<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) January 21, 1999
FORD CREDIT AUTO OWNER TRUST Series 1999-A
(Ford Credit Auto Receivables Two L.P. - Originator)
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-63551 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 issuance by Ford Credit Auto Owner Trust 1999-A
(the "Trust") of Asset Backed Securities pursuant to the Prospectus dated
January 11, 1999 and the Prospectus Supplement dated January 13, 1999 filed with
the Securities and Exchange Commission pursuant to its Rule 424(b)(2), Ford
Credit Auto Receivables Two L.P. ("FCARTLP") is filing the exhibits listed below
to this Current Report on Form 8-K which are incorporated by reference herein.
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 January 1, 1999 between this Report.
the Trust and The Chase Manhattan
Bank (the "Indenture Trustee").
Exhibit 4.2 Conformed copy of the Amended and Filed with
Restated Trust Agreement dated as this Report.
of January 1, 1999 among FCARTLP,
The Bank of New York, as owner
trustee, and The Bank of New York
(Delaware), as Delaware trustee.
Exhibit 8.1 Opinion of Skadden, Arps, Slate, Filed with
Meagher & Flom LLP with respect to this Report.
certain federal income tax matters.
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Designation Description Method of
Filing
- ----------- ------------ --------------
<S> <C> <C>
Exhibit 8.2 Opinion of H.D. Smith, Secretary Filed with
and Corporate Counsel of Ford Motor this Report.
Credit Company ("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 H.D. Smith, Secretary
and Corporate 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.
January 1, 1999 among FCARTLP,
Ford Credit and the Trust.
Exhibit 99.2 Conformed copy of the Administration Filed with
Agreement dated as of January 1, 1999 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 January 1, 1999 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: January 28, 1999 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 January 1, 1999 between
the Trust and Indenture Trustee.
Exhibit 4.2 Conformed copy of the Amended and
Restated Trust Agreement dated as of
January 1, 1999 among FCARTLP and The
Bank of New York, as owner trustee,
and The Bank of New York (Delaware),
as Delaware trustee.
Exhibit 8.1 Opinion of Skadden, Arps, Slate,
Meagher & Flom LLP with respect to
certain federal income tax matters.
Exhibit 8.2 Opinion of H.D. Smith, Secretary
and Corporte Counsel of Ford Credit,
relating to certain Michhigan 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 H.D. Smith, Secretary and
Corporate 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 January 1, 1999
among FCARTLP, Ford Credit and the
Trust.
Exhibit 99.2 Conformed copy of the Administration
Agreement dated as of January 1, 1999
among Ford Credit, as administrator,
the Indenture Trustee and the Trust.
Exhibit 99.3 Conformed copy of the Purchase Agreement
dated as of January 1, 1999 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 1999-A,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of January 1, 1999
-------------------------------------------
<PAGE> 2
CROSS REFERENCE TABLE1
<TABLE>
<CAPTION>
TIA Indenture
Section Section
<S> <C>
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
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
</TABLE>
- -----------------------
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
<TABLE>
<S> <C> <C>
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..................... 8
SECTION 2.7 Persons Deemed Owners.......................................... 9
SECTION 2.8 Payment of Principal and Interest; Defaulted Interest.......... 9
SECTION 2.9 Cancellation................................................... 11
SECTION 2.10 Release of Collateral.......................................... 12
SECTION 2.11 Book-Entry Notes............................................... 12
SECTION 2.12 Notices to Clearing Agency..................................... 13
SECTION 2.13 Definitive Notes............................................... 14
SECTION 2.14 Authenticating Agents.......................................... 14
ARTICLE III COVENANTS..................... 16
SECTION 3.1 Payment of Principal and Interest.............................. 16
SECTION 3.2 Maintenance of Office or Agency................................ 16
SECTION 3.3 Money for Payments To Be Held in Trust......................... 16
SECTION 3.4 Existence...................................................... 19
SECTION 3.5 Protection of Indenture Trust Estate........................... 19
SECTION 3.6 Opinions as to Indenture Trust Estate.......................... 20
SECTION 3.7 Performance of Obligations; Servicing of Receivables........... 21
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............ 25
SECTION 3.11 Successor or Transferee........................................ 28
SECTION 3.12 No Other Business.............................................. 28
SECTION 3.13 No Borrowing................................................... 28
SECTION 3.14 Servicer's Obligations......................................... 28
SECTION 3.15 Guarantees, Loans, Advances and Other Liabilities.............. 28
SECTION 3.16 Capital Expenditures........................................... 29
SECTION 3.17 Further Instruments and Acts................................... 29
SECTION 3.18 Restricted Payments............................................ 29
SECTION 3.19 Notice of Events of Default.................................... 30
SECTION 3.20 Removal of Administrator....................................... 30
ARTICLE IV SATISFACTION AND DISCHARGE............... 30
SECTION 4.1 Satisfaction and Discharge of Indenture........................ 30
SECTION 4.2. Satisfaction, Discharge and Defeasance of Notes................ 32
SECTION 4.3. Application of Trust Money..................................... 33
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
</TABLE>
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<TABLE>
<S> <C> <C>
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..................... 45
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........................... 47
SECTION 5.9. Rights and Remedies Cumulative............................... 47
SECTION 5.10. Delay or Omission Not a Waiver............................... 47
SECTION 5.11. Control by Noteholders....................................... 47
SECTION 5.12. Waiver of Past Defaults...................................... 48
SECTION 5.13. Undertaking for Costs........................................ 49
SECTION 5.14. Waiver of Stay or Extension Laws............................. 49
SECTION 5.15. Action on Notes.............................................. 50
SECTION 5.16. Performance and Enforcement of Certain Obligations........... 50
ARTICLE VI THE INDENTURE TRUSTEE................ 52
SECTION 6.1. Duties of Indenture Trustee.................................. 52
SECTION 6.2. Rights of Indenture Trustee.................................. 53
SECTION 6.3. Individual Rights of Indenture Trustee....................... 55
SECTION 6.4. Indenture Trustee's Disclaimer............................... 55
SECTION 6.5. Notice of Defaults; Insolvency or Dissolution of
Depositor or General Partner................................. 55
SECTION 6.6. Reports by Indenture Trustee to Noteholders.................. 56
SECTION 6.7. Compensation and Indemnity................................... 56
SECTION 6.8. Replacement of Indenture Trustee............................. 57
SECTION 6.9. Successor Indenture Trustee by Merger........................ 59
SECTION 6.10. Appointment of Co-Indenture Trustee or Separate
Indenture Trustee............................................ 60
SECTION 6.11. Eligibility; Disqualification................................ 60
SECTION 6.12. Preferential Collection of Claims Against Issuer............. 63
ARTICLE VII NOTEHOLDERS' LISTS AND REPORTS............ 64
SECTION 7.1. Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders..................................... 64
SECTION 7.2. Preservation of Information; Communications to
Noteholders.................................................. 64
SECTION 7.3. Reports by Issuer............................................ 65
SECTION 7.4. Reports by Indenture Trustee................................. 65
ARTICLE VIII ACCOUNTS, DISBURSEMENTS AND RELEASES........ 67
SECTION 8.1. Collection of Money.......................................... 67
SECTION 8.2. Trust Accounts and Payahead Account.......................... 67
SECTION 8.3. General Provisions Regarding Accounts........................ 72
SECTION 8.4. Release of Indenture Trust Estate............................ 73
SECTION 8.5. Opinion of Counsel........................................... 74
ARTICLE IX SUPPLEMENTAL INDENTURES............... 75
SECTION 9.1. Supplemental Indentures Without Consent of
Noteholders.................................................. 75
SECTION 9.2. Supplemental Indentures with Consent of
Noteholders.................................................. 77
SECTION 9.3. Execution of Supplemental Indentures......................... 79
SECTION 9.4. Effect of Supplemental Indenture............................. 80
</TABLE>
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<TABLE>
<S> <C> <C>
SECTION 9.5. Conformity with Trust Indenture Act......................... 80
SECTION 9.6. Reference in Notes to Supplemental Indentures............... 80
ARTICLE X REDEMPTION OF NOTES................. 82
SECTION 10.1. Redemption.................................................. 82
SECTION 10.2. Form of Redemption Notice................................... 82
SECTION 10.3. Notes Payable on Redemption Date............................ 83
ARTICLE XI MISCELLANEOUS.................. 84
SECTION 11.1. Compliance Certificates and Opinions, etc................... 84
SECTION 11.2. Form of Documents Delivered to Indenture Trustee............ 86
SECTION 11.3. Acts of Noteholders......................................... 88
SECTION 11.4. Notices, etc., to Indenture Trustee, Issuer and Rating
Agencies.................................................... 88
SECTION 11.5. Notices to Noteholders; Waiver.............................. 89
SECTION 11.6. Alternate Payment and Notice Provisions..................... 90
SECTION 11.7. Conflict with Trust Indenture Act........................... 91
SECTION 11.8. Effect of Headings and Table of Contents.................... 91
SECTION 11.9. Successors and Assigns...................................... 91
SECTION 11.10. Separability................................................ 91
SECTION 11.11. Benefits of Indenture....................................... 91
SECTION 11.12. Legal Holidays.............................................. 92
SECTION 11.13. Governing Law............................................... 92
SECTION 11.14. Counterparts................................................ 92
SECTION 11.15. Recording of Indenture...................................... 92
SECTION 11.16. Trust Obligation............................................ 92
SECTION 11.17. No Petition................................................. 93
SECTION 11.18. Inspection.................................................. 93
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 A-5 NOTE].................................... A-5-1
EXHIBIT A-6 [FORM OF CLASS A-6 NOTE].................................... A-6-1
EXHIBIT A-7 [FORM OF CLASS B NOTE]...................................... A-7-1
EXHIBIT B [FORM OF NOTE DEPOSITORY AGREEMENT]......................... B-1
SCHEDULE A Schedule of Receivables..................................... SA-1
APPENDIX A Definitions and Usage....................................... AA-1
</TABLE>
<PAGE> 6
INDENTURE, dated as of January 1, 1999, (as from time to time amended,
supplemented or otherwise modified and in effect, this "Indenture") between FORD
CREDIT AUTO OWNER TRUST 1999-A, 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 5.010%
Asset Backed Notes (the "Class A-1 Notes"), Class A-2 5.089% Asset Backed Notes
(the "Class A-2 Notes"), Class A-3 5.31% Asset Backed Notes (the "Class A-3
Notes"), Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes"), Class A-5
5.38% Asset Backed Notes (the "Class A-5 Notes"), Class A-6 5.41% Asset Backed
Notes (the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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
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 rights under the Purchase 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
<PAGE> 7
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.
ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions and Usage. Except as otherwise specified herein
or as the context may other wise 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.
<PAGE> 8
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, the Class A-5 Notes, the Class A-6 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, Exhibit A-5, Exhibit A-6 and Exhibit A-
7, 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,
Exhibit A-5, Exhibit A-6 and Exhibit A-7 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.
(c) The Indenture Trustee shall, upon Issuer Order, authenticate and
deliver Class A-1 Notes for original issue in an aggregate principal amount of
$250,000,000, Class A-2 Notes for original issue in an aggregate principal
amount of $296,000,000, Class A-3 Notes for original issue in an aggregate
principal amount of $495,000,000, Class A-4 Notes for original issue in an
aggregate principal amount of $313,767,000, Class A-5 Notes for original issue
in an aggregate principal amount of $250,000,000, Class A-6 Notes for original
issue in an aggregate principal amount of $250,000,000 and Class B Notes for
original issue in an aggregate principal amount of $68,695,000. The aggregate
principal amount of Class A-1 Notes, Class A-2 Notes, Class A-3 Notes, Class A-4
Notes, Class A-5 Notes, Class A-6 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.
(e) No Note shall be entitled to any benefit under this Indenture
<PAGE> 9
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.
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 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) [Reserved]
<PAGE> 10
(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.
(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 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
<PAGE> 11
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 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, the Class A-5 Notes, the Class A-6 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, the Class A-5 Rate, the Class A-6 Rate and the Class B Rate,
respectively, as set forth in Exhibit A-1, Exhibit A-2, Exhibit A-3, Exhibit
A-4, Exhibit A-5, Exhibit A-6 and Exhibit A-7, 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
<PAGE> 12
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 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, Exhibit A-5, Exhibit A-6 and Exhibit
A-7 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.
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
<PAGE> 13
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 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 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 here-
under) 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
<PAGE> 14
Note Owners and/or Clearing Agency Participants 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. 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 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.
<PAGE> 15
(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.
<PAGE> 16
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 In denture 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 payments 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
<PAGE> 17
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
(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, how
ever, 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 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).
<PAGE> 18
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
<PAGE> 19
(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.
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 1999, 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, rerecording 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 In denture until April 30 in
the following calendar year.
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
<PAGE> 20
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 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 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
<PAGE> 21
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 In denture 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 otherwise dispose of any of the properties
or as sets 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 pay able 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
<PAGE> 22
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, an Officer's Certificate stating, as to the Authorized Officer signing
such Officer's Certificate, that:
(i) a review of the activities of the Issuer during such year
and of its performance under this Indenture has been made under such
Authorized Officer's supervision; and
(ii) to the best of such Authorized Officer's knowledge, based
on such review, the Issuer has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has
been a default in its compliance with any such condition or covenant,
specifying each such default known to such Authorized Officer and the
nature and status thereof.
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 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
<PAGE> 23
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 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).
<PAGE> 24
SECTION 3.11 Successor or Transferee. (a) Upon any consolidation or
merger of the Issuer in accordance with Section 3.10(a), the Person formed by
or surviving such consolidation or merger (if other than the Issuer) shall
succeed to, and be substituted for, and may exercise every right and power of,
the Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.
(b) Upon a conveyance or transfer of all 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 In denture 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 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
<PAGE> 25
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 distribution
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.
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 entire
indebtedness on such Notes not theretofore delivered to the Indenture
Trustee for cancellation when due to the applicable Final Scheduled
<PAGE> 26
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 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
<PAGE> 27
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;
(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.
<PAGE> 28
ARTICLE V
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-6 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 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 in correct 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
<PAGE> 29
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 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 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)
<PAGE> 30
default is made in the payment of any interest on any Note when the same be
comes 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 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 other wise:
(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
<PAGE> 31
Indenture Trustee and each predecessor Indenture Trustee, except as a
result of negligence or bad faith) and of the Noteholders allowed in
such Proceedings;
(ii) unless prohibited by applicable law and regulations, to vote
on behalf of the Noteholders in any election of a trustee, a standby
trustee or Person performing similar functions in any such Proceedings;
(iii) to collect and receive any monies or other property payable
or deliverable on any such claims and to 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
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):
<PAGE> 32
(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 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 (x)(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 and (y)
with respect to an Event of Default described in Section 5.1(iii), (A) the
Certificateholders of all outstanding Certificates consent thereto or (B) the
proceeds of such sale or liquidation are sufficient to pay in full the
principal of and accrued interest on the outstanding Notes and Certificates. In
determining such sufficiency or insufficiency with respect to clauses (x)(B),
(x)(C) and (y)(B) 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,
<PAGE> 33
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 A-5 Notes for amounts
due and unpaid on the Class A-5 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-5 Notes for principal, until the principal
amount of the outstanding Class A-5 Notes is reduced to zero;
(ix) ninth, to Noteholders of the Class A-6 Notes for amounts due
and unpaid on the Class A-6 Notes for principal, ratably, without
preference or priority of any kind, according to the amounts due and
payable on the Class A-6 Notes for principal, until the principal
amount of the outstanding Class A-6 Notes is reduced to zero;
(x) tenth, to Noteholders of the Class B Notes for amounts due
and unpaid on the Class B Notes in respect of interest, ratably, with-
out preference or priority of any kind, according to the amounts due
and payable on the Class B Notes for interest;
(xi) eleventh, 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
<PAGE> 34
(xii) twelfth, 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.
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,
<PAGE> 35
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 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 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:
<PAGE> 36
(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
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 than 10% of the
principal amount of the Notes Outstanding or (c) any suit
<PAGE> 37
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 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
<PAGE> 38
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.
<PAGE> 39
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
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 In-
denture 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.
<PAGE> 40
(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 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.
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
<PAGE> 41
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, 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
each 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.
<PAGE> 42
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
reason able 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,
indemnify 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 with out cause by so notifying the
Indenture Trustee and the Issuer and may appoint 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
<PAGE> 43
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. There-
upon, 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 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 Indenture Trustee may adopt the
certificate of authentication of any predecessor trustee, and deliver such
Notes so authenticated; and in case at that time any of the Notes shall not have
been authenticated, any successor to the Indenture Trustee may authenticate
such Notes either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee. 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
<PAGE> 44
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 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
(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
<PAGE> 45
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
Commission, 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
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.
<PAGE> 46
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.
(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
<PAGE> 47
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,
2000, the Indenture Trustee shall mail to each Noteholder as required by TIA
Section 313(c) a brief report dated as of 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.
<PAGE> 48
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 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, if any;
<PAGE> 49
(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, if any;
(vi) sixth, to the Certificate Interest Distribution Account, the
Accrued Class C Certificate Interest;
(vii) seventh, to the Certificate Interest Distribution Account,
the Accrued Class D Certificate Interest;
(viii) eighth, to the Reserve Account, the amount, if any,
required to reinstate the amount in the Reserve Account up to the
Specified Reserve Balance;
(ix) ninth, to the Principal Distribution Account, the Regular
Principal Distribution Amount, if any; and
(x) tenth, 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, (A) following the occurrence and during the
continuation of an Event of Default specified in Section 5.1(i) or (ii) of the
Indenture or an Insolvency Event with respect to the Issuer, in each case 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, (B) following the occurrence and
during the continuation of any other Event of Default, which has resulted in an
acceleration of the Notes, the Servicer shall instruct the Indenture Trustee to
transfer the funds on deposit in the Collection Account remaining after the
application of clauses (i), (ii), (iii) and (iv) above to the Principal
Distribution Account to the extent necessary to reduce the principal amount of
all the Notes to zero, and (C) in the case of an event described in clause (A)
or (B), 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
<PAGE> 50
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 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 A-5 Notes in reduction
of principal until the principal amount of the outstanding Class A-5
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-5 Notes in full, the amounts available shall be applied to the
payment of principal on the Class A-5 Notes on a pro rata basis;
(vi) sixth, to the Noteholders of the Class A-6 Notes in reduction
of principal until the principal amount of the outstanding Class A-6
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-6 Notes in full, the amounts available shall be applied to the
payment of principal on the Class A-6 Notes on a pro rata basis;
(vii) seventh, 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;
(viii) eighth, to the Certificate Principal Distribution Account,
in reduction of the Certificate Balance of the Class C Certificates,
until the Certificate Balance of the Class C Certificates has been
reduced to zero;
(ix) ninth, to the Certificate Principal Distribution Account, in
reduction of the Certificate Balance of the Class D
<PAGE> 51
Certificates, until the Certificate Balance of the Class D
Certificates has been reduced to zero; and
(x) tenth, 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 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 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
<PAGE> 52
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 accordance 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.
<PAGE> 53
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 supplemental 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
<PAGE> 54
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 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) modify or alter provisions of this Section 9.2;
(ii) 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 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);
(iii) reduce the percentage of the principal amount of the
<PAGE> 55
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;
(iv) modify or alter the provisions of the proviso to the
definition of the term "Outstanding";
(v) 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;
(vi) 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;
(vii) 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 for the mandatory redemption of the Notes contained
herein; or
(viii) 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
<PAGE> 56
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 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.
<PAGE> 57
ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1. Redemption. (a) The Class A 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 Aggregate 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 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 Notes and the Class B
Notes to be redeemed, whereupon all such Class A 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 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
<PAGE> 58
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.
<PAGE> 59
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.
(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
<PAGE> 60
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 impair 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 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
<PAGE> 61
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 reason able 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 consolidated 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 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
<PAGE> 62
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 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 1999-A, in care of The Bank of New York, 101
Barclay Street, Floor 12 East, New York, New York, 10256, Attention:
Asset-Backed Finance Unit, 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 IBCA, Inc., 1 State Street Plaza, New York, New
York 10004, 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 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
<PAGE> 63
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.
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.
<PAGE> 64
SECTION 11.13. Governing Law. This Indenture shall be construed in
accordance with the laws of the 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 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
<PAGE> 65
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.
<PAGE> 66
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 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
By: /s/ Cheryl L. Laser
----------------------
Name: Cheryl L. Laser
Title: Assistant 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> 67
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 $250,000,000
No. R-_ CUSIP NO. 34527RBS1
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-1 5.010% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $250,000,000 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 January 1, 1999 (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 July 1999 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
<PAGE> 68
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.
<PAGE> 69
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.]
<PAGE> 70
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
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: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 71
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-1 5.010% Asset Backed Notes (the "Class A-1 Notes")
which, together with the Issuer's Class A-2 5.089% Asset Backed Notes (the
"Class A-2 Notes"), Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes"),
Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes"), Class A-5 5.38%
Asset Backed Notes (the "Class A-5 Notes"), Class A-6 5.41% Asset Backed Notes
(the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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, the Class A-5 Notes, the Class A-6 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 February 16, 1999.
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.
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
<PAGE> 72
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.
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 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
<PAGE> 73
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 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
<PAGE> 74
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, The Bank of New York, 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 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.
<PAGE> 75
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.
<PAGE> 76
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 $296,000,000
No. R-_ CUSIP NO. 34527RBT9
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-2 5.089% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $296,000,000 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 dated as of January 1, 1999 (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 previous
<PAGE> 77
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.
<PAGE> 78
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.]
<PAGE> 79
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
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: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 80
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes")
which, together with the Issuer's Class A-1 5.010% Asset Backed Notes (the
"Class A-1 Notes"), Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes"),
Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes"), Class A-5 5.38%
Asset Backed Notes (the "Class A-5 Notes"), Class A-6 5.41% Asset Backed Notes
(the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes, and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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 are
senior in right of payment to the Class A-3 Notes, the Class A-4 Notes, the
Class A-5 Notes, the Class A-6 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 February 16, 1999.
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.
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
<PAGE> 81
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.
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 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
<PAGE> 82
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 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
<PAGE> 83
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, The Bank of New York, 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 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.
<PAGE> 84
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.
<PAGE> 85
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 $495,000,000
No. R-_ CUSIP NO. 34527RBU6
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-3 5.31% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $495,000,000 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 dated as of January 1, 1999 (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
<PAGE> 86
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.
<PAGE> 87
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.]
<PAGE> 88
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
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: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 89
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes")
which, together with the Issuer's Class A-1 5.010% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes"),
Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes"), Class A-5 5.38%
Asset Backed Notes (the "Class A-5 Notes"), Class A-6 5.41% Asset Backed Notes
(the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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, the
Class A-5 Notes, the Class A-6 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 February 16, 1999.
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.
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
<PAGE> 90
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.
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, the Class A 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.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations, 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 stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
<PAGE> 91
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 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.
<PAGE> 92
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, The Bank of New York, 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 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.
<PAGE> 93
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.
<PAGE> 94
EXHIBIT A-4
[FORM OF CLASS A-4 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 $313,767,000
No. R-_ CUSIP NO. 34527RBV4
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-4 5.31% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $313,767,000 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 January 1, 1999 (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 November 2001 Distribution Date (the "Class A-4 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
<PAGE> 95
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.
<PAGE> 96
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.]
<PAGE> 97
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
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: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 98
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes")
which, together with the Issuer's Class A-1 5.010% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes"),
Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes"), Class A-5 5.38%
Asset Backed Notes (the "Class A-5 Notes"), Class A-6 5.41% Asset Backed Notes
(the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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 A-5 Notes, the Class A-6 Notes and 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 February 16, 1999.
As described on the face hereof, the entire unpaid principal amount of
this Note shall be due and payable on the Class A-4 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-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
<PAGE> 99
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.
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 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.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations, 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 stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
<PAGE> 100
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 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.
<PAGE> 101
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, The Bank of New York, 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 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.
<PAGE> 102
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.
<PAGE> 103
EXHIBIT A-5
[FORM OF CLASS A-5 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 $250,000,000
No. R-_ CUSIP NO. 34527RBY8
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-5 5.38% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $250,000,000 by (ii) the aggregate amount,
if any, payable to Noteholders of Class A-5 Notes on such Distribution Date from
the Principal Distribution Account in respect of principal on the Class A-5
Notes pursuant to Section 3.1 of the Indenture dated as of January 1, 1999 (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 June 2002 Distribution Date (the "Class
A-5 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.
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
<PAGE> 104
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.]
<PAGE> 105
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
By:
------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-5 Notes designated above and referred to in the
within-mentioned Indenture.
Date: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 106
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class A-5 5.38% Asset Backed Notes (the "Class A-5 Notes")
which, together with the Issuer's Class A-1 5.010% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes"),
Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes"), Class A-4 5.31%
Asset Backed Notes (the "Class A-4 Notes"), Class A-6 5.41% Asset Backed Notes
(the "Class A-6 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, Class A-4 Notes and the Class A-5 Notes, the "Class
A Notes") and Class B 5.79% 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-5 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The Class
A-5 Notes are subordinated in right of payment to the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes and the Class A-4 Notes and are senior in right
of payment to the Class A-6 Notes and the Class B Notes, each as and to the
extent provided in the Indenture.
Principal of the Class A-5 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 February 16, 1999.
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-5 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 on the Class A-5 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
<PAGE> 107
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.
The Issuer shall pay interest on overdue installments of interest at
the Class A-5 Rate to the extent lawful.
As provided in the Indenture, the Class A 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.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations, 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 stock, unpaid capital
contribution or failure to
<PAGE> 108
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 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
<PAGE> 109
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, The Bank of New York, 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 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.
<PAGE> 110
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.
<PAGE> 111
EXHIBIT A-6
[FORM OF CLASS A-6 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 $250,000,000
No. R-_ CUSIP NO. 34527RBZ5
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS A-6 5.41% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [______________] 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 $250,000,000 by (ii) the aggregate amount,
if any, payable to Noteholders of Class A-6 Notes on such Distribution Date from
the Principal Distribution Account in respect of principal on the Class A-6
Notes pursuant to Section 3.1 of the Indenture dated as of January 1, 1999 (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 March 2003 Distribution Date (the "Class
A-6 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.
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
<PAGE> 112
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.]
<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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
By:
------------------
Authorized Officer
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class A-6 Notes designated above and referred to in the
within-mentioned Indenture.
Date: January 21, 1999
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-6 5.41% Asset Backed Notes (the "Class A-6 Notes")
which, together with the Issuer's Class A-1 5.010% Asset Backed Notes (the
"Class A-1 Notes"), Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes"),
Class A-3 5.31% Asset Backed Notes (the "Class A-3 Notes"), Class A-4 5.31%
Asset Backed Notes (the "Class A-4 Notes"), Class A-5 5.38% Asset Backed Notes
(the "Class A-5 Notes" and, together with the Class A-1 Notes, the Class A-2
Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 5.79% 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-6 Notes are and will be equally and ratably secured by the
collateral pledged as security therefor as provided in the Indenture. The Class
A-6 Notes are subordinated in right of payment to the Class A-1 Notes, the Class
A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class A-5 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-6 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 February 16, 1999.
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-6 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 on the Class A-6 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
<PAGE> 115
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.
The Issuer shall pay interest on overdue installments of interest at
the Class A-6 Rate to the extent lawful.
As provided in the Indenture, the Class A 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.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations, 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 stock, unpaid capital
contribution or failure to
<PAGE> 116
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 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
<PAGE> 117
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, The Bank of New York, 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 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.
<PAGE> 118
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.
<PAGE> 119
EXHIBIT A-7
[FORM OF CLASS B 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 $68,695,000
No. R-_ CUSIP NO. 34527RBW2
FORD CREDIT AUTO OWNER TRUST 1999-A
CLASS B 5.79% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-A, 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 [___________] 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 $68,695,000 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 January 1,
1999 (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 June 2003 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.
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
<PAGE> 120
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.]
<PAGE> 121
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: January 21, 1999
FORD CREDIT AUTO OWNER TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as Owner Trustee of
Ford Credit Auto Owner Trust 1999-A
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: January 21, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------
Authorized Officer
<PAGE> 122
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the Issuer,
designated as its Class B 5.79% 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 5.010% Asset Backed Notes (the "Class A-1 Notes"),
Class A-2 5.089% Asset Backed Notes (the "Class A-2 Notes"), Class A-3 5.31%
Asset Backed Notes (the "Class A-3 Notes"), Class A-4 5.31% Asset Backed Notes
(the "Class A-4 Notes"), Class A 5.38% Asset Backed Notes (the "Class A-5
Notes"), and Class A-6 5.41% Asset Backed Notes (the "Class A-6 Notes" and,
together with the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the
Class A-4 Notes and the Class A-5 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 February 16, 1999.
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 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
<PAGE> 123
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.
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 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.
The transfer of this Note is subject to the restrictions on transfer
specified on the face hereof and to the other limitations set forth in the
Indenture. Subject to the satisfaction of such restrictions and limitations, 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 stock, unpaid capital
contribution or failure to pay any installment or call owing to such entity.
<PAGE> 124
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 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.
<PAGE> 125
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, The Bank of New York, 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 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.
<PAGE> 126
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.
<PAGE> 127
EXHIBIT B
[FORM OF NOTE DEPOSITORY AGREEMENT]
<PAGE> 128
SCHEDULE A
Schedule of Receivables
[Provided to the Indenture Trustee at the Closing]
<PAGE> 129
APPENDIX A
Definitions and Usage
SEE TAB NO. 11
<PAGE> 1
EXHIBIT 4.2
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
TRUST AGREEMENT
among
FORD CREDIT AUTO RECEIVABLES TWO L.P.
as Depositor,
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
and
THE BANK OF NEW YORK,
as Owner Trustee
Dated as of January 1, 1999
- --------------------------------------------------------------------------------
<PAGE> 2
AMENDED AND RESTATED TRUST AGREEMENT, dated as of January 1, 1999 (as
from time to time amended, supplemented or otherwise modified and in effect,
this "Agreement"), among FORD CREDIT AUTO RECEIVABLES TWO L.P., a Delaware
limited partnership, as Depositor, having its principal executive office at The
American Road, Dear born, Michigan 48121; THE BANK OF NEW YORK (DELAWARE), a
Delaware banking corporation not in its individual capacity but solely as
Delaware trustee under this Agreement (the "Delaware Trustee"), having its
principal corporate trust office at White Clay Center, Route 273, Newark,
Delaware 19711; and THE BANK OF NEW YORK, a New York 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 101 Barclay Street, Floor 12E, New York, New York
10286 for the purpose of establishing the Ford Credit Auto Owner Trust. Each of
the Delaware Trustee and the Owner Trustee are referred to individually as a
"Co-Trustee" and collectively as the "Co-Trustees".
WHEREAS, the parties hereto intend to amend and restate that certain
Trust Agreement, dated as of January 1, 1999, among the Depositor, the Delaware
Trustee 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, the Delaware Trustee 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.
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust created hereby shall be known as "Ford
Credit Auto Owner Trust 1999-A", 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 on behalf of the Trust.
SECTION 2.2. Offices. The Delaware office of the Trust shall be in
care of the Delaware Trustee at the Corporate Trust Office or at such other
address in the State of Delaware as the Delaware Trustee may designate by
written notice to the Certificateholders and the Depositor. The New York 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 New York 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:
<PAGE> 3
(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;
(vi) to engage in those activities, including entering into
agreements, that are necessary, suit able 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. Appointment of Delaware Trustee. The Delaware Trustee is
appointed to serve as the trustee of the Trust in the State of Delaware for the
sole and limited purpose of satisfying the requirement of Section 3807 of the
Delaware Business Trust Statute that the Trust have at least one trustee with a
principal place of business in Delaware. It is understood and agreed by the
parties hereto and the Certificateholders that the Delaware Trustee shall have
none of the duties or liabilities of the Owner Trustee. The duties of the
Delaware Trustee shall be limited to (a) accepting legal process served on the
Trust in the State of Delaware and (b) the execution of any certificates
required to be filed with the Secretary of State of the State of Delaware which
the Delaware Trustee is required to execute pursuant to Section 3811 of the
Business Trust Statute, and the Delaware Trustee shall provide prompt notice to
the Owner Trustee of its performance of any such acts. The parties hereto and
the Certificateholders understand and agree that the Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and liabilities, of the Owner Trustee. The Delaware Trustee shall not
be liable for the acts or omissions of the Owner Trustee, the Depositor or the
Trust. To the extent that, at law or in equity, the Delaware Trustee has duties
(including fiduciary duties) and liabilities relating thereto to the Trust or to
the Certificateholders, it is hereby understood and agreed by
<PAGE> 4
the other parties hereto and the Certificateholders that such duties and
liabilities are replaced by the duties and liabilities of the Delaware Trustee
expressly set forth in this Trust Agreement. The Delaware Trustee shall owe no
fiduciary or other duties to the Trust or to the Depositor except as expressly
provided for herein.
SECTION 2.6. Capital Contribution of Owner Trust Estate. As of January
1,1999, the Depositor sold, assigned, transferred, conveyed and set over to
the Owner Trustee the sum of $1. The Owner Trustee hereby acknowledges receipt
intrust 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 or the Delaware Trustee, promptly reimburse the Owner Trustee or the
Delaware Trustee for any such expenses paid by the Owner Trustee or the Delaware
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 2.7. 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 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. Together with the Delaware Trustee, the Owner Trustee has filed the
Certificate of Trust with the Secretary of State.
SECTION 2.8. 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
<PAGE> 5
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 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 2.9. 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 2.10. Situs of Trust. The Trust shall be administered in the
State of New York. 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, the Delaware Trustee 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 principal office of the Trust shall be in care of the Delaware
Trustee in the State of Delaware. The Trust shall also have an office in care of
the Owner Trustee in the State of New York.
SECTION 2.11. 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 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, receiver ship, liquidation and other similar
laws and to general equitable principles.
<PAGE> 6
(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
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 2.12. 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 in come, 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 Certificate- holders of each Class of Certificates 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 Class C Certificate Interest or Accrued
Class D Certificate Interest, as applicable, for such Class for
<PAGE> 7
such month, (ii) the portion of the market discount on the Receivables
accrued during such month that is allocable to the excess, if any, of the
aggregate Initial Certificate Balance of such class of Certificates over
the initial aggregate issue price of such Class of Certificates and (iii)
any amount expected to be distributed to the Certificateholders of such
Class 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 of such Class (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.
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 Owner Trust Estate.
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 such
Certificateholder's Certificates 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
<PAGE> 8
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 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 Class C Certificates and the Class
D Certificates shall each be issued in one or more registered, definitive,
physical certificates, in the form set forth in Exhibit A and Exhibit B,
respectively, in denominations of at least $20,000 and in integral multiples of
$1,000 in excess thereof. No Certificate may be sold, transferred, as signed,
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 Class C Certificates, in an
aggregate principal balance equal to the Initial Certificate Balance of such
Class C Certificates, and the Class D Certificates, in an aggregate principal
balance equal to the Initial Certificate Balance of such Class D Certificates,
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 treasurer or any assistant
<PAGE> 9
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 or Exhibit B, as applicable,
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 Class C Certificate shall be permitted,
recognized or recorded unless the prospective transferee of such Class C
Certificate shall provide a letter in the form of Exhibit C hereof 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 Class C 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 that is subject to Section 4975
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. ss. 2510.3- 101 or otherwise under ERISA) or (E)
a person in vesting "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), an 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 C 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 clause (A), (B), (C) or (E)
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 C 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
<PAGE> 10
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 Class C
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 Class C
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) Each Class D Certificate shall bear a legend to the following
effect unless determined other wise by the Administrator (as certified to the
Owner Trustee in an Officer's Certificate) and the Owner Trustee consistent with
applicable law:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE
SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF,
BY PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST AND THE
DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHER WISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT
THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT F TO THE TRUST
AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST AGREEMENT,
WITH SUCH CHANGES THEREIN AS MAY BE APPROVED BY THE DEPOSITOR, (2) PURSUANT TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAIL ABLE), SUBJECT TO THE RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE
CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE TRUST AND THE INITIAL
PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE
501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO
ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO THE TRUST AGREEMENT OR
(B) THE RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE CERTIFICATE
REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST AND THE INITIAL
PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH
THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO
THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE
SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE
STATES OF THE UNITED STATES."
<PAGE> 11
As a condition to the registration of any Transfer of a Class D
Certificate, the prospective transferee of such a Class D Certificate shall be
required to represent in writing to the Owner Trustee, the Certificate
Registrar and the Initial Purchaser the following, unless determined otherwise
by the Administrator (as certified to the Owner Trustee in an Officer's
Certificate):
(i) It understands that no subsequent Transfer of the Class D
Certificates is permitted unless it causes its proposed transferee to
provide to the Trust, the Certificate Registrar and the Initial Purchaser a
letter substantially in the form of Exhibit D or Exhibit E hereof (with
such changes therein as may be approved by the Depositor), as applicable,
or such other written statement as the Depositor shall prescribe.
(ii) It is not, and each account (if any) for which it is
purchasing the Class D 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 that is subject to
Section 4975 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
otherwise under ERISA) or (E) a person investing "plan assets" of any such
plan (including without limitation, for purposes of this clause (E),
subject to any exceptions approved by the Depositor, an insurance company
general account, but excluding any entity registered under the Investment
Company Act of 1940, as amended).
(iii) It 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, regard less 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 described in clause (A), (B), (C) or (E) of this
paragraph (iii) has the authority to control all substantial decisions of
the trust or (E) a person not described in clauses (A) though (D) of this
paragraph (iii) whose ownership of the Class D 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 Trust
and the Depositor with an IRS Form 4224 (and such other certifications,
representations, or opinions of counsel as may be requested by the Trust
or the Depositor).
(iv) It understands that any purported Transfer of any Class D
Certificate (or any interest therein) in contravention of any of the
restrictions and conditions contained in this Section will be a Void
Transfer, and the purported transferee in a Void Transfer will not be
recognized by the Trust or any other person as a Certificateholder for any
purpose.
(d) By acceptance of any Class D Certificate, the Certificateholder
thereof specifically agrees with and
<PAGE> 12
represents to the Depositor, the Trust and the Certificate Registrar, that no
Transfer of such Class D Certificate shall be made unless the registration re-
quirements of the Securities Act and any applicable State securities laws are
complied with, or such Transfer is exempt from the registration requirements
under the Securities Act because the Transfer satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A under the
Securities Act ("Rule 144A"), to a transferee who the transferor reasonably
believes is a Qualified Institutional Buyer that is purchasing for its own
account or for the account of a Qualified Institutional Buyer and to whom
notice is given that such Transfer is being made in reliance upon Rule 144A
under the Securities Act and (x) the transferor executes and delivers to
the Trust and the Certificate Registrar, a Rule 144A transferor certificate
substantially in the form attached as Exhibit F and (y) the transferee
executes and delivers to the Trust and the Certificate Registrar an
investment letter substantially in the form attached as Exhibit D;
(ii) after the appropriate holding period, such Transfer is
pursuant to an exemption from registration under the Securities Act
provided by Rule 144 under the Securities Act and the transferee, if
requested by the Trust, the Certificate Registrar or the Initial Purchaser,
delivers an Opinion of Counsel in form and substance satisfactory to the
Trust and the Initial Purchaser; or
(iii) such Transfer is to an institutional accredited investor as
defined in rule 501(a)(1), (2), (3) or (7) of Regulation D promulgated
under the Securities Act in a transaction exempt from the registration
requirements of the Securities Act, such Transfer is in accordance with any
applicable securities laws of any State of the United States or any other
jurisdiction, and such investor executes and delivers to the Trust and the
Certificate Registrar an investment letter substantially in the form
attached as Exhibit E.
(e) The Depositor shall make available to the prospective transferor
and transferee of a Class D Certificate information requested to satisfy the
requirements of paragraph (d)(4) of Rule 144A (the "Rule 144A Information").
The Rule 144A Information shall include any or all of the following items
requested by the prospective transferee:
(i) the private placement memorandum, if any, relating to the
Class D Certificates, and any amendments or supplements thereto;
(ii) each statement delivered to Certificateholders pursuant to
Section 5.2(b) on each Distribution Date preceding such request; and
(iii) such other information as is reasonably available to the
Owner Trustee in order to comply with requests for information pursuant to
Rule 144A under the Securities Act.
None of the Depositor, the Certificate Registrar or the Owner Trustee
is under an obligation to register any Class D Certificate under the Securities
Act or any other securities law.
(f) Upon surrender for registration of Transfer
<PAGE> 13
of any Certificate at the office or agency maintained pursuant to Section 3.9
and upon compliance with any provisions of this Agreement relating to such
Transfer, the Owner Trustee shall execute, authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Certificates
in authorized denominations of a like Class and 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 Class and 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 cancel led 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 govern mental 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 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
Class, 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
<PAGE> 14
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 Aggregate 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 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,
regard less 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 New York, 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 The Bank of New York, 101 Barclay Street, Floor 12 East, New York,
New York 10286, Attention: Asset-Backed Finance Unit as its principal corpo-
rate 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 each
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 each 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
<PAGE> 15
Agent appointed by the 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 Re serve Account following the payment in full of the
aggregate principal amount of the Notes and the Aggregate 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.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificate holders with Respect to
Certain Matters. It is the intention of the Depositor and the Certificateholders
that the powers and duties of the Owner Trustee are ministerial and
non-ministerial; provided, however, that any non-ministerial action (including
the taking of any legal action) may only be taken by the Owner Trustee in
accordance with this Section 4.1. 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) Certificate- holders 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
with held 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 afore mentioned claims or lawsuits for collection by the Servicer of
the Receivables);
<PAGE> 16
(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 adversely 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.
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 Aggregate Certificate Balance. Except as expressly provided
herein, any written notice of
<PAGE> 17
the Certificateholders delivered pursuant to this Agreement shall be effective
if signed by Certificateholders of Certificates evidencing not less than a
majority of the Aggregate Certificate Balance at the time of the delivery of
such notice.
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 two segregated trust accounts, each
in the name of "The Bank of New York, 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 Interest Distribution Account" and the "Certificate Principal
Distribution Account," respectively (each of the Certificate Interest
Distribution Account and the Certificate Principal Distribution Account, a
"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 each
Certificate Distribution Account pursuant to the Sale and Servicing Agreement
shall be applied as provided in the Basic Documents. In the event that either
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 such 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). Each 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 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:
(i) withdraw the amounts deposited into the Certificate Interest
Distribution Account pursuant to Section 4.6(c) of the Sale and
Servicing Agreement on or prior to such Distribution Date and make or
cause to be made distributions and payments in the following order of
priority:
(1) first, to the Certificateholders of Class C
Certificates, an amount equal to the Accrued Class C Certificate
Interest, provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class C
Certificate Interest, the amounts available shall be applied to
the payment of such interest on the Class C Certificates on a pro
rata basis;
(2) second, to the Certificateholders of Class D Certifi-
cates, an amount equal to the Accrued Class D Certificate
Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class D
Certificate Interest, the amounts available shall be applied to
the
<PAGE> 18
payment of such interest on the Class D Certificates on a pro
rata basis; and
(3) third, to the Depositor, any funds remaining on deposit
in the Certificate Interest Distribution Account.
(ii) withdraw the amounts deposited into the Certificate
Principal Distribution Account pursuant to Section 4.6(c) and (d)
of the Sale and Servicing Agreement on or prior to such
Distribution Date and make or cause to be made distributions and
payments in the following order of priority:
(1) first, to the Certificateholders of the Class C
Certificates in reduction of the Certificate Balance of the Class
C Certificates, until the Certificate Balance of the Class C
Certificates has been reduced to zero; provided that if there are
not sufficient funds available to reduce the Certificate Balance
of the Class C Certificates to zero, the amounts available shall
be applied to the reduction of the Certificate Balance of the
Class C Certificates on a pro rata basis;
(2) second, to the Certificateholders of the Class D
Certificates in reduction of the Certificate Balance of the Class
D Certificates, until the Certificate Balance of the Class D
Certificates has been reduced to zero; provided that if there
are not sufficient funds available to reduce the Certificate Bal-
ance of the Class D Certificates to zero, the amounts available
shall be applied to the reduction of the Certificate Balance of
the Class D Certificates on pro rata basis; and
(3) third, to the Depositor, any funds remaining on deposit
in the Certificate Principal Distribution Account.
(b) On each Distribution Date, the Owner Trustee shall, or shall cause
the Certificate Paying Agent to, send to each Certificateholder as of the re-
lated 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 with holding tax is payable with
respect to a distribution (such as a distribution to a
<PAGE> 19
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 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 Certificate- holder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate (whether on the applicable 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
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.
<PAGE> 20
(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.
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority. The Owner Trustee is authorized and
directed to execute and deliver on behalf of the Trust 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 $250,000,000, (ii) Class A-2 Notes in the
aggregate principal amount of $296,000,000, (iii) Class A-3 Notes in the
aggregate principal amount of $495,000,000, (iv) Class A-4 Notes in the
aggregate principal amount of $313,767,000, (v) Class A-5 Notes in the aggregate
principal amount of $250,000,000, (vi) Class A-6 Notes in the aggregate
principle amount of $250,000,000 and (vii) Class B Notes in the aggregate
principal amount of $68,695,000. 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 directs 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. Subject to Section 4.1 hereof, 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 anything else to the contrary in this Agreement, 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 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 super vise 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
<PAGE> 21
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, 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
<PAGE> 22
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,
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. Neither the Depositor nor the Certificateholders shall
direct the Trustee to take any action that would violate the provisions of this
Section 6.5.
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.
ARTICLE VII
REGARDING THE OWNER TRUSTEE AND THE DELAWARE TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties. Each of the Owner
Trustee and the Delaware Trustee accept the trusts hereby created and each
agrees to perform its duties hereunder with respect to such trusts but only
upon the terms of this Agreement. Each Co-Trustee also agrees to disburse all
monies actually received by it constituting part of the Owner Trust Estate upon
the terms of this Agreement and the other Basic Documents to which each
Co-Trustee is a party. Each Co-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 either Co-Trustee. In particular, but not by way of limitation
(and subject to the exceptions set forth in the preceding sentence):
(a) the Co-Trustees shall not be liable for any error of judgment made
by a responsible officer of either of the Co-Trustees;
(b) the Co-Trustees shall not be liable with respect to any action
taken or omitted to be taken by them in accordance with the instructions of
any Certificateholder, the Indenture Trustee, the Depositor, the
Administrator or the Servicer;
<PAGE> 23
(c) no provision of this Agreement or any other Basic Document shall
require the Co-Trustees to expend or risk funds or otherwise incur any
financial liability in the performance of any of their rights or powers
hereunder or under any other Basic Document if the Co-Trustees shall have
reason able grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not reasonably assured or
provided to them;
(d) under no circumstances shall the Co-Trustees 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;
(e) the Co-Trustees 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 Co-Trustees
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 Co-Trustees 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 other wise and the Co-Trustees 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 Co-Trustees shall be under no obligation to exercise any of
the rights or powers vested in them 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 Co- Trustees security or indemnity
satisfactory to them against the costs, expenses and liabilities that may
be incurred by the Co-Trustees therein or thereby. The right of the
Co-Trustees to perform any discretionary act enumerated in this Agreement
or in any other Basic Document shall not be construed as a duty, and the
Co-Trustees shall not be answerable for other than the willful misconduct,
bad faith or negligence of either of them in the performance of any such
act.
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. (a) The Owner Trustee
hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
<PAGE> 24
(i) It is a banking corporation duly organized and validly existing in
good standing under the laws of the State of New York. It has all requisite
corporate power and authority to execute, deliver and perform its
obligations under this Agreement.
(ii) 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.
(iii) 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.
(b) The Delaware Trustee hereby represents and warrants to the
Depositor, for the benefit of the Certificateholders, that:
(i) 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.
(ii) 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.
(iii) 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 Delaware 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 Co-Trustees 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 Co-Trustees may accept a certified copy of a resolution of the
board of directors or other governing body of any corporate party as conclusive
evidence that such resolution has been duly adopted by such body and that the
same is in full force and effect. As to any fact or matter the method of the
determination of which is not specifically prescribed herein, the Co-Trustees
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
<PAGE> 25
Co-Trustees 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 Co-Trustees (i) may act directly or through its agents or
attorneys pursuant to agreements entered into with any of them, and the
Co-Trustees 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
Co-Trustees 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 Co-Trustees shall not be liable for anything done, suffered or omitted
in good faith by them 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 of New York
acts solely as Owner Trustee hereunder and The Bank of New York (Delaware) acts
solely as Delaware Trustee hereunder and not in their individual capacities, and
all Persons having any claim against the Co-Trustees 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 correctness thereof. The Co-Trustees make no representa-
tions 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, the Delaware Trustee, The Bank of New York
and The Bank of New York (Delaware) 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 or the Delaware Trustee.
SECTION 7.7. Co-Trustees May Own Certificates and Notes. The Bank of
New York and The Bank of New York (Delaware), in their individual or any other
capacities, may become the owner or pledgee of Certificates or Notes and may
<PAGE> 26
deal with the Depositor, the Servicer, the Administrator and the Indenture
Trustee in banking transactions with the same rights as they would have if
either of them were not the Owner Trustee or the Delaware Trustee.
ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses. The Co-Trustees shall
receive as compensation for their services hereunder such fees as have been
separately agreed upon before the date hereof between the Depositor and the
Co-Trustees, and the Co-Trustees shall be entitled to and reimbursed by the
Depositor for their other reasonable expenses hereunder, including the
reasonable compensation, expenses and disbursements of such agents,
representatives, experts and counsel as the Co- Trustees may employ in
connection with the exercise and performance of their 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 Co-Trustees, The Bank of New York and The
Bank of New York (Delaware) 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 Co-Trustees, The Bank of New York and The Bank of New York
(Delaware) 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 Co-Trustees 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 Co-Trustees' 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 Co-Trustees. Any amounts paid to the
Co-Trustees pursuant to this Article VIII shall be deemed not to be a part of
the Owner Trust Estate immediately after such payment.
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 wind up and dissolve, (i) upon
the maturity or
<PAGE> 27
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 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
<PAGE> 28
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 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) the Certificateholders (other than the Depositor) of each
Class of Certificates evidencing not less than a majority of the Certificate
Balance of such Class and a majority of the right to receive distributions in
respect of interest on the Certificate Balance of such Class (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 out standing 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, the Class A-5 Notes, the Class A-6 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 Admin-
istrator 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. 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,
<PAGE> 29
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 Certifi cates 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 Aggregate Certificate Balance plus accrued and
unpaid interest (including any overdue interest) thereon. The Servicer shall
furnish the Rating Agencies and the Owner Trustee notice of such prepayment. If
the Certificates are to be 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 Prepayment
Price, this Agreement and the Trust shall terminate.
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee and Delaware
Trustee. (a) The Owner Trustee shall at all times (i) be authorized to exercise
corporate trust powers; (ii) 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 (iii) 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
<PAGE> 30
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.
(b) The Delaware Trustee shall at all times (i) be a corporation
satisfying the provisions of Section 3807(a) of the Business Trust Statute.
SECTION 10.2. Resignation or Removal of Owner Trustee or the Delaware
Trustee. The Owner Trustee or the Delaware Trustee may at any time resign and be
discharged from the trusts hereby created by giving written notice thereof to
the Administrator. Upon receiving such notice of resignation, the Administrator
shall promptly appoint a successor Owner Trustee or Delaware Trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
resigning Owner Trustee or Delaware Trustee and one copy to the successor Owner
Trustee or Delaware Trustee. If no successor Owner Trustee or Delaware 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
or Delaware Trustee may petition any court of competent jurisdiction for the
appointment of a successor Owner Trustee or Delaware 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 or Delaware
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment.
If at any time the Owner Trustee or Delaware Trustee shall cease to be
eligible in accordance with the provisions of Section 10.1 or a Co-Trustee
resigns pursuant to Section 10.2 of this Agreement and the ineligible or
non-resigning Co-Trustee or either Co-Trustees shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee or Delaware Trustee shall be legally unable to act, or if at any time an
Insolvency Event with respect to the Owner Trustee or Delaware Trustee shall
have occurred and be continuing, then the Administrator may remove the Co-
Trustee that is insolvent or legally unable to act or may remove both
Co-Trustees. If the Administrator shall remove one or both of the Co-Trustees
under the authority of the immediately preceding sentence, the Administrator
shall promptly appoint a successor Co-Trustee or Co- Trustees, as applicable, by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Co-Trustee or Co-Trustees, as applicable, so removed
and one copy to the successor Co-Trustee or Co- Trustees, as applicable, and
shall pay all fees owed to the outgoing Co-Trustee or Co-Trustees, as
applicable.
Any resignation or removal of a Co-Trustee and appointment of a
successor Co-Trustee or Co-Trustees pursuant to any of the provisions of this
Section 10.2 shall not become effective until acceptance of appointment by the
successor Co-Trustee or Co-Trustees pursuant to Section 10.3, payment of all
fees and expenses owed to the outgoing Co-Trustee or Co-Trustees 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 Co-Trustee or Co-Trustees to the
Certificateholders, the Indenture Trustee, the Noteholders, any remaining
Co-Trustee and each
<PAGE> 31
of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee or Delaware Trustee. Any
successor Owner Trustee or Delaware Trustee appointed pursuant to Section 10.2
shall execute, acknowledge and deliver to the Administrator and to its
predecessor Owner Trustee or Delaware Trustee an instrument accepting such
appointment under this Agreement. Upon the resignation or removal of the
predecessor Owner Trustee or Delaware Trustee becoming effective pursuant to
Section 10.2, such successor Owner Trustee or Delaware 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 or Delaware Trustee. The
predecessor Owner Trustee or Delaware Trustee shall, upon payment of its fees
and expenses, deliver to the successor Owner Trustee or Delaware Trustee all
documents and statements and monies held by it under this Agreement, and the
Administrator and the predecessor Owner Trustee or Delaware Trustee shall
execute and deliver such instruments and do such other things as may reasonably
be required for fully and certainly vesting and confirming in the successor
Owner Trustee or Delaware Trustee all such rights, powers, duties, and
obligations.
No successor Owner Trustee or Delaware Trustee shall accept
appointment as provided in this Section 10.3 unless, at the time of such
acceptance, such successor Owner Trustee or Delaware Trustee shall be eligible
pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee or
Delaware Trustee pursuant to this Section 10.3, the Administrator shall mail
notice of the successor of such Owner Trustee or Delaware Trustee to all
Certificateholders, the Indenture Trustee, the Noteholders, any remaining
Co-Trustee 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 or Delaware Trustee, the successor Owner Trustee or Delaware
Trustee shall cause such notice to be mailed at the expense of the
Administrator.
Any successor Delaware Trustee appointed here under shall file the
amendments to the Certificate of Trust with the Secretary of State identifying
the name and principal place of business of such successor Delaware Trustee in
the State of Delaware.
SECTION 10.4. Merger or Consolidation of Owner Trustee or Delaware
Trustee. Any corporation into which the Owner Trustee or Delaware 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 or Delaware Trustee shall be a party, or any corporation succeeding to
all or substantially all of the corporate trust business of the Owner Trustee
or Delaware 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 or Delaware
Trustee here under; provided that such corporation shall be eligible pursuant to
Section 10.1; and provided further, that (i) the Owner Trustee or Delaware
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 and (ii) the
Delaware Trustee shall file an amendment to the Certificate of Trust as required
by Section 10.3.
<PAGE> 32
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 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.
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.
<PAGE> 33
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.
SECTION 10.6. Compliance with Business Trust Statute. Notwithstanding
anything herein to the contrary, the Trust shall at all times have at least one
trustee which meets the requirements of Section 3807(a) of the Business Trust
Statute.
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
Aggregate 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 Aggregate Certificate Balance
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
<PAGE> 34
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.
(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 account-
ing 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 Sections 2.7
and 11.1, 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
<PAGE> 35
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 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 unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 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 as signs, 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 covenants and agrees that
it 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 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,
<PAGE> 36
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.
SECTION 11.12. Sale and Servicing Agreement Obligations.
Notwithstanding any other provision of this Agreement, the Owner Trustee agrees
that it will comply with its obligations under Sections 3.1, 4.1 and 4.2 of the
Sale and Servicing Agreement.
<PAGE> 37
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
THE BANK OF NEW YORK(DELAWARE),
as Delaware Trustee
By: /s/ Cheryl L. Laser
--------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
THE BANK OF NEW YORK,
as Owner Trustee
By: /s/ Cheryl L. Laser
--------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
<PAGE> 38
EXHIBIT A
[FORM OF CLASS C CERTIFICATE]
NUMBER $39,254,000
R-______ CUSIP NO. 34527RBX0
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 1999-A
CLASS C 6.52% 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 Class C
Certificates of Ford Credit Auto Owner Trust 1999-A (the "Trust") formed by Ford
Credit Auto Receivables Two L.P., a Delaware limited partnership (the
"Depositor"). The Class C Certificates have an aggregate Initial Certificate
Balance of $39,254,000 and bear interest at a rate of 6.52% per annum (the
"Class C Rate").
<PAGE> 39
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of January 1, 1999 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), among
the Depositor, The Bank of New York (Delaware), not in its individual capacity
but solely as Delaware trustee (the "Delaware Trustee") and The Bank of New
York, 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 "Class C 6.52% Asset Backed Certificates" (herein called the "Class C
Certificates") which, together with the Certificates designated as "Class D
8.00% Asset Backed Certificates" (the "Class D Certificates" and, together with
the Class C Certificates, the "Certificates") are issued under and are 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. Also issued under
the Indenture, dated as of January 1, 1999 (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 5.010% Asset Backed
Notes", "Class A-2 5.089% Asset Backed Notes", "Class A-3 5.31% Asset Backed
Notes", "Class A-4 5.31% Asset Backed Notes", "Class A-5 5.38% Asset Backed
Notes", "Class A-6 5.41% Asset Backed Notes" and "Class B 5.79% Asset Backed
Notes" (collectively, the "Notes"). 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 January 1, 1999 (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 TRUST IN THE
FOREGOING PROPERTY OF THE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO
SECURE THE PAYMENT OF THE NOTES.
<PAGE> 40
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 February 16, 1999, 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 Class C
Certificateholders on such Distribution Date; provided, however, that principal
will be distributed to the Class C 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 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 New York, New York.
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.
<PAGE> 41
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.
<PAGE> 42
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Class C Certificate to be duly
executed.
FORD CREDIT AUTO OWNER
TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual
capacity but solely as
Owner Trustee
By:
----------------------------------
Authorized Officer
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the within-mentioned
Trust Agreement.
Dated: January 21, 1999
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By:
-----------------------------------
Authorized Officer
<PAGE> 43
[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 Class C
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 Aggregate 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 registrable in the
Certificate Register upon surrender of this Certificate for registration of
Transfer at the offices or agencies maintained by The Bank of New York
(Delaware) in its capacity as Certificate Registrar, or by any successor
Certificate Registrar, in New York, New York, accompanied by a writ ten
instrument 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 like
Class and 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.
<PAGE> 44
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 that is
subject to Section 4975 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. ss. 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), an 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 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 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.
<PAGE> 45
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.
<PAGE> 46
EXHIBIT B
[FORM OF CLASS D CERTIFICATE]
NUMBER $39,254,000
R-_______ Private Placement
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST AND THE
DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
TO A PERSON THAT THE HOLDER REASON ABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN ACCOUNT
OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH CASE, THAT
THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE
144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF
A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT F TO THE TRUST
AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A
LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT D TO THE TRUST AGREEMENT,
(2) PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE RECEIPT BY THE TRUST, THE INITIAL
PURCHASER AND THE CERTIFICATE REGISTRAR OF SUCH EVIDENCE ACCEPTABLE TO THE TRUST
AND THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, (3) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF
IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES ACT
PURSUANT TO ANY OTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE CERTIFICATE
REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT E TO THE
TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE
CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST AND THE
INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE
WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, OR
(4) TO THE DEPOSITOR, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES
LAWS OF THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE
UNITED STATES.
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 1999-A
CLASS D 8.00% 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
<PAGE> 47
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 Class D Certificates of Ford
Credit Auto Owner Trust 1999-A (the "Trust") formed by Ford Credit Auto
Receivables Two L.P., a Delaware limited partnership (the "Depositor"). The
Class D Certificates have an aggregate Initial Certificate Balance of
$39,254,000 and bear interest at a rate of 8.00% per annum (the "Class D Rate").
<PAGE> 48
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of January 1, 1999 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), among
the Depositor, The Bank of New York (Delaware), not in its individual capacity
but solely as Delaware trustee (the "Delaware Trustee") and The Bank of New
York, 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 "Class D 8.00% Asset Backed Certificates" (herein called the "Class D
Certificates") which, together with the Certificates designated as "Class C
6.52% Asset Backed Certificates" (the "Class C Certificates" and, together with
the Class D Certificates, the "Certificates") are issued under and are 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. Also issued under
the Indenture, dated as of January 1, 1999 (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 5.010% Asset
Backed Notes", "Class A-2 5.089% Asset Backed Notes", "Class A-3 5.31% Asset
Backed Notes", "Class A-4 5.31% Asset Backed Notes", "Class A-5 5.38% Asset
Backed Notes", "Class A-6 5.41% Asset Backed Notes" and "Class B 5.79% Asset
Backed Notes" (collectively, the "Notes"). 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 January 1, 1999 (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 TRUST IN THE FOREGOING
PROPERTY OF THE TRuST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE THE
PAYMENT OF THE NOTES.
<PAGE> 49
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 February 16, 1999, 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 Class D
Certificateholders on such Distribution Date; provided, however, that principal
will be distributed to the Class D Certificateholders on each Distribution Date
on (to the extent of funds remaining after all classes of the Notes and the
Class C Certificates have been paid in full) and after the date on which all
classes of the Notes and the Class C Certificates 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 OF THE NOTEHOLDERS AND THE CLASS C CERTIFICATEHOLDERS 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 partner ship 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 New York, New York.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which
<PAGE> 50
further provisions shall for all purposes have the same effect as if set
forth at this place.
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.
<PAGE> 51
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust and not
in its individual capacity, has caused this Class D Certificate to be duly
executed.
FORD CREDIT AUTO OWNER
TRUST 1999-A
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------
Authorized Officer
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Trust Agreement.
Dated: January 21, 1999
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By:
------------------------
Authorized Officer
<PAGE> 52
[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 Class C
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 Aggregate 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 registrable in the
Certificate Register upon surrender of this Certificate for registration of
Transfer at the offices or agencies maintained by The Bank of New York
(Delaware) in its capacity as Certificate Registrar, or by any successor
Certificate Registrar, in New York, New York, accompanied by a written
instrument 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 like
Class and 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.
<PAGE> 53
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 that is
subject to Section 4975 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. ss. 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), an 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 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 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.
<PAGE> 54
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.
<PAGE> 55
EXHIBIT C
[FORM OF INVESTMENT LETTER - CLASS C CERTIFICATES]
[Date]
Ford Credit Auto Owner Trust 1999-A,
as Issuer
The Bank of New York,
as Owner Trustee and
as Certificate Registrar
101 Barclay Street
New York, New York 10286
Ladies and Gentlemen:
In connection with our proposed purchase of the Class C 6.52% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1999-A
(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"), that is subject to
Section 4975 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. Sections 2510.3-101 or otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), an 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 of clause (A), (B), (C) or (E) 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.
<PAGE> 56
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.
<PAGE> 57
EXHIBIT D
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
QUALIFIED INSTITUTIONAL BUYER]
[Date]
Ford Credit Auto Owner Trust 1999-A
as Issuer
The Bank of New York
as Owner Trustee and
Certificate Registrar
101 Barclay Street
New York, New York 10286
Re: Ford Credit Auto Owner Trust 1999-A
Class D 8.00% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 8.00% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1999-A
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. The undersigned agrees to be bound by, and not to resell, transfer,
assign, participate, pledge or otherwise dispose of (any such act, a
"Transfer") the Certificates except in compliance with, the restrictions
and conditions set forth in the legend on the face of the Class D
Certificates and under the Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that no subsequent Transfer of the Certificates is
permitted unless we cause our proposed transferee to provide to the Issuer,
the Certificate Registrar and the Initial Purchaser a letter substantially
in the form of this letter or Exhibit E to the Trust Agreement, as
applicable, or such other written statement as the Depositor shall
prescribe.
3. We are a "qualified institutional buyer" (within the meaning of
Rule 144A under the Securities Act (a "QIB") and we are acquiring the
Certificates for our own account or for a single account (which is a QIB)
as to which we exercise sole investment discretion.
4. 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") that is subject to Section 4975 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 otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), an insurance company general
account, but excluding any
<PAGE> 58
entity registered under the Investment Company Act of 1940, as amended).
5. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is includible in gross income for United States tax
purposes, regardless of its source, (iv) a trust if a U.S. court is able to
exercise primary supervision over the administration of such trust and one
or more persons described in clauses (i) to (iii) above or clause (v) below
has the authority to control all substantial decisions of the trust or (v)
a person not described in clauses (i) to (iv) 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 a Form 4224 (and such other
certifications, representations, or opinions of counsel as may be requested
by the Issuer or the Depositor).
6. We understand that any purported Transfer of any Certificate (or
any interest therein) in contravention of the restrictions and conditions
above will be null and void (each, a "Void Transfer"), and the purported
transferee in a Void Transfer will not be recognized by the Issuer or any
other person as a Certificateholder for any purpose.
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 Certificates
<PAGE> 59
EXHIBIT E
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
Ford Credit Auto Owner Trust 1999-A
as Issuer
The Bank of New York
as Owner Trustee and
Certificate Registrar
101 Barclay Street
New York, New York 10286
Re: Ford Credit Auto Owner Trust 1999-A
Class D 8.00% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 8.00% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1999-A
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. The undersigned agrees to be bound by, and not to resell, transfer,
assign, participate, pledge or otherwise dispose of (any such act, a
"Transfer") the Certificates except in compliance with, the restrictions
and conditions set forth in the legend on the face of the Class D
Certificates and under the Securities Act of 1933, as amended (the
"Securities Act").
2. We understand that no subsequent Transfer of the Certificates is
permitted unless we cause our proposed transferee to provide to the Issuer,
the Certificate Registrar and the Initial Purchaser a letter substantially
in the form of this letter or Exhibit D to the Trust Agreement, as
applicable, or such other written statement as the Depositor shall
prescribe.
3. We are a "qualified institutional buyer" (within the meaning of
Rule 144A under the Securities Act (a "QIB") and we are acquiring the
Certificates for our own account or for a single account (which is a QIB)
as to which we exercise sole investment discretion.
4. 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") that is subject to Section 4975 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 otherwise under ERISA) or (E) a
person investing "plan assets" of any such plan (including
<PAGE> 60
without limitation, for purposes of this clause (E), an insurance company
general account, but excluding any entity registered under the Investment
Company Act of 1940, as amended).
5. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws of
the United States or any political subdivision thereof, (iii) an estate the
income of which is includible in gross income for United States tax
purposes, regard less of its source, (iv) a trust if a U.S. court is able
to exercise primary supervision over the administration of such trust and
one or more persons described in clauses (i) to (iii) above or clause (v)
below has the authority to control all substantial decisions of the trust
or (v) a person not described in clauses (i) to (iv) 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 a Form 4224 (and
such other certifications, representations, or opinions of counsel as may
be requested by the Issuer or the Depositor).
6. We understand that any purported Transfer of any Certificate (or
any interest therein) in contravention of the restrictions and conditions
above will be null and void (each, a "Void Transfer"), and the purported
transferee in a Void Transfer will not be recognized by the Issuer or any
other person as a Certificateholder for any purpose.
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 Certificates
<PAGE> 61
EXHIBIT F
FORM OF RULE 144A TRANSFEROR CERTIFICATE -
CLASS D CERTIFICATES
[Date]
The Bank of New York
as Owner Trustee and
Certificate Registrar
101 Barclay Street
New York, New York 10286
Re: Ford Credit Auto Owner Trust 1999-A
Class D 8.00% Asset Backed Certificates
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in denomination of
Class D 8.00% Asset Backed Certificates (the "Certificates") of Ford Credit Auto
Owner Trust 1999-A
(the "Issuer").
The undersigned is the holder of the Certificates and with this notice
hereby deposits with the Owner Trustee $ [*] in denomination of Certificates and
requests that Certificates of the same class in the same aggregate denomination
be issued, executed and authenticated and registered to the purchaser on , 199
[ ], as specified in the Trust Agreement dated as of January 1, 1999 relating to
the Certificates, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned (i)
reasonably believes the purchaser is a "qualified institutional buyer," as
defined in Rule 144A under the Securities Act of 1933 (the "Act"), (ii) such
purchaser has acquired the Certificates in a transaction effected in accordance
with the exemption from the registration requirements of the Act provided by
Rule 144A, (iii) if the purchaser has purchased the Certificates for
an account for which it is acting as fiduciary or agent, such account is a
qualified institutional buyer and (iv) the purchaser is acquiring Certificates
for its own account or for an institutional account for which it is acting as
fiduciary or agent.
Very truly yours,
[NAME OF HOLDER OF
CERTIFICATES]
By:
Name:
Title:
[*] authorized denomination
<PAGE> 62
EXHIBIT G
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
FORD CREDIT AUTO OWNER TRUST 1999-A
This Certificate of Trust of FORD CREDIT AUTO OWNER TRUST 1999-A (the
"Trust"), dated as of January 1, 1999, is being duly executed and filed by The
Bank of New York (Delaware), a Delaware banking corporation, as Delaware trustee
(the "Delaware Trustee") and The Bank of New York, a New York banking
corporation, as owner trustee (the "Owner Trustee"), to form a business trust
under the Delaware Business Trust Act (12 Delaware Code, Sections 3801 et seq.)
(the"Act").
1. Name. The name of the business trust formed hereby is FORD CREDIT
AUTO OWNER TRUST 1999-A.
2. Delaware Trustee. The name and business address of the trustee of
the Trust in the State of Delaware is The Bank of New York (Delaware), White
Clay Center, Route 273, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be effective upon
filing.
IN WITNESS WHEREOF, the undersigned, being the sole trustees of the
Trust, have executed this Certificate of Trust as of the date first above
written in accordance with Section 3811(a)(1) of the Act.
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Owner Trustee under a Trust
Agreement dated as of January 1,
1999
By:
-------------------------------
Name:
Title:
THE BANK OF NEW YORK (DELAWARE), not
in its individual capacity but
solely as Delaware Trustee under a
Trust Agreement dated as of January
1, 1999
By:
-------------------------------
Name:
Title:
<PAGE> 63
APPENDIX A
Definitions and Usage
SEE TAB NO. 11
<PAGE> 64
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS AND USAGE
ARTICLE II ORGANIZATION OF THE TRUST
SECTION 2.1. Name.......................................................2
SECTION 2.2. Offices....................................................2
SECTION 2.3. Purposes and Powers........................................2
SECTION 2.4. Appointment of Owner Trustee...............................3
SECTION 2.5. Appointment of Delaware Trustee............................3
SECTION 2.6. Capital Contribution of Owner Trust Estate.................4
SECTION 2.7. Declaration of Trust.......................................4
SECTION 2.8. Liability of the Depositor.................................5
SECTION 2.9. Title to Trust Property....................................5
SECTION 2.10. Situs of Trust.............................................5
SECTION 2.11. Representations and Warranties of the Depositor............5
SECTION 2.12. Federal Income Tax Matters.................................7
ARTICLE III TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership..............................10
SECTION 3.2. Capital Accounts..........................................10
SECTION 3.3. The Certificates..........................................11
SECTION 3.4. Authentication of Certificates............................11
SECTION 3.5. Registration of Certificates; Transfer
and Exchange of Certificates..............................12
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen Certificates.........19
SECTION 3.7. Persons Deemed Owners of Certificates.....................19
SECTION 3.8. Access to List of Certificateholders'
Names and Addresses...................................... 20
SECTION 3.9. Maintenance of Office or Agency...........................20
SECTION 3.10. Appointment of Certificate Paying Agent...................21
SECTION 3.11. Certain Rights of Depositor...............................22
ARTICLE IV ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with
Respect to Certain Matters................................22
SECTION 4.2. Action by Certificateholders with
Respect to Certain Matters................................23
SECTION 4.3. Action by Certificateholders with
Respect to Bankruptcy.....................................24
SECTION 4.4. Restrictions on Certificateholders' Power.................24
SECTION 4.5. Majority Control..........................................24
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate
Distribution Account......................................25
SECTION 5.2. Application of Trust Funds................................25
SECTION 5.3. Method of Payment.........................................28
SECTION 5.4. No Segregation of Monies; No Interest.....................28
SECTION 5.5. Accounting and Reports to Noteholders,
Certificateholders, Internal Revenue
Service and Others........................................29
SECTION 5.6. Signature on Returns; Tax Matters Partner.................29
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority.........................................30
SECTION 6.2. General Duties............................................30
SECTION 6.3. Action upon Instruction...................................31
<PAGE> 65
SECTION 6.4. No Duties Except as Specified in this
Agreement or in Instructions..............................32
SECTION 6.5. No Action Except Under Specified
Documents or Instructions.................................33
SECTION 6.6. Restrictions..............................................33
ARTICLE VII REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties...........................33
SECTION 7.2. Furnishing of Documents...................................35
SECTION 7.3. Representations and Warranties............................36
SECTION 7.4. Reliance; Advice of Counsel...............................37
SECTION 7.5. Not Acting in Individual Capacity.........................38
SECTION 7.6. Owner Trustee Not Liable for
Certificates or Receivables...............................38
SECTION 7.7. Co-Trustees May Own Certificates and Notes................39
ARTICLE VIII COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses.........................39
SECTION 8.2. Indemnification...........................................39
SECTION 8.3. Payments to Co-Trustees...................................40
ARTICLE IX TERMINATION
SECTION 9.1. Termination of Trust Agreement............................40
SECTION 9.2. Dissolution upon Insolvency or
Dissolution of Depositor or General Partner...............42
SECTION 9.3. Prepayment of Certificates................................44
ARTICLE X SUCCESSOR OWNER TRUSTEES AND ADDITIONAL
OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee................45
SECTION 10.2. Resignation or Removal of Owner Trustee
or the Delaware Trustee...................................46
SECTION 10.3. Successor Owner Trustee or Delaware Trustee...............47
SECTION 10.4. Merger or Consolidation of Owner Trustee
or Delaware Trustee.......................................48
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.............49
SECTION 10.6. Compliance with Business Trust Statute....................51
ARTICLE XI MISCELLANEOUS
SECTION 11.1. Supplements and Amendments................................51
SECTION 11.2. No Legal Title to Owner Trust Estate
in Certificateholders.....................................53
SECTION 11.3. Limitation on Rights of Others............................53
SECTION 11.4. Notices...................................................54
SECTION 11.5. Severability..............................................54
SECTION 11.6. Separate Counterparts.....................................54
SECTION 11.7. Successors and Assigns....................................55
SECTION 11.8. No Petition...............................................55
SECTION 11.9. No Recourse...............................................55
SECTION 11.10. Headings..................................................55
SECTION 11.11. Governing Law.............................................55
SECTION 11.12. Sale and Servicing Agreement Obligations..................56
<PAGE> 66
EXHIBIT A [FORM OF CLASS C CERTIFICATE]...........................A-1
EXHIBIT B [FORM OF CLASS D CERTIFICATE]...........................B-1
EXHIBIT C [FORM OF INVESTMENT LETTER -
CLASS C CERTIFICATES]...................................C-1
EXHIBIT D [FORM OF INVESTMENT LETTER -
CLASS D CERTIFICATES QUALIFIED
INSTITUTIONAL BUYER]....................................D-1
EXHIBIT E [FORM OF INVESTMENT LETTER -
CLASS D CERTIFICATES INSTITUTIONAL
ACCREDITED INVESTOR]....................................E-1
EXHIBIT F FORM OF RULE 144A TRANSFEROR
CERTIFICATE - CLASS D CERTIFICATES......................F-1
EXHIBIT G [FORM OF CERTIFICATE OF TRUST]..........................G-1
APPENDIX A Definitions and Usage..................................AA-1
<PAGE> 1
EXHIBIT 8.1
January 21, 1999
To the Addressees Indicated
on Schedule A hereto
Re: Ford Credit Auto Owner Trust
1999-A Asset Backed Notes
Ladies and Gentlemen:
You have requested our opinion as to certain federal income tax
consequences in connection with the issuance of the Class A-1 5.010% Asset
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.089% Asset Backed Notes
(the "Class A-2 Notes"), the Class A-3 5.31% Asset Backed Notes (the "Class A-3
Notes"), the Class A-4 5.31% Asset Backed Notes (the "Class A-4 Notes"), the
Class A-5 5.38% Asset Backed Notes (the "Class A-5 Notes"), the Class A-6 5.41%
Asset Backed Notes (the "Class A-6 Notes") and, together with the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, and the
Class A-5 Notes, the "Class A Notes"), the Class B 5.79% Asset Backed Notes (the
"Class B Notes" and, together with the Class A Notes, the "Notes"), the Class C
6.52% Asset Backed Certificates (the "Class C Certificates") and the Class D
8.00% Asset Backed Certificates (the "Class D Certificates" and, together with
the Class C Certificates, the "Certificates") by Ford Credit Auto Owner Trust
1999-A (the "Trust") pursuant to the terms of, (a) with respect to the Notes, an
Indenture dated as of January 1, 1999 (the "Indenture") between the Trust and
The Chase Manhattan Bank, as Indenture Trustee (the "Indenture Trustee"), and
(b) with respect to the Certificates, an Amended and Restated Trust Agreement
dated as of January 1, 1999 (the "Trust Agreement") between Ford Credit Auto
Receivables Two L.P. (the "Seller"), The Bank of New York, as Owner Trustee (the
"Owner Trustee") and The Bank of New York (Delaware), as Delaware Trustee (the
"Delaware Trustee"). 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 will be sold to the
underwriters (the "Note Underwriters") who are named in Schedule I pursuant to
an underwriting agreement (the "Note Underwriting Agreement") between the
Seller and Goldman, Sachs & Co. ("Goldman") and Chase Securities Inc. ("Chase
Securities"), as representatives of the several Note Underwriters. The Class
A-5 Notes and the Class A-6 Notes will be purchased directly from the Seller by
Ford Motor Credit Company ("Ford Credit"). The Class C Certificates will be sold
to Goldman and Chase Securities, as Class C Certificate underwriters (the
"Certificate Underwriters" and, together with the Note Underwriters, the
"Underwriters") pursuant to an underwriting agreement (the "Certificate
Underwriting Agreement") between the Seller, Goldman and Chase Securities. The
Class D Certificates will initially be retained by the Seller.1
The rights of the holders of the Class A Notes (the "Class A
Noteholders") will be senior to the rights of the holders of the Class B Notes
(the "Class B Noteholders" and, together with the Class A Noteholders, the
"Noteholders"). The rights of the Noteholders will be senior to the rights of
the holders of the Certificates (the "Certificateholders"). The rights of the
Class C Certificates (the "Class C Certificateholders") will be senior to the
rights of the holders of the Class D Certificates (the "Class D
Certificateholders"). Each payment period, the Seller will be entitled to
receive any remaining portion of funds on deposit in the Collection Account
after (i) the Total Required Payment has been made, (ii) the Reserve Account's
balance has been restored, if necessary, to the Specified Reserve Balance and
(iii) the Regular Principal Distribution Amount has been deposited into the
Principal Distribution Account. The Seller will at all times hold the right to
receive all such excess amounts.
You have asked us whether, for federal income tax purposes, the Class A
Notes and the Class B Notes will be characterized as debt and whether the Trust
will be classified as an association (or publicly traded partnership) taxable as
a corporation. In
<PAGE> 2
rendering our opinion, we have examined and relied upon the registration
statements for the Notes and the Class C Certificates on Form S-3, Registration
No. 333-40421, filed with the Securities and Exchange Commission (the "SEC") on
January 20, 1998 and Registration No. 333-63551, filed with the SEC on December
7, 1998 (collectively, the "Registration Statement"), including the prospectus
dated January 11, 1999 as supplemented by the prospectus supplement dated
January 13, 1999 included therein (the "Prospectus"), the Indenture, the Trust
Agreement, the Sale and Servicing 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 the parties to such documents will comply with the terms
thereof, that such documents are not amended and that such documents are
enforceable in accordance with their respective terms. In connection therewith,
we note that you will receive an opinion from this firm regarding such
enforceability.
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 certain
calculations performed by Goldman. In addition, our opinion is premised on the
accuracy of the facts set forth in the Prospectus and the facts set forth in the
representations referred to in the Prospectus.
In rendering our opinion, we have also considered and relied upon the
Internal Revenue Code of 1986, as amended (the "Code"), administrative rulings,
judicial decisions, Treasury Regulations, and such other authorities as we have
deemed appropriate. The statutory provisions, Treasury Regulations,
interpretations, and other authorities upon which our opinion is based are
subject to change, and such changes could apply 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.
I. Federal Income Tax Characterization of the Notes.
Whether the Class A Notes and the Class B Notes are debt or equity
interests in the Trust Property is determined both by the terms of the Notes and
by whether the "substantial incidents of ownership" of the Trust Property have
been transferred to the Noteholders. See, Watts Copy Systems, Inc. v.
Commissioner, 67 TCM 2480, 2483 (1994); Coulter Electronics, Inc. v.
Commissioner, 59 TCM 350 (1990), aff'd, 943 F.2d 1318 (11th Cir. 1991); United
Surgical Steel Co. v. Commissioner, 54 T.C. 1215 (1970), acq., 1971-2 C.B. 3;
Town & Country Food Co. v. Commissioner, 51 T.C. 1049 (1969), acq., 1969-2 C.B.
xxv; GCM 39567 (June 10, 1986); and GCM 39584 (December 3, 1986). Thus, the most
important considerations are: (i) whether the Noteholders bear the burdens of
ownership of the Trust Property, (ii) whether the Noteholders have any of the
benefits of ownership of the Trust Property, and (iii) whether the terms of the
Notes have features which are more characteristic of debt than of equity. As
discussed below, the Class A Noteholders do not obtain, and the Class B
Noteholders should not be viewed as obtaining, the benefits and burdens of
ownership of the Trust Property.
A. The Benefits and Burdens of the Trust Property are Retained by the
Seller.
1. Burdens of Ownership. The principal burden of ownership with
respect to the Trust Property is the risk of loss arising from shortfalls in the
payments on the Receivables. As described below, the transaction pursuant to
which the Notes are issued has been structured so that the risk of loss is borne
by the Seller and the holders of the Certificates.
Because a substantial portion of the Receivables bear rates of
interest below the sum of the highest note interest rate and the servicing fee
rate (the "Discount Rate"), in computing the principal amount of Class A Notes
and Class B Notes to be
<PAGE> 3
issued the scheduled payments on each such Receivable were discounted at such
rate. The total face amount of Notes and Certificates issued is equal to
approximately 102% of the initial sum of the resulting discounted principal
amounts and the principal amounts of the remaining Receivables (the "Adjusted
Pool Balance").2 The Class A Notes will initially be supported by the Class B
Notes and the Certificates which, together, have a face amount equal to 7.5% of
the initial Adjusted Pool Balance, and the principal of which will not be paid
until the Class A Notes are paid in full.3 The Class B Notes will be supported
by the Certificates having a face amount equal to 4.1% of the initial Adjusted
Pool Balance, the principal of which will not be paid until the Notes are paid
in full. The Notes (and the Certificates) will also be supported by the Reserve
Account, which may be drawn upon to make required payments of principal and
interest to Noteholders, and which will initially be funded by a portion of the
proceeds of the Notes and Certificates in the amount of $10,050,107.40, or 0.51%
of the initial Adjusted Pool Balance. Thus, the initial total credit enhancement
supporting the Class A Notes is equal to 8.01% of the initial Adjusted Pool
Balance, and the initial total credit enhancement supporting the Class B Notes
is equal to 4.51% of the initial Adjusted Pool Balance. However, as a result of
the Over-issuance, the amount of the initial credit enhancement supporting the
Notes must be reduced by 2%, which leaves 6.01% and 2.51% of the initial
Adjusted Pool Balance supporting the Class A Notes and the Class B Notes,
respectively. In addition, the Notes will have the benefit, on each payment
date, of the "spread" as is further discussed below.
On each Distribution Date, any shortfalls in amounts available to make
required payments of principal and interest to Noteholders will first be ab
sorbed by the portion of the monthly payments from the Receivables which are
attributable to the "spread" between the income from the Receivables (less
certain Trust expenses) and the weighted average rate on the Notes and the
Certificates (the "Spread"). The rights of the Class B Noteholders will be
subordinate to the rights of the Class A Noteholders (the rights of the holders
of each Class of Class A Notes are pari passu with the rights of the holders of
each other Class of Class A Notes). Any amounts remaining in the Collection
Account after giving effect to the payment of the Total Required Payment and
depositing amounts in the Reserve Account to the extent necessary to replenish
it to the Specified Reserve Balance will first be applied to retire the Class
A-1 Notes and the Class A-2 Notes in full. Thereafter, amounts remaining in the
Collection Account are to be deposited in the Principal Distribution Account on
each Distribution Date to the extent of the Regular Principal Distribution
Amount.
The "Yield Supplement Overcollateralization Amount" for each Receivable
for each Collection Period is the excess, if any, of the present value of the
scheduled payments due on such Receivable for each future Collection Period
discounted at the APR of the Receivable over the present value of such scheduled
payments discounted at 9.00%, assuming that future scheduled payments on the
Receivables are made on their scheduled due dates without any delays, defaults
or prepayments. The "Regular Principal Distribution Amount" generally will at
least equal the excess of the outstanding principal amount of securities of the
Trust over the sum of the Adjusted Pool Balance and 1% of the Pool Balance.4
Based on this formula, amounts otherwise distributable to the Seller will be
applied generally to establish and maintain a "cushion" of 1% (including the
Reserve Account) of the Pool Balance in addition to the credit enhancement of
(i) with respect to the Class A Notes, 5.5% of the initial Adjusted Pool Balance
(provided by the Class B Notes and the Certificates), and (ii) with respect to
the Class B Notes, 2% of the initial Adjusted Pool Balance (provided by the
Certificates). Moreover, because the Yield Supplement Overcollateralization
Amount for each Distribution Date, which is used to calculate the Adjusted Pool
Balance, is based on original payment schedules and is not reduced to take
account of prepayments (including prepayments of the Notes as a result of
defaults on the Receivables), a prepayment of a below-market rate loan will
result in a "turbo" of the Notes to the extent of that Receivable's Yield
Supplement Overcollateralization Amount. Based on calculations provided by
Goldman (calculated using the pricing prepayment assumption and historic loss
levels) the excess of the Adjusted Pool Balance over the outstanding amount of
the Class A Notes at the end of one year will have increased to 13.12% of the
then Adjusted Pool Balance and at the end of two years will have increased to
approximately 25.24% of the then Adjusted Pool Balance, while the
overcollateralization supporting the Class B
<PAGE> 4
Notes (i.e., the excess of the Adjusted Pool Balance over the outstanding amount
of the Class A Notes and the Class B Notes) at the end of one year will have
increased to 7.47% of the then Adjusted Pool Balance and at the end of two years
such overcollateralization will have increased to approximately 14.21% of the
then Adjusted Pool Balance.
While the Indenture permits interest to be paid on the Certificates
ahead of principal on the Class A Notes and the Class B Notes in some
circumstances, such right will be curtailed in any period in which the aggregate
outstanding principal balance of the Class A Notes is greater than the current
Pool Balance.
Based on the amounts of credit support and overcollateralization
described above, the Class A-1 Notes and the Class A-2 Notes will be given a
rating in the highest short-term rating category, the Class A-3 Notes, the Class
A-4 Notes, the Class A-5 Notes, and the Class A-6 Notes will be given a rating
in the highest long-term rating category and the Class B Notes will be given a
rating of "A" or their respective equivalents from at least two nationally
recognized rating agencies. These investment grade ratings indicate a very high
likelihood that all interest and principal will be timely paid with respect to
the Notes and that the Noteholders do not bear any significant risk of loss
associated with ownership of the Trust Property (although, obviously the risk of
loss with respect to the Class B Notes is greater than the risk associated with
the Class A Notes).
2. Benefits of Ownership. The primary benefits of ownership of the
Trust Property are the payments due from Obligors with respect to the
Receivables. If market interest rates for comparable receivables decrease in
relation to the yield on the Receivables, the Receivables will increase in
value. The Indenture, the Trust Agreement and the Sale and Servicing Agreement
together provide that the rate of return to the Noteholders is, for each of the
Classes of the Notes, a fixed rate set at the time of the pricing of the Notes
and the Seller receives the remaining proceeds from the Receivables (after
payment of fixed costs including interest on the Certificates). Thus the
economic return to a Noteholder is the result not of any change in the value of
the Receivables but rather reflects the rate of interest payable on a fixed rate
debt instrument.
As described above, the Seller retains an ownership interest in the
Trust Property in the form of the right to receive, on a periodic basis, amounts
not used to make payments on the Notes or Certificates and, upon payment in full
of the Notes and Certificates, any Receivables remaining in the Trust. According
to projections provided by Goldman, the net present value of such amount will
equal 2.4% of the initial Adjusted Pool Balance (discounted at a rate of 8%).
3. Default Rights. In the event that the Trust defaults in the
payment of any interest (other than a default in the payment of interest on the
Class B Notes prior to the time that all of the Class A Notes have been paid in
full) and such default is not remedied within five days, or the Trust defaults
in the payment of the full amount of the principal or any installment of the
principal of any Note when the same becomes due and payable, an Event of Default
will occur and either the Indenture Trustee or the holders of Notes representing
not less than a majority of the outstanding amount of the Notes may declare all
of the Notes, including interest accrued and unpaid, to be immediately due and
payable (however, if an Event of Default occurs, the Class B Noteholders will
not have any right to direct or to consent to any actions by the Indenture
Trustee until the Class A Notes have been paid in full). Upon such a
declaration, the Indenture Trustee could sell the Trust Property and the
proceeds therefrom would be applied to pay the Noteholders to the extent of the
outstanding amount and any accrued and unpaid interest, before making any
payments to Certificateholders.
B. Other Factors.
A number of other factors support the conclusion that the Class A Notes
are, in substance, debt and that the Class B Notes should also be considered
debt. The Notes are denominated as indebtedness and the Seller and the
Noteholders, by their purchase of the Notes, will agree to treat the Notes for
federal, state and local income and
<PAGE> 5
franchise tax purposes as indebtedness of the Trust. The terms of the
Receivables differ materially from the terms of the Notes with regard to their
respective interest rates. Moreover, Goldman has informed us that the
Receivables will have a weighted average life of 1.5 years (based on the pricing
prepayment assumption). On the other hand, the Notes, of which there will be
seven classes, will have weighted average lives of 0.17 years for the Class A-1
Notes, 0.48 years for the Class A-2 Notes, 1.00 years for the Class A-3 Notes,
1.64 years for the Class A-4 Notes, 2.18 years for the Class A-5 Notes, 2.84
years for the Class A-6 Notes, and 3.46 years for the Class B Notes (based on
the pricing prepayment assumption). The Trust will retain control and possession
of the Receivables. The Servicer is responsible for servicing, collection and
administration of the Receivables and will bear all costs and expenses incurred
in connection with such activities, although an amount to compensate the
Servicer for collection activity is permitted by the Sale and Servicing
Agreement to be periodically withdrawn by the Servicer from the assets otherwise
held by the Trust for the benefit of the Noteholders. The Indenture Trustee, on
behalf of the Noteholders, has the right to inspect the documentation with
respect to the Receivables that the Servicer will maintain on behalf of the
Trust, a right which is common in loan transactions. The foregoing additional
factors support the conclusion that the transaction described in the Indenture,
the Trust Agreement and the Sale and Servicing Agreement with respect to the
Notes constitutes an issuance of debt. Moreover, the substance of the
transaction is consistent with the characterization of the Notes as debt.
Based on and subject to the foregoing, although there are no
authorities involving closely comparable situations, in our opinion the Class A
Notes will be treated as indebtedness for federal income tax purposes.
The Class B Notes are subordinate to the Class A Notes, and are
supported, as described above, by less credit enhancement than the Class A
Notes. In addition, the rights of holders of Class B Notes as creditors are
limited while the Class A Notes are outstanding. For these reasons, the Class B
Notes could be viewed as bearing certain burdens of ownership of the
Receivables. However, despite the foregoing factors, the Class B Notes are rated
"A" or its equivalent by at least two nationally recognized rating agencies
evidencing a high degree of certainty that they will be repaid (and thus do not
bear any expected risk of losses with respect to the Receivables). In addition,
the Class B Notes do not receive any benefits of ownership of the Receivables.
Accordingly, while the issue is not free from doubt, in our opinion the Class B
Notes should be characterized as indebtedness for federal income tax purposes.
II. Federal Income Tax Characterization of the Trust.
The Certificates are denominated as equity interests in the Trust, and
the Seller and the Certificateholders, in purchasing the Certificates, agree to
treat the Trust as a partnership for federal income tax purposes, with the
partners being the Seller and the Certificateholders. The Seller will at all
times, possess the right to receive all of the Trust Property not used to pay
the Notes and Certificates.
Although, in some respects, the Trust is similar to trusts established
to hold collateral pledged as security in connection with lending transactions,
because the Trust will issue and distribute the Class C Certificates to third
parties, and no opinion of counsel is sought that such Certificates are debt,
the Trust must be viewed as an entity whose characterization will be determined
under Sections 7701 or 7704 and applicable Treasury Regulations promulgated
thereunder.5
Section 7704 of the Code provides that, subject to certain exceptions,
a partnership the interests in which are (i) traded on an established securities
market or (ii) readily tradable on a secondary market (or the substantial
equivalent thereof) will be treated as a corporation for federal income tax
purposes. Section 7704(c), however, excepts certain publicly traded partnerships
("PTPs") from treatment as a corporation for tax purposes if they have
sufficient passive-type income. Specifically, Section 7704(c) provides that a
PTP shall not be treated as a corporation for tax purposes if 90 percent or more
of its gross income consists of "qualifying income." Qualifying income is
defined by
<PAGE> 6
Section 7704(d) to include interest and any gain from the sale or disposition of
a capital asset. The Trust's sole source of income will derive from interest
paid with regard to and gain resulting from the disposition of the Receivables.
We note that Section 7704(d)(2) disqualifies from the category of
otherwise "qualifying income" interest that is derived in the conduct of a
"financial or insurance business." In our view, because the Indenture Trustee,
Owner Trustee and Servicer cannot manage the assets of the Trust in any ordinary
sense, and in particular, cannot sell the Receivables (except in the event of an
Event of Default or dissolution of the Trust) and cannot acquire additional
assets, the Trust should not be found to be carrying on a financial business.
However, the Service has not provided guidance as to what constitutes a
financial or insurance business and accordingly our conclusion is based on our
interpretation of the statutory language of Section 7704 and not on authorities
construing the statute. Accordingly, we believe that since the Trust should not
be found to be engaged in a financial business the interest received on the
Receivables will constitute qualifying income.
Accordingly, the Trust would qualify for the Section 7704(c) exception
to the PTP rules and would not be taxable as a corporation thereunder, assuming
that it otherwise would qualify as a partnership for federal income tax
purposes.
"Eligible entities" (i.e.,entities not explicitly classified as a
corporation under Treas. Reg. Section 301.7701-2(b)) with at least two members
are, by default, treated as partnerships for federal income taxation purposes.
Treas. Reg. Section 301.7701- 3(b). The Trust, which is a business trust formed
under the laws of the State of Delaware pursuant to the Trust Agreement, may not
be treated as a trust for federal income taxes because it may not be "simply an
arrangement to protect or conserve [the Trust Property] for beneficiaries".
Treas Reg. Section 301.7701-4(b). Therefore, because the Trust is not included
in the list of corporate entities described in Treas. Reg. Section
301.7701-2(b), it will be treated as a partnership for federal income tax
purposes under Treas. Reg. Section 301.7701-3(b), if it (i) is not a trust for
federal income tax purposes and (ii) is treated as having multiple owners. In
such a case, in our opinion the Trust will not be classified as an association
or a PTP taxable as a corporation for federal income tax purposes.
III. Federal Tax Matters in Prospectus
Based on and subject to the foregoing, it is our opinion that, under
present law, the discussions presented under the captions "SUMMARY -- Tax
Status" and "CERTAIN FEDERAL INCOME TAX CONSEQUENCES" in the Prospectus,
although general in nature, to the extent that they address matters of federal
income tax law or legal conclusions with respect thereto, are correct in all
material respects.
* * *
We express no opinion with respect to the matters addressed in this
opinion other than as set forth above, and this opinion is not to be used,
circulated, quoted or otherwise referred to for any other purpose without prior
written consent in each instance. We hereby consent to the filing of this
opinion as an exhibit to material filed in accordance with the Securities
Exchange Act of 1934, as amended, to be incorporated by reference in the
Registration Statement. We disclaim any obligation to update this opinion letter
for events occurring or coming to our attention after the date hereof.
Very truly yours,
Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE> 7
Schedule A
Ford Credit Auto Receivables Two L.P.
The American Road
Dearborn, Michigan 48121
Ford Credit Auto Owner Trust 1999-A
c/o The Bank of New York,
as Owner Trustee
101 Barclay Street
New York, New York 10286
The Chase Manhattan Bank,
as Indenture Trustee
Corporate Trust Administration
450 West 33rd Street, 15th floor
New York, New York 10001-2697
Goldman, Sachs & Co.
Chase Securities Inc.
as Representatives of the several Note Underwriters,
and as Certificate Underwriters
c/o Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Standard & Poor's Ratings Services
25 Broadway
New York, New York 10004
Moody's Investors Service, Inc.
99 Church Street
New York, New York 10007
Fitch IBCA, Inc.
One State Street Plaza
New York, New York 10004
<PAGE> 1
EXHIBIT 8.2
Ford Credit Auto Receivables Two L.P. January 21, 1999
The American Road
Dearborn, Michigan 48121
Re: Ford Credit Auto Owner Trust 1999-A
-----------------------------------
Ladies and Gentlemen:
I do hereby confirm that the statements set forth in the Prospectus
dated January 11, 1999, as supplemented by Prospectus Supplement dated
January 13, 1999 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/ Hurley D. Smith
<PAGE> 1
EXHIBIT 99.1
SALE AND SERVICING AGREEMENT, dated as of January 1, 1999 (as from time
to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), by and among FORD CREDIT AUTO OWNER TRUST 1999-A (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> 2
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 approximately 99.6% of
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 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
<PAGE> 3
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 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
acceleration under the terms of any Receivable shall have arisen; and Ford
Credit shall not waive any of the foregoing.
<PAGE> 4
(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.
(xvii) One Original. There shall be only one original executed copy of
each Receivable.
(xviii) New and Used Vehicles. Approximately 77.5% of the aggregate
Principal Balance of the Receivables, constituting 69.2% 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 5.4% of the Receivables constitute Precomputed
Receivables and 94.6% of the Receivables constitute Simple Interest Receivables.
(xx) Origination. Each Receivable shall have an origination date on or
after January 1, 1997.
(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 1.90%.
(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
<PAGE> 5
the case of Simple Interest Receivables, on or prior to January 31, 1999 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.
(xxvi) Rating Agencies. The rating agencies rating the Notes and the
Class C Certificates are Moody's, Standard & Poor's and Fitch and the rating
agencies rating the Class D Certificates are 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 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.
<PAGE> 6
(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 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.
<PAGE> 7
(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 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 by Certificateholders of Certificates evidencing not less than 25% of
the Aggregate 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.
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
<PAGE> 8
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 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
<PAGE> 9
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.
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 reperfect 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 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
<PAGE> 10
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 for each Class of
Certificates as of the close of business on the Distribution Date occurring in
that month.
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, 2000, 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
<PAGE> 11
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 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, 2000 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.
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.
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 1999-A", at a Qualified Institution or
<PAGE> 12
Qualified Trust Institution (which shall initially be the corporate trust
department of The Chase Manhattan Bank), which shall be designated as the
"Collection Account". Initially, the Collection Account shall be account number
C-28563 and shall include any successor or replacement accounts thereto. 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 (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 two segregated trust accounts, each in the name "The Bank of New York
as Owner Trustee" at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of The Bank of New
York), which shall be designated as the "Certificate Interest Distribution
Account" and the "Certificate Principal Distribution Account", respectively.
Each Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee. All monies deposited from time to time in each
Certificate Distribution Account pursuant to this Agreement and the Indenture
shall
<PAGE> 13
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 either Certificate
Distribution Account is no longer to be maintained at the corporate trust
department of The Bank of New York the Servicer shall, with the Owner Trustee's
assistance as necessary, cause such 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). Each Certificate Distribution Account
will be established and maintained pursuant to an account agreement which
specifies New York law as the governing law.
(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 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
<PAGE> 14
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 remittance 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 Aggregate
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 Purchased 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 Aggregate Certificate Balance or a Trustee Officer in
the Corporate
<PAGE> 15
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.
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 Advance 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
<PAGE> 16
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 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), (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 (iv) fourth, in an amount equal to the amount (if positive)
calculated by the Servicer pursuant to the fourth 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:
<PAGE> 17
(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 appli-
cable, 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 Class C
Certificate Interest, the Accrued Class D Certificate Interest and the Regular
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 either Class of Certificates, the Servicer shall calculate the
difference, if any, between (i) the amount required to pay such Class of Notes
or such Class of 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 the Reserve Account in the amount of such difference (if positive).
The Servicer also shall calculate, on or before each Determination Date, (i) the
sum of the Available Funds plus the amounts withdrawn from the Reserve Account
in accordance with the two immediately preceding sentences plus the amount
remaining on deposit in the Reserve Account after the withdrawal of such
amounts, and (ii) the amount required to pay the Servicing Fee and principal and
interest of each Class of Notes and Certificates in full in accordance with the
priorities set forth in Sections 4.6(c) and (d), and, if the amount determined
pursuant to clause (i) of this sentence is greater than the amount determined
pursuant to clause (ii) of this sentence, the Indenture Trustee, pursuant to
Section 4.5(b), shall withdraw funds from the Reserve Account in an amount which
is, together with Available Funds and the amounts withdrawn from the Reserve
Account in accordance with the two immediately preceding sentences, sufficient
to pay the amount specified in clause (ii) of this sentence.
(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
<PAGE> 18
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 Interest Distribution Account, the
Accrued Class C Certificate Interest;
(vii) seventh, to the Certificate Interest Distribution Account,
the Accrued Class D Certificate Interest.
(viii) eighth, to the Reserve Account, the amount, if any,
required to reinstate the amount in the Reserve Account up to the Specified
Reserve Balance;
(ix) ninth, to the Principal Distribution Account, the Regular
Principal Distribution Amount; and
(x) tenth, 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, (A) following the occurrence and during
the continuation of an Event of Default specified in Section 5.1(i) or (ii) of
the Indenture or an Insolvency Event with respect to the Issuer, in each case
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, (B) following the
occurrence and during the continuation of any other Event of Default, which has
resulted in an acceleration of the Notes, the Servicer shall instruct the
Indenture Trustee to
<PAGE> 19
transfer the funds on deposit in the Collection Account remaining after the
application of clauses (i), (ii), (iii) and (iv) above to the Principal
Distribution Account to the extent necessary to reduce the principal amount of
all the Notes to zero, and (C) in the case of an event described in clause (A)
or (B), 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 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 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 A-5 Notes in reduction
of principal until the principal amount of the outstanding Class A-5 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-5 Notes in
full, the amounts available shall be applied to the payment of principal on
the Class A-5 Notes on a pro rata basis;
(vi) sixth, to the Noteholders of the Class A-6 Notes in reduction
of principal until the principal amount of the outstanding Class A-6 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-6 Notes in
full, the amounts available shall be applied to the payment of principal
<PAGE> 20
on the Class A-6 Notes on a pro rata basis;
(vii) seventh, 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;
(viii) eighth, to the Certificate Principal Distribution Account,
in reduction of the Certificate Balance of the Class C Certificates, until
the Certificate Balance of the Class C Certificates has been reduced to
zero;
(ix) ninth, to the Certificate Principal Distribution Account, in
reduction of the Certificate Balance of the Class D Certificates, until the
Certificate Balance of the Class D Certificates has been reduced to zero;
and
(x) tenth, 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
1999-A" 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 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
<PAGE> 21
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.
(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 Aggregate 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
<PAGE> 22
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 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 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 Balance
of each Class of Certificates and the Certificate Pool Factor for each Class
of Certificates 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;
<PAGE> 23
(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.
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 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 here under, enforceable
against creditors of and purchasers from the Seller; and this Agreement and the
other Basic Documents to which the
<PAGE> 24
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 Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Seller of its obligations under, or the validity or
enforceability of, 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 Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of
<PAGE> 25
(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 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 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
<PAGE> 26
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, primafacie 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 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 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.
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.
<PAGE> 27
(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 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 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 Delaware 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,
<PAGE> 28
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, the Delaware 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 Delaware 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, the Delaware Trustee and the Indenture Trustee, 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, the Delaware Trustee or the
Indenture Trustee, as applicable; (ii) 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 (iii) 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
<PAGE> 29
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, the Delaware 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.
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 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.
<PAGE> 30
(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 par ties 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 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.
<PAGE> 31
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 writ
ten 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 Aggregate 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 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
<PAGE> 32
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 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 accept able 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
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
<PAGE> 33
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 Aggregate 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 Termination 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, either 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.
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
<PAGE> 34
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 Aggregate Certificate Balance and all accrued but unpaid interest
(including any over due 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.
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 Aggregate 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 the provisions of this Agreement,
or of modifying in any manner the rights of the Noteholders or the
<PAGE> 35
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 any 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
Certificate holders 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 Certificate holders provided
for in this Agreement) and of evidencing the authorization of the execution
thereof by Noteholders and Certificateholders shall be subject to such reason
able 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.
(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
<PAGE> 36
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 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 to obtain abstracts from the Servicer's records
regarding any Receivable.
(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.
<PAGE> 37
(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 re citing 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 (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 deter mined in
accordance with such laws.
SECTION 10.4. 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
here of, 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
<PAGE> 38
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 IBCA, Inc., at the following address: Fitch IBCA, Inc.,
1 State Street Plaza, New York, New York 10004, Attention: Asset Backed
Surveillance. 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 662/3% of the principal amount of
the Notes Outstanding and the Certificateholders of Certificates evidencing not
less than 662/3% of the Aggregate 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.
SECTION 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 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, the Indenture Trustee, the Delaware Trustee and the Owner
Trustee and their respective successors and permitted assigns and each of the
Indenture Trustee, the Delaware Trustee and the Owner Trustee may enforce the
provisions
<PAGE> 39
hereof as if they were parties thereto. 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 Hurley D. Smith,
Secretary, Ford Motor Credit Company, The American Road, Dearborn, Michigan
48121.
SECTION 10.12. No Bankruptcy Petition. The Owner Trustee, the Indenture
Trustee, the Issuer and the Servicer each covenants 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 The Bank of New York not in its individual
capacity but solely in its capacity as Owner Trustee of the Issuer and in no
event shall The Bank of New York 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
<PAGE> 40
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.
SECTION 10.14. [Reserved].
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.
<PAGE> 41
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/ Hurley D. Smith
--------------------------------
Name: Hurley D. Smith
Title: Secretary
FORD CREDIT AUTO OWNER TRUST
1999-A,
as Issuer
By: THE BANK OF NEW YORK
not in its individual
capacity but solely as
Owner Trustee
By: /s/ Cheryl L. Laser
--------------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice
President
FORD MOTOR CREDIT COMPANY,
as Servicer
By: /s/ R.P. Conrad
----------------------------------
Name: R.P. Conrad
Title: Assistant Secretary
<PAGE> 42
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
THE BANK OF NEW YORK
not in its individual capacity
but solely as Owner Trustee
By: /s/ Cheryl L. Laser
------------------------------
Name: Cheryl L. Laser
Title: Assistant Vice President
<PAGE> 43
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
<PAGE> 44
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
<PAGE> 45
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
<PAGE> 46
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
<PAGE> 47
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
<PAGE> 48
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/CL
Campbell Forum
Suite 650
801 E. Campbell Road
Richardson, TX 75081
Davenport
5405 Utica Ridge Road
Suite 200
Davenport, IA 52807
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
Des Moines
4200 Corporate Drive
Suite 107
W. Des Moines, IA 50266
<PAGE> 49
Detroit-North
1301 W. Longlake Road
Suite 150
Troy, MI 48098
Detroit-West
1655 Fairlane Circle
Suite 900
Allen Park, MI 48101
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
<PAGE> 50
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
<PAGE> 51
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
3150 U.S. Route 60 *
Ona, WV 25545
Indianapolis
5875 Castle Creek Pkwy.
North Drive
Suite 240
Indianapolis, IN 46250
Jackson
800 Avery Boulevard
Suite B
Ridgeland, MS 39157
Jacksonville
Suite 310
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
<PAGE> 52
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
One Jericho Plaza
2nd Floor Wing B
Jericho, NY 11753
Louisville
150 Executive Park
Louisville, KY 40207
Lubbock
4010 82nd Street
Suite 200
Lubbock, TX 79424
<PAGE> 53
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Manchester
4 Bedford Farms
Bedford, NH 03110
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
<PAGE> 54
New Haven
35 Thorpe Ave.
Wallingford, CT 06492
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
New Jersey-North
72 Eagle Rock Avenue
3rd Floor
East Hanover, NJ 07936
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
15 Smith Road
Suite 4300
Chevron Building
Midland, TX 79705
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
<PAGE> 55
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
<PAGE> 56
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, ME
2401 Congress Street
Portland, ME 04102
Portland, OR
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
<PAGE> 57
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
6120 Stoneridge Mall Rd.
Suite 200
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
<PAGE> 58
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
St. Paul
7760 France Avenue South
Suite 920
Bloomington, MN 55435
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
<PAGE> 59
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
Terre Haute
4551 S. Springhill
Junction Street
Terre Haute, IN 47802
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
<PAGE> 60
APPENDIX A
Definitions and Usage
SEE TAB NO. 11
<PAGE> 61
SALE AND SERVICING AGREEMENT
by and among
FORD CREDIT AUTO OWNER TRUST 1999-A,
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO L.P.,
as Seller
and
FORD MOTOR CREDIT COMPANY,
as Servicer
Dated as of January 1, 1999
<PAGE> 62
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
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...............................11
SECTION 3.1. Duties of Servicer...............................................................12
SECTION 3.2. Collection of Receivable Payments................................................12
SECTION 3.3. Realization Upon Receivables.....................................................12
SECTION 3.4. Reserved.........................................................................13
SECTION 3.5. Maintenance of Security Interests in Financed Vehicles...........................13
SECTION 3.6. Covenants of Servicer............................................................13
SECTION 3.7. Purchase of Receivables Upon Breach..............................................13
SECTION 3.8. Servicer Fee.....................................................................14
SECTION 3.9. Servicer's Certificate...........................................................14
SECTION 3.10. Annual Statement as to Compliance; Notice of Event of Servicing Termination......15
SECTION 3.11. Annual Independent Certified Public Accountant's Report..........................16
SECTION 3.12. Access to Certain Documentation and Information Regarding Receivables............16
SECTION 3.13. Servicer Expenses................................................................17
ARTICLE IV DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS..............17
SECTION 4.1. Accounts.........................................................................17
SECTION 4.2. Collections......................................................................21
SECTION 4.3. Application of Collections.......................................................22
SECTION 4.4. Advances.........................................................................22
SECTION 4.5. Additional Deposits..............................................................24
SECTION 4.6. Distributions....................................................................25
SECTION 4.7. Reserve Account..................................................................30
SECTION 4.8. Net Deposits.....................................................................32
SECTION 4.9. Statements to Noteholders and Certificateholders.................................33
ARTICLE V [Intentionally Omitted]........................................................................34
ARTICLE VI THE SELLER....................................................................................35
SECTION 6.1. Representations and Warranties of Seller.........................................35
SECTION 6.2. Liability of Seller; Indemnities.................................................37
SECTION 6.3. Merger or Consolidation of, or Assumption of the Obligations of, Seller..........38
SECTION 6.4. Limitation on Liability of Seller and Others.....................................39
SECTION 6.5. Seller May Own Notes or Certificates ............................................39
ARTICLE VII THE SERVICER.................................................................................40
SECTION 7.1. Representations of Servicer......................................................40
SECTION 7.2. Indemnities of Servicer..........................................................42
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations of, Servicer........44
SECTION 7.4. Limitation on Liability of Servicer and Others...................................45
</TABLE>
<PAGE> 63
<TABLE>
<S> <C>
SECTION 7.5. Delegation of Duties.............................................................45
SECTION 7.6. Ford Credit Not to Resign as Servicer............................................46
SECTION 7.7. Servicer May Own Notes or Certificates...........................................46
ARTICLE VIII SERVICING TERMINATION.......................................................................47
SECTION 8.1. Events of Servicing Termination..................................................47
SECTION 8.2. Appointment of Successor Servicer................................................49
SECTION 8.3. Repayment of Advances........... . . ............................................50
SECTION 8.4. Notification to Noteholders and Certificateholders...............................50
SECTION 8.5. Waiver of Past Events of Servicing Termination...................................50
ARTICLE IX TERMINATION...................................................................................51
SECTION 9.1. Optional Purchase of All Receivables ............................................51
SECTION 9.2. Succession Upon Satisfaction and Discharge of Indenture..........................51
ARTICLE X MISCELLANEOUS PROVISIONS.......................................................................52
SECTION 10.1. Amendment.......................................................................52
SECTION 10.2. Protection of Title to Trust....................................................54
SECTION 10.3. Governing Law...................................................................57
SECTION 10.4. Notices ........................................................................57
SECTION 10.5. Severability of Provisions......................................................58
SECTION 10.6. Assignment......................................................................58
SECTION 10.7. Further Assurances..............................................................58
SECTION 10.8. No Waiver; Cumulative Remedies..................................................59
SECTION 10.9. Third-Party Beneficiaries.......................................................59
SECTION 10.10. Actions by Noteholders or Certificateholders....................................59
SECTION 10.11. Agent for Service...............................................................60
SECTION 10.12. No Bankruptcy Petition..........................................................60
SECTION 10.13. Limitation of Liability of Owner Trustee and Indenture Trustee..................60
SECTION 10.14. [Reserved]......................................................................61
SECTION 10.15. Savings Clause..................................................................61
Schedule A [Schedule of Receivables].................................................... SA-1
Schedule B Location of Receivable Files. ................................................SB-1
Appendix A Definitions and Usage........................................................ AA-1
</TABLE>
<PAGE> 1
EXHIBIT 99.2
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, dated as of January 1, 1999 (as from
time to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), is by and among FORD CREDIT AUTO OWNER TRUST 1999-A, 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.
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, in the name and on behalf of the Issuer or the Owner Trustee, all
appropriate action that is the duty of the Issuer or the Owner Trustee to take,
if any, 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):
<PAGE> 2
(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 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));
<PAGE> 3
(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 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
<PAGE> 4
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 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 rendered 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);
<PAGE> 5
(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;
(D) indemnify the Owner Trustee and the Delaware Trustee and their
successors, assigns, directors, officers, employees, agents and
servants (collectively, the "Indemnified Parties") for, and hold them
harmless 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 Delaware Trustee or any other Indemnified Party
in any way relating to or arising out of the Trust Agreement, the Basic
Documents, the Owner Trust Estate, the administration of the Owner
Trust Estate or the action or inaction of the Owner Trustee under the
Trust Agreement, except only that the Administrator shall not be liable
for or required to indemnify an Indemnified Party from and against
Expenses arising or resulting from the Indemnified Party's own willful
misconduct, bad faith or negligence; and
(E) indemnify, defend and hold harmless the Issuer, the Owner
Trustee, the Delaware Trustee, the Indenture Trustee and any of their
respective officers, directors, employees and agents from and against
any loss, liability or expense incurred by reason of (i) the
Depositor's or the Issuer's violation of federal or state securities
laws in connection with the offering and sale of the Notes and the
Certificates or (ii) any breach of the Depositor of any term, provision
or covenant contained in the Sale and Servicing Agreement.
Indemnification under this Section shall survive the resignation or
removal of the Owner Trustee, the Delaware Trustee or the Indenture Trustee and
the termination of this Agreement and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Administrator shall have made any
indemnity payments pursuant to this Section and the Person to or on behalf of
whom such payments are made thereafter shall collect any such amount from
others, such Person shall promptly repay such amounts to the Administrator,
without interest.
(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,
<PAGE> 6
all such documents, reports, filings, instruments, certificates and opinions
that it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Related 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, 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 February 15, 1999 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 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 or
the Delaware 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
<PAGE> 7
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 Successor
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) shall be construed to
impose any liability as such on any of them
<PAGE> 8
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 substantial 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
<PAGE> 9
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
resignation 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 of follows:
(a) if to the Issuer or the Owner Trustee, to:
Ford Credit Auto Owner Trust 1999-A
c/o The Bank of New York
101 Barclay Street, Floor 12 East
New York, New York 10286
Attention: Asset-Backed Finance Unit
Telephone: (212) 815-
Facsimile: (212) 815-
(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
<PAGE> 10
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 accepted by the assignee, shall bind the assignee hereunder in
the same manner as the Administrator is bound hereunder. Notwithstanding the
foregoing, this Agreement may be assigned by the Administrator without the
consent of the Issuer or the Owner Trustee to a corporation or other
organization that is a successor (by merger, consolidation or purchase of
assets) to the Administrator; provided that such successor organization executes
and delivers to the Issuer, the Owner Trustee and the Indenture Trustee an
agreement in 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.
<PAGE> 11
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 signed on behalf of the Issuer by The Bank of New York not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event shall The Bank of New York 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 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 and the Delaware
Trustee are third-party beneficiaries to this Agreement and are entitled to the
rights and benefits hereunder and may enforce the provisions hereof as if they
were parties hereto.
21. Nonpetition Covenants. (a) Notwithstanding any prior termination
of this Agreement, the Seller, the Administrator, the Owner Trustee, the
Delaware 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 Trustee, the Delaware 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
<PAGE> 12
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.
<PAGE> 13
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 1999-A
By: THE BANK OF NEW YORK, not in
its individual capacity but
solely as Owner Trustee
By: /s/ Cheryl L. Laser
------------------------------------------
Name: Cheryl L. Laser
Title: Assistant 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> 14
APPENDIX A
Definitions and Usage
SEE TAB NO. 11
<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 the 1st day of
January 1999, 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 1999-A 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.
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
<PAGE> 2
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 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. As
detailed on Schedule B hereto, an amount equal to approximately
$1,452,335,970.87 (representing the net cash 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. In addition, $249,993,700 of the Receivables Purchase Price
will be paid by delivery to the Seller of $250,000,000 principal amount of Class
A-5 5.38% Asset Backed Notes and $249,996,195 of the Receivables Purchase Price
will be paid by delivery to the Seller of $250,000,000 principal amount of Class
A-6 5.41% Asset Backed Notes of Ford Credit Auto Owner Trust 1999-A. The
remaining portion of the Receivables Purchase Price ($107,946,151.60) 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 LLP, 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;
<PAGE> 3
(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; and (e) the Certificate Underwriting Agreement, pursuant
to which the Purchaser will sell to the Certificate Underwriters the Class C
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 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
<PAGE> 4
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 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 Dealer to the Seller, (b)
<PAGE> 5
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 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
<PAGE> 6
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 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
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.
<PAGE> 7
(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 77.5% of the
aggregate Principal Balance of the Receivables, constituting 69.2% 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 5.4% of the Receivables constitute
Precomputed Receivables and 94.6% of the Receivables constitute Simple
Interest Receivables.
(xx) Origination. Each Receivable shall have an
origination date on or after January 1, 1997.
(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 1.90%.
(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 January 31, 1999 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.
<PAGE> 8
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.
(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).
<PAGE> 9
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.
(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
<PAGE> 10
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 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 its duties under this Agreement or by reason of reckless disregard of the
Seller's obligations and duties under this Agreement.
<PAGE> 11
(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. The Seller agrees to treat this conveyance as (i) an
absolute transfer for tax purposes and (ii) a 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.
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 Agreement 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
<PAGE> 12
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) PricewaterhouseCoopers LLP 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) The Seller will cooperate with the Purchaser and
PricewaterhouseCoopers LLP 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) PricewaterhouseCoopers LLP 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 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
<PAGE> 13
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.
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.
<PAGE> 14
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/ Hurley D. Smith
---------------------------------
Name: Hurley D. Smith
Title: Secretary
<PAGE> 15
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated as
of January 1, 1999 (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 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.
<PAGE> 16
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 January 1, 1999.
FORD MOTOR CREDIT COMPANY
By:
----------------------------------
Name:
Title:
<PAGE> 17
EXHIBIT B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
<PAGE> 18
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
<PAGE> 19
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
<PAGE> 20
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
<PAGE> 21
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
<PAGE> 22
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/CL
Campbell Forum
Suite 650
801 E. Campbell Road
Richardson, TX 75081
Davenport
5405 Utica Ridge Road
Suite 200
Davenport, IA 52807
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
Des Moines
4200 Corporate Drive
Suite 107
W. Des Moines, IA 50266
<PAGE> 23
Detroit-North
1301 W. Longlake Road
Suite 150
Troy, MI 48098
Detroit-West
1655 Fairlane Circle
Suite 900
Allen Park, MI 48101
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
<PAGE> 24
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
<PAGE> 25
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
3150 U.S. Route 60 *
Ona, WV 25545
Indianapolis
5875 Castle Creek Pkwy.
North Drive
Suite 240
Indianapolis, IN 46250
Jackson
800 Avery Boulevard
Suite B
Ridgeland, MS 39157
Jacksonville
Suite 310
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
<PAGE> 26
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
One Jericho Plaza
2nd Floor Wing B
Jericho, NY 11753
Louisville
150 Executive Park
Louisville, KY 40207
Lubbock
4010 82nd Street
Suite 200
Lubbock, TX 79424
<PAGE> 27
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Manchester
4 Bedford Farms
Bedford, NH 03110
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
<PAGE> 28
New Haven
35 Thorpe Ave.
Wallingford, CT 06492
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
New Jersey-North
72 Eagle Rock Avenue
3rd Floor
East Hanover, NJ 07936
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
15 Smith Road
Suite 4300
Chevron Building
Midland, TX 79705
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
<PAGE> 29
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
<PAGE> 30
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, ME
2401 Congress Street
Portland, ME 04102
Portland, OR
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
<PAGE> 31
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
6120 Stoneridge Mall Rd.
Suite 200
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
<PAGE> 32
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
St. Paul
7760 France Avenue South
Suite 920
Bloomington, MN 55435
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
<PAGE> 33
Terre Haute
4551 S. Springhill
Junction Street
Terre Haute, IN 47802
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
<PAGE> 34
APPENDIX A
Definitions and Usage
SEE TAB NO. 11
<PAGE> 35
Schedule B Receivables Purchase Price
<TABLE>
<S> <C>
Total net cash proceeds of offering $ 1,450,132,988.19
of Notes and Certificates received
by Purchaser after funding Reserve
Account
plus Value of Class A-5 Notes $ 249,993,700.00
plus Value of Class A-6 Notes $ 249,996,195.00
Total value received by Purchaser $ 1,950,122,883.19
available for transfer to Ford
Credit as Seller1
Receivables Purchase Price $ 2,060,272,017.47
(equal to 102.5% of principal
amount of Receivables)
minus Total value received by $ 1,950,122,883.19
Purchaser available for transfer to
Ford Credit as Seller
Difference2 $ 110,149,134.28
-----------------
Total portion of Receivables $ 1,452,335,970.873
Purchase Price paid by the
Seller in cash4
plus Value of Class A-5 Notes $ 249,993,700.00
plus Value of Class A-6 Notes $ 249,996,195.00
plus Deemed Capital Contribution $ 107,946,151.60
from Ford Credit to Purchaser
$ 2,060,272,017.47
-----------------
</TABLE>
<PAGE> 1
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 instrument. 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."
(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
<PAGE> 2
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 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.
"Accrued Class C Certificate Interest" shall mean, with respect to any
Distribution Date, the sum of the Class C Certificateholders' Monthly Accrued
Interest for such Distribution Date and the Class C Certificateholders' Interest
Carryover Shortfall for such Distribution Date.
"Accrued Class D Certificate Interest" shall mean, with respect to any
Distribution Date, the sum of the Class D Certificateholders' Monthly Accrued
Interest for such Distribution Date and the Class D Certificateholders' Interest
Carryover Shortfall for such Distribution Date.
"Act" shall have the meaning specified in Section 11.3(a) of the
Indenture.
"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.
<PAGE> 3
"Administration Agreement" shall mean the Administration Agreement,
dated as of January 1, 1999, 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 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.
"Aggregate Certificate Balance" shall mean, as of any date of
determination, the sum of the Certificate Balance as of such date of the Class C
Certificates and the Certificate Balance as of such date of the Class D
Certificates.
"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
<PAGE> 4
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 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 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
<PAGE> 5
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 recoverable 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.
"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.
"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 Class A-4 Note" shall mean a beneficial interest in the
Class A-4 Notes, ownership and
<PAGE> 6
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-5 Note" shall mean a beneficial interest in the
Class A-5 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-6 Note" shall mean a beneficial interest in the
Class A-6 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 B Note" shall mean a beneficial interest in the Class
B 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, the Book-Entry Class A-3 Notes, the Book-Entry Class
A-4 Notes, the Book-Entry Class A-5 Notes, the Book-Entry Class A-6 Notes and
the Book-Entry Class B Notes, collectively.
"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 ss. 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.
"Certificates" shall mean the Class C Certificates and the Class D
Certificates, collectively.
"Certificate Balance" shall mean, with respect to each Class of
Certificates and as the context so requires, (i) with respect to all
Certificates of such Class, an amount equal to, initially, the Initial
Certificate Balance of such Class of Certificates and, thereafter, an amount
equal to the Initial Certificate Balance of such Class of Certificates, reduced
by all amounts distributed to
<PAGE> 7
Certificateholders of such Class of Certificates and allocable to principal or
(ii) with respect to any Certificate of such Class, 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 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 of the applicable Class, 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; provided, further that
at any time following an Event of Servicing Termination, in determining whether
the Certificateholders of the requisite portion or percentage of the Aggregate
Certificate Balance may terminate all the rights and obligations of the Servicer
or waive any Event of Servicing Termination to the extent set forth in Section
8.1 of the Sale and Servicing Agreement, the Class D Certificates shall be
disregarded and deemed to have a Certificate Balance of zero until the
Certificate Balance of the Class C Certificates has been reduced to zero.
Certificates so owned that have been pledged in good faith may be regarded as
included in the Certificate Balance of the applicable Class 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 each of the Certificate
Interest Distribution Account and the Certificate Principal Distribution
Account.
"Certificate Interest Distribution Account" shall mean the account
established and maintained as such pursuant to Section 4.1(c) of the Sale and
Servicing Agreement.
"Certificate Principal Distribution Account" shall mean the account
established and maintained as such pursuant
<PAGE> 8
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.
"Certificate Indemnification Agreement" shall mean each of the
Certificate Indemnification Agreements, each dated as of January 13, 1999,(i) by
and between Ford Credit and the Certificate Underwriters and (ii) by and between
Ford Credit and the Initial Purchaser.
"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 G 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, with respect to each Class of
Certificates as of the close of business on the last day of a Collection Period,
a seven-digit decimal figure equal to the Certificate Balance of such Class of
Certificates (after giving effect to any reductions therein to be made on the
immediately following Distribution Date) divided by the Initial Certificate
Balance of such Class of Certificates. Each Certificate Pool Factor will be
1.0000000 as of the Closing Date; thereafter, each Certificate Pool Factor will
decline to reflect reductions in the Certificate Balance of the applicable Class
of Certificates.
"Certificate Register" and "Certificate Registrar" shall have the
respective meanings specified in Section 3.5 of the Trust Agreement.
"Certificate Underwriters" shall mean Goldman, Sachs & Co. and Chase
Securities Inc., as underwriters of the Class C Certificates pursuant to the
Certificate Underwriting Agreement.
"Certificate Underwriting Agreement" shall mean the Certificate
Underwriting Agreement, dated as of January 13, 1999, between the Seller and the
Certificate Underwriters.
<PAGE> 9
"Class" shall mean (i) 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, the Class
A-5 Notes, the Class A-6 Notes or the Class B Notes or (ii) a class of
Certificates, which may be the Class C Certificates or the Class D Certificates.
"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, the Class A-4 Notes, the Class A-5 Notes and the Class A-6 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 July 1999
Distribution Date.
"Class A-1 Noteholder" shall mean the Person in whose name a Class A-1
Note is registered on the Note Register.
"Class A-1 Notes" shall mean the $250,000,000 aggregate initial
principal amount Class A-1 5.010% 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 5.010% 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"
<PAGE> 10
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 $296,000,000 aggregate initial
principal amount Class A-2 5.089% 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 5.089% per annum. Interest with respect to
the Class A-2 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-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 $495,000,000 aggregate initial
principal amount Class A-3 5.31% 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 5.31% per annum. Interest with respect to
the Class A-3 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-4 Final Scheduled Distribution Date" shall mean the November
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 Notes" shall mean the $313,767,000 aggregate initial
principal amount Class A-4 5.31% 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 5.31% 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 A-5 Final Scheduled Distribution Date" shall mean the June 2002
Distribution Date.
"Class A-5 Noteholder" shall mean the Person in
<PAGE> 11
whose name a Class A-5 Note is registered on the Note Register.
"Class A-5 Notes" shall mean the $250,000,000 aggregate initial
principal amount Class A-5 5.38% Asset Backed Notes issued by the Trust pursuant
to the Indenture, substantially in the form of Exhibit A-5 to the Indenture.
"Class A-5 Rate" shall mean 5.38% per annum. Interest with respect to the Class
A-5 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-6 Final Scheduled Distribution Date" shall mean the March 2003
Distribution Date.
"Class A-6 Noteholder" shall mean the Person in whose name a Class A-6
Note is registered on the Note Register.
"Class A-6 Notes" shall mean the $250,000,000 aggregate initial
principal amount Class A-6 5.41% Asset Backed Notes issued by the Trust pursuant
to the Indenture, substantially in the form of Exhibit A-6 to the Indenture.
"Class A-6 Rate" shall mean 5.41% per annum. Interest with respect to
the Class A-6 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 June 2003
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 preceding
Distribution Date, to the extent permitted by law, at the Class B 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 Rate on the outstanding
<PAGE> 12
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 $68,695,000 aggregate initial principal
amount Class B 5.79% Asset Backed Notes issued by the Trust pursuant to the
Indenture, substantially in the form of Exhibit A-6 to the Indenture.
"Class B Rate" shall mean 5.79% 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.
"Class C Certificateholder" shall mean the Person in whose name a Class
C Certificate is registered in the Certificate Register.
"Class C Certificateholders' Interest Carryover Shortfall" shall mean,
with respect to any Distribution Date, the excess of the sum of the Class C
Certificateholders' Monthly Accrued Interest for the preceding Distribution Date
and any outstanding Class C Certificateholders' Interest Carryover Shortfall
from the close of business on such preceding Distribution Date, over the amount
in respect of interest that is actually paid to Class C Certificateholders on
such preceding Distribution Date, plus thirty (30) days of interest on such
excess, to the extent permitted by law, at the Class C Rate.
"Class C 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 the Class C Rate on the
Certificate Balance of the Class C Certificates 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 of
the Class C Certificates made on or prior to such preceding Distribution Date.
"Class C Certificates" shall mean the $39,254,000 aggregate initial
principal balance Class C 6.52% Asset Backed Certificates evidencing the
beneficial interest of a Class C Certificateholder in the property of the Trust,
substantially in the form of Exhibit A to the Trust Agreement; 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 the Certificateholders
<PAGE> 13
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.
"Class C Final Scheduled Distribution Date" shall mean the August 2003
Distribution Date.
"Class C Rate" shall mean 6.52% per annum. Interest with respect to the
Class C 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.
"Class D Certificateholder" shall mean the Person in whose name a Class
D Certificate is registered in the Certificate Register.
"Class D Certificateholders' Interest Carryover Shortfall" shall mean,
with respect to any Distribution Date, the excess of the sum of the Class D
Certificateholders' Monthly Accrued Interest for the preceding Distribution Date
and any outstanding Class D Certificateholders' Interest Carryover Shortfall
from the close of business on such preceding Distribution Date, over the amount
in respect of interest that is actually paid to Class D Certificateholders on
such preceding Distribution Date, plus thirty (30) days of interest on such
excess, to the extent permitted by law, at the Class D Rate.
"Class D 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 the Class D Rate on the
Certificate Balance of the Class D Certificates 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 of
the Class D Certificates made on or prior to such preceding Distribution Date.
"Class D Certificates" shall mean the $39,254,000 aggregate initial
principal balance Class D 8.00% Asset Backed Certificates evidencing the
beneficial interest of a Class D Certificateholder in the property of the Trust,
substantially in the form of Exhibit B to the Trust Agreement; 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 the 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.
<PAGE> 14
"Class D Final Scheduled Distribution Date" shall mean the June 2004
Distribution Date.
"Class D Rate" shall mean 8.00% per annum. Interest with respect to the
Class D 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.
"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 January 21, 1999.
"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.
"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
<PAGE> 15
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 January 21, 1999, 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
101 Barclay Avenue, Floor 12 East, New York, New York 10286 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); (ii) with respect to the
Delaware Trustee, the principal corporate trust office of the Delaware Trustee
located at White Clay Center, Route 273, Newark, Delaware 19711 or at such other
address as the Delaware Trustee may designate from time to time by notice to the
Certificateholders and the Depositor, or the principal corporate trust office of
any successor Delaware Trustee (the address of which the successor Delaware
Trustee will notify the Certificateholders and the Depositor); and (iii) 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 principal corporate trust
office of any successor Indenture Trustee (the address of which the successor
Indenture Trustee will notify the Noteholders and the Issuer).
"Co-Trustees" shall mean, individually and collectively, the Owner
Trustee and the Delaware Trustee.
"Cutoff Date" shall mean January 1, 1999.
"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
<PAGE> 16
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.
"Delaware Trustee" shall mean The Bank of New York (Delaware), a
Delaware banking corporation, not in its individual capacity but solely as
Delaware Trustee under the Trust Agreement, or any successor Delaware Trustee
under the Trust Agreement.
"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.
"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 Maturity Date" shall mean May 31, 2004.
<PAGE> 17
"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
aggregate outstanding principal amount of the Class A Notes as of the preceding
Distribution Date (after giving effect to any principal payments made on the
Class A Notes on such preceding Distribution Date) over (b) the difference
between (1) the Pool Balance at the end of the Collection Period preceding such
Distribution Date minus (2) the Yield Supplement Overcollateralization Amount;
provided, however, that the First Priority Principal Distribution Amount shall
not exceed the sum of the aggregate outstanding principal amount of all of the
Notes and the Aggregate Certificate Balance of all of the Certificates on such
Distribution Date (prior to giving effect to any principal payments made on the
Securities on such Distribution Date); and provided, further, that (i) the First
Priority Principal Distribution Amount on and after 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 and after 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 and after the
Class A-3 Final Scheduled Distribution Date shall not be less than the amount
that is necessary to reduce the outstanding principal amount of the Class A-3
Notes to zero; (iv) the First Priority Principal Distribution Amount on and
after 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; (v) the First Priority Principal Distribution Amount on and
after the Class A-5 Final Scheduled Distribution Date shall not be less than the
amount that is necessary to reduce the outstanding principal amount of the Class
A-5 Notes to zero; and (vi) the First Priority Principal Distribution Amount on
and after the Class A-6 Final Scheduled Distribution Date shall not be less than
the amount that is necessary to reduce the outstanding principal amount of the
Class A-6 Notes to zero.
"Fitch" shall mean Fitch IBCA, Inc.
"Ford Credit" shall mean Ford Motor Credit Company, a Delaware
corporation.
<PAGE> 18
"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 January 1, 1999, by
and between the Trust and the Indenture Trustee.
"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,
<PAGE> 19
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, with respect to each Class of
Certificates and as the context so requires, (i) with respect to all
Certificates of such Class, $39,254,000 or (ii) with respect to any Certificate
of such Class, an amount equal to the initial denomination of such Certificate.
"Initial Pool Balance" shall mean 2,010,021,480.46.
"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 and the Class A-2 Notes, from and including
the Closing Date (in the case of the first Distribution Date) or from and
<PAGE> 20
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 and the Class A-2 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.
"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 ss. 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.
"Monthly Remittance Condition" shall have the
<PAGE> 21
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 January 21,
1999, 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 January 12, 1999, 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, the Class A-5 Rate, the Class A-6 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 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.
<PAGE> 22
"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 January 12, 1999 among the Seller, Goldman, Sachs & Co.
and Chase Securities Inc. 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, the Class A-5 Notes, the Class A-6 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 theretofore authenticated and delivered under the
Indenture except:
(a) Notes theretofore cancelled by the Note Registrar or
delivered to the Note Registrar for cancellation;
(b) 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 (provided, however, that if such Notes are to be redeemed, notice
of such redemption has been duly given pursuant to this
<PAGE> 23
Indenture or provision for such notice has been made, satisfactory to
the Indenture Trustee); and
(c) 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 requisite 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 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-6 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
<PAGE> 24
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 The Bank of New York, a New York 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.
"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
<PAGE> 25
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;
(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.
<PAGE> 26
"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 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 of the Class of Certificates to be prepaid plus accrued and unpaid
interest thereon at the applicable Certificate Rate plus interest on any overdue
interest at the applicable Certificate Rate (to the extent lawful) to but
excluding the Prepayment 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 method, (b)
<PAGE> 27
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.
"Private Placement Memorandum" shall have the meaning specified in the
Certificate Purchase 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
January 1, 1999, 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.
"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
<PAGE> 28
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 The Bank of New York, 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 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.
<PAGE> 29
"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-6 Notes and the 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 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.
"Regular Principal Distribution Amount" shall mean, with respect to any
Distribution Date, an amount not less than zero equal to the difference between
(i) the greater of (1) the aggregate outstanding principal amount of the Class
A-1 Notes and the Class A-2 Notes as of the preceding Distribution Date (after
giving effect to any principal payments made on the Class A-1 Notes and the
Class A-2 Notes on such preceding 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 all the Notes and the Aggregate Certificate
Balance of all of the Certificates as of the preceding Distribution Date (after
giving effect to any principal payments made on the Securities on such preceding
Distribution Date) or the Closing Date, as the case may be, over (b) the
difference between (x) the Pool Balance at the
<PAGE> 30
end of the Collection Period preceding such Distribution Date minus (y) the
Specified Overcollateralization Amount with respect to such Distribution Date
minus (z) the Yield Supplement 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 Regular Principal Distribution Amount shall not exceed the sum of the
aggregate outstanding principal amount of all of the Notes and the Aggregate
Certificate Balance of all of the Certificates on such Distribution Date (after
giving effect to any principal payments made on the Securities 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 (i) the Regular Principal Distribution Amount on or
after the Class C Final Scheduled Distribution Date shall not be less than the
amount that is necessary to reduce the Certificate Balance of the Class C
Certificates to zero; and (ii) the Regular Principal Distribution Amount on or
after the Class D Final Scheduled Distribution Date shall not be less than the
amount that is necessary to reduce the Certificate Balance of the Class D
Certificates to zero.
"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 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
<PAGE> 31
Specified Reserve Balance with respect to such Distribution Date.
"Reserve Initial Deposit" shall mean, with respect to the Closing Date,
$10,050,107.40.
"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 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 January 1, 1999, 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, disk or other means acceptable to the Trustee).
"Second Priority Principal Distribution Amount" shall mean, with
respect to any Distribution Date, an amount not less than zero equal to the
difference between (i) the excess, if any, of (a) the aggregate outstanding
principal amount of the Notes as of the preceding Distribution Date (after
giving effect to any principal payments made on the Notes on such preceding
Distribution Date) over (b) the difference between (1) the Pool Balance at the
end of the Collection Period preceding such Distribution Date and (2) the Yield
Supplement 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 sum of the aggregate outstanding principal amount of all the Notes and the
Aggregate Certificate Balance of all of the Certificates on such Distribution
Date (after giving effect to any principal payments made on the Securities on
such Distribution Date in
<PAGE> 32
respect of the First Priority Principal Distribution Amount, if any); and
provided, further that the Second Priority Principal Distribution Amount on or
after 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.
"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.
"Simple Interest Method" shall mean the method of
<PAGE> 33
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 greatest of (i) $10,050,107.40, (ii) 1.0% of the Pool
Balance at the end of the Collection Period preceding such Distribution Date or
(iii) the aggregate principal balance of the Receivables that are delinquent 91
days or more and are not Liquidated Receivables at the end of the Collection
Period preceding such Distribution Date; provided, however, that the Specified
Credit Enhancement Amount with respect to any Distribution Date shall not exceed
the sum of the aggregate outstanding principal amount of all the Notes and the
Aggregate Certificate Balance of all the Certificates as of the preceding
Distribution Date (after giving effect to any principal payments made on the
Securities on such preceding 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 $10,050,107.40; provided,
however, that the Specified Reserve Balance with respect to any Distribution
Date shall not exceed the sum of the aggregate outstanding principal amount of
all the Notes and the Aggregate Certificate Balance of all the Certificates as
of the preceding Distribution Date (after giving effect to any principal
payments made on the Securities on such preceding Distribution Date).
"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.
"Successor Servicer" shall have the meaning specified in Section 3.7(e)
of the Indenture.
<PAGE> 34
"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.
"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 Distribution Amount, the Accrued Class C Certificate Interest
and the Accrued Class D 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 1999-A, 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 January 1, 1999, by and among the Seller, as depositor, the Owner
Trustee and the Delaware Trustee.
"Trust Indenture Act" or "TIA" shall mean the Trust Indenture Act of
1939, as amended, unless otherwise specifically provided.
<PAGE> 35
"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 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, the Certificate Interest Distribution Account, the Certificate
Principal Distribution Account and all amounts, securities, investments,
investment property and other property deposited in or credited to any of the
foregoing, all security entitlements relating to 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, condemnation awards, rights to payment
<PAGE> 36
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.
"Yield Supplement Overcollateralization Amount" shall mean, with
respect to any Distribution Date, the amount specified on the Yield Supplement
Overcollateralization Schedule with respect to such Distribution Date.
"Yield Supplement Overcollateralization Schedule" shall mean the
following schedule:
Closing Date: $ 47,305,047.93
February 1999: $ 45,324,388.88
March 1999: $ 43,383,058.64
April 1999: $ 41,481,526.11
May 1999: $ 39,620,223.19
June 1999: $ 37,799,560.15
July 1999: $ 36,019,978.24
August 1999: $ 34,281,874.97
September 1999: $ 32,585,648.35
October 1999: $ 30,931,725.54
November 1999: $ 29,320,561.04
December 1999: $ 27,752,621.88
January 2000: $ 26,228,374.54
February 2000: $ 24,748,294.68
March 2000: $ 23,312,848.20
April 2000: $ 21,922,444.91
May 2000: $ 20,577,431.18
June 2000: $ 19,278,167.78
July 2000: $ 18,024,965.39
August 2000: $ 16,818,161.69
September 2000: $ 15,658,074.89
October 2000: $ 14,545,076.98
November 2000: $ 13,479,516.72
December 2000: $ 12,461,760.46
January 2001: $ 11,491,960.03
February 2001: $ 10,570,042.18
March 2001: $ 9,695,706.55
April 2001: $ 8,868.737.69
May 2001: $ 8,089,233.57
June 2001: $ 7,357,049.99
July 2001: $ 6,671,688.77
August 2001: $ 6,031,939.00
September 2001: $ 5,435,368.07
<PAGE> 37
October 2001: $ 4,879,070.26
November 2001: $ 4,360,678.11
December 2001: $ 3,878,135.33
January 2002: $ 3,430,891.51
February 2002: $ 3,018,473.05
March 2002: $ 2,640,086.01
April 2002: $ 2,294,849.23
May 2002: $ 1,981,426.91
June 2002: $ 1,698,192.55
July 2002: $ 1,443,912.25
August 2002: $ 1,217,028.00
September 2002: $ 1,015,367.51
October 2002: $ 836,724.52
November 2002: $ 679,045.84
December 2002: $ 540,565.85
January 2003: $ 420,476.55
February 2003: $ 317,798.63
March 2003: $ 231,457.94
April 2003: $ 160,514.06
May 2003: $ 104,279.33
June 2003: $ 61,776.68
July 2003: $ 31,857.50
August 2003: $ 13,165.81
September 2003: $ 3,448.77
October 2003: $ 33.85
November 2003: $ 1.43
