Law. This agreement shall be construed in accordance with
the laws of the State of New York, and the obligations, rights and remedies of
the parties hereunder shall be determined in accordance with such laws.
15. Headings. The Section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
16. Counterparts. This Agreement may be executed in counterparts, each of
which when so executed shall be an original, but all of which together shall
constitute but one and the same agreement.
17. Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other
jurisdiction.
18. Not Applicable to Ford Credit in Other Capacities. Nothing in this
Agreement shall affect any right or obligation Ford Credit may have in any
other capacity.
19. Limitation of Liability of Owner Trustee and Indenture Trustee. (a)
Notwithstanding anything contained herein to the contrary, this instrument has
been
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countersigned by PNC Bank, Delaware not in its individual capacity but solely
in its capacity as Owner Trustee of the Issuer and in no event shall PNC Bank,
Delaware in its individual capacity or any beneficial owner of the Issuer have
any liability for the representations, warranties, covenants, agreements or
other obligations of the Issuer hereunder, as to all of which recourse shall be
had solely to the assets of the Issuer. For all purposes of this Agreement, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by The Chase Manhattan Bank not in its
individual capacity but solely as Indenture Trustee and in no event shall The
Chase Manhattan Bank have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any of
the certificates, notices or agreements delivered pursuant hereto, as to all of
which recourse shall be had solely to the assets of the Issuer.
20. Third-Party Beneficiary. The Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.
21. Nonpetition Covenants. (a) Notwithstanding any prior termination of
this Agreement, the Seller, the Administrator, the Owner Trustee and the
Indenture Trustee shall not, prior to the date which is one year and one day
after the termination of this Agreement with respect to the Issuer, acquiesce,
petition or otherwise invoke or cause the Issuer to invoke the process of any
court or government authority for the purpose of commencing or sustaining a
case against the Issuer under any federal or State bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Issuer or any substantial part of
its property, or ordering the winding up or liquidation of the affairs of the
Issuer.
(b) Notwithstanding any prior termination of this Agreement, the Issuer,
the Administrator, the Owner
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Trustee and the Indenture Trustee shall not, prior to the date which is one
year and one day after the termination of this Agreement with respect to the
Seller, acquiesce, petition or otherwise invoke or cause the Seller or the
General Partner to invoke the process of any court or government authority for
the purpose of commencing or sustaining a case against the Seller or the
General Partner under any federal or State bankruptcy, insolvency or similar
law or appointing a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of the Seller or the General Partner or
any substantial part of their respective property, or ordering the winding up
or liquidation of the affairs of the Seller or the General Partner.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the day and year first above written.
FORD CREDIT AUTO OWNER TRUST 1997-B
By: PNC BANK, DELAWARE, not in its
individual capacity but
solely as Owner Trustee
By: \s\ Michael B McCarthy
-----------------------
Name: Michael B. McCarthy
Title: Vice President
THE CHASE MANHATTAN BANK, not in its individual
capacity but solely as Indenture Trustee
By: \s\ Michael A. Smith
-----------------------
Name: Michael A. Smith
Title: Vice President
FORD MOTOR CREDIT COMPANY, as Administrator
By: \s\ R. P. Conrad
-----------------------
Name: R. P. Conrad
Title: Assistant Secretary
<PAGE> 19
APPENDIX A
Definitions and Usage
AA-1
<PAGE> 1
EXHIBIT 99.3
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (as from time to time amended, supplemented or
otherwise modified and in effect, this "Agreement") is made as of this 1st day
of October 1997, by and between FORD MOTOR CREDIT COMPANY, a Delaware
corporation (the "Seller"), having its principal executive office at The
American Road, Dearborn, Michigan 48121, and FORD CREDIT AUTO RECEIVABLES TWO
L.P., a Delaware limited partnership (the "Purchaser"), having its principal
executive office at The American Road, Dearborn, Michigan 48121.
WHEREAS, in the regular course of its business, the Seller purchases
certain motor vehicle retail installment sale contracts secured by new and used
automobiles and light trucks from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms pursuant
to which the Receivables (as hereinafter defined) are to be conveyed by the
Seller to the Purchaser, which Receivables will be transferred by the Purchaser
pursuant to the Sale and Servicing Agreement (as hereinafter defined) to the
Ford Credit Auto Owner Trust 1997-B to be created pursuant to the Trust
Agreement (as hereinafter defined), which Trust will issue notes secured by
such Receivables and certain other property of the Trust, pursuant to the
Indenture (as hereinafter defined), and will issue certificates representing
beneficial interests in such Receivables and certain other property of the
Trust, pursuant to the Trust Agreement.
NOW, THEREFORE, in consideration of the foregoing, other good and valuable
consideration, and the mutual terms and covenants contained herein, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein. The term "Seller" herein shall mean Ford Motor Credit
Company.
<PAGE> 2
ARTICLE II
CONVEYANCE AND ACQUISITION OF RECEIVABLES
2.1 Conveyance and Acquisition of Receivables
On the Closing Date, subject to the terms and conditions of this
Agreement, the Seller agrees to convey to the Purchaser, and the Purchaser
agrees to acquire from the Seller, the Receivables and the other property
relating thereto (as defined below).
(a) Conveyance of Receivables. Effective as of the Closing Date and
simultaneously with the transactions pursuant to the Indenture, the Sale and
Servicing Agreement and the Trust Agreement, the Seller hereby transfers,
assigns and otherwise conveys to the Purchaser, without recourse, all right,
title and interest of the Seller, whether now owned or hereafter acquired, in
and to the following: (i) the Receivables; (ii) with respect to Precomputed
Receivables, monies due thereunder on or after the Cutoff Date (including
Payaheads) and, with respect to Simple Interest Receivables, monies due or
received thereunder on or after the Cutoff Date (including in each case any
monies received prior to the Cutoff Date that are due on or after the Cutoff
Date and were not used to reduce the principal balance of the Receivable);
(iii) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest of the Seller in the
Financed Vehicles; (iv) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii)
payments and proceeds with respect to the Receivables held by the Seller;
(viii) all property (including the right to receive Liquidation Proceeds)
securing a Receivable (other than a Receivable repurchased by the Seller); (ix)
rebates of premiums and other amounts relating to insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and (x)
all present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in
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respect of any or all of the foregoing, including all proceeds of the
conversion thereof, voluntary or involuntary, into cash or other liquid
property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds,
condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.
(b) Receivables Purchase Price. In consideration for the Receivables and
other properties described in Section 2.1(a), the Purchaser shall, on the
Closing Date, pay to the Seller the Receivables Purchase Price. An amount
equal to approximately $1,664,790,628 (representing the proceeds from the sale
of the Notes and Certificates offered to the public, plus the amount of the
cash capital contribution by the General Partner to the Purchaser on the
Closing Date, minus the Reserve Initial Deposit) of the Receivables Purchase
Price shall be paid to the Seller in cash. The remaining portion of the
Receivables Purchase Price shall be deemed paid and returned to the Purchaser
and be considered a contribution to capital. The portion of the Receivables
Purchase Price to be paid in cash shall be paid by federal wire transfer (same
day) funds.
2.2 The Closing. The conveyance and acquisition of the Receivables shall
take place at a closing (the "Closing") at the offices of Skadden,
Arps, Slate, Meagher & Flom, 919 Third Avenue, New York, New York 10022 on the
Closing Date, simultaneously with the closings under: (a) the Sale and
Servicing Agreement pursuant to which the Purchaser will assign all of its
right, title and interest in, to and under the Receivables and certain other
property to the Trust in exchange for the Notes and the Certificates; (b) the
Indenture, pursuant to which the Trust will issue the Notes and pledge all of
its right, title and interest in, to and under the Receivables and certain
other property to secure the Notes; (c) the Trust Agreement, pursuant to which
the Trust will issue the Certificates; (d) the Note Underwriting Agreement,
pursuant to which the Purchaser will sell to the Note Underwriters the
Underwritten Notes; (e) the Class A-4 Note Purchase Agreement, pursuant to
which the Purchaser will sell to the Class A-4
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<PAGE> 4
Note Purchaser the Class A-4 Notes; and (f) the Certificate Underwriting
Agreement, pursuant to which the Purchaser will sell to the Certificate
Underwriter the Certificates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Warranties of the Purchaser. The Purchaser hereby represents and
warrants to the Seller as of the date hereof and as of the Closing Date:
(a) Organization, etc. The Purchaser has been duly organized and is
validly existing as a limited partnership in good standing under the laws of
the State of Delaware, and has full power and authority to execute and deliver
this Agreement and to perform the terms and provisions hereof and thereof.
(b) Due Authorization and No Violation. This Agreement has been duly
authorized, executed and delivered by the Purchaser, and is the valid, binding
and enforceable obligation of the Purchaser except as the same may be limited
by insolvency, bankruptcy, reorganization or other laws relating to or
affecting the enforcement of creditors' rights or by general equity principles.
The consummation of the transactions contemplated by this Agreement, and the
fulfillment of the terms hereof, will not conflict with or result in a breach
of any of the terms or provisions of, or constitute a default under (in each
case material to the Purchaser), or result in the creation or imposition of any
lien, charge or encumbrance (in each case material to the Purchaser) upon any
of the property or assets of the Purchaser pursuant to the terms of, any
indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing
agreement or similar agreement or instrument under which the Purchaser is a
debtor or guarantor, nor will such action result in any violation of the
provisions of the Certificate of Limited Partnership or the Limited Partnership
Agreement of the Purchaser.
(c) No Proceedings. No legal or governmental proceedings are pending to
which the Purchaser is a party or of which any property of the Purchaser is the
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subject, and no such proceedings are threatened or contemplated by governmental
authorities or threatened by others, other than such proceedings which will not
have a material adverse effect upon the general affairs, financial position,
net worth or results of operations (on an annual basis) of the Purchaser and
will not materially and adversely affect the performance by the Purchaser of
its obligations under, or the validity and enforceability of, this Agreement.
3.2 Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser as of the
date hereof and as of the Closing Date:
(i) Organization, etc. The Seller has been duly incorporated and
is validly existing as a corporation in good standing under the laws of
the State of Delaware, and is duly qualified to transact business and is
in good standing in each jurisdiction in the United States of America in
which the conduct of its business or the ownership of its property
requires such qualification.
(ii) Power and Authority. The Seller has full power and authority
to convey and assign the property conveyed and assigned to the
Purchaser hereunder and has duly authorized such sale and assignment to
the Purchaser by all necessary corporate action. This Agreement has
been duly authorized, executed and delivered by the Seller and shall
constitute the legal, valid and binding obligation of the Seller except
as the same may be limited by insolvency, bankruptcy, reorganization or
other laws relating to or affecting the enforcement of creditors' rights
or by general equity principles.
(iii) No Violation. The consummation of the transactions
contemplated by this Agreement, and the fulfillment of the terms hereof,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under (in each case material to
the Seller and its subsidiaries considered as a whole), or result in
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<PAGE> 6
the creation or imposition of any lien, charge or encumbrance (in each
case material to the Seller and its subsidiaries considered as a whole)
upon any of the property or assets of the Seller pursuant to the terms
of, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument under which
the Seller is a debtor or guarantor, nor will such action result in any
violation of the provisions of the Certificate of Incorporation or the
By-Laws of the Seller.
(iv) No Proceedings. No legal or governmental proceedings are
pending to which the Seller is a party or of which any property of the
Seller is the subject, and no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, other
than such proceedings which will not have a material adverse effect upon
the general affairs, financial position, net worth or results of
operations (on an annual basis) of the Seller and its subsidiaries
considered as a whole and will not materially and adversely affect the
performance by the Seller of its obligations under, or the validity and
enforceability of, this Agreement.
(b) The Seller makes the following representations and warranties as to
the Receivables on which the Purchaser relies in accepting the Receivables.
Such representations and warranties speak as of the execution and delivery of
this Agreement, but shall survive the transfer, assignment and conveyance of
the Receivables to the Purchaser and the subsequent assignment and transfer to
the Trust pursuant to the Sale and Servicing Agreement and the pledge thereof
to the Indenture Trustee pursuant to the Indenture:
(i) Characteristics of Receivables. Each Receivable (a) shall have
been originated in the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business, shall have been fully and properly executed by the
parties thereto, shall have been purchased by the Seller from such
Dealer under an existing dealer agreement with the Seller, shall have
been validly assigned by such
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Dealer to the Seller, (b) shall have created or shall create a valid,
subsisting, and enforceable first priority security interest in favor of
the Seller in the Financed Vehicle, which security interest shall be
assignable by the Seller to the Purchaser, (c) shall contain customary
and enforceable provisions such that the rights and remedies of the
holder thereof shall be adequate for realization against the collateral
of the benefits of the security, (d) shall provide for level monthly
payments (provided that the payment in the first or last month in the
life of the Receivable may be minimally different from the level
payment) that fully amortize the Amount Financed by maturity and yield
interest at the Annual Percentage Rate, (e) shall provide for, in the
event that such contract is prepaid, a prepayment that fully pays the
Principal Balance, and (f) is a Precomputed Receivable or a Simple
Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables shall be true and correct in all material
respects as of the opening of business on the Cutoff Date, and no
selection procedures believed to be adverse to the Noteholders or the
Certificateholders shall have been utilized in selecting the Receivables
from those receivables which meet the criteria contained herein. The
computer tape or other listing regarding the Receivables made available
to the Purchaser and its assigns is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the sale of the
Financed Vehicle shall have complied at the time it was originated or
made and at the execution of this Agreement shall comply in all material
respects with all requirements of applicable federal, State, and local
laws, and regulations thereunder, including, without limitation, usury
laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act,
the Federal Reserve Board's Regulations B and Z, and State adaptations
of the National Consumer Act and of the Uniform
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<PAGE> 8
Consumer Credit Code, and other consumer credit laws and equal credit
opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the
genuine, legal, valid, and binding payment obligation in writing of the
Obligor, enforceable by the holder thereof in accordance with its terms
subject to the effect of bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights
generally.
(v) No Government Obligor. None of the Receivables shall be due
from the United States of America or any State or from any agency,
department, or instrumentality of the United States of America or any
State.
(vi) Security Interest in Financed Vehicle. Immediately prior
to the transfer, assignment and conveyance thereof, each Receivable
shall be secured by a validly perfected first security interest in the
Financed Vehicle in favor of the Seller as secured party or all
necessary and appropriate actions shall have been commenced that would
result in the valid perfection of a first security interest in the
Financed Vehicle in favor of the Seller as secured party.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed Vehicle
have been released from the lien granted by the related Receivable in
whole or in part.
(viii) No Waiver. No provision of a Receivable shall have been
waived.
(ix) No Defenses. No right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any
Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims shall have been filed for work, labor, or materials relating to a
Financed Vehicle that shall be liens prior to, or
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<PAGE> 9
equal or coordinate with, the security interest in the Financed Vehicle
granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a
period of not more than thirty (30) days as of the Cutoff Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable shall have occurred; and no continuing condition
that with notice or the lapse of time would constitute a default,
breach, violation, or event permitting acceleration under the terms of
any Receivable shall have arisen; and the Seller shall not waive any of
the foregoing.
(xii) Insurance. The Seller, in accordance with its customary
procedures, shall have determined that the Obligor has obtained or
agreed to obtain physical damage insurance covering the Financed
Vehicle.
(xiii) Title. It is the intention of the Seller that the transfer
and assignment herein contemplated constitute an absolute transfer of
the Receivables from the Seller to the Purchaser and that the beneficial
interest in and title to the Receivables not be part of the Seller's
estate in the event of the filing of a bankruptcy petition by or against
the Seller under any bankruptcy law. No Receivable has been
transferred, assigned, or pledged by the Seller to any Person other than
the Purchaser. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each
Receivable free and clear of all Liens, encumbrances, security
interests, and rights of others and, immediately upon the transfer
thereof, the Purchaser shall have good and marketable title to each
Receivable, free and clear of all Liens, encumbrances, security
interests, and rights of others; and the transfer has been perfected
under the UCC.
(xiv) Valid Assignment. No Receivable shall have been originated
in, or shall be subject to the laws of, any jurisdiction under which the
transfer, assignment and conveyance of such Receivable under this
Agreement or pursuant to transfers of the Notes or the Certificates
shall be
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unlawful, void, or voidable. The Seller has not entered into any
agreement with any account debtor that prohibits, restricts or
conditions the assignment of any portion of the Receivables.
(xv) All Filings Made. All filings (including, without limitation,
UCC filings) necessary in any jurisdiction to give the Purchaser a first
perfected ownership interest in the Receivables shall have been made.
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper"
as defined in the UCC.
(xvii) One Original. There shall be only one original executed
copy of each Receivable.
(xviii) New and Used Vehicles. Approximately 70.0% of the
aggregate Principal Balance of the Receivables, constituting 62.5% of
the number of Receivables, as of the Cutoff Date, represent vehicles
financed at new vehicle rates, and the remainder of the Receivables
represent vehicles financed at used vehicle rates.
(xix) Amortization Type. By aggregate Principal Balance as of the
Cutoff Date, approximately 38.1% of the Receivables constitute
Precomputed Receivables and 61.9% of the Receivables constitute Simple
Interest Receivables.
(xx) Origination. Each Receivable shall have an origination date
on or after January 1, 1996.
(xxi) Maturity of Receivables. Each Receivable shall have an
original maturity of not greater than sixty (60) months.
(xxii) Minimum Annual Percentage Rate. Each Receivable shall have
an Annual Percentage Rate equal to or greater than 7.75%.
(xxiii) Scheduled Payments. Each Receivable shall have a first
Scheduled Payment due, in the case of Precomputed Receivables, or a
first
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scheduled due date, in the case of Simple Interest Receivables, on or
prior to October 31, 1997 and no Receivable shall have a payment that is
more than thirty (30) days overdue as of the Cutoff Date.
(xxiv) Location of Receivable Files. The Receivable Files shall
be kept at one or more of the locations listed in Schedule A hereto.
(xxv) No Extensions. The number of Scheduled Payments, in the
case of Precomputed Receivables, and the number of scheduled due dates,
in the case of Simple Interest Receivables, shall not have been extended
on any Receivable on or before the Cutoff Date.
(xxvi) Other Data. The numerical data relating to the
characteristics of the Receivables contained in the Prospectus are true
and correct in all material respects.
(xxvii) Agreement. The representations and warranties in this
Agreement shall be true.
(xxviii) No Receivables Originated in Alabama or Pennsylvania. No
Receivable shall have been originated in Alabama or Pennsylvania.
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ARTICLE IV
CONDITIONS
4.1 Conditions to Obligation of the Purchaser. The obligation of the
Purchaser to acquire the Receivables is subject to the satisfaction of the
following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Seller hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Seller shall have performed
all obligations to be performed by it hereunder on or prior to the Closing
Date.
(b) Computer Files Marked. The Seller shall, at its own expense, on or
prior to the Closing Date, indicate in its computer files that the Receivables
have been conveyed to the Purchaser pursuant to this Agreement and deliver to
the Purchaser the Schedule of Receivables certified by an officer of the Seller
to be true, correct and complete.
(c) Documents to be Delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will execute and
deliver the Assignment. The Assignment shall be substantially in the
form of Exhibit A hereto.
(ii) Evidence of UCC Filing. On or prior to the Closing Date, the
Seller shall record and file, at its own expense, a UCC-1 financing
statement in each jurisdiction in which required by applicable law,
executed by the Seller, as seller or debtor, and naming the Purchaser,
as purchaser or secured party, naming the Receivables and the other
property conveyed hereunder as collateral, meeting the requirements of
the laws of each such jurisdiction and in such manner as is necessary to
perfect the transfer, assignment and conveyance of such Receivables to
the Purchaser. The Seller shall deliver a file-stamped copy, or other
evidence satisfactory to the Purchaser of such filing, to the Purchaser
on or prior to the Closing Date.
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<PAGE> 13
(iii) Other Documents. Such other documents as the Purchaser may
reasonably request.
(d) Other Transactions. The transactions contemplated by the Sale and
Servicing Agreement, the Indenture and the Trust Agreement shall be consummated
on the Closing Date.
4.2 Conditions to Obligation of the Seller. The obligation of the Seller
to convey the Receivables to the Purchaser is subject to the satisfaction of
the following conditions:
(a) Representations and Warranties True. The representations and
warranties of the Purchaser hereunder shall be true and correct on the Closing
Date with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b) Receivables Purchase Price. At the Closing Date, the Purchaser
will deliver to the Seller the Receivables Purchase Price, as provided in
Section 2.1(b).
13
<PAGE> 14
ARTICLE V
COVENANTS OF THE SELLER
The Seller covenants and agrees with the Purchaser as follows, provided,
however, that to the extent that any provision of this ARTICLE V conflicts with
any provision of the Sale and Servicing Agreement, the Sale and Servicing
Agreement shall govern:
5.1 Protection of Right, Title and Interest.
(a) The Seller shall execute and file such financing statements and
cause to be executed and filed such continuation statements, all in
such manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Purchaser in the Receivables and in
the proceeds thereof. The Seller shall deliver (or cause to be delivered) to
the Purchaser file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) The Seller shall not change its name, identity, or corporate
structure in any manner that would, could, or might make any financing
statement or continuation statement filed by the Seller in accordance with
paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Purchaser at least five (5)
days' prior written notice thereof and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller shall give the Purchaser at least sixty (60) days' prior
written notice of any relocation of its principal executive office if,
as a result of such relocation, the applicable provisions of the UCC would
require the filing of any amendment of any previously filed financing or
continuation statement or of any new financing statement and shall promptly
file any such amendment or new financing statement. The Seller shall at all
times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
14
<PAGE> 15
(d) The Seller shall maintain accounts and records as to each Receivable
accurately and in sufficient detail to permit the reader thereof to know at any
time the status of such Receivable, including payments and recoveries made and
payments owing (and the nature of each).
(e) The Seller shall maintain its computer systems so that, from and after
the time of conveyance hereunder of the Receivables to the Purchaser, the
Seller's master computer records (including any back-up archives) that refer to
a Receivable shall indicate clearly the interest of the Purchaser in such
Receivable and that such Receivable is owned by the Purchaser. Indication of
the Purchaser's ownership of a Receivable shall be deleted from or modified on
the Seller's computer systems when, and only when, the Receivable shall have
been paid in full or repurchased.
(f) If at any time the Seller shall propose to sell, grant a security
interest in, or otherwise transfer any interest in automotive receivables to
any prospective purchaser, lender, or other transferee, the Seller shall give
to such prospective purchaser, lender, or other transferee computer tapes,
records, or print-outs (including any restored from back-up archives) that, if
they shall refer in any manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been conveyed to and is owned by the
Purchaser.
(g) The Seller shall permit the Purchaser and its agents at any time
during normal business hours to inspect, audit, and make copies of and
abstracts from the Seller's records regarding any Receivable.
(h) Upon request, the Seller shall furnish to the Purchaser, within twenty
(20) Business Days, a list of all Receivables (by contract number and name of
Obligor) then owned by the Purchaser, together with a reconciliation of such
list to the Schedule of Receivables.
5.2 Other Liens or Interests. Except for the conveyances hereunder and
pursuant to the other Basic Documents, the Seller will not sell, pledge, assign
or transfer any Receivable to any other Person, or grant, create, incur, assume
or suffer to exist any Lien on any
15
<PAGE> 16
interest therein, and the Seller shall defend the right, title, and interest
of the Purchaser in, to and under such Receivables against all claims
of third parties claiming through or under the Seller; provided, however, that
the Seller's obligations under this Section 5.2 shall terminate upon the
termination of the Trust pursuant to the Trust Agreement.
5.3 Costs and Expenses. The Seller agrees to pay all reasonable costs and
disbursements in connection with the perfection, as against all third parties,
of the Purchaser's right, title and interest in and to the Receivables.
5.4 Indemnification.
(a) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the failure of a Receivable to be
originated in compliance with all requirements of law and for any breach of any
of the Seller's representations and warranties contained herein.
(b) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all costs, expenses, losses, damages, claims, and
liabilities, arising out of or resulting from the use, ownership, or operation
by the Seller or any Affiliate thereof of a Financed Vehicle.
(c) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all taxes that may at any time be asserted
against the Purchaser with respect to the transactions contemplated herein,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege, or license taxes and costs and expenses
in defending against the same.
(d) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against any and all costs, expenses, losses, claims, damages, and
liabilities to the extent that such cost, expense, loss, claim, damage, or
liability arose out of, or was imposed upon the Purchaser through, the
negligence, willful misfeasance, or bad faith of the Seller in the performance
of
16
<PAGE> 17
its duties under this Agreement or by reason of reckless disregard of the
Seller's obligations and duties under this Agreement.
(e) The Seller shall defend, indemnify, and hold harmless the Purchaser
from and against all costs, expenses, losses, claims, damages, and liabilities
arising out of or incurred in connection with the acceptance or performance of
the Seller's trusts and duties as Servicer under the Sale and Servicing
Agreement, except to the extent that such cost, expense, loss, claim, damage,
or liability shall be due to the willful misfeasance, bad faith, or negligence
(except for errors in judgment) of the Purchaser.
These indemnity obligations shall be in addition to any obligation that
the Seller may otherwise have.
5.5 Treatment. Seller agrees to treat this conveyance as (i) an absolute
transfer for tax purposes and (ii) an sale for all other purposes (including
without limitation financial accounting purposes), in each case on all relevant
books, records, tax returns, financial statements and other applicable
documents.
17
<PAGE> 18
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Obligations of Seller. The obligations of the Seller under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
6.2 Repurchase Events. The Seller hereby covenants and agrees with the
Purchaser for the benefit of the Purchaser, the Trust, the Owner Trustee, the
Indenture Trustee, the Noteholders and the Certificateholders, that the
occurrence of a breach of any of the Seller's representations and warranties
contained in Section 3.2(b) hereof shall constitute events obligating the
Seller to repurchase Receivables hereunder ("Repurchase Events"), at the
Purchase Amount from the Purchaser or from the Trust. The repurchase
obligation of the Seller shall constitute the sole remedy to the Purchaser, the
Trust, the Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders against the Seller with respect to any Repurchase Event.
6.3 Seller's Assignment of Purchased Receivables. With respect to all
Receivables repurchased by the Seller pursuant to this Agreement, the Purchaser
shall assign, without recourse, representation or warranty, to the Seller all
the Purchaser's right, title and interest in and to such Receivables, and all
security and documents relating thereto.
6.4 Trust. The Seller acknowledges that:
(a) The Purchaser will, pursuant to the Sale and Servicing Agreement,
convey the Receivables to the Trust and assign its rights under this Agreement
to the Owner Trustee for the benefit of the Noteholders and the
Certificateholders, and that the representations and warranties contained in
this Agreement and the rights of the Purchaser under Sections 6.2 and 6.3
hereof are intended to benefit the Trust, the Owner Trustee, the Noteholders
and the Certificateholders. The Seller hereby consents to such conveyance and
assignment.
(b) The Trust will, pursuant to the Indenture, pledge the Receivables and
its rights under this Agree-
18
<PAGE> 19
ment to the Indenture Trustee for the benefit of the Noteholders, and
that the representations and warranties contained in this Agreement and the
rights of the Purchaser under this Agreement, including under Sections 6.2 and
6.3 are intended to benefit the Indenture Trustee and the Noteholders. The
Seller hereby consents to such pledge.
6.5 Amendment. This Agreement may be amended from time to time by a
written amendment duly executed and delivered by the Seller and the Purchaser;
provided, however, that any such amendment that materially adversely affects
the rights of the Noteholders or the Certificateholders under the Indenture,
Sale and Servicing Agreement or Trust Agreement shall be consented to by the
Noteholders of Notes evidencing not less than a majority of the Notes
Outstanding and the Certificateholders of Certificates evidencing not less than
a majority of the Certificate Balance.
6.6 Accountants' Letters.
(a) Coopers & Lybrand L.L.P. will review the characteristics of the
Receivables described in the Schedule of Receivables and will compare those
characteristics to the information with respect to the Receivables contained in
the Prospectus.
(b) Seller will cooperate with the Purchaser and Coopers & Lybrand
L.L.P. in making available all information and taking all steps reasonably
necessary to permit such accountants to complete the review set forth
in Section 6.6(a) above and to deliver the letters required of them under the
Note Underwriting Agreement and the Certificate Underwriting Agreement.
(c) Coopers & Lybrand L.L.P. will deliver to the Purchaser a letter,
dated the Closing Date, in the form previously agreed to by the Seller
and the Purchaser, with respect to the financial and statistical information
contained in the Prospectus under the caption "Delinquencies, Repossessions
and Net Losses" and with respect to such other information as may be agreed in
the form of letter.
6.7 Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy
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<PAGE> 20
under this Agreement or the Assignment shall operate as a waiver thereof,
nor shall any single or partial exercise of any such power, right or
remedy preclude any other or further exercise thereof or the exercise of any
other power, right or remedy.
6.8 Notices. All communications and notices pursuant hereto to either
party shall be in writing or by telegraph or telex and addressed or delivered
to it at its address (or in case of telex, at its telex number at such address)
shown in the opening portion of this Agreement or at such other address as may
be designated by it by notice to the other party and, if mailed or sent by
telegraph or telex, shall be deemed given when mailed, communicated to the
telegraph office or transmitted by telex.
6.9 Costs and Expenses. The Seller will pay all expenses incident to the
performance of its obligations under this Agreement and the Seller agrees to
pay all reasonable out-of-pocket costs and expenses of the Purchaser, excluding
fees and expenses of counsel, in connection with the perfection as against
third parties of the Purchaser's right, title and interest in and to the
Receivables and the enforcement of any obligation of the Seller hereunder.
6.10 Representations to the Seller. The respective agreements,
representations, warranties and other statements by the Seller and the
Purchaser set forth in or made pursuant to this Agreement shall remain in full
force and effect and will survive the closing under Section 2.2 hereof.
6.11 Confidential Information. The Purchaser agrees that it will
neither use nor disclose to any Person the names and addresses of the Obligors,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Receivables, under any Sale and Servicing Agreement or as required by
law.
6.12 Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
20
<PAGE> 21
6.13 GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
6.14 Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
21
<PAGE> 22
IN WITNESS WHEREOF, the parties hereby have caused this Purchase Agreement
to be executed by their respective officers thereunto duly authorized as of the
date and year first above written.
FORD MOTOR CREDIT COMPANY
By: \s\ R. P. Conrad
-----------------------------
Name: R. P. Conrad
Title: Assistant Secretary
FORD CREDIT AUTO RECEIVABLES
TWO L.P.
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: \s\ R. P. Conrad
-----------------------------
Name: R. P. Conrad
Title: Assistant Secretary
<PAGE> 23
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as of
October 1, 1997 (the "Purchase Agreement"), between the undersigned and FORD
CREDIT AUTO RECEIVABLES TWO L.P. (the "Purchaser"), the undersigned does hereby
assign, transfer and otherwise convey unto the Purchaser, without recourse, all
right, title and interest of the undersigned, whether now owned or hereafter
acquired, in and to the following: (i) the Receivables; (ii) with respect to
Precomputed Receivables, monies due thereunder on or after the Cutoff Date
(including Payaheads) and, with respect to Simple Interest Receivables, monies
due or received thereunder on or after the Cutoff Date (including in each case
any monies received prior to the Cutoff Date that are due on or after the
Cutoff Date and were not used to reduce the principal balance of the
Receivable); (iii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables and any other interest of the Seller in
the Financed Vehicles; (iv) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii)
payments and proceeds with respect to the Receivables held by the Seller;
(viii) all property (including the right to receive Liquidation Proceeds)
securing a Receivable (other than a Receivable repurchased by the Seller); (ix)
rebates of premiums and other amounts relating to insurance policies and other
items financed under the Receivables in effect as of the Cutoff Date; and (x)
all present and future claims, demands, causes of action and choses in action
in respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and
other property which
<PAGE> 24
at any time constitute all or part of or are included in the proceeds
of any of the foregoing. The foregoing conveyance does not constitute and is
not intended to result in any assumption by the Purchaser of any obligation of
the undersigned to the Obligors, insurers or any other Person in connection
with the Receivables, Receivable Files, any insurance policies or any agreement
or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
2
<PAGE> 25
Capitalized terms used herein and not otherwise defined shall have the
meaning assigned to them in the Purchase Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Assignment to be duly
executed as of October 1, 1997.
FORD MOTOR CREDIT COMPANY
By: _______________________
Name:
Title:
3
<PAGE> 26
Exhibit B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
<PAGE> 27
Schedule A
Location of Receivable Files
Akron
175 Montrose West Avenue
Crown Pointe Building
Suite 300
Copley, OH 44321
Albany
5 Pine West Plaza
Albany, NY 12205
Albuquerque
6100 Uptown Blvd., N.E.
Suite 300
Albuquerque, NM 87110
Amarillo
1616 S. Kentucky
Bldg. D, Suite 130
Amarillo, TX 79102
Anchorage
3201 C Street
Suite 303
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
Athens
3708 Atlanta Highway
Athens, GA 30604
Atlanta-North
North Park Town Center
Bldg. 400, Suite 180
1000 Abernathy Rd. N.E.
Atlanta, GA 30328
A-1
<PAGE> 28
Atlanta-South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Atlanta/CL
1117 Perimeter Ctr. W
Suite 404 West
Atlanta, GA 30338
Atlantic Region District Office
14104 Newbrook Drive
Chantilly, VA 22021
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Baltimore-East
Campbell Corporate
Center One
4940 Campbell Blvd.
Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Boston-North
One Tech Drive
3rd Floor
Andover, MA 01810-2497
A-2
<PAGE> 29
Boston-South
Southboro Place
2nd Floor
352 Turnpike Road
Southboro, MA 01772
Bristol
Landmark Center-
Suite A
113 Landmark Lane
Bristol, TN 37620
Buffalo
95 John Muir Drive
Suite 102
Amherst, NY 14228
Cape Girardeau
1409-C N. Mt. Auburn Rd.
Cape Girardeau, MO 63701
Charleston
Rivergate Center
Suite 150
4975 LaCross Road
North Charleston, SC 29418
Charlotte
6302 Fairview Road
Suite 500
Charlotte, NC 28210
Charlotte/CL
6302 Fairview Road
Suite 510
Charlotte, NC 28210
Chattanooga
6025 Lee Highway
Suite 443
Chattanooga, TN 37421
Cheyenne
6234 Yellowstone Road
Cheyenne, WY 82009
A-3
<PAGE> 30
Chicago-East
One River Place
Suite A
Lansing, IL 60438
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Chicago-South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Chicago-West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195
Chicago/CL
745 McClintock Drive
Suite 300
Burr Ridge, IL 60521
Cincinnati
8805 Governors Hill Dr.
Suite 230
Cincinnati, OH 45249
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
A-4
<PAGE> 31
Columbus
Metro V, Suite 470
655 Metro Place S
Dublin, OH 43017
Coral Springs-East
3111 N. University Dr.
Suite 800
Coral Springs, FL 33065
Corpus Christi
5350 South Staples
Suite 225
Corpus Christi, TX 78411
Dallas
Campbell Forum
Suite 600
801 E. Campbell Road
Richardson, TX 75081
Dallas
Campbell Forum
Suite 650
801 E. Campbell Road
Richardson, TX 75081
Davenport
Commerce Exch. Bldg.
2535 Tech Drive
Suite 300
Bettendorf, IA 52722
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
A-5
<PAGE> 32
Des Moines
4200 Corporate Drive
Suite 107
W. Des Moines, IA 50266
Detroit-North
580 Kirts Boulevard
Suite 300
Troy, MI 48084
Detroit-West
One Parklane Blvd.
Suite 405E
Dearborn, MI 48126
Detroit/CL
One Parklane Blvd.
Suite 301E
Dearborn, MI 48126
Dothan
137 Clinic Drive
Dothan, AL 36303
El Paso
1200 Golden Key Circle
Suite 104
El Paso, TX 79925
Eugene
1600 Valley River Drive
Suite 190
Eugene, OR 97401
Falls Church
1420 Springhill Road
Suite 550
McLean, VA 22102
Fargo
3100 13th Ave. South
Suite 304
Fargo, ND 58103
A-6
<PAGE> 33
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Findlay
3500 North Main Street
Findlay, OH 45840-1447
Ft. Myers
11935 Fairway Lakes Dr.
Fort Myers, FL 33913
Ft. Worth
Center Park Tower
Suite 400
2350 West Airport Frwy.
Bedford, TX 76022
Grand Junction
744 Horizon Court
Suite 330
Grand Junction, CO 81506
Grand Rapids
2851 Charlevoix Drive SE
Suite 300
Grand Rapids, MI 49546
Greensboro
1500 Pinecroft Rd.
Suite 220
Greensboro, NC 27407
Harlingen
1916 East Harrison
Harlingen, TX 78550
Harrisburg
4900 Ritter Road
Mechanicsburg, PA 17055
Henderson
618 North Green Street
Henderson, KY 42420
A-7
<PAGE> 34
Honolulu
Ala Moano Pacific Center
Suite 922
1585 Kapiolani Blvd.
Honolulu, HI 96814
Houston-North
363 N. Sam Houston Pkwy. E.
Suite 700
Houston, TX 77060
Houston-West
820 Gessner
Suite 700
Houston, TX 77024
Huntington
3425 U.S. Route 60 East
Barboursville, WV 25504
Indianapolis
5875 Castle Creek Pkwy.
North Drive
Suite 240
Indianapolis, IN 46250
Jackson
Highland Village Center
Suite 292
4500 I-55 North
Jackson, MS 39211
Jacksonville
Suite 310
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
A-8
<PAGE> 35
Kansas City
8717 West 110th Street
Bldg. #14, Suite 550
Overland Park, KS 66210
Knoxville
5500 Lonas Drive
Suite 260
Knoxville, TN 37909
Lafayette
Saloom Office Park
Suite 350
100 Asma Boulevard
Lafayette, LA 70508
Lansing
2140 University Park Drive
Okemos, MI 48864
Las Vegas
500 N Rainbow Blvd.
Suite 312
Las Vegas, NV 89107
Little Rock
1701 Centerview Dr.
Suite 301
Little Rock, AR 72211
Long Island
972 Brush Hollow Road
5th Floor
Westbury, NY 11590-1740
Louisville
502 Executive Park
Louisville, KY 40207
Lubbock
4010 82nd Street
Suite 200
Lubbock, TX 79424
A-9
<PAGE> 36
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Manchester
4 Bedford Farms
Bedford, NH 03110
Marshall
1408 North Michigan
Marshall, IL 62441
Memphis
6555 Quince Road
Suite 300
Memphis, TN 38119
Miami
6303 Blue Lagoon Drive
Suite 200
Miami, FL 33126
Milwaukee
10850 W. Park Place
Suite 110
Milwaukee, WI 53224
Minneapolis
One Southwest Crossing
Suite 308
11095 Viking Drive
Eden Prairie, MN 55344
Mobile
1201 Montlimar Dr.
Suite 700
Mobile, AL 36609-1718
Nashville
Highland Ridge
Suite 190
565 Marriott Drive
Nashville, TN 37214
A-10
<PAGE> 37
New Haven
35 Thorpe Ave.
Wallingford, CT 06492
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
New Jersey-North
103 Eisenhower Parkway
4th Floor
Roseland, NJ 07068
New Jersey-South
10000 MidAtlantic Dr.
Suite 401 West
Mt. Laurel, NJ 08054
New Orleans
Lakeway III
3838 N. Causeway Blvd.
Suite 3200
Metairie, LA 70002
Norfolk
Greenbrier Pointe
Suite 350
1401 Greenbrier Pkwy.
Chesapeake, VA 23320
Odessa
Ashford Park Office Center
Suite 201A
2626 John B. Sheprd Parkway
Odessa, TX 79762
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
A-11
<PAGE> 38
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
Orange
765 The City Drive
Suite 400
Orange, CA 92668
Orange/CL
765 The City Drive
Suite 401
Orange, CA 92668
Orlando
1060 Maitland Ctr Commons
Suite 210
Maitland, FL 32751
Pasadena
225 S. Lake Avenue
Suite 1200
Pasadena, CA 91101
Pensacola
25 W. Cedar Street
Suite 316
Pensacola, Fl 32501
Philadelphia
Bay Colony Executive Park
Suite 100
575 E. Swedesford Rd.
Wayne, PA 19087
Philadelphia/CL
500 N. Gulph Rd.
Suite 110
King of Prussia, PA 19406
A-12
<PAGE> 39
Phoenix
4742 North 24th Street
Suite 215
Phoenix, AZ 85016
Pittsburgh
Foster Plaza 9
750 Holiday Drive
4th Floor, Suite 420
Pittsburgh, PA 15220
Portland
2401 Congress Street
Portland, ME 04102
Portland
10220 S.W. Greenburg Blvd.
Suite 415
Portland, OR 97223
Raleigh
3651 Trust Drive
Raleigh, NC 27604
Regional Opers Center
7090 Columbia Gateway Dr.
Columbia, MD 21046
Richmond
300 Arboretum Place
Suite 320
Richmond, VA 23236
Roanoke
5238 Valley Pointe Pkwy.
Suite 6
Roanoke, VA 24019
Sacramento
2720 Gateway Oaks Dr.
Suite 200
Sacramento, CA 95833
Saginaw
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
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Salt Lake City
310 E. 4500 S.
Suite 340
Murray, UT 84107
Santa Ana Central Collections
765 The City Drive
Suite 402
Orange. CA 92668
San Antonio
100 N.E. Loop 410
Suite 625
San Antonio, TX 78216-4742
San Bernardino
1615 Orange Tree Lane
Suite 215
Redlands, CA 92374
San Diego
3111 Camino Del Rio N.
Suite 1333
San Diego, CA 92108
San Francisco
4301 Hacienda Dr.
Suite 400
Pleasanton, CA 94588
San Francisco/CL
4900 Hopyard Road
Suite 220
Pleasanton CA 94588
San Jose
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
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Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98006
Shreveport
South Pointe Centre
Suite 200
3007 Knight Street
Shreveport, LA 71105
South Bay
301 E. Ocean Boulevard
Suite 1900
Long Beach, CA 90802
South Bend
4215 Edison Lakes Parkway
Suite 140
Mishawaka, IN 46545
Spokane
901 North Monroe Ct.
Suite 350
Spokane, WA 99201-2148
Springfield
3275 E. Ridgeview
Springfield, MO 65804
St. Louis
4227 Earth City Expressway
Suite 100
Earth City, MO 63045
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
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Tulsa
9820 East 41st St.
Suite 300
Tulsa, OK 74145
Tupelo
One Mississippi Plaza
Tupelo, MS 38801
Tyler
821 East SE Loop 323
Suite 300
Tyler, TX 75701
Ventura
260 Maple Court
Suite 210
Ventura, CA 93003
Washington, D.C.
2440 Research Blvd.
Suite 150
Rockville, MD 20850
Westchester
660 White Plains Road
Tarrytown, NY 10591
Western Carolina
215 Thompson Street
Hendersonville, NC 28792
Wichita
7570 West 21st
Wichita, KS 67212
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APPENDIX A
Definitions and Usage
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EXHIBIT 99.4
APPENDIX A
DEFINITIONS AND USAGE
Usage
The following rules of construction and usage shall be applicable to any
agreement or instrument that is governed by this Appendix:
(a) All terms defined in this Appendix shall have the defined meanings
when used in any agreement or instrument governed hereby and in any certificate
or other document made or delivered pursuant thereto unless otherwise defined
therein.
(b) As used herein, in any agreement or instrument governed hereby and in
any certificate or other document made or delivered pursuant thereto,
accounting terms not defined in this Appendix or in any such agreement,
instrument, certificate or other document, and accounting terms partly defined
in this Appendix or in any such agreement, instrument, certificate or other
document, to the extent not defined, shall have the respective meanings given
to them under generally accepted accounting principles as in effect on the date
of such agreement or instru- ment. To the extent that the definitions of
accounting terms in this Appendix or in any such agreement, instrument,
certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in
this Appendix or in any such instrument, certificate or other document shall
control.
(c) The words "hereof," "herein," "hereunder" and words of similar import
when used in an agreement or instrument refer to such agreement or instrument
as a whole and not to any particular provision or subdivision thereof;
references in an agreement or instrument to "Article," "Section" or another
subdivision or to an attachment are, unless the context otherwise requires, to
an article, section or subdivision of or an attachment to such agreement or
instrument; and the term "including" means "including without limitation."
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(d) The definitions contained in this Appendix are equally applicable to
both the singular and plural forms of such terms and to the masculine as well
as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred to below or
in any agreement or instrument that is governed by this Appendix means such
agreement or instrument or statute as from time to time amended, modified or
supplemented, including (in the case of agreements or instruments) by waiver or
consent and (in the case of statutes) by succession of comparable successor
statutes and includes (in the case of agreements or instruments) references to
all attachments thereto and instruments incorporated therein. References to a
Person are also to its permitted successors and assigns.
Definitions
"Accrued Certificate Interest" shall mean, with respect to any Distribution
Date, the sum of the Certificateholders' Monthly Accrued Interest for such
Distribution Date and the Certificateholders' Interest Carryover Shortfall for
such Distribution Date.
"Accrued Class A Note Interest" shall mean, with respect to any Distribution
Date, the sum of the Class A Noteholders' Monthly Accrued Interest for such
Distribution Date and the Class A Noteholders' Interest Carryover Shortfall for
such Distribution Date.
"Accrued Class B Note Interest" shall mean, with respect to any Distribution
Date, the sum of the Class B Noteholders' Monthly Accrued Interest for such
Distribution Date and the Class B Noteholders' Interest Carryover Shortfall for
such Distribution Date.
"Act" shall have the meaning specified in Section 11.3(a) of the Indenture.
"Actual Class A Note Overcollateralization Amount" shall mean, with respect
to any Distribution Date, the sum of (x) the Pool Balance at the end of the
Collection Period preceding such Distribution Date minus (y) the aggregate
outstanding principal amount of the
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Class A Notes as of the preceding Distribution Date (after giving effect to any
principal payments made on such preceding Distribution Date) or the Closing
Date, as the case may be.
"Actual Class B Note Overcollateralization Amount" shall mean, with respect
to any Distribution Date, the sum of (x) the Pool Balance at the end of the
Collection Period preceding such Distribution Date minus (y) the aggregate
outstanding principal amount of the Notes as of the preceding Distribution Date
(after giving effect to any principal payments made on such preceding
Distribution Date) or the Closing Date, as the case may be.
"Actuarial Method" shall mean the method of allocating a fixed level payment
on a Receivable between principal and interest, pursuant to which the portion
of such payment that is allocated to interest is the product of one-twelfth
(1/12) of the APR on the Receivable multiplied by the scheduled principal
balance of the Receivable.
"Actuarial Receivable" shall mean any Receivable under which the portion of
a payment with respect thereto allocable to interest and the portion of a
payment with respect thereto allocable to principal is determined in accordance
with the Actuarial Method.
"Administration Agreement" shall mean the Administration Agreement, dated as
of October 1, 1997, by and among the Administrator, the Issuer and the
Indenture Trustee.
"Administrator" shall mean Ford Credit, in its capacity as administrator
under the Administration Agreement, or any successor Administrator thereunder.
"Advance" shall mean either a Precomputed Advance or a Simple Interest
Advance or both, as applicable.
"Affiliate" shall mean, with respect to any specified Person, any other
Person controlling or controlled by or under common control with such specified
Person. For the purposes of this definition, "control" when used with respect
to any Person shall mean the power
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to direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" shall have meanings correlative to
the foregoing.
"Amount Financed" shall mean, with respect to a Receivable, the amount
advanced under the Receivable toward the purchase price of the Financed Vehicle
and any related costs.
"Annual Percentage Rate" or "APR" of a Receivable shall mean the annual rate
of finance charges stated in the Receivable.
"Applicable Tax State" shall mean, as of any date of determination, each
State as to which any of the following is then applicable: (a) a State in which
the Owner Trustee maintains its Corporate Trust Office, (b) a State in which
the Owner Trustee maintains its principal executive offices, and (c) the State
of Michigan.
"Assignment" shall mean the document of assignment attached as Exhibit A to
the Purchase Agreement.
"Authenticating Agent" shall have the meaning specified in Section 2.14 of
the Indenture.
"Authorized Officer" shall mean, (i) with respect to the Issuer, any officer
within the Corporate Trust Office of the Owner Trustee, including any vice
president, assistant vice president, secretary, assistant secretary or any
other officer of the Owner Trustee customarily performing functions similar to
those performed by any of the above designated officers and, for so long as the
Administration Agreement is in full force and effect, any officer of the
Administrator who is authorized to act for the Administrator in matters
relating to the Issuer and to be acted upon by the Administrator pursuant to
the Administration Agreement; and (ii) with respect to the Indenture Trustee or
the Owner Trustee, any officer within the Corporate Trust Office of the
Indenture Trustee or the Owner Trustee, as the case may be, including any vice
president, assistant vice president, secretary, assistant secretary or any
other officer of the Indenture Trustee or the Owner Trustee, as the case may
be, customarily performing functions similar to
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those performed by any of the above designated officers and also, with respect
to a particular matter, any other officer to whom such matter is referred
because of such officer's knowledge of and familiarity with the particular
subject and shall also mean, with respect to the Owner Trustee, any officer of
the Administrator.
"Available Funds" shall mean, for any Distribution Date, the sum of the
Available Collections for such Distribution Date and the Reserve Account
Release Amount for such Distribution Date.
"Available Collections" shall mean, for any Distribution Date, the sum of
the following amounts with respect to the Collection Period preceding such
Distribution Date: (i) all scheduled payments and all prepayments in full
collected with respect to Precomputed Receivables (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into the Payahead
Account) and all payments collected with respect to Simple Interest
Receivables; (ii) all Liquidation Proceeds attributable to Receivables which
became Liquidated Receivables during such Collection Period in accordance with
the Servicer's customary servicing procedures, and all recoveries in respect of
Liquidated Receivables which were written off in prior Collection Periods;
(iii) all Precomputed Advances made by the Servicer of principal due on the
Precomputed Receivables; (iv) all Advances made by the Servicer of interest due
on the Receivables and all amounts advanced by the Servicer pursuant to Section
4.4(c) of the Sale and Servicing Agreement; (v) the Purchase Amount received
with respect to each Receivable that became a Purchased Receivable during such
Collection Period; and (vi) partial prepayments of any refunded item included
in the principal balance of a Receivable, such as extended warranty protection
plan costs, or physical damage, credit life, disability insurance premiums, or
any partial prepayment which causes a reduction in the Obligor's periodic
payment to an amount below the Scheduled Payment as of the Cutoff Date;
provided however, that in calculating the Available Collections the following
will be excluded: (i) amounts received on any Receivable to the extent that the
Servicer has previously made an unreimbursed Advance on such Receivable; (ii)
amounts received on any Receivable to the extent that the Servicer has
previously made an unreimbursed Advance on a Receivable which is not recov-
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erable from collections on the particular Receivable; (iii) Liquidation
Proceeds with respect to a particular Precomputed Receivable to the extent of
any unreimbursed Precomputed Advances thereon; (iv) all payments and proceeds
(including Liquidation Proceeds) of any Receivables the Purchase Amount of
which has been included in the Available Funds in a prior Collection Period;
(v) Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including interest
for the then current Collection Period) but only to the extent of any
unreimbursed Simple Interest Advances; and (vi) amounts constituting the
Supplemental Servicing Fee.
"Bankruptcy Code" shall mean the United States Bankruptcy Code, 11 U.S.C.
101 et seq., as amended.
"Basic Documents" shall mean the Certificate of Limited Partnership, the
Limited Partnership Agreement, the Certificate of Trust, the Trust Agreement,
the Purchase Agreement, the Sale and Servicing Agreement, the Indenture, the
Administration Agreement, the Note Depository Agreement, the Control Agreement
and the other documents and certificates delivered in connection therewith.
"Book-Entry Class A-1 Note" shall mean a beneficial interest in the Class
A-1 Notes, ownership and transfers of which shall be made through book entries
by a Clearing Agency as described in Section 2.11 of the Indenture.
"Book-Entry Class A-2 Note" shall mean a beneficial interest in the Class
A-2 Notes, ownership and transfers of which shall be made through book entries
by a Clearing Agency as described in Section 2.11 of the Indenture.
"Book-Entry Class A-3 Note" shall mean a beneficial interest in the Class
A-3 Notes, ownership and transfers of which shall be made through book entries
by a Clearing Agency as described in Section 2.11 of the Indenture.
"Book-Entry Notes" shall mean the Book-Entry Class A-1 Notes, the Book-Entry
Class A-2 Notes and the Book-Entry Class A-3 Notes, collectively.
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"Business Day" shall mean any day other than a Saturday, a Sunday or a day
on which banking institutions or trust companies in New York, New York or the
State of Delaware are authorized or obligated by law, regulation or executive
order to remain closed.
"Business Trust Statute" shall mean Chapter 38 of Title 12 of the Delaware
Code, 12 Delaware Code Section 3801 et seq., as amended.
"Capital Account" shall mean the account established pursuant to Section 3.2
of the Trust Agreement and the amount of any Certificateholder's Capital
Account shall be the amount determined in accordance with such Section 3.2 of
the Trust Agreement.
"Certificate" shall mean a physical certificate evidencing the beneficial
interest of a Certificateholder in the property of the Trust, substantially in
the form of Exhibit A to the Trust Agreement. Such certificate shall entitle
the Certificateholder thereof to distributions of principal and interest
pursuant to the Trust Agreement from collections and other proceeds in respect
of the Owner Trust Estate; provided, however, that the Owner Trust Estate has
been pledged to the Indenture Trustee to secure payment of the Notes and that
the rights of Certificateholders to receive distributions on the Certificates
are subordinated to the rights of the Noteholders as described in the Sale and
Servicing Agreement, the Indenture and the Trust Agreement.
"Certificate Balance" shall mean, as the context so requires, (i) with
respect to all of the Certificates, an amount equal to, initially, the Initial
Certificate Balance and, thereafter, an amount equal to the Initial Certificate
Balance, reduced by all amounts distributed to the Certificateholders and
allocable to principal or (ii) with respect to any Certificate, an amount equal
to, initially, the initial denomination of such Certificate and, thereafter, an
amount equal to such initial denomination, reduced by all amounts distributed
in respect of such Certificate and allocable to principal; provided, that in
determining whether the Certificateholders of Certificates evidencing the
requisite portion or percentage of the aggregate Certificate Balance have given
any request, demand, authorization, direction, notice, consent, or waiver
hereunder or under any Basic
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Document, Certificates owned by the Issuer, any other obligor upon the
Certificates, the Seller, the Servicer or any Affiliate of any of the foregoing
Persons shall be disregarded and deemed to be excluded from the Certificate
Balance, except that, in determining whether the Indenture Trustee and Owner
Trustee shall be protected in relying on any such request, demand,
authorization, direction, notice, consent, or waiver, only Certificates that a
Trustee Officer of the Indenture Trustee, if applicable, and an Authorized
Officer of the Owner Trustee with direct responsibility for the administration
of the Trust Agreement, if applicable, knows to be so owned shall be so
disregarded. Certificates so owned that have been pledged in good faith may be
regarded as included in the Certificate Balance if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as applicable,
the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates, the Seller,
the Servicer or any Affiliate of any of the foregoing Persons.
"Certificate Distribution Account" shall mean the account established and
maintained as such pursuant to Section 4.1(c) of the Sale and Servicing
Agreement.
"Certificateholder" shall mean a Person in whose name a Certificate is
registered in the Certificate Register.
"Certificateholders' Interest Carryover Shortfall" shall mean, with respect
to any Distribution Date, the excess of the sum of the Certificateholders'
Monthly Accrued Interest for the preceding Distribution Date and any
outstanding Certificateholders' Interest Carryover Shortfall from the close of
business on such preceding Distribution Date, over the amount in respect of
interest that is actually deposited in the Certificate Distribution Account on
such preceding Distribution Date, plus thirty (30) days of interest on such
excess, to the extent permitted by law, at the Certificate Rate.
"Certificateholders' Monthly Accrued Interest" shall mean, with respect to
any Distribution Date, thirty (30) days of interest (or, in the case of the
first Distribution Date, interest accrued from and including the Closing Date
to but excluding such Distribution Date) at
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the Certificate Rate on the Certificate Balance on the immediately preceding
Distribution Date or the Closing Date, as the case may be, after giving effect
to all distributions allocable to the reduction of the Certificate Balance made
on or prior to such preceding Distribution Date.
"Certificate Indemnification Agreement" shall mean the Certificate
Indemnification Agreement, dated as of October 24, 1997, by and between Ford
Credit and the Certificate Underwriter.
"Certificate of Limited Partnership" shall mean the Certificate of Limited
Partnership of the Depositor filed for the Depositor pursuant to Section
17-201(a) of the Limited Partnership Act.
"Certificate of Trust" shall mean the Certificate of Trust in the form of
Exhibit B to the Trust Agreement filed for the Trust pursuant to Section
3810(a) of the Business Trust Statute.
"Certificate Paying Agent" shall mean any paying agent or co-paying agent
appointed pursuant to Section 3.10 of the Trust Agreement and shall initially
be the Owner Trustee.
"Certificate Pool Factor" shall mean, as of the close of business on the
last day of a Collection Period, a seven-digit decimal figure equal to the
Certificate Balance (after giving effect to any reductions therein to be made
on the immediately following Distribution Date) divided by the Initial
Certificate Balance. The Certificate Pool Factor will be 1.0000000 as of the
Closing Date; thereafter, the Certificate Pool Factor will decline to reflect
reductions in the Certificate Balance.
"Certificate Rate" shall mean 6.65% per annum. Interest with respect to the
Certificates shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Certificate Register" and "Certificate Registrar" shall have the respective
meanings specified in Section 3.5 of the Trust Agreement.
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"Certificate Underwriter" shall mean Goldman, Sachs & Co., as underwriters
of the Certificates pursuant to the Certificate Underwriting Agreement.
"Certificate Underwriting Agreement" shall mean the Certificate Underwriting
Agreement, dated as of October 24, 1997, between the Seller and Goldman, Sachs
& Co., as Certificate Underwriter.
"Class" shall mean a class of Notes, which may be the Class A-1 Notes, the
Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes or the Class B Notes.
"Class A Noteholders' Interest Carryover Shortfall" shall mean, with respect
to any Distribution Date, the excess of the Class A Noteholders' Monthly
Accrued Interest for the preceding Distribution Date and any outstanding Class
A Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest that is actually paid to
Noteholders of Class A Notes on such preceding Distribution Date, plus interest
on the amount of interest due but not paid to Noteholders of Class A Notes on
the preceding Distribution Date, to the extent permitted by law, at the
respective Note Interest Rates borne by such Class A Notes for the related
Interest Period.
"Class A Noteholders' Monthly Accrued Interest" shall mean, with respect to
any Distribution Date, the aggregate interest accrued for the related Interest
Period on the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes and the
Class A-4 Notes at the respective Note Interest Rate for such Class on the
outstanding principal amount of the Notes of each such Class on the immediately
preceding Distribution Date or the Closing Date, as the case may be, after
giving effect to all payments of principal to the Noteholders of the Notes of
such Class on or prior to such preceding Distribution Date.
"Class A-1 Final Scheduled Distribution Date" shall mean the October 1998
Distribution Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1 Note
is registered on the Note Register.
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"Class A-1 Notes" shall mean the $490,000,000.00 aggregate initial principal
amount Class A-1 5.748% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-1 to the Indenture.
"Class A-1 Rate" shall mean 5.748% per annum. Interest with respect to the
Class A-1 Notes shall be computed on the basis of actual days elapsed and a
360-day year for all purposes of the Basic Documents.
"Class A-2 Final Scheduled Distribution Date" shall mean the January 2000
Distribution Date.
"Class A-2 Noteholder" shall mean the Person in whose name a Class A-2 Note
is registered on the Note Register.
"Class A-2 Notes" shall mean the $388,000,000.00 aggregate initial principal
amount Class A-2 5.95% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-2 to the Indenture.
"Class A-2 Rate" shall mean 5.95% per annum. Interest with respect to the
Class A-2 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class A-3 Final Scheduled Distribution Date" shall mean the April 2001
Distribution Date.
"Class A-3 Noteholder" shall mean the Person in whose name a Class A-3 Note
is registered on the Note Register.
"Class A-3 Notes" shall mean the $514,000,000.00 aggregate initial principal
amount Class A-3 6.05% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-3 to the Indenture.
"Class A-3 Rate" shall mean 6.05% per annum. Interest with respect to the
Class A-3 Notes shall be computed on the basis of a 360-day year consisting of
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twelve 30-day months for all purposes of the Basic Documents.
"Class A-4 Final Scheduled Distribution Date" shall mean the October 2001
Distribution Date.
"Class A-4 Noteholder" shall mean the Person in whose name a Class A-4 Note
is registered on the Note Register.
"Class A-4 Note Purchase Agreement" shall mean the Purchase Agreement, dated
as of October 31, 1997, between the Seller and the Class A-4 Note Purchaser,
relating to the purchase of the Class A-4 Notes.
"Class A-4 Note Purchaser" shall mean FCAR Owner Trust, a Delaware business
trust.
"Class A-4 Notes" shall mean the $189,004,978.96 aggregate initial principal
amount Class A-4 6.15% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-4 to the Indenture.
"Class A-4 Rate" shall mean 6.15% per annum. Interest with respect to the
Class A-4 Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Class B Final Scheduled Distribution Date" shall mean the May 2002
Distribution Date.
"Class B Noteholder" shall mean the Person in whose name a Class B Note is
registered on the Note Register.
"Class B Noteholders' Interest Carryover Shortfall" shall mean, with respect
to any Distribution Date, the excess of the Class B Noteholders' Monthly
Accrued Interest for the preceding Distribution Date and any outstanding Class
B Noteholders' Interest Carryover Shortfall on such preceding Distribution
Date, over the amount in respect of interest that is actually paid to
Noteholders of Class B Notes on such preceding Distribution Date, plus interest
on the amount of interest due but not paid to Noteholders of Class B Notes on
the pre-
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ceding Distribution Date, to the extent permitted by law, at the Class B Note
Rate for the related Interest Period.
"Class B Noteholders' Monthly Accrued Interest" shall mean, with respect to
any Distribution Date, the aggregate interest accrued for the related Interest
Period on the Class B Notes at the Class B Note Rate on the outstanding
principal amount of the Class B Notes on the immediately preceding Distribution
Date or the Closing Date, as the case may be, after giving effect to all
payments of principal to the Noteholders of the Class B Notes on or prior to
such preceding Distribution Date.
"Class B Notes" shall mean the $93,501,000.00 aggregate initial principal
amount Class B 6.40% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-5 to the Indenture.
"Class B Rate" shall mean 6.40% per annum. Interest with respect to the
Class B Notes shall be computed on the basis of a 360-day year consisting of
twelve 30-day months for all purposes of the Basic Documents.
"Clearing Agency" shall mean an organization registered as a "clearing
agency" pursuant to Section 17A of the Exchange Act.
"Clearing Agency Participant" shall mean a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with
the Clearing Agency.
"Closing Date" shall mean October 31, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as amended, and
Treasury Regulations promulgated thereunder.
"Collateral" shall have the meaning specified in the Granting Clause of the
Indenture.
"Collection Account" shall mean the account or accounts established and
maintained as such pursuant to Section 4.1(a) of the Sale and Servicing
Agreement.
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"Collection Period" shall mean each calendar month during the term of this
Agreement or, in the case of the initial Collection Period, the period from the
Cutoff Date to and including the last day of the month in which the Cutoff Date
occurred. Any amount stated "as of the close of business of the last day of a
Collection Period" shall give effect to the following calculations as
determined as of the end of the day on such last day: 1) all applications of
collections, 2) all current and previous Payaheads, 3) all applications of
Payahead Balances, 4) all Advances and reductions of Outstanding Advances and
5) all distributions.
"Collections" shall mean all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Commission" shall mean the Securities and Exchange Commission.
"Computer Tape" shall mean the computer tape generated by the Seller which
provides information relating to the Receivables and which was used by the
Seller in selecting the Receivables conveyed to the Trust hereunder.
"Control Agreement" shall mean the Securities Account Control Agreement,
dated as of October 31, 1997, by and among the Seller, the Issuer, the
Indenture Trustee and The Chase Manhattan Bank in its capacity as a securities
intermediary.
"Corporate Trust Office" shall mean, (i) with respect to the Owner Trustee,
the principal corporate trust office of the Owner Trustee located at 222
Delaware Avenue, Wilmington, Delaware 19801 or at such other address as the
Owner Trustee may designate from time to time by notice to the
Certificateholders and the Depositor, or the principal corporate trust office
of any successor Owner Trustee (the address of which the successor Owner
Trustee will notify the Certificateholders and the Depositor); and (ii) with
respect to the Indenture Trustee, the principal corporate trust office of the
Indenture Trustee located at 450 West 33rd Street, New York, New York 10001, or
at such other address as the Indenture Trustee may designate from time to time
by notice to the Noteholders and the Issuer, or the princi-
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pal corporate trust office of any successor Indenture Trustee (the address of
which the successor Indenture Trustee will notify the Noteholders and the
Issuer).
"Cutoff Date" shall mean October 1, 1997.
"Dealer" shall mean the dealer who sold a Financed Vehicle and who
originated and assigned the respective Receivable to Ford Credit under an
existing agreement between such dealer and Ford Credit.
"Dealer Recourse" shall mean, with respect to a Receivable (i) any amount
paid by a Dealer or credited against a reserve established for, or held on
behalf of, a Dealer in excess of that portion of finance charges rebated to the
Obligor which is attributable to the Dealer's participation, if any, in the
Receivable, and (ii) all recourse rights against the Dealer which originated
the Receivable and any successor Dealer.
"Default" shall mean any occurrence that is, or with notice or the lapse of
time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section 2.11 of the
Indenture.
"Depositor" shall mean the Seller in its capacity as Depositor under the
Trust Agreement.
"Determination Date" shall mean, with respect to any Collection Period, the
Business Day immediately preceding the Distribution Date following such
Collection Period.
"Distribution Date" shall mean the fifteenth (15th) day of each calendar
month or, if such day is not a Business Day, the next succeeding Business Day.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" shall have the meaning specified in Section 5.1 of the
Indenture.
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"Event of Servicing Termination" shall mean an event specified in Section
8.1 of the Sale and Servicing Agreement.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
"Executive Officer" shall mean, with respect to any corporation, the Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer, President,
Executive Vice President, any Vice President, the Secretary or the Treasurer of
such corporation and, with respect to any partnership, any general partner
thereof.
"Expenses" shall have the meaning assigned to such term in Section 8.2 of
the Trust Agreement.
"Final Scheduled Distribution Date" shall mean the April 2003 Distribution
Date.
"Final Scheduled Maturity Date" shall mean March 31, 2003.
"Financed Vehicle" shall mean a new or used automobile or light truck,
together with all accessions thereto, securing an Obligor's indebtedness under
the respective Receivable.
"First Priority Principal Distribution Amount" shall mean, with respect to
any Distribution Date, an amount equal to the excess, if any, of (a) the
Minimum Required Class A Note Overcollateralization Amount over (b) the Actual
Class A Note Overcollateralization Amount; provided, however, that the First
Priority Principal Distribution Amount shall not exceed the outstanding
principal amount of all the Notes and the Certificate Balance; and provided,
further, that (i) the First Priority Principal Distribution Amount on the Class
A-1 Final Scheduled Distribution Date shall not be less than the amount that is
necessary to reduce the outstanding principal amount of the Class A-1 Notes to
zero; (ii) the First Priority Principal Distribution Amount on the Class A-2
Final Scheduled Distribution Date shall not be less than the amount that is
necessary to reduce the outstanding principal amount of the Class A-2 Notes to
zero; (iii) the First Priority Principal Distribution Amount on the Class A-3
Final Scheduled Distribution Date
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shall not be less than the amount that is necessary to reduce the outstanding
principal amount of the Class A-3 Notes to zero; and (iv) the First Priority
Principal Distribution Amount on the Class A-4 Final Scheduled Distribution
Date shall not be less than the amount that is necessary to reduce the
outstanding principal amount of the Class A-4 Notes to zero.
"Fitch" shall mean Fitch Investors Service, L.P.
"Ford Credit" shall mean Ford Motor Credit Company, a Delaware corporation.
"General Partner" shall mean Ford Credit Auto Receivables Two, Inc., a
Delaware corporation, or any substitute General Partner under the Limited
Partnership Agreement.
"Grant" shall mean to mortgage, pledge, bargain, sell, warrant, alienate,
remise, release, convey, assign, transfer, create, and to grant a lien upon and
a security interest in and right of set-off against, and to deposit, set over
and confirm pursuant to the Indenture. A Grant of the Collateral or of any
other agreement or instrument shall include all rights, powers and options (but
none of the obligations) of the granting party thereunder, including the
immediate and continuing right to claim for, collect, receive and give receipt
for principal and interest payments in respect of the Collateral and all other
monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"Indemnified Parties" shall have the meaning assigned to such term in Section
8.2 of the Trust Agreement.
"Indenture" shall mean the Indenture, dated as of October 1, 1997, by and
between the Trust and the Indenture Trustee.
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"Indenture Trustee" shall mean The Chase Manhattan Bank, a New York
corporation, not in its individual capacity but solely as Indenture Trustee
under the Indenture, or any successor Indenture Trustee under the Indenture.
"Indenture Trust Estate" shall mean all money, instruments, rights and other
property that are subject or intended to be subject to the lien and security
interest of Indenture for the benefit of the Noteholders (including, without
limitation, all property and interests Granted to the Indenture Trustee),
including all proceeds thereof.
"Independent" shall mean, when used with respect to any specified Person,
that such Person (a) is in fact independent of the Issuer, any other obligor on
the Notes, the Seller and any Affiliate of any of the foregoing Persons, (b)
does not have any direct financial interest or any material indirect financial
interest in the Issuer, any such other obligor, the Seller or any Affiliate of
any of the foregoing Persons and (c) is not connected with the Issuer, any such
other obligor, the Seller or any Affiliate of any of the foregoing Persons as
an officer, employee, promoter, underwriter, trustee, partner, director or
person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion to be
delivered to the Indenture Trustee under the circumstances described in, and
otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer
has read the definition of "Independent" in this Indenture and that the signer
is Independent within the meaning thereof.
"Initial Certificate Balance" shall mean, as the context so requires, (i)
with respect to all of the Certificates, $25,501,000.00 or (ii) with respect to
any Certificate, an amount equal to the initial denomination of such
Certificate.
"Initial Pool Balance" shall mean $1,700,006,978.96.
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"Insolvency Event" shall mean, with respect to any Person, (i) the making of
a general assignment for the benefit of creditors, (ii) the filing of a
voluntary petition in bankruptcy, (iii) being adjudged a bankrupt or insolvent,
or having had entered against such Person an order for relief in any bankruptcy
or insolvency proceeding, (iv) the filing by such Person of a petition or
answer seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law or
regulation, (v) the filing by such Person of an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against such Person in any proceeding specified in (vii) below, (vi) seeking,
consent to or acquiescing in the appointment of a trustee, receiver or
liquidator of such Person or of all or any substantial part of the assets of
such Person or (vii) the failure to obtain dismissal within 60 days of the
commencement of any proceeding against such Person seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any statute, law or regulation, or the entry of any order
appointing a trustee, liquidator or receiver of such Person or of such Person's
assets or any substantial portion thereof.
"Interest Period" shall mean, with respect to any Distribution Date (i) with
respect to the Class A-1 Notes, from and including the Closing Date (in the
case of the first Distribution Date) or from and including the most recent
Distribution Date on which interest has been paid to but excluding the
following Distribution Date and (ii) with respect to each Class of Notes other
than the Class A-1 Notes, from and including the Closing Date (in the case of
the first Distribution Date) or from and including the fifteenth day of the
calendar month preceding each Distribution Date to but excluding the fifteenth
day of the following calendar month.
"IRS" shall mean the Internal Revenue Service.
"Issuer" shall mean the Trust unless a successor replaces it and,
thereafter, shall mean the successor and for purposes of any provision
contained in the Indenture and required by the TIA, each other obligor on the
Notes.
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"Issuer Order" and "Issuer Request" shall mean a written order or request
signed in the name of the Issuer by any one of its Authorized Officers and
delivered to the Indenture Trustee.
"Lien" shall mean a security interest, lien, charge, pledge, equity, or
encumbrance of any kind other than tax liens, mechanics' liens, and any liens
which attach to the respective Receivable by operation of law.
"Limited Partnership Act" shall mean the Delaware Revised Uniform Limited
Partnership Act, Chapter 17 of Title 6 of the Delaware Code, 17 Delaware Code
Section 101 et seq., as amended.
"Limited Partnership Agreement" shall mean the Amended and Restated
Agreement of Limited Partnership of Ford Credit Auto Receivables Two L.P.,
dated as of June 1, 1996, by and between Ford Credit Auto Receivables Two,
Inc., as general partner, and Ford Credit, as limited partner.
"Liquidated Receivable" shall mean a Receivable which, by its terms, is in
default and as to which the Servicer has determined, in accordance with its
customary servicing procedures, that eventual payment in full is unlikely or
has repossessed and disposed of the Financed Vehicle.
"Liquidation Proceeds" shall mean the monies collected from whatever source,
during the respective Collection Period, on a Liquidated Receivable, net of the
sum of any amounts expended by the Servicer for the account of the Obligor plus
any amounts required by law to be remitted to the Obligor.
"Minimum Required Class A Note Overcollateralization Amount" shall mean,
with respect to any Distribution Date, the lesser of (x) $80,750,332 and (y)
7.50% of the Pool Balance at the end of the Collection Period preceding such
Distribution Date.
"Minimum Required Class B Note Overcollateralization Amount" shall mean,
with respect to any Distribution Date, the lesser of (x) $8,500,035 and (y)
5.00% of the Pool Balance at the end of the Collection Period preceding such
Distribution Date.
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"Monthly Remittance Condition" shall have the meaning specified in Section
4.1(e) of the Sale and Servicing Agreement.
"Moody's" shall mean Moody's Investors Service, Inc.
"Note Depository Agreement" shall mean the agreement dated October 31, 1997,
by and among the Trust, the Indenture Trustee and The Depository Trust Company,
as the initial Clearing Agency, relating to the Notes, substantially in the
form of Exhibit B to the Indenture.
"Noteholder" shall mean the Person in whose name a Note is registered on the
Note Register.
"Note Indemnification Agreement" shall mean the Note Indemnification
Agreement, dated as October 24, 1997, by and between Ford Credit and the Note
Underwriters.
"Note Interest Rate" shall mean the Class A-1 Rate, the Class A-2 Rate, the
Class A-3 Rate, the Class A-4 Rate or the Class B Rate, as applicable.
"Note Owner" shall mean, with respect to any Book-Entry Note, the Person who
is the beneficial owner of such Book-Entry Note, as reflected on the books of
the Clearing Agency or on the books of a Person maintaining an account with
such Clearing Agency (directly as a Clearing Agency Participant or as an
indirect participant, in each case in accordance with the rules of such
Clearing Agency).
"Note Paying Agent" shall mean the Indenture Trustee or any other Person
that meets the eligibility standards for the Indenture Trustee specified in
Section 6.11 of the Indenture and is authorized by the Issuer to make payments
to and distributions from the Collection Account (including the Principal
Distribution Account), including payment of principal of or interest on the
Notes on behalf of the Issuer.
"Note Pool Factor" shall mean, with respect to each Class of Notes as of the
close of business on the last day of a Collection Period, a seven-digit decimal
figure equal to the outstanding principal balance of such
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Class of Notes (after giving effect to any reductions thereof to be made on the
immediately following Distribution Date) divided by the original outstanding
principal balance of such Class of Notes. The Note Pool Factor will be
1.0000000 as of the Closing Date; thereafter, the Note Pool Factor will decline
to reflect reductions in the outstanding principal amount of such Class of
Notes.
"Note Register" and "Note Registrar" shall have the respective meanings
specified in Section 2.5 of the Indenture.
"Note Underwriters" shall mean the underwriters named in Schedule I to the
Note Underwriting Agreement.
"Note Underwriting Agreement" shall mean the Note Underwriting Agreement,
dated as of October 24, 1997, between the Seller and Goldman, Sachs & Co., as
representatives of the several Note Underwriters.
"Notes" shall mean the Class A-1 Notes, the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes and the Class B Notes, collectively.
"Obligor" on a Receivable shall mean the purchaser or co-purchasers of the
Financed Vehicle or any other Person who owes payments under the Receivable
(not including any Dealer in respect of Dealer Recourse).
"Officer's Certificate" shall mean (i) with respect to the Trust, a
certificate signed by any Authorized Officer of the Trust and (ii) with respect
to the Seller or the Servicer, a certificate signed by the chairman of the
board, the president, any executive vice president, any vice president, the
treasurer, any assistant treasurer, or the controller of the Seller or the
Servicer, as applicable.
"Opinion of Counsel" shall mean a written opinion of counsel which counsel
shall be acceptable to the Indenture Trustee, the Owner Trustee or the Rating
Agencies, as applicable.
"Optional Purchase Percentage" shall mean 10%.
"Outstanding" shall mean with respect to the Notes, as of the date of
determination, all Notes there-
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tofore authenticated and delivered under the Indenture except:
Notes theretofore cancelled by the Note Registrar or delivered
to the Note Registrar for cancellation;
Notes or portions thereof the payment for which money in the
necessary amount has been theretofore deposited with the Indenture
Trustee or any Note Paying Agent in trust for the Noteholders of such
Notes (pro- vided, however, that if such Notes are to be redeemed,
notice of such redemption has been duly given pursuant to this
Indenture or provision for such notice has been made, satisfactory to
the Indenture Trustee); and
Notes in exchange for or in lieu of which other Notes have
been authenticated and delivered pursuant to this Indenture unless
proof satisfactory to the Indenture Trustee is presented that any
such Notes are held by a bona fide purchaser;
provided, that in determining whether the Noteholders of Notes evidencing the
requisite principal amount of the Notes Outstanding have given any request,
demand, authorization, direction, notice, consent, or waiver under any Basic
Document, Notes owned by the Issuer, any other obligor upon the Notes, the
Seller, the Servicer or any Affiliate of any of the foregoing Persons shall be
disregarded and deemed not to be Outstanding, except that, in determining
whether the Indenture Trustee shall be protected in relying on any such
request, demand, authorization, direction, notice, consent, or waiver, only
Notes that a Responsible Officer of the Indenture Trustee knows to be so owned
shall be so disregarded; provided, further that (i) at any time following an
Event of Default, in determining whether the Noteholders of the requi- site
principal amount of Notes Outstanding have given any request, demand,
authorization, direction, notice, consent, or waiver under any Basic Document
and (ii) at any time following an Event of Servicing Termination, in
determining whether the Noteholders of the requisite principal amount of Notes
Outstanding may terminate all the rights and obligations of the Servicer or
waive any
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Event of Servicing Termination to the extent set forth in Section 8.1 of the
Sale and Servicing Agreement, the Class B Notes shall be disregarded and deemed
not to be Outstanding until the principal amount of the outstanding Class A-4
Notes has been reduced to zero. Notes owned by the Issuer, any other obligor
upon the Notes, the Seller, the Servicer or any Affiliate of any of the
foregoing Persons that have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Indenture
Trustee the pledgee's right so to act with respect to such Notes and that the
pledgee is not the Issuer, any other obligor upon the Notes, the Seller, the
Servicer or any Affiliate of any of the foregoing Persons.
"Outstanding Advances" shall mean either Outstanding Precomputed
Advances or Outstanding Simple Interest Advances or both, as applicable.
"Outstanding Precomputed Advances" on the Precomputed Receivables
shall mean the sum, as of the close of business on the last day of a Collection
Period, of all Precomputed Advances as reduced as provided in Section 4.4(a) of
the Sale and Servicing Agreement.
"Outstanding Simple Interest Advances" on the Simple Interest
Receivables shall mean the sum, as of the close of business on the last day of
a Collection Period, of all Simple Interest Advances as reduced as provided in
Section 4.4(b) of the Sale and Servicing Agreement.
"Owner Trustee" shall mean PNC Bank, Delaware, a Delaware banking
corporation, not in its individual capacity but solely as Owner Trustee under
the Trust Agreement, or any successor Owner Trustee under the Trust Agreement.
"Owner Trust Estate" shall mean all right, title and interest of the
Trust in, to and under the property and rights assigned to the Trust pursuant
to Article II of the Sale and Servicing Agreement.
"Payahead" on a Receivable shall mean the amount, as of the close of
business on the last day of a Collection Period, specified in Section 4.3 of
the Sale and Servicing Agreement with respect to such Receivable.
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"Payahead Account" shall mean the account established and maintained
as such pursuant to Section 4.1(d) of the Sale and Servicing Agreement.
"Payahead Balance" on a Receivable shall mean the sum, as of the
close of business on the last day of a Collection Period, of all Payaheads made
by or on behalf of the Obligor with respect to such Receivable (including any
amount paid by or on behalf of the Obligor prior to the Cutoff Date that is due
on or after the Cutoff Date and was not used to reduce the principal balance of
such Receivable), as reduced by applications of previous Payaheads with respect
to such Receivable, pursuant to Sections 4.3 and 4.4 of the Sale and Servicing
Agreement.
"Permitted Investments" shall mean, on any date of determination,
book- entry securities, negotiable instruments or securities represented by
instruments in bearer or registered form with maturities not exceeding the
Business Day preceding the next Distribution Date which evidence:
(a) direct non-callable obligations of, and obligations fully
guaranteed as to timely payment by, the United States of America;
(b) demand deposits, time deposits or certificates of deposit of any
depository institution or trust company incorporated under the laws of the
United States of America or any state thereof (or any domestic branch of a
foreign bank) and subject to supervision and examination by Federal or
State banking or depository institution authorities; provided, however,
that at the time of the investment or contractual commitment to invest
therein, the commercial paper or other short-term unsecured debt
obligations (other than such obligations the rating of which is based on
the credit of a Person other than such depository institution or trust
company) thereof shall have a credit rating from each of the Rating
Agencies in the highest investment category granted thereby;
(c) commercial paper having, at the time of the investment or
contractual commitment to invest therein, a rating from each of the Rating
Agencies in the highest investment category granted thereby;
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(d) investments in money market funds having a rating from each of
the Rating Agencies in the highest investment category granted thereby
(including funds for which the Indenture Trustee or the Owner Trustee or
any of their respective Affiliates is investment manager or advisor);
(e) bankers' acceptances issued by any depository institution or
trust company referred to in clause (b) above;
(f) repurchase obligations with respect to any security that is a
direct non-callable obligation of, or fully guaranteed by, the United
States of America or any agency or instrumentality thereof the obligations
of which are backed by the full faith and credit of the United States of
America, in either case entered into with a depository institution or
trust company (acting as principal) described in clause (b); and
(g) any other investment with respect to which the Issuer or the
Servicer has received written notification from the Rating Agencies that
the acquisition of such investment as a Permitted Investment will not
result in a withdrawal or downgrading of the ratings on the Notes or the
Certificates.
"Person" shall mean any individual, corporation, estate, partnership,
joint venture, association, joint stock company, trust, unincorporated
organization, or government or any agency or political subdivision thereof.
"Physical Property" shall have the meaning assigned to such term in
the definition of "Delivery" above.
"Pool Balance" as of the close of business of the last day of a
Collection Period shall mean the aggregate Principal Balance of the Receivables
(excluding Purchased Receivables and Liquidated Receivables).
"Pool Factor" as of the last day of a Collection Period shall mean a
seven-digit decimal figure
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equal to the Pool Balance divided by the Initial Pool Balance.
"Precomputed Advance" shall mean the amount, as of the last day of a
Collection Period, which the Servicer is required to advance on the respective
Precomputed Receivable pursuant to Section 4.4(a) of the Sale and Servicing
Agreement.
"Precomputed Receivable" shall mean any Receivable under which the
portion of a payment allocable to earned interest (which may be referred to in
the related contract as an add-on finance charge) and the portion allocable to
the Amount Financed are determined according to the sum of periodic balances or
the sum of monthly balances or any equivalent method, or which is an Actuarial
Receivable.
"Predecessor Note" shall mean, with respect to any particular Note,
every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note and, for purposes of this definition, any
Note authenticated and delivered under Section 2.6 of the Indenture in lieu of
a mutilated, lost, destroyed or stolen Note shall be deemed to evidence the
same debt as the mutilated, lost, destroyed or stolen Note.
"Prepayment Date" shall mean, with respect to a prepayment of the
Certificates pursuant to Section 9.3(a) of the Trust Agreement or a
distribution to Certificateholders pursuant to Section 9.1(c) of the Trust
Agreement, the Distribution Date specified by the Owner Trustee pursuant to
said Section 9.3(a) or 9.1(c), as applicable.
"Prepayment Price" shall mean an amount equal to the Certificate
Balance plus accrued and unpaid interest thereon at the Certificate Rate plus
interest on any overdue interest at the Certificate Rate (to the extent lawful)
to but excluding the Redemption Date.
"Principal Balance" of a Receivable, as of the close of business on
the last day of a Collection Period, shall mean the Amount Financed minus the
sum of (a) in the case of a Precomputed Receivable, that portion of all
Scheduled Payments due on or prior to such day allocable to principal using the
actuarial or constant yield meth-
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od, (b) in the case of a Simple Interest Receivable, that portion of all
Scheduled Payments actually received on or prior to such date allocable to
principal using the Simple Interest Method, (c) any refunded portion of
extended warranty protection plan costs, or of physical damage, credit life, or
disability insurance premiums included in the Amount Financed, (d) any payment
of the Purchase Amount with respect to the Receivable allocable to principal
and (e) any prepayment in full or any partial prepayments applied to reduce the
principal balance of the Receivable.
"Principal Distribution Account" shall mean the administrative
subaccount of the Collection Account established and maintained as such
pursuant to Section 4.1(b) of the Sale and Servicing Agreement.
"Proceeding" shall mean any suit in equity, action at law or other
judicial or administrative proceeding.
"Program" shall have the meaning specified in Section 3.11 of the
Sale and Servicing Agreement.
"Prospectus" shall have the meaning specified in the Note
Underwriting Agreement.
"Purchase Agreement" shall mean the Purchase Agreement, dated as of
October 1, 1997, by and between the Seller and Ford Credit.
"Purchase Amount" shall mean the amount, as of the close business on
the last day of a Collection Period, required to be paid by an Obligor to
prepay in full the respective Receivable under the terms thereof (which amount
shall include a full month's interest, in the month of payment, at the Annual
Percentage Rate).
"Purchased Receivable" shall mean a Receivable purchased as of the
close of business on the last day of the respective Collection Period by the
Servicer pursuant to Section 3.7 of the Sale and Servicing Agreement or by the
Seller pursuant to Section 2.2 of the Purchase Agreement.
"Purchaser" shall mean the Seller in its capacity as Purchaser under
the Purchase Agreement.
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"Qualified Institution" shall mean any depository institution
organized under the laws of the United States of America or any one of the
states thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or one of the states
thereof and subject to supervision and examination by federal or state banking
authorities which at all times has a short-term deposit rating of P-1 by
Moody's and A-1+ by Standard & Poor's and, in the case of any such institution
organized under the laws of the United States of America, whose deposits are
insured by the Federal Deposit Insurance Corporation or any successor thereto.
"Qualified Trust Institution" shall mean the corporate trust
department of PNC Bank, Delaware, The Chase Manhattan Bank, or any institution
organized under the laws of the United States of America or any one of the
states thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or one of the states
thereof and subject to supervision and examination by federal or state banking
authorities which at all times (i) is authorized under such laws to act as a
trustee or in any other fiduciary capacity, (ii) holds not less than one
billion dollars in assets in its fiduciary capacity, and (iii) has a long-term
deposit rating of not less than Baa3 from Moody's.
"Rating Agency" shall mean each of the nationally recognized
statistical rating organizations designated by the Seller or an Affiliate to
provide a rating on the Notes or the Certificates which is then rating such
Notes or Certificates. If no such organization or successor is any longer in
existence, "Rating Agency" shall be a nationally recognized statistical rating
organization or other comparable Person designated by the Seller or an
Affiliate, notice of which designation shall be given to the Indenture Trustee,
the Owner Trustee and the Servicer.
"Rating Agency Condition" shall mean, with respect to any action,
that each Rating Agency shall have been given prior notice thereof and that
each of the Rating Agencies shall have notified the Seller, the Servicer, the
Owner Trustee and the Indenture Trustee in writing that such action will not
result in a reduction
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or withdrawal of the then current rating of the Notes or the Certificates.
"Realized Losses" shall mean, the excess of the Principal Balance of
any Liquidated Receivable over Liquidation Proceeds to the extent allocable to
principal received in the Collection Period.
"Receivable" shall mean any retail installment sale contract which
shall appear on the Schedule of Receivables and any amendments, modifications
or supplements to such retail installment sale contract which has not been
released by the Indenture Trustee and the Owner Trustee from the Trust.
"Receivable Files" shall mean the documents specified in Section 2.4
of the Sale and Servicing Agreement.
"Receivables Purchase Price" shall mean the fair market value of the
Receivables on the Closing Date, as mutually agreed by the Seller and Ford
Credit.
"Record Date" shall mean, (i) with respect to any Distribution Date
or Redemption Date and any Book-Entry Note, the close of business on the day
prior to such Distribution Date or Redemption Date or, with respect to any
Definitive Note, the last day of the month preceding the month in which such
Distribution Date or Redemption Date occurs and (ii) with respect to any
Distribution Date or Prepayment Date and any Certificate, the close of business
on the last day of the month preceding the month in which such Distribution
Date or Prepayment Date occurs.
"Redemption Date" shall mean with respect to a redemption of the
Class A-4 Notes and Class B Notes pursuant to Section 10.1(a) of the Indenture
or a payment to Noteholders pursuant to Section 10.1(b) of the Indenture, the
Distribution Date specified by the Servicer pursuant to said Section 10.1(a) or
(b), as applicable.
"Redemption Price" shall mean an amount equal to the unpaid principal
amount of the Class of Notes to be redeemed plus accrued and unpaid interest
thereon at the applicable Note Interest Rate plus interest on any
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overdue interest at the applicable Note Interest Rate (to the extent lawful) to
but excluding the Redemption Date.
"Registered Noteholder" shall mean the Person in whose name a Note is
registered on the Note Register on the applicable Record Date.
"Related Agreements" shall have the meaning specified in the recitals
to the Administration Agreement.
"Required Rating" shall mean a rating on (i) short-term unsecured
debt obligations of P-1 by Moody's, (ii) short-term unsecured debt obligations
of A-1+ by Standard & Poor's and (iii) short-term unsecured debt obligations of
F-1+ by Fitch, if rated by Fitch; and any requirement that short-term unsecured
debt obligations have the "Required Rating" shall mean that such short-term
unsecured debt obligations have the foregoing required ratings from each of
such Rating Agencies.
"Reserve Account" shall mean the account established and maintained
as such pursuant to Section 4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Determination Date" shall mean the November 1998
Distribution Date.
"Reserve Account Property" shall have the meaning specified in
Section 4.7(a) of the Sale and Servicing Agreement.
"Reserve Account Release Amount" shall mean, with respect to any
Distribution Date, an amount equal to the excess, if any, of (i) the amount of
cash or other immediately available funds in the Reserve Account on such
Distribution Date (prior to giving effect to any withdrawals therefrom relating
to such Distribution Date over (ii) the Specified Reserve Balance with respect
to such Distribution Date.
"Reserve Initial Deposit" shall mean, with respect to the Closing
Date, $34,000,140.
"Rule of 78's Payment" shall mean, with respect to any Precomputed
Receivable which provides that, if such Receivable is prepaid in full, the
amount payable
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will be determined according to the Rule of 78's method, an amount (if
positive) equal to (i) the amount due allocating payments between principal and
interest based upon the Rule of 78's minus (ii) the amount that would be due
allocating payments between principal and interest from the date of origination
of the Receivable using the Actuarial Method.
"Sale and Servicing Agreement" shall mean the Sale and Servicing
Agreement, dated as of October 1, 1997, by and among the Trust, as issuer, the
Depositor, as seller, and Ford Credit, as servicer.
"Scheduled Payment" shall mean, for any Collection Period for any
Receivable, the amount indicated in such Receivable as required to be paid by
the Obligor in such Collection Period (without giving effect to deferments of
payments pursuant to Section 3.2 of the Sale and Servicing Agreement or any
rescheduling in any insolvency or similar proceedings).
"Schedule of Receivables" shall mean the list identifying the
Receivables attached as Schedule A to the Purchase Agreement, the Sale and
Servicing Agreement and the Indenture (which list may be in the form of
microfiche).
"Second Priority Principal Distribution Amount" shall mean, with
respect to any Distribution Date, an amount not less than zero equal to the sum
of (i) the excess, if any, of (a) the Minimum Required Class B Note
Overcollateralization Amount over (b) the Actual Class B Note
Overcollateralization Amount, minus (ii) the First Priority Principal
Distribution Amount, if any, with respect to such Distribution Date; provided,
however, that the Second Priority Principal Distribution Amount shall not
exceed the outstanding principal amount of all the Notes and the Certificate
Balance (after giving effect to any principal payments made on such
Distribution Date in respect of the First Priority Principal Distribution
Amount, if any); and provided, further, that the Second Priority Principal
Distribution Amount on the Class B Final Scheduled Distribution Date shall not
be less than the amount that is necessary to reduce the outstanding principal
amount of the Class B Notes to zero.
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"Secretary of State" shall mean the Secretary of State of the State
of Delaware.
"Securities" shall mean the Notes and the Certificates, collectively.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Securityholders" shall mean the Noteholders and the
Certificateholders, collectively.
"Seller" shall mean Ford Credit Auto Receivables Two L.P. as the
seller of the Receivables under the Sale and Servicing Agreement, and each
successor to Ford Credit Auto Receivables Two L.P. (in the same capacity)
pursuant to Section 6.3 of the Sale and Servicing Agreement.
"Servicer" shall mean Ford Credit as the servicer of the Receivables,
and each successor to Ford Credit (in the same capacity) pursuant to Section
7.3 of the Sale and Servicing Agreement.
"Servicer's Certificate" shall mean a certificate completed and
executed by the Servicer by any executive vice president, any vice president,
the treasurer, any assistant treasurer, the controller, or any assistant
controller of the Servicer pursuant to Section 3.9 of the Sale and Servicing
Agreement.
"Servicing Fee" shall mean, with respect to a Collection Period, the
fee payable to the Servicer for services rendered during such Collection
Period, which shall be equal to one-twelfth of the Servicing Fee Rate
multiplied by the Pool Balance as of the first day of the Collection Period.
"Servicing Fee Rate" shall mean 1.0% per annum.
"Simple Interest Advance" shall mean the amount of interest, as of
the close of business on the last day of a Collection Period, which the
Servicer is required to advance on the Simple Interest Receivables pursuant to
Section 4.4(b) of the Sale and Servicing Agreement.
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"Simple Interest Method" shall mean the method of allocating a fixed
level payment to principal and interest, pursuant to which the portion of such
payment that is allocated to interest is equal to the product of the fixed rate
of interest multiplied by the unpaid principal balance multiplied by the period
of time elapsed since the preceding payment of interest was made.
"Simple Interest Receivable" shall mean any Receivable under which
the portion of a payment allocable to interest and the portion allocable to
principal is determined in accordance with the Simple Interest Method.
"Specified Credit Enhancement Amount" shall mean, with respect to any
Distribution Date, the greater of $17,000,070 or 5.00% of the Pool Balance at
the end of the Collection Period preceding such Distribution Date.
"Specified Overcollateralization Amount" shall mean, with respect to
any Distribution Date, the excess, if any, of (a) the Specified Credit
Enhancement Amount over (b) the Specified Reserve Balance, each with respect to
such Distribution Date.
"Specified Reserve Balance" shall mean (i) with respect to any
Distribution Date prior to the Reserve Account Determination Date, $34,000,140
and (ii) with respect to any Distribution Date on or after the Reserve Account
Determination Date, the greater of $8,500,035 or 2.00% of the Pool Balance at
the end of the Collection Period preceding such Distribution Date; provided,
however, that the Specified Reserve Balance may be reduced from time to time if
the Rating Agencies have delivered prior written notice to the Seller, the
Servicer, the Indenture Trustee and the Owner Trustee that such reduction will
not result in a reduction, withdrawal or qualification of each Rating Agency's
then current ratings of each Class of the Notes and the Certificates.
"Standard & Poor's" shall mean Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc.
"State" shall mean any state or commonwealth of the United State of
America, or the District of Columbia.
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"Successor Servicer" shall have the meaning specified in Section
3.7(e) of the Indenture.
"Supplemental Servicing Fee" shall mean, the fee payable to the
Servicer for certain services rendered during the respective Collection Period,
determined pursuant to and defined in Section 3.8 of the Sale and Servicing
Agreement.
"Third Priority Principal Distribution Amount" shall mean, with
respect to any Distribution Date, an amount not less than zero equal to the sum
of (i) the greater of (1) the aggregate outstanding principal amount of the
Class A-1 Notes as of the preceding Distribution Date (after giving effect to
any principal payments made on such Distribution Date) or the Closing Date, as
the case may be, and (2) the excess, if any, of (a) the sum of the aggregate
outstanding principal amount of the Notes and the Certificate Balance as of the
preceding Distribution Date (after giving effect to any principal payments made
on such Distribution Date) or the Closing Date, as the case may be, over (b)
the sum of (x) the Pool Balance at the end of the Collection Period preceding
such Distribution Date minus (y) the Specified Overcollateralization Amount
with respect to such Distribution Date, minus (ii) the sum of the First
Priority Principal Distribution Amount, if any, and the Second Priority
Principal Distribution Amount, if any, each with respect to such Distribution
Date; provided, however, that the Third Priority Principal Distribution Amount
shall not exceed the outstanding principal amount of all the Notes and the
Certificate Balance (after giving effect to any principal payments made on such
Distribution Date in respect of the First Priority Principal Distribution
Amount, if any, and the Second Priority Principal Distribution Amount, if any);
and provided, further, that the Third Priority Principal Distribution Amount on
the Final Scheduled Distribution Date shall not be less than the amount that is
necessary to reduce the Certificate Balance to zero.
"Total Required Payment" shall mean, with respect to any Distribution
Date, the sum of the Servicing Fee and all unpaid Servicing Fees from prior
Collection Periods, the Accrued Class A Note Interest, the First Priority
Principal Distribution Amount, the Accrued Class B Note Interest, the Second
Priority Principal
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Distribution Amount and the Accrued Certificate Interest; provided, however,
that following the occurrence and during the continuation of an Event of
Default which has resulted in an acceleration of the Notes or following an
Insolvency Event or a dissolution with respect to the Seller or the General
Partner, on any Distribution Date until the Distribution Date on which the
outstanding principal amount of all the Notes has been paid in full, the Total
Required Payment shall mean the sum of the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods, the Accrued Class A Note
Interest, the Accrued Class B Note Interest and the amount necessary to reduce
the outstanding principal amount of all the Notes to zero.
"Transfer" shall have the meaning specified in Section 3.3 of the
Trust Agreement.
"Treasury Regulations" shall mean regulations, including proposed or
temporary regulations, promulgated under the Code. References to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.
"Trust" shall mean Ford Credit Auto Owner Trust 1997-B, a Delaware
business trust established pursuant to the Trust Agreement.
"Trust Accounts" shall have the meaning specified in Section 4.7(a)
of the Sale and Servicing Agreement.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement
dated as of October 1, 1997, by and between the Seller, as depositor, and the
Owner Trustee.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, unless otherwise specifically provided.
"Trustee Officer" shall mean, with respect to the Indenture Trustee,
any officer within the Corporate Trust Office of the Indenture Trustee with
direct responsibility for the administration of the Indenture and the other
Basic Documents on behalf of the Indenture Trustee
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and also, with respect to a particular matter, any other officer to whom such
matter is referred because of such officer's knowledge of and familiarity with
the particular subject and, with respect to the Owner Trustee, any officer
within the Corporate Trust Office of the Owner Trustee with direct
responsibility for the administration of the Trust Agreement and the other
Basic Documents on behalf of the Owner Trustee.
"Trust Property" shall mean, collectively, (i) the Receivables; (ii)
with respect to Precomputed Receivables, monies due thereunder on or after the
Cutoff Date (including Payaheads) and, with respect to Simple Interest
Receivables, monies due or received thereunder on or after the Cutoff Date;
(iii) the security interests in the Financed Vehicles granted by Obligors
pursuant to the Receivables and any other interest of the Issuer in the
Financed Vehicles; (iv) rights to receive proceeds with respect to the
Receivables from claims on any physical damage, credit life, credit disability,
or other insurance policies covering Financed Vehicles or Obligors; (v) Dealer
Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii) the
Trust Accounts and the Certificate Distribution Account and all amounts,
securities, investments and other property deposited in or credited to any of
the foregoing and all proceeds thereof; (viii) all of the Seller's rights under
the Sale and Servicing Agreement; (ix) all of the Seller's rights under the
Purchase Agreement, including the right of the Seller to cause Ford Credit to
repurchase Receivables from the Seller; (x) payments and proceeds with respect
to the Receivables held by the Servicer; (xi) all property (including the right
to receive Liquidation Proceeds) securing a Receivable (other than a Receivable
repurchased by the Servicer or purchased by the Seller); (xii) rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cutoff Date; and (xiii) all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds,
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condemnation awards, rights to payment of any and every kind and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing.
"UCC" shall mean the Uniform Commercial Code as in effect in any
relevant jurisdiction.
"Void Transfer" shall have the meaning specified in Section 3.3 of
the Trust Agreement.
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