<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) September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
(Ford Credit Auto Receivables Two L.P. - Originator)
-------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-82895 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
1
<PAGE> 2
Item 5. Other Events
In connection with the issuance by Ford Credit Auto Owner Trust 1999-D
(the "Trust") of Asset Backed Securities pursuant to the Prospectus dated
September 17, 1999 and the Prospectus Supplement dated September 17, 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 September 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 September 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, Filed with
Meagher & Flom LLP (included as part this Report.
of Exhibit 8.1).
Exhibit 23.2 Consent of H.D. Smith, Secretary Filed with
and Corporate Counsel of Ford this Report.
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.
September 1, 1999 among FCARTLP,
Ford Credit and the Trust.
Exhibit 99.2 Conformed copy of the Administration Filed with
Agreement dated as of September 1, this Report.
1999 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 September 1, this Report.
1999 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: October 5, 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 September 1, 1999 between
the Trust and Indenture Trustee.
Exhibit 4.2 Conformed copy of the Amended and
Restated Trust Agreement dated as of
September 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 Corporate Counsel of Ford Credit,
relating to certain Michigan tax
matters.
Exhibit 23.1 Consent of Skadden, Arps, Slate,
Meagher & Flom LLP (included as part
of Exhibit 8.1).
Exhibit 23.2 Consent of 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 September 1, 1999
among FCARTLP, Ford Credit and the
Trust.
Exhibit 99.2 Conformed copy of the Administration
Agreement dated as of September 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 September 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-D,
as Issuer
and
THE CHASE MANHATTAN BANK,
as Indenture Trustee
Dated as of September 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>
<CAPTION>
Page
----
ARTICLE I
<S> <C> <C>
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............................................................15
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
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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...............................................................23
SECTION 3.9 Annual Statement as to Compliance................................................24
SECTION 3.10 Issuer May Consolidate, etc., Only
on Certain Terms.................................................................25
SECTION 3.11 Successor or Transferee..........................................................27
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......................................................29
SECTION 3.20 Removal of Administrator.........................................................29
ARTICLE IV
SATISFACTION AND DISCHARGE.............................................30
SECTION 4.1 Satisfaction and Discharge of
Indenture........................................................................30
SECTION 4.2 Satisfaction, Discharge and
Defeasance of Notes..............................................................31
SECTION 4.3 Application of Trust Money.......................................................33
SECTION 4.4 Repayment of Monies Held by Note
Paying Agent.....................................................................33
ARTICLE V
REMEDIES.......................................................35
SECTION 5.1 Events of Default................................................................35
SECTION 5.2 Acceleration of Maturity;
Rescission and Annulment.........................................................37
</TABLE>
ii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<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...............................................46
SECTION 5.9 Rights and Remedies Cumulative...................................................47
SECTION 5.10 Delay or Omission Not a Waiver...................................................47
SECTION 5.11 Control by Controlling Note
Class............................................................................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....................................................61
</TABLE>
iii
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<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
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.........................................................................71
SECTION 8.4 Release of Indenture Trust Estate................................................73
SECTION 8.5 Opinion of Counsel...............................................................73
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
SECTION 9.5 Conformity with Trust Indenture Act..............................................80
SECTION 9.6 Reference in Notes to Supplemental
Indentures.......................................................................80
</TABLE>
iv
<PAGE> 7
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE X
REDEMPTION OF NOTES.................................................81
SECTION 10.1 Redemption.......................................................................81
SECTION 10.2 Form of Redemption Notice........................................................81
SECTION 10.3 Notes Payable on Redemption Date.................................................82
ARTICLE XI
MISCELLANEOUS.....................................................83
SECTION 11.1 Compliance Certificates and
Opinions, etc....................................................................83
SECTION 11.2 Form of Documents Delivered to
Indenture Trustee................................................................85
SECTION 11.3 Acts of Noteholders..............................................................86
SECTION 11.4 Notices, etc., to Indenture
Trustee, Issuer and Rating Agencies..............................................87
SECTION 11.5 Notices to Noteholders; Waiver...................................................88
SECTION 11.6 Alternate Payment and Notice
Provisions.......................................................................89
SECTION 11.7 Conflict with Trust Indenture Act................................................89
SECTION 11.8 Effect of Headings and Table of
Contents.........................................................................90
SECTION 11.9 Successors and Assigns...........................................................90
SECTION 11.10 Separability.....................................................................90
SECTION 11.11 Benefits of Indenture............................................................90
SECTION 11.12 Legal Holidays...................................................................90
SECTION 11.13 Governing Law....................................................................91
SECTION 11.14 Counterparts.....................................................................91
SECTION 11.15 Recording of Indenture...........................................................91
SECTION 11.16 Trust Obligation.................................................................91
SECTION 11.17 No Petition......................................................................92
SECTION 11.18 Inspection.......................................................................92
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 B [FORM OF CLASS B NOTE]..........................................................B-1
EXHIBIT C [FORM OF NOTE DEPOSITORY AGREEMENT].............................................C-1
SCHEDULE A Schedule of Receivables........................................................SA-1
</TABLE>
v
<PAGE> 8
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
APPENDIX A Definitions and Usage..........................................................AA-1
</TABLE>
vi
<PAGE> 9
INDENTURE, dated as of September 1, 1999, (as from time to
time amended, supplemented or otherwise modified and in effect, this
"Indenture") between FORD CREDIT AUTO OWNER TRUST 1999-D, 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 5.411% Asset Backed Notes (the "Class A-1 Notes"), Class A-2 5.816% Asset
Backed Notes (the "Class A-2 Notes"), Class A-3 6.20% Asset Backed Notes (the
"Class A-3 Notes"), Class A-4 6.40% Asset Backed Notes (the "Class A-4 Notes"),
Class A-5 6.52% 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 and the Class A-4
Notes, the "Class A Notes") and Class B 6.87% 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 Actuarial 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
<PAGE> 10
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 purchased by the Servicer or repurchased by the Seller); (l) rebates
of premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cutoff Date; and (m) all
present and future claims, demands, causes of action and choses in action in
respect of any or all of the foregoing and all payments on or under and all
proceeds of every kind and nature whatsoever in respect of any or all of the
foregoing, including all proceeds of the conversion thereof, voluntary or
involuntary, into cash or other liquid property, all cash proceeds, accounts,
accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit
accounts, insurance proceeds, condemnation awards, rights to payment of any and
every kind and other forms of obligations and receivables, instruments and other
property which at any time constitute all or part of or are included in the
proceeds of any of the foregoing (collectively, the "Collateral").
The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Notes, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.
The Indenture Trustee, as Indenture Trustee on behalf of the
Noteholders, acknowledges such Grant, accepts the trusts under this Indenture in
accordance with the provisions of this Indenture and agrees to perform its
duties required in this Indenture to the best of its ability to the end that the
interests of the Noteholders may be adequately and effectively protected.
2
<PAGE> 11
ARTICLE I
DEFINITIONS, USAGE AND INCORPORATION BY REFERENCE
SECTION 1.1 Definitions and Usage. Except as otherwise
specified herein or as the context may otherwise require, capitalized terms used
but not otherwise defined herein are defined in Appendix A hereto, which also
contains rules as to usage that shall be applicable herein.
SECTION 1.2 Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this Indenture. The following
TIA terms used in this Indenture have the following meanings:
"indenture securities" shall mean the Notes.
"indenture security holder" shall mean a
Noteholder.
"indenture to be qualified" shall mean this
Indenture.
"indenture trustee" or "institutional trustee"
shall mean the Indenture Trustee.
"obligor" on the indenture securities shall mean the Issuer
and any other obligor on the indenture securities.
All other TIA terms used in this Indenture that are defined in
the TIA, defined by TIA reference to another statute or defined by Commission
rule have the meaning assigned to them by such definitions.
3
<PAGE> 12
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 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 and Exhibit B, 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 and Exhibit B are part of the terms of this Indenture
and are incorporated herein by reference.
SECTION 2.2 Execution, Authentication and Delivery. (a) The
Notes shall be executed on behalf of the Issuer by any of its Authorized
Officers. The signature of any such Authorized Officer on the Notes may be
manual or facsimile.
(b) Notes bearing the manual or facsimile signature of
individuals who were at any time Authorized Officers of the Issuer shall bind
the Issuer, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or did
not hold such offices at the date of such Notes.
4
<PAGE> 13
(c) The Indenture Trustee shall, upon Issuer Order,
authenticate and deliver the Notes for original issue in the Classes and initial
aggregate principal amounts as set in the table below.
<TABLE>
<CAPTION>
Class Initial Aggregate
Principal Amount
<S> <C>
Class A-1 Notes $ 153,000,000
Class A-2 Notes $ 449,000,000
Class A-3 Notes $ 1,370,000,000
Class A-4 Notes $ 400,000,000
Class A-5 Notes $ 588,189,000
Class B Notes $ 109,640,000
</TABLE>
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 and Class B Notes Outstanding at any
time may not exceed those respective amounts except as provided in Section 2.6.
(d) The Class A-1 and Class A-2 Notes shall be issuable as
Book-Entry Notes in minimum denominations of $100,000 and in integral multiples
of $1,000 in excess thereof. The Class A-3, Class A-4, Class A-5 and Class B
Notes shall be issuable as Book-Entry 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 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
5
<PAGE> 14
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
6
<PAGE> 15
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]
(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
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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,
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lost or stolen Note, but not a mutilated Note, shall have become or within seven
(7) days shall be due and payable, or shall have been called for redemption,
instead of issuing a replacement Note, the Issuer may pay such destroyed, lost
or stolen Note when so due or payable or upon the Redemption Date without
surrender thereof. If, after the delivery of such replacement Note or payment of
a destroyed, lost or stolen Note pursuant to the proviso to the preceding
sentence, a protected purchaser of the original Note in lieu of which such
replacement Note was issued presents for payment such original Note, the Issuer
and the Indenture Trustee shall be entitled to recover such replacement Note (or
such payment) from the Person to whom it was delivered or any Person taking such
replacement Note from such Person to whom such replacement Note was delivered or
any assignee of such Person, except a protected purchaser, and shall be entitled
to recover upon the security or indemnity provided therefor to the extent of any
loss, damage, cost or expense incurred by the Issuer or the Indenture Trustee in
connection therewith.
(b) Upon the issuance of any replacement Note under this
Section 2.6, the Issuer may require the payment by the Noteholder of such Note
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable expenses (including the
fees and expenses of the Indenture Trustee) connected therewith.
(c) Every replacement Note issued pursuant to this Section 2.6
in replacement of any mutilated, destroyed, lost or stolen Note shall constitute
an original additional contractual obligation of the Issuer, whether or not the
mutilated, destroyed, lost or stolen Note shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes duly issued hereunder.
(d) The provisions of this Section 2.6 are exclusive and shall
preclude (to the extent lawful) all 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
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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 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 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 and Exhibit B, respectively,
and such interest shall be due and payable on each Distribution Date as
specified therein, subject to Section 3.1. Any installment of interest or
principal, if any, payable on any Note that is punctually paid or duly provided
for by the Issuer on the applicable Distribution Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered
on the Record Date either by wire transfer in immediately available funds, to
the account of such Noteholder at a bank or other entity having appropriate
facilities therefor, if such Noteholder shall have provided to the Note
Registrar appropriate written instructions at least five (5) Business Days prior
to such Distribution Date and such Noteholder's Notes in the aggregate evidence
a denomination of not less than $1,000,000, or, if not, by check mailed
first-class postage prepaid to such Person's address as it appears on the Note
Register on such Record Date; provided that, unless Definitive Notes have been
issued to Note Owners pursuant to Section 2.13, with respect to Notes registered
on the Record Date in the name of the nominee of the Clearing Agency (initially,
such nominee to be Cede & Co.), payment shall be made by wire transfer in
immediately available funds to the account 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.
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(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 and
Exhibit B 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 Controlling Note Class 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
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so delivered shall be promptly cancelled by the Indenture Trustee. No Notes
shall be authenticated in lieu of or in exchange for any Notes cancelled as
provided in this Section 2.9, except as expressly permitted by this Indenture.
All cancelled Notes may be held or disposed of by the Indenture Trustee in
accordance with its standard retention or disposal policy as in effect at the
time unless the Issuer shall direct by an Issuer Order that they be destroyed or
returned to it and so long as such Issuer Order is timely and the Notes have not
been previously disposed of by the Indenture Trustee.
SECTION 2.10 Release of Collateral. Subject to Section 11.1
and the terms of the Basic Documents, the Indenture Trustee shall release
property from the lien of this Indenture only upon receipt of an Issuer Request
accompanied by an Officer's Certificate, an Opinion of Counsel and Independent
Certificates in accordance with TIA Sections 314(c) and 314(d)(1) or an Opinion
of Counsel in lieu of such Independent Certificates to the effect that the TIA
does not require any such Independent Certificates. If the Commission shall
issue an exemptive order under TIA Section 304(d) modifying the Owner Trustee's
obligations under TIA Sections 314(c) and 314(d)(1), subject to Section 11.1 and
the terms of the Basic Documents, the Indenture Trustee shall release property
from the lien of this Indenture in accordance with the conditions and procedures
set forth in such exemptive order.
SECTION 2.11 Book-Entry Notes. The 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;
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(ii) the Note Registrar and the Indenture Trustee
shall be entitled to deal with the Clearing Agency for all
purposes of this Indenture (including the payment of principal
of and interest on the Book-Entry Notes and the giving of
instructions or directions hereunder) as the sole Noteholder,
and shall have no obligation to the Note Owners;
(iii) to the extent that the provisions of this
Section 2.11 conflict with any other provisions of this
Indenture, the provisions of this Section 2.11 shall control;
(iv) the rights of Note Owners shall be exercised
only through the Clearing Agency and shall be limited to those
established by law and agreements between such Note Owners and
the Clearing Agency and/or the Clearing Agency Participants
pursuant to the Note Depository Agreement. Unless and until
Definitive Notes are issued to Note Owners pursuant to Section
2.13, the initial Clearing Agency shall make book-entry
transfers among the Clearing Agency Participants and receive
and transmit payments of principal of and interest on the
Book-Entry Notes to such Clearing Agency Participants; and
(v) whenever this Indenture requires or permits
actions to be taken based upon instructions or directions of
Noteholders of Notes evidencing a specified percentage of the
principal amount of the Notes Outstanding (or any Class
thereof, including the Controlling Note Class) the Clearing
Agency shall be deemed to represent such percentage only to
the extent that it has received instructions to such effect
from Note Owners and/or Clearing Agency Participants owning or
representing, respectively, such required percentage of the
beneficial interest of the Notes Outstanding (or Class
thereof, including the Controlling Note Class) and has
delivered such instructions to the Indenture Trustee.
SECTION 2.12 Notices to Clearing Agency. Whenever a notice or
other communication to the
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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. With respect to any Class or
Classes of Book-Entry 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 such Class of 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 such Class of Book- Entry Notes evidencing
beneficial interests aggregating not less than a majority of the principal
amount of such Class 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 such Class of Note Owners, then the
Clearing Agency shall notify all Note Owners of such Class and the Indenture
Trustee of the occurrence of such event and of the availability of Definitive
Notes to the Note Owners of the applicable Class 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
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of Notes in connection with issuance, transfers and exchanges under Sections
2.2, 2.3, 2.5, 2.6 and 9.6, as fully to all intents and purposes as though each
such Authenticating Agent had been expressly authorized by those Sections to
authenticate such Notes. For all purposes of this Indenture, the authentication
of Notes by an Authenticating Agent pursuant to this Section 2.14 shall be
deemed to be the authentication of Notes "by the Indenture Trustee."
(b) Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, without the
execution or filing of any further act on the part of the parties hereto or such
Authenticating Agent or such successor corporation.
(c) Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Indenture Trustee and the Owner Trustee.
The Indenture Trustee may at any time terminate the agency of any Authenticating
Agent by giving written notice of termination to such Authenticating Agent and
the Owner Trustee. Upon receiving such notice of resignation or upon such a
termination, the Indenture Trustee may appoint a successor Authenticating Agent
and shall give written notice of any such appointment to the Owner Trustee.
(d) The Administrator agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its services. The provisions
of Sections 2.9 and 6.4 shall be applicable to any Authenticating Agent.
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ARTICLE III
COVENANTS
SECTION 3.1 Payment of Principal and Interest. The Issuer
shall duly and punctually pay the principal of and interest, if any, on the
Notes in accordance with the terms of the Notes and this Indenture. Without
limiting the foregoing and subject to Section 8.2, on each Distribution Date the
Issuer shall cause to be paid all amounts on deposit in the Collection Account
and the Principal Distribution Account with respect to the Collection Period
preceding such Distribution Date and deposited therein pursuant to the Sale and
Servicing Agreement. Amounts properly withheld under the Code by any Person from
a payment to any Noteholder of interest and/or principal shall be considered as
having been paid by the Issuer to such Noteholder for all purposes of this
Indenture.
SECTION 3.2 Maintenance of Office or Agency. The Issuer shall
maintain in the Borough of Manhattan, The City of New York, an office or agency
where Notes may be surrendered for registration of transfer or exchange, and
where notices and demands to or upon the Issuer in respect of the Notes and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. The Issuer shall give
prompt written notice to the Indenture Trustee of the location, and of any
change in the location, of any such office or agency. If, at any time, the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders, notices and
demands may be made or served at the Corporate Trust Office, and the Issuer
hereby appoints the Indenture Trustee as its agent to receive all such
surrenders, notices and demands.
SECTION 3.3 Money for Payments To Be Held in Trust. (a) As
provided in Sections 8.2 and 5.4(b), all payments of amounts due and payable
with respect to any Notes that are to be made from amounts withdrawn from the
Trust Accounts and the Payahead Account shall be made on behalf of the Issuer by
the Indenture Trustee or by another Note Paying Agent, and no amounts so
withdrawn from the Trust Accounts and the Payahead Account for
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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 such sums to such Persons as herein provided;
(ii) give the Indenture Trustee notice of any default
by the Issuer (or any other obligor upon the Notes) of which
it has actual knowledge in the making of any payment required
to be made with respect to the Notes;
(iii) at any time during the continuance of any such
default, upon the written request of the Indenture Trustee,
forthwith pay to the Indenture Trustee all sums so held in
trust by such Note Paying Agent;
(iv) immediately resign as a Note Paying Agent and
forthwith pay to the Indenture Trustee all sums held by it in
trust for the payment of Notes if at any time it ceases to
meet the standards required to be met by a Note Paying Agent
at the time of its appointment; and
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(v) comply with all requirements of the Code and any
State or local tax law with respect to the withholding from
any payments made by it on any Notes of any applicable
withholding taxes imposed thereon and with respect to any
applicable reporting requirements in connection therewith.
(d) The Issuer may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, by
Issuer Order direct any Note Paying Agent to pay to the Indenture Trustee all
sums held in trust by such Note Paying Agent, such sums to be held by the
Indenture Trustee upon the same trusts as those upon which the sums were held by
such Note Paying Agent; and upon such payment by any Note Paying Agent to the
Indenture Trustee, such Note Paying Agent shall be released from all further
liability with respect to such money.
(e) Subject to applicable laws with respect to escheat of
funds, any money held by the Indenture Trustee or any Note Paying Agent in trust
for the payment of any amount due with respect to any Note and remaining
unclaimed for two (2) years after such amount has become due and payable shall
be discharged from such trust and be paid to the Issuer on Issuer Request; and
the Noteholder of such Note shall thereafter, as an unsecured general creditor,
look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Issuer), and all liability of the Indenture Trustee or
such Note Paying Agent with respect to such trust money shall thereupon cease;
provided, however, that the Indenture Trustee or such Note Paying Agent, before
being required to make any such repayment, shall at the expense and direction of
the Issuer cause to be published once, in a newspaper published in the English
language, customarily published on each Business Day and of general circulation
in The City of New York, notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than thirty (30) days
from the date of such publication, any unclaimed balance of such money then
remaining shall be repaid to the Issuer. The Indenture Trustee shall also adopt
and employ, at the expense and direction of the Issuer, any other reasonable
means of notification of such repayment (including, but not limited to, mailing
notice of such
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repayment to Noteholders whose Notes have been called but have not been
surrendered for redemption or whose right to or interest in monies due and
payable but not claimed is determinable from the records of the Indenture
Trustee or of any Note Paying Agent, at the last address of record for each such
Noteholder).
SECTION 3.4 Existence. The Issuer shall keep in full effect
its existence, rights and franchises as a business trust under the laws of the
State of Delaware (unless it becomes, or any successor Issuer hereunder is or
becomes, organized under the laws of any other State or of the United States of
America, in which case the Issuer shall keep in full effect its existence,
rights and franchises under the laws of such other jurisdiction) and shall
obtain and preserve its qualification to do business in each jurisdiction in
which such qualification is or shall be necessary to protect the validity and
enforceability of this Indenture, the Notes, the Collateral and each other
instrument or agreement included in the Indenture Trust Estate.
SECTION 3.5 Protection of Indenture Trust Estate. The Issuer
shall from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action
necessary or advisable to:
(i) maintain or preserve the lien and security
interest (and the priority thereof) of this Indenture or carry
out more effectively the purposes hereof;
(ii) perfect, publish notice of or protect the
validity of any Grant made or to be made by this Indenture;
(iii) enforce any of the Collateral; or
(iv) preserve and defend title to the Indenture Trust
Estate and the rights of the Indenture Trustee and the
Noteholders in such Indenture Trust Estate against the claims
of all Persons.
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The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required to be executed pursuant to this Section 3.5; provided,
however, that the Indenture Trustee shall be under no obligation to file any
such financing statement, continuation statement or other instrument required to
be executed pursuant to this Section 3.5.
SECTION 3.6 Opinions as to Indenture Trust Estate. (a) On the
Closing Date, the Issuer shall furnish to the Indenture Trustee an Opinion of
Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and security
interest of this Indenture and reciting the details of such action, or stating
that, in the opinion of such counsel, no such action is necessary to make such
lien and security interest effective.
(b) On or before April 30 in each calendar year, beginning in
2000, 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 Indenture until April 30 in
the following calendar year.
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SECTION 3.7 Performance of Obligations; Servicing of
Receivables. (a) The Issuer shall not take any action and shall use its best
efforts not to permit any action to be taken by others that would release any
Person from any of such Person's material covenants or obligations under any
instrument or agreement included in the Indenture Trust Estate or that would
result in the amendment, hypothecation, subordination, termination or discharge
of, or impair the validity or effectiveness of, any such instrument or
agreement, except as expressly provided in this Indenture and the other Basic
Documents.
(b) The Issuer may contract with other Persons to assist it in
performing its duties under this Indenture, and any performance of such duties
by a Person identified to the Indenture Trustee in an Officer's Certificate of
the Issuer shall be deemed to be action taken by the Issuer. Initially, the
Issuer has contracted with the Servicer and the Administrator to assist the
Issuer in performing its duties under this Indenture.
(c) The Issuer shall punctually perform and observe all of its
obligations and agreements contained in this Indenture, the other Basic
Documents and in the instruments and agreements included in the Indenture Trust
Estate, including, but not limited to, filing or causing to be filed all
financing statements and continuation statements required to be filed under the
UCC by the terms of this Indenture and the Sale and Servicing Agreement in
accordance with and within the time periods provided for herein and therein.
Except as otherwise expressly provided therein, the Issuer shall not waive,
amend, modify, supplement or terminate any Basic Document or any provision
thereof without the consent of the Indenture Trustee and the Noteholders of
Notes evidencing not less than a majority of the principal amount of each Class
of Notes then Outstanding, voting separately.
(d) If the Issuer shall have knowledge of the occurrence of an
Event of Servicing Termination under the Sale and Servicing Agreement, the
Issuer shall promptly notify the Indenture Trustee and the Rating Agencies
thereof and shall specify in such notice the action, if any, the Issuer is
taking in respect of such default. If an Event of Servicing Termination shall
arise from the failure of the Servicer to perform any of its duties or
obligations under the Sale and Servicing Agreement with
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respect to the Receivables, the Issuer shall take all reasonable steps available
to it to remedy such failure.
(e) As promptly as possible after the giving of notice of
termination to the Servicer of the Servicer's rights and powers pursuant to
Section 8.1 of the Sale and Servicing Agreement or the Servicer's resignation in
accordance with the terms of the Sale and Servicing Agreement, the Issuer shall
appoint a Successor Servicer 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
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such successor for the servicing of the Receivables (such agreement to be in
form and substance satisfactory to the Indenture Trustee). If the Indenture
Trustee shall succeed to the Servicer's duties as servicer of the Receivables as
provided herein, it shall do so in its individual capacity and not in its
capacity as Indenture Trustee and, accordingly, the provisions of Article VI
hereof shall be inapplicable to the Indenture Trustee in its duties as the
successor to the Servicer and the servicing of the Receivables. In case the
Indenture Trustee shall become successor to the Servicer under the Sale and
Servicing Agreement, the Indenture Trustee shall be entitled to appoint as
Servicer any one of its Affiliates; provided that the Indenture Trustee, in its
capacity as the Servicer, shall be fully liable for the actions and omissions of
such Affiliate in such capacity as Successor Servicer.
(f) Upon any termination of the Servicer's rights and powers
pursuant to the Sale and Servicing Agreement, the Issuer shall promptly notify
the Indenture Trustee. As soon as a Successor Servicer is appointed by the
Issuer, the Issuer shall notify the Indenture Trustee of such appointment,
specifying in such notice the name and address of such Successor Servicer.
(g) Without derogating from the absolute nature of the
assignment granted to the Indenture Trustee under this Indenture or the rights
of the Indenture Trustee hereunder, the Issuer hereby agrees that it shall not,
without the prior written consent of the Indenture Trustee or the Noteholders of
Notes evidencing not less than a majority in principal amount of the Notes
Outstanding, amend, modify, waive, supplement, terminate or surrender, or agree
to any amendment, modification, supplement, termination, waiver or surrender of,
the terms of any Collateral (except to the extent otherwise provided in the Sale
and Servicing Agreement or the other Basic Documents).
SECTION 3.8 Negative Covenants. So long as any Notes are
Outstanding, the Issuer shall not:
(i) except as expressly permitted by this Indenture,
the Trust Agreement, the Purchase Agreement or the Sale and
Servicing Agreement, sell, transfer, exchange or otherwise
dispose
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of any of the properties or assets of the Issuer, including
those included in the Indenture Trust Estate, unless directed
to do so by the Indenture Trustee;
(ii) claim any credit on, or make any deduction from
the principal or interest payable in respect of, the Notes
(other than amounts properly withheld from such payments under
the Code) or assert any claim against any present or former
Noteholder by reason of the payment of the taxes levied or
assessed upon the Trust or the Indenture Trust Estate;
(iii) dissolve or liquidate in whole or
in part; or
(iv) (A) permit the validity or effectiveness of this
Indenture to be impaired, or permit the lien of this Indenture
to be amended, hypothecated, subordinated, terminated or
discharged, or permit any Person to be released from any
covenants or obligations with respect to the Notes under this
Indenture except as may be expressly permitted hereby, (B)
permit any lien, charge, excise, claim, security interest,
mortgage or other encumbrance (other than the lien of this
Indenture) to be created on or extend to or otherwise arise
upon or burden the assets of the Issuer, including those
included in the Indenture Trust Estate, or any part thereof or
any interest therein or the proceeds thereof (other than tax
liens, mechanics' liens and other liens that arise by
operation of law, in each case on any of the Financed Vehicles
and arising solely as a result of an action or omission of the
related Obligor) or (C) permit the lien of this Indenture not
to constitute a valid first priority (other than with respect
to any such tax, mechanics' or other lien) security interest
in the Indenture Trust Estate.
SECTION 3.9 Annual Statement as to Compliance. The Issuer
shall deliver to the Indenture Trustee, within 120 days after the end of each
calendar year, an Offi-
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cer'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
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effect that such transaction will not have any material
adverse tax consequence to the Issuer, any Noteholder or any
Certificateholder;
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such consolidation or merger and such
supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing
required by the Exchange Act).
(b) Other than as specifically contemplated by the Basic
Documents, the Issuer shall not convey or transfer any of its properties or
assets, including those included in the Indenture Trust Estate, to any Person,
unless:
(i) the Person that acquires by conveyance or
transfer the properties and assets of the Issuer the
conveyance or transfer of which is hereby restricted shall (A)
be a United States citizen or a Person organized and existing
under the laws of the United States of America or any State,
(B) expressly assumes, by an indenture supplemental hereto,
executed and delivered to the Indenture Trustee, in form
satisfactory to the Indenture Trustee, the due and punctual
payment of the principal of and interest on all Notes and the
performance or observance of every agreement and covenant of
this Indenture on the part of the Issuer to be performed or
observed, all as provided herein, (C) expressly agrees by
means of such supplemental indenture that all right, title and
interest so conveyed or transferred shall be subject and
subordinate to the rights of Noteholders, (D) unless otherwise
provided in such supplemental indenture, expressly agrees to
indemnify, defend and hold harmless the Issuer against and
from any loss, liability or
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expense arising under or related to this Indenture and the
Notes, and (E) expressly agrees by means of such supplemental
indenture that such Person (or if a group of Persons, then one
specified Person) shall make all filings with the Commission
(and any other appropriate Person) required by the Exchange
Act in connection with the Notes;
(ii) immediately after giving effect to such
transaction, no Default or Event of Default shall have
occurred and be continuing;
(iii) the Rating Agency Condition shall have been
satisfied with respect to such transaction;
(iv) the Issuer shall have received an Opinion of
Counsel (and shall have delivered copies thereof to the
Indenture Trustee) to the effect that such transaction will
not have any material adverse tax consequence to the Issuer,
any Noteholder or any Certificateholder;
(v) any action that is necessary to maintain the lien
and security interest created by this Indenture shall have
been taken; and
(vi) the Issuer shall have delivered to the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel
each stating that such conveyance or transfer and such
supplemental indenture comply with this Article III and that
all conditions precedent herein provided for relating to such
transaction have been complied with (including any filing
required by the Exchange Act).
SECTION 3.11 Successor or Transferee. (a) Upon any
consolidation or merger of the Issuer in accordance with Section 3.10(a), the
Person formed by or surviving such consolidation or merger (if other than the
Issuer) shall succeed to, and be substituted for, and may exercise every right
and power of, the Issuer under this Indenture with the same effect as if such
Person had been named as the Issuer herein.
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(b) Upon a conveyance or transfer of all the assets and
properties of the Issuer pursuant to Section 3.10(b), the Issuer shall be
released from every covenant and agreement of this Indenture to be observed or
performed on the part of the Issuer with respect to the Notes immediately upon
the delivery of written notice to the Indenture Trustee stating that the Issuer
is to be so released.
SECTION 3.12 No Other Business. The Issuer shall not engage in
any business other than financing, acquiring, owning and pledging the
Receivables in the manner contemplated by this Indenture and the Basic Documents
and activities incidental thereto.
SECTION 3.13 No Borrowing. The Issuer shall not issue, incur,
assume, guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Notes and the Certificates.
SECTION 3.14 Servicer's Obligations. The Issuer shall cause
the Servicer to comply with the Sale and Servicing Agreement, including Sections
3.9, 3.10, 3.11, 3.12, 3.13 and 4.9 and Article VII thereof.
SECTION 3.15 Guarantees, Loans, Advances and Other
Liabilities. Except as contemplated by this Indenture and the other Basic
Documents, the Issuer shall not make any loan or advance or credit to, or
guarantee (directly or indirectly or by an instrument having the effect of
assuring another's payment or performance on any obligation or capability of so
doing or otherwise), endorse or otherwise become contingently liable, directly
or indirectly, in connection with the obligations, stocks or dividends of, or
own, purchase, repurchase or acquire (or agree contingently to do so) any stock,
obligations, assets or securities of, or any other interest in, or make any
capital contribution to, any other Person.
SECTION 3.16 Capital Expenditures. The Issuer shall not make
any expenditure (by long-term or operating lease or otherwise) for capital
assets (either realty or personalty).
SECTION 3.17 Further Instruments and Acts. Upon request of the
Indenture Trustee, the Issuer shall execute and deliver such further instruments
and do such
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further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.
SECTION 3.18 Restricted Payments. The Issuer shall not,
directly or indirectly, (i) make any distribution (by reduction of capital or
otherwise), whether in cash, property, securities or a combination thereof, to
the Owner Trustee or any owner of a beneficial interest in the Issuer or
otherwise with respect to any ownership or equity interest or security in or of
the Issuer or to the Servicer or the Administrator, (ii) redeem, purchase,
retire or otherwise acquire for value any such ownership or equity interest or
security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Issuer may make, or cause to be made, (x)
payments to the Servicer, the Administrator, the Owner Trustee, the Indenture
Trustee, the Noteholders and the Certificateholders as contemplated by, and to
the extent funds are available for such purpose under, this Indenture and the
other Basic Documents and (y) payments to the Indenture Trustee pursuant to
Section 2(a)(ii) of the Administration Agreement. The Issuer shall not, directly
or indirectly, make payments to or distributions from the Collection Account or
the Principal Distribution Account except in accordance with this Indenture and
the other Basic Documents.
SECTION 3.19 Notice of Events of Default. The Issuer shall
give the Indenture Trustee and the Rating Agencies prompt written notice of each
Event of Default hereunder and of each default on the part of any party to the
Sale and Servicing Agreement or the Purchase Agreement with respect to any of
the provisions thereof.
SECTION 3.20 Removal of Administrator. For so long as any
Notes are Outstanding, the Issuer shall not remove the Administrator without
cause unless the Rating Agency Condition shall have been satisfied in connection
therewith.
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ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1 Satisfaction and Discharge of Indenture. This
Indenture shall cease to be of further effect with respect to the Notes except
as to (i) rights of registration of transfer and exchange, (ii) substitution of
mutilated, destroyed, lost or stolen Notes, (iii) rights of Noteholders to
receive payments of principal thereof and interest thereon, (iv) Sections 3.3,
3.4, 3.5, 3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities
of the Indenture Trustee hereunder (including the rights of the Indenture
Trustee under Section 6.7 and the obligations of the Indenture Trustee under
Section 4.3), and (vi) the rights of Noteholders as beneficiaries hereof with
respect to the property so deposited with the Indenture Trustee payable to all
or any of them, and the Indenture Trustee, on demand of and at the expense of
the Issuer, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture with respect to the Notes, when:
(A) either
(1) all Notes theretofore authenticated and delivered
(other than (i) Notes that have been destroyed, lost or stolen
and that have been replaced or paid as provided in Section 2.6
and (ii) Notes for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from
such trust, as provided in Section 3.3) have been delivered to
the Indenture Trustee for cancellation; or
(2) all Notes not theretofore delivered to the Indenture
Trustee for cancellation have become due and payable and the
Issuer has irrevocably deposited or caused to be irrevocably
deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States
of America (which will mature prior to the date such amounts
are payable), in trust for such purpose, in an amount
sufficient without reinvestment to pay and
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discharge the entire indebtedness on such Notes not
theretofore delivered to the Indenture Trustee for
cancellation when due to the applicable Final Scheduled
Distribution Date or Redemption Date (if Notes shall have been
called for redemption pursuant to Section 10.1(a)), as the
case may be, and all fees due and payable to the Indenture
Trustee;
(B) the Issuer has paid or caused to be paid all other sums
payable hereunder and under any of the other Basic Documents
by the Issuer;
(C) the Issuer has delivered to the Indenture Trustee an
Officer's Certificate, an Opinion of Counsel and (if required
by the TIA or the Indenture Trustee) an Independent
Certificate from a firm of certified public accountants, each
meeting the applicable requirements of Section 11.1(a) and,
subject to Section 11.2, each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with; and
(D) the Issuer has delivered to the Indenture Trustee an
Opinion of Counsel to the effect that the satisfaction and
discharge of the Notes pursuant to this Section 4.1 will not
cause any Noteholder to be treated as having sold or exchanged
any of its Notes for purposes of Section 1001 of the Code.
Upon the satisfaction and discharge of the Indenture pursuant to this Section
4.1, at the request of the Owner Trustee, the Indenture Trustee shall deliver to
the Owner Trustee a certificate of a Trustee Officer stating that all
Noteholders have been paid in full and stating whether, to the best knowledge of
such Trustee Officer, any claims remain against the Issuer in respect of the
Indenture and the Notes.
SECTION 4.2 Satisfaction, Discharge and Defeasance of Notes.
(a) Upon satisfaction of the conditions set forth in
subsection (b) below, the Issuer shall be deemed
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to have paid and discharged the entire indebtedness on all the Outstanding
Notes, and the provisions of this Indenture, as it relates to such Notes, shall
no longer be in effect (and the Indenture Trustee, at the expense of the Issuer,
shall execute proper instruments acknowledging the same), except as to (i)
rights of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Notes, (iii) rights of Noteholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.2, 3.3, 3.4, 3.5,
3.8, 3.10, 3.12 and 3.13, (v) the rights, obligations and immunities of the
Indenture Trustee hereunder (including the rights of the Indenture Trustee under
Section 6.7 and the obligations of the Indenture Trustee under Section 4.3), and
(vi) the rights of Noteholders as beneficiaries hereof with respect to the
property so deposited with the Indenture Trustee payable to all or any of them.
(b) The satisfaction, discharge and defeasance of the Notes
pursuant to subsection (a) of this Section 4.2 is subject to the satisfaction of
all of the following conditions:
(i) the Issuer has deposited or caused to be
deposited irrevocably (except as provided in Section 4.4) with
the Indenture Trustee as trust funds in trust, specifically
pledged as security for, and dedicated solely to, the benefit
of the Noteholders, which, through the payment of interest and
principal in respect thereof in accordance with their terms
will provide, not later than one day prior to the due date of
any payment referred to below, money in an amount sufficient,
in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written
certification thereof delivered to the Indenture Trustee, to
pay and discharge the entire indebtedness on the Outstanding
Notes, for principal thereof and interest thereon to the date
of such deposit (in the case of Notes that have become due and
payable) or to the maturity of such principal and interest, as
the case may be;
(ii) such deposit will not result in a breach or
violation of, or constitute an event
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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
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Paying Agent shall be released from all further liability with respect to such
monies.
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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 of the Controlling Note Class 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; 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
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Notes evidencing not less than 25% of the principal amount of
the Controlling Note Class, a written notice specifying such
default or incorrect representation or warranty and requiring
it to be remedied and stating that such notice is a "Notice of
Default" hereunder; or
(iv) the filing of a decree or order for relief by a
court having jurisdiction in the premises in respect of the
Issuer or any substantial part of the Indenture Trust Estate
in an involuntary case under any applicable federal or State
bankruptcy, insolvency or other similar law now or hereafter
in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator or similar official of the
Issuer or for any substantial part of the Indenture Trust
Estate, or ordering the winding-up or liquidation of the
Issuer's affairs, and such decree or order shall remain
unstayed and in effect for a period of sixty (60) consecutive
days; or
(v) the commencement by the Issuer of a voluntary
case under any applicable federal or State bankruptcy,
insolvency or other similar law now or hereafter in effect, or
the consent by the Issuer to the entry of an order for relief
in an involuntary case under any such law, or the consent by
the Issuer to the appointment or taking possession by a
receiver, liquidator, assignee, custodian, trustee,
sequestrator or similar official of the Issuer or for any
substantial part of the Indenture Trust Estate, or the making
by the Issuer of any general assignment for the benefit of
creditors, or the failure by the Issuer generally to pay its
debts as such debts become due, or the taking of any action by
the Issuer in furtherance of any of the foregoing.
The Issuer shall deliver to the Indenture Trustee, within five (5) days after
the occurrence thereof, written 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)
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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 Controlling Note Class
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 Controlling Note Class, 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.
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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) there is
an Event of Default relating to the nonpayment of any interest on any Note when
the same becomes due and payable, and such Event of Default continues for a
period of five (5) days, or (ii) there is an Event of Default relating to the
nonpayment 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, as more particularly provided in Section 5.4, in its
discretion, may 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
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equitable right vested in the Indenture Trustee by this Indenture or by law.
(d) In case there shall be pending, relative to the Issuer or
any other obligor upon the Notes or any Person having or claiming an ownership
interest in the Indenture Trust Estate, Proceedings under Title 11 of the United
States Code or any other applicable federal or State bankruptcy, insolvency or
other similar law, or in case a receiver, assignee or trustee in bankruptcy or
reorganization, liquidator, sequestrator or similar official shall have been
appointed for or taken possession of the Issuer or its property or such other
obligor or Person, or in case of any other comparable judicial Proceedings
relative to the Issuer or other obligor upon the Notes, or to the creditors or
property of the Issuer or such other obligor, the Indenture Trustee,
irrespective of whether the principal of any Notes shall then be due and payable
as therein expressed or by declaration or otherwise and irrespective of whether
the Indenture Trustee shall have made any demand pursuant to the provisions of
this Section 5.3, shall be entitled and empowered, by intervention in such
Proceedings or otherwise:
(i) to file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect
of the Notes and to file such other papers or documents as may
be necessary or advisable in order to have the claims of the
Indenture Trustee (including any claim for reasonable
compensation to the Indenture Trustee and each predecessor
Indenture Trustee, and their respective agents, attorneys and
counsel, and for reimbursement of all expenses and liabilities
incurred, and all advances and disbursements made, by the
Indenture Trustee and each predecessor Indenture Trustee,
except as a result of negligence or bad faith) and of the
Noteholders allowed in such Proceedings;
(ii) unless prohibited by applicable law and
regulations, to vote on behalf of the Noteholders in any
election of a trustee, a standby trustee or Person performing
similar functions in any such Proceedings;
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(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 Inden-
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ture Trustee shall be brought in its own name as trustee of an express trust,
and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents, attorneys and counsel, shall be
for the ratable benefit of the Noteholders in respect of which such judgment has
been recovered.
(g) In any Proceedings brought by the Indenture Trustee (and
also any Proceedings involving the interpretation of any provision of this
Indenture to which the Indenture Trustee shall be a party), the Indenture
Trustee shall be held to represent all the Noteholders, and it shall not be
necessary to make any Noteholder a party to any such Proceedings.
SECTION 5.4 Remedies; Priorities. (a) If an Event of Default
shall have occurred and be continuing, the Indenture Trustee may do one or more
of the following (subject to Section 5.5):
(i) institute Proceedings in its own name and as
trustee of an express trust for the collection of all amounts
then payable on the Notes or under this Indenture with respect
thereto, whether by declaration or otherwise, enforce any
judgment obtained, and collect from the Issuer and any other
obligor upon such Notes monies adjudged due;
(ii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect
to the Indenture Trust Estate;
(iii) exercise any remedies of a secured party under
the UCC and take any other appropriate action to protect and
enforce the rights and remedies of the Indenture Trustee and
the Noteholders; and
(iv) sell the Indenture Trust Estate or any portion
thereof or rights or interest therein, at one or more public
or private sales called and conducted in any manner permitted
by law.
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provided, however, the Indenture Trustee may not sell or otherwise liquidate the
Indenture Trust Estate unless:
(A) the Event of Default is of the type described
in Section 5.1(i) or (ii); or
(B) the Indenture Trustee is 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; or
(C) with respect to any Event of Default described in Section
5.1(iv) and (v):
(1) the Noteholders of Notes evidencing 100%
of the principal amount of the Controlling
Note Class consent thereto; or
(2) 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
(3) the Indenture Trustee-
(x) 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
(y) the Indenture Trustee obtains the consent of
Noteholders of Notes evidencing not less than
662/3% of the principal amount of the
Controlling Note Class; or
(D) with respect to an Event of Default described in Section
5.1(iii):
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(1) the Noteholders of all Outstanding Notes
and the Certificateholders of all outstanding
Certificates consent thereto; or
(2) the proceeds of such sale or liquidation are
sufficient to pay in full the principal of and
accrued interest on the Outstanding Notes and
outstanding
Certificates.
In determining such sufficiency or insufficiency with respect to clauses (C)(2),
(D)(2) and (C)(3)(x) 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) Notwithstanding the provisions of Section 8.2, 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,
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
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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 B Notes
for amounts due and unpaid on the Class B Notes in respect
of interest, ratably, without preference or priority of any
kind, according to the amounts due and payable on the Class B
Notes for interest;
(x) tenth, 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
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<PAGE> 53
the Outstanding Class B Notes is reduced to zero;
(xi) eleventh, to the Issuer for amounts required to
be distributed to the Certificateholders pursuant to the Trust
Agreement and the Sale and Servicing Agreement; and
(xii) twelfth, to the Seller, any money or property
remaining after payment in full of the amounts described in
clauses (i)-(xi) of this Section 5.4(b).
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.
(c) Upon a sale or other liquidation of the Receivables in the
manner set forth in Section 5.4(a), the Indenture Trustee shall provide
reasonable prior notice of such sale or liquidation to each Noteholder and
Certificateholder. A Noteholder or Certificateholder may submit a bid with
respect to such sale.
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 at the time the Indenture Trustee makes such
election or deposited therein during the Collection Period in which such
election is made (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 deter-
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mining 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 Controlling Note Class 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 Controlling Note Class.
It is understood and intended that no one or more Noteholders
shall have any right in any manner whatever by virtue of, or by availing of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other
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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 Controlling
Note Class, 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,
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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 Controlling Note Class of Noteholders.
The Noteholders of Notes evidencing not less than a majority of the principal
amount of the Controlling Note Class shall have the right to direct the time,
method and place of conducting any Proceeding for any remedy available to the
Indenture Trustee with respect to the Notes or exercising any trust or power
conferred on the Indenture Trustee; provided that:
(a) such direction shall not be in conflict
with any rule of law or with this Indenture;
(b) subject to the express terms of Section 5.4, any direction
to the Indenture Trustee to sell or liquidate the Indenture Trust Estate shall
be by Noteholders of Notes evidencing not less than 100% of the principal amount
of the Controlling Note Class;
(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
Controlling Note Class 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.
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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 Controlling Note Class 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
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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 in the case of a right or remedy under this Indenture
which is instituted by the Controlling Note Class, more than 10% of the
Controlling Note Class) or (c) any suit instituted by any Noteholder for the
enforcement of the payment of principal of or interest on any Note on or after
the respective due dates expressed in such Note and in this Indenture (or, in
the case of redemption, on or after the Redemption Date).
SECTION 5.14 Waiver of Stay or Extension Laws. The Issuer
covenants (to the extent that it may lawfully do so) that it shall not at any
time insist upon, or plead or in any manner whatsoever, claim or take the
benefit or advantage of, any stay or extension law wherever enacted, now or at
any time hereafter in force, that may affect the covenants or the performance of
this Indenture, and the Issuer (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law, and covenants that it
shall not hinder, delay or impede the execution of any power herein granted to
the Indenture Trustee, but will suffer and permit the execution of every such
power as though no such law had been enacted.
SECTION 5.15 Action on Notes. The Indenture Trustee's right to
seek and recover judgment on the Notes or under this Indenture shall not be
affected by the seeking, obtaining or application of any other relief under or
with respect to this Indenture. Neither the lien of this Indenture nor any
rights or remedies of the Indenture Trustee or the Noteholders shall be impaired
by the recovery of any judgment by the Indenture Trustee against the Issuer or
by the levy of any execution under such judgment upon any portion of the
Indenture Trust Estate or upon any of the assets of the Issuer. Any money or
property collected by the Indenture Trustee shall be applied in accordance with
Section 5.4(b).
SECTION 5.16 Performance and Enforcement of
Certain Obligations. (a) Promptly following a request from the Indenture
Trustee to do so, and at the Adminis-
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trator'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 662/3% of the principal amount of the Controlling
Note Class shall, exercise all rights, remedies, powers, privileges and claims
of the Issuer against the Seller or the Servicer under or in connection with the
Sale and Servicing Agreement, or against the Seller or Ford Credit under or in
connection with the Purchase Agreement, including the right or power to take any
action to compel or secure performance or observance by the Seller, the Servicer
or Ford Credit, as the case may be, of each of their obligations to the Issuer
thereunder and to give any consent, request, notice, direction, approval,
extension, or waiver under the Sale and Servicing Agreement or the Purchase
Agreement, as the case may be, and any right of the Issuer to take such action
shall be suspended.
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ARTICLE VI
THE INDENTURE TRUSTEE
SECTION 6.1 Duties of Indenture Trustee. (a) If an Event of
Default has occurred and is continuing, the Indenture Trustee shall exercise the
rights and powers vested in it by this Indenture and use the same degree of care
and skill in their exercise as a prudent Person would exercise or use under the
circumstances in the conduct of such Person's own affairs.
(b) Except during the continuance of an Event
of Default:
(i) the Indenture Trustee undertakes to perform such
duties and only such duties as are specifically set forth in
this Indenture and no implied covenants or obligations shall
be read into this Indenture against the Indenture Trustee; and
(ii) in the absence of bad faith on its part, the
Indenture Trustee may conclusively rely, as to the truth of
the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the
Indenture Trustee and, if required by the terms of this
Indenture, conforming to the requirements of this Indenture;
provided, however, that the Indenture Trustee shall examine
the certificates and opinions to determine whether or not they
conform to the requirements of this Indenture.
(c) The Indenture Trustee may not be relieved from liability
for its own negligent action, its own negligent failure to act or its own
willful misconduct, except that:
(i) this paragraph does not limit the
effect of paragraph (b) of this Section 6.1;
(ii) the Indenture Trustee shall not be liable for
any error of judgment made in good faith by a Trustee Officer
unless it is proved
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that the Indenture Trustee was negligent in ascertaining the
pertinent facts; and
(iii) the Indenture Trustee shall not be liable with
respect to any action it takes or omits to take in good faith
in accordance with a direction received by it pursuant to
Section 5.11.
(d) The Indenture Trustee shall not be liable for interest on
any money received by it except as the Indenture Trustee may agree in writing
with the Issuer.
(e) Money held in trust by the Indenture Trustee need not be
segregated from other funds except to the extent required by law or the terms of
this Indenture or the Sale and Servicing Agreement.
(f) No provision of this Indenture shall require the Indenture
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder or in the exercise of any of
its rights or powers, if it shall have reasonable grounds to believe that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(g) Every provision of this Indenture relating to the conduct
or affecting the liability of or affording protection to the Indenture Trustee
shall be subject to the provisions of this Section 6.1 and to the provisions of
the TIA.
(h) The Indenture Trustee shall not be charged with knowledge
of any Event of Default unless either (1) a Trustee Officer shall have actual
knowledge of such Event of Default or (2) written notice of such Event of
Default shall have been given to the Indenture Trustee in accordance with the
provisions of this Indenture.
SECTION 6.2 Rights of Indenture Trustee. (a) The Indenture
Trustee may rely and shall be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture or other paper or document
believed by it to be genuine and to have been signed or presented by the
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proper Person. The Indenture Trustee need not investigate any fact or matters
stated in any such document.
(b) Before the Indenture Trustee acts or refrains from acting,
it may require an Officer's Certificate or an Opinion of Counsel. The Indenture
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on an Officer's Certificate or Opinion of Counsel.
(c) The Indenture Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents or attorneys or a custodian or nominee, and the Indenture Trustee
shall not be responsible for any misconduct or negligence on the part of, or for
the supervision of, any such agent, attorney, custodian or nominee appointed
with due care by it hereunder.
(d) The Indenture Trustee shall not be liable for any action
it takes or omits to take in good faith which it believes to be authorized or
within its rights or powers; provided, however, that such action or omission by
the Indenture Trustee does not constitute willful misconduct, negligence or bad
faith.
(e) The Indenture Trustee may consult with counsel, and the
advice or opinion of counsel with respect to legal matters relating to this
Indenture and the Notes shall be full and complete authorization and protection
from liability in respect to any action taken, omitted or suffered by it
hereunder in good faith and in accordance with the advice or opinion of such
counsel.
(f) The Indenture Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Indenture or to honor
the request or direction of any of the Noteholders pursuant to this Indenture
unless such Noteholders shall have offered to the Indenture Trustee reasonable
security or indemnity against the reasonable costs, expenses, disbursements,
advances and liabilities which might be incurred by it, its agents and its
counsel in compliance with such request or direction.
(g) Any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request.
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SECTION 6.3 Individual Rights of Indenture Trustee. The
Indenture Trustee, in its individual or any other capacity, may become the owner
or pledgee of Notes and may otherwise deal with the Issuer or its Affiliates
with the same rights it would have if it were not Indenture Trustee. Any Note
Paying Agent, Note Registrar, co-registrar or co-paying agent hereunder may do
the same with like rights.
SECTION 6.4 Indenture Trustee's Disclaimer. The Indenture
Trustee (i) shall not be responsible for, and makes no representation as to, the
validity or adequacy of this Indenture or the Notes and (ii) shall not be
accountable for the Issuer's use of the proceeds from the Notes, or responsible
for any statement of the Issuer in this Indenture or in any document issued in
connection with the sale of the Notes or in the Notes (all of which shall be
taken as statements of the Issuer) other than the Indenture Trustee's
certificate of authentication.
SECTION 6.5 Notice of Defaults; Insolvency or Dissolution of
Depositor or General Partner. (a) If a Default occurs and is continuing and if
it is known to a Trustee Officer of the Indenture Trustee, the Indenture Trustee
shall mail to each Noteholder notice of such Default within ninety (90) days
after it occurs. Except in the case of a Default in payment of principal of or
interest on any Note (including payments pursuant to the mandatory redemption
provisions of such Note), the Indenture Trustee may withhold the notice if and
so long as a committee of its Trustee Officers in good faith determines that
withholding the notice is in the interests of Noteholders.
(b) If the Indenture Trustee receives notice from the Owner
Trustee of the occurrence of an Insolvency Event or a dissolution with respect
to the Depositor or the General Partner pursuant to Section 9.2 of the Trust
Agreement, the Indenture Trustee shall give prompt written notice to the
Noteholders of the occurrence of such event. If the Indenture Trustee receives
notice from the Owner Trustee pursuant to such Section 9.2 that the requisite
percentages of Noteholders, Certificateholders and holders of interests, if any,
in the Reserve Account disapprove of the liquidation of the Receivables and
termination of the Trust pursuant to such Section 9.2, the Indenture Trustee, at
the expense of the Issuer,
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shall (i) appoint an entity acceptable to Ford Credit to acquire an interest in
the Trust and to act as substitute "general partner" of the Trust for federal
income tax purposes and (ii) obtain an Opinion of Counsel that the Trust will
not thereafter be classified as an association (or publicly traded partnership)
taxable as a corporation for federal income tax and Applicable Tax State
purposes. If the Indenture Trustee is unable to locate such an entity or obtain
such Opinion of Counsel within ninety (90) days after the date of the applicable
Insolvency Event or dissolution, the Indenture Trustee shall so notify the Owner
Trustee promptly in writing. Upon termination of the Trust pursuant to such
Section 9.2, the Indenture Trustee shall, if so directed by the Owner Trustee,
sell the assets of the Trust (other than the Trust Accounts and 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.
SECTION 6.7 Compensation and Indemnity. (a) The Issuer shall,
or shall cause the Administrator to, pay to the Indenture Trustee from time to
time reasonable compensation for its services. The Indenture Trustee's
compensation shall not be limited by any law on compensation of a trustee of an
express trust. The Issuer shall, or shall cause the Administrator to, reimburse
the Indenture Trustee for all reasonable out-of-pocket expenses incurred or made
by it, including costs of collection, in addition to the compensation for its
services. Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Indenture Trustee's agents, counsel,
accountants and experts. The Issuer shall, or shall cause the Administrator to,
indem-
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nify the Indenture Trustee for, and to hold it harmless against, any and all
loss, liability or expense (including attorneys' fees) incurred by it in
connection with the administration of this trust and the performance of its
duties hereunder, including the costs and expenses of defending itself against
any claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder. The Indenture Trustee shall notify the Issuer
and the Administrator promptly of any claim for which it may seek indemnity.
Failure by the Indenture Trustee to so notify the Issuer and the Administrator
shall not relieve the Issuer or the Administrator of its obligations hereunder.
The Issuer shall, or shall cause the Administrator to, defend any such claim,
and the Indenture Trustee may have separate counsel and the Issuer shall, or
shall cause the Administrator to, pay the fees and expenses of such counsel.
Neither the Issuer nor the Administrator need reimburse any expense or indemnity
against any loss, liability or expense incurred by the Indenture Trustee through
the Indenture Trustee's own willful misconduct, negligence or bad faith.
(b) The Issuer's payment obligations to the Indenture Trustee
pursuant to this Section 6.7 shall survive the resignation or removal of the
Indenture Trustee and the discharge of this Indenture. When the Indenture
Trustee incurs expenses after the occurrence of a Default specified in Section
5.1(iv) or (v) with respect to the Issuer, the expenses are intended to
constitute expenses of administration under Title 11 of the United States Code
or any other applicable federal or State bankruptcy, insolvency or similar law.
SECTION 6.8 Replacement of Indenture Trustee. (a) No
resignation or removal of the Indenture Trustee, and no appointment of a
successor Indenture Trustee, shall become effective until the acceptance of
appointment by the successor Indenture Trustee pursuant to this Section 6.8 and
payment in full of all sums due to the Indenture Trustee pursuant to Section
6.7. The Indenture Trustee may resign at any time by so notifying the Issuer.
The Noteholders of Notes evidencing not less than a majority in principal amount
of the Controlling Note Class may remove the Indenture Trustee without cause by
so notifying the Indenture Trustee and the Issuer and may
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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 of
acting.
If the Indenture Trustee resigns or is removed or if a vacancy exists in the
office of Indenture Trustee for any reason (the Indenture Trustee in such event
being referred to herein as the retiring Indenture Trustee), the Issuer shall
promptly appoint a successor Indenture Trustee.
(b) Any successor Indenture Trustee shall deliver a written
acceptance of its appointment to the retiring Indenture Trustee and to the
Issuer. Thereupon, if all sums due the retiring Indenture Trustee pursuant to
Section 6.7 have been paid in full, the resignation or removal of the retiring
Indenture Trustee shall become effective, and the successor Indenture Trustee
shall have all the rights, powers and duties of the Indenture Trustee under this
Indenture. The successor Indenture Trustee shall mail a notice of its succession
to Noteholders. If all sums due the retiring Indenture Trustee pursuant to
Section 6.7 have been paid in full, the retiring Indenture Trustee shall
promptly transfer all property held by it as Indenture Trustee to the successor
Indenture Trustee.
(c) If a successor Indenture Trustee does not take office
within sixty (60) days after the retiring Indenture Trustee resigns or is
removed, the retiring Indenture Trustee, the Issuer or the Noteholders of Notes
evidencing not less than a majority in principal amount of the Controlling Note
Class may petition any court of competent jurisdiction for the appointment of a
successor Indenture Trustee. If the Indenture Trustee fails to
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comply with Section 6.11, any Noteholder who has been a bona fide Noteholder for
at least six (6) months may petition any court of competent jurisdiction for the
removal of the Indenture Trustee and the appointment of a successor Indenture
Trustee.
(d) Notwithstanding the replacement of the Indenture Trustee
pursuant to this Section 6.8, the obligations of the Issuer and the
Administrator under Section 6.7 shall continue for the benefit of the retiring
Indenture Trustee.
SECTION 6.9 Successor Indenture Trustee by Merger. (a) If the
Indenture Trustee consolidates with, merges or converts into, or transfers all
or substantially all its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee
corporation or banking association without any further act shall be the
successor Indenture Trustee; provided that such corporation or banking
association shall be otherwise qualified and eligible under Section 6.11. The
Indenture Trustee shall provide the Rating Agencies with prior written notice of
any such transaction.
(b) In case at the time such successor or successors by
merger, conversion or consolidation to the Indenture Trustee shall succeed to
the trusts created by this Indenture any of the Notes shall have been
authenticated but not delivered, any such successor to the 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 provided anywhere in the Notes or in this
Indenture that the certificate of the Indenture Trustee shall have.
SECTION 6.10 Appointment of Co-Indenture Trustee or Separate
Indenture Trustee. (a) Notwithstanding any other provisions of this Indenture,
at any time, for the purpose of meeting any legal requirement of any
jurisdiction in which any part of the Indenture Trust Estate may at the time be
located, the Indenture Trustee
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shall have the power and may execute and deliver an instrument to appoint one or
more Persons to act as a co-trustee or co-trustees, or separate trustee or
separate trustees, of all or any part of the Trust, and to vest in such Person
or Persons, in such capacity and for the benefit of the Noteholders, such title
to the Indenture Trust Estate, or any part hereof, and, subject to the other
provisions of this Section 6.10, such powers, duties, obligations, rights and
trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 and no notice to
Noteholders of the appointment of any co-trustee or separate trustee shall be
required under Section 6.8.
(b) Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations
conferred or imposed upon the Indenture Trustee shall be
conferred or imposed upon and exercised or performed by the
Indenture Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or
co-trustee shall not be authorized to act separately without
the Indenture Trustee joining in such act), except to the
extent that under any law of any jurisdiction in which any
particular act or acts are to be performed the Indenture
Trustee shall be incompetent or unqualified to perform such
act or acts, in which event such rights, powers, duties and
obligations (including the holding of title to the Indenture
Trust Estate or any portion thereof in any such jurisdiction)
shall be exercised and performed singly by such separate
trustee or co-trustee, but solely at the direction of the
Indenture Trustee;
(ii) no trustee hereunder shall be personally liable
by reason of any act or omission of any other trustee
hereunder; and
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(iii) the Indenture Trustee may at any time accept
the resignation of or remove any separate trustee or
co-trustee.
(c) Any notice, request or other writing given to the
Indenture Trustee shall be deemed to have been given to each of the then
separate trustees and co-trustees, as effectively as if given to each of them.
Every instrument appointing any separate trustee or co-trustee shall refer to
this Indenture and the conditions of this Article VI. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Indenture Trustee or separately, as may be provided therein,
subject to all the provisions of this Indenture, specifically including every
provision of this Indenture relating to the conduct of, affecting the liability
of, or affording protection to, the Indenture Trustee. Every such instrument
shall be filed with the Indenture Trustee.
(d) Any separate trustee or co-trustee may at any time
constitute the Indenture Trustee its agent or attorney-in-fact with full power
and authority, to the extent not prohibited by law, to do any lawful act under
or in respect of this Agreement on its behalf and in its name. If any separate
trustee or co-trustee shall die, become incapable of acting, resign or be
removed, all of its estates, properties, rights, remedies and trusts shall vest
in and be exercised by the Indenture Trustee, to the extent permitted by law,
without the appointment of a new or successor trustee.
SECTION 6.11 Eligibility; Disqualification. (a) 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).
(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
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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).
(c) 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
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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.
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ARTICLE VII
NOTEHOLDERS' LISTS AND REPORTS
SECTION 7.1 Issuer To Furnish Indenture Trustee Names and
Addresses of Noteholders. The Issuer shall furnish or cause to be furnished to
the Indenture Trustee (a) not more than five (5) days after each Record Date, a
list, in such form as the Indenture Trustee may reasonably require, of the names
and addresses of the Noteholders as of such Record Date and (b) at such other
times as the Indenture Trustee may request in writing, within thirty (30) days
after receipt by the Issuer of any such request, a list of similar form and
content as of a date not more than ten (10) days prior to the time such list is
furnished; provided, however, that (i) so long as the Indenture Trustee is the
Note Registrar, no such list shall be required to be furnished and (ii) no such
list shall be required to be furnished with respect to Noteholders of Book-Entry
Notes.
SECTION 7.2 Preservation of Information; Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as
is reasonably practicable, the names and addresses of the Noteholders contained
in the most recent list furnished to the Indenture Trustee as provided in
Section 7.1 and the names and addresses of Noteholders received by the Indenture
Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.1 upon receipt of a new list
so furnished.
(b) Noteholders may communicate pursuant to TIA Section 312(b)
with other Noteholders with respect to their rights under this Indenture or
under the Notes. Upon receipt by the Indenture Trustee of any request by three
or more Noteholders or by one or more Noteholders of Notes evidencing not less
than 25% of the Notes Outstanding to receive a copy of the current list of
Noteholders (whether or not made pursuant to TIA Section 312(b)), the Indenture
Trustee shall promptly notify the Administrator thereof by providing to the
Administrator a copy of such request and a copy of the list of Noteholders
produced in response thereto.
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(c) The Issuer, the Indenture Trustee and the Note Registrar
shall have the protection of TIA Section 312(c).
SECTION 7.3 Reports by Issuer. (a) The
Issuer shall:
(i) file with the Indenture Trustee, within fifteen
(15) days after the Issuer is required to file the same with
the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such
portions of any of the foregoing as the Commission may from
time to time by rules and regulations prescribe) that the
Issuer may be required to file with the Commission pursuant to
Section 13 or 15(d) of the Exchange Act;
(ii) file with the Indenture Trustee and the
Commission in accordance with the rules and regulations
prescribed from time to time by the Commission such additional
information, documents and reports with respect to compliance
by the Issuer with the conditions and covenants of this
Indenture as may be required from time to time by such rules
and regulations; and
(iii) supply to the Indenture Trustee (and the
Indenture Trustee shall transmit by mail to all Noteholders
described in TIA Section 313(c)) such summaries of any
information, documents and reports required to be filed by the
Issuer pursuant to clauses (i) and (ii) of this Section 7.3(a)
and by rules and regulations prescribed from time to time by
the Commission.
(b) Unless the Issuer otherwise determines, the fiscal year of
the Issuer shall correspond to the calendar year.
SECTION 7.4 Reports by Indenture Trustee. (a) If required by
TIA Section 313(a), within sixty (60) days after each May 15, beginning with May
15, 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
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Indenture Trustee also shall comply with TIA Section 313(b).
(b) A copy of each report at the time of its mailing to
Noteholders shall be filed by the Indenture Trustee with the Commission and each
stock exchange, if any, on which the Notes are listed. The Issuer shall notify
the Indenture Trustee if and when the Notes are listed on any stock exchange.
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ARTICLE VIII
ACCOUNTS, DISBURSEMENTS AND RELEASES
SECTION 8.1 Collection of Money. Except as otherwise expressly
provided herein, the Indenture Trustee may demand payment or delivery of, and
shall receive and collect, directly and without intervention or assistance of
any fiscal agent or other intermediary, all money and other property payable to
or receivable by the Indenture Trustee pursuant to this Indenture and the Sale
and Servicing Agreement. The Indenture Trustee shall apply all such money
received by it as provided in this Indenture and the Sale and Servicing
Agreement. Except as otherwise expressly provided in this Indenture, if any
default occurs in the making of any payment or performance under any agreement
or instrument that is part of the Indenture Trust Estate, the Indenture Trustee
may take such action as may be appropriate to enforce such payment or
performance, including the institution and prosecution of appropriate
Proceedings. Any such action shall be without prejudice to any right to claim a
Default or Event of Default under this Indenture and any right to proceed
thereafter as provided in Article V.
SECTION 8.2 Trust Accounts and Payahead Account. (a) On or
prior to the Closing Date, the Issuer shall cause the Servicer to establish and
maintain the Trust Accounts and the Payahead Account as provided in Sections 4.1
and 4.7 of the Sale and Servicing Agreement.
(b) On or before each Distribution Date, the Servicer shall
deposit all Available Collections with respect to the Collection Period
preceding such Distribution Date in the Collection Account as provided in
Sections 4.2, 4.3, 4.4 and 4.5 of the Sale and Servicing Agreement. On or before
each Distribution Date, all amounts required to be withdrawn from the Reserve
Account and deposited in the Collection Account pursuant to Section 4.5 of the
Sale and Servicing Agreement shall be withdrawn by the Indenture Trustee from
the Reserve Account and deposited to the Collection Account.
(c) On each Distribution Date, the Indenture Trustee (based on
the information contained in the Servicer's Certificate delivered on or before
the related Determination Date pursuant to Section 3.9 of the Sale
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and Servicing Agreement) shall make the following withdrawals from the
Collection Account and make deposits, distributions and payments, to the extent
of funds on deposit in the Collection Account with respect to the Collection
Period preceding such Distribution Date (including funds, if any, deposited
therein from the Reserve Account and the Payahead Account), in the following
order of priority:
(i) first, to the Servicer, the Servicing Fee and
all unpaid Servicing Fees from prior Collection Periods;
(ii) second, to the Noteholders of Class A Notes, the
Accrued Class A Note Interest; provided that if there are not
sufficient funds available to pay the entire amount of the
Accrued Class A Note Interest, the amounts available shall be
applied to the payment of such interest on the Class A Notes
on a pro rata basis;
(iii) third, to the Principal Distribution Account,
the First Priority Principal Distribution Amount, if any;
(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;
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(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 any other provision of this Article VIII, and subject to Section
5.4(b), (A) following the occurrence and during the continuation of an Event of
Default specified in Section 5.1(i), 5.1(ii), 5.1(iv) or 5.1(v) which has
resulted in an acceleration of the Notes (or following the occurrence of any
such event after an Event of Default specified in Section 5.1(iii) has occurred
and the Notes have been accelerated), 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 Class A Notes to zero, (B) following the occurrence
and during the continuation of an Event of Default specified in Section
5.1(iii), 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
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Determination Date pursuant to Section 3.9 of the Sale and Servicing Agreement)
shall withdraw the funds on deposit in the Principal Distribution Account with
respect to the Collection Period preceding such Distribution Date and make
distributions and payments in the following order of priority:
(i) first, to the Noteholders of the Class A-1 Notes
in reduction of principal until the principal amount of the
Outstanding Class A-1 Notes has been paid in full; provided
that if there are not sufficient funds available to pay the
principal amount of the Outstanding Class A-1 Notes in full,
the amounts available shall be applied to the payment of
principal on the Class A-1 Notes on a pro rata basis;
(ii) second, to the Noteholders of the Class A-2
Notes in reduction of principal until the principal amount of
the Outstanding Class A-2 Notes has been paid in full;
provided that if there are 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;
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(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 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;
(vii) seventh, 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;
(viii) eighth, 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
(ix) ninth, 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
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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
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reinvest funds in the Collection Account, the Payahead Account or the Reserve
Account, as the case may be, in one or more Permitted Investments described in
clause (b) of the definition thereof.
SECTION 8.4 Release of Indenture Trust Estate. (a) Subject to
the payment of its fees and expenses pursuant to Section 6.7, the Indenture
Trustee may, and when required by the provisions of this Indenture shall,
execute instruments to release property from the lien of this Indenture, or
convey the Indenture Trustee's interest in the same, in a manner and under
circumstances that are not inconsistent with the provisions of this Indenture.
No party relying upon an instrument executed by the Indenture Trustee as
provided in this Article VIII shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
(b) The Indenture Trustee shall, at such time as there are no
Notes Outstanding and all sums due the Indenture Trustee pursuant to Section 6.7
have been paid in full, release any remaining portion of the Indenture Trust
Estate that secured the Notes from the lien of this Indenture and release to the
Issuer or any other Person entitled thereto any funds then on deposit in the
Trust Accounts. The Indenture Trustee shall release property from the lien of
this Indenture pursuant to this Section 8.4(b) only upon receipt of an Issuer
Request accompanied by an Officer's Certificate, an Opinion of Counsel and (if
required by the TIA) Independent Certificates in accordance with TIA Sections
314(c) and 314(d)(1) meeting the applicable requirements of Section 11.1.
(c) Each Noteholder or Note Owner, by its acceptance of a Note
or, in the case of a Note Owner, a beneficial interest in a Note, acknowledges
that from time to time the Indenture Trustee shall release the lien of this
Indenture on any Receivable to be sold to (i) the Seller in accordance with
Section 2.3 of the Sale and Servicing Agreement and (ii) to the Servicer in
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
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Section 8.4(a), accompanied by copies of any instruments involved, and the
Indenture Trustee shall also require, except in connection with any action
contemplated by Section 8.4(c), as a condition to such action, an Opinion of
Counsel, in form and substance satisfactory to the Indenture Trustee, stating
the legal effect of any such action, outlining the steps required to complete
the same, and concluding that all conditions precedent to the taking of such
action have been complied with and such action will not materially and adversely
impair the security for the Notes or the rights of the Noteholders in
contravention of the provisions of this Indenture; provided, however, that such
Opinion of Counsel shall not be required to express an opinion as to the fair
value of the Indenture Trust Estate. Counsel rendering any such opinion may
rely, without independent investigation, on the accuracy and validity of any
certificate or other instrument delivered to the Indenture Trustee in connection
with any such action.
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ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1 Supplemental Indentures Without Consent of
Noteholders. (a) Without the consent of the Noteholders but with prior notice to
the Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Order, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as in force at the date of the execution thereof), in form
satisfactory to the Indenture Trustee, for any of the following purposes:
(i) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or
better to assure, convey and confirm unto the Indenture
Trustee any property subject or required to be subjected to
the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(ii) to evidence the succession, in compliance with
the applicable provisions hereof, of another Person to the
Issuer, and the assumption by any such successor of the
covenants of the Issuer herein and in the Notes contained;
(iii) to add to the covenants of the Issuer, for the
benefit of the Noteholders, or to surrender any right or power
herein conferred upon the Issuer;
(iv) to convey, transfer, assign, mortgage or pledge
any property to or with the Indenture Trustee;
(v) to cure any ambiguity, to correct or supplement
any provision herein or in any supplemental indenture that may
be inconsistent with any other provision herein or in any
supplemental indenture or to make any other provisions with
respect to matters or questions arising under this Indenture
or under any supplemental indenture which shall not be
incon-
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sistent with the provisions of the Indenture; provided that
such action shall not materially adversely affect the
interests of the Noteholders;
(vi) to evidence and provide for the acceptance of
the appointment hereunder by a successor trustee with respect
to the Notes and to add to or change any of the provisions of
this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one
trustee, pursuant to the requirements of Article VI; or
(vii) to modify, eliminate or add to the provisions
of this Indenture to such extent as shall be necessary to
affect the qualification of this Indenture under the TIA or
under any similar federal statute hereafter enacted and to add
to this Indenture such other provisions as may be expressly
required by the TIA.
The Indenture Trustee is hereby authorized to join in the
execution of any such supplemental indenture and to make any further appropriate
agreements and stipulations that may be therein contained.
(b) The Issuer and the Indenture Trustee, when authorized by
an Issuer Order, may, also without the consent of any of the Noteholders but
with prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner (other than the modifications set forth in Section 9.2)
the rights of the Noteholders under this Indenture; provided, however, that (i)
such action shall not, as evidenced by an Opinion of Counsel, adversely affect
in any material respect the interests of any Noteholder, (ii) the Rating Agency
Condition shall have been satisfied with respect to such action and (iii) such
action shall not, as evidenced by an Opinion of Counsel, cause the Issuer to be
characterized for federal or any then Applicable Tax State income tax purposes
as an association taxable as a corporation or otherwise have any material
adverse impact on the federal or any then Applicable Tax State income taxation
of any Notes Out-
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standing 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, 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 (iii) (x) such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests of
any Noteholder, with respect to supplemental indentures relating to matters
other than those specified in clause (y) below or (y) the Noteholders of each
Outstanding Note affected thereby shall have consented thereto, with respect to
any supplemental indenture which would:
(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
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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 Notes Outstanding or the Controlling Note Class, 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 (x) the provisions of the
proviso to the definition of the term "Outstanding" or (y) the
definition of "Controlling Note Class";
(v) reduce the percentage of the principal amount of
the Notes Outstanding or of the Controlling Note Class
required to direct or consent to a sale or liquidation by the
Indenture Trustee of 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/or the Certificates, as
applicable;
(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;
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(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 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.
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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,
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in the opinion of the Indenture Trustee and the Issuer, to any such supplemental
indenture may be prepared and executed by the Issuer and authenticated and
delivered by the Indenture Trustee in exchange for Outstanding Notes.
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ARTICLE X
REDEMPTION OF NOTES
SECTION 10.1 Redemption. (a) The Class A 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. 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 and the Rating Agencies not later than forty (40) days prior to the
Redemption Date (and the Indenture Trustee shall promptly furnish notice to the
Noteholders) 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
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following receipt of notice from the Issuer or Servicer pursuant to Section
10.1(a), but not later than thirty (30) days prior to the applicable Redemption
Date, to each Noteholder as of the close of business on the Record Date
preceding the applicable Redemption Date, at such Noteholder's address or
facsimile number appearing in the Note Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price;
(iii) the place where such Notes are to be
surrendered for payment of the Redemption Price (which shall
be the office or agency of the Issuer to be maintained as
provided in Section 3.2); and
(iv) that on the Redemption Date, the Redemption
Price will become due and payable upon each such Note and that
interest thereon shall cease to accrue for and after said
date.
Notice of redemption of the Notes shall be given by the Indenture Trustee in the
name and at the expense of the Issuer. Failure to give notice of redemption, or
any defect therein, to any Noteholder shall not impair or affect the validity of
the redemption of any other Note.
SECTION 10.3 Notes Payable on Redemption Date. The Notes to be
redeemed shall, following notice of redemption as required by Section 10.2 (in
the case of redemption pursuant to Section 10.1(a)), shall on the Redemption
Date become due and payable at the Redemption Price and (unless the Issuer shall
default in the payment of the Redemption Price) no interest shall accrue on the
Redemption Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Redemption Price.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Compliance Certificates and Opinions, etc. (a)
Upon any application or request by the Issuer to the Indenture Trustee to take
any action under any provision of this Indenture, the Issuer shall furnish to
the Indenture Trustee (i) an Officer's Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with, (ii) an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with and (iii) (if required by the TIA) an Independent Certificate from
a firm of certified public accountants meeting the applicable requirements of
this Section 11.1, except that, in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(A) a statement that each signatory of such certificate or
opinion has read or has caused to be read such covenant or condition
and the definitions herein relating thereto;
(B) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(C) a statement that, in the opinion of each such signatory,
such signatory has made such examination or investigation as is
necessary to enable such signatory to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(D) a statement as to whether, in the opinion of each such
signatory, such condition or covenant has been complied with.
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(b) (i) Prior to the deposit of any Collateral or other
property or securities with the Indenture Trustee that is to
be made the basis for the release of any property or
securities subject to the lien of this Indenture, the Issuer
shall, in addition to any obligation imposed in Section
11.1(a) or elsewhere in this Indenture, furnish to the
Indenture Trustee an Officer's Certificate certifying or
stating the opinion of each person signing such certificate as
to the fair value (within ninety (90) days of such deposit) to
the Issuer of the Collateral or other property or securities
to be so deposited.
(ii) Whenever the Issuer is required to furnish to
the Indenture Trustee an Officer's Certificate certifying or
stating the opinion of any signer thereof as to the matters
described in clause (i) above, the Issuer shall also deliver
to the Indenture Trustee an Independent Certificate as to the
same matters, if the fair value to the Issuer of the
securities to be so deposited and of all other such securities
made the basis of any such withdrawal or release since the
commencement of the then-current fiscal year of the Issuer, as
set forth in the certificates delivered pursuant to clause (i)
above and this clause (ii), is ten percent (10%) or more of
the principal amount of the Notes Outstanding, but such a
certificate need not be furnished with respect to any
securities so deposited, if the fair value thereof to the
Issuer as set forth in the related Officer's Certificate is
less than $25,000 or less than one percent (1%) of the
principal amount of the Notes Outstanding.
(iii) Whenever any property or securities are to be
released from the lien of this Indenture, the Issuer shall
also furnish to the Indenture Trustee an Officer's Certificate
certifying or stating the opinion of each person signing such
certificate as to the fair value (within ninety (90) days of
such release) of the property or securities proposed to be
released and stating that in the opinion of
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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
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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 of an
Authorized Officer or opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
officer or officers of the Servicer, the Seller, the Administrator or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Servicer, the Seller, the Administrator or the Issuer, or
in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to such matters are erroneous.
(c) Where any Person is required to make, give or execute two
or more applications, requests, comments, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be 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
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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 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 pur-
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pose 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-D, 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, 55 Water Street, 40th Floor, New York, New
York 10041, 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
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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
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
90
<PAGE> 99
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.
91
<PAGE> 100
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
92
<PAGE> 101
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 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.
93
<PAGE> 102
IN WITNESS WHEREOF, the Issuer and the Indenture Trustee have
caused this Indenture to be duly executed by their respective officers,
thereunto duly authorized, all as of the day and year first above written.
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
By: /s/ Joyce P. Maccou
----------------------------------------
Name: Joyce P. Maccou
Title: Assistant Treasurer
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> 103
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.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 PURSUANT TO
THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION 3(a)(3) THEREOF.
REGISTERED $153,000,000
No. R-[ ] CUSIP NO. 34527RCV3
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS A-1 5.411% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, 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 ONE HUNDRED AND FIFTY THREE MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $153,000,000
(the original face amount of this Note) and the denominator of which is
$153,000,000 by (ii) the aggregate amount, if any, payable to Noteholders of
Class
A-1-1
<PAGE> 104
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 September 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
December 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
Distribution Date on which interest has been paid (or, in the case of the
initial Distribution Date, from the Closing Date) to but excluding such
Distribution Date. Interest will be computed on the basis of actual days elapsed
and a 360-day year. Such principal of and interest on this Note shall be paid in
the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
A-1-2
<PAGE> 105
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-1-3
<PAGE> 106
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
--------------------------------
Authorized Officer
<PAGE> 107
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-1 5.411% Asset Backed Notes (the "Class A-1
Notes") which, together with the Issuer's Class A-2 5.816% Asset Backed Notes
(the "Class A-2 Notes"), Class A-3 6.20% Asset Backed Notes (the "Class A-3
Notes"), Class A-4 6.40% Asset Backed Notes (the "Class A-4 Notes"), Class A-5
6.52% 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 and the Class A-4 Notes, the
"Class A Notes") and Class B 6.87% 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 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 October 15, 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 Class A Notes have declared the Notes to be immediately due and payable
in the manner provided in Section 5.2 of the Indenture. All
A-1-5
<PAGE> 108
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 will be made without requiring that this Note be
submitted for notation of payment. Any reduction in the principal amount of this
Note (or any one or more Predecessor Notes) effected by any payments made on any
Distribution Date shall be binding upon all future Noteholders of this Note and
of any Note issued upon the registration of transfer hereof or in exchange
hereof or in lieu hereof, whether or not noted hereon. If funds are expected to
be available, as provided in the Indenture, for payment in full of the then
remaining unpaid principal amount of this Note on a Distribution Date, then the
Indenture Trustee, in the name of and on behalf of the Issuer, will notify the
Person who was the Registered Noteholder hereof as of the Record Date preceding
such Distribution Date by notice mailed or transmitted by facsimile prior to
such Distribution Date, and the amount then due and payable shall be payable
only upon presentation and surrender of this Note at the Indenture Trustee's
principal Corporate Trust Office or at the office of the Indenture Trustee's
agent appointed for such purposes located in The City of New York.
A-1-6
<PAGE> 109
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, 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.
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
A-1-7
<PAGE> 110
Person may have expressly agreed and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for
any unpaid consideration for stock, unpaid capital contribution for stock,
unpaid capital contribution or failure to pay any installment or call owing to
such entity.
Each Noteholder or Note Owner, by acceptance of a Note or, in
the case of a Note Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Note Owner
will not at any time institute against the Seller, the General Partner or the
Issuer, or join in any institution against the Seller, the General Partner or
the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or State bankruptcy or
similar law in connection with any obligations relating to the Notes, the
Indenture or the other Basic Documents.
The Issuer has entered into the Indenture and this Note is
issued with the intention that, for federal, State and local income, and
franchise tax purposes, the Notes will qualify as indebtedness of the Issuer
secured by the Indenture Trust Estate. Each Noteholder, by its acceptance of a
Note (and each Note Owner by its acceptance of a beneficial interest in a Note),
will be deemed to agree to treat the Notes for federal, State and local income,
single business and franchise tax purposes as indebtedness of the Issuer.
Prior to the due presentment for registration of transfer of
this Note, the Issuer, the Indenture Trustee and any agent of the Issuer or the
Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is
registered as the owner hereof for all purposes, whether or not this Note be
overdue, and none of the Issuer, the Indenture Trustee or any such agent shall
be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the
consent of all Noteholders adversely affected) the amendment thereof by the
Issuer and the Indenture Trustee without the consent of the Noteholders provided
certain conditions are satisfied. The Indenture
A-1-8
<PAGE> 111
also contains provisions permitting the Noteholders of Notes evidencing
specified percentages of the principal amount of the Notes Outstanding or of the
Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of The Chase Manhattan Bank, in
its individual capacity, 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
A-1-9
<PAGE> 112
to any of them for, the payment of principal or of interest on this Note or
performance of, or omission to perform, any of the covenants, obligations or
indemnifications contained in the Indenture. The Noteholder of this Note, by his
acceptance hereof, agrees that, except as expressly provided in the Basic
Documents, in the case of an Event of Default under the Indenture, the
Noteholder shall have no claim against any of the foregoing for any deficiency,
loss or claim therefrom; provided, however, that nothing contained herein shall
be taken to prevent recourse to, and enforcement against, the assets of the
Issuer for any and all liabilities, obligations and undertakings contained in
the Indenture or in this Note.
A-1-10
<PAGE> 113
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> 114
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.
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 PURSUANT TO
THE EXEMPTION FROM REGISTRATION SET FORTH IN SECTION 3(a)(3) THEREOF.
REGISTERED $449,000,000
No. R-[ ] CUSIP NO. 34527RCW1
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS A-2 5.816% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of FOUR HUNDRED AND FORTY_NINE MILLION
DOLLARS payable on each Distribution Date in an amount equal to the result
obtained by multiplying (i) a fraction the numerator of which is $449,000,000
(the original face amount of this Note) and the denominator of which is
$449,000,000 by (ii) the aggregate amount, if any, payable to Noteholders of
Class
A-2-1
<PAGE> 115
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 September 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 June
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
Distribution Date on which interest has been paid (or, in the case of the
initial Distribution Date, from the Closing Date) to but excluding such
Distribution Date. Interest will be computed on the basis of actual days elapsed
and a 360-day year. Such principal of and interest on this Note shall be paid
in the manner specified on the reverse hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
A-2-2
<PAGE> 116
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-2-3
<PAGE> 117
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
------------------------------
Authorized Officer
<PAGE> 118
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-2 5.816% Asset Backed Notes (the "Class A-2
Notes") which, together with the Issuer's Class A-1 5.411% Asset Backed Notes
(the "Class A-1 Notes"), Class A-3 6.20% Asset Backed Notes (the "Class A-3
Notes"), Class A-4 6.40% Asset Backed Notes (the "Class A-4 Notes"), Class A-5
6.52% 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 and the Class A-4 Notes, the
"Class A Notes") and Class B 6.87% 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 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 October 15, 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 Class A Notes have declared the Notes to be immediately due and payable
in the
A-2-5
<PAGE> 119
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 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 Inden-
A-2-6
<PAGE> 120
ture 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, 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.
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
A-2-7
<PAGE> 121
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 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 requiring the
consent of all Noteholders adversely af-
A-2-8
<PAGE> 122
fected) the amendment thereof by the Issuer and the Indenture Trustee without
the consent of the Noteholders provided certain conditions are satisfied. The
Indenture also contains provisions permitting the Noteholders of Notes
evidencing specified percentages of the principal amount of the Notes
Outstanding or of the Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of The Chase Manhattan Bank, in
its individual capacity, The Bank of New York, in its individual capacity, any
owner of a beneficial interest in the Issuer, or
A-2-9
<PAGE> 123
any of their respective partners, beneficiaries, agents, officers, directors,
employees or successors or assigns shall be personally liable for, nor shall
recourse be had to any of them for, the payment of principal or of interest on
this Note or performance of, or omission to perform, any of the covenants,
obligations or indemnifications contained in the Indenture. The Noteholder of
this Note, by his acceptance hereof, agrees that, except as expressly provided
in the Basic Documents, in the case of an Event of Default under the Indenture,
the Noteholder shall have no claim against any of the foregoing for any
deficiency, loss or claim therefrom; provided, however, that nothing contained
herein shall be taken to prevent recourse to, and enforcement against, the
assets of the Issuer for any and all liabilities, obligations and undertakings
contained in the Indenture or in this Note.
A-2-10
<PAGE> 124
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
--------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
------------------ -------------------------
Signature Guaranteed
*/
-------------------------
- -------------------------
*/ NOTICE: The signature to this assignment must correspond with the name of the
registered owner as it appears on the face of the within Note in every
particular, without alteration, enlargement or any change whatever. Such
signature must be guaranteed by an "eligible guarantor institution" meeting
the requirements of the Note Registrar.
A-2-11
<PAGE> 125
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 $1,370,000,000
No. R-[ ] CUSIP NO. 34527RCX9
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS A-3 6.20% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, 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 ONE BILLION THREE HUNDRED AND
SEVENTY MILLION DOLLARS payable on each Distribution Date in an amount equal to
the result obtained by multiplying (i) a fraction the numerator of which is
$1,370,000,000 (the original face amount of this Note) and the denominator of
which is $1,370,000,000 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 September 1, 1999 (as from time to time
A-3-1
<PAGE> 126
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 2002 Distribution Date (the "Class A-3 Final Scheduled Distribution
Date"). Capitalized terms used but not defined herein are defined in Article I
of the Indenture, which also contains rules as to construction that shall be
applicable herein.
The Issuer shall pay interest on this Note at the rate per
annum shown above on each Distribution Date until the principal of this Note is
paid or made available for payment, on the principal amount of this Note
outstanding on the preceding Distribution Date (after giving effect to all
payments of principal made on the preceding Distribution Date), subject to
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Note will accrue for each Distribution Date from and including the fifteenth day
of the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
A-3-2
<PAGE> 127
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-3-3
<PAGE> 128
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
-------------------------------
Authorized Officer
<PAGE> 129
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-3 6.20% Asset Backed Notes (the "Class A-3
Notes") which, together with the Issuer's Class A-1 5.411% Asset Backed Notes
(the "Class A-1 Notes"), Class A-2 5.816% Asset Backed Notes (the "Class A-2
Notes"), Class A-4 6.40% Asset Backed Notes (the "Class A-4 Notes"), Class A-5
6.52% 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 and the Class A-4 Notes, the
"Class A Notes") and Class B 6.87% 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 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 October 15, 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 Class A Notes have declared the Notes to be immediately due and payable
in the
A-3-5
<PAGE> 130
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 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 Inden-
A-3-6
<PAGE> 131
ture 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,
A-3-7
<PAGE> 132
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 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.
A-3-8
<PAGE> 133
The Indenture permits (with certain exceptions requiring the
consent of all Noteholders adversely affected) the amendment thereof by the
Issuer and the Indenture Trustee without the consent of the Noteholders provided
certain conditions are satisfied. The Indenture also contains provisions
permitting the Noteholders of Notes evidencing specified percentages of the
principal amount of the Notes Outstanding or of the Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of The Chase Manhattan Bank, in
its individual capacity, The Bank of New York, in its individual
A-3-9
<PAGE> 134
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.
A-3-10
<PAGE> 135
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
------------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
------------------- ------------------------
Signature Guaranteed
*/
------------------------
- -------------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
A-3-11
<PAGE> 136
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 $400,000,000
No. R-[ ] CUSIP NO. 34527RCY7
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS A-4 6.40% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of FOUR HUNDRED MILLION DOLLARS payable
on each Distribution Date in an amount equal to the result obtained by
multiplying (i) a fraction the numerator of which is $400,000,000 (the original
face amount of this Note) and the denominator of which is $400,000,000 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 September 1,
A-4-1
<PAGE> 137
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 October 2002 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 day
of the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
A-4-2
<PAGE> 138
Unless the certificate of authentication hereon has been
executed by the Indenture Trustee whose name appears below by manual signature,
this Note shall not be entitled to any benefit under the Indenture referred to
on the reverse hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-4-3
<PAGE> 139
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
---------------------------
Authorized Officer
<PAGE> 140
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-4 6.40% Asset Backed Notes (the "Class A-4
Notes") which, together with the Issuer's Class A-1 5.411% Asset Backed Notes
(the "Class A-1 Notes"), Class A-2 5.816% Asset Backed Notes (the "Class A-2
Notes"), Class A-3 6.20% Asset Backed Notes (the "Class A-3 Notes"), Class A-5
6.52% 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 and the Class A-4 Notes, the
"Class A Notes") and Class B 6.87% 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 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 October 15, 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 Class A Notes have declared the Notes to be immediately due and payable
in the
A-4-5
<PAGE> 141
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 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 Inden-
A-4-6
<PAGE> 142
ture 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,
A-4-7
<PAGE> 143
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 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.
A-4-8
<PAGE> 144
The Indenture permits (with certain exceptions requiring the
consent of all Noteholders adversely affected) the amendment thereof by the
Issuer and the Indenture Trustee without the consent of the Noteholders provided
certain conditions are satisfied. The Indenture also contains provisions
permitting the Noteholders of Notes evidencing specified percentages of the
principal amount of the Notes Outstanding or of the Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of The Chase Manhattan Bank, in
its individual
A-4-9
<PAGE> 145
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.
A-4-10
<PAGE> 146
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
----------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
-------------------------
Signature Guaranteed
*/
-------------------------
- -----------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
A-4-11
<PAGE> 147
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 $588,189,000
No. R-[ ] CUSIP NO. 34527RCZ4
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS A-5 6.52% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, a business trust
organized and existing under the laws of the State of Delaware (herein referred
to as the "Issuer"), for value received, hereby promises to pay to CEDE & CO.,
or registered assigns, the principal sum of FIVE HUNDRED EIGHTY-EIGHT MILLION
ONE HUNDRED AND EIGHTY-NINE THOUSAND DOLLARS payable on each Distribution Date
in an amount equal to the result obtained by multiplying (i) a fraction the
numerator of which is $588,189,000 (the original face amount of this Note) and
the denominator of which is $588,189,000 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
A-5-1
<PAGE> 148
Section 3.1 of the Indenture dated as of September 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 September 2003 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
certain limitations contained in Section 3.1 of the Indenture. Interest on this
Note will accrue for each Distribution Date from and including the fifteenth day
of the calendar month immediately preceding such Distribution Date (or, in the
case of the initial Distribution Date, from the Closing Date) to but excluding
the fifteenth day of the following calendar month. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. Such principal of and
interest on this Note shall be paid in the manner specified on the reverse
hereof.
The principal of and interest on this Note are payable in such
coin or currency of the United States of America as at the time of payment is
legal tender for payment of public and private debts. All payments made by the
Issuer with respect to this Note shall be applied first to interest due and
payable on this Note as provided above and then to the unpaid principal of this
Note.
Reference is made to the further provisions of this Note set
forth on the reverse hereof, which shall have the same effect as though fully
set forth on the face of this Note.
A-5-2
<PAGE> 149
Unless the certificate of authentication hereon has been executed by the
Indenture Trustee whose name appears below by manual signature, this Note shall
not be entitled to any benefit under the Indenture referred to on the reverse
hereof, or be valid or obligatory for any purpose.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK.]
A-5-3
<PAGE> 150
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
--------------------------------
Authorized Officer
<PAGE> 151
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class A-5 6.52% Asset Backed Notes (the "Class A-5
Notes") which, together with the Issuer's Class A-1 5.411% Asset Backed Notes
(the "Class A-1 Notes"), Class A-2 5.816% Asset Backed Notes (the "Class A-2
Notes"), Class A-3 6.20% Asset Backed Notes (the "Class A-3 Notes"), Class A-4
6.40% Asset Backed Notes (the "Class A-4 Notes" and, together with the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes and the Class A-5 Notes, the
"Class A Notes") and Class B 6.87% 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 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 October 15, 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
A-5-5
<PAGE> 152
amount of the Class A Notes 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 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
princi-
A-5-6
<PAGE> 153
pal 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
A-5-7
<PAGE> 154
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 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
A-5-8
<PAGE> 155
or any such agent shall be affected by notice to the contrary.
The Indenture permits (with certain exceptions requiring the
consent of all Noteholders adversely affected) the amendment thereof by the
Issuer and the Indenture Trustee without the consent of the Noteholders provided
certain conditions are satisfied. The Indenture also contains provisions
permitting the Noteholders of Notes evidencing specified percentages of the
principal amount of the Notes Outstanding or of the Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
A-5-9
<PAGE> 156
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.
A-5-10
<PAGE> 157
ASSIGNMENT
Social Security or taxpayer I.D. or other identifying number of assignee:
-----------------------
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto:
- --------------------------------------------------------------------------------
(name and address of assignee)
the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises.
Dated: */
---------------- -------------------------
Signature Guaranteed
*/
-------------------------
- ----------------------
*/ NOTICE: The signature to this assignment must correspond with the name
of the registered owner as it appears on the face of the within Note in
every particular, without alteration, enlargement or any change
whatever. Such signature must be guaranteed by an "eligible guarantor
institution" meeting the requirements of the Note Registrar.
A-5-11
<PAGE> 158
EXHIBIT B
[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 $109,640,000
No. R-[ ] CUSIP NO. 34527RDA8
FORD CREDIT AUTO OWNER TRUST 1999-D
CLASS B 6.87% ASSET BACKED NOTES
Ford Credit Auto Owner Trust 1999-D, 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 ONE HUNDRED NINE MILLION SIX HUNDRED
AND FORTY THOUSAND DOLLARS payable on each Distribution Date in an amount equal
to the result obtained by multiplying (i) a fraction the numerator of which is
$109,640,000 (the original face amount of this Note) and the denominator of
which is $109,640,000 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 Iden-
B-1
<PAGE> 159
ture dated as of September 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
January 2004 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
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.
B-2
<PAGE> 160
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.]
B-3
<PAGE> 161
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: September 23, 1999
FORD CREDIT AUTO OWNER TRUST 1999-D
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee of
Ford Credit Auto Owner Trust
1999-D
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: September 23, 1999
THE CHASE MANHATTAN BANK,
not in its individual capacity but
solely as Indenture Trustee
By:
-------------------------------
Authorized Officer
<PAGE> 162
[REVERSE OF NOTE]
This Note is one of a duly authorized issue of Notes of the
Issuer, designated as its Class B 6.87% 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 5.411% Asset Backed Notes (the "Class A-1
Notes"), Class A-2 5.816% Asset Backed Notes (the "Class A-2 Notes"), Class A-3
6.20% Asset Backed Notes (the "Class A-3 Notes"), Class A-4 6.40% Asset Backed
Notes (the "Class A-4 Notes") and Class A-5 6.52% 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 and the Class A-4 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 October 15, 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 Controlling Note Class have declared the Notes to be immediately
due and payable in the manner provided in Section 5.2 of the Indenture. All
principal
B-5
<PAGE> 163
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 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.
B-6
<PAGE> 164
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
B-7
<PAGE> 165
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 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 requiring the consent of all
Noteholders adversely af-
B-8
<PAGE> 166
fected) the amendment thereof by the Issuer and the Indenture Trustee without
the consent of the Noteholders provided certain conditions are satisfied. The
Indenture also contains provisions permitting the Noteholders of Notes
evidencing specified percentages of the principal amount of the Notes
Outstanding or of the Controlling Note Class, 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 term "Issuer", as used in this Note, includes any
successor to the Issuer under the Indenture.
The Issuer is permitted by the Indenture, under certain
circumstances, to merge or consolidate, subject to the rights of the Indenture
Trustee and the Noteholders under the Indenture.
The Notes are issuable only in registered form in
denominations as provided in the Indenture, subject to certain limitations
therein set forth.
This Note and the Indenture shall be governed by, and
construed in accordance with the laws of the State of New York, without
reference to its conflicts of law provisions.
No reference herein to the Indenture, and no provision of this
Note or of the Indenture, shall alter or impair the obligation of the Issuer,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the times, place and rate, and in the coin or currency herein
prescribed.
Anything herein to the contrary notwithstanding, except as
expressly provided in the Basic Documents, none of The Chase Manhattan Bank, in
its individual capacity, The Bank of New York, in its individual capacity, any
owner of a beneficial interest in the Issuer, or
B-9
<PAGE> 167
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.
B-10
<PAGE> 168
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.
B-11
<PAGE> 169
EXHIBIT C
[FORM OF NOTE DEPOSITORY AGREEMENT]
B-1
<PAGE> 170
SCHEDULE A
Schedule of Receivables
[Provided to the Indenture Trustee at the Closing]
SA-1
<PAGE> 171
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
AA-1
<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 September 1, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C> <C>
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.................................................. 6
SECTION 2.10. Situs of Trust........................................................... 6
SECTION 2.11. Representations and Warranties
of the Depositor......................................................... 6
SECTION 2.12. Federal Income Tax Matters............................................... 8
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............................................................. 20
SECTION 3.8. Access to List of Certificateholders' Names and Addresses................ 20
SECTION 3.9. Maintenance of Office or Agency.......................................... 21
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....................................................... 23
SECTION 4.2. Action by Certificateholders
with Respect to Certain Matters.......................................... 24
SECTION 4.3. Action by Certificateholders
with Respect to Bankruptcy............................................... 24
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
SECTION 4.4. Restrictions on Certificateholders'
Power.................................................................... 25
SECTION 4.5. Majority Control......................................................... 25
ARTICLE V APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate
Distribution Account..................................................... 25
SECTION 5.2. Application of Trust Funds............................................... 26
SECTION 5.3. Method of Payment........................................................ 28
SECTION 5.4. No Segregation of Monies; No Interest.................................... 29
SECTION 5.5. Accounting and Reports to Noteholders, Certificateholders,
Internal Revenue Service and Others...................................... 29
SECTION 5.6. Signature on Returns; Tax
Matters Partner.......................................................... 30
ARTICLE VI AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority........................................................ 30
SECTION 6.2. General Duties........................................................... 31
SECTION 6.3. Action upon Instruction.................................................. 31
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.......................................... 34
SECTION 7.2. Furnishing of Documents.................................................. 36
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.......................................................... 40
SECTION 8.3. Payments to Co-Trustees.................................................. 40
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
ARTICLE IX TERMINATION
SECTION 9.1. Termination of Trust Agreement........................................... 41
SECTION 9.2. Dissolution upon Insolvency or
Dissolution of Depositor or
General Partner.......................................................... 43
SECTION 9.3. Prepayment of Certificates............................................... 44
ARTICLE X SUCCESSOR OWNER TRUSTEES AND
ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for
Owner Trustee............................................................ 46
SECTION 10.2. Resignation or Removal of Owner
Trustee or the Delaware Trustee.......................................... 46
SECTION 10.3. Successor Owner Trustee or
Delaware Trustee......................................................... 48
SECTION 10.4. Merger or Consolidation of Owner
Trustee or Delaware Trustee.............................................. 49
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........................................... 54
SECTION 11.4. Notices.................................................................. 54
SECTION 11.5. Severability............................................................. 55
SECTION 11.6. Separate Counterparts.................................................... 55
SECTION 11.7. Successors and Assigns................................................... 55
SECTION 11.8. No Petition.............................................................. 55
SECTION 11.9. No Recourse.............................................................. 55
SECTION 11.10. Headings................................................................. 56
SECTION 11.11. Governing Law............................................................ 56
SECTION 11.12. Sale and Servicing Agreement
Obligations.............................................................. 56
</TABLE>
iii
<PAGE> 5
<TABLE>
<S> <C> <C>
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
</TABLE>
iv
<PAGE> 6
AMENDED AND RESTATED TRUST AGREEMENT, dated as of September
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, Dearborn, 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 1999-D.
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 September 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.
<PAGE> 7
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust created hereby shall be
known as "Ford Credit Auto Owner Trust 1999-D", 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:
(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 each
Certificate Distribution Account and the proceeds thereof) to the
Indenture Trustee pursuant to the Indenture;
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<PAGE> 8
(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, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The Trust
shall not engage in any activity other than in connection with the foregoing or
other than as required or authorized by the terms of this Agreement or the other
Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. 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
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<PAGE> 9
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 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 September 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 in trust from the Depositor, as of such date, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay the organizational expenses of the Trust as they may arise or shall,
upon the request of the Owner Trustee 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 part-
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<PAGE> 10
nership. 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 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
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Section 2.8, 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
and the Delaware 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.
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<PAGE> 12
(c) The Depositor has the power and authority to execute
and deliver this Agreement and to carry out its terms, and the Depositor has
full power and authority to sell and assign the property to be sold and assigned
to, and deposited with, the Trust, and the Depositor has duly authorized such
sale and assignment and deposit to the Trust; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor.
(d) This Agreement constitutes a legal, valid, and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and other
similar laws and to general equitable principles.
(e) The consummation of the transactions contemplated by
this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with
or without notice or lapse of time or both) a default under, the Certificate of
Limited Partnership or the Limited Partnership Agreement, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound; nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or,
to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) There are no proceedings or investigations pending or,
to the Depositor's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
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
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<PAGE> 13
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
income, state and local income and franchise tax and any other income taxes, the
Trust will be treated as a partnership and the Certificateholders and the
Depositor will be treated as partners in that partnership. The Depositor hereby
agrees and the Certificateholders by acceptance of a Certificate agree to such
treatment and each agrees to take no action inconsistent with such treatment.
For purposes of federal income, State and local income and franchise tax and any
other income taxes each month:
(a) amounts paid to any Certificateholder pursuant to
Section 5.2(a)(i) shall be treated as a guaranteed payment within the
meaning of Section 707(c) of the Code;
(b) to the extent the characterization provided for in
paragraph (a) of this Section 2.11 is not respected, gross ordinary
income of the Trust for such month as determined for federal income tax
purposes shall be allocated among the Certificateholders 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 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
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<PAGE> 14
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.
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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 subject), and (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of income and gain (including income
exempt from tax). The Capital Account of the Depositor or each Certificateholder
shall be decreased by (i) the dollar amount of any cash distributions made to
the Depositor or such Certificateholder, as the case may be, (ii) the fair
market value of any property (other than cash) distributed to the Depositor or
such Certificateholder, as the case may be (net of any liabilities to which the
property is subject), (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of loss or deductions (or items thereof),
and (iv) any allocations of expenditures of the Trust described in Section
705(a)(2)(B) of the Code.
(b) Notwithstanding any other provision of this
Agreement to the contrary, the foregoing provisions of this Section 3.2
regarding the maintenance of Capital Accounts shall be construed so as to comply
with the provisions of the Treasury Regulations promulgated
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pursuant to Section 704 of the Code. The Depositor is hereby authorized to
modify these provisions to the minimum extent necessary to comply with such
regulations.
SECTION 3.3. The Certificates. (a) 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, assigned, participated, pledged, or otherwise disposed of (any such
act, a "Transfer") to any Person except in accordance with the provisions of
Section 3.5 and any attempted Transfer in violation of Section 3.5 shall be null
and void (each a "Void Transfer").
(b) 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.
(c) 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,
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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 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 either:
(A) not, and each account (if any) for which it is
purchasing the Class C Certificates is not (1) an employee
benefit plan, as defined in Section 3(3) of ERISA, that is
subject to Title I of ERISA, (2) a plan described in
Section 4975(e)(1) of the Code that is subject to Section
4975 of the Code, (3) a governmental
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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, (4) 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 (5) a person investing "plan assets" of any such
plan (including without limitation, for purposes of this
clause (5), an insurance company general account, but
excluding any entity registered under the Investment
Company Act of 1940, as amended); or
(B) an insurance company acting on behalf of a general
account and (1) on the date of purchase less than 25% of
the assets of such general account (as reasonably
determined by it) constitute "plan assets" for purposes of
Title I of ERISA and Section 4975 of the Code, (2) the
purchase and holding of such Class C Certificates are
eligible for exemptive relief under Sections (I) and (III)
of Prohibited Transaction Class Exemption 95-60, and (3)
the purchaser agrees that if, after the purchaser's initial
acquisition of the Class C Certificates, at any time during
any calendar quarter 25% or more of the assets of such
general account (as reasonably determined by it no less
frequently than each calendar quarter) constitute "plan
assets" for purposes of Title I of ERISA or Section 4975 of
the Code and no exemption or exception from the prohibited
transaction rules applies to the continued holding of the
Class C Certificates under Section 401(c) of ERISA and the
final regulations thereunder or under an exemption or
regulation issued by the United States Department of Labor
under ERISA, it will dispose of all Class C Certificates
then held in its general account by the end of the next
following calendar quarter.
(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
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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 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 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 otherwise 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
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BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASE
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 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 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 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."
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
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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, 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
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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 represents to the
Depositor, the Trust and the Certificate Registrar, that no Transfer of such
Class D Certificate shall be made unless the registration requirements 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
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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
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register any Class D Certificate under the Securities Act or any other
securities law.
(f) Upon surrender for registration of Transfer 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 cancelled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of Transfer
or exchange of Certificates, but the Owner Trustee or the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any Transfer or exchange of Certificates.
The preceding provisions of this Section 3.5 notwithstanding,
the Owner Trustee shall not make and the Certificate Registrar need not register
any Transfer or exchange of Certificates for a period of fifteen (15) days
preceding any Distribution Date for any payment with respect to the
Certificates.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate
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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 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
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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, regardless of the source from which such
information was derived.
SECTION 3.9. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the State of 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 corporate trust office for such purposes. The Owner Trustee shall give
prompt written notice to the Depositor and to the Certificateholders of any
change in the location of the Certificate Registrar or any such office or
agency.
SECTION 3.10. Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from
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
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initially be the Owner Trustee, and any co-paying agent chosen by the Owner
Trustee. The Owner Trustee shall be permitted to resign as Certificate Paying
Agent upon thirty (30) days' written notice to the Owner Trustee. In the event
that the Bank shall no longer be the Certificate Paying Agent, the Owner Trustee
shall appoint a successor to act as Certificate Paying Agent (which shall be a
bank or trust company). The Owner Trustee shall cause such successor Certificate
Paying Agent or any additional Certificate Paying Agent appointed by the Owner
Trustee to execute and deliver to the Owner Trustee an instrument in which such
successor Certificate Paying Agent or additional Certificate Paying Agent shall
agree with the Owner Trustee that as Certificate Paying Agent, such successor
Certificate Paying Agent or additional Certificate Paying Agent will hold all
sums, if any, held by it for payment to the Certificateholders in trust for the
benefit of the Certificateholders entitled thereto until such sums shall be paid
to such Certificateholders. The Certificate Paying Agent shall return all
unclaimed funds to the Owner Trustee and upon removal of a Certificate Paying
Agent such Certificate Paying Agent shall also return all funds in its
possession to the Owner Trustee. The provisions of Sections 7.1, 7.3, 7.4 and
8.1 shall apply to the Owner Trustee also in its role as Certificate Paying
Agent, for so long as the Owner Trustee shall act as Certificate Paying Agent
and, to the extent applicable, to any other paying agent appointed hereunder.
Any reference in this Agreement to the Certificate Paying Agent shall include
any co-paying agent unless the context requires otherwise.
SECTION 3.11. Certain Rights of Depositor. The Depositor
shall be entitled to any amounts not needed on any Distribution Date to make
payments on the Notes or the Certificates or to make deposits to the Reserve
Account pursuant to Section 4.6 of the Sale and Servicing Agreement, and to
receive amounts remaining in the Reserve Account following the payment in full
of the aggregate principal amount of the Notes and the 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
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association (or publicly traded partnership) taxable as a corporation.
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders 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) Certificateholders holding not less than a majority of
the Aggregate Certificate Balance shall not have notified the Owner Trustee in
writing prior to the 30th day after such notice is given that such
Certificateholders have withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by the
Trust (except claims or lawsuits brought by the Servicer in connection
with the collection of the Receivables) and the settlement of any
material action, claim or lawsuit brought by or against the Trust
(except with respect to the aforementioned claims or lawsuits for
collection by the Servicer of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the
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consent of any Noteholder is not required and such amendment materially
adversely affects the interests of any 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.
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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 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, 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 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
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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 Certificates, 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 payment
of such interest on the Class D Certificates on a pro
rata basis; and
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(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
Balance 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 related Record Date the statement provided to the Owner
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Trustee by the Servicer pursuant to Section 4.9 of the Sale and Servicing
Agreement with respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on
the Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.2. The Owner Trustee and each Certificate Paying
Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
such withholding tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed with
respect to a Certificateholder shall be treated as cash distributed to such
Certificateholder at the time it is withheld by the Trust and remitted to the
appropriate taxing authority. If there is a possibility that withholding tax is
payable with respect to a distribution (such as a distribution to a non-U.S.
Certificateholder), the Owner Trustee may, in its sole discretion, withhold such
amounts in accordance with this paragraph (c). In the event that a
Certificateholder wishes to apply for a refund of any such withholding tax, the
Owner Trustee shall reasonably cooperate with such Certificateholder in making
such claim so long as such Certificateholder agrees to reimburse the Owner
Trustee for any out-of-pocket expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section
9.1(c), distributions required to be made to Certificateholders on any
Distribution Date shall be made to 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
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Certificateholder at the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate (whether on the 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.
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SECTION 5.6. Signature on Returns; Tax Matters Partner.
(a) The Depositor, as general partner for income tax purposes, shall prepare (or
cause to be prepared) and sign, on behalf of the Trust, the tax returns of the
Trust.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
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 $153,000,000, (ii) Class
A-2 Notes in the aggregate principal amount of $449,000,000, (iii) Class A-3
Notes in the aggregate principal amount of $1,370,000,000, (iv) Class A-4 Notes
in the aggregate principal amount of $400,000,000, (v) Class A-5 Notes in the
aggregate principal amount of $588,189,000 and (vi) Class B Notes in the
aggregate principal amount of $109,640,000. 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
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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 supervise the administration, servicing or
collection of the Receivables.
SECTION 6.3. Action upon Instruction. (a) Subject to
Article IV, and in accordance with the terms of the Basic Documents, the
Certificateholders may, by written instruction, direct the Owner Trustee in the
management of the Trust.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is contrary
to the terms hereof or of any other Basic Document or is otherwise contrary to
law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by the terms of this
Agreement or any other Basic Document, the Owner Trustee shall promptly give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not
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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,
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except as expressly provided by the terms of this Agreement or in any document
or written instruction received by the Owner Trustee pursuant to Section 6.3;
and no implied duties or obligations shall be read into this Agreement or any
other Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any lien
(other than the lien of the Indenture) on any part of the Owner Trust Estate
that results from actions by, 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
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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;
(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 reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to them;
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(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 otherwise 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
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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:
(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:
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(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 Co-Trustees for any
action taken or omitted to be taken by it in good faith in reliance thereon.
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(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
representations as to the validity or sufficiency of this Agreement, of any
other Basic Document or of the Certificates (other than the signature and
countersignature of the Owner Trustee on the Certificates) or the Notes, or of
any Receivable or related documents. The Owner Trustee, 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
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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 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
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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.
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ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement. (a) This
Agreement (other than the provisions of Article VIII) shall terminate and be of
no further force or effect and the Trust shall wind up and dissolve, (i) upon
the maturity or other liquidation of the last remaining Receivable and the
disposition of any amounts received upon such maturity or liquidation, (ii) upon
the payment to the Noteholders and the Certificateholders of all amounts
required to be paid to them pursuant to the terms of the Indenture, the Sale and
Servicing Agreement and Article V or (iii) at the time provided in Section 9.2.
Any Insolvency Event, liquidation, dissolution, death or incapacity with respect
to any Certificateholder, other than the Depositor as described in Section 9.2,
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of all or any part of the Trust or Owner Trust Estate nor (z) otherwise affect
the rights, obligations and liabilities of the parties hereto. Upon dissolution
of the Trust, the Owner Trustee shall wind up the business and affairs of the
Trust as required by Section 3808 of the Business Trust Statute.
(b) Except as provided in Section 9.1(a), neither the
Depositor nor any Certificateholder shall be entitled to revoke or terminate the
Trust.
(c) Notice of any termination of the Trust, specifying
the Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of notice of
such termination from the Servicer, stating (i) the Distribution Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment
(after reservation of sums sufficient to pay all claims and obligations, if
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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
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 certifi-
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cate 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 each such Class and a majority of the right to receive
distributions in respect of interest on the Certificate Balance of each 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 each such Class and a majority
of the right to receive interest on the principal amount of each such Class
(including in each case the Notes owned by the Servicer and any of its
Affiliates other than the Depositor), and (c) holders of other interests, if any
(the existence of which interests the Administrator will have advised the Owner
Trustee in writing), in the Reserve Account (other than the Depositor) having
interests with a value not less than a majority of the value of all interests in
the Reserve Account (other than any such interests held by the Depositor), to
the effect that each such party disapproves of the liquidation of the
Receivables and termination of the Trust and in connection therewith the
Indenture Trustee (i) appoints an entity acceptable to Ford Credit to acquire an
interest in the Trust and to act as substitute "general partner" of the Trust
for federal income tax purposes and (ii) obtains an Opinion of Counsel that the
Trust will not thereafter be classified as an association (or publicly traded
partnership) taxable as a corporation for federal income tax and Applicable Tax
State purposes. Promptly after the occurrence of any Insolvency Event or
dissolution with respect
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to the Depositor or the General Partner, (A) the Depositor shall give the
Indenture Trustee and the Owner Trustee written notice of such Insolvency Event,
(B) the Owner Trustee shall, upon the receipt of such written notice from the
Depositor, give prompt written notice to the Certificateholders, holders of
interests, if any, in the Reserve Account and the Indenture Trustee, of the
occurrence of such event, (C) the Indenture Trustee shall, upon receipt of
written notice of such Insolvency Event or dissolution from the Owner Trustee or
the Depositor, give prompt written notice to the Noteholders of the occurrence
of such event, and (D) the Owner Trustee shall, upon receipt of written
instructions from the applicable percentages of Noteholders, Certificateholders
and holders of interests, if any, in the Reserve Account disapproving of
liquidation and termination, give prompt written notice thereof to the Indenture
Trustee; provided, however, that any failure to give a notice required by this
sentence shall not prevent or delay, in any manner, a termination of the Trust
pursuant to the first sentence of this Section 9.2. Upon a termination pursuant
to this Section 9.2, the Owner Trustee shall direct the Indenture Trustee
promptly to sell the assets of the Trust (other than the Trust Accounts and 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 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
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Servicer shall furnish notice of such election to the Owner Trustee not later
than twenty (20) days prior to the Prepayment Date and the Trust shall deposit
by 10:00 A.M. (New York City time) on the Prepayment Date in the Certificate
Distribution Account the Prepayment Price of the Certificates to be redeemed,
whereupon all such Certificates shall be due and payable on the Prepayment Date.
(b) Notice of prepayment under Section 9.3(a) shall be
given by the Owner Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted immediately following receipt of notice from the Trust or
Servicer pursuant to Section 9.3(a), but not later than ten (10) days prior to
the applicable Prepayment Date, to each Certificateholder as of the close of
business on the Record Date preceding the applicable Prepayment Date, at such
Certificateholder's address or facsimile number appearing in the Certificate
Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where such Certificates are to be
surrendered for payment of the Prepayment Price (which
shall be the office or agency of the Owner Trustee to be
maintained as provided in Section 3.9).
Notice of prepayment of the Certificates shall be given by the Owner Trustee in
the name and at the expense of the Trust. Failure to give notice of prepayment,
or any defect therein, to any Certificateholder shall not impair or affect the
validity of the prepayment of any other Certificate.
(c) Following notice of prepayment as required by Section
9.3(b), the Certificates shall on the Prepayment Date be paid by the Trust at
the Prepayment Price and (unless the Trust shall default in the payment of the
Prepayment Price) no interest shall accrue on the Prepayment Price for any
period after the date to which accrued interest is calculated for purposes of
calculating the Prepayment Price. Following payment in full of the
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Prepayment Price, this Agreement and the Trust shall terminate.
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
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 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. (a) 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, as applicable, 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 applicable successor Owner Trustee or Delaware Trustee. If
no successor Owner Trustee or Delaware Trustee shall have been so appointed
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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.
(b) 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.
(c) 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
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<PAGE> 53
Certificateholders, the Indenture Trustee, the Noteholders, any remaining
Co-Trustee and each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee or Delaware Trustee.
(a) 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.
(b) 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.
(c) 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.
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<PAGE> 54
(d) Any successor Delaware Trustee appointed hereunder 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 hereunder; 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.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee. (a)
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
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<PAGE> 55
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.
(b) 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.
(c) 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
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<PAGE> 56
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.
(d) 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
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<PAGE> 57
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 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.
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<PAGE> 58
(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
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<PAGE> 59
Estate shall operate to terminate this Agreement or the trusts hereunder or
entitle any transferee to an accounting or to the transfer to it of legal title
to any part of the Owner Trust Estate.
SECTION 11.3. Limitation on Rights of Others. Except for Sections 2.7
and 11.1, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Delaware Trustee, the Depositor, the Administrator, the
Certificateholders, the Servicer and, to the extent expressly provided herein,
the Indenture Trustee and the Noteholders, and nothing in this Agreement (other
than Section 2.7), whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions or
provisions contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly specified or
permitted by the terms hereof, all notices shall be in writing and shall be
deemed given upon receipt by the intended recipient or three (3) Business Days
after mailing if mailed by certified mail, postage prepaid (except that notice
to the Owner Trustee and the Delaware Trustee shall be deemed given only upon
actual receipt by the Owner Trustee and the Delaware Trustee, respectively), if
to the Owner Trustee or the Delaware Trustee, addressed to the respective
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
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<PAGE> 60
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 assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8. No Petition. The Owner Trustee (not in its individual
capacity but solely as Owner Trustee), by entering into this Agreement, and each
Certificateholder, by accepting a Certificate, hereby 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, except
as may be expressly set forth or
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<PAGE> 61
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.
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<PAGE> 62
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/ Joyce P. Maccou
---------------------------------------
Name: Joyce P. Maccou
Title: Assistant Treasurer
<PAGE> 63
EXHIBIT A
FORM OF CLASS C CERTIFICATE
NUMBER $62,650,000
R-[ ] CUSIP NO. 34527RDB6
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-D
CLASS C 7.21% 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-D (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
$62,650,000 and bear interest at a rate of 7.21% per annum (the "Class C Rate").
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<PAGE> 64
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of September 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 7.21% 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 September 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 5.411% Asset Backed
Notes", "Class A-2 5.816% Asset Backed Notes", "Class A-3 6.20% Asset Backed
Notes", "Class A-4 6.40% Asset Backed Notes", "Class A-5 6.52% Asset Backed
Notes" and "Class B 6.87% 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 Actuarial
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
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<PAGE> 65
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 September 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.
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 October 15, 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
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<PAGE> 66
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
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<PAGE> 67
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.
Unless the certificate of authentication hereon shall have been
executed by an authorized officer of the Owner Trustee, by manual signature,
this Certificate shall not entitle the Certificateholder hereof to any benefit
under the Trust Agreement or the Sale and Servicing Agreement or be valid for
any purpose.
This Certificate shall be construed in accordance with the laws of the
State of Delaware and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws.
A-5
<PAGE> 68
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-D
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: September 23, 1999
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------------
Authorized Officer
<PAGE> 69
[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 a form of the Trust Agreement as an exhibit thereto, has been filed
with the Securities and Exchange Commission with respect to the Class A-3 Notes,
the Class A-4 Notes, the Class A-5 Notes, the Class B 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 Cer-
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<PAGE> 70
tificate 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.
The Class C Certificates may be acquired only by an entity that is
either: (a) not, and each account (if any) for which it is purchasing the Class
C Certificates is not (i) 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, (ii) 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, (iii) 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, (iv) 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
A-8
<PAGE> 71
C.F.R. ss. 2510.3-101 or otherwise under ERISA) or (v) a person investing "plan
assets" of any such plan (including without limitation, for purposes of this
clause (v), an insurance company general account, but excluding any entity
registered under the Investment Company Act of 1940, as amended); or (b) an
insurance company acting on behalf of a general account and (i) on the date of
purchase less than 25% of the assets of such general account (as reasonably
determined by it) constitute "plan assets" for purposes of Title I of ERISA and
Section 4975 of the Code, (ii) the purchase and holding of such Class C
Certificates are eligible for exemptive relief under Sections (I) and (III) of
Prohibited Transaction Class Exemption 95-60, and (iii) the purchaser agrees
that if, after the purchaser's initial acquisition of the Class C Certificates,
at any time during any calendar quarter 25% or more of the assets of such
general account (as reasonably determined by it no less frequently than each
calendar quarter) constitute "plan assets" for purposes of Title I of ERISA or
Section 4975 of the Code and no exemption or exception from the prohibited
transaction rules applies to the continued holding of the Class C Certificates
under Section 401(c) of ERISA and the final regulations thereunder or under an
exemption or regulation issued by the United States Department of Labor under
ERISA, it will dispose of all Class C Certificates then held in its general
account by the end of the next following calendar quarter.
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
A-9
<PAGE> 72
opinions of counsel as may be requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust Agreement and
the Trust created thereby shall terminate (i) upon the maturity or other
liquidation of the last remaining Receivable and the disposition of any amounts
received upon such maturity or liquidation or (ii) upon the payment to the
Noteholders and the Certificateholders of all amounts required to be paid to
them pursuant to the Indenture, the Trust Agreement and the Sale and Servicing
Agreement, and upon such termination any remaining assets of the Trust shall be
distributed to the Depositor. The Servicer of the Receivables may at its option
purchase the assets of the Trust at a price specified in the Sale and Servicing
Agreement, and such purchase of the Receivables and other property of the Trust
will effect early retirement of the Notes and the Certificates; however, such
right of purchase is exercisable only as of the last day of any Collection
Period as of which the Pool Balance is less than or equal to 10% of the Initial
Pool Balance.
A-10
<PAGE> 73
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and transfers
unto
------------------------
PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
- --------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
Attorney to transfer said Certificate on the
- -----------------------------------
books of the Certificate Registrar, with full power of substitution in the
premises.
Dated:
-------------------
*/
-----------------------------------
Signature Guaranteed:
*/
-----------------------------------
- -------------------------
*/ NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
A-11
<PAGE> 74
EXHIBIT B
FORM OF CLASS D CERTIFICATE
NUMBER $62,650,000
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 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,
(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
B-1
<PAGE> 75
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-D
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 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-D (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
$62,650,000 and bear interest at a rate of 8.00% per annum (the "Class D Rate").
B-2
<PAGE> 76
The Trust was created pursuant to an Amended and Restated Trust
Agreement, dated as of September 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
7.21% 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 September 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 5.411% Asset Backed
Notes", "Class A-2 5.816% Asset Backed Notes", "Class A-3 6.20% Asset Backed
Notes", "Class A-4 6.40% Asset Backed Notes", "Class A-5 6.52% Asset Backed
Notes" and "Class B 6.87% 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 Actuarial
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
B-3
<PAGE> 77
in one or more accounts maintained pursuant to the Sale and Servicing Agreement,
dated as of September 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.
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 October 15, 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.
B-4
<PAGE> 78
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 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,
B-5
<PAGE> 79
which 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.
B-6
<PAGE> 80
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-D
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: September 23, 1999
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By:
--------------------------------
Authorized Officer
<PAGE> 81
[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 a form of the Trust Agreement as an exhibit thereto, has been filed
with the Securities and Exchange Commission with respect to the Class A-3 Notes,
the Class A-4 Notes, the Class A-5 Notes, the Class B 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
B-8
<PAGE> 82
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.
The Class D 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
B-9
<PAGE> 83
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.
B-10
<PAGE> 84
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.
B-11
<PAGE> 85
EXHIBIT C
FORM OF INVESTMENT LETTER - CLASS C CERTIFICATES
[Date]
Ford Credit Auto Owner Trust 1999-D,
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 7.21% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1999-D
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor" or "Seller"), we confirm that:
1. We are either:
(a) not, and each account (if any) for which we are purchasing the
Certificates is not (i) 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,
(ii) 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, (iii) 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, (iv) 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 (v) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (v), an
insurance company general account, but excluding an entity
registered under the Investment Company Act of 1940, as amended),
or
(b) an insurance company acting on behalf of a general account and
(i) on the date hereof less than 25% of the assets of such general
account
C-1
<PAGE> 86
(as reasonably determined by us) constitute "plan assets" for
purposes of Title I of ERISA and Section 4975 of the Code, (ii)
the purchase and holding of such Certificates are eligible for
exemptive relief under Sections (I) and (III) of Prohibited
Transaction Class Exemption 95-60, and (iii) the undersigned
agrees that if, after the undersigned's initial acquisition of the
Certificates, at any time during any calendar quarter 25% or more
of the assets of such general account (as reasonably determined by
us no less frequently than each calendar quarter) constitute "plan
assets" for purposes of Title I of ERISA or Section 4975 of the
Code and no exemption or exception from the prohibited transaction
rules applies to the continued holding of the Certificates under
Section 401(c) of ERISA and the final regulations thereunder or
under an exemption or regulation issued by the DOL under ERISA, we
will dispose of all Certificates then held in our general account
by the end of the next following calendar quarter.
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
C-2
<PAGE> 87
the Issuer or any other person as a Certificateholder for any purpose.
4. We agree that if we determine to Transfer any of the
Certificates we will cause our proposed transferee to provide to the Issuer and
the Certificate Registrar a letter substantially in the form of this letter.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
------------------------------
Name:
Title:
Securities To Be Purchased:
$ principal balance of Certificates
Annex A attached hereto lists the name of the account and principal balance of
Certificates purchased for each account (if any) for which we are purchasing
Certificates.
C-3
<PAGE> 88
EXHIBIT D
FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
QUALIFIED INSTITUTIONAL BUYER
[Date]
Ford Credit Auto Owner Trust 1999-D
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-D
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-_D (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.
D-1
<PAGE> 89
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 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
D-2
<PAGE> 90
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
D-3
<PAGE> 91
EXHIBIT E
FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
INSTITUTIONAL ACCREDITED INVESTOR
[Date]
Ford Credit Auto Owner Trust 1999-D
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-D
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-D
(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
E-1
<PAGE> 92
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 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
E-2
<PAGE> 93
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
E-3
<PAGE> 94
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-D
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-D (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 September 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
F-1
<PAGE> 95
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
F-2
<PAGE> 96
EXHIBIT G
FORM OF CERTIFICATE OF TRUST
CERTIFICATE OF TRUST OF
FORD CREDIT AUTO OWNER TRUST 1999-D
This Certificate of Trust of Ford Credit Auto Owner Trust 1999-D
(the "Trust"), dated as of September 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, ss. 3801 et seq.) (the
"Act").
1. Name. The name of the business trust formed hereby is Ford
Credit Auto Owner Trust 1999-D.
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 September 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 September 1, 1999
By:
-------------------------------
Name:
Title:
G-1
<PAGE> 97
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
<PAGE> 1
EXHIBIT 8.1
September 23, 1999
To the Addressees Indicated
on Schedule A hereto
Re: Ford Credit Auto Owner Trust
1999-D 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 5.411% Asset
Backed Notes (the "Class A-1 Notes"), the Class A-2 5.816% Asset Backed Notes
(the "Class A-2 Notes" and, together with the Class A-1 Notes, the "Exempt
Notes"), the Class A-3 6.20% Asset Backed Notes (the "Class A-3 Notes"), the
Class A-4 6.40% Asset Backed Notes (the "Class A-4 Notes"), the Class A-5 6.52%
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 and the Class A-4 Notes, the
"Class A Notes"), the Class B 6.87% Asset Backed Notes (the "Class B Notes" and,
together with the Class A-3 Notes, the Class A-4 Notes and the Class A-5 Notes,
the "Publicly Offered Notes" and, together with the Exempt Notes, the "Notes"),
the Class C 7.21% 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-D (the "Trust") pursuant to the terms of, (a) with respect to
the Notes, an Indenture dated as of September 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 September 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
<PAGE> 2
To the Addresses Indicated
on Schedule A hereto
September 23, 1999
Page 2
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, the Class A-5 Notes and the Class B Notes will be sold to the
underwriters (the "Underwriters") who are named in Schedule I pursuant to an
underwriting agreement (the "Underwriting Agreement") between the Seller and
Goldman, Sachs & Co. ("Goldman") and Salomon Smith Barney Inc. ("Salomon"),
as representatives of the several Underwriters. The Class C Certificates will
be sold to Goldman and Salomon pursuant to the Underwriting Agreement. 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 rendering our opinion, we have
examined and relied upon (i) the
- ---------------------
(1) Terms not otherwise defined herein have the meanings assigned to them in the
Indenture (as defined above).
<PAGE> 3
To the Addresses Indicated
on Schedule A hereto
September 23, 1999
Page 3
registration statements for the Publicly Offered Notes and the Class C
Certificates on Form S-3, consisting of (a) Registration No. 333-63551, filed
with the Securities and Exchange Commission (the "SEC") on September 17, 1998
and Amendment No.1 thereto filed with the SEC on December 2, 1998 and (b)
Registration No. 333-82895, filed with the SEC on July 15, 1999 and Amendment
No.1 thereto filed with the SEC on September 3, 1999 (such registration
statements, as so amended, the "Registration Statement"), including the
prospectus dated September 17, 1999 as supplemented by the prospectus supplement
dated September 17, 1999 included therein (the "Prospectus"), (ii) the offering
memorandum dated September 17, relating to the offering of the Exempt Notes (the
"Offering Memorandum"), which includes and incorporates the Prospectus as a part
thereof, (iii) the Indenture, (iv) the Trust Agreement, (v) the Sale and
Servicing Agreement, (vi) a certificate executed by an officer of the Seller
dated the date hereof regarding the Seller's projections of the losses that the
Trust will incur in respect of the Receivables (the "Loss Assumption
Certificate"), and (vii) 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 Offering Memorandum
and the facts set forth in the representations referred to in the Prospectus and
the Offering Memorandum.
<PAGE> 4
To the Addresses Indicated
on Schedule A hereto
September 23, 1999
Page 4
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.
<PAGE> 5
To the Addresses Indicated
on Schedule A hereto
September 23, 1999
Page 5
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.
The total face amount of Notes and Certificates issued by the Trust
is equal to approximately 96.82% of the initial aggregate principal amount of
the Receivables. As a result, as of the date hereof, there is a 'cushion' of
equity supporting the Notes and the Certificates equal to 3.18% of the initial
Pool Balance (the "Initial Equity"). Additionally, the Class A Notes will
initially be supported by the Class B Notes and the Certificates which,
together, have a face amount equal to 7.12% of the initial Pool Balance, and the
principal of which will not be paid until the Class A Notes are paid in full.
Further, the Class B Notes will be supported by the Certificates having a face
amount equal to 3.80% of the initial Pool Balance, the principal of which will
not be paid until the Notes are paid in full. Finally, 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 $16,500,115.20 or 0.5% of the initial Pool
Balance. Thus, the initial total credit enhancement supporting the Class A Notes
is equal to 10.80% of the initial Pool Balance, and the initial total credit
enhancement supporting the Class B Notes is equal to 7.48% of the initial Pool
Balance. 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
absorbed by the portion of the monthly payments from the Receivables which are
attributable to the "spread" between the income from the Receivables (less
certain
<PAGE> 6
To the Addresses Indicated
on Schedule A hereto
September 23, 1999
Page 6
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.(2)
- -------------------
(2) The Regular Principal Distribution Amount will equal the difference between
(i) the greater of (1) the then principal balance of the Class A-1 Notes and
Class A-2 Notes and (2) an amount sufficient to cause the then Pool Balance to
exceed the aggregate outstanding principal amount of the Notes and Certificates
by the difference between (x) the Pool Balance and (y) the sum of the Specified
Overcollateralization Amount and the Yield Supplement Overcollateralization
Amount, and (ii) the First Priority Principal Distribution Amount and the Second
Priority 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
9.50%, assuming that future scheduled payments on the Receivables are made on
their scheduled due dates without any delays, defaults or prepayments. Based on
this formula, amounts otherwise distributable to the Seller will be applied
generally to establish and maintain a "cushion" of at least 1% (including the
Reserve Account) of the Pool Balance in addition to the credit enhancement of
(i) with respect to the Class A Notes, 7.12% of the initial Pool Balance
(provided by the Class B Notes and the
(continued...)
<PAGE> 7
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 7
Based on calculations provided by Goldman (calculated using
historic loss and prepayment levels) the excess of the Pool Balance over the
outstanding amount of the Class A Notes at the end of one year will have
increased to 16.40% of the then Pool Balance and at the end of two years will
have increased to approximately 27.80% of the then Pool Balance, while the
overcollateralization supporting the Class B Notes (i.e., the excess of the 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 10.93% of the then Pool Balance
and at the end of two years such overcollateralization will have increased to
approximately 16.76% of the then 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 and the Class A-5 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)(...continued)
Certificates), and (ii) with respect to the Class B Notes, 3.80% of the initial
Pool Balance (provided by the Certificates).
<PAGE> 8
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 8
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 2.30% of the initial Pool Balance (discounted at a rate of
8%).(3)
- ------------------------
(3) A substantial portion of the Receivables bear rates of interest below the
sum of the highest note interest rate and the Servicing Fee ("Subvened
Receivables"). Accordingly, for purposes of this opinion, a significant portion
of the 'spread' that would otherwise contribute to the 'cushion' supporting the
Notes and the Certificates has been reallocated to provide for payments due with
respect to the Notes that could not otherwise be made because of shortfalls in
Trust cash flow caused by the Subvened Receivables. It is important to note,
however, that Goldman's determination of the net present value of the 'spread'
does not take into account losses that the Trust will incur in respect of the
Receivables (which, according to the Loss Assumption Certificate provided by the
Seller, are projected to be approximately 11 basis points (expressed as a
percentage of the initial Pool Balance) greater than the losses incurred by Ford
Credit Auto Owner Trust 1999-C in respect of its pool of receiv-
(continued...)
<PAGE> 9
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 9
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 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 2.06 years
(based on the assumptions set forth in the Prospectus under the caption
"STRUCTURAL SUMMARY-composition of the Receivables"). On the other hand, the
Notes, of which
- -------------------------
(3) (...continued)
ables). Accordingly, we recognize that the net present value of the remaining
spread will, in reality, be less than 2.30% of the initial Pool Balance.
<PAGE> 10
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 10
there will be six classes, will have weighted average lives of 0.07 years for
the Class A-1 Notes, 0.27 years for the Class A-2 Notes, 1.00 years for the
Class A-3 Notes, 1.87 years for the Class A-4 Notes, 2.58 years for the Class
A-5 Notes and 2.98 years for the Class B Notes (based on the pricing prepayment
assumption and the other assumptions set forth in the Prospectus under the
caption "THE RECEIVABLES POOL-Weighted Average Life of the Securities"). 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
<PAGE> 11
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 11
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.(4)
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 Section 7704(d) to include interest and
- ---------------------------------
(4) Unless otherwise indicted, all "Section" references hereinafter shall be to
the Code.
<PAGE> 12
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 12
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. ss. 301.7701-2(b)) with at least two members
are, by default, treated as partnerships for federal income taxation purposes.
Treas. Reg. ss. 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. ss. 301.7701-4(b). Therefore, because the Trust is not included in
the list of corporate entities described in Treas. Reg. ss. 301.7701-2(b), it
will be treated as a partnership for federal income tax purposes under Treas.
Reg. ss. 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
<PAGE> 13
To the Addressees Indicated
on Schedule A hereto
September 23, 1999
Page 13
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", "TAX MATTERS" and "FEDERAL INCOME TAX MATTERS" 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,
/s/ Skadden, Arps, Slate, Meagher & Flom LLP
<PAGE> 14
Schedule A
Ford Credit Auto Receivables Two L.P.
The American Road
Dearborn, Michigan 48121
The Bank of New York,
as Owner Trustee
Ford Credit Auto Owner Trust 1999-D
101 Barclay Street, Floor 12 East
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.,
Salomon Smith Barney Inc.
On behalf of themselves and
as Representatives of the several 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. September 23, 1999
The American Road
Dearborn, Michigan 48121
Re: Ford Credit Auto Owner Trust 1999-D
-----------------------------------
Ladies and Gentlemen:
I do hereby confirm that the statements set forth in the Prospectus
dated September 17, 1999, as supplemented by Prospectus Supplement dated
September 17, 1999 under the caption "Summary-Tax Status" in the Prospectus
Supplement as they relate to Michigan state tax matters and in the Prospectus
Supplement under the caption "State Tax Matters," 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 "State Tax
Matters" 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
by and among
------------
FORD CREDIT AUTO OWNER TRUST 1999-D,
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO L.P.,
as Seller,
and
---
FORD MOTOR CREDIT COMPANY,
as Servicer
Dated as of September 1, 1999
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <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.......................................................8
SECTION 2.5 Duties of Servicer as Custodian...................................................9
SECTION 2.6 Instructions; Authority to Act...................................................10
SECTION 2.7 Custodian's Indemnification......................................................10
SECTION 2.8 Effective Period and Termination.................................................11
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY..................................11
SECTION 3.1 Duties of Servicer...............................................................11
SECTION 3.2 Collection of Receivable Payments................................................12
SECTION 3.3 Realization Upon Receivables.....................................................13
SECTION 3.4 Allocations of Collections.......................................................13
SECTION 3.5 Maintenance of Security Interests
in Financed Vehicles.............................................................13
SECTION 3.6 Covenants of Servicer............................................................14
SECTION 3.7 Purchase of Receivables Upon Breach..............................................14
SECTION 3.8 Servicer Fee.....................................................................15
SECTION 3.9 Servicer's Certificate...........................................................15
SECTION 3.10 Annual Statement as to Compliance;
Notice of Event of Servicing
Termination......................................................................16
SECTION 3.11 Annual Independent Certified Public
Accountant's Report..............................................................17
SECTION 3.12 Access to Certain Documentation and
Information Regarding Receivables................................................17
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 3.13 Servicer Expenses................................................................18
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS
AND CERTIFICATEHOLDERS......................................18
SECTION 4.1 Accounts.........................................................................18
SECTION 4.2 Collections......................................................................22
SECTION 4.3 Application of Collections.......................................................23
SECTION 4.4 Advances.........................................................................24
SECTION 4.5 Additional Deposits..............................................................26
SECTION 4.6 Distributions....................................................................26
SECTION 4.7 Reserve Account..................................................................31
SECTION 4.8 Net Deposits.....................................................................34
SECTION 4.9 Statements to Noteholders and
Certificateholders...............................................................34
ARTICLE V
[Intentionally Omitted].....................................36
ARTICLE VI
THE SELLER............................................36
SECTION 6.1 Representations and Warranties of
Seller...........................................................................36
SECTION 6.2 Liability of Seller; Indemnities.................................................38
SECTION 6.3 Merger or Consolidation of, or
Assumption of the Obligations of,
Seller...........................................................................40
SECTION 6.4 Limitation on Liability of Seller
and Others.......................................................................41
SECTION 6.5 Seller May Own Notes or
Certificates.....................................................................41
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
----
ARTICLE VII
<S> <C> <C>
THE SERVICER...........................................41
SECTION 7.1 Representations of Servicer......................................................41
SECTION 7.2 Indemnities of Servicer..........................................................43
SECTION 7.3 Merger or Consolidation of, or
Assumption of the Obligations of,
Servicer.........................................................................45
SECTION 7.4 Limitation on Liability of Servicer
and Others.......................................................................46
SECTION 7.5 Delegation of Duties.............................................................47
SECTION 7.6 Ford Credit Not to Resign as
Servicer.........................................................................47
SECTION 7.7 Servicer May Own Notes or
Certificates.....................................................................48
ARTICLE VIII
SERVICING TERMINATION......................................48
SECTION 8.1 Events of Servicing Termination..................................................48
SECTION 8.2 Appointment of Successor Servicer................................................51
SECTION 8.3 Repayment of Advances............................................................52
SECTION 8.4 Notification to Noteholders and
Certificateholders...............................................................52
SECTION 8.5 Waiver of Past Events of Servicing
Termination......................................................................52
ARTICLE IX
TERMINATION...........................................53
SECTION 9.1 Optional Purchase of All Receivables.............................................53
SECTION 9.2. Succession Upon Satisfaction and
Discharge of Indenture...........................................................53
ARTICLE X
MISCELLANEOUS PROVISIONS.....................................54
SECTION 10.1 Amendment........................................................................54
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 10.2 Protection of Title to Trust
Property.........................................................................56
SECTION 10.3 Governing Law....................................................................59
SECTION 10.4 Notices..........................................................................59
SECTION 10.5 Severability of Provisions.......................................................60
SECTION 10.6 Assignment.......................................................................60
SECTION 10.7 Further Assurances...............................................................60
SECTION 10.8 No Waiver; Cumulative Remedies...................................................61
SECTION 10.9 Third-Party Beneficiaries........................................................61
SECTION 10.10 Actions by Noteholders or
Certificateholders...............................................................61
SECTION 10.11 Agent for Service................................................................62
SECTION 10.12 No Bankruptcy Petition...........................................................62
SECTION 10.13 Limitation of Liability of Owner
Trustee and Indenture Trustee....................................................62
SECTION 10.14 Savings Clause...................................................................63
Schedule A Schedule of Receivables........................................................SA-1
Schedule B-1 Location of Receivable Files...................................................SB-1
Schedule B-2 Custodians for Receivable Files.................................................B-1
Appendix A Definitions and Usage..........................................................AA-1
</TABLE>
iv
<PAGE> 6
SALE AND SERVICING AGREEMENT, dated as of September 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-D (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 purchase a portfolio of
receivables and related property consisting of motor vehicle retail installment
sale contracts generated by Ford Motor Credit Company and PRIMUS in the ordinary
course of their business and conveyed to the Seller;
WHEREAS, the Seller is willing to sell such portfolio of
receivables and related property to the Issuer; and
WHEREAS, Ford Motor Credit Company is willing to service such
receivables on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the
mutual covenants herein contained, and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein are
defined in Appendix A hereto, which also contains rules as to usage that shall
be applicable herein.
<PAGE> 7
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property. In consideration of
the Issuer's delivery to, or upon the order of, the Seller of the Notes and the
Certificates in an aggregate principal amount equal to 96.82% 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 Prop erty. 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
Closing Date, 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 either (X) by the Seller from Ford Credit, which in turn shall
have purchased such Receivable from a Dealer under an existing dealer agreement
with Ford Credit, and which shall have been validly assigned by such Dealer to
Ford Credit and which in turn shall have been validly assigned by Ford Credit to
the Seller in accordance with its terms, or (Y) by the Seller from Ford Credit,
which shall have been assigned such Receivable by PRIMUS, which in turn shall
have purchased such Receivable from a Dealer or other finance source (provided
that such purchase relates to an
2
<PAGE> 8
individual Receivable and not a bulk purchase) under an existing agreement with
PRIMUS, and which shall have been validly assigned by such Dealer or other
finance source to PRIMUS and shall have been validly assigned by PRIMUS to Ford
Credit in the ordinary course of business and 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 an Actuarial Receivable or a Simple
Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables shall be true and correct in all material respects as of
the opening of business on the Cutoff Date, and no selection procedures believed
to be adverse to the Noteholders or the Certificateholders shall have been
utilized in selecting the Receivables from those receivables which meet the
criteria contained herein. The computer tape or other listing regarding the
Receivables made available to the Issuer and its assigns (which computer tape or
other listing is required to be delivered as specified herein) is true and
correct in all material 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,
3
<PAGE> 9
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 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 Re ceivables 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, any State or
political subdivision of either thereof.
(vi) Security Interest in Financed Vehicle. Immediately prior
to the transfer, assignment and conveyance thereof, each Receivable shall be
secured by a first priority, validly perfected 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 a first
priority, validly perfected 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
4
<PAGE> 10
work, labor, or materials relating to a Financed Vehicle that shall be liens
prior to, or equal 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.
(xii) Insurance. Ford Credit, in accordance with its customary
standards, policies and procedures, shall have determined that, as of the date
of origination of each Receivable, the Obligor had 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 sale,
transfer, assignment and conveyance 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 sold,
transferred, assigned, conveyed 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, participations 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, participations 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 sale, transfer,
5
<PAGE> 11
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 priority, validly 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. The Seller, or its custodian, has possession of such
original with respect to each Receivable.
(xviii) New and Used Vehicles. 70.00% of the aggregate
Principal Balance of the Receivables, constituting 62.82% 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, 0.95% of the Receivables constitute Actuarial Receivables and
99.05% of the Receivables constitute Simple Interest Receivables.
(xx) Origination. Each Receivable shall have an origination
date on or after September 1, 1997.
(xxi) PRIMUS. 11.96% of the aggregate Principal Balance of
the Receivables as of the Cutoff Date, represent Receivables originated through
PRIMUS and assigned to Ford Credit, and the remainder of the Receivables were
originated through Ford Credit (excluding PRIMUS).
(xxii) Maturity of Receivables. Each Receivable shall have an
original maturity of not greater than sixty (60) months.
6
<PAGE> 12
(xxiii) Annual Percentage Rate. The Annual Percentage Rate of
each Receivable shall be not less than 1.90% and not greater than 20.00%.
(xxiv) Scheduled Payments. Each Receivable shall have a first
Scheduled Payment due, in the case of Actuarial Receivables, or a first
scheduled due date, in the case of Simple Interest Receivables, on or prior to
September 30, 1999 and no Receivable shall have a payment that is more than
thirty (30) days overdue as of the Cutoff Date.
(xxv) Location of Receivable Files. The Receivable Files shall
be kept at one or more of the locations listed in Schedule B-1 hereto or the
offices of one of the custodians specified in Schedule B-2 hereto.
(xxvi) No Extensions. The number of Scheduled Payments, in the
case of Actuarial Receivables, and the number of scheduled due dates, in the
case of Simple Interest Receivables, shall not have been extended on or before
the Cutoff Date on any Receivable.
(xxvii) 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.
(xxviii) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
(xxix) 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
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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 such 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 Receivable.
(ii) The original credit application fully executed
by the Obligor or a photocopy thereof or a record thereof on a computer
file, diskette 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 standards, policies and procedures,
evidencing the
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security interest of Ford Credit in the Financed Vehicle.
(iv) Any and all other documents (including any
computer file, diskette 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 reason able 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 and, consistent with such reasonable care, the Servicer may
utilize the services of third parties to act as custodian of physical Receivable
Files, subject to Section 7.5. In accordance with its customary standards,
policies and procedures 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
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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-1 to
this Agreement or the offices of one of its custodians specified in Schedule B-2
of 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,
but only upon reasonable notice and during the normal business hours at the
respective offices of the Servicer.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer shall release or cause to be released 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
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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 to the Indenture Trustee or the
Indenture Trustee's agent the Receivable Files and the related accounts and
records maintained by the Servicer at such place or places as the Indenture
Trustee may reasonably designate.
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ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer. The Servicer shall manage,
service, administer, and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Servicer exercises with
respect to all comparable automotive 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
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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 6 months past 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
standards, policies and 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 standards, policies and procedures as it
shall deem necessary or advisable in its servicing of comparable receivables,
which may include reasonable efforts to realize upon any Dealer Recourse and
selling the Financed Vehicle at public or private sale. The foregoing shall be
subject to the provision that, in any case in which the Financed Vehicle shall
have suffered damage, the Servicer shall not be required to 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.
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SECTION 3.4 Allocations of Collections. If an Obligor is
obligated under one or more Receivables and also under one or more other assets
owned by Ford Credit or assigned by Ford Credit to third parties, then any
payment on any such asset received from or on behalf of such Obligor shall, if
identified as being made with respect to a particular item or asset, be applied
to such item, and otherwise shall be allocated by Ford Credit in accordance with
its customary standards, policies and procedures.
SECTION 3.5 Maintenance of Security Interests in Financed
Vehicles. The Servicer shall, in accordance with its customary standards,
policies and procedures, take such steps as are necessary to maintain perfection
of the security interest created by each Receivable in the related Financed
Vehicle. The Issuer hereby authorizes the Servicer to take such steps as are
necessary to re-perfect such security interest on behalf of the Issuer and the
Indenture Trustee in the event of the relocation of a Financed Vehicle or for
any other reason.
SECTION 3.6 Covenants of Servicer. The Servicer shall not (i)
release the Financed Vehicle securing each such Receivable from the security
interest granted by such Receivable in whole or in part except in the event of
payment in full by or on behalf of the Obligor thereunder or repossession, (ii)
impair the rights of the Noteholders or the Certificateholders in the
Receivables, (iii) change the Annual Percentage Rate with respect to any
Receivable, or (iv) modify the Amount Financed or the total number of Scheduled
Payments (in the case of an Actuarial 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. (a) The
Seller, the Servicer or the Owner Trustee, as the case may be, promptly shall
inform the other parties to this Agreement, 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
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Trustee (which shall include any Receivable as to which a breach of Section 3.6
has occurred) at the Purchase Amount. 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.
(b) The Seller, the Servicer or the Owner Trustee, as the case
may be, promptly shall inform the other parties to this Agreement in writing,
upon the discovery of any breach of the representations and warranties of Ford
Credit, as seller, set forth in Section 3.2(b) of the Purchase Agreement. Unless
the breach shall have been cured by the last day of the second Collection Period
following the discovery, the Servicer 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 Ford Credit's
option, the last day of the first Collection Period following the discovery). In
consideration of the purchase of the Receivable, Ford Credit shall remit,
pursuant to Section 6.2 of the Purchase Agreement, the Purchase Amount to the
Servicer and the Servicer shall remit the Purchase Amount to the Collection
Account as specified in Section 4.5 hereof.
(c) With respect to all Receivables purchased pursuant to this
Section 3.7, the Issuer shall assign to the Servicer or the Seller, as
applicable, without recourse, representation or warranty, all of the Issuer's
right, title and interest in and to such Receivables and all security and
documents relating thereto.
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 and other administrative fees and expenses or similar charges allowed by
applicable law with respect to Receivables during each Collection Period (the
"Sup-
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plemental 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 this 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
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such Officer's Certificate and the report referred to in Section 3.11 may be
obtained by any Certificateholder by a request in writing to the Owner Trustee,
or by any Noteholder or Person certifying that it is a Note Owner by a request
in writing to the Indenture Trustee, in either case addressed to the applicable
Corporate Trust Office. Upon the telephone request of the Owner Trustee, the
Indenture Trustee shall promptly furnish the Owner Trustee a list of Noteholders
as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving of
notice or lapse of time, or both, would become an Event of Servicing Termination
under Section 8.1. The Seller shall deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained knowledge thereof,
but in no event later than five (5) Business Days thereafter, written notice in
an Officer's Certificate of any event which with the giving of notice or lapse
of time, or both, would become an Event of Servicing Termination under clause
(a)(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
excep-
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tions 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 Re ceivables 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
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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-D", at a Qualified Institution or Qualified Trust
Institution (which shall initially be the corporate trust department of The
Chase Manhattan Bank), which shall be designated as the "Collection Account".
Initially, the Collection Account shall be account number C-70780 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
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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 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.
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(d) The Servicer shall, prior to the Closing Date, establish
and maintain a segregated trust account in the name of "The Chase Manhattan Bank
as Indenture Trustee" at a Qualified Institution or Qualified Trust Institution
(which shall initially be the corporate trust department of The Chase Manhattan
Bank), which shall be designated as the "Payahead Account". The Payahead Account
shall be held in trust for the benefit of the Obligors. The Payahead Account
shall be under the sole dominion and control of the Indenture Trustee; provided
that the Servicer may make deposits to and direct the Indenture Trustee in
writing to make withdrawals from the Payahead Account in accordance with the
Basic Documents. The Payahead Account shall not be a part of the Trust Property.
All deposits to and withdrawals from the Payahead Account shall be made only
upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to
the first sentence of Section 4.2, all amounts held in the Payahead Account
shall, to the extent permitted by applicable law, rules and regulations, be
invested, as directed in writing by the Servicer, by the bank or trust company
then maintaining the Payahead Account in Permitted Investments that mature not
later than the Business Day immediately prior to the Distribution Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Payahead Account shall be
withdrawn from the Payahead Account at the direction of the Servicer and shall
be paid to the Servicer. In the event that the Payahead Account is no longer to
be maintained at the corporate trust department of The Chase Manhattan Bank, the
Servicer shall, with the Indenture Trustee's or Owner Trustee's assistance as
necessary, cause the Payahead Account to be moved to a Qualified Institution or
a Qualified Trust Institution within ten (10) Business Days (or such longer
period not to exceed thirty (30) calendar days as to which each Rating Agency
may consent).
(e) Notwithstanding the provisions of clause (d) above and of
Section 4.6(a)(ii), for so long as (i) Ford Credit is the Servicer, (ii) the
rating of Ford Credit's short-term unsecured debt is at least P-1 by Moody's, is
at least A-1 by Standard & Poor's and is at
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least F-1 by Fitch and (iii) no Event of Servicing Termination shall have
occurred (each, a "Monthly Remittance Condition"), Payaheads need not be
remitted to and deposited in the Payahead Account but instead may be remitted
to and held by the Servicer. So long as each Monthly Remittance Condition is
satisfied, the Servicer shall not be required to segregate or otherwise hold
separate any Payaheads remitted to the Servicer as aforesaid but shall be
required to remit Payaheads to the Collection Account in accordance with Section
4.6(a)(i). At any time that any Monthly Remittance Condition is not satisfied,
the Servicer shall deposit in the Payahead Account the amount of any Payaheads
then held or received by it (which amount shall be at least equal to the
Payahead Balance as of the close of business on the last day of the immediately
preceding Collection Period). Notwithstanding the foregoing, if a Monthly
Remittance Condition is not satisfied the Servicer may utilize, with respect to
Payaheads, an alternative remittance schedule (which may include the remittance
schedule utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the Indenture
Trustee written confirmation from each Rating Agency that such alternative
remittance schedule will not result in the downgrading or withdrawal by such
Rating Agency of the ratings then assigned to the Notes and the Certificates.
The Owner Trustee and the Indenture Trustee shall not be deemed to have
knowledge of any event or circumstance under clause (iii) of the first sentence
of this Section 4.1(e) that would require 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, but excluding Purchased Receivables) and (ii)
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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 Trust Office with knowledge hereof or familiarity herewith has
actual knowledge of such event or circumstance. For purposes of this Article IV
the phrase "payments by or on behalf of Obligors" shall mean payments made by
Persons other than the Servicer or by other means.
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SECTION 4.3 Application of Collections. For the purposes of
this Agreement, as of the close of business on the last day of each Collection
Period, all collections for the Collection Period with respect to each
Receivable (other than a Purchased Receivable) shall be applied by the Servicer
as follows:
Payments by or on behalf of the Obligor which are not late fees,
prepayment charges, or other administrative fees and expenses, or
similar charges which constitute the Supplemental Servicing Fee shall
be applied first to reduce Outstanding Advances made with respect to
such Receivable, as described in Sections 4.4(a) and (b) below. Next,
any excess shall be applied (i) in the case of Simple Interest
Receivables, to interest and principal on the Receivable in accordance
with the Simple Interest Method and (ii) in the case of Actuarial
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 Actuarial Receivable but only if the
sum of such excess and the previous Payahead Balance shall be
sufficient to prepay the Actuarial 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 an Actuarial 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, an
"Actuarial Advance"). The Servicer will be obligated to make an Actuarial
Advance in respect of an Actuarial Receivable only to the extent
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that the Servicer, in its sole discretion, shall deter mine that the Actuarial
Advance shall be recoverable from subsequent collections or recoveries on any
Actuarial Receivable. With respect to each Actuarial Receivable, the Actuarial
Advance shall increase Outstanding Actuarial Advances. Outstanding Actuarial
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 Out standing Actuarial
Advance with respect to any Actuarial Receivable shall not be recoverable, the
Servicer shall be reimbursed from any collections made on other Receivables in
the Trust, and Outstanding Actuarial Advances with respect to such Actuarial
Receivable shall be reduced accordingly.
(b) As of the close of business on the last day of each
Collection Period, the Servicer shall advance an amount equal to the amount of
interest due on the Simple Interest Receivables at their respective APRs for the
related Collection Period (assuming the Simple Interest Receivables pay on
their respective due dates) minus the amount of interest actually received on
the Simple Interest Receivables during the related Collection Period (such
amount, a "Simple Interest Advance"). With respect to each Simple Interest
Receivable, the Simple Interest Advance shall increase Outstanding Simple
Interest Advances. If such calculation results in a negative number, an amount
equal to such negative number shall be paid to the Servicer and the amount of
Outstanding Simple Interest Advances shall be reduced by such amount. In
addition, in the event that a Simple Interest Receivable becomes a Liquidated
Receivable, Liquidation Proceeds with respect to a Simple Interest Receivable
attributable to accrued and unpaid interest thereon (but not including interest
for the then current Collection Period) shall be paid to the Servicer to reduce
Outstanding Simple Interest Advances, but only to the extent of any Outstanding
Simple Interest Advances. The Servicer shall not make any advance in respect of
principal of Simple Interest Receivables.
If the Servicer shall determine that an Out standing Simple
Interest Advance with respect to any Simple Interest Receivable shall not be
recoverable, the
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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
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amounts set forth in the Servicer's Certificate for such Distribution Date:
(i) From the Payahead Account, or from the Servicer
in the event the provisions of Section 4.1(e) above are applicable, to
the Collection Account, in immediately available funds, (x) the portion
of Payaheads constituting Scheduled Payments or prepayments in full,
required by Sections 4.3 and 4.4(a), and (y) the Payahead Balance, if
any, relating to any Purchased Receivable.
(ii) From the Collection Account to the Payahead
Account, or to the Servicer in the event the provisions of Section
4.1(e) above are applicable, in immediately available funds, the
aggregate Payaheads required by Section 4.3 for the Collection Period
related to such Distribution Date.
(iii) From the Collection Account to the Servicer, in
immediately available funds, repayment of Outstanding Advances pursuant
to Sections 4.4(a) and (b).
(b) Prior to each Distribution Date, the Servicer shall on or
before each Determination Date calculate the Available Collections, the Reserve
Account Release Amount, the Available Funds, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods, if any, the Accrued Class A Note
Interest, the First Priority Principal Distribution Amount, the Accrued Class B
Note Interest, the Second Priority Principal Distribution Amount, the Accrued
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 an amount
equal to the lesser of such difference (if positive) or the balance of such
Reserve Account. 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
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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 Re serve 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 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
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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),
5.1(ii), 5.1(iv) or 5.1(v) of the Indenture which has resulted in an
acceleration of the Notes (or following the occurrence of any
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such event after an Event of Default specified in Section 5.1(iii) of the
Indenture has occurred and the Notes have been accelerated), 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 Class A Notes to zero, (B) following
the occurrence and during the continuation of an Event of Default specified in
Section 5.1(iii) of the Indenture, 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 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
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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 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;
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(vii) seventh, 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;
(viii) eighth, 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
(ix) ninth, 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-D" 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
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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 there from 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 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
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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.
(d) The Seller shall be permitted to sell, transfer, convey or
assign in any manner its rights in the Reserve Account under this Section
4.7(c), together with its rights to receive amounts under Section 4.5(c)(x) of
this Agreement and Sections 5.4(b)(xii) and 8.2(c)(x) of the Indenture, provided
that each of the following:
(i) the Rating Agency Condition is satisfied with
respect such action;
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(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; and
(iii) the transferee or assignee agrees in writing to
take positions for federal and any Applicable Tax State income tax
purposes consistent with the tax positions taken previously by the
Seller.
SECTION 4.8 Net Deposits. For so long as (i) Ford Credit shall
be the Servicer, (ii) the Servicer shall be entitled pursuant to Section 4.2 to
remit collections on a monthly basis rather than within two Business Days of
receipt, and (iii) the Servicer shall be entitled pursuant to Section 4.1(e) to
retain Payaheads rather than deposit them in the Payahead Account, Ford Credit
may make the remittances pursuant to Sections 4.2 and 4.5 above, net of amounts
to be distributed to Ford Credit pursuant to Section 4.6(c). Nonetheless, the
Servicer shall account for all of the above described remittances and
distributions except for the Supplemental Servicing Fee in the Servicer's
Certificate as if the amounts were deposited and/or transferred separately.
SECTION 4.9 Statements to Noteholders and Certificateholders.
On each Distribution Date, the Servicer shall provide to the Indenture Trustee
(with copies to the Rating Agencies and each Note Paying Agent) for the
Indenture Trustee to forward to each Noteholder of record as of the most recent
Record Date and to the Owner Trustee (with copies to the Rating Agencies and to
each Certificate Paying Agent) for the Owner Trustee to forward to each
Certificateholder of record as of the 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 Certificate Balance;
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(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 amount of any previously due and unpaid
payment of principal of the Notes or of the Certificate Balance, as
applicable, and the change in such amount from that of the prior
Distribution Date;
(x) 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;
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(xi) the amount of the aggregate Realized Losses, if
any, with respect to the related Collection Period;
(xii) 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
(xiii) the amount of Advances, if any, on such
Distribution Date (stating separately the amount of Actuarial Advances
and Simple Interest Advances).
Each amount set forth on the Distribution Date statement
pursuant to clauses (i), (ii), (vi), (vii) and (ix) 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
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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, executed and
delivered by the Seller by all necessary action.
(d) Valid Conveyance; Binding Obligation. This Agreement shall
evidence a valid transfer, assignment and conveyance of the Receivables and the
other Trust Property conveyed by the Seller to the Issuer hereunder, enforceable
against creditors of and purchasers from the Seller; and this Agreement and the
other Basic Documents to which the Seller is a party constitute legal, valid,
and binding obligations of the Seller, enforceable against the Seller in
accordance with their terms, subject, as to enforceability, to applicable
bankruptcy, insolvency, reorganization, conservatorship, receivership,
liquidation and other similar laws and to general equitable principles.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which the Seller
is a party and the fulfillment of the terms hereof and thereof will not conflict
with, result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under the
Certificate of Limited Partnership or Limited Partnership Agreement, any
indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing
agreement or similar agreement
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or 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, charge or encumbrance
upon any of its properties pursuant to the terms of any such indenture,
mortgage, deed of trust, loan agreement, guarantee, lease financing agreement or
similar agreement or 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. There are no proceedings or investigations
pending, or, to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its proper ties: (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,
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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 (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.
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(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 promptly 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 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 neces-
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sary 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) and (y) above shall be conditions to the consummation of the transactions
referred to in clauses (i), (ii) or (iii) above.
SECTION 6.4 Limitation on Liability of Seller and Others. The
Seller and any officer or employee or agent of the Seller may rely in good faith
on the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute, or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
SECTION 6.5 Seller May Own Notes or Certificates. The Seller,
and any Affiliate of the Seller, may in its individual or any other capacity
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Seller or an 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:
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(a) Organization and Good Standing. The Servicer shall have
been duly organized and shall be validly existing as a corporation in good
standing under the laws of the State of its incorporation, with power and
authority to own its properties and to conduct its business as such properties
shall be currently owned and such business is presently conducted, and had at
all relevant times, and shall have, power, authority, and legal right to
acquire, own, sell and service the Receivables and to hold the Receivable Files
as custodian on behalf of the Issuer and the Indenture Trustee.
(b) Due Qualification. The Servicer shall be duly qualified to
do business as a foreign corporation in good standing, and shall have obtained
all necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business (including the servicing of
the Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer shall have the power and
authority to execute and deliver this Agreement and the other Basic Documents to
which it is a party and to carry out their terms, and the execution, delivery
and performance of this Agreement and the other Basic Documents to which it is a
party shall have been duly authorized, executed and delivered 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
(in each case material to the Servicer and its subsidiaries considered
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as a whole), the articles of incorporation or by-laws of the Servicer, or any
indenture, mortgage, deed of trust, loan agreement, guarantee, lease financing
agreement or similar agreement or 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, charge or encumbrance (in each case material to the Servicer and its
subsidiaries considered as a whole) upon any of its properties pursuant to the
terms of any such indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or 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 in come,
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
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Trustee, the Indenture Trustee, the Noteholders, the Certificateholders and the
Seller from and against any and all costs, expenses, losses, damages, claims and
liabilities, arising out of or resulting from the use, ownership or operation by
the Servicer or any Affiliate thereof of a Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the
Issuer, the Owner Trustee, 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 con-
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tained 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.
(e) Indemnification under this Section 7.2 by Ford Credit (or
any successor thereto pursuant to Section 8.2) as Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, shall survive the
termination of such Person as Servicer or a resignation by such Person as
Servicer as well as the termination of this Agreement or the resignation or
removal of the Owner Trustee, 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 Person to or on behalf of whom such payments are made
thereafter shall collect any of such amounts from others, such Person 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)
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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
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reason of reckless disregard of obligations and duties under this Agreement, or
by reason of negligence in the performance of its duties under this Agreement
(except for errors in judgment). The Servicer and any director, officer or
employee or agent of the Servicer may rely in good faith on any Opinion of
Counsel or on any Officer's Certificate of the Seller or certificate of auditors
believed to be genuine and to have been signed by the proper party in respect of
any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall
not be under any obligation to appear in, prosecute, or defend any legal action
that shall not be incidental to its duties to service the Receivables in
accordance with this Agreement, and that in its opinion may involve it in any
expense or liability; provided, however, that the Servicer may undertake any
reasonable action that it may deem necessary or desirable in respect of this
Agreement and the rights and duties of the 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
some of or substantially all of 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 and the Servicer shall be
solely responsible for the fees of any such sub-contractors.
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 permissi-
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ble 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 Section 8.1(b), (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.
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 Trustee any proceeds or payment
required to be so delivered under the terms of the Notes and the
Certificates and this Agreement that shall continue unremedied for a
period of three (3) Business Days after written notice of such failure
is received by
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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 or the Seller, as the case may be, 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 Controlling Note Class or,
if no Notes are outstanding, by Certificateholders of Certificates
evidencing not less than 25% of the Certificate Balance of the
Controlling Certificate Class; 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 insol-
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vency or reorganization statute, make an assignment for the benefit of
its creditors, or voluntary suspend payment of its obligations or
become insolvent;
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 Controlling Note Class
(or, if no Notes are outstanding, the Owner Trustee or Certificates evidencing
not less than a majority of the Certificate Balance of the Controlling
Certificate Class), by notice then given in writing to the Servicer (and to the
Indenture Trustee and the Owner Trustee if given by the Noteholders and to the
Owner Trustee if given by the Certificateholders) (with a copy to the Rating
Agencies) may terminate all of the rights and obligations of the Servicer under
this Agreement. On or after the receipt by the Servicer of such written notice,
all authority and power of the Servicer under this Agreement, whether with
respect to the Notes, the Certificates or the Trust Property or otherwise, shall
pass to and be vested in the Indenture Trustee or such Successor Servicer as may
be appointed under Section 8.2; and, without limitation, the Indenture Trustee
and the Owner Trustee are hereby authorized and empowered to execute and
deliver, on behalf of the predecessor Servicer, as attorney-in-fact or other
wise, 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.
(b) Upon termination of the Servicer under Section 8.1(a), 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
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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 Indenture Trustee and the Owner
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 Issuer
shall appoint a Successor Servicer, and the Successor Servicer shall accept its
appointment by a written assumption in form acceptable to the Owner Trustee and
the Indenture Trustee (with a copy to each Rating Agency). In the event that a
Successor Servicer has not been appointed at the time when the predecessor
Servicer has ceased to act as Servicer in accordance with this Section 8.2, the
Indenture Trustee without further action shall automatically be appointed the
Successor Servicer. Notwithstanding the above, the Indenture Trustee, if it
shall be legally unable so to act, shall appoint, or petition a court of
competent jurisdiction to appoint, any established institution, having a net
worth of not less than $100,000,000 and whose regular business shall include the
servicing of 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 responsibili-
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ties, duties, and liabilities arising thereafter relating thereto placed on the
predecessor Servicer, by the terms and provisions of this Agreement.
(c) In connection with such appointment, the Indenture Trustee
may make such arrangements for the compensation of such Successor Servicer out
of payments on Receivables as it and such Successor Servicer shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the predecessor Servicer under this Agreement. The Indenture Trustee
and such Successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 8.3 Repayment of Advances. If the identity of the
Servicer shall change, the predecessor Servicer shall be entitled to receive to
the extent of available funds reimbursement for Outstanding Advances pursuant to
Section 4.3 and 4.4, in the manner specified in Section 4.6, with respect to all
Advances made by the predecessor Servicer.
SECTION 8.4 Notification to Noteholders and
Certificateholders. Upon any termination of, or appointment of a successor to,
the Servicer pursuant to this Article VIII, the Indenture Trustee shall give
prompt written notice thereof to Noteholders, and the Owner Trustee shall give
prompt written notice thereof to Certificateholders at their respective
addresses of record and to each Rating Agency.
SECTION 8.5 Waiver of Past Events of Servicing Termination.
The Noteholders of Notes evidencing not less than a majority of the principal
amount of the Controlling Note Class (or, if no Notes are outstanding, the Owner
Trustee or Certificates evidencing not less than a majority of the Certificate
Balance of the Controlling Certificate Class) 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,
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<PAGE> 59
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 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.
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ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment. (a) This Agreement may be amended by
the Seller, the Servicer and the Issuer, with the consent of the Indenture
Trustee and the Owner Trustee to the extent that their respective rights or
obligations may be affected thereby (which consent may not be unreasonably
withheld), but without the consent of any of the Noteholders or the
Certificateholders, to cure any ambiguity, to correct or supplement any
provisions in this Agreement, or to add any provisions to or change or eliminate
any provisions or to modify the rights of the Noteholders or Certificateholders;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel delivered to the Owner Trustee and the Indenture Trustee, materially and
adversely affect 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 each Class of the Notes 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
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<PAGE> 61
the provisions of this Agreement, or of modifying in any manner the rights of
the Noteholders or the Certificateholders; provided, however, that no such
amendment shall (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that shall be required
to be made on any Note or Certificate or change any Note Interest Rate or any
Certificate Rate or, with out satisfaction of the Rating Agency Condition, 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 and the Indenture Trustee will provide notification of
the substance of such amendment or consent to each Noteholder. It shall not be
necessary for the consent of Noteholders or the Certificateholders pursuant to
this Section 10.1 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Noteholders and Certificateholders provided for in this Agreement) and of
evidencing the authorization of the execution thereof by Noteholders and
Certificateholders shall be subject to such reasonable requirements as the Owner
Trustee and the Indenture Trustee may prescribe, including the establishment of
record dates pursuant to paragraph number 2 of the Note Depository Agreement.
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<PAGE> 62
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee and the Indenture Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement and the Opinion of Counsel referred to
in Section 10.2(i)(1). The Owner Trustee or the Indenture Trustee may, but shall
not be obligated to, enter into any such amendment which affects such Owner
Trustee's or Indenture Trustee's own rights, duties or immunities under this
Agreement or otherwise.
SECTION 10.2 Protection of Title to Trust Property. (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
ss. 9-402(7) of the UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least five (5) days' prior written notice thereof, with a
copy to the Rating Agencies, and shall have promptly filed appropriate
amendments to all previously filed financing statements or continuation
statements.
(c) The Seller and the Servicer shall give the Owner Trustee
and the Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement or of
any new financing statement and shall promptly file any such amendment or new
financing statement. The Servicer shall at all
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times maintain each office from which it shall service Receivables, and its
principal executive office, within the United States of America.
(d) The Servicer shall maintain accounts and records as to
each Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, the Payahead Account and the Reserve Account in respect of such
Receivable.
(e) The Servicer shall maintain its computer systems so that,
from and after the time of conveyance under this Agreement of the Receivables to
the Issuer, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate clearly the interest of the
Issuer and the Indenture Trustee in such Receivable and that such Receivable is
owned by the Issuer and has been pledged to the Indenture Trustee pursuant to
the Indenture. Indication of the Issuer's and the Indenture Trustee's interest
in a Receivable shall not be deleted from or modified on the Servicer's
computer systems until, and only until, 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, upon receipt of reasonable prior notice,
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.
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(h) Upon request, the Servicer shall furnish to the Owner
Trustee and the Indenture Trustee, within twenty (20) Business Days, a list of
all Receivables (by contract number and name of Obligor) then held as part of
the Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer shall deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of this
Agreement and of each amendment thereto, an Opinion of Counsel either
(A) stating that, in the opinion of such Counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and protect
such interest; and
(2) within 120 days after the beginning of each
calendar year beginning with the first calendar year beginning more
than three months after the Cutoff Date, an Opinion of Counsel, dated
as of a date during such 120-day period, either (A) stating that, in
the opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture
Trustee in the Receivables, and 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
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(as of the date of such opinion) to be taken in the following year to preserve
and protect such interest.
(j) The Seller shall, to the extent required by applicable
law, cause the Notes and the Certificates to be registered with the Securities
and Exchange Commission pursuant to Section 12(b) or Section 12(g) of the
Securities Exchange Act of 1934 within the time periods specified in such
sections.
(k) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and all of which counterparts shall constitute but one and the same instrument.
SECTION 10.3 Governing Law. THIS AGREEMENT SHALL BE
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE
OBLIGATIONS, RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.4 Notices. All demands, notices, and communications
under this Agreement shall be in writing, personally delivered, sent by
telecopier, over night courier or mailed by certified mail, return receipt
requested, and shall be deemed to have been duly given upon receipt (a) in the
case of the Seller or the Servicer, to the agent for service as specified in
Section 10.11 hereof, or at such other address as shall be designated by the
Seller or the Servicer in a written notice to the Owner Trustee and the
Indenture Trustee, (b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee, (c) in the case of the Indenture Trustee, at the
Corporate Trust Office of the Indenture Trustee, (d) in the case of Moody's
Investors Service, Inc., at the following address: Moody's Investors Service,
Inc., ABS Monitoring Department, 99 Church Street, New York, New York 10007, (e)
in the case of Standard & Poor's Ratings Services, at the following address:
Standard & Poor's Ratings Services, 55 Water Street, 40th Floor, New York, New
York 10041, 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
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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
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Noteholders or the Certificateholders, any right, remedy, power or privilege
hereunder, shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges therein provided are
cumulative and not exhaustive of any rights, remedies, powers and privileges
provided by law.
SECTION 10.9 Third-Party Beneficiaries. This Agreement will
inure to the benefit of and be binding upon the parties hereto, the Noteholders,
the Certificateholders, 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 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.
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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
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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.
SECTION 10.14 Savings Clause. It is the intention of the
Seller and the Issuer that the transfer of the Trust Property contemplated
herein constitute an absolute transfer of the Trust Property, conveying good
title to the Trust Property from the Seller to the Issuer. However, in the
event that such transfer is deemed to be a pledge, the Seller hereby grants to
the Issuer a first priority security interest in all of the Seller's right,
title and interest in, to and under the Trust Property, and all proceeds
thereof, to secure a loan in an amount equal to all amounts payable under the
Notes and the Certificates, and in such event, this Agreement shall constitute a
security agreement under applicable law.
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<PAGE> 70
IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES TWO
L.P.,
as Seller
By: FORD CREDIT AUTO
RECEIVABLES TWO, INC.,
as General Partner
By: /s/ R. P. Conrad
-----------------------
Name: R. P. Conrad
Title: Assistant
Secretary
FORD CREDIT AUTO OWNER TRUST
1999-D,
as Issuer
By: THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Joyce P. Maccou
-----------------------
Name: Joyce P. Maccou
Title: Assistant
Treasurer
FORD MOTOR CREDIT COMPANY,
as Servicer
By: /s/ Hurley D. Smith
-----------------------
Name: Hurley D. Smith
Title: Secretary
<PAGE> 71
Accepted and agreed:
THE CHASE MANHATTAN BANK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Michael A. Smith
-----------------------------------
Name: Michael A. Smith
Title: Vice President
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Joyce P. Maccou
-----------------------------------
Name: Joyce P. Maccou
Title: Assistant Treasurer
<PAGE> 72
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
<PAGE> 73
SCHEDULE B-1
Location of Receivable Files
at Ford Credit Branch Offices
Akron
175 Montrose West Avenue
Crown Pointe Building
Suite 300
Copley, OH 44321
Albany
5 Pine West Plaza
Albany, NY 12205
Albuquerque
6100 Uptown Blvd., N.E.
Suite 300
Albuquerque, NM 87110
Amarillo
1616 S. Kentucky
Bldg. D, Suite 130
Amarillo, TX 79102
Anchorage
3201 C Street
Suite 303
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
Athens
3708 Atlanta Highway
Athens, GA 30604
Atlanta-North
North Park Town Center
Bldg. 400, Suite 180
1000 Abernathy Rd. N.E.
Atlanta, GA 30328
SB-1
<PAGE> 74
Atlanta-South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Atlanta/CL
1117 Perimeter Ctr. W
Suite 404 West
Atlanta, GA 30338
Atlantic Region District Office
14104 Newbrook Drive
Chantilly, VA 22021
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Baltimore
Campbell Corporate
Center One
4940 Campbell Blvd.
Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Boston-North
One Tech Drive
3rd Floor
Andover, MA 01810-2497
SB-2
<PAGE> 75
Boston-South
Southboro Place
2nd Floor
352 Turnpike Road
Southboro, MA 01772
Bristol
Landmark Center-
Suite A
113 Landmark Lane
Bristol, TN 37620
Buffalo
95 John Muir Drive
Suite 102
Amherst, NY 14228
Cape Girardeau
1409-C N. Mt. Auburn Rd.
Cape Girardeau, MO 63701
Charleston
Rivergate Center
Suite 150
4975 LaCross Road
North Charleston, SC 29418
Charlotte
6302 Fairview Road
Suite 500
Charlotte, NC 28210
Charlotte/CL
6302 Fairview Road
Suite 510
Charlotte, NC 28210
Chattanooga
2 Northgate Park
Suite 200
Chattanooga, TN 37415
Cheyenne
6234 Yellowstone Road
Cheyenne, WY 82009
SB-3
<PAGE> 76
Chicago-East
One River Place
Suite A
Lansing, IL 60438
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Chicago-South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Chicago-West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195
Chicago/CL
745 McClintock Drive
Suite 300
Burr Ridge, IL 60521
Cincinnati
8805 Governors Hill Dr.
Suite 230
Cincinnati, OH 45249
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
SB-4
<PAGE> 77
Columbus
Metro V, Suite 470
655 Metro Place S
Dublin, OH 43017
Coral Springs
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
SB-5
<PAGE> 78
Detroit-North
1301 W. Long Lake 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 205
Fargo, ND 58103
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Findlay
3500 North Main Street
Findlay, OH 45840-1447
SB-6
<PAGE> 79
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
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
SB-7
<PAGE> 80
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
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
SB-8
<PAGE> 81
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 79423
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
SB-9
<PAGE> 82
Midland
15 Smith Road
Suite 4300
Chevron Building
Midland, TX 79705
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
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
SB-10
<PAGE> 83
New Orleans
Lakeway III
3838 N. Causeway Blvd.
Suite 3200
Metairie, LA 70002
Norfolk
Greenbrier Pointe
Suite 350
1401 Greenbrier Pkwy.
Chesapeake, VA 23320
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
Nashville Customer Service Center
9009 Carothers Parkway
Franklin, TN 37067
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
SB-11
<PAGE> 84
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
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
SB-12
<PAGE> 85
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
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
SB-13
<PAGE> 86
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
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98009-1608
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
SB-14
<PAGE> 87
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
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
SB-15
<PAGE> 88
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
SB-16
<PAGE> 89
Schedule B-2
Location of Receivable Files
at Third Party Custodians for Ford Credit
Security Archives
5022 Harding Place
Nashville, TN 37211
<PAGE> 90
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
AA-1
<PAGE> 1
EXHIBIT 99.2
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT, dated as of September 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-D, a Delaware
business trust (the "Issuer"), FORD MOTOR CREDIT COMPANY, a Delaware
corporation, as administrator (the "Administrator"), and THE CHASE MANHATTAN
BANK, a New York corporation, not in its individual capacity but solely as
Indenture Trustee (the "Indenture Trustee").
WHEREAS, the Issuer is issuing the Notes pursuant to the Indenture and
the Certificates pursuant to the Trust Agreement and has entered into certain
agreements in connection therewith, including (i) the Sale and Servicing
Agreement, (ii) the Note Depository Agreement and (iii) the Indenture (the Sale
and Servicing Agreement, the Note Depository Agreement and the Indenture being
referred to hereinafter collectively as the "Related Agreements");
WHEREAS, the Issuer and the Owner Trustee desire to have the
Administrator perform certain duties of the Issuer and the Owner Trustee under
the Related Agreements and to provide such additional services consistent with
the terms of this Agreement and the Related Agreements as the Issuer and the
Owner Trustee may from time to time request; and
WHEREAS, the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto, intending to be legally
bound, agree as follows:
1. Definitions and Usage. Except as otherwise specified herein or as
the context may otherwise require, capitalized terms used but not otherwise
defined herein are defined in Appendix A hereto, which also contains rules as to
usage that shall be applicable herein.
<PAGE> 2
2. Duties of the Administrator. (a) Duties with Respect to the
Indenture and the Note Depository Agreement. (i) The Administrator agrees to
perform all its duties as Administrator and the duties of the Issuer under the
Note Depository Agreement. In addition, the Administrator shall consult with the
Owner Trustee regarding the duties of the Issuer under the Indenture and the
Note Depository Agreement. The Administrator shall monitor the performance of
the Issuer and shall advise the Owner Trustee when action is necessary to comply
with the Issuer's duties under the Indenture and the Note Depository Agreement.
The Administrator shall prepare for execution by the Issuer, or shall cause the
preparation by other appropriate Persons of, all such documents, reports,
filings, instruments, certificates and opinions that it shall be the duty of the
Issuer to prepare, file or deliver pursuant to the Indenture and the Note
Depository Agreement. In furtherance of the foregoing, the Administrator shall
take, 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):
(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);
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<PAGE> 3
(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);
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<PAGE> 4
(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));
(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);
4
<PAGE> 5
(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 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);
5
<PAGE> 6
(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);
(AB) 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);
(AC) the execution and delivery of new Notes conforming to any
supplemental indenture (Section 9.6);
(AD) the notification of Noteholders of redemption of the Notes
or duty to cause the Indenture Trustee to provide such notification
(Section 10.2);
(AE) 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));
(AF) 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));
(AG) 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);
(AH) 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
(AI) the recording of the Indenture, if applicable (Section
11.15).
(ii) The Administrator will:
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<PAGE> 7
(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);
(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
7
<PAGE> 8
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, 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.
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<PAGE> 9
(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 October 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
9
<PAGE> 10
Administrator may enter into transactions or otherwise deal with any of its
Affiliates; provided, however, that the terms of any such transactions or
dealings shall be in accordance with any directions received from the Issuer and
shall be, in the Administrator's opinion, no less favorable to the Issuer than
would be available from unaffiliated parties.
(c) Non-Ministerial Matters. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the Administrator
shall not take any action unless within a reasonable time before the taking of
such action, the Administrator shall have notified the Owner Trustee of the
proposed action and the Owner Trustee shall not have withheld consent or
provided an alternative direction. For the purpose of the preceding sentence,
"non-ministerial matters" shall include, without limitation:
(A) the amendment of or any supplement to the Indenture;
(B) the initiation of any claim or lawsuit by the Issuer and the
compromise of any action, claim or lawsuit brought by or against the
Issuer (other than in connection with the collection of the
Receivables or Permitted Investments);
(C) the amendment, change or modification of the Related
Agreements;
(D) the appointment of successor Note Registrars, successor Note
Paying Agents and successor Indenture Trustees pursuant to the
Indenture or the appointment of successor Administrators or 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.
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<PAGE> 11
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 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.
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<PAGE> 12
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
12
<PAGE> 13
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(c) shall occur, it shall give written notice
thereof to the Issuer and the Indenture Trustee within seven (7) days after the
happening of such event.
(d) No resignation or removal of the Administrator pursuant to this
Section 9 shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have agreed
in writing to be bound by the terms of this Agreement in the same manner as the
Administrator is bound hereunder. The Issuer shall provide written notice of any
such resignation or removal to the Indenture Trustee, with a copy to the Rating
Agencies.
(e) The appointment of any successor Administrator shall be effective
only after satisfaction of the Rating Agency Condition with respect to the
proposed appointment.
(f) Subject to Sections 9(d) and 9(e), 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.
13
<PAGE> 14
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-D
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) 815-5731
Facsimile: (212) 815-5544
(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, 14th floor
New York, New York 10001
Attention: Michael A. Smith
Telephone: (212) 946-3346
Facsimile: (212) 946-8158
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 provi-
14
<PAGE> 15
sions 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 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 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 of the Aggregate 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
15
<PAGE> 16
manner as the Administrator is bound hereunder. Subject to the foregoing, this
Agreement shall bind any successors or assigns of the parties hereto.
14. Governing Law. This agreement shall be construed in accordance
with the laws of the State of New York, and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.
15. Headings. The Section headings hereof have been inserted for
convenience of reference only and shall not be construed to affect the meaning,
construction or effect of this Agreement.
16. Counterparts. This Agreement may be executed in counterparts,
each of which when so executed shall be an original, but all of which together
shall constitute but one and the same agreement.
17. Severability. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof and any such prohibition or unenforceability in any jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.
18. Not Applicable to Ford Credit in Other Capacities. Nothing in this
Agreement shall affect any right or obligation Ford Credit may have in any other
capacity.
19. Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained herein to the contrary, this instrument
has been 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
16
<PAGE> 17
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 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
17
<PAGE> 18
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.
18
<PAGE> 19
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-D
By: THE BANK OF NEW YORK, not in
its individual capacity but
solely as Owner Trustee
By: /s/ Joyce P. Maccou
-----------------------------
Name: Joyce P. Maccou
Title: Assistant Treasurer
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> 20
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
AA-1
<PAGE> 1
EXHIBIT 99.3
PURCHASE AGREEMENT
This PURCHASE AGREEMENT (as from time to time amended,
supplemented or otherwise modified and in effect, this "Agreement") is made as
of the 1st day of September 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 and related property are to be sold,
transferred, assigned and otherwise conveyed by the Seller to the Purchaser,
which Receivables will be transferred by the Purchaser pursuant to the Sale and
Servicing Agreement to the Ford Credit Auto Owner Trust 1999-D to be created
pursuant to the Trust Agreement, which Trust will issue notes secured by such
Receivables and certain other property of the Trust, pursuant to the Indenture,
and will issue certificates representing beneficial interests in such
Receivables and certain other property of the Trust, pursuant to the Trust
Agreement.
NOW, THEREFORE, in consideration of the foregoing, other good
and valuable consideration, and the mutual terms and covenants contained herein,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein are
defined in Appendix A hereto, which also contains rules as to usage that shall
be applicable herein. The term "Seller" herein shall mean Ford Motor Credit
Company.
<PAGE> 2
ARTICLE II
CONVEYANCE AND ACQUISITION OF RECEIVABLES
2.1 Conveyance and Acquisition of Receivables
On the Closing Date, subject to the terms and conditions of
this Agreement, the Seller agrees to sell to the Purchaser, and the Purchaser
agrees to purchase from the Seller, the Receivables and the other property
relating thereto (as defined below).
(a) Conveyance of Purchased Property. 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
sells, transfers, assigns and otherwise conveys to the Purchaser, without
recourse, all right, title and interest of the Seller, whether now owned or
hereafter acquired, in and to the following (collectively, the "Purchased
Property"): (i) the Receivables; (ii) with respect to Actuarial 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,
<PAGE> 3
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
Purchased Property described in Section 2.1(a) hereof, the Purchaser shall, on
the Closing Date, pay to the Seller the Receivables Purchase Price. As detailed
on Schedule B hereto, the portion of the Receivables Purchase Price to be paid
in cash is an amount equal to the net cash proceeds from the sale of the Notes
and Certificates to the Underwriters pursuant to the Underwriting Agreement plus
the amount of the cash capital contribution by the General Partner to the
Purchaser on the Closing Date, minus the Reserve Initial Deposit. The remaining
portion of the Receivables Purchase Price ($175,640,367.94) shall be deemed paid
and returned to the Purchaser and shall 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.
(c) It is understood that the absolute sale, transfer,
assignment and conveyance of the Purchased Property by the Seller to the
Purchaser pursuant to this Agreement shall be without recourse and the Seller
does not guarantee collection of any Receivable, provided, however, that such
sale, transfer, assignment and conveyance shall be made pursuant to and in
reliance on by the Purchaser of the representations and warranties of the Seller
as set forth in Section 3.2(b) hereof.
2.2 The Closing. The sale, assignment, conveyance and
acquisition of the Purchased Property 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; (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
Underwriting Agreement, pursuant to which the Purchaser will sell to the
Underwriters the Underwritten Securities.
<PAGE> 4
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Representations and 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 legal,
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.
(c) No Conflicts. 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.
(d) 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
<PAGE> 5
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.
(e) Fair Market Value. The Purchaser has determined that
the Receivables Purchase Price paid by it for the Purchased Property on the
Closing Date is equal to the fair market value for the Purchased Property.
3.2 Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the
Purchaser as of the date hereof and as of the Closing Date:
(i) Organization, etc. The Seller has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, and is duly qualified to transact
business and is in good standing in each jurisdiction in the United States
of America in which the conduct of its business or the ownership of its
property requires such qualification.
(ii) Power and Authority; Due Authorization;
Enforceability. 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, binding and
enforceable 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
<PAGE> 6
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 Closing Date,
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 either (X) by the Seller from a
Dealer under an existing dealer agreement with the Seller and shall have
been validly assigned by such Dealer to the Seller or (Y) by PRIMUS from a
Dealer or other finance source (provided that such purchase relates to an
individual Receivable and not a bulk purchase) under an existing agreement
with PRIMUS and shall have been validly assigned by such Dealer or other
finance source to PRIMUS and shall have been validly assigned by PRIMUS to
the Seller in the ordinary course of business, (b) shall have created or
shall create a valid, subsisting, and enforceable first priority security
interest in favor of the Seller in the Financed Vehicle, which security
interest shall be assignable by the Seller to the Purchaser, (c) shall
contain customary and enforceable provisions
<PAGE> 7
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 an Actuarial 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 material 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 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, any
State or political subdivision of either thereof.
<PAGE> 8
(vi) Security Interest in Financed Vehicle.
Immediately prior to the transfer, assignment and conveyance thereof, each
Receivable shall be secured by a first priority, validly perfected 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 a first priority, validly perfected security interest in the
Financed Vehicle in favor of the Seller as secured party.
(vii) Receivables in Force. No Receivable shall have
been satisfied, subordinated, or rescinded, nor shall any Financed Vehicle
have been released from the lien granted by the related Receivable in whole
or in part.
(viii) No Waiver. No provision of a Receivable shall
have been waived.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened with respect
to any Receivable.
(x) No Liens. To the best of the Seller's knowledge,
no liens or claims shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be liens prior to, or equal 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. With respect to each Receivable, the
Seller, in accordance with its customary standards, policies and procedures,
shall have determined that, as of the date of
<PAGE> 9
origination of each Receivable, the Obligor had 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 sale,
transfer, assignment and conveyance 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 sold, transferred, assigned, conveyed 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, participations and rights of others
(limited, in the case of mechanics' liens, tax liens and liens attaching to
the related Receivables by operation of law, to the best of the Seller's
knowledge) 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, participations and rights of
others; and the transfer of the Purchased Property 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 sale, 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 Purchaser
a first priority, validly 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. The Seller, or its custodian, has
possession of such original with respect to each Receivable.
<PAGE> 10
(xviii) New and Used Vehicles. 70.00% of the aggregate
Principal Balance of the Receivables, constituting 62.82% 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, 0.95% of the Receivables constitute Actuarial
Receivables and 99.05% of the Receivables constitute Simple Interest
Receivables.
(xx) Origination. Each Receivable shall have an
origination date on or after September 1, 1997.
(xxi) PRIMUS. 11.96% of the aggregate Principal
Balance of the Receivables as of the Cutoff Date represent Receivables
originated through PRIMUS and assigned to the Seller, and 88.04% of the
aggregate Principal Balance of the Receivables as of the Cutoff Date
represent Receivables that were originated through Ford Credit (excluding
PRIMUS).
(xxii) Maturity of Receivables. Each Receivable shall
have an original maturity of not greater than sixty (60) months.
(xxiii) Annual Percentage Rate. The Annual Percentage
Rate of each Receivable shall be not less than 1.90% and not greater than
20.00%.
(xxiv) Scheduled Payments. Each Receivable shall have
a first Scheduled Payment due, in the case of Actuarial Receivables, or a
first scheduled due date, in the case of Simple Interest Receivables, on or
prior to September 30, 1999 and no Receivable shall have a payment that is
more than thirty (30) days overdue as of the Cutoff Date.
(xxv) Location of Receivable Files. The Receivable
Files shall be kept at one or more of the locations listed in Schedule A-1
hereto or the offices of one of the custodians specified in Schedule A-2
hereto.
<PAGE> 11
(xxvi) No Extensions. The number of Scheduled
Payments, in the case of Actuarial Receivables, and the number of scheduled
due dates, in the case of Simple Interest Receivables, shall not have been
extended on or before the Cutoff Date on any Receivable.
(xxvii) Other Data. The numerical data relating to the
characteristics of the Receivables contained in the Prospectus are true and
correct in all material respects.
(xxviii) Agreement. The representations and warranties
in this Agreement shall be true.
(xxix) No Receivables Originated in Alabama or
Pennsylvania. No Receivable shall have been originated in Alabama or
Pennsylvania.
(c) The Seller has determined that the Receivables
Purchase Price received by it for the Purchased Property on the Closing Date
is equal to the fair market value for the Purchased Property.
ARTICLE IV
CONDITIONS
4.1 Conditions to Obligation of the Purchaser. The obligation
of the Purchaser to purchase 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, at its own expense,
on or prior to the Closing Date, shall indicate in its computer files, in
accordance with its customary standards, policies and procedures, that the
Receivables have been conveyed to the Purchaser pursuant to this Agreement and
shall deliver to the Purchaser the Schedule of Receivables certified by an
officer of the Seller to be true, correct and complete.
<PAGE> 12
(c) Documents to be Delivered by the Seller at the
Closing.
(i) The Assignment. On the Closing Date, 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, 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 in
accordance with Section 2.1(b).
<PAGE> 13
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 (or its assignee) 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 ss. 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).
<PAGE> 14
(e) The Seller shall maintain its computer systems,
in accordance with its customary standards, policies and procedures, 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 or its
assignee. Indication of the ownership of a Receivable by the Purchaser or its
assignee shall not be deleted from or modified on the Seller's computer systems
until, and only until, the Receivable shall have been paid in full or
repurchased.
(f) If at any time the Seller shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Seller shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been conveyed to and is owned by
the Purchaser.
(g) The Seller shall, upon receipt by the Seller of
reasonable prior notice, 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.
<PAGE> 15
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 provided, however, with respect to a breach of the Seller's
representations and warranties as set forth in Section 3.2(b), any
indemnification amounts owed pursuant to this Section 5.4 with respect of a
Receivable shall give effect to and not be duplicative of the Purchase Amounts
paid by the Seller pursuant to Section 6.2 hereof.
(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.
(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
<PAGE> 16
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 of Receivables Upon Breach by the Seller.
(a) 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.
(b) Any Person who discovers a breach of any representation
or warranty of the Seller set forth in Section 3.2(b) hereof may, and if such
Person is the Seller or the Servicer, shall, inform promptly the Servicer, the
Seller, the Purchaser, the Trust, the Owner Trustee and the Indenture Trustee,
as the case may be, in writing, upon the discovery of any breach of any
representation or warranty as set forth in Section 3.2(b) hereof. Unless the
breach shall have been cured by the last day of the second Collection
<PAGE> 17
Period following such discovery (or, at the Seller's election, the last day of
the first following Collection Period), the Seller shall repurchase any
Receivable materially and adversely affected by such breach at the Purchase
Amount. In consideration of the repurchase of such Receivable, the Seller shall
remit the Purchase Amount to the Servicer for distribution pursuant to Section
4.2 of the Servicing Agreement. The sole remedy (except as provided in Section
5.4 hereof) of the Purchaser, the Trust, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders against the Seller with
respect to a Repurchase Event shall be to require the Seller to repurchase
Receivables pursuant to this Section 6.2. With respect to all Receivables
repurchased pursuant to this Section 6.2, the Purchaser shall assign to the
Seller, without recourse, representation or warranty, all the Purchaser's right,
title and interest in and to such Receivables, and all security and documents
relating thereto.
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 Trust 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
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
<PAGE> 18
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 Aggregate 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 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 facsimile and addressed or
delivered to it at its address as shown below or at such other address as may be
designated by it by notice to the other party and, if mailed or sent by
facsimile, shall be deemed given when mailed or when transmitted by facsimile.
To Seller: Ford Motor Credit Company
The American Road
<PAGE> 19
P.O. Box 6044
Dearborn, Michigan 48121-6044
Attn: Secretary
Facsimile No.: (313) 594-7742
To Purchaser: Ford Credit Auto Receivables Two L.P.
c/o Ford Credit Auto Receivables Two Inc.
The American Road
Dearborn, Michigan 48121
Attn: Secretary
Facsimile No.: (313) 594-7742
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 Survival. The respective agreements, representations,
warranties and other statements by the Seller and the Purchaser set forth in or
made pursuant to this Agreement shall remain in full force and effect and will
survive the closing under Section 2.2 hereof and any sale, transfer or other
assignment of the Receivables by the Purchaser.
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
<PAGE> 20
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.
6.15 Further Assurances. Seller and Purchaser will each, at
the request of the other, execute and deliver to the other all other instruments
that either may reasonably request in order to perfect the conveyance, transfer,
assignment and delivery to Purchaser of the rights to be conveyed, transferred,
assigned and delivered and for the consummation of this Agreement.
<PAGE> 21
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/ Hurley D. Smith
------------------------------------
Name: Hurley D. Smith
Title: Secretary
FORD CREDIT AUTO RECEIVABLES
TWO L.P.
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: /s/ R. P. Conrad
------------------------------------
Name: R. P. Conrad
Title: Assistant
Secretary
<PAGE> 22
EXHIBIT A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement
dated as of September 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 Actuarial 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 the 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
<PAGE> 23
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> 24
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 September 1, 1999.
FORD MOTOR CREDIT COMPANY
By:
-----------------------------------
Name:
Title:
<PAGE> 25
Exhibit B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
<PAGE> 26
Schedule A-1
Location of Receivable Files
at Ford Credit Branch Offices
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> 27
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
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
<PAGE> 28
3rd Floor
Andover, MA 01810-2497
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
2 Northgate Park
Suite 200
Chattanooga, TN 37415
<PAGE> 29
Cheyenne
6234 Yellowstone Road
Cheyenne, WY 82009
<PAGE> 30
Chicago-East
One River Place
Suite A
Lansing, IL 60438
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Chicago-South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Chicago-West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195
Chicago/CL
745 McClintock Drive
Suite 300
Burr Ridge, IL 60521
Cincinnati
8805 Governors Hill Dr.
Suite 230
Cincinnati, OH 45249
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
Columbia
250 Berryhill Road
Suite 201
<PAGE> 31
Columbia, SC 29210
<PAGE> 32
Columbus
Metro V, Suite 470
655 Metro Place S
Dublin, OH 43017
Coral Springs
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
<PAGE> 33
Suite 107
W. Des Moines, IA 50266
Detroit-North
1301 W. Long Lake 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 205
Fargo, ND 58103
<PAGE> 34
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
<PAGE> 35
Mechanicsburg, PA 17055
Henderson
618 North Green Street
Henderson, KY 42420
<PAGE> 36
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> 37
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 Asthma 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 79423
Macon
<PAGE> 38
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
Midland
15 Smith Road
Suite 4300
Chevron Building
Midland, TX 79705
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
<PAGE> 39
Nashville, TN 37214
<PAGE> 40
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
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
<PAGE> 41
Nashville Customer Service Center
9009 Carothers Parkway
Franklin, TN 37067
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> 42
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
<PAGE> 43
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
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
<PAGE> 44
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
<PAGE> 45
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98009-1608
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> 46
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> 47
Schedule A-2
Location of Receivable Files
at Third Party Custodians of Ford Credit
Security Archives
5022 Harding Place
Nashville, TN 37211
<PAGE> 48
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
<PAGE> 49
Schedule B - Receivables Purchase Price
<TABLE>
<S> <C>
Total net cash proceeds from $ 3,126,379,640.13
the Underwriters for purchase of the
Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes,
Class A-5 Notes, Class B Notes and
Class C Certificates received by
Purchaser after funding Reserve Account (16,500,115.20)
Total cash received by Purchaser $ 3,109,879,524.93
===================
available for transfer to Ford
Credit as Seller(1)
Receivables Purchase Price(2) 3,289,104,390.18
minus Total cash received by
Purchaser available for transfer to
Ford Credit as Seller (3,109,879,524.93)
-------------------
Difference(3) $ 179,224,865.25
===================
Total portion of Receivables
Purchase Price paid by the Purchaser
in cash (including FCARTI
capital contribution) $ 3,113,464,022.24
plus Deemed Capital Contribution
from Ford Credit to Purchaser 175,640,367.94
------------------
Receivables Purchase Price $ 3,289,104,390.18
===================
</TABLE>
- ------------------
(1) The Class D Certificate is retained by the Purchaser and is not available
for transfer to Ford Credit.
(2) The Seller and the Purchaser have determined that the Receivables Purchase
Price equals the fair market value of the Receivables and the related property
and the fair market value is calculated as 105% of the adjusted pool balance (or
99.67% of the original pool balance).
(3) In order to maintain the 98% interest of Ford Credit as the limited partner
of the Purchaser and the 2% interest of Ford Credit Auto Receivables Two, Inc.
("FCARTI") as the general partner of the Purchaser, FCARTI must contribute 2% of
$179,224,865.25 to the Purchaser. FCARTI will obtain such amount (equal to
$3,584,497.31) through a capital contribution from Ford Credit.
<PAGE> 50
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
Oklahoma City
Perimeter Center
Suite 300
4101 Perimeter Ctr Dr.
Oklahoma City, OK 73112
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Omaha Customer Service Center
12110 Emmet Street
Omaha, NB 68164
<PAGE> 51
Nashville Customer Service Center
9009 Carothers Parkway
Franklin, TN 37067
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> 52
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
<PAGE> 53
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
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
<PAGE> 54
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
<PAGE> 55
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98009-1608
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> 56
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> 57
Schedule A-2
Location of Receivable Files
at Third Party Custodians of Ford Credit
<PAGE> 58
APPENDIX A
Definitions and Usage
SEE TAB NO. 12
<PAGE> 59
Schedule A - Receivables Purchase Price
<TABLE>
<S> <C>
Total net cash proceeds from $ 3,126,379,640.13
the Underwriters for purchase of the
Class A-1 Notes, Class A-2 Notes,
Class A-3 Notes, Class A-4 Notes,
Class A-5 Notes,Class B Notes and
Class C Certificates received by
Purchaser after funding Reserve Account (16,500,115.20)
Total cash received by Purchaser $ 3,109,879,524.93
===================
available for transfer to Ford
Credit as Seller1
Receivables Purchase Price2$ 3,289,104,390.18
minus Total cash received by
Purchaser available for transfer to
Ford Credit as Seller (3,109,879,524.93)
-------------------
Difference3 $ 179,224,865.25
===================
Total portion of Receivables
Purchase Price paid by the Purchaser
in cash (including FCARTI
capital contribution) $ 3,113,464,022.24
plus Deemed Capital Contribution
from Ford Credit to Purchaser 175,640,367.94
-----------------
Receivables Purchase Price $ 3,289,104,390.18
===================
</TABLE>
- ------------------
1The Class D Certificate is retained by the Purchaser and is not available for
transfer to Ford Credit.
2The Seller and the Purchaser have determined that the Receivables Purchase
Price equals the fair market value of the Receivables and the related property
and the fair market value is calculated as 105% of the adjusted pool balance (or
99.67% of the original pool balance).
3In order to maintain the 98% interest of Ford Credit as the limited partner of
the Purchaser and the 2% interest of Ford Credit Auto Receivables Two, Inc.
("FCARTI") as the general partner of the Purchaser, FCARTI must contribute 2% of
$179,224,865.25 to the Purchaser. FCARTI will obtain such amount (equal to
$3,584,497.31) through a capital contribution from Ford Credit.
<PAGE> 1
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
<PAGE> 2
applicable to both the singular and plural forms of such terms and to the
masculine as well as to the feminine and neuter genders of such terms.
(e) Any agreement, instrument or statute defined or referred
to below or in any agreement or instrument that is governed by this Appendix
means such agreement or instrument or statute as from time to time amended,
modified or supplemented, including (in the case of agreements or instruments)
by waiver or consent and (in the case of statutes) by succession of comparable
successor statutes and includes (in the case of agreements or instruments)
references to all attachments thereto and instruments incorporated therein.
References to a Person are also to its permitted successors and assigns.
Definitions
"Accrued 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 Advance" shall mean the amount, as of the last day
<PAGE> 3
of a Collection Period, which the Servicer is required to advance on the
respective Actuarial Receivable pursuant to Section 4.4(a) of the Sale and
Servicing Agreement.
"Actuarial Method" shall mean the method of allocating a fixed
level payment on a Receivable between principal and interest, pursuant to which
the portion of such payment that is allocated to interest is the product of
one-twelfth (1/12) of the APR on the Receivable multiplied by the scheduled
principal balance of the Receivable.
"Actuarial Receivable" shall mean any Receivable under which
the portion of a payment with respect thereto allocable to interest and the
portion of a payment with respect thereto allocable to principal is determined
in accordance with the Actuarial Method.
"Administration Agreement" shall mean the Administration
Agreement, dated as of September 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 an Actuarial 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.
<PAGE> 4
"Annual Percentage Rate" or "APR" of a Receivable shall mean
the annual rate of finance charges stated in the Receivable.
"Applicable Tax State" shall mean, as of any date of
determination, each State as to which any of the following is then applicable:
(a) a State in which the Owner Trustee maintains its Corporate Trust Office, (b)
a State in which the Owner Trustee maintains its principal executive offices,
and (c) the State of Michigan.
"Assignment" shall mean the document of assignment attached
as Exhibit A to the Purchase Agreement.
"Authenticating Agent" shall have the meaning specified in
Section 2.14 of the Indenture.
"Authorized Officer" shall mean, (i) with respect to the
Issuer, any officer within the Corporate Trust Office of the Owner Trustee,
including any vice president, assistant vice president, secretary, assistant
secretary or any other officer of the Owner Trustee customarily performing
functions similar to those per formed 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 Actuarial Receivables (including amounts withdrawn
from the Payahead Account but excluding amounts
<PAGE> 5
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 Actuarial Advances made by the Servicer of
principal due on the Actuarial Receivables; (iv) all Advances made by the
Servicer of interest due on the Receivables and all amounts advanced by the
Servicer pursuant to Section 4.4(c) of the Sale and Servicing Agreement; (v) the
Purchase Amount received with respect to each Receivable that became a Purchased
Receivable during such Collection Period; and (vi) partial prepayments of any
refunded item included in the principal balance of a Receivable, such as
extended warranty protection plan costs, or physical damage, credit life,
disability insurance premiums, or any partial prepayment which causes a
reduction in the Obligor's periodic payment to an amount below the Scheduled
Payment as of the Cutoff Date; provided however, that in calculating the
Available Collections the following will be excluded: (i) amounts received on
any Receivable to the extent that the Servicer has previously made an
unreimbursed Advance on such Receivable; (ii) amounts received on any of the
Receivables 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
Actuarial Receivable to the extent of any unreimbursed Actuarial 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.
"Bank" shall mean The Bank of New York, a New York banking
corporation.
"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
<PAGE> 6
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 Note" shall mean, a beneficial interest in any 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 and the Class B Notes, in each case issued in
book-entry form as described in Section 2.11 of the Indenture.
"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 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
<PAGE> 7
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. 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 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 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.
<PAGE> 8
"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.
"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 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 Notes" shall mean, collectively, 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.
"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 and the Class A-5 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
<PAGE> 9
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
December 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 $153,000,000 aggregate
initial principal amount Class A-1 5.411% 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 5.411% per annum. Interest with
respect to the Class A-1 Notes shall be computed on the basis of actual days
elapsed and a 360-day year for all purposes of the Basic Documents.
"Class A-2 Final Scheduled Distribution Date" shall mean the
June 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 $449,000,000 aggregate
initial principal amount Class A-2 5.816% 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 5.816% 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 2002 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 $1,370,000,000 aggregate
initial principal amount Class A-3 6.20% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-3 to the
Indenture.
<PAGE> 10
"Class A-3 Rate" shall mean 6.20% 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
October 2002 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 $400,000,000 aggregate
initial principal amount Class A-4 6.40% Asset Backed Notes issued by the Trust
pursuant to the Indenture, substantially in the form of Exhibit A-4 to the
Indenture.
"Class A-4 Rate" shall mean 6.40% 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
September 2003 Distribution Date.
"Class A-5 Noteholder" shall mean the Person in whose name a
Class A-5 Note is registered on the Note Register.
"Class A-5 Notes" shall mean the $588,189,000 aggregate
initial principal amount Class A-5 6.52% 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 6.52% 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 B Final Scheduled Distribution Date" shall mean the
January 2004 Distribution Date.
<PAGE> 11
"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 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 $109,640,000 aggregate initial
principal amount Class B 6.87% Asset Backed Notes issued by the Trust pursuant
to the Indenture, substantially in the form of Exhibit B to the Indenture.
"Class B Rate" shall mean 6.87% 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.
<PAGE> 12
"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 $62,650,000 aggregate
initial principal balance Class C 7.21% 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 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
March 2004 Distribution Date.
"Class C Rate" shall mean 7.21% 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.
<PAGE> 13
"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 $62,650,000 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.
"Class D Final Scheduled Distribution Date" shall mean the
December 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 September 23, 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
<PAGE> 14
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 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 the Closing Date, by and among the Seller, the Issuer,
the Indenture Trustee and The Chase Manhattan Bank in its capacity as a
securities intermediary.
"Controlling Certificate Class" shall mean, with respect to
any Certificates outstanding, the Class C Certificates as long as any Class C
Certificates are outstanding and thereafter the Class D Certificates so long as
any Class D Certificates are outstanding.
"Controlling Note Class" shall mean, with respect to any Notes
Outstanding, the Class A Notes as long as any Class A Notes are Outstanding, and
thereafter the Class B Notes as long as any Class B Notes are Outstanding
(excluding Notes held by the Seller, the Servicer or their Affiliates).
<PAGE> 15
"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 September 1, 1999.
"Dealer" shall mean the dealer who sold a Financed Vehicle and
who originated and assigned the respective Receivable to Ford Credit or PRIMUS
under an existing agreement between such dealer and either Ford Credit or
PRIMUS.
"Dealer Recourse" shall mean, with respect to a Receivable (i)
any amount paid by a Dealer or credited against a reserve established for, or
held on behalf of, a Dealer in excess of that portion of finance charges rebated
to the Obligor which is attributable to the Dealer's participation, if any, in
the Receivable, and (ii) all recourse rights against the Dealer which originated
the Receivable and any successor Dealer.
"Default" shall mean any occurrence that is, or with notice or
the lapse of time or both would become, an Event of Default.
"Definitive Notes" shall have the meaning specified in Section
2.11 of the Indenture.
<PAGE> 16
"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.
"Exempt Notes" shall mean the Notes which are exempt from
Registration under the Securities Act pursuant to Section 3(a)(3) of the
Securities Act, namely the Class A-1 Notes and the Class A-2 Notes.
"Expenses" shall have the meaning assigned to such term in
Section 8.2 of the Trust Agreement.
<PAGE> 17
"Final Scheduled Maturity Date" shall mean June 29, 2004.
"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 out-
standing 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 and (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.
"Fitch" shall mean Fitch IBCA, Inc.
"Ford Credit" shall mean Ford Motor Credit Company, a Delaware
corporation.
"General Partner" shall mean Ford Credit Auto Receivables Two,
Inc., a Delaware corporation, or any substitute General Partner under the
Limited Partnership Agreement.
<PAGE> 18
"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.
"Indemnification Agreement" shall mean the Indemnification
Agreement, dated September 17, 1999, by and between Ford Credit and the
Representatives.
"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 September 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
<PAGE> 19
foregoing Persons, (b) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller or any Affiliate of any of the foregoing Persons and (c) is not connected
with the Issuer, any such other obligor, the Seller or any Affiliate of any of
the foregoing Persons as an officer, employee, promoter, underwriter, trustee,
partner, director or person performing similar functions.
"Independent Certificate" shall mean a certificate or opinion
to be delivered to the Indenture Trustee under the circumstances described in,
and otherwise complying with, the applicable requirements of Section 11.1 of the
Indenture, made by an Independent appraiser or other expert appointed by an
Issuer Order and approved by the Indenture Trustee in the exercise of reasonable
care, and such opinion or certificate shall state that the signer has read the
definition of "Independent" in this Indenture and that the signer is Independent
within the meaning thereof.
"Initial Certificate Balance" shall mean (i) with respect to
the Class C Certificates, $62,650,000, (ii) with respect to the Class D
Certificates, $62,650,000 and (iii) with respect to any Certificate of either
such Class, an amount equal to the initial denomination of such Certificate.
"Initial Pool Balance" shall mean $3,300,023,039.40.
"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
<PAGE> 20
and including the Closing Date (in the case of the first Distribution Date) or
from and including the most recent Distribution Date on which interest has been
paid to but excluding the following Distribution Date and (ii) with respect to
each Class of Notes other than the Class A-1 Notes 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
<PAGE> 21
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 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 the
Closing Date 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 C to the Indenture.
"Noteholder" shall mean the Person in whose name a Note is
registered on the Note Register.
"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 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
<PAGE> 22
Class of Notes.
"Note Register" and "Note Registrar" shall have the respective
meanings specified in Section 2.5 of the Indenture.
"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 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 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
<PAGE> 23
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. 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 Actuarial Advances" on the Actuarial Receivables
shall mean the sum, as of the close of business on the last day of a Collection
Period, of all Actuarial Advances as reduced as provided in Section 4.4(a) of
the Sale and Servicing Agreement.
"Outstanding Advances" shall mean either Outstanding
Actuarial Advances or Outstanding Simple Interest Advances or both, as
applicable.
"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
<PAGE> 24
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
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;
<PAGE> 25
(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.
"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).
<PAGE> 26
"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.
"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.
"PRIMUS" shall mean, until August 1999, PRIMUS Automotive
Financial Services, Inc., a wholly owned subsidiary of Ford Credit conducting
its business as a corporate entity separate from Ford Credit and beginning in
August 1999, Primus Financial Services, a d/b/a of Ford Credit, conducting its
business as a division of Ford Credit.
"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 an Actuarial 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) 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
<PAGE> 27
Purchase Amount with respect to the Receivable allocable to principal and (e)
any prepayment in full or any partial prepayments applied to reduce the
principal balance of the Receivable.
"Principal Distribution Account" shall mean the administrative
subaccount of the Collection Account established and maintained as such pursuant
to Section 4.1(b) of the Sale and Servicing Agreement.
"Proceeding" shall mean any suit in equity, action at law or
other judicial or administrative proceeding.
"Program" shall have the meaning specified in Section 3.11 of
the Sale and Servicing Agreement.
"Prospectus" shall have the meaning specified in the
Underwriting Agreement.
"Purchase Agreement" shall mean the Purchase Agreement, dated
as of September 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 Property" shall mean the Receivables and related
property described in Section 2.1(a) of the Purchase Agreement.
"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 6.2 of the Purchase Agreement.
"Purchaser" shall mean the Seller in its capacity as Purchaser
under the Purchase Agreement.
<PAGE> 28
"Qualified Institution" shall mean any depository institution
organized under the laws of the United States of America or any one of the
states thereof or incorporated under the laws of a foreign jurisdiction with a
branch or agency located in the United States of America or one of the states
thereof and subject to supervision and examination by federal or state banking
authorities which at all times has a short-term deposit rating of P-1 by Moody's
and A-1+ by Standard & Poor's and, in the case of any such institution organized
under the laws of the United States of America, whose deposits are insured by
the Federal Deposit Insurance Corporation or any successor thereto.
"Qualified Trust Institution" shall mean the corporate trust
department of 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
<PAGE> 29
has not been released by the Indenture Trustee and the Owner Trustee from the
Trust.
"Receivable Files" shall mean the documents specified in
Section 2.4 of the Sale and Servicing Agreement.
"Receivables Purchase Price" shall mean the fair market value
of the Receivables on the Closing Date, as set forth on Schedule A to the
Purchase Agreement.
"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 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
<PAGE> 30
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 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.
"Representatives" shall mean Goldman, Sachs & Co. and Salomon
Smith Barney Inc. as representatives of the several Underwriters.
"Repurchase Event" shall mean the occurrence of a breach of
any of the Seller's representations and warranties contained in Section 3.2(b)
of the Purchase Agreement obligating the Seller to repurchase Receivables
thereunder at the Purchase Amount from the Purchaser or from the Trust.
"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
<PAGE> 31
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 Specified Reserve Balance with respect
to such Distribution Date.
"Reserve Initial Deposit" shall mean, with respect to the
Closing Date, $16,500,115.20.
"Sale and Servicing Agreement" shall mean the Sale and
Servicing Agreement, dated as of September 1, 1999, by and among the Trust, as
issuer, the Seller, 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
<PAGE> 32
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 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
<PAGE> 33
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 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) $16,500,115.20, (ii) 1% 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 $16,500,115.20;
provided, however, that the Specified Reserve Balance with respect to any
Distribution Date shall not exceed the sum of the aggregate outstanding
<PAGE> 34
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 mean an institution appointed as
successor Servicer pursuant to Section 8.2 of the Sale and Servicing Agreement.
"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.
<PAGE> 35
"Trust" shall mean Ford Credit Auto Owner Trust 1999-D, 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 September 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.
"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 Actuarial 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
<PAGE> 36
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 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.
"Underwriters" shall mean the underwriters named in Schedule I
to the Underwriting Agreement.
"Underwriting Agreement" shall mean the Underwriting
Agreement, dated September 17, 1999 between the Seller and the Representatives
of the several Underwriters.
"Underwritten Securities" shall mean the Notes and the Class C
Certificates.
"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: $ 167,542,662.80
October 1999: $ 160,495,841.56
November 1999: $ 153,591,627.07
<PAGE> 37
December 1999: $ 146,831,791.26
January 2000: $ 140,218,029.56
February 2000: $ 133,751,967.90
March 2000: $ 127,435,315.38
April 2000: $ 121,269,707.31
May 2000: $ 115,256,895.42
June 2000: $ 109,398,620.15
July 2000: $ 103,696,590.99
August 2000: $ 98,152,560.18
September 2000: $ 92,768,239.64
October 2000: $ 87,545,423.27
November 2000: $ 82,485,924.37
December 2000: $ 77,591,417.15
January 2001: $ 72,862,813.97
February 2001: $ 68,300,301.72
March 2001: $ 63,903,740.63
April 2001: $ 59,673,516.01
May 2001: $ 55,611,048.45
June 2001: $ 51,717,290.95
July 2001: $ 47,992,068.09
August 2001: $ 44,435,161.75
September 2001: $ 41,045,359.08
October 2001: $ 37,820,517.25
November 2001: $ 34,758,808.73
December 2001: $ 31,856,984.19
January 2002: $ 29,112,184.84
February 2002: $ 26,520,965.41
March 2002: $ 24,079,242.94
April 2002: $ 21,783,301.32
May 2002: $ 19,628,374.42
June 2002: $ 17,608,544.67
July 2002: $ 15,719,030.17
August 2002: $ 13,955,955.30
September 2002: $ 12,317,577.76
October 2002: $ 10,802,337.78
November 2002: $ 9,408,845.04
December 2002: $ 8,134,561.88
January 2003: $ 6,976,989.93
February 2003: $ 5,932,505.12
March 2003: $ 4,996,094.02
<PAGE> 38
April 2003: $ 4,163,301.16
May 2003: $ 3,429,400.45
June 2003: $ 2,787,769.90
July 2003: $ 2,230,886.91
August 2003: $ 1,750,727.79
September 2003: $ 1,343,146.24
October 2003: $ 1,003,262.43
November 2003: $ 724,731.16
December 2003: $ 500,670.81
January 2004: $ 324,628.63
February 2004: $ 191,935.59
March 2004: $ 98,705.53
April 2004: $ 40,473.28
May 2004: $ 10,303.84
June 2004: $ 70.55
