<PAGE> 1
REGISTRATION NO. 33-63345
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------
FORD CREDIT 1995-B GRANTOR TRUST
(In which the Certificates represent undivided interests)
---------------------
FORD CREDIT AUTO RECEIVABLES CORPORATION
(Originator of the Trust described herein)
A DELAWARE CORPORATION
IRS EMPLOYER NO. 38-2973806
---------------------
THE AMERICAN ROAD
DEARBORN, MICHIGAN 48121
(313) 322-3000
---------------------
J.D. BRINGARD, ESQ.
FORD MOTOR CREDIT COMPANY
THE AMERICAN ROAD
DEARBORN, MICHIGAN 48121
(313-594-7742)
(Name and Address of Agent for Service)
COPY TO:
SUSAN M. CURTIS, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
919 THIRD AVENUE
NEW YORK, NEW YORK 10022
(212-735-3000)
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable on or after the effective date of this Registration Statement.
If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. / /
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
PROPOSED
MAXIMUM PROPOSED
AMOUNT OFFERING MAXIMUM AMOUNT OF
TITLE OF SECURITIES BEING PRICE AGGREGATE REGISTRATION
BEING REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE(2)
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C>
% Asset Backed
Certificates, Class A.... $1,636,265,306.01 100%(1) $1,636,265,306.01 $564,229.42
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
(1) Estimated solely for the purpose of calculating the registration fee.
(2) $344.83 of which was previously paid.
---------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
The information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor
may offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such state.
SUBJECT TO COMPLETION, DATED NOVEMBER 7, 1995
$1,636,265,306.01
FORD CREDIT 1995-B GRANTOR TRUST
% ASSET BACKED CERTIFICATES, CLASS A
(LOGO)
FORD CREDIT AUTO RECEIVABLES CORPORATION
SELLER
-------------------------
FORD MOTOR CREDIT COMPANY
SERVICER
-------------------------
The % Asset Backed Certificates (the "Certificates") will consist of two
Classes of Certificates, the Class A Certificates and the Class B Certificates.
Only the Class A Certificates are being offered hereby. The Class A Certificates
will evidence in the aggregate an undivided ownership interest of 93.5% in a
trust (the "Trust") to be formed pursuant to a Pooling and Servicing Agreement
to be entered into among Ford Credit Auto Receivables Corporation, as Seller
(the "Seller"), Ford Motor Credit Company, as Servicer (the "Servicer"), and
Chemical Bank, as Trustee. The Class B Certificates, which initially will be
retained by the Seller, will evidence in the aggregate an undivided ownership
interest of 6.5% in the Trust. The rights of the Class B Certificateholders to
receive distributions with respect to the Receivables are subordinated to the
rights of the Class A Certificateholders, to the extent described herein.
Principal, and interest to the extent of the Pass-Through Rate of % per
annum, will be distributed on the 15th day of each month (or the next following
business day) beginning December 15, 1995 (the "Distribution Date"). The Final
Scheduled Distribution Date on the Certificates will be October 15, 2000. The
Trust property will include a pool of retail installment sale contracts
originated on or after November 1, 1994 secured by new and used automobiles and
light trucks (the "Receivables"), certain monies due thereunder on or after
November 1, 1995, security interests in the vehicles financed thereby and
certain other property. See "Property of the Trust".
There currently is no secondary market for the Class A Certificates and
there is no assurance that one will develop. The Underwriters expect, but are
not obligated, to make a market in the Class A Certificates. There is no
assurance that any such market will continue.
FOR A DISCUSSION OF CERTAIN RISKS ASSOCIATED WITH AN INVESTMENT IN THE
CERTIFICATES, SEE "RISK FACTORS" ON PAGE 7.
-------------------------
THE CERTIFICATES REPRESENT INTERESTS IN THE TRUST AND DO NOT REPRESENT INTERESTS
IN OR OBLIGATIONS OF THE SELLER, THE SERVICER OR ANY OF THEIR RESPECTIVE
AFFILIATES.
-------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) THE SELLER(1)(3)
----------------- ------------- -----------------
<S> <C> <C> <C>
Per Class A Certificate....................... % % %
Total......................................... $ $ $
</TABLE>
- -------------------------
(1) Plus accrued interest, if any, at the Pass-Through Rate calculated from
November 15, 1995 to date of delivery.
(2) Ford Credit has agreed to indemnify the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933.
(3) Before deducting expenses payable by the Seller estimated at $800,000.
-------------------------
The Class A Certificates are offered by the Underwriters, when, as, and if
issued and accepted by the Underwriters and subject to their right to reject
orders in whole or in part. It is expected that the Class A Certificates will be
delivered in book-entry form on or about November , 1995.
-------------------------
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
The date of this Prospectus is November , 1995.
<PAGE> 3
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVERALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE CLASS A
CERTIFICATES AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All documents filed by the Trust pursuant to Section 13(a), 13(c), 14 or
15(d) of the Securities Exchange Act of 1934 after the date of this Prospectus
and prior to the termination of the offering of the Class A Certificates shall
be deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing such documents.
AVAILABLE INFORMATION
Ford Credit Auto Receivables Corporation, as originator of the Trust, has
filed a Registration Statement under the Securities Act of 1933, as amended,
with the Securities and Exchange Commission (the "Commission") on behalf of the
Trust with respect to the Class A Certificates offered pursuant to this
Prospectus. For further information, reference is made to the Registration
Statement and amendments thereof and to the exhibits thereto, which are
available for inspection without charge at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549;
7 World Trade Center, 13th Floor, New York, New York 10048; and Northwest Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661. Copies of the
Registration Statement and amendments thereof and exhibits thereto may be
obtained from the Public Reference Section of the Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 at prescribed rates.
REPORTS TO CLASS A CERTIFICATEHOLDERS BY THE TRUSTEE
Chemical Bank (the "Trustee"), as Trustee for the Class A
Certificateholders and Class B Certificateholders (collectively, the
"Certificateholders") under the Pooling and Servicing Agreement, to be dated as
of November 1, 1995, by and among the Seller, the Servicer and the Trustee, will
provide to Class A Certificateholders (which shall be Cede & Co. as the nominee
of The Depository Trust Company ("DTC") unless Definitive Certificates are
issued under the limited circumstances described herein) monthly and annual
reports concerning the Receivables. See "The Certificates -- Statements to Class
A Certificateholders; -- General; -- Book-Entry Registration."
2
<PAGE> 4
SUMMARY
This summary is qualified in its entirety by reference to the detailed
information appearing elsewhere in this Prospectus. Certain capitalized terms
used in the Summary are defined elsewhere in this Prospectus. A listing of the
pages on which some of such terms are defined is found in the "Index of Terms."
ISSUER........................ Ford Credit 1995-B Grantor Trust (the "Trust"),
to be formed by the Seller pursuant to a
Pooling and Servicing Agreement to be dated
as of November 1, 1995 (the "Agreement"),
among the Seller, the Servicer and Chemical
Bank, as trustee (the "Trustee").
SELLER........................ Ford Credit Auto Receivables Corporation, a
wholly owned subsidiary of Ford Motor Credit
Company ("Ford Credit").
SERVICER...................... Ford Credit, a wholly owned subsidiary of Ford
Motor Company.
SECURITIES OFFERED............ The Certificates consist of two classes,
entitled % Asset Backed Certificates,
Class A (the "Class A Certificates") and
% Asset Backed Certificates, Class B
(the "Class B Certificates"). Only the Class
A Certificates are being offered hereby. Each
Certificate will represent a fractional
undivided interest in the Trust. The Trust
property will include retail installment sale
contracts originated on or after November 1,
1994 secured by new and used automobiles and
light trucks (the "Receivables"), certain
monies due thereunder on or after November 1,
1995 (the "Cutoff Date"), security interests
in the vehicles securing the Receivables
("Financed Vehicles"), certain bank accounts
and the proceeds thereof, any proceeds from
claims on certain insurance policies, and
certain rights under the Agreement. The Class
A Certificates shall be issued in fully
registered form in denominations of $1,000
and integral multiples thereof. The
Receivables will be purchased by the Seller
from Ford Credit pursuant to a Purchase
Agreement (the "Purchase Agreement") between
the Seller and Ford Credit providing for such
purchase on or before the date of issuance of
the Certificates.
The Class A Certificates will evidence in the
aggregate an undivided ownership interest
(the "Class A Percentage") of 93.5% of the
Trust (initially representing
$1,636,265,306.01) and the Class B
Certificates will evidence in the aggregate
an undivided ownership interest (the "Class B
Percentage") of 6.5% of the Trust (initially
representing $113,751,064.05). The Class B
Certificates are subordinated to the Class A
Certificates, to the extent described herein.
The Class B Certificates are not being
offered hereby and initially will be retained
by the Seller.
REGISTRATION OF THE CLASS A
CERTIFICATES.................. The Class A Certificates initially will be
represented by one or more Class A
Certificates registered in the name of Cede &
Co. ("Cede"), as the nominee of DTC. No
person acquiring an interest in the Class A
Certificates (a "Class A Certificate Owner"
or "Certificate Owner") will be entitled to
receive a definitive certificate representing
such person's interest, except in the event
that Definitive Certificates (as defined
herein) are issued under the limited
circumstances described herein. All
references herein to Class A
Certificateholders shall reflect the rights
of Class A Certificate Owners, as such rights
may be exercised through DTC and its
Participants, except as otherwise
3
<PAGE> 5
specified herein. See "The Certificates --
Definitive Certificates."
PASS-THROUGH RATE............. % per annum.
INTEREST...................... On each Distribution Date, the Trustee shall
pass through and distribute pro rata to the
holders of record of Class A Certificates
(the "Class A Certificateholders") as of the
fourteenth day of the current calendar month
(or, if Definitive Certificates are issued,
the last day of the preceding calendar month)
(the "Record Date") interest at one-twelfth
of the Pass-Through Rate, calculated on the
basis of a 360-day year consisting of twelve
30-day months, on the Class A Certificate
Balance as of the last day of the preceding
calendar month to the extent of funds
available from (i) the Class A Percentage of
the Available Interest, (ii) the
Subordination Spread Account, and (iii) the
Class B Percentage of the Total Available
Amount. The "Class A Certificate Balance"
shall equal, initially, the Class A
Percentage of the Pool Balance as of the
Cutoff Date and thereafter shall equal the
initial Class A Certificate Balance reduced
by all principal distributions on the Class A
Certificates.
PRINCIPAL..................... On each Distribution Date, the Trustee shall
pass through and distribute pro rata to
Certificateholders as of the Record Date all
scheduled payments of principal, the
principal portion of all prepayments in full
(and certain partial prepayments) collected
and the principal balance of each Receivable
purchased by the Servicer, repurchased by the
Seller or liquidated by the Servicer, each
with respect to the preceding calendar month.
Such principal, to the extent of funds
available from (i) the Class A Percentage of
the Available Principal, (ii) the
Subordination Spread Account, and (iii) the
Class B Percentage of the Total Available
Amount will be passed through on each
Distribution Date to the Class A
Certificateholders in an amount equal to the
Class A Percentage of: (a) the principal
portion of all scheduled payments due during
the preceding Collection Period; (b) the
principal portion of all prepayments in full
received during the preceding Collection
Period (and certain partial prepayments); (c)
the principal balance of each Receivable that
was purchased by the Servicer or repurchased
by the Seller, in each case, under an
obligation that arose during the preceding
Collection Period; and (d) the principal
balance of each Receivable liquidated by the
Servicer, during the preceding Collection
Period. A "Collection Period" with respect to
a Distribution Date will be the calendar
month preceding the month in which such
Distribution Date occurs, or, in the case of
the initial Distribution Date, the period
from the Cutoff Date through the last day of
the calendar month preceding the month in
which the initial Distribution Date occurs.
SUBORDINATION................. The rights of the holders of the Class B
Certificates (the "Class B
Certificateholders") to receive distributions
to which they would otherwise be entitled
with respect to the Receivables are
subordinated to the rights of the Class A
Certificateholders, as described more fully
herein.
SUBORDINATION SPREAD
ACCOUNT....................... The Subordination Spread Account will be
created with an initial deposit by the Seller
of cash or Eligible Investments maturing on
or prior to the initial Distribution Date and
having a value of $2,625,025 (the
"Subordination Initial Deposit"). The
Subordination Initial Deposit will be
augmented by the deposit
4
<PAGE> 6
in the Subordination Spread Account of
amounts otherwise distributable to Class B
Certificateholders until the amount in the
Subordination Spread Account reaches an
amount equal to the Specified Subordination
Spread Account Balance. Thereafter, amounts
otherwise distributable to the Class B
Certificateholders will be deposited in the
Subordination Spread Account to the extent
necessary to maintain the amount in the
Subordination Spread Account at an amount
equal to the Specified Subordination Spread
Account Balance. Amounts in the Subordination
Spread Account on any Distribution Date
(after giving effect to all distributions
made on such Distribution Date) in excess of
the Specified Subordination Spread Account
Balance for such Distribution Date generally
will be released to the Class B
Certificateholders. The "Specified
Subordination Spread Account Balance" with
respect to any Distribution Date will be
equal to $13,125,123, except that in the
event that on any Distribution Date (i) the
annualized average for the preceding three
Collection Periods of the ratios of net
losses (i.e., the balances of all Receivables
which are determined to be uncollectible in
the Collection Period, less any Liquidation
Proceeds) to the Pool Balance as of the first
day of each such Collection Period exceeds
2.25% or (ii) the average for the preceding
three Collection Periods of the ratios of the
number of Receivables that have been
repossessed but not yet sold or are
delinquent 60 days or more to the outstanding
number of Receivables exceeds 1.50%, then the
Specified Subordination Spread Account
Balance for such Distribution Date shall be
an amount equal to the percentage of the Pool
Balance as of the first day of such
Collection Period determined by deducting
from eleven percent the following fraction,
expressed as a percentage: (x) 1 minus (y) a
fraction, the numerator of which is the Class
A Certificate Balance and the denominator of
which is the Pool Balance both as of the
first day of such Collection Period, but in
no event shall the Specified Subordination
Spread Account Balance be more than
$78,750,737, or less than $13,125,123. On any
Distribution Date on which the aggregate
balance of the Class A Certificates is
$175,002,000 or less after giving effect to
distributions on such Distribution Date, the
Specified Subordination Spread Account
Balance shall be the greater of the balance
described above or $30,625,287. The
Subordination Spread Account will be
maintained with Chemical Bank, as agent for
the Class A Certificateholders as a
segregated trust account, and will not be
part of the Trust.
DISTRIBUTION DATE............. The 15th day of each month (or if such 15th day
is not a business day, the next following
business day).
ADVANCES...................... The Servicer each month will advance to the
Trust, in respect of each Receivable, that
portion of scheduled payments that was not
timely made (an "Advance"). The Servicer
shall be entitled to reimbursement of
Advances from subsequent payments on or with
respect to the Receivables. The Servicer will
not be required to make any Advance to the
extent that it does not expect to recoup the
Advance from subsequent collections or
recoveries. See "The Certificates --
Advances."
REPURCHASES AND PURCHASES
OF CERTAIN RECEIVABLES........ The Seller will be obligated to repurchase any
Receivable if the interest of the Trust
therein is materially adversely affected by a
5
<PAGE> 7
breach of any representation or warranty made
by the Seller with respect to the Receivable
and if the breach has not been cured by the
last day of the second (or, if the Seller
elects, the first) month following the
discovery by or notice to the Seller of the
breach. Ford Credit will be obligated to
repurchase the Receivable from the Seller
pursuant to the Purchase Agreement
contemporaneously with the Seller's
repurchase from the Trust. The Seller's
obligation to repurchase a Receivable from
the Trust is not conditioned upon Ford
Credit's repurchase obligation of that
Receivable.
The Servicer will be obligated to purchase any
Receivable if, among other things, it changes
the APR or the amount or the number of the
scheduled payments of such Receivable or
fails to maintain a perfected security
interest in the Financed Vehicle. See "The
Certificates -- Servicing Procedures."
SERVICER FEE.................. The Servicer will receive each month a fee for
servicing the Receivables equal to (a) the
product of one-twelfth of 1.00% (the
"Servicing Fee Rate") and the Pool Balance
outstanding at the beginning of the previous
month, plus (b) any late, prepayment, and
other administrative fees and expenses
collected during such month plus reinvestment
proceeds on any payments received in respect
of the Receivables. See "The Certificates --
Servicing Compensation."
OPTIONAL PURCHASE............. The Servicer may purchase all of the
Receivables as of the last day of any month
on or after which the aggregate principal
balance of the Receivables (after giving
effect to the current calendar month's
collections and Advances) declines below 10%
of the original Pool Balance. The purchase
price will be equal to the aggregate Purchase
Amounts, and will be distributed to
Certificateholders on the next following
Distribution Date. See "The
Certificates -- Termination."
TRUSTEE....................... Chemical Bank.
TAX STATUS.................... In the opinion of special tax counsel to the
Seller, the Trust will be treated as a
grantor trust for federal income tax
purposes, and will not be subject to federal
income tax. Certificate Owners will report
their pro rata shares of all income earned on
the Receivables (other than amounts, if any,
treated as "stripped coupons") and, subject
to certain limitations in the case of
Certificate Owners who are individuals,
trusts, or estates, may deduct their pro rata
shares of reasonable servicing and other fees
paid or incurred by the Trust. See "Certain
Federal Income Tax Consequences."
ERISA CONSIDERATIONS.......... As described herein, the Class A Certificates
may be purchased by employee benefit plans
that are subject to the Employee Retirement
Income Security Act of 1974, as amended
("ERISA"). See "ERISA Considerations."
RATING........................ As a condition of issuance, the Class A
Certificates will be rated in the highest
rating category by at least one nationally
recognized rating agency. There is no
assurance that a rating will not be lowered
or withdrawn by a rating agency based on a
change in circumstances deemed by such rating
agency to adversely affect the Class A
Certificates. See "Rating of the Class A
Certificates."
6
<PAGE> 8
RISK FACTORS
LIMITED LIQUIDITY
There currently is no secondary market for the Class A Certificates, and
there is no assurance that one will develop. The Underwriters expect, but are
not obligated, to make a market in the Class A Certificates. There is no
assurance that any such market will develop or, if one does develop, that it
will provide liquidity of investment or will continue for the life of the Class
A Certificates.
THE TRUST
The Seller will establish the Trust by selling and assigning the
Receivables and certain other property of the Trust to the Trustee in exchange
for the Certificates. The Trust will not acquire any other assets, nor will the
Trust engage in any business activity. The Trust will hold the property of the
Trust, issue the Certificates and distribute payments on the Certificates. See
"Formation of the Trust" and "Property of the Trust".
CERTAIN LEGAL ASPECTS -- THE RECEIVABLES
Pursuant to the Agreement, the Servicer will service and administer the
Receivables. The Agreement will also designate the Servicer as custodian to
maintain possession as the Trustee's agent of the retail installment sale
contracts and any other documents relating to the Receivables. To assure uniform
quality in servicing both the Receivables and the Servicer's own portfolio of
receivables, as well as to facilitate servicing and save administrative costs,
the installment sale contracts and other documents relating thereto will not be
physically segregated from other similar documents that are in the Servicer's
possession or otherwise stamped or marked to reflect the transfer to the Trust
so long as Ford Credit is servicing the Receivables. However, Uniform Commercial
Code financing statements reflecting the sale and assignment of the Receivables
by Ford Credit to the Seller and by the Seller to the Trustee will be filed, and
the Servicer's accounting records and computer systems will be marked to reflect
such sale and assignment. Because the Receivables will remain in the Servicer's
possession and will not be stamped or otherwise marked to reflect the assignment
to the Trustee, if a subsequent purchaser were able to take physical possession
of the Receivables without knowledge of the assignment, the Trustee's interest
in the Receivables could be defeated.
In most states, assignments such as those under the Purchase Agreement and
the Agreement together with a perfected security interest in the chattel paper
are an effective conveyance of a security interest in the vehicles subject to
the chattel paper without amendment of any lien noted on a vehicle's certificate
of title, and the assignee succeeds thereby to the assignor's rights as secured
party. In the absence of fraud or forgery by the vehicle owner or the Servicer
or administrative error by state or local agencies, the notation of Ford
Credit's lien on the certificates of title will be sufficient to protect the
Trust against the rights of subsequent purchasers of a Financed Vehicle or
subsequent lenders who take a security interest in a Financed Vehicle. If there
are any Financed Vehicles as to which Ford Credit failed to obtain a perfected
security interest, its security interest would be subordinate to, among others,
subsequent purchasers of the Financed Vehicles and holders of perfected security
interests. Such a failure, however, would constitute a breach of Ford Credit's
warranties under the Purchase Agreement and of the Seller's warranties under the
Agreement and would create an obligation of Ford Credit under the Purchase
Agreement and of the Seller under the Agreement to purchase the related
Receivable unless the breach is cured. See "The Certificates -- Sale and
Assignment of Receivables." By not identifying the Trust as the secured party on
the certificate of title, the security interest of the Trust in the Financed
Vehicle may not be perfected in all states or could be defeated through fraud or
negligence. The Seller will assign its rights under the Purchase Agreement to
the Trust. See "Certain Legal Aspects of the Receivables -- Security Interests
in Vehicles."
CERTAIN LEGAL ASPECTS -- BANKRUPTCY CONSIDERATIONS
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to ensure that the voluntary or involuntary application
for relief by Ford Credit under the United States Bankruptcy Code or similar
applicable state laws ("Insolvency Laws") will not result in consolidation of
the assets and liabilities of the Seller with those of Ford Credit. These steps
include the creation of the Seller as a separate, limited-purpose subsidiary
pursuant to a certificate of incorporation containing certain limitations
(including
7
<PAGE> 9
restrictions on the nature of the Seller's business and a restriction on the
Seller's ability to commence a voluntary case or proceeding under any Insolvency
Law without the unanimous affirmative vote of all of its directors). The
Seller's Certificate of Incorporation includes a provision that, under certain
circumstances relating to the credit ratings of Ford Credit, requires the Seller
to have two directors who qualify under the Certificate of Incorporation as
"Independent Directors." However, there can be no assurance that the activities
of the Seller would not result in a court concluding that the assets and
liabilities of the Seller should be consolidated with those of Ford Credit in a
proceeding under any Insolvency Law. See "The Seller."
It is intended by Ford Credit and the Seller that the transfer of the
Receivables by Ford Credit to the Seller under the Purchase Agreement constitute
a "true sale" of the Receivables to the Seller. If the transfer constitutes such
a "true sale," the Receivables and the proceeds thereof would not be part of
Ford Credit's bankruptcy estate under Section 541 of the Bankruptcy Code should
Ford Credit become the subject of a bankruptcy case subsequent to the transfer
of the Receivables to the Seller.
In a 1993 decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), cert. denied 114 S.Ct 554 (1993), the United States Court of Appeals
for the 10th Circuit suggested that even where a transfer of accounts from a
seller to a buyer constitutes a "true sale," the accounts would nevertheless
constitute property of the seller's bankruptcy estate in a bankruptcy of the
seller. If Ford Credit or the Seller were to become subject to a bankruptcy
proceeding and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses on
their investment in the Certificates. Counsel to Seller has advised the Seller
that the reasoning of the Octagon case appears to be inconsistent with precedent
and the Uniform Commercial Code. See "The Seller."
MATURITY AND PREPAYMENT ASSUMPTIONS
All the Receivables are prepayable at any time. If prepayments are received
on the Receivables, the actual weighted average life of the Receivables will be
shorter than the scheduled weighted average life, which is based on the
assumptions that payments will be made as scheduled, and that no prepayments
will be made. (For this purpose the term "prepayments" includes liquidations due
to default, as well as receipt of proceeds from credit life, credit disability,
and casualty insurance policies.) Weighted average life means the average amount
of time during which each dollar of principal on a receivable is outstanding.
The rate of prepayments on the Receivables may be influenced by a variety
of economic, social, and other factors, including the fact that an Obligor may
not sell or transfer a Financed Vehicle without the consent of the Servicer.
Ford Credit does not maintain records adequate to provide quantitative data
regarding its prepayment experience on its portfolio of U.S. retail installment
sale contracts covering new and used vehicles. However, Ford Credit (i) believes
that the actual rate of prepayments will result in a substantially shorter
weighted average life than the scheduled weighted average life and (ii)
estimates that the actual weighted average life of its portfolio of U.S. retail
installment contracts for new and used automobiles and light trucks ranges
between 60% and 70% of their scheduled weighted average life. Substantially all
reinvestment risks resulting from a faster or slower incidence of prepayment of
Receivables will be borne by the Certificateholders in that market interest
rates on new investments acquired by Certificateholders with funds received from
such prepayments may be lower than the Pass-Through Rate. See also "The
Certificates -- Termination" regarding the Servicer's option to purchase the
Receivables when the aggregate principal balance of the Receivables (the "Pool
Balance") is less than 10% of the Pool Balance as of the Cutoff Date.
SUBORDINATION OF THE CLASS B CERTIFICATES; SUBORDINATION SPREAD ACCOUNT
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables will be subordinated to the rights of the Class A
Certificateholders in the event of defaults and delinquencies on the Receivables
as provided in the Agreement. The protection afforded to the Class A
Certificateholders will be effected both by the preferential right of the Class
A Certificateholders to receive current distributions with respect to the
Receivables and by the establishment of the Subordination Spread Account. The
Subordination Spread Account will be created with an initial deposit by the
Seller of the Subordination Initial Deposit and
8
<PAGE> 10
will be augmented by deposit therein of amounts otherwise distributable to Class
B Certificateholders until the amount in the Subordination Spread Account
reaches an amount equal to the Specified Subordination Spread Account Balance.
Thereafter, amounts otherwise distributable to the Class B Certificateholders
will be deposited in the Subordination Spread Account to the extent necessary to
maintain the amount in the Subordination Spread Account at the Specified
Subordination Spread Account Balance.
The Subordination Spread Account will not be a part of or otherwise
includible in the Trust and will be a segregated trust account held by Chemical
Bank as agent for the Class A Certificateholders (the "Class A Agent"). On each
Distribution Date, (i) if the amounts on deposit in the Subordination Spread
Account are less than the Specified Subordination Spread Account Balance, the
Trustee will, after payment of any amounts required to be distributed to holders
of the Class A Certificates and the payment of the Servicing Fee due with
respect to the related Collection Period (including any unpaid Servicing Fees
with respect to prior Collection Periods), withdraw from the Collection Account
and deposit in the Subordination Spread Account the amount remaining in the
Collection Account that would otherwise be distributed to the holders of the
Class B Certificates, or such lesser portion thereof as is sufficient to restore
the amount in the Subordination Spread Account to such Specified Subordination
Spread Account Balance and (ii) if the amounts on deposit in the Subordination
Spread Account on such Distribution Date (after giving effect to all deposits or
withdrawals therefrom on such Distribution Date) are greater than the Specified
Subordination Spread Account Balance for such Distribution Date, the Class A
Agent will release and distribute any such excess to the holders of the Class B
Certificates. Upon any such distribution, the Class A Certificateholders will
have no rights in, or claims to, such amounts.
The subordination of the Class B Certificates and the Subordination Spread
Account described above are intended to enhance the likelihood of receipt by
Class A Certificateholders of the full amount of principal and interest on the
Receivables due them and to decrease the likelihood that the Class A
Certificateholders will experience losses. However, in certain circumstances,
the Subordination Spread Account could be depleted and shortfalls could result.
THE CLASS A CERTIFICATES
The Class A Certificates will be represented initially by physical
certificates registered in the name of Cede as nominee of DTC. No Class A
Certificate Owner will be entitled to receive a definitive certificate
representing such person's interest in the Trust except in certain limited
circumstances. Under the terms of the Agreement, Class A Certificate Owners will
not be recognized as Certificateholders, and will be permitted to exercise the
rights of the Certificateholders only indirectly through DTC. See "The
Certificates."
FORMATION OF THE TRUST
The Seller will establish the Trust by selling and assigning the Trust
property, as described below, to the Trustee in exchange for the Certificates.
The Servicer will service the Receivables pursuant to the Agreement, and will be
compensated for acting as the Servicer. See "The Certificates -- Servicing
Compensation." To facilitate servicing and to minimize administrative burden and
expense the Servicer will retain physical possession of the Receivables and
documents relating thereto as custodian for the Trustee. Due to the
administrative burden and expense, the certificates of title to the Financed
Vehicles will not be amended to reflect the assignment of the security interest
in the Financed Vehicles to the Trustee. In the absence of such amendment, the
Trustee may not have a perfected security interest in the Financed Vehicles in
all states. See "Certain Legal Aspects of the Receivables -- Security Interests
in Vehicles." The Trustee will not be responsible for the legality, validity, or
enforceability of any security interest in any Financed Vehicle.
If the protection provided to the Class A Certificateholders by the
subordination of the Class B Certificates and by the Subordination Spread
Account is insufficient, the Class A Certificateholders would have to look to
the Obligors on the Receivables, the proceeds from the repossession and sale of
Financed Vehicles which secure defaulted Receivables and the proceeds from
Dealer Recourse. In such event, certain factors, such as the Trustee's not
having perfected security interests in the Financed Vehicles in all states, may
affect the Trust's ability to repossess and sell the collateral securing the
Receivables, and thus may reduce the
9
<PAGE> 11
proceeds to be distributed to Certificateholders. See "The
Certificates -- Subordination of the Class B Certificates; Subordination Spread
Account" and "Certain Legal Aspects of the Receivables."
PROPERTY OF THE TRUST
Each Certificate represents a fractional undivided interest in the Trust.
The property of the Trust will include retail installment sale contracts
originated on or after November 1, 1994 between dealers (the "Dealers") and
retail purchasers (the "Obligors") secured by new and used automobiles and light
trucks and all payments due thereunder on or after the Cutoff Date. The
Receivables were originated by Dealers in accordance with Ford Credit's
requirements under agreements with Dealers, for assignment to Ford Credit, have
been so assigned, will, on or prior to the issuance of the Certificates, be sold
to the Seller by Ford Credit, are serviced by Ford Credit, and evidence the
indirect financing made available by Ford Credit to the Obligors. The property
of the Trust also will include (i) such amounts as from time to time may be held
in separate trust accounts (the "Collection Account" and the "Certificate
Account") established and maintained pursuant to the Agreement, and the proceeds
of such accounts; (ii) security interests in the Financed Vehicles and any
accessions thereto; (iii) any Dealer Recourse; (iv) the right to proceeds of
credit life, credit disability, and physical damage insurance policies covering
the Financed Vehicles; (vi) the rights of the Seller under the Purchase
Agreement; (vii) certain rebates of premiums and other amounts relating to
certain insurance policies and other items financed under the Receivables in
effect as of the Cutoff Date and (viii) any and all proceeds of the foregoing.
The property of the Trust does not include the Payahead Account and the
Subordination Spread Account.
Additionally, pursuant to agreements between Ford Credit and the Dealers,
the Dealers are obligated to repurchase from Ford Credit Receivables which do
not meet certain representations made by the Dealers, as well as those covered
by recourse plans ("Dealer Recourse"). See "The Receivables."
THE RECEIVABLES
The Receivables were purchased by Ford Credit in the ordinary course of
business in accordance with Ford Credit's underwriting standards, which
emphasize the Obligor's ability to pay and creditworthiness, as well as the
asset value of the Financed Vehicle. Generally, Ford Credit does not finance
more than 100% of the manufacturers suggested retail value of a new vehicle or
more than 100% of published prices for used vehicles. However, under limited
circumstances which Ford Credit determines to be appropriate, it will advance
more than 100% of these values. The Receivables were selected from Ford Credit's
portfolio by several criteria, including the following: each Receivable (i) was
originated in the United States, (ii) has a contractual Annual Percentage Rate
("APR") that equals or exceeds 7.35%, (iii) provides for level monthly payments
which provide interest at the APR and fully amortize the amount financed over an
original term no greater than 60 months, (iv) is not more than 30 days past due
as of the Cutoff Date and has never been extended and (v) was originated on or
after November 1, 1994. The Receivables were selected at random from Ford
Credit's portfolio of retail installment sale contracts for new vehicles and
Ford Credit's portfolio of retail installment sale contracts for used vehicles,
in each case, meeting the criteria described above. No selection procedures
believed to be adverse to the Certificateholders were utilized in selecting the
Receivables from qualifying retail installment sale contracts. All terms of the
retail installment sale contracts constituting the Receivables which are
material to investors are described in this Prospectus.
Approximately 70.0% of the aggregate principal balance of the Receivables,
constituting 61.8% 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.
Based on principal balance, less than 1.0% of the Receivables provide
recourse to the Dealer which originated the Receivable. Dealers are generally
obligated under these recourse plans for payment of the unpaid principal balance
of a defaulted contract, unless Ford Credit fails to repossess the vehicle and
deliver it to the Dealer within 90 days after default. The Dealer's obligation
generally terminates after the first 24 monthly payments are made under the
related contract.
The geographical distribution, composition, and distribution by annual
percentage rate of the Receivables are as set forth in the following tables.
10
<PAGE> 12
GEOGRAPHIC DISTRIBUTION OF THE RECEIVABLES POOL
<TABLE>
<CAPTION>
PERCENTAGE
OF
AGGREGATE
PRINCIPAL
STATE(1) BALANCE
- ----------------------------------- ----------
<S> <C>
Alabama............................ 1.62%
Alaska............................. 0.23
Arizona............................ 0.13
Arkansas........................... 4.36
California......................... 14.79
Colorado........................... 2.76
Connecticut........................ 2.81
Delaware........................... 0.25
District of Columbia............... 0.24
Florida............................ 3.41
Georgia............................ 7.44
Hawaii............................. 0.01
Idaho.............................. 0.02
Illinois........................... 4.06
Indiana............................ 0.22
Iowa............................... 0.63
Kansas............................. 0.20
Kentucky........................... 0.74
Louisiana.......................... 1.43
Maine.............................. 0.02
Maryland........................... 5.98
Massachusetts...................... 3.97
Michigan........................... 3.74
Minnesota.......................... 0.05
Mississippi........................ 1.33
Missouri........................... 5.42
<CAPTION>
PERCENTAGE
OF
AGGREGATE
PRINCIPAL
STATE(1) BALANCE
- ----------------------------------- ----------
<S> <C>
Montana............................ 0.35%
Nebraska........................... 0.37
Nevada............................. 0.10
New Hampshire...................... 0.21
New Jersey......................... 3.98
New Mexico......................... 0.64
New York........................... 6.18
North Carolina..................... 2.47
North Dakota....................... 0.01
Ohio............................... 0.21
Oklahoma........................... 1.27
Oregon............................. 0.09
Pennsylvania(2).................... 0.00
Rhode Island....................... 0.41
South Carolina..................... 1.14
South Dakota....................... 0.02
Tennessee.......................... 1.13
Texas.............................. 8.26
Utah............................... 0.03
Vermont............................ 0.04
Virginia........................... 3.65
Washington......................... 1.25
West Virginia...................... 2.02
Wisconsin.......................... 0.05
Wyoming............................ 0.28
</TABLE>
- ---------------
(1) Based on the current billing addresses of the Obligors on the Receivables.
(2) Pennsylvania was excluded for administrative reasons.
COMPOSITION OF THE RECEIVABLES
<TABLE>
<S> <C>
Aggregate Principal Balance............................................ $1,750,016,370.06
Number of Receivables.................................................. 130,438
Average Principal Balance.............................................. $13,416.46
Average Original Amount Financed....................................... $14,238.04
(Range)........................................................... $626.08 to $60,130.00
Weighted Average APR................................................... 11.68%
(Range)........................................................... 7.35% to 20.0%
Weighted Average Original Term......................................... 56.25 months
(Range)........................................................... 6 to 60 months
Weighted Average Remaining Term........................................ 52.13 months
(Range)........................................................... 1 to 59 months
Scheduled Weighted Average Life(1)..................................... 28.78 months
</TABLE>
- ---------------
(1) Based on Scheduled Payments as of the Cutoff Date, assuming no prepayments
on the Receivables are made after the Cutoff Date.
11
<PAGE> 13
DISTRIBUTION BY APR OF THE RECEIVABLES
<TABLE>
<CAPTION>
PERCENTAGE OF
AGGREGATE AGGREGATE
NUMBER OF PRINCIPAL PRINCIPAL
APR RANGE RECEIVABLES BALANCE BALANCE
- ----------------- ---------------- ----------------- ----------------
<S> <C> <C> <C>
7.35% to 7.50% 924 $ 14,163,815.62 %0.81
7.51 to 8.00 4,961 72,024,378.86 4.12
8.01 to 8.50 7,145 103,007,949.54 5.89
8.51 to 9.00 12,305 182,024,099.52 10.40
9.01 to 9.50 10,503 154,474,692.20 8.83
9.51 to 10.00 12,902 184,100,773.34 10.52
10.01 to 10.50 11,149 153,718,524.66 8.78
10.51 to 11.00 9,178 130,450,476.04 7.45
11.01 to 11.50 4,776 66,057,983.03 3.77
11.51 to 12.00 7,274 98,550,880.50 5.63
12.01 to 12.50 3,988 51,539,145.21 2.95
12.51 to 13.00 6,093 78,393,480.06 4.48
13.01 to 13.50 3,002 37,802,341.95 2.16
13.51 to 14.00 4,667 57,219,646.82 3.27
14.01 to 14.50 2,609 32,375,693.73 1.85
14.51 to 15.00 4,402 52,520,863.11 3.00
15.01 to 15.50 2,043 24,499,421.85 1.40
15.51 to 16.00 3,702 44,025,796.19 2.52
16.01 to 16.50 2,180 25,955,079.03 1.48
16.51 to 17.00 3,157 36,938,017.81 2.11
17.01 to 17.50 2,027 24,804,508.52 1.42
17.51 to 18.00 5,095 59,379,409.42 3.39
18.01 to 18.50 1,065 11,498,592.40 0.66
18.51 to 19.00 2,290 23,394,658.99 1.34
19.01 to 19.50 848 9,104,477.23 0.52
19.51 to 20.00 2,153 21,991,664.43 1.26
---------------- ----------------- -------
Totals 130,438 $1,750,016,370.06 100.00%
======= =============== ======
</TABLE>
MATURITY AND PREPAYMENT ASSUMPTIONS
All the Receivables are prepayable at any time. If prepayments are received
on the Receivables, the actual weighted average life of the Receivables will be
shorter than the scheduled weighted average life, which is based on the
assumptions that payments will be made as scheduled, and that no prepayments
will be made. (For this purpose the term "prepayments" includes liquidations due
to default, as well as receipt of proceeds from credit life, credit disability,
and casualty insurance policies.) Weighted average life means the average amount
of time during which each dollar of principal on a receivable is outstanding.
The rate of prepayments on the Receivables may be influenced by a variety
of economic, social, and other factors, including the fact that an Obligor may
not sell or transfer a Financed Vehicle without the consent of the Servicer.
Ford Credit does not maintain records adequate to provide quantitative data
regarding its prepayment experience on its portfolio of U.S. retail installment
sale contracts covering new and used vehicles. However, Ford Credit (i) believes
that the actual rate of prepayments will result in a substantially shorter
weighted average life than the scheduled weighted average life shown above and
(ii) estimates that the actual weighted average life of its portfolio of U.S.
retail installment contracts for new and used automobiles and light trucks
ranges between 60% and 70% of their scheduled weighted average life.
Substantially all reinvestment risks resulting from a faster or slower incidence
of prepayment of Receivables will be borne by the Certificateholders in that
market interest rates on new investments acquired by Certificateholders with
12
<PAGE> 14
funds received from such prepayments may be lower than the Pass-Through Rate.
See also "The Certificates -- Termination" regarding the Servicer's option to
purchase the Receivables when the aggregate principal balance of the Receivables
is less than 10% of the Pool Balance as of the Cutoff Date.
DELINQUENCIES, REPOSSESSIONS, AND NET LOSSES
Set forth below is certain information concerning Ford Credit's experience
with respect to its portfolio of U.S. retail installment sale contracts for new
and used automobiles and light trucks (including previously sold contracts which
Ford Credit continues to service, but not including retail installment sale
contracts purchased by Ford Credit under certain special financing programs).
There is no assurance that the behavior of the Receivables will be comparable to
Ford Credit's experience shown in the following tables or that the trend in
losses and delinquencies will continue into the future.
DELINQUENCY EXPERIENCE(1)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Average Number of
Contracts Outstanding
During the Period............. 3,418,133 3,433,517 3,430,145 3,398,797 3,388,214 3,398,048 3,616,862
Average Daily Delinquencies
as a Percent of Average
Contracts Outstanding
31-60 Days(2)............... 2.15% 2.01% 2.03% 2.02% 2.35% 2.72% 2.71%
61-90 Days(2)............... 0.17% 0.15% 0.15% 0.15% 0.20% 0.29% 0.31%
Over 90 Days(3)............. 0.03% 0.03% 0.03% 0.03% 0.04% 0.07% 0.08%
</TABLE>
- ---------------
(1) The information in the table includes U.S. retail installment sale contracts
for new and used automobiles and light trucks and includes previously sold
contracts which Ford Credit continues to service; it does not include retail
installment sale contracts purchased by Ford Credit under certain special
financing programs.
(2) Delinquencies represent the daily average number of contracts
delinquent.
(3) Delinquencies represent the average monthly end-of-period number of
contracts delinquent.
13
<PAGE> 15
CREDIT LOSS AND REPOSSESSION EXPERIENCE(1)
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DECEMBER 31,
----------------------- ---------------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
--------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Average Portfolio Outstanding
During the Period
(Millions)................. $35,045.1 $33,457.2 $33,703.3 $31,204.9 $29,505.1 $28,977.1 $30,789.7
Percent of Average
Receivables Outstanding
During the Period without
Recourse to Dealer......... 99.0% 98.5% 98.6% 97.7% 96.4% 94.4% 92.2%
Repossessions as a Percent of
Average Number of Contracts
Outstanding................ 2.26%(2) 2.11%(2) 2.15% 2.27% 2.74% 3.27% 3.17%
Net Losses as a Percent of
Gross Liquidations(3)...... 1.23% 0.95% 1.06% 1.16% 1.52% 2.29% 2.40%
Net Losses as a Percent of
Average Portfolio
Outstanding(3)............. 0.71%(2) 0.55%(2) 0.62% 0.69% 0.90% 1.29% 1.31%
</TABLE>
- ---------------
(1) Except as indicated, all amounts and percentages are based on the gross
amount scheduled to be paid on each contract, including unearned finance and
other charges. The information in the table includes U.S. retail installment
sale contracts for new and used automobiles and light trucks and includes
previously sold contracts which Ford Credit continues to service; it does
not include retail installment sale contracts purchased by Ford Credit under
certain special financing programs.
(2) Annualized rate.
(3) "Net Losses" are equal to the aggregate balance of all contracts which are
determined to be uncollectible in the period less any recoveries on
contracts charged-off in the period or any prior periods. Effective January
1, 1993 net losses include expenses associated with outside collection
agencies. Other expenses associated with collection, repossession, and
disposition of the vehicle continue to be excluded. These other expenses are
not material to the data presented.
The reduction in credit losses from 1990 through 1994 primarily has been
due to actions taken by Ford Credit to improve purchase and collection
practices, as well as higher vehicle resale values. The actions taken by Ford
Credit include establishment of a risk-based pricing policy, improved training,
retention of experienced collection personnel, faster direct customer contact on
problem accounts, and implementation of new risk-rating guides. Ford Credit's
retail loss experience also depends upon the availability of recourse from
dealers, the number of repossessions, the amount outstanding at the time of
repossession, and the resale value of repossessed vehicles. The increase in
credit losses during the first nine months of 1995 primarily has been the result
of a slowing economy and higher losses per unit due to a weaker used vehicle
market. See "The Certificates -- Servicing Procedures."
CLASS A CERTIFICATE FACTORS AND TRADING INFORMATION
The "Class A Certificate Factor" is a seven-digit decimal which the
Servicer will compute each month indicating the Class A Certificate Balance as
of the close of business on the Distribution Date in that month as a fraction of
the original Class A Certificate Balance. The Class A Certificate Factor will be
1.0000000 as of the Cutoff Date; thereafter, the Class A Certificate Factor will
decline to reflect reductions in the Class A Certificate Balance. The amount of
a Class A Certificateholder's pro rata share of the Class A Certificate Balance
can be determined by multiplying the original denomination of the holder's
Certificate by the Class A Certificate Factor as of the close of business on the
most recent Distribution Date. The Class A Certificate Factor will be made
available through DTC and the Underwriters.
Pursuant to the Agreement, the Certificateholders will receive monthly
reports concerning the payments received on the Receivables, the Class A
Certificate Balance, the Class A Certificate Factor, and various other items of
information. Class A Certificateholders of record during any calendar year will
be furnished information for tax reporting purposes not later than the latest
date permitted by law. See "The Certificates -- Statements to Class A
Certificateholders."
14
<PAGE> 16
USE OF PROCEEDS
The net proceeds to be received by the Seller from the sale of the Class A
Certificates, after deductions of estimated expenses, ($ ) will be
applied to the purchase of the Receivables from Ford Credit.
THE SELLER
The Seller, a wholly owned subsidiary of Ford Credit, was incorporated in
the State of Delaware on February 13, 1991. The Seller was organized for limited
purposes, which include purchasing receivables from Ford Credit and transferring
such receivables to third parties and any activities incidental to and necessary
or convenient for the accomplishment of such purposes. The principal executive
offices of the Seller are located at The American Road, Dearborn, Michigan
48121. The telephone number of such offices is (313) 322-1989.
The Seller has taken steps in structuring the transactions contemplated
hereby that are intended to ensure that the voluntary or involuntary application
for relief by Ford Credit under the United States Bankruptcy Code or similar
applicable state laws ("Insolvency Laws") will not result in consolidation of
the assets and liabilities of the Seller with those of Ford Credit. These steps
include the creation of the Seller as a separate, limited-purpose subsidiary
pursuant to a certificate of incorporation containing certain limitations
(including restrictions on the nature of the Seller's business and a restriction
on the Seller's ability to commence a voluntary case or proceeding under any
Insolvency Law without the unanimous affirmative vote of all of its directors).
The Seller's Certificate of Incorporation includes a provision that, under
certain circumstances relating to the credit ratings of Ford Credit, requires
the Seller to have two directors who qualify under the Certificate of
Incorporation as "Independent Directors." However, there can be no assurance
that the activities of the Seller would not result in a court concluding that
the assets and liabilities of the Seller should be consolidated with those of
Ford Credit in a proceeding under any Insolvency Law.
The Seller has received the advice of counsel to the effect that, subject
to certain facts, assumptions and qualifications, it would not be a proper
exercise by a court of its equitable discretion to disregard the separate
corporate existence of the Seller and to require the consolidation of the assets
and liabilities of the Seller with the assets and liabilities of Ford Credit in
the event of the application of the federal bankruptcy laws to Ford Credit.
Among other things, it is assumed by counsel that the Seller will follow certain
procedures in the conduct of its affairs, including maintaining records and
books of account separate from those of Ford Credit, refraining from commingling
its assets with those of Ford Credit, doing business from an office separate
from that of Ford Credit and refraining from holding itself out as having agreed
to pay, or being liable for, the debts of Ford Credit. The Seller intends to
follow and has represented to such counsel that it will follow these and other
procedures related to maintaining its separate corporate identity. However, in
the event that the Seller did not follow these procedures, there can be no
assurance that a court would not conclude that the assets and liabilities of the
Seller should be consolidated with those of Ford Credit. If a court were to
reach such a conclusion, or a filing were made under any Insolvency Law by or
against the Seller, or if an attempt were made to litigate any of the foregoing
issues, delays in distributions on the Certificates (and possible reductions in
the amount of such distributions which may be substantial) could occur.
It is intended by Ford Credit and the Seller that the transfer of the
Receivables by Ford Credit to the Seller under the Purchase Agreement constitute
a "true sale" of the Receivables to the Seller. If the transfer constitutes such
a "true sale," the Receivables and the proceeds thereof would not be part of
Ford Credit's bankruptcy estate under Section 541 of the Bankruptcy Code should
Ford Credit become the subject of a bankruptcy case subsequent to the transfer
of the Receivables to the Seller. The Seller has received the advice of counsel
to the effect that, subject to certain facts, assumptions and qualifications, in
the event Ford Credit were to become the subject of a voluntary or involuntary
case under the Bankruptcy Code subsequent to the transfer of the Receivables to
the Seller, the transfer of the Receivables by Ford Credit to the Seller
pursuant to the Purchase Agreement would be characterized as a "true sale" of
the Receivables from Ford Credit to the Seller and the Receivables and the
proceeds thereof would not form part of Ford Credit's bankruptcy estate pursuant
to Section 541 of the Bankruptcy Code.
15
<PAGE> 17
In a 1993 decision, Octagon Gas Systems, Inc. v. Rimmer, 995 F.2d 948 (10th
Cir. 1993), cert. denied 114 S.Ct 554 (1993), the United States Court of Appeals
for the 10th Circuit suggested that even where a transfer of accounts from a
seller to a buyer constitutes a "true sale," the accounts would nevertheless
constitute property of the seller's bankruptcy estate in a bankruptcy of the
seller. If Ford Credit or the Seller were to become subject to a bankruptcy
proceeding and a court were to follow the Octagon court's reasoning,
Certificateholders might experience delays in payment or possibly losses on
their investment in the Certificates. As part of the advice of counsel described
above, counsel has advised the Seller that the reasoning of the Octagon case
appears to be inconsistent with precedent and the Uniform Commercial Code.
THE SERVICER
Ford Credit was incorporated in Delaware in 1959 and is a wholly owned
subsidiary of Ford Motor Company ("Ford").
Ford Credit provides wholesale financing and capital loans to franchised
Ford vehicle dealers and other dealers associated with such franchisees and
purchases retail installment sale contracts and retail leases from them. Ford
Credit also makes loans to vehicle leasing companies, the majority of which are
affiliated with such dealers. In addition, a wholly owned subsidiary of Ford
Credit provides these financing services in the U.S. to other vehicle dealers.
More than 84% of all new vehicles financed by Ford Credit are manufactured by
Ford or its affiliates. Ford Credit also provides retail financing for used
vehicles built by Ford and other manufacturers. In addition to vehicle
financing, Ford Credit makes loans to affiliates of Ford, finances certain
receivables of Ford and its subsidiaries, and offers diversified financing
services which are managed by USL Capital Corporation, a wholly owned subsidiary
of Ford Holdings, Inc. ("Ford Holdings"). Ford Credit also manages the insurance
businesses of The American Road Insurance Company, a wholly owned subsidiary of
Ford Holdings. Ford Credit also is a significant equity participant in Ford
Holdings whose primary activities are consumer and commercial financing
operations, insurance underwriting and equipment leasing.
The mailing address of Ford Credit's executive offices is The American
Road, Dearborn, Michigan 48121. The telephone number of such offices is (313)
322-3000.
THE CERTIFICATES
The Class A Certificates offered hereby will be issued pursuant to the
Agreement. Copies of the Agreement (without exhibits) may be obtained by the
Class A Certificateholders upon request in writing to the Servicer, at its
address set forth above. Citations to the relevant sections of the Agreement
appear below in parentheses. The following summary does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Agreement.
GENERAL
The Class A Certificates will be offered for purchase in denominations of
$1,000 and integral multiples thereof, and will be represented initially by
physical certificates registered in the name of Cede as the nominee of DTC
except that one Class A Certificate may be issued in a denomination that
includes any residual portion of the Class A Percentage of the original Pool
Balance. No Certificate Owner will be entitled to receive a certificate
representing such person's interest in the Class A Certificates, except as set
forth below under "Definitive Certificates." Unless and until Definitive
Certificates are issued under the limited circumstances described herein, all
references to actions by Class A Certificateholders shall refer to actions taken
by DTC upon instructions from its Participants (as defined below), and all
references herein to distributions, notices, reports and statements to Class A
Certificateholders shall refer to distributions, notices, reports and statements
to DTC or Cede, as the registered holder of the Class A Certificates, as the
case may be, for distribution to Certificate Owners in accordance with DTC
procedures. See "The Certificates -- Book-Entry Registration."
In general, it is intended that Class A Certificateholders receive, on each
Distribution Date, the Class A Percentage of the scheduled payments of principal
due and the aggregate full prepayments and certain partial
16
<PAGE> 18
prepayments on the Receivables made during or with respect to the preceding
calendar month (the "Collection Period"), plus interest at the Pass-Through Rate
on the Class A Certificate Balance. (Section 14.06.) See "The
Certificates -- Distributions on Certificates." A scheduled payment on a
Receivable may be made by or on behalf of the respective Obligor, or advanced by
the Servicer. See "The Certificates -- Advances." A prepayment of a Receivable
may be made by or on behalf of the respective Obligor, by application of certain
insurance proceeds, as a result of a repurchase made by the Seller or the
Servicer, or upon the repossession and liquidation of the respective Financed
Vehicle or other enforcement measure taken with respect to a defaulted
Receivable. See "The Certificates -- Sale and Assignment of Receivables," and
"-- Servicing Procedures."
The Certificates will evidence interests in the Trust created pursuant to
the Agreement. The Class A Certificates will evidence in the aggregate an
undivided ownership interest (the "Class A Percentage") of 93.5% of the Trust
and the Class B Certificates will evidence in the aggregate an undivided
ownership interest (the "Class B Percentage") of 6.5% of the Trust. The Class B
Certificates, which are not being offered hereby, will be held initially by the
Seller. (Sections 16.01, 16.02 and 16.04.)
BOOK-ENTRY REGISTRATION
DTC is a limited purpose trust company organized under the laws of the
State of New York, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York UCC and a "clearing agency"
registered pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. DTC was created to hold securities for its participating organizations
("Participants") and to facilitate the clearance and settlement of securities
transactions between Participants through electronic book-entries, thereby
eliminating the need for physical movement of certificates. Participants include
securities brokers and dealers, banks, trust companies and clearing
corporations. Indirect access to the DTC system also is available to others such
as banks, brokers, dealers and trust companies that clear through or maintain a
custodial relationship with a Participant, either directly or indirectly
("Indirect Participants").
Certificate Owners that are not Participants or Indirect Participants but
desire to purchase, sell or otherwise transfer ownership of, or other interests
in, Class A Certificates may do so only through Participants and Indirect
Participants. In addition, Certificate Owners will receive all distributions of
principal and interest from the Trustee through DTC Participants. Under a
book-entry format, Certificate Owners may experience some delay in their receipt
of payments, since such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments to its Participants, which
thereafter will forward them to Indirect Participants or Certificate Owners. It
is anticipated that the only "Class A Certificateholder" will be Cede, as
nominee of DTC. Certificate Owners will not be recognized by the Trustee as
Class A Certificateholders, as such term is used in the Agreement, and
Certificate Owners will be permitted to exercise the rights of Class A
Certificateholders only indirectly through DTC and its Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
Class A Certificates among Participants on whose behalf it acts with respect to
the Class A Certificates and to receive and transmit distributions of principal
of, and interest on, the Class A Certificates. Participants and Indirect
Participants with which Certificate Owners have accounts with respect to the
Class A Certificates similarly are required to make book-entry transfers and
receive and transmit such payments on behalf of their respective Certificate
Owners. Accordingly, although Class A Certificate Owners will not possess Class
A Certificates, the Rules provide a mechanism by which Participants will receive
payments and will be able to transfer their interests.
Because DTC can only act on behalf of Participants, who in turn act on
behalf of Indirect Participants and certain banks, the ability of a Class A
Certificate Owner to pledge Class A Certificates to persons or entities that do
not participate in the DTC system, or to otherwise act with respect to such
Certificates, may be limited due to the unavailability of physical certificates
evidencing interests in the Class A Certificates.
DTC has advised the Seller that it will take any action permitted to be
taken by a Class A Certificateholder under the Agreement only at the direction
of one or more Participants to whose accounts with DTC the Class A Certificates
are credited. Additionally, DTC has advised the Seller that it will take such
17
<PAGE> 19
actions with respect to specified percentages of the Class A Certificates only
at the direction of and on behalf of Participants whose holdings include
undivided interests that satisfy such specified percentages. DTC may take
conflicting actions with respect to other undivided interests to the extent that
such actions are taken on behalf of Participants whose holdings include such
undivided interests.
Neither the Seller nor the Trustee will have any liability for any aspect
of the records relating to or payments made on account of beneficial ownership
interests of the Class A Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
DEFINITIVE CERTIFICATES
The Class A Certificates will be issued in fully registered, certificated
form ("Definitive Certificates") to Certificate Owners or their nominees, rather
than to DTC or its nominee, only if (i) the Seller advises the Trustee in
writing that DTC is no longer willing or able to discharge properly its
responsibilities as depository with respect to the Class A Certificates and the
Trustee or the Seller is unable to locate a qualified successor, (ii) the Seller
at its option, elects to terminate the book-entry system through DTC or (iii)
after the occurrence of an Event of Default, Class A Certificate Owners
representing not less than 51% of the Class A Certificate Balance advise the
Trustee through DTC in writing that the continuation of a book-entry system
through DTC (or a successor thereto) is no longer in the Certificate Owners'
best interest. (Section 16.10.)
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify all Certificate Owners through
Participants of the availability of Definitive Certificates and that the Record
Date will thereafter be the last day of each calendar month. Upon surrender by
DTC of the definitive certificates representing the Class A Certificates and
receipt of instructions for re-registration, the Trustee will reissue the Class
A Certificates as Definitive Certificates to Certificate Owners.
Distributions of principal of, and interest on, the Class A Certificates
will thereafter be made by the Trustee directly to holders of Definitive
Certificates in accordance with the procedures set forth in the Agreement, to
holders in whose names the Definitive Certificates were registered at the close
of business on the last day of the preceding calendar month. Such distributions
will be made by check mailed to the address of such holder as it appears on the
register maintained by the Trustee. The final payment on any Class A
Certificate, however, will be made only upon presentation and surrender of such
Class A Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be transferable and exchangeable at the
offices of the Trustee or of a certificate registrar named in a notice delivered
to holders of Definitive Certificates. No service charge will be imposed for any
registration of transfer or exchange, but the Trustee may require payment of a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
SALE AND ASSIGNMENT OF RECEIVABLES
Prior to the time of issuance of the Class A Certificates, pursuant to a
Purchase Agreement (the "Purchase Agreement"), Ford Credit will sell and assign
to the Seller, without recourse, its entire interest in the Receivables
(exclusive of any amount allocable to the premium for physical damage insurance
force-placed by Ford Credit), including its security interests in the Financed
Vehicles. At the time of issuance of the Class A Certificates the Seller will
sell and assign to the Trustee, without recourse, the Seller's entire interest
in the Receivables, including its security interests in the Financed Vehicles.
Each Receivable will be identified in a schedule to the Agreement. The Trustee
has not and will not independently verify the existence and qualification of the
Receivables. The Trustee will, concurrently with such sale and assignment,
execute, authenticate, and deliver the Certificates to the Seller in exchange
for the Receivables. (Section 16.02.) The Seller will sell the Class A
Certificates to the Underwriters. See "Underwriting."
In the Purchase Agreement, Ford Credit will represent and warrant to the
Seller, and in the Agreement the Seller will represent and warrant to the
Trustee, among other things, that (i) the information provided with respect to
the Receivables is correct in all material respects; (ii) the Obligor on each
Receivable has
18
<PAGE> 20
obtained or agreed to obtain physical damage insurance in accordance with Ford
Credit's normal requirements; (iii) at the date of issuance of the Certificates,
the Receivables are free and clear of all security interests, liens, charges,
and encumbrances (such representation and warranty will be made to the best of
its knowledge with respect to mechanic's liens and the like relating to a
Financed Vehicle) and no setoffs, defenses, or counterclaims against it have
been asserted or threatened; (iv) at the date of issuance of the Certificates,
each of the Receivables is or will be secured by a first perfected security
interest in the Financed Vehicle in favor of Ford Credit; and (v) each
Receivable, at the time it was originated, complied, and at the date of issuance
of the Certificates, complies in all material respects with applicable federal
and state laws, including consumer credit, truth in lending, equal credit
opportunity, and disclosure laws. As of the last day of the second (or, if the
Seller elects, the first) month following the discovery by or notice to the
Seller of a breach of any representation or warranty of the Seller which
materially and adversely affects the interests of the Certificateholders in a
Receivable, the Seller, unless it cures the breach, will purchase the Receivable
from the Trustee, and Ford Credit will purchase the Receivable from the Seller,
at a price equal to the amount required to be paid by the related Obligor to
prepay the Receivable (including one month's interest thereon, in the month of
payment, at the APR), after giving effect to the receipt of any moneys collected
(from whatever source) on such Receivable, if any (such price, the "Purchase
Amount"). The purchase obligation will constitute the sole remedy available to
the Certificateholders or the Trustee for any such uncured breach. (Sections
12.01 and 12.02.)
Pursuant to the Agreement, the Servicer will service and administer the
Receivables. The Agreement will also designate the Servicer as custodian to
maintain possession as the Trustee's agent of the retail installment sale
contracts and any other documents relating to the Receivables. (Section 12.03.)
To assure uniform quality in servicing both the Receivables and the Servicer's
own portfolio of receivables, as well as to facilitate servicing and save
administrative costs, the installment sale contracts and other documents
relating thereto will not be physically segregated from other similar documents
that are in the Servicer's possession or otherwise stamped or marked to reflect
the transfer to the Trust so long as Ford Credit is servicing the Receivables.
However, Uniform Commercial Code financing statements reflecting the sale and
assignment of the Receivables by Ford Credit to the Seller and by the Seller to
the Trustee will be filed, and the Servicer's accounting records and computer
systems will be marked to reflect such sale and assignment. Because the
Receivables will remain in the Servicer's possession and will not be stamped or
otherwise marked to reflect the assignment to the Trustee, if a subsequent
purchaser were able to take physical possession of the Receivables without
knowledge of the assignment, the Trustee's interest in the Receivables could be
defeated. See "Certain Legal Aspects of the Receivables -- Security Interests in
Vehicles."
ACCOUNTS
The Servicer will establish two accounts in the name of the Trustee on
behalf of the Certificateholders, the first into which certain payments made on
or with respect to the Receivables will be deposited (the "Collection Account"),
and the second from which all distributions with respect to the Receivables and
the Certificates will be made (the "Certificate Account"). The Collection
Account shall be maintained with the Trustee so long as (i) the Trustee's
short-term unsecured debt obligations have a rating of P-1 by Moody's Investors
Service, Inc. and a rating of A-1+ by Standard & Poor's Corporation (the
"Required Deposit Rating") or (ii) such Account is maintained in the trust
department of the Trustee. If the short-term unsecured debt obligations of the
Trustee do not have the Required Deposit Rating, the Servicer shall, with the
Trustee's assistance as necessary, cause the Collection Account to be moved to a
bank whose short-term unsecured debt obligations have such a rating or moved to
the trust department of the Trustee. The Collection Account and the Certificate
Account shall initially be maintained in the trust department of the Trustee.
(Section 14.01.)
The Servicer will also establish an additional account (the "Payahead
Account") in the name of the Trustee, into which early payments by or on behalf
of the Obligors which constitute neither scheduled payments, full prepayments,
nor certain partial prepayments that result in a reduction of the Obligor's
periodic payment below the scheduled payment as of the Cutoff Date ("Payaheads")
will be deposited until such time as the payment falls due. The Payahead Account
will be established initially and maintained with the Trustee
19
<PAGE> 21
for so long as (i) the short-term unsecured debt obligations of the Trustee have
the Required Deposit Rating or (ii) such Account is maintained in the trust
department of the Trustee. (Section 14.01.)
Notwithstanding the foregoing, so long as Ford Credit is the servicer and
provided that (i) there exists no Event of Default and (ii) each other condition
to holding Payaheads as may be required by the Agreement is satisfied, Payaheads
may be retained by the Servicer until the related Distribution Date. (Section
14.01.)
SERVICING PROCEDURES
The Servicer will make reasonable efforts to collect all payments due with
respect to the Receivables and will continue such collection procedures as it
follows with respect to its own automotive retail installment sale contracts, in
a manner consistent with the Agreement. (Section 13.01.) Consistent with its
normal procedures, the Servicer may, in its discretion, arrange with the Obligor
on a Receivable to defer or modify the payment schedule. (Section 13.02.) Some
of such arrangements may cause the Servicer to purchase the Receivable while
others may result in the Servicer making Advances with respect to the
Receivable. (Sections 13.07 and 14.04.) If the Servicer determines that eventual
payment in full of a Receivable is unlikely, the Servicer will follow its normal
practices and procedures to realize upon the Receivable, including the
repossession and disposition of the Financed Vehicle securing the Receivable at
a public or private sale, or the taking of any other action permitted by
applicable law. (Section 13.03.)
COLLECTIONS
The Servicer will deposit all payments on Receivables received from
Obligors and all proceeds of Receivables collected during each Collection Period
into the Collection Account not later than the business day after receipt.
However, so long as Ford Credit is the servicer and provided that (i) there
exists no Event of Default and (ii) each other condition to making monthly
deposits as may be required by the Agreement is satisfied, the Servicer may
retain such amounts until the related Distribution Date. The Servicer or the
Seller, as the case may be, will remit the aggregate Purchase Amount of
Receivables to be purchased from the Trust to the Collection Account on the
Distribution Date. Pending deposit into the Collection Account, collections may
be employed by the Servicer at its own risk and for its own benefit and will not
be segregated from its own funds. (Section 14.02.)
For purposes of the Agreement, collections on a Receivable made during a
Collection Period which are not late fees, prepayment charges, or certain other
similar fees or charges shall be applied first to any outstanding Advances made
by the Servicer with respect to such Receivable and then to the scheduled
payment. To the extent that such collections on a Receivable during a Collection
Period exceed the outstanding Advances and the scheduled payment on such
Receivable, the collections shall be applied to prepay the Receivable in full.
If the collections are insufficient to prepay the Receivable in full, they
generally shall be treated as Payaheads until such later Collection Period as
such Payaheads may be transferred to the Collection Account and applied either
to the scheduled payment or to prepay the Receivable in full. (Sections 14.03,
14.04, and 14.06.)
ADVANCES
To the extent the collections on a Receivable for a Collection Period are
less than the scheduled payment, the amount of Payaheads made on such Receivable
not previously applied (the "Payahead Balance"), if any, with respect to such
Receivable shall be applied by the Servicer to the extent of the shortfall. To
the extent of any remaining shortfall, the Servicer will make an Advance of the
deficiency. The Servicer will be obligated to make an Advance in respect of a
Receivable only to the extent that the Servicer, in its sole discretion, expects
to recoup the Advance from the Obligor, the Purchase Amount, Liquidation
Proceeds or collections from other Receivables. (Section 14.04.) The Servicer
will deposit Advances in the Collection Account on the following Distribution
Date. The Servicer will be entitled to recoup its Advances from subsequent
payments by or on behalf of the Obligor, collections of Liquidation Proceeds and
payment of the Purchase Amount; or, upon the determination that reimbursement
from the preceding sources is unlikely, will be entitled to recoup its Advances
from collections from other Receivables. (Section 14.04.)
20
<PAGE> 22
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 advance the amount of
such interest. The Servicer will not be entitled to recoup any such advance.
(Section 14.04.)
SERVICING COMPENSATION
The Servicer is entitled under the Agreement to receive a servicing fee
(the "Servicing Fee") for each Collection Period equal to one-twelfth of 1.00%
(the "Servicing Fee Rate") multiplied by the Pool Balance as of the first day of
such Collection Period. The Servicer is also entitled to receive a supplemental
servicing fee (the "Supplemental Servicing Fee") for each Collection Period
equal to any late, prepayment, and other administrative fees and expenses
collected during the Collection Period, plus any interest earned during the
Collection Period on deposits made with respect to the Receivables. The Servicer
will be paid the Servicing Fee and the Supplemental Servicing Fee for each
Collection Period on the following Distribution Date.
The Servicing Fee and the Supplemental Servicing Fee (collectively, the
"Servicer Fee") are intended to compensate the Servicer for performing the
functions of a third party servicer of the Receivables as an agent for the
Certificateholders, including collecting and posting all payments, responding to
inquiries of Obligors on the Receivables, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to Obligors, paying costs
of collections, and policing the collateral. The Servicer Fee will also
compensate the Servicer for administering the Receivables, including making
Advances, accounting for collections, furnishing monthly and annual statements
to the Trustee with respect to distributions, and generating federal income tax
information for the Trust. The Servicer Fee also will reimburse the Servicer for
certain taxes, the Trustee's fees, accounting fees, outside auditor fees, data
processing costs, and other costs incurred in connection with administering the
Receivables. (Sections 13.13 and 20.07.)
DISTRIBUTIONS ON CERTIFICATES
On or about the tenth calendar day of each month, the Servicer will inform
the Trustee of the amount of aggregate collections on the Receivables, the
aggregate Advances to be made by the Servicer and the aggregate Purchase Amount
of Receivables to be purchased by the Seller or the Servicer, all with respect
to the preceding Collection Period. (Section 13.09.)
On each Distribution Date, the Servicer, or the Trustee, as the case may
be, shall transfer the portion of Payaheads constituting all or a portion of
scheduled payments for that Collection Period or, which together with that
month's payment by an Obligor constitute prepayments in full on the Receivables
to the Certificate Account. On the Distribution Date, the Trustee shall cause
collections made during the Collection Period which constitute Payaheads to be
transferred from the Certificate Account to the Servicer, or to the Payahead
Account if required. (Sections 14.01 and 14.06.)
The Servicer shall determine prior to each Distribution Date the Total
Available Amount, the Available Interest, the Available Principal, the Class A
Distributable Amount and the Class B Distributable Amount and, based on the
Total Available Amount and the other distributions to be made on such
Distribution Date, as described below, determine the amount to be distributed to
Certificateholders of each Class. (Sections 13.09 and 14.06(b).)
Determination of Available Amounts. The "Total Available Amount" for a
Distribution Date (being the funds available for distribution to
Certificateholders of each Class with respect to such Distribution Date in
accordance with the priorities described below) shall be the sum of the
Available Interest and the Available Principal.
The "Available Interest" for a Distribution Date shall be the sum of the
following amounts with respect to the preceding Collection Period: (i) that
portion of all collections on the Receivables allocable to interest (including
amounts withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account); (ii) all proceeds of the liquidation of defaulted
Receivables ("Liquidated Receivables") received in connection with such
liquidation, net of expenses incurred by the Servicer and any amounts required
by law to be remitted to the Obligor on such Liquidated Receivable ("Liquidation
Proceeds") to the extent attributable to interest due thereon in accordance with
the Servicer's customary servicing procedures;
21
<PAGE> 23
(iii) all Advances made by the Servicer, of interest due on Receivables; (iv)
all advances, if any, of interest made by the Servicer in respect of Receivables
which were prepaid in full; and (v) the Purchase Amount of each Receivable that
was purchased by the Seller or Servicer under an obligation which arose during
the related Collection Period, to the extent attributable to accrued interest
thereon.
The "Available Principal" for a Distribution Date shall be the sum of the
following amounts with respect to the preceding Collection Period: (i) that
portion of all collections on the Receivables allocable to principal (including
amounts withdrawn from the Payahead Account but excluding amounts deposited into
the Payahead Account); (ii) all Liquidation Proceeds attributable to principal
in accordance with the Servicer's customary servicing procedures; (iii) all
Advances made by the Servicer, of principal due on the Receivables; (iv) to the
extent attributable to principal, the Purchase Amount received with respect to
each Receivable purchased by the Seller or the Servicer under an obligation
which arose during such Collection Period; and (v) 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 or
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.
The Available Interest and the Available Principal on any Distribution Date
shall exclude the following:
(i) amounts received on Receivables to the extent that the Servicer
has previously made an unreimbursed Advance; and
(ii) Liquidation Proceeds with respect to a particular Receivable to
the extent of any unreimbursed Advances, and amounts representing
reimbursement for certain costs and expenses incurred by the Servicer as
provided in the Agreement.
Calculation of Distributable Amounts. The "Class A Distributable Amount"
with respect to a Distribution Date shall be an amount equal to the sum of:
(i) the "Class A Principal Distributable Amount," consisting of the
Class A Percentage of:
(a) the principal portion of all scheduled payments due during the
preceding Collection Period;
(b) the principal portion of all prepayments in full received
during the preceding Collection Period (and certain partial prepayments)
(except to the extent included in (a) above);
(c) the principal balance of each Receivable that was purchased by
the Seller or the Servicer under an obligation that arose during the
preceding Collection Period (except to the extent included in (a) or (b)
above); and
(d) the principal balance of each Receivable liquidated by the
Servicer during the preceding Collection Period; plus
(ii) the "Class A Interest Distributable Amount," consisting of thirty
(30) days' interest at the Pass-Through Rate on the Class A Certificate
Balance as of the last day of the preceding Collection Period.
The "Class A Certificate Balance" shall equal, initially, the Class A
Percentage of the Pool Balance as of the Cutoff Date and, thereafter shall equal
the initial Class A Certificate Balance, reduced by all amounts previously
distributed to Class A Certificateholders and allocable to principal.
The "Class B Distributable Amount" with respect to a Distribution Date
shall be an amount equal to the sum of:
(i) the "Class B Principal Distributable Amount," consisting of the
Class B Percentage of the amounts set forth under (i)(a) through (i)(d)
above with respect to the Class A Principal Distributable Amount; plus
(ii) the "Class B Interest Distributable Amount," consisting of thirty
(30) days' interest at the Pass-Through Rate on the Class B Certificate
Balance as of the last day of the preceding Collection Period plus the
excess, for each Receivable having an APR greater than the sum of the
Pass-Through Rate and the Servicing Fee Rate, of the interest portion of
the scheduled payment over the portion of such interest equal to interest
at the sum of the Pass-Through Rate and the Servicing Fee Rate.
22
<PAGE> 24
The "Class B Certificate Balance" shall equal, initially, the Class B
Percentage of the Pool Balance as of the Cutoff Date and, thereafter shall equal
the initial Class B Certificate Balance, reduced by all amounts previously
distributed to Class B Certificateholders (or deposited in the Subordination
Spread Account not including the Subordination Initial Deposit) and allocable to
principal and by the Class A Principal Carryover Shortfall and the Class B
Principal Carryover Shortfall.
Calculation of Amounts to be Distributed. Prior to each Distribution Date,
the Servicer will calculate the amount to be distributed to the
Certificateholders.
The holders of the Class A Certificates will receive on any Distribution
Date, to the extent of available funds, an amount equal to the sum of the Class
A Distributable Amount and any outstanding Class A Interest Carryover Shortfall
and Class A Principal Carryover Shortfall (as defined below). (Section
14.06(c).) On each Distribution Date on which the sum of the Class A Interest
Distributable Amount and any outstanding Class A Interest Carryover Shortfall
from the preceding Distribution Date (plus, to the extent not otherwise provided
for, interest on such Class A Interest Carryover Shortfall at the Pass-Through
Rate from such preceding Distribution Date to the current Distribution Date, to
the extent permitted by law) exceeds the Class A Percentage of the Available
Interest (after payment of the Servicing Fee including any unpaid Servicing Fees
with respect to prior Collection Periods) on such Distribution Date, the Class A
Certificateholders shall be entitled to receive such shortfall first, from the
Class B Percentage of the Available Interest; second, if such amounts are
insufficient, from amounts available in the Subordination Spread Account; and
third, if such amounts are insufficient, from the Class B Percentage of the
Available Principal; provided, however, that if the Servicer shall fail to make
an advance of interest in respect of a Receivable prepaid in full, the portion
of such shortfall attributable thereto shall be paid only from amounts available
in the Subordination Spread Account. (Section 14.06(d).) The "Class A Interest
Carryover Shortfall" as of the close of any Distribution Date means the excess
of the Class A Interest Distributable Amount for such Distribution Date plus any
outstanding Class A Interest Carryover Shortfall from the preceding Distribution
Date, plus interest on such outstanding Class A Interest Carryover Shortfall, to
the extent permitted by law, at the Pass-Through Rate from such preceding
Distribution Date through the current Distribution Date, over the amount of
interest that the holders of the Class A Certificates actually received on such
current Distribution Date.
On each Distribution Date on which the sum of the Class A Principal
Distributable Amount and any outstanding Class A Principal Carryover Shortfall
from the preceding Distribution Date exceeds the Class A Percentage of the
Available Principal on such Distribution Date, the Class A Certificateholders
shall be entitled to receive such shortfall first, from the Class B Percentage
of the Available Principal; second, if such amounts are insufficient, from
amounts available in the Subordination Spread Account and third, if such amounts
are insufficient, from the Class B Percentage of the Available Interest.
(Section 14.06(d).) The "Class A Principal Carryover Shortfall" as of the close
of any Distribution Date means the excess of the Class A Principal Distributable
Amount plus any outstanding Class A Principal Carryover Shortfall from the
preceding Distribution Date over the amount of principal that the holders of the
Class A Certificates actually received on such current Distribution Date.
The holders of the Class B Certificates are entitled to receive on any
Distribution Date an amount equal to the sum of the Class B Interest
Distributable Amount, the Class B Principal Distributable Amount (and any
shortfalls from prior Distribution Dates in payments to the Class B
Certificateholders), after giving effect to (A) any amounts required to be
distributed to the holders of Class A Certificates pursuant to the subordination
of the rights of the holders of Class B Certificates, and (B) amounts required
to pay the Servicing Fee (including any unpaid Servicing Fees with respect to
prior Collection Periods) payable to the Servicer on such Distribution Date.
(Section 14.06(c).)
SUBORDINATION OF THE CLASS B CERTIFICATES; SUBORDINATION SPREAD ACCOUNT
The rights of the Class B Certificateholders to receive distributions with
respect to the Receivables will be subordinated to the rights of the Class A
Certificateholders in the event of defaults and delinquencies on the Receivables
as provided in the Agreement. The protection afforded to the Class A
Certificateholders will be
23
<PAGE> 25
effected both by the preferential right of the Class A Certificateholders to
receive current distributions with respect to the Receivables and by the
establishment of the Subordination Spread Account. The Subordination Spread
Account will be created with an initial deposit by the Seller of the
Subordination Initial Deposit and will be augmented by deposit therein of
amounts otherwise distributable to Class B Certificateholders until the amount
in the Subordination Spread Account reaches an amount equal to the Specified
Subordination Spread Account Balance. Thereafter, amounts otherwise
distributable to the Class B Certificateholders will be deposited in the
Subordination Spread Account to the extent necessary to maintain the amount in
the Subordination Spread Account at the Specified Subordination Spread Account
Balance.
The Subordination Spread Account will not be a part of or otherwise
includible in the Trust and will be a segregated trust account held by Chemical
Bank as agent for the Class A Certificateholders (the "Class A Agent"). On each
Distribution Date, (i) if the amounts on deposit in the Subordination Spread
Account are less than the Specified Subordination Spread Account Balance, the
Trustee will, after payment of any amounts required to be distributed to holders
of the Class A Certificates and the payment of the Servicing Fee due with
respect to the related Collection Period (including any unpaid Servicing Fees
with respect to prior Collection Periods), withdraw from the Collection Account
and deposit in the Subordination Spread Account the amount remaining in the
Collection Account that would otherwise be distributed to the holders of the
Class B Certificates, or such lesser portion thereof as is sufficient to restore
the amount in the Subordination Spread Account to such Specified Subordination
Spread Account Balance and (ii) if the amount on deposit in the Subordination
Spread Account on such Distribution Date (after giving effect to all deposits or
withdrawals therefrom on such Distribution Date) is greater than the Specified
Subordination Spread Account Balance for such Distribution Date, the Class A
Agent will release and distribute any such excess to the holders of the Class B
Certificates. Upon any such distribution, the Class A Certificateholders will
have no rights in, or claims to, such amounts. (Section 14.07.)
Amounts held from time to time in the Subordination Spread Account will
continue to be held for the benefit of holders of the Class A Certificates and
holders of the Class B Certificates in order to effectuate the subordination of
the rights of the holders of the Class B Certificates to the rights of the
holders of the Class A Certificates. Funds in the Subordination Spread Account
shall be invested as provided in the Agreement in Eligible Investments. The
holders of the Class B Certificates shall be entitled to receive all investment
earnings on amounts in the Subordination Spread Account. Investment income on
amounts in the Subordination Spread Account will not be available for
distribution to the holders of the Class A Certificates or otherwise subject to
any claims or rights of the holders of the Class A Certificates. (Section
14.07(c).)
"Eligible Investments" for monies deposited in the Subordination Spread
Account are limited to investments acceptable to the rating agency or agencies
then rating the Class A Certificates as being consistent with the then-current
rating of the Class A Certificates. Eligible Investments are limited to
obligations or securities that mature not later than the Distribution Date next
succeeding the day of investment. (Section 14.01.)
The time necessary for the Subordination Spread Account to reach and
maintain the Specified Subordination Spread Account Balance at any time after
the date of issuance of the Certificates will be affected by the delinquency,
credit loss and repossession and prepayment experience of the Receivables and,
therefore, cannot be predicted accurately.
If on any Distribution Date the holders of the Class A Certificates do not
receive the sum of the Class A Distributable Amount, the Class A Interest
Carryover Shortfall and the Class A Principal Carryover Shortfall for such
Distribution Date (after giving effect to any amounts withdrawn from the
Subordination Spread Account and the Class B Distributable Amount and applied to
such deficiency, as described above), the holders of the Class B Certificates
will not receive any portion of the Total Available Amount.
The subordination of the Class B Certificates and the Subordination Spread
Account described above are intended to enhance the likelihood of receipt by
Class A Certificateholders of the full amount of principal and interest on the
Receivables due them and to decrease the likelihood that the Class A
Certificateholders will experience losses. However, in certain circumstances,
the Subordination Spread Account could be depleted and shortfalls could result.
24
<PAGE> 26
NET DEPOSITS
As an administrative convenience and for so long as certain conditions are
satisfied, the Servicer will be permitted to make the deposit of collections and
aggregate Advances and Purchase Amounts for or with respect to the Collection
Period, net of distributions to the Servicer as reimbursement of Advances or
payment of the Servicer Fee with respect to the Collection Period. Similarly,
the Servicer may cause to be made a single, net transfer from the Certificate
Account to the Payahead Account, or vice versa. The Servicer, however, will
account to the Trustee and to the Certificateholders as if all deposits,
distributions, and transfers were made individually. (Section 14.08.)
The following chart sets forth an example of the application of the
foregoing provisions to a monthly distribution:
<TABLE>
<S> <C>
November 1 --
November 30.......... Collection Period. The Servicer receives monthly payments,
prepayments, and other proceeds in respect of the
Receivables.
December 10............ The tenth calendar day of the month. On or about this date
the Servicer notifies the Trustee of, among other things,
the amounts to be distributed on the Distribution Date.
December 14............ Record Date. Distributions on the Distribution Date are
made to Certificateholders of record at the close of
business on this date (or, if Definitive Certificates are
issued, the Record Date will be November 30).
December 15............ Distribution Date. On or before this date, the Seller and
the Servicer (or the Trustee), make the required
remittances and transfers to the Collection Account and the
Certificate Account in immediately available funds, and the
Trustee distributes to holders of the Class A Certificates
and of the Class B Certificates amounts payable in respect
of the Certificates and pays the Servicer Fee and remits
amounts to the Subordination Spread Account (if required).
</TABLE>
STATEMENTS TO CLASS A CERTIFICATEHOLDERS
On each Distribution Date, the Trustee will include with each distribution
to each Class A Certificateholder (which shall be Cede as the nominee for DTC
unless Definitive Certificates are issued under the limited circumstances
described herein) as of the close of business on the last day of the preceding
Collection Period a statement, setting forth the following information with
respect to the preceding Collection Period:
(i) the amount of the distribution allocable to principal;
(ii) the amount of the distribution allocable to interest;
(iii) the Pool Balance as of the close of business on the last day of
the preceding Collection Period;
(iv) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period and the Certificateholder's Class
A Percentage of the Servicing Fee and the amount of any unpaid Servicing
Fees and the change in such amount from that of the prior Distribution
Date;
(v) the amount of the Class A Interest Carryover Shortfall and Class
A Principal Carryover Shortfall, if any, on such Distribution Date and the
change in such amounts from those of the prior Distribution Date;
(vi) the Class A Certificate Factor and Class B Certificate Balance
as of such Distribution Date;
(vii) the amount otherwise distributable to the Class B
Certificateholders that is distributed to Class A Certificateholders on
such Distribution Date;
(viii) the balance of the Subordination Spread Account on such
Distribution Date, after giving effect to distributions and deposits made
on such Distribution Date and the change in such balance from that of the
prior Distribution Date;
(ix) the aggregate amount in the Payahead Account and the change in
such amount from that of the prior Distribution Date; and
25
<PAGE> 27
(x) the amount of Advances on such Distribution Date.
Each amount set forth pursuant to subclauses (i), (ii), (iv) and (v) above
shall be expressed in the aggregate and as a dollar amount per $1,000 of
original principal balance of a Class A Certificate.
Within the prescribed period of time for tax reporting purposes after the
end of each calendar year during the term of the Agreement, the Trustee shall
mail to each person who at any time during such calendar year shall have been a
Class A Certificateholder and received any payment thereon, a statement
containing the sum of the amounts described in (i), (ii), (iv), and (v) above
for the purposes of such Class A Certificateholder's preparation of federal
income tax returns. (Section 14.09.) See "Certain Federal Income Tax
Consequences."
EVIDENCE AS TO COMPLIANCE
The Agreement will provide that a firm of independent public accountants
will furnish to the Trustee on or before April 30 of each year, beginning April
30, 1996, a statement as to compliance by the Servicer during the preceding
calendar year, or part thereof in the case of calendar year 1995, ended December
31 with certain standards relating to the servicing of the Receivables, the
Servicer's accounting and computer systems with respect thereto, and certain
other matters. (Section 13.11.)
The Agreement will also provide for delivery to the Trustee, on or before
April 30 of each year, commencing April 30, 1996, of a certificate signed by an
officer of the Servicer stating that the Servicer has fulfilled its obligations
under the Agreement throughout the preceding calendar year, or part thereof in
the case of calendar year 1995, ended December 31 or, if there has been a
default in the fulfillment of any such obligation, describing each such default.
(Section 13.10.)
Copies of such statements and certificates may be obtained by Class A
Certificateholders by a request in writing addressed to the Trustee.
CERTAIN MATTERS REGARDING THE SERVICER
The Agreement will provide that Ford Credit may not resign from its
obligations and duties as servicer thereunder, except upon determination that
Ford Credit's performance of such duties is no longer permissible under
applicable law. No such resignation will become effective until the Trustee or a
successor servicer has assumed Ford Credit's servicing obligations and duties
under the Agreement. (Section 8.01.)
The Agreement will further provide that neither the Servicer, nor any of
its directors, officers, employees, and agents will be under any liability to
the Trust or the Certificateholders for taking any action or for refraining from
taking any action pursuant to the Agreement, or for errors in judgment;
provided, however, that neither the Servicer nor any such person will be
protected against any liability that would otherwise be imposed by reason of
willful misfeasance, bad faith, or negligence (except for errors in judgment) in
the performance of duties, or by reason of reckless disregard of obligations and
duties thereunder. In addition, the Agreement will provide that the Servicer is
under no obligation to appear in, prosecute, or defend any legal action that is
not incidental to the Servicer's servicing responsibilities under the Agreement
and that, in its opinion, may cause it to incur any expense or liability. The
Servicer may, however, undertake any reasonable action that it may deem
necessary or desirable in respect of the Agreement, the rights and duties of the
parties thereto, and the interests of the Certificateholders thereunder. In such
event, the legal expenses and costs of such action and any liability resulting
therefrom will be expenses, costs, and liabilities of the Servicer, and the
Servicer will not be entitled to be reimbursed therefor. (Section 18.04.)
Any entity into which the Servicer or the Seller, as the case may be, may
be merged or consolidated, or any entity resulting from any merger, conversion,
or consolidation to which the Servicer or the Seller, as the case may be, is a
party, or any entity succeeding to the business of the Servicer or the Seller,
as the case may be, or any corporation, more than 50% of the voting stock of
which is owned, directly or indirectly, by Ford, which assumes the obligations
of the Servicer or the Seller, as the case may be, will be the successor of the
Servicer or the Seller, as the case may be, under the Agreement. (Sections 17.03
and 18.03.) For as long as Ford Credit is the Servicer, it may at any time
subcontract substantially all of its duties as servicer under the Agreement to
any corporation more than 50% of the voting stock of which is owned, directly or
indirectly, by
26
<PAGE> 28
Ford and the Servicer may at any time perform certain specific duties as
servicer through other subcontractors. (Section 18.05.)
EVENTS OF DEFAULT
"Events of Default" under the Agreement will consist of (i) any failure by
the Servicer to deliver to the Trustee for distribution to the
Certificateholders or deposit in the Subordination Spread Account any required
payment, which failure continues unremedied for three Business Days after
written notice from the Trustee is received by the Servicer or after discovery
by an officer of the Servicer; (ii) any failure by the Seller or the Servicer
duly to observe or perform in any material respect any other covenant or
agreement in the Agreement which failure materially and adversely affects the
rights of Certificateholders and which continues unremedied for 90 days after
the giving of written notice of such failure (1) to the Seller or the Servicer,
as applicable, by the Trustee or (2) to the Seller or the Servicer, as
applicable, and to the Trustee by holders of Class A Certificates evidencing not
less than 25% of the Class A Certificate Balance; and (iii) certain events of
insolvency, readjustment of debt, marshalling of assets and liabilities, or
similar proceedings with respect to the Servicer indicating its insolvency,
reorganization pursuant to bankruptcy proceedings, or inability to pay its
obligations. (Section 19.01.)
RIGHTS UPON EVENT OF DEFAULT
As long as an Event of Default under the Agreement remains unremedied, the
Trustee or holders of Class A Certificates evidencing not less than 51% of the
Class A Certificate Balance may terminate all the rights and obligations of the
Servicer under the Agreement, whereupon the Trustee will succeed to all the
responsibilities, duties, and liabilities of the Servicer under such Agreement
and will be entitled to similar compensation arrangements. If, however, a
bankruptcy trustee or similar official has been appointed for the Servicer, and
no Event of Default other than such appointment has occurred, such trustee or
official may have the power to prevent the Trustee or the Class A
Certificateholders from effecting a transfer of servicing. In the event that the
Trustee is unwilling or unable to so act, it may appoint, or petition a court of
competent jurisdiction for the appointment of, a successor with a net worth of
at least $100,000,000 and whose regular business includes the servicing of
automotive receivables. The Trustee, or any person appointed as successor
Servicer, shall be the successor in all respects to the predecessor Servicer
under the Agreement and all references therein to the Servicer shall apply to
such successor Servicer. The Trustee may make such arrangements for compensation
to be paid, which in no event may be greater than the servicing compensation to
Ford Credit, as Servicer, under the Agreement. (Sections 19.01 and 19.02.)
WAIVER OF PAST DEFAULTS
The holders of Class A Certificates evidencing not less than 51% of the
Class A Certificate Balance may waive any default by the Servicer in the
performance of its obligations under the Agreement and its consequences, except
a default in making any required deposits to or payments from the Collection
Account or the Certificate Account in accordance with the Agreement. No such
waiver shall impair the Certificateholders' rights with respect to subsequent
defaults. (Section 19.05.)
AMENDMENT
The Agreement may be amended by the Seller, the Servicer, and the Trustee,
without the consent of the Certificateholders, (i) to cure any ambiguity,
correct or supplement any provision therein which may be inconsistent with any
other provision therein, or make any other provisions with respect to matters or
questions arising under such Agreement which are not inconsistent with the
provisions of the Agreement; provided that such action will not, in the opinion
of counsel satisfactory to the Trustee, materially and adversely affect the
interest of any Certificateholder, and (ii) to provide for the transfer of the
Class B Certificates; provided that certain conditions specified in the
Agreement are satisfied prior to such transfer, including written confirmation
from any rating agency rating the Class A Certificates that such transfer will
not result in the qualification, downgrading or withdrawal of the then current
rating assigned to the Class A Certificates by such rating agency, and that such
amendment will not change the timing of, or the amount of, any
27
<PAGE> 29
distributions that the holders of the Class A Certificates are entitled to
receive under the Agreement. The Agreement may also be amended by the Seller,
the Servicer, and the Trustee with the consent of the holders of Class A
Certificates and Class B Certificates, each voting as a Class, evidencing not
less than 51% of the Class A Certificate Balance and Class B Certificate
Balance, respectively, for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the Agreement or of
modifying in any manner the rights of 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 on any Certificate or change the
Pass-Through Rate or the Specified Subordinated Spread Account Balance or (ii)
reduce the aforesaid percentage of the Class A Certificate Balance or Class B
Certificate Balance, which is required to consent to any such amendment, without
the consent of the holders of all Certificates of such Class. (Section 22.01.)
LIST OF CERTIFICATEHOLDERS
Upon written request of the Servicer, the Trustee will provide to the
Servicer within 15 days after receipt of such request a list of the names and
addresses of all Certificateholders of record as of the most recent Record Date.
Upon written request by three or more Certificateholders or by one or more
holders of Class A Certificates evidencing not less than 25% of the Class A
Certificate Balance, and upon compliance by such Certificateholders with certain
other provisions of the Agreement, the Trustee will afford such
Certificateholders access during business hours to the current list of
Certificateholders for purposes of communicating with other Certificateholders
with respect to their rights under the Agreement. (Section 16.06.)
The Agreement will not provide for the holding of any annual or other
meetings of Certificateholders.
TERMINATION
The respective obligations of the Seller, the Servicer and the Trustee
pursuant to the Agreement will terminate upon (i) the maturity or other
liquidation of the last Receivable and the disposition of any amounts received
upon liquidation of any remaining Receivables and (ii) the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement. In order to avoid excessive administrative expense, the Servicer, or
its successor, is permitted at its option to purchase from the Trust, as of the
last day of any month as of which the then outstanding Pool Balance is less than
10% of the original Pool Balance, all remaining Receivables at a price equal to
the aggregate of the Purchase Amounts thereof as of such last day. Exercise of
such right will effect early retirement of the Certificates. The Trustee will
give written notice of termination to each Certificateholder of record. The
final distribution to any Certificateholder will be made only upon surrender and
cancellation of such holder's Certificate at any office or agency of the Trustee
specified in the notice of termination. Any funds remaining in the Trust, after
the Trustee has taken certain measures to locate a Certificateholder and such
measures have failed, will be distributed to the Edison Institute, Dearborn,
Michigan. (Sections 21.01 and 21.02.)
DUTIES OF THE TRUSTEE
The Trustee makes no representations as to the validity or sufficiency of
the Agreement, the Certificates (other than the authentication of the
Certificates), or any Receivables or related documents, and is not accountable
for the use or application by the Servicer of any funds paid to the Seller or
the Servicer in respect of the Certificates or the Receivables, or the
investment of any monies by the Servicer before such monies are deposited into
the Certificate Account. The Trustee has not independently verified the
Receivables. If no Event of Default has occurred, the Trustee is required to
perform only those duties specifically required of it under the Agreement.
Generally, those duties are limited to the receipt of the various certificates,
reports, or other instruments required to be furnished to the Trustee under the
Agreement, in which case it is only required to examine them to determine
whether they conform to the requirements of the Agreement. The Trustee shall not
be charged with knowledge of a failure by the Servicer to perform its duties
under the Agreement which failure constitutes an Event of Default unless the
Trustee obtains actual knowledge of such failure as specified in the Agreement.
(Sections 20.01 and 20.05.)
28
<PAGE> 30
The Trustee is under no obligation to exercise any of the rights or powers
vested in it by the Agreement or to make any investigation of matters arising
thereunder or to institute, conduct, or defend any litigation thereunder or in
relation thereto at the request, order, or direction of any of the
Certificateholders, unless such Certificateholders have offered to the Trustee
reasonable security or indemnity against the costs, expenses, and liabilities
that may be incurred therein or thereby. (Section 20.04.) No Class A
Certificateholder will have any right under the Agreement to institute any
proceeding with respect to the Agreement, unless such holder previously has
given to the Trustee written notice of default and unless (i) the default arises
from the Seller's or the Servicer's failure to remit payments when due under the
Agreement or (ii) the holders of Class A Certificates evidencing not less than
25% of the Class A Certificate Balance have made written request upon the
Trustee to institute such proceeding in its own name as Trustee thereunder and
have offered to the Trustee reasonable indemnity and the Trustee for 30 days has
neglected or refused to institute any such proceeding. (Section 22.03.)
THE TRUSTEE
Chemical Bank is the Trustee under the Agreement. The Trustee, in its
individual capacity or otherwise, may hold Certificates in its own name or as
pledgee. (Section 20.06.) For the purpose of meeting the legal requirements of
certain jurisdictions, the Servicer and the Trustee acting jointly (or in some
instances, the Trustee acting alone) shall have the power to appoint co-trustees
or separate trustees of all or any part of the Trust. In the event of such
appointment, all rights, powers, duties, and obligations conferred or imposed
upon the Trustee by the Agreement shall be conferred or imposed upon the Trustee
and such separate trustee or co-trustee jointly, or, in any jurisdiction in
which the Trustee shall be incompetent or unqualified to perform certain acts,
singly upon such separate trustee or co-trustee who shall exercise and perform
such rights, powers, duties, and obligations solely at the direction of the
Trustee. (Section 20.13.)
The Trustee may resign at any time, in which event the Servicer will be
obligated to appoint a successor trustee. The Servicer may also remove the
Trustee if the Trustee ceases to be eligible to continue as such under the
Agreement, becomes legally unable to act, or becomes insolvent. In such
circumstances, the Servicer will be obligated to appoint a successor trustee.
Any resignation or removal of the Trustee and appointment of a successor trustee
does not become effective until acceptance of the appointment by the successor
trustee. (Section 20.10.)
The Agreement will provide that the Servicer will pay the Trustee's fees.
(Section 20.07.) The Agreement will further provide that the Trustee will be
entitled to indemnification by the Seller and the Servicer for, and will be held
harmless against, any loss, liability, fee, disbursement, or expense incurred by
the Trustee not resulting from the Trustee's own willful misfeasance, bad faith,
or negligence (other than by reason of a breach of any of its representations or
warranties set forth in the Agreement). The Agreement will further provide that
the Seller and the Servicer will indemnify the Trustee for certain taxes that
may be asserted in connection with the transaction.
RATING OF THE CLASS A CERTIFICATES
It is a condition to issuance of the Class A Certificates that they be
rated in the highest rating category by at least one nationally recognized
rating agency. The rating is not a recommendation to purchase, hold or sell
Class A Certificates, inasmuch as such rating does not comment as to market
price or suitability for a particular investor. There is no assurance that the
rating will remain for any given period of time or that the rating will not be
lowered or withdrawn entirely by such rating agency if in its judgment
circumstances in the future so warrant.
29
<PAGE> 31
CERTAIN LEGAL ASPECTS OF THE RECEIVABLES
SECURITY INTERESTS IN VEHICLES
In all states in which the Receivables have been originated, retail
installment sale contracts such as the Receivables evidence the credit sale of
automobiles and light trucks by dealers to obligors; the contracts also
constitute personal property security agreements and include grants of security
interests in the vehicles under the Uniform Commercial Code (the "UCC").
Perfection of security interests in the vehicles is generally governed by the
motor vehicle registration laws of the state in which the vehicle is located. In
most states in which the Receivables have been originated, a security interest
in a vehicle is perfected by notation of the secured party's lien on the
vehicle's certificate of title. Each Receivable prohibits the sale or transfer
of the Financed Vehicle without Ford Credit's consent.
Pursuant to the Purchase Agreement, Ford Credit will assign its security
interests in the Financed Vehicles securing the Receivables to the Seller and,
pursuant to the Agreement, the Seller will assign its security interests in the
Financed Vehicles securing the Receivables to the Trustee. However, because of
the administrative burden and expense, the Servicer, the Seller and the Trustee
will not amend any certificate of title to identify the Trust as the new secured
party on the certificates of title relating to the Financed Vehicles. Also, the
Servicer will continue to hold any certificates of title relating to the
Financed Vehicles in its possession as custodian for the Trustee pursuant to the
Agreement. See "The Certificates -- Sale and Assignment of Receivables."
In most states, assignments such as those under the Purchase Agreement and
the Agreement together with a perfected security interest in the chattel paper
are an effective conveyance of a security interest in the vehicles subject to
the chattel paper without amendment of any lien noted on a vehicle's certificate
of title, and the assignee succeeds thereby to the assignor's rights as secured
party. In the absence of fraud or forgery by the vehicle owner or the Servicer
or administrative error by state or local agencies, the notation of Ford
Credit's lien on the certificates of title will be sufficient to protect the
Trust against the rights of subsequent purchasers of a Financed Vehicle or
subsequent lenders who take a security interest in a Financed Vehicle. If there
are any Financed Vehicles as to which Ford Credit failed to obtain a perfected
security interest, its security interest would be subordinate to, among others,
subsequent purchasers of the Financed Vehicles and holders of perfected security
interests. Such a failure, however, would constitute a breach of Ford Credit's
warranties under the Purchase Agreement and of the Seller's warranties under the
Agreement and would create an obligation of Ford Credit under the Purchase
Agreement and of the Seller under the Agreement to purchase the related
Receivable unless the breach is cured. See "The Certificates -- Sale and
Assignment of Receivables." By not identifying the Trust as the secured party on
the certificate of title, the security interest of the Trust in the Financed
Vehicle could be defeated through fraud or negligence. The Seller will assign
its rights under the Purchase Agreement to the Trust.
Under the laws of most states, the perfected security interest in a vehicle
would continue for four months after a vehicle is moved to a state other than
the state in which it is initially registered and thereafter until the vehicle
owner re-registers the vehicle in the new state. A majority of states generally
require surrender of a certificate of title to re-register a vehicle;
accordingly, a secured party must surrender possession if it holds the
certificate of title to the vehicle, or, in the case of vehicles registered in
states providing for the notation of a lien on the certificate of title but not
possession by the secured party, the secured party would receive notice of
surrender if the security interest is noted on the certificate of title. Thus,
the secured party would have the opportunity to re-perfect its security interest
in the vehicle in the state of relocation. In states that do not require a
certificate of title for registration of a motor vehicle, re-registration could
defeat perfection. In the ordinary course of servicing receivables, Ford Credit
takes steps to effect re-perfection upon receipt of notice of re-registration or
information from the obligor as to relocation. Similarly, when an obligor sells
a vehicle, Ford Credit must surrender possession of the certificate of title or
will receive notice as a result of its lien noted thereon and accordingly will
have an opportunity to require satisfaction of the related Receivable before
release of the lien. Under the Agreement, the Servicer is obligated to take
appropriate steps, at the Servicer's expense, to maintain perfection of security
interests in the Financed Vehicles.
30
<PAGE> 32
Under the laws of most states, liens for repairs performed on a motor
vehicle and liens for certain unpaid taxes take priority over even a perfected
security interest in a Financed Vehicle. The Internal Revenue Code of 1986 also
grants priority to certain federal tax liens over the lien of a secured party.
The laws of certain states and federal law permit the confiscation of motor
vehicles under certain circumstances if used in unlawful activities, which may
result in the loss of a secured party's perfected security interest in the
confiscated motor vehicle. Ford Credit will represent to the Seller and the
Seller will represent to the Trust that each security interest in a Financed
Vehicle is or will be prior to all other present liens (other than tax liens and
liens that arise by operation of law) upon and security interests in such
Financed Vehicle. However, liens for repairs or taxes, or the confiscation of a
Financed Vehicle, could arise or occur at any time during the term of a
Receivable. No notice will be given to the Trustee or Certificateholders in the
event such a lien arises or confiscation occurs.
REPOSSESSION
In the event of default by vehicle purchasers, the holder of the retail
installment sale contract has all the remedies of a secured party under the UCC,
except where specifically limited by other state laws. The UCC remedies of a
secured party include the right to repossession by self-help means, unless such
means would constitute a breach of the peace. Unless a vehicle is voluntarily
surrendered, self-help repossession is the method employed by Ford Credit in the
majority of instances in which a default occurs and is accomplished simply by
retaking possession of the financed vehicle. In cases where the obligor objects
or raises a defense to repossession, or if otherwise required by applicable
state law, a court order must be obtained from the appropriate state court, and
the vehicle must then be repossessed in accordance with that order.
NOTICE OF SALE; REDEMPTION RIGHTS
In the event of default by the obligor, some jurisdictions require that the
obligor be notified of the default and be given a time period within which the
obligor may cure the default prior to repossession. Generally, this right of
reinstatement may be exercised on a limited number of occasions in any one-year
period.
The UCC and other state laws require the secured party to provide the
obligor with reasonable notice of the date, time, and place of any public sale
and/or the date after which any private sale of the collateral may be held. The
obligor has the right to redeem the collateral prior to actual sale by paying
the secured party the unpaid principal balance of the obligation plus reasonable
expenses for repossessing, holding, and preparing the collateral for disposition
and arranging for this sale, plus, in some jurisdictions, reasonable attorneys'
fees, or, in some states, by payment of delinquent installments or the unpaid
balance. Repossessed vehicles are generally resold by Ford Credit through
automobile auctions which are attended principally by dealers.
DEFICIENCY JUDGMENTS AND EXCESS PROCEEDS
The proceeds of resale of the repossessed vehicles generally will be
applied to the expenses of resale and repossession and then to the satisfaction
of the indebtedness of the obligor on the receivable. While some states impose
prohibitions or limitations on deficiency judgments if the net proceeds from
resale do not cover the full amount of the indebtedness, a deficiency judgment
can be sought in those states that do not prohibit or limit such judgments.
However, the deficiency judgment would be a personal judgment against the
obligor for the shortfall, and a defaulting obligor can be expected to have very
little capital or sources of income available following repossession. Therefore,
in many cases, it may not be useful to seek a deficiency judgment or, if one is
obtained, it may be settled at a significant discount.
Occasionally, after resale of a vehicle and payment of all expenses and
indebtedness, there is a surplus of funds. In that case, the UCC requires the
lender to remit the surplus to any holder of any lien with respect to the
vehicle or if no such lienholder exists or there are remaining funds, the UCC
requires the lender to remit the surplus to the former obligor.
31
<PAGE> 33
CONSUMER PROTECTION LAWS
Numerous federal and state consumer protection laws and related regulations
impose substantial requirements upon lenders and servicers involved in consumer
finance. These laws include the Truth-in-Lending Act, the Equal Credit
Opportunity Act, the Federal Trade Commission Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices Act, the Magnuson-Moss Warranty Act, the
Federal Reserve Board's Regulations B and Z, state adaptations of the National
Consumer Act and of the Uniform Consumer Credit Code, and state motor vehicle
retail installment sales acts, retail installment sales acts, and other similar
laws. Also, state laws impose finance charge ceilings and other restrictions on
consumer transactions and require contract disclosures in addition to those
required under federal law. These requirements impose specific statutory
liabilities upon creditors who fail to comply with their provisions. In some
cases, this liability could affect an assignee's ability to enforce consumer
finance contracts such as the Receivables.
The so-called "Holder-in-Due-Course" Rule of the Federal Trade Commission
(the "FTC Rule"), the provisions of which are generally duplicated by the
Uniform Consumer Credit Code, other state statutes, or the common law in certain
states, has the effect of subjecting a seller (and certain related lenders and
their assignees) in a consumer credit transaction and any assignee of the seller
to all claims and defenses which the obligor in the transaction could assert
against the seller of the goods. Liability under the FTC Rule is limited to the
amounts paid by the obligor under the contract, and the holder of the contract
may also be unable to collect any balance remaining due thereunder from the
obligor.
Most of the Receivables will be subject to the requirements of the FTC
Rule. Accordingly, the Trustee, as holder of the Receivables, will be subject to
any claims or defenses that the purchaser of the Financed Vehicle may assert
against the seller of the Financed Vehicle. Such claims are limited to a maximum
liability equal to the amounts paid by the obligor on the Receivable. Under most
state motor vehicle dealer licensing laws, sellers of motor vehicles are
required to be licensed to sell motor vehicles at retail sale. Furthermore,
Federal Odometer Regulations promulgated under the Motor Vehicle Information and
Cost Savings Act require that all sellers of new and used vehicles furnish a
written statement signed by the seller certifying the accuracy of the odometer
reading. If a seller is not properly licensed or if an Odometer Disclosure
Statement was not provided to the purchaser of the related financed vehicle, the
obligor may be able to assert a defense against the seller of the vehicle. If an
obligor were successful in asserting any such claim or defense, such claim or
defense would constitute a breach of Ford Credit's and the Seller's
representations and warranties under the Purchase Agreement and the Agreement,
respectively, and would create an obligation of Ford Credit and the Seller to
repurchase the Receivable unless the breach is cured. See "The
Certificates -- Sale and Assignment of the Receivables."
Courts have imposed general equitable principles on secured parties
pursuing repossession of collateral or litigation involving deficiency balances.
These equitable principles may have the effect of relieving an obligor from some
or all of the legal consequences of a default.
In several cases, obligors have asserted that the self-help remedies of
secured parties under the UCC and related laws violate the due process
protections provided under the 14th Amendment to the Constitution of the United
States. Courts have generally upheld the notice provisions of the UCC and
related laws as reasonable or have found that the repossession and resale by the
creditor do not involve sufficient state action to afford constitutional
protection to consumers.
Ford Credit and the Seller will warrant under the Purchase Agreement and
the Agreement, respectively, that each Receivable complies with all requirements
of law in all material respects. Accordingly, if an obligor has a claim against
the Trust for violation of any law and such claim materially and adversely
affects the Trust's interest in a Receivable, such violation would constitute a
breach of warranty under the Purchase Agreement and the Agreement and would
create an obligation of Ford Credit and the Seller to repurchase the Receivable
unless the breach is cured. See "The Certificates -- Sale and Assignment of the
Receivables."
32
<PAGE> 34
OTHER LIMITATIONS
In addition to the laws limiting or prohibiting deficiency judgments,
numerous other statutory provisions, including federal bankruptcy laws and
related state laws, may interfere with or affect the ability of a lender to
realize upon collateral or enforce a deficiency judgment. For example, in a
Chapter 13 proceeding under the federal bankruptcy law, a court may prevent a
lender from repossessing a motor vehicle, and, as part of the rehabilitation
plan, reduce the amount of the secured indebtedness to the market value of the
motor vehicle at the time of bankruptcy (as determined by the court), leaving
the party providing financing as a general unsecured creditor for the remainder
of the indebtedness. A bankruptcy court may also reduce the monthly payments due
under a contract or change the rate of interest and time of repayment of the
indebtedness.
TRANSFERS OF VEHICLES
The Receivables prohibit the sale or transfer of the vehicle securing a
Receivable without Ford Credit's consent and, except those originated in Ohio
and Wisconsin, permit Ford Credit to accelerate the maturity of the Receivable
upon a sale or transfer without its consent. The Servicer will not consent to a
sale or transfer and will require prepayment of the Receivable. The Servicer may
enter into a transfer of equity agreement with the secondary purchaser for the
purpose of effecting the transfer of the Financed Vehicle.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a general discussion of certain federal income tax
consequences of the purchase, ownership, and disposition of Class A
Certificates. This summary is based upon laws, regulations, rulings, and
decisions currently in effect, all of which are subject to change. The
discussion does not deal with all federal tax consequences applicable to all
categories of investors, some of which may be subject to special rules. In
addition, this summary is generally limited to investors who will hold the Class
A Certificates as "capital assets" (generally, property held for investment)
within the meaning of Section 1221 of the Internal Revenue Code of 1986, as
amended (the "Code"). Investors should consult their own tax advisors to
determine the federal, state, local, and other tax consequences of the purchase,
ownership, and disposition of the Class A Certificates. Prospective investors
should note that no rulings have been or will be sought from the Internal
Revenue Service (the "Service") with respect to any of the federal income tax
consequences discussed below, and no assurance can be given that the Service
will not take contrary positions.
TAX STATUS OF THE TRUST
In the opinion of Skadden, Arps, Slate, Meagher & Flom, special tax counsel
to the Seller, the Trust will be classified as a grantor trust and not as an
association taxable as a corporation for federal income tax purposes. Subject to
the discussion of stripped coupons below under "Characterization of Fees," each
Class A Certificate Owner will be treated as the owner of a pro rata undivided
interest in the Class A Percentage of the ordinary income and corpus portions of
the Trust.
Income on the Receivables. If the Receivables are not characterized as
"stripped bonds" or otherwise recharacterized, each Class A Certificate Owner
will be required to report on its federal income tax return its pro rata share
of the Class A Percentage of the entire income of the Trust for the period
during which it owns a Class A Certificate, including interest or finance
charges earned on the Receivables, and any gain or loss upon collection or
disposition of the Receivables. Because the Receivables, when originally issued
by the Obligors to the Dealers from whom Ford Credit acquired the Receivables,
are believed to have had adequate stated interest, the original issue discount
("OID") rules and imputed interest rules should not apply to the Receivables
except to the extent that a Receivable is treated as a "stripped bond," as
discussed below. The portion of each monthly payment to a Class A Certificate
Owner that is allocable to principal on the Receivables will represent a
recovery of capital, which will reduce the tax basis of such Class A Certificate
Owner's undivided interest in the Receivables. In computing its federal income
tax liability, a Class A Certificate Owner will be entitled to deduct,
consistent with its method of accounting, its pro rata share of reasonable
servicing fees, and other fees paid or incurred by the Trust as provided in
Section 162 or 212 of the Code. If a Class A Certificate Owner is an individual,
estate or trust the deduction for his pro rata share of
33
<PAGE> 35
such fees will be allowed only to the extent that all of his miscellaneous
itemized deductions, including his share of such fees, exceed 2% of his adjusted
gross income. In addition, in the case of Certificate Owners who are
individuals, otherwise allowable itemized deductions will be reduced, but not by
more than 80%, by an amount equal to 3% of the Certificate Owner's adjusted
gross income in excess of a statutorily defined threshold ($114,700 in the case
of a married couple filing jointly for taxable years beginning in 1995, which
amount will be adjusted for inflation). Because the Servicer will not report to
Class A Certificate Owners the amount of income or deductions attributable to
the Supplemental Servicing Fee, such a Class A Certificate Owner may effectively
underreport his net taxable income. To the extent that the Receivables are
characterized as "stripped bonds," as discussed below, the portion of the
interest treated as retained by the Class B Certificateholder, the Seller, or
the Servicer would not be included in the income of Class A Certificateholders.
See "Characterization of Fees" below.
To the extent that the purchase price of a Class A Certificate allocated to
a Class A Certificate Owner's undivided interest in a Receivable is greater than
or less than the portion of the principal balance of the Receivable allocable to
the Class A Certificate, such interest in the Receivable will have been acquired
at a premium or discount, as the case may be. In determining whether a Class A
Certificate Owner has purchased its interest in the Receivables (or any
Receivable) at a discount, a portion of the purchase price for a Class A
Certificate may be allocated to accrued interest on each Receivable and to
amounts held in the Collection Account pending distribution to
Certificateholders at the time of purchase as though such accrued interest and
collections on the Receivables were separate assets purchased by the Class A
Certificate Owner, thus reducing the portion of the purchase price allocable to
a Class A Certificate Owner's undivided interest in each Receivable (the
"Purchase Price") and increasing the potential discount on the Receivables.
Characterization of Fees. The Servicer intends to report income to
Certificate Owners on the assumption that the Certificate Owners own a 93.5%
interest in all of the principal and interest derived from the Receivables.
However, to the extent that the amounts paid to the Servicer, the Seller, or the
Class B Certificateholder exceed reasonable fees for services rendered, by
reason of the extent to which either the weighted average APR of the
Receivables, or the individual stated APRs of some of the Receivables, exceed
the Pass-Through Rate, such amounts will be treated as an interest in the
Receivables retained by the Seller, the Servicer, or the Class B
Certificateholder. There are no authoritative pronouncements for federal income
tax purposes as to either the maximum amount of compensation that may be
considered reasonable for servicing Receivables, providing the Subordination
Spread Account, or performing other services in the context of transactions
involving receivables such as the Receivables, although the Service has issued
such guidelines in the context of mortgage loans. To the extent that amounts
paid to the Servicer, the Seller, or the Class B Certificateholder exceed
reasonable compensation for services provided, they would be viewed as having
retained for federal income tax purposes an ownership interest in a portion of
each interest payment with respect to the certain Receivables (each such
payment, a "stripped coupon"). As a result, such Receivables would be treated as
"stripped bonds" within the meaning of the Code.
To the extent that the Receivables are characterized as "stripped bonds,"
the income of the Trust allocable to Class A Certificate Owners will not include
the portion of the interest on the Receivables treated as having been retained
by the Seller or the Class B Certificateholder, as the case may be, and the
deductions allocable to Class A Certificate Owners will be limited to their
share of reasonable servicing and other fees paid or incurred by the Trust. In
addition, a Class A Certificate Owner will not be subject to the market discount
rules discussed below with respect to the stripped Receivables, but instead will
be subject to the OID rules contained in the Code. However, if the price at
which a Certificate Owner were deemed to have acquired a stripped Receivable is
less than the remaining principal balance of such Receivable by an amount which
is less than a statutorily defined de minimis amount, such Receivable would not
be treated as having OID. In general, the amount of OID on a Receivable treated
as a "stripped bond" will be de minimis if it is less than 1/4 of one percent
for each remaining full year of weighted average life of the Receivable
(probably based on a prepayment assumption) remaining after the purchase date
until the final maturity of the Receivable. If the amount of OID is de minimis
under this rule, the actual amount of discount on such a Receivable would be
includible in income proportionately as principal payments are received on the
Receivable in the proportion that the amount of the principal payment made bears
to the total principal amount of the Receivable.
34
<PAGE> 36
If the OID on a Receivable, which may differ for each Receivable, based on
the Class A Certificateholder's Purchase Price, is not treated as being de
minimis, a Certificate Owner will be required to include any OID on a Receivable
in income as it accrues, regardless of when cash payments are received, using a
method reflecting a constant yield to maturity on the Receivable. It is possible
that the Service could require use of a prepayment assumption in computing the
yield of a stripped Receivable. If a stripped Receivable is deemed to be
acquired by a Class A Certificateholder at a greater than de minimis discount,
such treatment would accelerate the accrual of income by a Class A Certificate
Owner. Prospective investors are advised to consult their own tax advisors
regarding the extent to which a portion of the amounts paid to the Servicer or
the Class B Certificateholder could be characterized other than as compensation
for services rendered for federal income tax purposes and the calculation of OID
on the Receivables.
It is also possible that any fees deemed to be excessive could be
recharacterized as deferred purchase price payable to the Seller by Class A
Certificate Owners in exchange for the Receivables. The likely effect of such
recharacterization would be to accelerate realization of taxable income by a
Class A Certificate Owner.
Rule of 78s Receivables. The annual statement regularly furnished to
Certificateholders for federal income tax purposes will include information
based on the actuarial method of accounting for interest and principal on the
Receivables, and the amount of the fees paid to the Servicer and others. Class A
Certificate Owners should generally be permitted to account for interest on the
Receivables using the actuarial method (the method used to compute the Class A
Certificate Factor and the Pass-Through Rate). However, some of the Receivables
provide that, upon a prepayment in full, the amount payable by the Obligor will
be determined under the Rule of 78s (the "Rule of 78s Receivables"). Prospective
investors should consult their tax advisors as to whether they may be required
or permitted to use the Rule of 78s method to account for interest on the Rule
of 78s Receivables. A Class A Certificateholder will be furnished information
for federal income tax purposes enabling him to report interest on the
Receivables under the Rule of 78s method of accounting only upon written request
to the Trustee, and payment of the actual costs of producing the same.
If a Rule of 78s Receivable is prepaid, any amount received by the Trust
upon prepayment in excess of the account balance using the actuarial method
would constitute income to a Class A Certificate Owner who had reported income
with respect to such Rule of 78s Receivable on the actuarial method, and an
amount equal to such excess will be paid to the Servicer as part of its
Supplemental Servicing Fee and be deductible to the extent described above.
MARKET DISCOUNT
If the Receivables are not treated as "stripped bonds," a Class A
Certificate Owner's interest in each Receivable the Purchase Price of which is
less than the original issue price (plus original issue discount, if any,
previously includible in the income of any holder) of the Receivable will be
treated as having been purchased at a "market discount". The market discount on
a Receivable will be considered to be zero if it is less than a statutorily
defined de minimis amount.
In general, under the market discount provisions of the Code, principal
payments received by the Trust, and all or a portion of the gain recognized upon
a sale or other disposition of a Receivable or upon the sale or other
disposition of a Class A Certificate by a Class A Certificate Owner, will be
taxable as ordinary income to the extent of accrued market discount, and a
portion of the interest deductions attributable to indebtedness treated as
incurred or continued to purchase or carry a Receivable or a Class A Certificate
must be deferred. The ordinary income treatment on dispositions and deferral of
interest deductions described in the preceding sentence will not apply if a
Class A Certificate Owner elects to include market discount in income currently
as it accrues for each taxable year during which it holds the Class A
Certificate. Market discount will accrue in the manner to be provided in
Treasury regulations, but the Conference Report accompanying the Tax Reform Act
of 1986 states that, until such regulations are issued, it is intended that
taxpayers may elect to accrue market discount either (i) under a constant yield
(economic accrual) method or (ii) at the election of the taxpayer, in the
proportion that the stated interest paid on the obligation for the current
period bears to total remaining interest on the obligation. As described above,
if the Class A Certificates are characterized as "stripped bonds", any discount
would be treated as original issue discount, the amount and timing of which
35
<PAGE> 37
should be comparable to the amount and timing of market discount if an election
is made to include market discount in income currently on the constant yield
method. See "Characterization of Fees" above. Due to the complexity of the
market discount rules, the Class A Certificate Owners are urged to consult their
own tax advisors as to whether market discount will result from the acquisition
of Class A Certificates, and as to the tax treatment of any such discount.
PREMIUM
In the event that a Receivable is treated as purchased at a premium (i.e.,
the Purchase Price exceeds the sum of principal payments to be made thereon),
such premium will be amortizable by a Class A Certificate Owner as an offset to
interest income (with a corresponding reduction in the Class A
Certificateholder's basis) under a constant yield method over the term of the
Receivable if an election under Section 171 of the Code is made (or previously
in effect in accordance with the provisions of the Tax Reform Act of 1986) with
respect to the Class A Certificates. Any such election will also apply to all
debt instruments held by the taxpayer at the beginning of the first taxable year
to which the election applies and all debt instruments acquired thereafter.
SALE OF A CLASS A CERTIFICATE OR A RECEIVABLE
If a Class A Certificate is sold, gain or loss will be recognized equal to
the difference between the amount realized on the sale and the Class A
Certificate Owner's adjusted basis in the Receivables and any other assets held
by the Trust. A Class A Certificate Owner's adjusted basis will equal the Class
A Certificate Owner's cost for the Class A Certificate, increased by any
discount previously included in income, and decreased by any deduction
previously allowed for accrued premium and by the amount of principal payments
previously received on the Receivables. Any gain or loss will be capital gain or
loss if the Class A Certificate was held as a capital asset, except that gain
will be treated in whole or in part as ordinary interest income to the extent of
the selling Class A Certificate Owner's interest in accrued market discount not
previously taken into income on Receivables having a fixed maturity date of more
than one year from the date of origination.
Under proposed Treasury regulations, the grant of an extension of the
maturity of a Receivable to the Obligor thereon could be treated as an exchange
if it changes the yield on the Receivable by more than a de minimis amount,
potentially resulting in taxable gain or loss to Certificate Owners. Reports to
Certificate Owners will not include information sufficient to calculate any such
gain or loss and accordingly, in the event that an extension were to result in a
deemed exchange, a Certificate Owner could underreport its taxable income. No
assurance can be given as to whether the proposed regulations will be adopted as
final regulations in their present form or whether, if adopted, they will apply
to the Receivables.
FOREIGN CLASS A CERTIFICATE OWNERS
Interest attributable to Receivables which is received by a foreign Class A
Certificate Owner will generally not be subject to the 30% withholding tax
imposed with respect to payments of interest, provided that such Class A
Certificate Owner is not engaged in a trade or business in the United States and
that such Class A Certificate Owner fulfills certain certification requirements.
Under such requirements, the holder must certify, under penalties of perjury,
that it is not a "United States person" and provide its name and address. For
this purpose, "United States person" means a citizen or resident of the U.S., a
corporation, partnership, or other entity created or organized in or under the
laws of the U.S. or any political subdivision thereof, or an estate or trust the
income of which is includible in gross income for U.S. federal income tax
purposes, regardless of its source.
BACKUP WITHHOLDING
Payments made on the Class A Certificates and proceeds from the sale of the
Class A Certificates will not be subject to a "backup" withholding tax of 31%
unless, in general, the Class A Certificate Owner fails to comply with certain
reporting procedures and is not an exempt recipient under applicable provisions
of the Code.
36
<PAGE> 38
ERISA CONSIDERATIONS
Section 406 of ERISA and Section 4975 of the Code prohibit a pension,
profit sharing, or other employee benefit plan from engaging in certain
transactions involving "plan assets" with persons that are "parties in interest"
under ERISA or "disqualified persons" under the Code with respect to the plan.
ERISA also imposes certain duties on persons who are fiduciaries of plans
subject to ERISA and prohibits certain transactions between a plan and parties
in interest with respect to such plans. Under ERISA, any person who exercises
any authority or control respecting the management or disposition of the assets
of a plan is considered to be a fiduciary of such plan (subject to certain
exceptions not here relevant). A violation of these "prohibited transaction"
rules may generate excise tax and other liabilities under ERISA and the Code for
such persons.
Pursuant to a final regulation (the "Final Regulation") issued by the
Department of Labor ("DOL") concerning the definition of what constitutes the
"plan assets" of an employee benefit plan subject to ERISA or the Code, or an
individual retirement account (an "IRA") (collectively referred to as "Benefit
Plans"), the assets and properties of certain entities in which a Benefit Plan
makes an equity investment could be deemed to be assets of the Benefit Plan in
certain circumstances. Accordingly, if Benefit Plans purchase Class A
Certificates, the Trust could be deemed to hold plan assets unless one of the
exceptions under the Final Regulation is applicable to the Trust.
The Final Regulation only applies to the purchase by a Benefit Plan of an
"equity interest" in an entity. Assuming that interests in Class A Certificates
are equity interests, the Final Regulation contains an exception that provides
that if a Benefit Plan acquires a "publicly-offered security," the issuer of the
security is not deemed to hold plan assets. A publicly-offered security is a
security that is (i) freely transferable, (ii) part of a class of securities
that is owned by 100 or more investors independent of the issuer and of one
another, and (iii) either is (A) part of a class of securities registered under
section 12(b) or 12(g) of the Exchange Act or (B) sold to the plan as part of an
offering of securities to the public pursuant to an effective registration
statement under the Act and the class of securities of which such security is a
part is registered under the Exchange Act within 120 days (or such later time as
may be allowed by the Commission) after the end of the fiscal year of the issuer
during which the offering of such securities to the public occurred. The Final
Regulation provides that if at all times more than 75% of the value of all
classes of equity interests in certificates are held by investors other than
benefit plan investors (which is defined as including plans subject to ERISA,
government plans, and IRAs), the investing plan's assets will not include any of
the underlying assets of the trust.
It is anticipated that interests in the Class A Certificates will meet the
criteria of publicly-offered securities as set forth above. The Underwriters
expect (although no assurances can be given) that interests in the Class A
Certificates will be held by at least 100 independent investors at the
conclusion of the offering; there are no restrictions imposed on the transfer of
interests in the Class A Certificates; and interests in the Class A Certificates
will be sold as part of an offering pursuant to an effective registration
statement under the Act and then will be timely registered under the Exchange
Act.
There can be no assurance that any of the exceptions set forth in the Final
Regulation will apply to the purchase of Certificates offered hereby. Under the
terms of the Final Regulation, if the Trust were deemed to hold "plan assets" by
reason of a Benefit Plan's investment in a Certificate, such "plan assets" would
include an undivided interest in the assets of the Trust. In addition, the
persons providing services with respect to the assets of the Trust, including
the Servicer and the Trustee, may be subject to the fiduciary responsibility
provisions of Title I of ERISA and be subject to the prohibited transaction
provisions of ERISA and Section 4975 of the Code with respect to transactions
involving such assets. Certain exemptions from the prohibited transaction rules
may be applicable, however.
In this regard, the DOL granted to each of Goldman, Sachs & Co., CS First
Boston Corporation, Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P.
Morgan Securities Inc. and Salomon Brothers Inc an administrative exemption
(Prohibited Transaction Exemption 89-88, 89-90, 90-29, 90-23 and 89-89,
respectively) (such exemptions collectively, the "Exemption") from certain of
the prohibited transaction rules of ERISA with respect to the initial purchase,
the holding, and the subsequent resale by Benefit Plans of
37
<PAGE> 39
certificates in asset backed pass-through trusts that consist of certain
receivables, loans, and other obligations that meet the conditions and
requirements of the Exemption. The receivables covered by the Exemption include
motor vehicle installment obligations such as the Receivables. The Exemption
will apply to the acquisition, holding, and resale of the Class A Certificates
by a Benefit Plan, provided that specified conditions (certain of which are
described below) are met. The Seller believes that the Exemption will apply to
the acquisition and holding of Class A Certificates by Benefit Plans and that
all conditions of the Exemption other than those within the control of the
investors have been or will be met.
Among the conditions which must be satisfied for the Exemption to apply to
the acquisition by a Benefit Plan of the Class A Certificates are the following
(each of which the Seller believes has been or will be met in connection with
the Class A Certificates):
(1) The acquisition of the Class A Certificates by a Benefit Plan is on
terms (including the price for the Class A Certificates) that are at least as
favorable to the Benefit Plan as they would be in an arm's-length transaction
with an unrelated party;
(2) The rights and interests evidenced by the Class A Certificates acquired
by the Benefit Plan are not subordinated to the rights and interests evidenced
by other certificates of the Trust;
(3) The Class A Certificates acquired by the Benefit Plan have received a
rating at the time of such acquisition that is in one of the three highest
generic rating categories from either Standard & Poor's Corporation, Moody's
Investors Service, Inc., Duff & Phelps Inc. or Fitch Investors Service, Inc.;
and
(4) The sum of all payments made to the Underwriters in connection with the
distribution of the Class A Certificates represents not more than reasonable
compensation for underwriting the Class A Certificates. The sum of all payments
made to and retained by the Seller pursuant to the sale of the Receivables to
the Trust represents not more than the fair market value of such Receivables.
The sum of all payments made to and retained by the Servicer represents not more
than reasonable compensation for the Servicer's services under the Agreement and
reimbursement of the Servicer's reasonable expenses in connection therewith.
In addition, it is a condition that the Benefit Plan investing in the Class
A Certificates be an "accredited investor" as defined in Rule 501(a)(1) of
Regulation D of the Commission under the Securities Act.
The Exemption does not apply to the acquisition and holding of Class A
Certificates by Benefit Plans sponsored by the Seller, the Underwriters, the
Trustee, the Servicer, any obligor with respect to Receivables included in the
Trust constituting more than 5% of the aggregate unamortized principal balance
of the assets in the Trust, or any affiliate of such parties (the "Restricted
Group"). As of the date hereof, no obligor with respect to Receivables included
in the Trust constitutes more than 5% of the aggregate unamortized principal
balance of the Trust. Moreover, the Exemption provides relief from certain
self-dealing/conflict of interest prohibited transactions, only if, among other
requirements (i) a Benefit Plan's investment in Class A Certificates does not
exceed 25% of all of the Class A Certificates outstanding at the time of the
acquisition and (ii) immediately after the acquisition, no more than 25% of the
assets of a Benefit Plan are invested in certificates representing an interest
in one or more trusts containing assets sold or serviced by the same entity.
Any Benefit Plan fiduciary that proposes to cause a Benefit Plan to
purchase Class A Certificates should consult with its counsel with respect to
the potential applicability of ERISA and the Code to such investments and
whether the Final Regulation or the Exemption or any statutory or administrative
exemption would be applicable and determine on its own whether all conditions
have been satisfied.
Moreover, each Benefit Plan fiduciary should determine whether, under the
general fiduciary standards of investment prudence and diversification, an
investment in the Class A Certificates is appropriate for the Benefit Plan,
taking into account the overall investment policy of the Benefit Plan and the
composition of the Benefit Plan's investment portfolio.
38
<PAGE> 40
UNDERWRITING
Subject to the terms and conditions set forth in the underwriting agreement
(the "Underwriting Agreement"), the Seller has agreed to sell to each of the
underwriters named below (the "Underwriters") and each of the Underwriters has
severally agreed to purchase the principal amount of Class A Certificates set
forth opposite its name below:
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT OF
CLASS A
UNDERWRITERS CERTIFICATES
------------------------------------------------------------------ -----------------
<S> <C>
Goldman, Sachs & Co. ............................................. $
CS First Boston Corporation.......................................
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.........................................
J.P. Morgan Securities Inc. ......................................
Salomon Brothers Inc..............................................
-----------------
Total........................................................ $1,636,265,306.01
===============
</TABLE>
The Seller has been advised by the Underwriters that they propose initially
to offer the Class A Certificates to the public at the price set forth on the
cover page of this Prospectus, and to certain dealers at such price less a
concession not in excess of % of the principal amount of the Class A
Certificates. The Underwriters may allow and such dealers may reallow to other
dealers a discount not in excess of % of such principal amount. After the
initial public offering, such public offering price, concession and reallowance
may be changed.
The Seller has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or to
contribute to payments which the Underwriters may be required to make in respect
thereof.
Upon receipt of a request by an investor who has received an electronic
Prospectus from an Underwriter or a request by such investor's representative
within the period during which there is an obligation to deliver a Prospectus,
the Seller or the Underwriter will promptly deliver, or cause to be delivered,
without charge, a paper copy of the Prospectus.
LEGAL OPINIONS
Certain legal matters relating to the Certificates will be passed upon for
the Seller and the Servicer by J. D. Bringard, Esq., Vice President -- General
Counsel of the Servicer, and for the Underwriters by Skadden, Arps, Slate,
Meagher & Flom, New York, New York. Certain federal income tax and other matters
will be passed upon for the Seller by Skadden, Arps, Slate, Meagher & Flom. Mr.
Bringard is a full-time employee of Ford Credit and owns and holds options to
purchase shares of Common Stock of Ford. Skadden, Arps, Slate, Meagher & Flom
have from time to time represented Ford and Ford Credit in connection with
certain transactions.
39
<PAGE> 41
INDEX OF TERMS
Set forth below is a list of the defined terms used in this Prospectus and
the pages on which the definitions of such terms may be found herein.
<TABLE>
<S> <C>
Advance.......................................................................... 5
Agreement........................................................................ 3
APR.............................................................................. 10
Available Interest............................................................... 21
Available Principal.............................................................. 22
Benefit Plans.................................................................... 37
Cede............................................................................. 3
Certificate Account.............................................................. 10, 19
Certificate Owner................................................................ 3
Certificateholders............................................................... 2
Certificates..................................................................... 1
Class A Agent.................................................................... 9, 24
Class A Certificate Balance...................................................... 4, 22
Class A Certificateholders....................................................... 4
Class A Certificate Factor....................................................... 14
Class A Certificate Owner........................................................ 3
Class A Certificates............................................................. 3
Class A Distributable Amount..................................................... 22
Class A Interest Carryover Shortfall............................................. 23
Class A Interest Distributable Amount............................................ 22
Class A Percentage............................................................... 3, 17
Class A Principal Carryover Shortfall............................................ 23
Class A Principal Distributable Amount........................................... 22
Class B Certificate Balance...................................................... 23
Class B Certificateholders....................................................... 4
Class B Certificates............................................................. 3
Class B Distributable Amount..................................................... 22
Class B Interest Distributable Amount............................................ 22
Class B Principal Distributable Amount........................................... 22
Class B Percentage............................................................... 3, 17
Code............................................................................. 33
Collection Account............................................................... 10, 19
Collection Period................................................................ 4, 16, 17
Commission....................................................................... 2
Cutoff Date...................................................................... 3
Dealer Recourse.................................................................. 10
Dealers.......................................................................... 10
Definitive Certificates.......................................................... 18
Distribution Date................................................................ 1
DOL.............................................................................. 37
DTC.............................................................................. 2
Eligible Investments............................................................. 24
ERISA............................................................................ 6
Events of Default................................................................ 27
Exemption........................................................................ 37
Final Regulation................................................................. 37
Final Scheduled Distribution Date................................................ 1
Financed Vehicles................................................................ 3
Ford............................................................................. 16
</TABLE>
40
<PAGE> 42
<TABLE>
<S> <C>
Ford Credit...................................................................... 3
Ford Holdings.................................................................... 16
FTC Rule......................................................................... 32
Indirect Participants............................................................ 17
Insolvency Laws.................................................................. 7, 15
IRA.............................................................................. 37
Liquidated Receivables........................................................... 21
Liquidation Proceeds............................................................. 21
Obligors......................................................................... 10
OID.............................................................................. 33
Participants..................................................................... 17
Pass-Through Rate................................................................ 1
Payahead Account................................................................. 10, 19
Payahead Balance................................................................. 20
Payaheads........................................................................ 19
Pool Balance..................................................................... 8
Purchase Agreement............................................................... 3, 18
Purchase Amount.................................................................. 19
Purchase Price................................................................... 34
Receivables...................................................................... 1, 3
Record Date...................................................................... 4
Required Deposit Rating.......................................................... 19
Restricted Group................................................................. 38
Rule of 78s Receivables.......................................................... 35
Rules............................................................................ 17
Seller........................................................................... 1
Service.......................................................................... 33
Servicer......................................................................... 1
Servicer Fee..................................................................... 21
Servicing Fee.................................................................... 21
Servicing Fee Rate............................................................... 6, 21
Specified Subordination Spread Account Balance................................... 5
Subordination Initial Deposit.................................................... 4
Subordination Spread Account..................................................... 4
Supplemental Servicing Fee....................................................... 21
Total Available Amount........................................................... 21
Trust............................................................................ 1, 3
Trustee.......................................................................... 2, 3
UCC.............................................................................. 30
Underwriters..................................................................... 39
Underwriting Agreement........................................................... 39
</TABLE>
41
<PAGE> 43
---------------------------------------------------------
---------------------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE INFORMATION OR TO MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
MADE BY THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE SELLER,
THE SERVICER OR THE UNDERWRITERS. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
THE DATE OF SUCH INFORMATION. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES OFFERED HEREBY
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER IN
SUCH JURISDICTION.
------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Incorporation of Certain Documents by
Reference............................... 2
Available Information..................... 2
Reports to Class A Certificateholders by
the Trustee............................. 2
Summary................................... 3
Risk Factors.............................. 7
Formation of the Trust.................... 9
Property of the Trust..................... 10
The Receivables........................... 10
Class A Certificate Factors and Trading
Information............................. 14
Use of Proceeds........................... 15
The Seller................................ 15
The Servicer.............................. 16
The Certificates.......................... 16
Rating of the Class A Certificates........ 29
Certain Legal Aspects of the
Receivables............................. 30
Certain Federal Income Tax
Consequences............................ 33
ERISA Considerations...................... 37
Underwriting.............................. 39
Legal Opinions............................ 39
Index of Terms............................ 40
</TABLE>
------------------------
UNTIL FEBRUARY , 1996 (90 DAYS AFTER THE
DATE OF THIS PROSPECTUS), ALL DEALERS EFFECTING TRANSACTIONS IN THE CLASS A
CERTIFICATES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
------------------------------------------------------
------------------------------------------------------
---------------------------------------------------------
---------------------------------------------------------
FORD CREDIT 1995-B
GRANTOR TRUST
$1,636,265,306.01
% ASSET BACKED CERTIFICATES,
CLASS A
(LOGO)
FORD CREDIT AUTO RECEIVABLES
CORPORATION
SELLER
FORD MOTOR CREDIT COMPANY
SERVICER
GOLDMAN, SACHS & CO.
CS FIRST BOSTON
MERRILL LYNCH & CO.
J.P. MORGAN SECURITIES INC.
SALOMON BROTHERS INC
------------------------------------------------------
------------------------------------------------------
<PAGE> 44
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the offering described in this Registration Statement:
<TABLE>
<S> <C>
Securities and Exchange Commission........................................ $564,229
Rating agency fees........................................................ 140,000
Printing.................................................................. 40,000
Accountants' fees......................................................... 30,000
Fees and expenses of Trustee.............................................. 17,000
Miscellaneous expenses.................................................... 8,771
--------
Total................................................................ $800,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of Delaware provides as follows:
145. Indemnification of officers, directors, employees and agents;
insurance --
(a) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(b) A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the corporation to procure a judgment
in its favor by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request
of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as
to which such person shall have been adjudged to be liable to the
corporation unless and only to the extent that the Court of Chancery or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expense which the Court of Chancery or such
other court shall deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of
any action, suit or proceeding referred to in subsections (a) and (b) of
this section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
II-1
<PAGE> 45
(d) Any indemnification under subsections (a) and (b) of this section
(unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth in
subsections (a) and (b) of this section. Such determination shall be made
(1) by a majority vote of the directors who are not parties to such action,
suit or proceeding, even though less than a quorum, or (2) if there are no
such directors, or if such directors so direct, by independent legal
counsel in a written opinion, or (3) by the stockholders.
(e) Expenses (including attorneys' fees) incurred by an officer or
director in defending any civil criminal, administrative or investigative
action, suit or proceeding may be paid by the corporation in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the corporation as authorized in this section. Such expenses
(including attorneys' fees) incurred by other employees and agents may be
so paid upon such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other subsections of this section shall not be
deemed exclusive of any other rights to which those seeking indemnification
or advancement of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise, both as to action
in his official capacity and as to action in another capacity while holding
such office.
(g) A corporation shall have power to purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or
agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
corporation would have the power to indemnify him against such liability
under this section.
(h) For purposes of this section, references to "the corporation"
shall include, in addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed in a
consolidation or merger which, if its separate existence had continued,
would have had power and authority to indemnify its directors, officers,
and employees or agents, so that any person who is or was a director,
officer, employee or agent of such constituent, or is or was serving at the
request of such constituent corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise, shall stand in the same position under this section with
respect to the resulting or surviving corporation as he would have with
respect to such constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other enterprises"
shall include employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the corporation" shall
include any service as a director, officer, employee, or agent of the
corporation which imposes duties on, or involves services by, such
director, officer, employee, or agent with respect to an employee benefit
plan, its participants or beneficiaries; and a person who acted in good
faith and in a manner he reasonably believed to be in the interest of the
participants and beneficiaries of an employee benefit plan shall be deemed
to have acted in a manner "not opposed to the best interests of the
corporation" as referred to in this section.
(j) The indemnification and advancement of expenses provided by, or
granted pursuant to this section shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
(k) The Court of Chancery is hereby vested with exclusive jurisdiction
to hear and determine all actions for advancement of expenses or
indemnification brought under this section or under any bylaw, agreement,
vote of stockholders or disinterested directors, or otherwise. The Court of
Chancery may summarily determine a corporation's obligation to advance
expenses (including attorneys' fees).
II-2
<PAGE> 46
Article Five of the Certificate of Incorporation of Ford Credit Auto
Receivables Corporation provides as follows:
(a) A director of the corporation shall not be personally liable to the
corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability
(i) for any breach of the director's duty of loyalty to the
corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under Section 174 of the Delaware General Corporation Law or
(iv) for any transaction from which the director derived an improper
personal benefit.
If the Delaware General Corporation Law is amended after approval by the
stockholders of this Article FIFTH to authorize corporate action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.
(b) Any repeal or modification of paragraph (a) of this Article FIFTH by
the stockholders of the corporation shall not adversely affect any right or
protection of a director of the corporation existing at the time of such repeal
or modification.
(c)(i) Each person who was or is made a party or is threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative, investigative or otherwise (hereinafter a
"proceeding"), by reason of the fact that he or she, or a person of whom he or
she is the legal representative, is or was a director, officer or employee of
the corporation or is or was serving at the request of the corporation as a
director, officer or employee of another corporation or of a partnership, joint
venture, trust or other enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is alleged action in an
official capacity as a director, officer or employee or in any other capacity
while serving as a director, officer or employee, shall be indemnified and held
harmless by the corporation to the fullest extent authorized by the Delaware
General Corporation Law, as the same exists or may hereafter be amended (but, in
the case of any such amendment, only to the extent that such amendment permits
the corporation to provide broader indemnification rights than said law
permitted the corporation to provide prior to such amendment), against all
expense, liability and loss (including penalties, fines, judgments, attorneys'
fees, amounts paid or to be paid in settlement and excise taxes imposed on
fiduciaries with respect to (i) employee benefit plans, (ii) charitable
organizations or (iii) similar matters) reasonably incurred or suffered by such
person in connection therewith and such indemnification shall continue as to a
person who has ceased to be a director, officer or employee and shall inure to
the benefit of his or her heirs, executors and administrators; provided,
however, that the corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such person (other than pursuant to subparagraph (c)(ii) of this Article FIFTH)
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the corporation. The right to indemnification conferred in this
subparagraph (c)(i) of Article FIFTH shall be a contract right and shall include
the right to be paid by the corporation the expenses incurred in defending any
such proceeding in advance of its final disposition; provided, however, that, if
the Delaware General Corporation Law requires, the payment of such expenses
incurred by a director or officer in his or her capacity as a director or
officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a proceeding
shall be made only upon delivery to the corporation of an undertaking, by or on
behalf of such director or officer, to repay all amounts so advanced if it shall
ultimately be determined that such director or officer is not entitled to be
indemnified under this subparagraph (c)(i) of Article FIFTH or otherwise.
(ii) If a claim which the corporation is obligated to pay under
subparagraph (c)(i) of this Article FIFTH is not paid in full by the corporation
within 60 days after a written claim has been received by the corporation, the
claimant may at any time thereafter bring suit against the corporation to
recover the unpaid amount of the
II-3
<PAGE> 47
claim and, if successful in whole or in part, the claimant shall be entitled to
be paid also the expense of prosecuting such claim. It shall be a defense to any
such action (other than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final disposition where
the required undertaking, if any is required, has been tendered to the
corporation) that the claimant has not met the standards of conduct which make
it permissible under the Delaware General Corporation Law for the corporation to
indemnify the claimant for the amount claimed, but the burden of proving such
defense shall be on the corporation. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct set forth in the
Delaware General Corporation Law, nor an actual determination by the corporation
(including its Board of Directors, independent legal counsel or its
stockholders) that the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the claimant has
not met the applicable standard of conduct.
(iii) The provisions of this paragraph (c) of Article FIFTH shall cover
claims, actions, suits and proceedings, civil or criminal, whether now pending
or hereafter commenced, and shall be retroactive to cover acts or omissions or
alleged acts or omissions which heretofore have taken place. If any part of this
paragraph (c) of Article FIFTH should be found to be invalid or ineffective in
any proceeding, the validity and effect of the remaining provisions shall not be
affected.
(iv) The right to indemnification and the payment of expenses incurred in
defending a proceeding in advance of its final disposition covered in this
paragraph (c) of Article FIFTH shall not be exclusive of any other right which
any person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, by-law, agreement, vote of stockholders or
disinterested directors or otherwise.
(v) The corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any such expense, liability or loss, whether or not the corporation
would have the power to indemnify such person against such expense, liability or
loss under the Delaware General Corporation Law.
(vi) The corporation may, to the extent authorized from time to time by the
Board of Directors, grant rights to indemnification, and rights to be paid by
the corporation the expenses incurred in defending any proceeding in advance of
its final disposition, to any agent of the corporation to the fullest extent of
the provisions of this paragraph (c) of Article FIFTH with respect to the
indemnification and advancement of expenses of directors, officers and employees
of the corporation.
Similar indemnification provisions in Section 5 of Article NINTH of the
Certificate of Incorporation of both Ford Motor Company and Ford Motor Credit
Company are applicable to directors, officers and employees of the Seller who
serve as such at the request of Ford Motor Company or Ford Motor Credit Company.
The Seller is insured for liabilities it may incur pursuant to Article
FIFTH of its Certificate of Incorporation relating to the indemnification of its
directors, officers and employees. In addition, directors, officers and certain
key employees are insured against certain losses which may arise out of their
employment and which are not recoverable under the indemnification provisions of
the Seller's Certificate of Incorporation. The premium for both insurance
coverages is paid by Ford Motor Company.
II-4
<PAGE> 48
ITEM 16. EXHIBITS AND FINANCIAL STATEMENTS.
(A) EXHIBITS:
<TABLE>
<C> <S>
1.1 -- Form of Underwriting Agreement.
3.1 -- Restated Certificate of Incorporation of the Seller, filed as Exhibit 3.1 to
Registration Statement No. 33-39027 and incorporated herein by reference.
3.2 -- By-Laws of the Seller, filed as Exhibit 3.2 to Registration Statement No.
33-39027 and incorporated herein by reference.
4.1 -- Form of Pooling and Servicing Agreement among the Seller, the Servicer, and
the Trustee.
4.2 -- Form of Standard Terms and Conditions of Agreement among the Seller, the
Servicer, and the Trustee.
5.1 -- Opinion of H. D. Smith Esq., Secretary and Corporate Counsel of Ford Credit
Auto Receivables Corporation with respect to legality.
8.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom with respect to tax matters.
10.1 -- Form of Purchase Agreement between Ford Motor Credit Company and the Seller.
23.1 -- Consent of H. D. Smith Esq., Secretary and Corporate Counsel of Ford Credit
Auto Receivables Corporation (included as part of Exhibit 5.1).
23.2 -- Consent of Skadden, Arps, Slate, Meagher & Flom (included as part of Exhibit
8.1).
24 -- Powers of Attorney.*
</TABLE>
- ---------------
* Previously filed.
ITEM 17. UNDERTAKINGS.
The undersigned registrant hereby undertakes that:
That, for purposes of determining any liability under the Securities Act of
1933, each filing of the registrant's annual report pursuant to section 13(a) or
section 15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the registration statement shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant, Ford Credit or Ford of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant, Ford
Credit, or Ford, as the case may be, will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933 each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-5
<PAGE> 49
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THE REGISTRANT
CERTIFIES THAT IT HAS REASONABLE GROUNDS TO BELIEVE THAT IT MEETS ALL OF THE
REQUIREMENTS FOR FILING ON FORM S-3, AND HAS DULY CAUSED THIS AMENDMENT NO. 1 TO
THE REGISTRATION STATEMENT TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO DULY AUTHORIZED, IN THE CITY OF DETROIT AND STATE OF MICHIGAN, ON THE
7TH DAY OF NOVEMBER, 1995.
FORD CREDIT AUTO RECEIVABLES CORPORATION
By WILLIAM E. ODOM*
-------------------------------------------
(WILLIAM E. ODOM, CHAIRMAN
OF THE BOARD OF DIRECTORS)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS AMENDMENT
NO. 1 TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE FOLLOWING
PERSONS IN THE CAPACITIES AND ON THE DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ----------------------------------------
<C> <S> <C>
WILLIAM E. ODOM* Chairman of the Board of November 7, 1995
- ---------------------------------------- Directors and Director
(WILLIAM E. ODOM) (principal executive officer)
KENNETH J. COATES* Director and Executive November 7, 1995
- ---------------------------------------- Vice President -- Finance
(KENNETH J. COATES) (principal financial officer)
TERRENCE F. MARRS* Controller (principal November 7, 1995
- ---------------------------------------- accounting officer)
(TERRENCE F. MARRS)
EDSEL B. FORD II* Director November 7, 1995
- ----------------------------------------
(EDSEL B. FORD II)
*By /s/ RICHARD P. CONRAD
- ----------------------------------------
(RICHARD P. CONRAD, ATTORNEY IN FACT)
</TABLE>
II-6
<PAGE> 50
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ --------------------------------------------------------------------------------------
<C> <S>
1.1 -- Form of Underwriting Agreement.
3.1 -- Restated Certificate of Incorporation of the Seller, filed as Exhibit 3.1 to
Registration Statement No. 33-39027 and incorporated herein by reference.
3.2 -- By-Laws of the Seller, filed as Exhibit 3.2 to Registration Statement No. 33-39027
and incorporated herein by reference.
4.1 -- Form of Pooling and Servicing Agreement among the Seller, the Servicer, and the
Trustee.
4.2 -- Form of Standard Terms and Conditions of Agreement among the Seller, the Servicer,
and the Trustee.
5.1 -- Opinion of H. D. Smith Esq., Secretary and Corporate Counsel of Ford Credit Auto
Receivables Corporation with respect to legality.
8.1 -- Opinion of Skadden, Arps, Slate, Meagher & Flom with respect to tax matters.
10.1 -- Form of Purchase Agreement between Ford Motor Credit Company and the Seller.
23.1 -- Consent of H. D. Smith Esq., Secretary and Corporate Counsel of Ford Credit Auto
Receivables Corporation (included as part of Exhibit 5.1).
23.2 -- Consent of Skadden, Arps, Slate, Meagher & Flom (included as part of Exhibit 8.1).
24.1 -- Powers of Attorney.*
</TABLE>
- ---------------
* Previously filed.
<PAGE> 1
EXHIBIT 1.1
FORD CREDIT 1995-B GRANTOR TRUST
____% ASSET BACKED CERTIFICATES
FORD CREDIT AUTO RECEIVABLES CORPORATION
(SELLER)
November 8, 1995
UNDERWRITING AGREEMENT
Goldman, Sachs & Co.
As Representatives
(the "Representative") of the
Several Underwriters,
85 Broad Street
New York, New York 10004
Ladies and Gentlemen:
1. Introductory. Ford Credit Auto Receivables
Corporation, a Delaware corporation (the "Seller"), proposes to sell
$_______________ principal amount of its ____% Asset Backed Certificates, Class
A (the "Class A Certificates") of the Ford Credit 1995-B Grantor Trust (the
"Trust"). Each Class A Certificate will represent a fractional undivided
interest in the Trust. The assets of the Trust will include, among other
things, a pool of retail installment sale contracts for new and used
automobiles and light trucks (the "Receivables") and certain monies due
thereunder on or after November 1, 1995 (the "Cutoff Date"), such Receivables
to be sold to the Trust and to be serviced for the Trust by Ford Motor Credit
Company, a Delaware corporation (the "Servicer" or "Ford Credit"). The Class A
Certificates will be issued in an aggregate principal amount of
$________________, which is equal to 93.5% of the aggregate principal balance
of the Receivables, as of the Cutoff Date. Simultaneously with the issuance
and sale of the Class A Certificates as contemplated herein, the Trust will
also issue certificates entitled "____% Asset Backed Certificates, Class B"
(the "Class B Certificates," and together with the Class A Certificates, the
"Certificates") evidencing an undivided ownership interest of 6.5% in the
Trust, payments
<PAGE> 2
in respect of which are, to the extent specified in the Pooling and Servicing
Agreement (defined below), subordinated to the rights of the holders of the
Class A Certificates. The Certificates will be issued pursuant to a pooling
and servicing agreement (the "Pooling and Servicing Agreement") to be dated as
of November 1, 1995, among the Seller, the Servicer and Chemical Bank, as
trustee (the "Trustee") and as Class A Agent.
Capitalized terms used herein and not otherwise defined shall
have the meanings given them in the Pooling and Servicing Agreement.
2. Representations and Warranties of the Seller. The
Seller represents and warrants to and agrees with the several underwriters
named in Schedule I hereto (the "Underwriters") that:
(a) A registration statement (No. 33-63345),
including a prospectus, on Form S-3, in respect of the Class A Certificates has
been filed with the Securities and Exchange Commission (the "Commission") in
the form heretofore delivered to the Underwriters. Such registration statement
in such form, including the exhibits thereto and any material incorporated by
reference therein, is hereinafter referred to as the "Registration Statement,"
and such prospectus, as first filed, or mailed for filing, with the Commission
pursuant to Rule 424(b) ("Rule 424(b)") under the Securities Act of 1933, as
amended (the "Act") is hereinafter referred to as the "Prospectus." For
purposes of this Agreement, "Effective Time" means the date and time as of
which such Registration Statement is declared effective by the Commission, and
"Effective Date" means the date of the Effective Time.
(b) On the Effective Date, the Registration
Statement will conform, in all material respects to the requirements of the
Act, the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
where applicable, and the rules and regulations of the Commission under the Act
or the Exchange Act, as applicable, and will not, as of the Effective Date,
contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that this representation and warranty shall
not apply to
2
<PAGE> 3
any statement or omission made in reliance upon and in conformity with
information furnished in writing to the Seller by the Underwriters expressly
for use in the Registration Statement relating to such Class A Certificates.
On the date of this Agreement, the Registration Statement conforms, and at the
time of filing of the Prospectus pursuant to Rule 424(b), the Registration
Statement and the Prospectus will conform, in all material respects to the
requirements of the Act and the rules and regulations of the Commission
thereunder (the "Rules and Regulations"), and, except as aforesaid, neither of
such documents includes, or will include, any untrue statement of a material
fact or omits, or will omit, to state any material fact required to be stated
therein or necessary to make the statements therein not misleading.
(c) The consummation by the Seller of the
transactions contemplated by this Agreement and the Pooling and Servicing
Agreement, and the fulfillment of the terms thereof, will not conflict with or
result in a breach of any of the terms or provisions of, or constitute a
default under, or result in the creation of any lien, charge, or encumbrance
upon any of the property or assets of the Seller 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.
3. Purchase, Sale, and Delivery of Certificates. On the
basis of the representations, warranties, and agreements herein contained, but
subject to the terms and conditions herein set forth, the Seller agrees to sell
to the Underwriters, and the Underwriters agree, severally and not jointly, to
purchase from the Seller, the aggregate principal amounts of the Class A
Certificates set forth opposite the names of the Underwriters in Schedule I
hereto. The Class A Certificates are to be purchased at the purchase price of
______% of the aggregate principal amount thereof plus accrued interest at the
applicable Pass-Through Rate (as defined in the Registration Statement)
calculated from (and including) November 15, 1995 to (but excluding) the
Closing Date.
Against payment of the purchase price in immediately available
funds drawn to the order of the Seller, the Seller will deliver the Class A
Certificates to the Representative, for the account of the Underwriters, at
3
<PAGE> 4
the office of Skadden, Arps, Slate, Meagher & Flom on November 15, 1995, at
10:00 a.m., New York time, or at such other time not later than seven full
business days thereafter as the Representative and the Seller determine, such
time being herein referred to as the "Closing Date." The Class A Certificates
to be so delivered will be initially represented by one or more Class A
Certificates registered in the name of Cede & Co., the nominee of The
Depository Trust Company ("DTC"). The interests of beneficial owners of the
Class A Certificates will be represented by book entries on the records of DTC
and participating members thereof. Definitive Class A Certificates will be
available only under limited circumstances.
4. Offering by Underwriters. It is understood that,
after the Registration Statement becomes effective, the Underwriters propose to
offer the Class A Certificates for sale to the public (which may include
selected dealers), as set forth in the Prospectus.
5. Covenants of the Seller. The Seller covenants and
agrees with the Underwriters:
(a) If required, to file the Prospectus with the
Commission pursuant to and in accordance with subparagraph (3) of the Rule
424(b) not later than the time specified therein. The Seller will advise the
Underwriters promptly of any such filing pursuant to Rule 424(b).
(b) To make no amendment or any supplement to the
Registration Statement or the Prospectus as amended or supplemented prior to
the Closing Date, without furnishing the Representative with a copy of the
proposed form thereof and providing the Representative with a reasonable
opportunity to review the same; and during such same period to advise the
Representative, promptly after it receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or becomes effective or
any supplement to the Prospectus as amended or supplemented or any amended
Prospectus has been filed or mailed for filing, of the issuance of any stop
order by the Commission, of the suspension of the qualification of the Class A
Certificates for offering or sale in any jurisdiction, of the initiation or
threatening of any proceeding for any such purpose, or of any request by the
Commission for the
4
<PAGE> 5
amending or supplementing of the Registration Statement or the Prospectus as
amended or supplemented or for additional information; and, in the event of the
issuance of any such stop order or of any order preventing or suspending the
use of any prospectus relating to the Class A Certificates or suspending any
such qualification, to use promptly its best efforts to obtain its withdrawal.
(c) Promptly from time to time to take such
action as the Representative may reasonably request in order to qualify the
Class A Certificates for offering and sale under the securities laws of such
states as the Representative may request and to continue such qualifications in
effect so long as necessary under such laws for the distribution of such Class
A Certificates, provided that in connection therewith the Seller shall not be
required to qualify as a foreign corporation to do business, or to file a
general consent to service of process in any jurisdiction, and provided further
that the expense of maintaining any such qualification more than one year from
the Closing Date with respect to such Class A Certificates shall be at the
Representative's expense.
(d) To furnish the Underwriters with copies of
the Registration Statement (including exhibits) and copies of the Prospectus as
amended or supplemented in such quantities as the Representative may from time
to time reasonably request; and if, before a period of six months shall have
elapsed after the Closing Date and the delivery of a prospectus shall be at
the time required by law in connection with sales of any such Class A
Certificates, either (i) any event shall have occurred as a result of which the
Prospectus would include any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, or
(ii) for any other reason it shall be necessary during such same period to
amend or supplement the Prospectus as amended or supplemented, to notify the
Representative and to prepare and furnish to the Representative as the
Representative may from time to time reasonably request an amendment or a
supplement to the Prospectus which will correct such statement or omission or
effect such compliance; and in case any Underwriter is required by law to
deliver a
5
<PAGE> 6
prospectus in connection with sales of any of such Class A Certificates at any
time six months or more after the Closing Date, upon the Representative's
request, but at the expense of such Underwriter, to prepare and deliver to such
Underwriter as many copies as the Representative may request of an amended or
supplemented prospectus complying with Section 10(a)(3) of the Act.
(e) To make generally available to Class A
Certificateholders of the Trust as soon as practicable after the Effective Date
of the Registration Statement (as such date is defined in Rule 158(c) under the
Act), an earnings statement of the Seller complying with Rule 158 under the Act
and covering a period of at least twelve consecutive months beginning after
such Effective Date.
(f) To furnish to the Representative copies of
the Registration Statement (one of which will be signed and will include all
exhibits), each related preliminary prospectus, the Prospectus and all
amendments and supplements to such documents, in each case as soon as available
and in such quantities as the Representative reasonably requests.
(g) So long as any of the Class A Certificates
are outstanding, to furnish the Representative copies of all reports or other
communications (financial or other) furnished to Class A Certificateholders of
the Trust, and to deliver to the Representative during such same period, (i) as
soon as they are available, copies of any reports and financial statements
furnished to or filed with the Commission and (ii) such additional information
concerning the business and financial condition of the Seller as the
Representative may from time to time reasonably request.
(h) To pay or cause to be paid all costs and
expenses incident to the performance of its obligations hereunder, including
any fees charged by the rating agency or rating agencies that initially rate
the Class A Certificates, and the reasonable expenses incurred in distributing
preliminary prospectuses and the Prospectus (including any amendments and
supplements thereto required within six months from the Closing Date pursuant
to Section 5(d) hereof) it being understood that, except as provided in this
subsection (h) and Section 9 hereof,
6
<PAGE> 7
the Underwriters will pay all their own costs and expenses, including, without
limitation, the cost of printing any agreement among underwriters, the fees of
the Underwriters' counsel, transfer taxes on resale of the Class A Certificates
by the Underwriters, and any advertising expenses connected with any offers
that the Underwriters may make.
(i) For a period from the date of this Agreement
until the retirement of the Class A Certificates, or until such time as the
Underwriters shall cease to maintain a secondary market in the Class A
Certificates, whichever occurs first, to deliver to the Representative the
annual statements of compliance and the annual independent certified public
accountants' reports furnished to the Trustee pursuant to Article XIII of the
Pooling and Servicing Agreement, as soon as such statements and reports are
furnished to the Trustee.
(j) On or before the Closing Date, the Seller
shall cause Ford Credit's computer records relating to the Receivables to be
marked to show the Trust's absolute ownership of the Receivables, and from and
after the Closing Date neither the Seller nor the Servicer shall take any
action inconsistent with the Trust's ownership of such Receivables, other than
as permitted by the Pooling and Servicing Agreement.
(k) To the extent, if any, that the rating
provided with respect to the Class A Certificates by the rating agency or
agencies that initially rate the Class A Certificates is conditional upon the
furnishing of documents or the taking of any other actions by the Seller, the
Seller shall furnish such documents and take any such other actions.
6. Conditions of the Obligations of the Underwriters.
The obligation of the Underwriters to purchase and pay for the Class A
Certificates will be subject to the accuracy of the representations and
warranties on the part of the Seller herein, to the accuracy of the statements
of officers of the Seller made pursuant to the provisions hereof, to the
performance by the Seller of its obligations hereunder and to the following
additional conditions precedent:
7
<PAGE> 8
(a) On or prior to the Closing Date, Coopers &
Lybrand shall have furnished to the Representative a letter dated as of the
Closing Date substantially in the form and substance of the draft to which the
Representative previously agreed.
(b) The Registration Statement shall have become
effective not later than 5:30 p.m., New York time, on November 7, 1995, or such
later date as shall have been consented to by the Representative; and prior to
the Closing Date no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall have
been instituted or, to the knowledge of the Seller, shall be contemplated by
the Commission.
(c) The Representative shall have received as of
the Closing Date an officer's certificate signed by the Chairman of the Board,
the President, the Executive Vice President - Finance or the Treasurer of the
Seller representing and warranting that, as of the Closing Date, the
representations and warranties of the Seller in this Agreement will be true and
correct in all material respects, that the Seller has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date in all material respects,
that no stop order suspending the effectiveness of the Registration Statement
has been issued and no proceedings for that purpose have been instituted or are
contemplated by the Commission.
(d) Since the respective dates as of which
information is given in the Prospectus as amended or supplemented, there shall
not have occurred any material adverse change, or any development involving a
prospective material adverse change, in or affecting particularly the business
or assets of the Seller, or any material adverse change in the financial
position or results or operations of the Seller, otherwise than as set forth or
contemplated in the Prospectus, which in any such case makes it impracticable
or inadvisable in the Representative's reasonable judgment to proceed with the
public offering or the delivery of the Class A Certificates on the terms and in
the manner contemplated in the Prospectus as amended or supplemented.
8
<PAGE> 9
(e) Subsequent to the execution and delivery of
this Agreement, the United States shall not have become engaged in hostilities
which have resulted in the declaration of a national emergency or a declaration
of war, which makes it impracticable or inadvisable in the Representative's
reasonable judgment to proceed with the public offering of the delivery of the
Certificates on the terms and in the manner contemplated in the Prospectus as
amended or supplemented.
(f) J.D. Bringard, Esq., Vice President-General
Counsel of Ford Credit and the Seller, or other counsel satisfactory to the
Representative in its reasonable judgment, shall have furnished to the
Representative, his written opinion, dated the Closing Date, in form reasonably
satisfactory to the Representative in its reasonable judgment, to the effect
that:
(i) 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) This Agreement has been duly
authorized, executed and delivered by the Seller.
(iii) The Pooling and Servicing Agreement and
the Purchase Agreement have been duly authorized, executed and
delivered by, and each constitutes a valid and binding obligation of,
the Seller.
(iv) The consummation of the transactions
contemplated by this Agreement, the Pooling and Servicing Agreement
and the Purchase Agreement, and the fulfillment of the terms thereof,
will not conflict with or result in a material breach of any of the
terms or provisions of, or constitute a default under, or result in
the creation or imposition of any material lien, charge or encumbrance
upon any
9
<PAGE> 10
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 known to such
counsel under which the Seller is a debtor or guarantor, nor will such
action result in any violation of the provisions of the Certificate of
Incorporation or the By-Laws of the Seller.
(v) The Class A Certificates have been
duly authorized; when executed and authenticated by the Trustee in
accordance with the Pooling and Servicing Agreement and delivered and
paid for pursuant to the Underwriting Agreement, the Class A
Certificates will constitute valid and binding obligations entitled to
the benefits provided by the Pooling and Servicing Agreement.
(vi) The Registration Statement has
become effective under the Act and, to the best knowledge of such
counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceeding for that
purpose has been instituted or threatened by the Commission; the
Registration Statement and the Prospectus as amended or supplemented
and any further amendments and supplements thereto made by the Seller
prior to the Closing Date (other than the financial statements and
other accounting information contained in the Registration Statement
or the Prospectus as amended or supplemented or any further amendments
or supplements thereto, or omitted therefrom, as to which such counsel
need express no opinion) comply as to form in all material respects
with the requirements of the Act and the rules and regulations
thereunder.
(vii) Such counsel believes that neither the
Registration Statement (other than the financial statements and other
accounting information contained therein or omitted therefrom, as to
which such counsel need express no opinion) nor any amendment hereto,
at the time
10
<PAGE> 11
the same became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(viii) Such counsel believes that at the
Closing Date the Prospectus as amended or supplemented (other than the
financial statements and the other accounting information contained
therein or omitted therefrom, as to which such counsel need express no
opinion) does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(ix) Such counsel does not know of any
contract or other document of a character required to be filed as an
exhibit to the Registration Statement or required to be incorporated
by reference into the Prospectus as amended or supplemented or
required to be described in the Registration Statement or the
Prospectus as amended or supplemented which is not filed or
incorporated by reference or described as required.
(x) Such counsel does not know of any
legal or governmental proceedings pending to which the Seller is a
party or of which any property of the Seller is the subject, and no
such proceedings are known by such counsel to be threatened or
contemplated by governmental authorities or threatened by others,
other than as set forth or contemplated in the Prospectus as amended
or supplemented and other than such proceedings which, in his opinion,
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 will not materially and adversely affect the
performance by the Seller of its obligations under, or the validity
and enforceability of, the Pooling and Ser-
11
<PAGE> 12
vicing Agreement, the Purchase Agreement or the Class A Certificates.
(xi) The Class A Certificates, the
Pooling and Servicing Agreement, the Purchase Agreement and this
Agreement each conform in all material respects with the descriptions
thereof contained in the Registration Statement and the Prospectus.
Such opinion may be made subject to the qualifications that
the enforceability of the terms of the Pooling and Servicing
Agreement, the Purchase Agreement and the Class A Certificates may be
limited by bankruptcy, insolvency, reorganizations or other similar
laws relating to or affecting the enforcement of creditors' rights
generally and by general equitable principles, regardless of whether
such enforceability is considered in a proceeding in equity or at law.
(g) J.D. Bringard, Esq., Vice President-General Counsel
of Ford Credit and the Seller, or other counsel satisfactory to the
Representative in its reasonable judgment, shall have furnished to the
Representative his written opinion, dated as of the Closing Date, in form
satisfactory to the Representative in its reasonable judgment, to the effect
that:
(i) Ford Credit 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) The indemnification agreement (the
"Indemnification Agreement") dated as of November 8, 1995, between
Ford Credit and the Underwriters, has been duly authorized, executed
and delivered by Ford Credit.
12
<PAGE> 13
(iii) The Pooling and Servicing Agreement and
the Purchase Agreement have been duly authorized, executed and
delivered by, and each constitutes a valid and binding obligation of,
Ford Credit.
(iv) The consummation of the transactions
contemplated by the Pooling and Servicing Agreement, the Purchase
Agreement and the Indemnification Agreement, and the fulfillment of
the terms thereof, will not conflict with or result in a breach of any
of the terms or provisions of, or constitute a default under (in each
case material to Ford Credit 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 Ford Credit and its subsidiaries
considered as a whole) upon any of the property or assets of Ford
Credit pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or similar
agreement or instrument known to such counsel under which Ford Credit
is a debtor or guarantor, nor will such action result in any violation
of the provisions of the Certificate of Incorporation or the By-Laws
of Ford Credit.
(v) Such counsel does not know of any
legal or governmental proceedings pending to which Ford Credit is a
party or of which any property of Ford Credit is the subject, and no
such proceedings are known by such counsel to be threatened or
contemplated by governmental authorities or threatened by others,
other than as set forth or contemplated in the Prospectus as amended
or supplemented and other than such proceedings which, in his opinion,
will not have a material adverse effect upon the general affairs,
financial position, net worth or results of operations (on an annual
basis) of Ford Credit and its subsidiaries considered as a whole and
will not materially and adversely affect the performance by Ford
Credit of its obligations under, or the validity and enforceability
of, the Pooling and Ser-
13
<PAGE> 14
vicing Agreement, the Purchase Agreement or the Indemnification
Agreement.
(vi) Ford Credit has full power and
authority to sell and assign the property to be sold and assigned to
the Seller pursuant to the Purchase Agreement and has duly authorized
such sale and assignment to the Seller by all necessary corporate
action.
(vii) The Seller has full power and authority
to sell and assign the property to be sold and assigned to and
deposited with the Trustee as part of the Trust and has duly
authorized such sale and assignment to the Trustee by all necessary
corporate action.
(viii) The statement in the Prospectus under
the caption "Certain Legal Aspects of the Receivables," to the extent
they constitute matters of law or legal conclusions, are correct in
all material respects.
(ix) Immediately prior to the sale of the
Receivables to the Seller, Ford Credit owned the Receivables free and
clear of any lien, security interest or charge, and immediately prior
to the assignment of the Receivables to the Trustee, the Seller owned
the Receivables free and clear of any lien, security interest or
charge. With respect to each Receivable constituting part of the
Trust, such Receivable is secured by a validly perfected first
priority security interest in the vehicle financed thereby in favor of
Ford Credit as a secured party or Ford Credit has instituted
appropriate procedures that if followed (and such counsel has no
reason to believe that they will not be so followed) will result in
the perfection of a first priority security interest in the vehicle
financed thereby in favor of Ford Credit as a secured party. Each
such Receivable has been duly and validly assigned to the Seller by
Ford Credit and to the Trustee as Trustee of the Trust by the Seller.
14
<PAGE> 15
(x) All filings necessary under
applicable law to perfect both the sale of the Receivables by Ford
Credit to the Seller pursuant to the Purchase Agreement and the sale
of the Receivables by the Seller to the Trustee as Trustee of the
Trust pursuant to the Pooling and Servicing Agreement have been made
and, provided that neither Ford Credit nor the Seller relocates its
principal place of business in a state other than Michigan and that
the Trustee maintains the list of Receivables for inspection by
interested parties as described above, no other filings (other than
the filing of continuation statements) need be made to maintain the
perfection of the sale of the Receivables either to the Seller
pursuant to the Purchase Agreement or to the Trustee as Trustee of the
Trust pursuant to the Pooling and Servicing Agreement.
(xi) The Pooling and Servicing Agreement
is not required to be qualified under the Trust Indenture Act of
1939, as amended, and the Trust is not required to be registered under
the Investment Company Act of 1940, as amended.
(xii) No consent, approval, authorization or
order of any court or governmental agency or body is required for the
consummation of the transactions contemplated herein or in the Pooling
and Servicing Agreement, the Purchase Agreement or the Indemnification
Agreement, except such as may be required under federal or state
securities laws in connection with the acquisition by the Underwriters
of the Class A Certificates, filings with respect to the transfer of
the Receivables to the Seller pursuant to the Purchase Agreement and
to the Trustee pursuant to the Pooling and Servicing Agreement and
such other approvals as have been obtained.
(xiii) Such counsel does not know of any
legal or governmental proceedings pending to which either Ford Credit
or the Seller is a party or of which any property of
15
<PAGE> 16
either Ford Credit or the Seller is the subject, and no such
proceedings are known by such counsel to be threatened or contemplated
by governmental authorities or threatened by others (1) seeking to
prevent the issuance of the Class A Certificates or the consummation
of any of the transactions contemplated by this Agreement, the Pooling
and Servicing Agreement, the Purchase Agreement or the Indemnification
Agreement, or (2) seeking adversely to affect the federal income tax
attributes of the Class A Certificates as described in the Prospectus
under the heading "Certain Federal Income Tax Consequences."
(xiv) Neither the issuance or sale of the
Class A Certificates, nor the execution and delivery of the Class A
Certificates, the Pooling and Servicing Agreement, the Purchase
Agreement or Indemnification Agreement, including, without limitation,
this Agreement nor the consummation of any of the other transactions
contemplated herein or in the Pooling and Servicing Agreement, the
Purchase Agreement or Indemnification Agreement by Ford Credit or the
Seller, as the case may be, will contravene the terms of any material
provision of any statute, order, or regulation applicable to Ford
Credit or the Seller, as the case may be, the failure with which to
comply could have a material adverse effect on Ford Credit and its
subsidiaries considered as a whole or the Seller, as the case may be.
(h) Skadden, Arps, Slate, Meagher & Flom (or such
other counsel satisfactory to the Representative) shall have furnished their
written opinion, dated the Closing Date, with respect to the characterization
of the transfer of the Receivables by Ford Credit to the Seller as a sale, and
with respect to the characterization of the transfer of the Receivables from
the Seller to the Trust, and as to certain matters described in Section
6(g)(iv) above (which opinion shall state that it may be relied upon by the
Trustee) to the Representative and to Ford Credit, and such opinion shall be in
substantially the form previously discussed with the Representative and its
counsel and in any event satisfactory in
16
<PAGE> 17
form and in substance to the Representative and its counsel and to Ford Credit.
(i) Skadden, Arps, Slate, Meagher & Flom, special
tax counsel to the Seller, shall have furnished to the Representative their
written opinion, dated as of the Closing Date, in form and in substance
satisfactory to the Representative in its reasonable judgment, to the effect
that:
(i) For New York franchise tax purposes,
the trust fund created by the Pooling and Servicing Agreement will not
be classified as a corporation and, accordingly, will not be subject
to New York franchise taxes, and Class A Certificateholders who are
not residents or otherwise subject to tax in New York will not be
subject to New York income or franchise taxes with respect to interest
from the Class A Certificates or with respect to any of the
Receivables.
(ii) The Trust created by the Pooling and
Servicing Agreement will not be classified as an association taxable
as a corporation for federal income tax purposes and, instead, under
subpart E, part I of subchapter J of the Internal Revenue code of
1986, as amended, the Trust will be treated as a grantor trust and,
subject to recharacterization of certain fees paid by the Trust, each
Class A Certificateholder will be treated as the owner of an undivided
interest in the income and corpus attributable to the trust fund.
(iii) The statements in the Registration
Statement and Prospectus under the headings "Certain Federal Income
Tax Consequences" and "ERISA Considerations," to the extent that they
constitute matters of law or legal conclusions with respect thereto,
have been prepared or reviewed by such counsel and are correct in all
material respects.
(j) The Representative shall have received an
opinion addressed to the Representative of Skadden, Arps, Slate, Meagher &
Flom, dated the Closing
17
<PAGE> 18
Date, with respect to the validity of the Class A Certificates and such other
related matters as the Representative shall require and the Seller shall have
furnished or caused to be furnished to such counsel such documents as they may
reasonably request for the purpose of enabling them to pass upon such matters.
(k) The Representative shall have received an
opinion addressed to the Representative, the Seller and the Servicer of Kelley,
Drye & Warren, counsel to the Trustee, dated the Closing Date and satisfactory
in form and substance to the Representative and to counsel to the Underwriters,
to the effect that:
(i) The Trustee has been duly
incorporated and is validly existing as a banking corporation in good
standing under the laws of the State of New York with full corporate
trust power and authority to enter into and perform its obligations
under the Pooling and Servicing Agreement.
(ii) The Pooling and Servicing Agreement
has been duly executed and delivered by the Trustee, and, insofar as
the laws governing the trust powers of the Trustee are concerned and
assuming due authorization, execution and delivery thereof by the
Seller and the Servicer, the Pooling and Servicing Agreement
constitutes a legal, valid and binding obligation of the Trustee,
enforceable against the Trustee in accordance with its terms, except
(1) the enforceability thereof may be subject to bankruptcy,
insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights, and (2) the remedy
of specific performance and injunctive and other forms of equitable
relief may be subject to equitable defenses and to the discretion of
the court before which any proceeding therefor may be brought.
(iii) The Class A Certificates have been duly
executed, authenticated and delivered by the Trustee.
18
<PAGE> 19
(iv) Neither the execution nor delivery
by the Trustee of the Pooling and Servicing Agreement nor the
consummation of any of the transactions by the Trustee contemplated
thereby required the consent or approval of, the giving of notice to,
the registration with, or the taking of any other action with respect
to, any governmental authority or agency under any existing federal or
New York State law governing the trust powers of the Trustee, except
such as have been obtained, made or taken.
(l) The Representative shall have received an
officer's certificate dated the Closing Date of the Chairman of the Board, the
President, the Executive Vice President-Finance or the Treasurer of each of
Ford Credit, the Seller and the Servicer in which such officers shall state
that, to the best of their knowledge after reasonable investigation, the
representations and warranties of the Seller and the Servicer contained in the
Pooling and Servicing Agreement and the representations and warranties of Ford
Credit and the Seller contained in the Purchase Agreement are true and correct
in all material respects, that Ford Credit, the Seller or the Servicer, as the
case may be, has complied with all agreements and satisfied all conditions on
its part to be performed or satisfied under such agreements at or prior to the
Closing Date in all material respects.
(m) The Class A Certificates shall have been
rated in the highest rating category by each of Moody's Investors Service, Inc.
and Standard & Poor's Corporation.
7. Indemnification and Contribution. (a) The Seller
will indemnify and hold each Underwriter harmless against any losses, claims,
damages, or liabilities, joint or several, to which such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages,
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus, or arise out of or are based
upon the omission or alleged omission to state
19
<PAGE> 20
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, and will reimburse each Underwriter for any
legal or other expenses reasonably incurred by such Underwriter in connection
with investigating or defending any such loss, claim, damage, liability or
action; provided, however, that the Seller will not be liable in any such case
to the extent that any such loss, claim, damage or liability arises out of or
is based upon an untrue statement or alleged untrue statement in or omission or
alleged omission from any of such documents in reliance upon and in conformity
with written information furnished to the Seller by any Underwriter through the
Representative specifically for use therein; and provided further, that the
Seller shall not be liable to any Underwriter or any person controlling any
Underwriter under the indemnity agreement in this subsection (a) with respect
to any of such documents to the extent that any such loss, claim, damage or
liability of the Underwriters or such controlling person results from the fact
that such Underwriter sold the Class A Certificates to a person to whom there
was not sent or given, at or prior to the written confirmation of such sale, a
copy of the Prospectus or of the Prospectus as then amended or supplemented
(excluding documents incorporated by reference), whichever is most recent, if
the Seller has previously furnished copies thereof to such Underwriter.
The indemnity agreement in this subsection (a) shall be in
addition to any liability which the Seller may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Underwriter within the meaning of the Act.
(b) Each Underwriter will indemnify and hold
harmless the Seller against any losses, claims, damages or liabilities to which
the Seller may become subject, under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus or
any amendment or supplement thereto, or any related preliminary prospectus, or
arise out of or are based upon the omission or the alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not
20
<PAGE> 21
misleading, in each case to the extent, but only to the extent, that such
untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information furnished
to the Seller by such Underwriter through the Representative specifically for
use therein, and will reimburse any legal or other expenses reasonably incurred
by the Seller in connection with investigating or defending any such action or
claim.
The indemnity agreement in this subsection (b) shall be in
addition to any liability which each Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each person, if any, who
controls the Seller within the meaning of the Act.
(c) Promptly after receipt by an indemnified
party under subsection (a) or (b) of written notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be
made against the indemnifying party under subsection (a) or (b) above, notify
the indemnifying party of the commencement thereof, and in the event that such
indemnified party shall not so notify the indemnifying party within 30 days
following receipt of any such notice by such indemnified party, the
indemnifying party shall have no further liability under such subsection to
such indemnified party unless the indemnifying party shall have received other
notice addressed and delivered in the manner provided in Section 10 hereof of
the commencement of such action; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party otherwise than under such subsection. In case any such
action is brought against any indemnified party and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party in its reasonable
judgment, and after notice from the indemnifying party to such indemnified
party of its election so to assume the defense thereof, the indemnifying party
will not be liable to such indemnified party under such subsection for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the
21
<PAGE> 22
defense thereof other than reasonable costs of investigation.
(d) If the indemnification provided for in this
Section is unavailable or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities
(or actions in respect thereof) in such proportion as is appropriate to reflect
the relative benefits received by the Seller on the one hand and the
Underwriters on the other from the offering of the Class A Certificates. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law, then each indemnifying party shall contribute to
such amount paid or payable by such indemnified party in such proportion as is
appropriate to reflect not only such relative benefits but also the relative
fault of the Seller on the one hand and the Underwriters on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages, or liabilities (or actions in respect thereof) as well as any
other relevant equitable considerations. The relative benefits received by the
Seller on the one hand and the Underwriters on the other shall be deemed to be
in the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Seller bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the Prospectus as amended or
supplemented with respect to the Class A Certificates. The relative fault
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the Seller or by
the Underwriters and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission, including, with respect to any Underwriter, the extent to which such
losses, claims, damages or liabilities (or actions in respect thereof) result
from the fact that such Underwriter sold such Class A Certificates to a person
to whom there was not sent or given, at or prior to the written
22
<PAGE> 23
confirmation of such sale, a copy of the Prospectus or the Prospectus as then
supplemented or amended (excluding documents incorporated by reference),
whichever is more recent, if the Seller has previously furnished copies thereof
to such Underwriter. The Seller and the Underwriters, severally and not
jointly, agree that it would not be just and equitable if contribution pursuant
to this subsection (d) were determined by pro rata allocation or by any other
method of allocation which does not take account of the equitable
considerations referred to above in this subsection (d). The amount paid by an
indemnified party as a result of the losses, claims, damages, or liabilities
(or actions in respect thereof) referred to above in this subsection (d) shall
be deemed to include any legal or other expenses reasonably incurred by such
indemnified party in connection with investigating or defending any action or
claim. Notwithstanding the provisions of this subsection (d), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Class A Certificates underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
8. Survival of Certain Representations and
Obligations. The respective indemnities, agreements, representations,
warranties and other statements of the Seller (including, without limitation,
Section 5(k)) or its officers and of the Underwriters set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation or statement as to the results thereof, made by or on behalf
of any Underwriter or the Seller or any of their respective representatives,
officers or directors of any controlling person, and will survive delivery of
and payment for the Class A Certificates.
9. Failure to Purchase the Class A Certificates.
If the purchase of the Class A Certificates shall not be consummated by the
Underwriters because the condition set forth in Section 6(e) has not
23
<PAGE> 24
been met, then the Seller shall be under no liability to the Underwriters with
respect to the Class A Certificates except as provided in Section 5(h) and
Section 7 hereof; but if for any other reason any Class A Certificates are not
delivered by the Seller as provided herein, the Seller will be liable to
reimburse the Underwriters, through the Representative, for all out-of-pocket
expenses, including counsel fees and disbursements reasonably incurred by the
Underwriters in making preparations for the offering of the Class A
Certificates, but the Seller shall then have no further liability to any
Underwriter with respect to such Class A Certificates except as provided in
Section 5(h) and Section 7 hereof. If any Underwriter or Underwriters default
on their obligations to purchase Class A Certificates hereunder and the
aggregate principal amount of Class A Certificates that such defaulting
Underwriter or Underwriters agreed but failed to purchase does not exceed 10%
of the total principal amount of Class A Certificates, the Representative may
make arrangements satisfactory to the Seller for the purchase of such Class A
Certificates by other persons, including the non-defaulting Underwriter or
Underwriters, but if no such arrangements are made by the Closing Date, the
non-defaulting Underwriter or Underwriters shall be obligated, in proportion to
their commitments hereunder, to purchase the Class A Certificates that such
defaulting Underwriter or Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of
Class A Certificates with respect to which such default or defaults occur
exceeds 10% of the total principal amount of Class A Certificates and
arrangements satisfactory to the non-defaulting Underwriter or Underwriters and
the Seller for the purchase of such Class A Certificates by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Underwriter or the Seller,
except as provided in Section 5(h) and Section 7 hereof. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter or Underwriters from liability for its default.
10. Notices. All communications hereunder will
be in writing and, if sent to the Representative or the Underwriters, will be
mailed, delivered or sent by
24
<PAGE> 25
facsimile transmission and confirmed to Goldman, Sachs & Co. at 85 Broad
Street, New York, New York 10004, Attention: Asset Backed Operations -
facsimile number (212) 902-0681; if sent to the Seller, will be mailed,
delivered or sent by facsimile transmission, and confirmed to it at Ford
Credit Auto Receivables Corporation, The American Road, Dearborn, Michigan
48121, attention of the Secretary - facsimile number (313) 248-7613.
11. Successors. This Agreement will inure to the
benefit of and be binding upon the Underwriters and the Seller and their
respective successors and the officers and directors and controlling persons
referred to in Section 7, and no other person will have any right or
obligations hereunder.
12. Applicable Law. This Agreement shall be
governed by, and construed in accordance with, the laws of the State of New
York.
13. Counterparts. This Agreement may be executed
by each of the parties hereto in any number of counterparts, and by each of the
parties hereto on separate counterparts, each of which counterparts, when so
executed and delivered, shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
25
<PAGE> 26
If the foregoing is in accordance with your understanding,
please sign and return to us a counterpart hereof, whereupon this letter and
your acceptance hereof shall constitute a binding agreement.
Very truly yours,
FORD CREDIT AUTO RECEIVABLES
CORPORATION
By:_________________________
Name: Hurley D. Smith
Title: Secretary
Accepted in New York, New York,
as of the date hereof:
GOLDMAN, SACHS & CO.
______________________________
Acting on behalf of itself and
as the Representatives of the
several Underwriters.
<PAGE> 27
ADDENDUM TO UNDERWRITING AGREEMENT
DATED NOVEMBER 8, 1995 RELATING TO
FORD CREDIT 1995-B GRANTOR TRUST
In order to clarify the provisions of Section 5(h) of the
Underwriting Agreement, dated November 8, 1995, among Ford Credit Auto
Receivables Corporation and Goldman, Sachs & Co., as Representatives of the
Several Underwriters, the parties hereto agree as follows:
1. The Underwriters shall pay directly (i) all Blue Sky
fees and expenses as well as reasonable fees and expenses of counsel in
connection with state securities law qualifications and any legal investment
surveys; and (ii) the reasonable fees and expenses of Skadden, Arps, Slate,
Meagher & Flom.
2. Ford Credit Auto Receivables Corporation shall pay
(i) the Securities and Exchange Commission the filing fee with respect to the
Class A Certificates; (ii) all fees of any rating agencies rating the Class A
Certificates; (iii) all fees and expenses of the Trustee; (iv) all reasonable
fees and expenses of Kelley, Drye & Warren, counsel to the Trustee; (v) all
fees and expenses of Coopers & Lybrand relating to the letter referred to in
Section 6(a) of the Underwriting Agreement; (vi) all fees and expenses of
accountants incurred in connection with the delivery of any accountant's or
auditor's reports required pursuant to the Pooling and Servicing Agreement;
(vii) the cost of printing any preliminary and final prospectus relating to the
Class A Certificates, and the Registration Statement; and (viii) any other fees
and expenses incurred in connection with the performance of its obligations
under the Underwriting Agreement.
27
<PAGE> 28
3. The provisions hereof are subject to the provisions
of Section 9 of the Underwriting Agreement.
Dated: November 8, 1995
FORD CREDIT AUTO RECEIVABLES
CORPORATION
By:______________________________
Name: Hurley D. Smith
Title: Secretary
GOLDMAN, SACHS & CO.
______________________________
Acting on behalf of itself and as
the Representatives of the several
Underwriters.
<PAGE> 29
SCHEDULE I
Goldman, Sachs & Co. . . . . . . . . . . . . . . . $______________
CS First Boston Corporation . . . . . . . . . . . . . . . ______________
Merrill Lynch, Pierce Fenner
& Smith Incorporated . . . . . . . . . . . . . . ______________
J.P. Morgan Securities Inc. . . . . . . . . . . . . . . . ______________
Salomon Brothers Inc . . . . . . . . . . . . . . . ______________
______________
Total . . . . . . . . . . . . .
==============
<PAGE> 1
EXHIBIT 4.1
______________________________
FORD CREDIT 1995-B GRANTOR TRUST
ASSET BACKED CERTIFICATES
______________________________
FORD CREDIT AUTO RECEIVABLES CORPORATION
Seller
FORD MOTOR CREDIT COMPANY
Servicer
CHEMICAL BANK
Trustee and Class A Agent
_________________
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 1995
_________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I Creation of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE II Conveyance of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE III Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE IV Acceptance by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE V Incorporation of Standard Terms and Conditions of Agreement . . . . . . . . . . . . . . . . 3
ARTICLE VI Special Definitions and Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE VII Additional Representations and Warranties of the Seller . . . . . . . . . . . . . . . . . . 6
ARTICLE VIII Ford Motor Credit Company Not to Resign as Servicer . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE IX Agent for Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE X Additional Covenants of the Seller . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Schedule A -- List of Receivables
Schedule B -- Location of Receivables
</TABLE>
i
<PAGE> 3
This Pooling and Servicing Agreement, dated as of November 1,
1995, is made with respect to the formation of the Ford Credit 1995-B Grantor
Trust, among FORD CREDIT AUTO RECEIVABLES CORPORATION, a Delaware corporation,
as Seller ("Seller"), FORD MOTOR CREDIT COMPANY, a Delaware corporation, as
Servicer ("Servicer"), and Chemical Bank, a New York banking corporation, as
trustee (in such capacity, the "Trustee") and as agent (the "Class A Agent").
WITNESSETH THAT: In consideration of the premises and of the
mutual agreements herein contained, the parties hereto agree as follows:
ARTICLE I
Section 1.1 Creation of Trust. Upon the execution of this
Agreement by the parties hereto, there is hereby created the Ford Credit 1995-B
Grantor Trust.
ARTICLE II
Section 2.1 Conveyance of Receivables. In consideration of
the Trustee's delivery to, or upon the order of, the Seller of Certificates
("Certificates") in an aggregate amount equal to the Original Pool Balance, the
Seller does hereby irrevocably sell, transfer, assign, and otherwise convey to
the Trustee, in trust for the benefit of the Certificateholders, 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 following:
(i) the Receivables listed in Schedule A
hereto and all monies paid thereon and due thereon on or after the
Cutoff Date (including 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 balances of the Receivables);
(ii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables;
2
<PAGE> 4
(iii) any proceeds from claims on any
physical damage, credit life, credit disability, or other insurance
policies covering Financed Vehicles or Obligors;
(iv) the Purchase Agreement, including the
right of the Seller to cause Ford Motor Credit Company to repurchase
Receivables from the Seller;
(v) Dealer Recourse;
(vi) 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
(vii) the proceeds of any and all of the
foregoing.
ARTICLE III
Reserved
ARTICLE IV
Section 4.1 Acceptance by Trustee. The Trustee does hereby
accept all consideration conveyed by the Seller pursuant to Section 2.1, and
declares that the Trustee shall hold such consideration upon the trusts herein
set forth for the benefit of all present and future Certificateholders, subject
to the terms and provisions of this Agreement.
ARTICLE V
Section 5.1 Incorporation of Standard Terms and Conditions of
Agreement. This Pooling and Servicing Agreement does hereby incorporate by
reference the Standard Terms and Conditions of Agreement for Ford Credit
Grantor Trusts dated as of November 1, 1995 ("Standard Terms and Conditions of
Agreement"), in the form attached hereto.
3
<PAGE> 5
ARTICLE VI
Section 6.1 Special Definitions and Terms. Whenever used in
the Standard Terms and Conditions of Agreement and in this Pooling and
Servicing Agreement, the following words and phrases shall have the following
meanings:
The "Class A Percentage" means 93.5%.
The "Class B Percentage" means 6.5%.
The "Corporate Trust Office" at the date hereof is located at
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Corporate Trust Department
The "Cutoff Date" shall be November 1, 1995.
The first "Distribution Date" shall be December 15, 1995.
The "Optional Purchase Percentage" shall be 10%.
The "Original Pool Balance" is $______________.
The "Pass-Through Rate" is ____% per annum.
The "Purchase Agreement" is the agreement dated as of November
1, 1995, relating to the purchase by the Seller from Ford Motor Credit Company
of the Receivables.
The "Required Deposit Rating" shall be a rating on (i)
short-term unsecured debt obligations of P-1 by Moody's Investors Service, Inc.
and (ii) short-term unsecured debt obligations of A-1+ by Standard & Poor's
Corporation; and any requirement that short-term unsecured debt obligations
have the "Required Deposit Rating" shall mean that such short-term unsecured
debt obligations have the foregoing required ratings from each of such rating
agencies.
The "Servicing Fee Rate" is 1.00% per annum.
4
<PAGE> 6
The "Specified Subordination Spread Account Balance" with
respect to any Distribution Date shall be $________; except that in the event
that on any Distribution Date (i) the annualized average for the preceding
three Collection Periods (or such shorter number of Collection Periods as have
elapsed since the Cutoff Date) of the ratios of net losses (i.e., the net
balances of all Receivables which are determined to be uncollectible in the
Collection Period, less any recoveries on Receivables charged off in the period
or prior periods) to the Pool Balance as of the first day of each such
Collection Period exceeds 2.25% or (ii) the average for the preceding three
Collection Periods (or such shorter number of Collection Periods as have
elapsed since the Cutoff Date) of the ratios of the number of Receivables that
have been repossessed but not yet sold or are delinquent 60 days or more to the
outstanding number of Receivables exceeds 1.50%, then the Specified
Subordination Spread Account Balance for such Distribution Date shall be an
amount equal to such percentage of the Pool Balance as of the opening of
business of the first day of such Collection Period as is determined by
deducting from eleven percent the following fraction, expressed as a
percentage: (x) 1 minus (y) a fraction, the numerator of which is the Class A
Certificate Balance and the denominator of which is the Pool Balance both as of
the opening of business of the first day of such Collection Period, but in no
event shall the Specified Subordination Spread Account Balance be more than
$_______________ or less than $___________. On any Distribution Date on which
the aggregate balance of the Class A Certificates is $_____________ or less
after giving effect to distributions on such Distribution Date, the Specified
Subordination Spread Account Balance shall be the greater of the balance
described above or $_____________.
The "Subordination Initial Deposit" is $____________.
5
<PAGE> 7
ARTICLE VII
Section 7.1 Additional Representations and Warranties of the
Seller. The Seller does hereby make the following representations and
warranties on which the Trustee shall be deemed to have relied in accepting the
Receivables in trust and executing and authenticating the Certificates:
(i) New and Used Vehicles. Approximately
____% of the aggregate Principal Balance of the Receivables,
constituting ____% 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;
(ii) Origination. Each Receivable shall
have an origination date on or after November 1, 1994;
(iii) Maturity of Receivables. Each
Receivable shall have an original maturity of not greater than 60
months;
(iv) Minimum Annual Percentage Rate. Each
Receivable shall have an Annual Percentage Rate equal to or greater
than ____%;
(v) Scheduled Payments. Each Receivable
shall have a first Scheduled Payment due on or prior to November 30,
1995 and no Receivable shall have a payment that is more than 30 days
overdue as of the Cutoff Date;
(vi) Location of Receivable Files. The
Receivable Files shall be kept at one or more of the locations listed
in Schedule B hereto;
(vii) No Extensions. The number of
Scheduled Payments shall not have been extended on any Receivable on
or before the Cutoff Date; and
6
<PAGE> 8
(viii) Rating Agencies. The rating agencies
rating the Certificates are Moody's Investors Service, Inc. and
Standard & Poor's Ratings Group.
ARTICLE VIII
Section 8.1 Ford Motor Credit Company Not to Resign as
Servicer. Subject to the provisions of Section 18.3 of the Standard Terms and
Conditions of Agreement, Ford Motor Credit Company shall not resign from the
obligations and duties hereby imposed on it as Servicer under this Agreement
except upon determination that the performance of its duties under this
Agreement shall no longer be permissible under applicable law. Notice of any
such determination permitting the resignation of Ford Motor Credit Company
shall be communicated to the 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 Trustee concurrently with or
promptly after such notice. No such resignation shall become effective until
the Trustee or a successor Servicer shall have taken the actions required by
the last paragraph of Section 19.1 of the Standard Terms and Conditions of
Agreement and shall have assumed the responsibilities and obligations of Ford
Motor Credit Company in accordance with Section 19.2 of the Standard Terms and
Conditions of Agreement.
ARTICLE IX
Section 9.1 Agent for Service. The agent for service for the
Seller and the Servicer shall be J.D. Bringard, Esq., Ford Motor Credit
Company, The American Road, Dearborn, Michigan 48121.
ARTICLE X
Section 10.1 Additional Covenants of the Seller.
7
<PAGE> 9
(a) The Seller agrees with each nationally
recognized rating agency which has been requested by the Seller or an affiliate
to rate the Class A Certificates issued pursuant to this Agreement and which is
then rating such Certificates that it shall not issue any additional securities
that could reasonably be expected to affect materially and adversely the
Certificates issued pursuant to this Agreement unless it shall have first
obtained written confirmation from such rating agency that such issuance will
not result in the qualification, downgrading or withdrawal of the then current
rating assigned to the Class A Certificates. The Seller shall provide a copy
of any such written confirmation to the Trustee.
(b) The Seller shall not, without first receiving
written confirmation from each nationally recognized rating agency which has
been requested by the Seller or an affiliate to rate the Class A Certificates
and which is then rating such Certificates that the then current rating
assigned to the Class A Certificates will not result in the qualification,
downgrading or withdrawal of such rating, and, upon the Seller's receipt of
such written confirmation from each such rating agency, the Trustee shall,
without any exercise of its own discretion, provide its written consent to the
Seller, do any of the following:
(i) engage in any business or activity
other than those set forth in Article Third of the Seller's
Certificate of Incorporation, as amended;
(ii) incur any indebtedness, or assume or
guaranty any indebtedness of any other entity, other than (A) any
indebtedness incurred in connection with Notes (as defined in the
Seller's Certificate of Incorporation, as amended) and (B) any
indebtedness to Ford Motor Credit Company or any affiliate thereof
incurred in connection with the acquisition of receivables, which
indebtedness shall be subordinated to all other obligations of the
Seller;
(iii) dissolve or liquidate, in whole or in
part; consolidate or merge with or into any other entity or convey or
transfer its
8
<PAGE> 10
properties and assets substantially as an entirety to any entity,
unless:
(A) the entity (if other than the
Seller) formed or surviving the consolidation or merger of which
acquires the properties and assets of the Seller is organized and
existing under the laws of the State of Delaware, expressly assumes
the due and punctual payment of, and all obligations of the Seller,
including those obligations of the Seller under this Agreement, and
has a Certificate of Incorporation containing provisions identical to
the provisions of Article Third, Article Fourth and Article Fifteen of
the Seller's Certificate of Incorporation, as amended; and
(B) immediately after giving effect to the
transaction, no default or event of default has occurred and is
continuing under any indebtedness of the Seller or any agreements
relating to such indebtedness; or
(iv) without the affirmative vote of 100%
of the members of the Board of Directors of the Seller, institute
proceedings to be adjudicated bankrupt or insolvent, or consent to the
institution of bankruptcy or insolvency proceedings against it, or
file a petition seeking or consent to reorganization or relief under
any applicable federal or state law relating to bankruptcy, or consent
to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the corporation or a
substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its
debts generally as they become due, or take corporate action in
furtherance of any such action.
[The remainder of this page intentionally left blank.]
9
<PAGE> 11
IN WITNESS WHEREOF, the Seller, the Servicer, and the Trustee
have caused this Pooling and Servicing Agreement to be duly executed by their
respective officers as of the day and year first above written.
FORD CREDIT AUTO
RECEIVABLES CORPORATION
[SEAL]
ATTEST: By:
-------------------------------
TITLE:
- -------------------------------
TITLE:
FORD MOTOR CREDIT COMPANY
[SEAL]
ATTEST: By:
-------------------------------
TITLE:
- -------------------------------
TITLE: Assistant Secretary
CHEMICAL BANK, as Trustee
ATTEST: By:
-------------------------------
TITLE:
- -------------------------------
TITLE: Trust Officer
10
<PAGE> 12
CHEMICAL BANK, as Class A Agent
Pursuant to Section 14.7
hereof
ATTEST: By:
----------------------------
TITLE:
- --------------------------------
TITLE: Trust Officer
11
<PAGE> 13
SCHEDULE A
LIST OF RECEIVABLES
DELIVERED TO TRUSTEE
AT CLOSING
<PAGE> 14
SCHEDULE B
LOCATION OF RECEIVABLES
Indianapolis
5875 Castle Creek Pkwy. North Drive
Suite 240
Indianapolis, IN 46250-4308
Detroit-North
580 Kirts Boulevard
Suite 300
Troy, MI 48084
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Ohio South
9797 Springboro Pike
Suite 302
Miamisburg, OH 45343
Detroit/West
One ParkLane Blvd.
Suite 405E
Dearborn, MI 48126
Chicago South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Grand Rapids
2851 Charlevoix Drive SE
Suite 300
Grand Rapids, MI 49546
Chicago - East
One River Place, Suite A
Lansing, IL 60438
<PAGE> 15
Akron
175 Montroes West Avenue
Suite 300 Crown Pointe
Copley, OH 44321
Louisville
502 Executive Park
Louisville, KY 40207
Milwaukee
10850 W. Park Place
Suite 110
Milwaukee, WI 53224
Chicago West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195-2008
Saginaw
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
Findlay
3500 North Main Street
Findlay, OH 45840-1447
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Philadelphia
Bay Colony Executive Park
575 E. Swedesford
Suite 100
Wayne, PA 19087
New Jersey South
5000 Dearborn Circle
Suite 200
Mt. Laurel, NJ 08054
Baltimore-West
1829 Reistertown Road
Baltimore, MD 21208-8861
B-2
<PAGE> 16
Long Island
972 Brush Hollow Road
5th Floor
Westbury, NY 11590-1740
Washington, D.C.
2440 Research Blvd.
Suite 150
Rockville, MD 20850-3293
New Haven
116 Washington Ave.
Floor #4
North Haven, CT 06473
Norfolk
Greenbrier Pointe
1401 Greenbrier Pkwy.
Suite 350
Chesapeake, VA 23320
New Jersey North
103 Eisenhower Parkway
4th Floor
Roseland, NJ 07068-1069
Pittsburgh
Foster Plaza 9
750 Holiday Drive
4th Floor, Suite 420
Pittsburgh, PA 15220-2783
Richmond
300 Arboretum Place
Suite 320
Richmond, VA 23236
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
Westchester
660 White Plains Road
Tarrytown, NY 10591-0010
B-3
<PAGE> 17
Mobile
1201 Montlimar Dr.
Suite 700
Mobile, AL 36609
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Orlando
2600 Lake Lucien Drive
Suite 306, The Forum Bldg.
Maitland, FL 32751
Memphis
6555 Quince Road
Suite 300
Memphis, TN 38119
Atlanta - North
North Park Town Center
1000 Abernathy Rd. N.E.
Bldg. 400, Suite 180
Atlanta, GA 30328
Greensboro
1500 Pinecroft Rd.
Suite 220
Greensboro, NC 27407
Charlotte
5832 Farm Pond Lane
Suite 200
Charlotte, NC 28212
Jacksonville
9485 Regency Square Boulevard
Jacksonville, FL 32225
Jackson
Highland Village Center
4500 I-55 North
Suite 292
Jackson, MS 39211
B-4
<PAGE> 18
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
Miami
6303 Blue Lagoon Drive
Suite 200
Miami, FL 33126
Dothan
3160 West Main Street
Suite 1
Dothan, AL 36301-1180
Nashville
565 Marriott Drive
Suite 190, Highland Ridge
Nashville, TN 37210
Raleigh
3651 Trust Drive
Raleigh, NC 27604
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
Odessa
Ashford Park Office Center
Suite 201A
2626 John Ben Sheppard Parkway
Odessa, TX 79762
Lubbock
Suite 200
4010 82nd Street
Lubbock, TX 79424
Dallas
801 E. Campbell Road
Suite 600, Campbell Forum
Richardson, TX 75801
B-5
<PAGE> 19
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Fort Worth
2350 W. Airport Hwy.
Suite 400, Center Park Tower
Bedford, TX 76022
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Houston-West
820 Gessner
Suite 700
Houston, TX 77024
Harlingen
1916 East Harrison
Harlingen, TX 78550
Corpus Christi
5350 South Staples
Suite 225
Corpus Christi, TX 78411
Little Rock
1701 Centerview Dr.
Suite 301
Little Rock, AR 72211
Amarillo
1616 S. Kentucky
Suite 130 Bldg. D
Amarillo, TX 79102
El Paso
1200 Golden Key Circle
Suite 104
El Paso, TX 79925
B-6
<PAGE> 20
Albuquerque
6100 Uptown Blvd., NE
Suite 300
Albuquerque, NM 87110
Houston-North
363 N. Sam Houston Pkwy. E.
Suite 700
Houston, TX 77060
San Antonio
1600 N.E. Loop 410
Suite 200
San Antonio, TX 78209
Tulsa
9820 East 41st St.
Suite 300
Tulsa, OK 74145
Minneapolis
11095 Viking Drive
Suite 308, One Southwest Crossing
Eden Prairie, MN 55344-7290
Wichita
7570 West 21st Street
Wichita, KS 67212
St. Louis
4227 Earth City Exp.
Suite 100
Earth City, MO 63045
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
Kansas City
8717 West 110th Street
Bldg. #14, Suite 550
Overland Park, KS 66210
B-7
<PAGE> 21
Des Moines
4200 Corporate Drive
Suite 107
West Des Moines, IA 50266
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Davenport
2535 Tech Drive
Suite 300, Commerce Exch. Bldg.
Bettendorf, IA 52722
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
Fargo
3100 13th Ave. South
Suite 304
Fargo, ND 58103
Springfield
3275 E. Ridgeview
Springfield, MO 65804-1816
Waterloo
211 E. San Marnan Dr.
Waterloo, IA 50702
San Bernadino
1615 Orange Tree Lane
Suite 215
Redlands, CA 92374
Salt Lake City
310 E. 4500 South
Suite 340
Murray, UT 84017
B-8
<PAGE> 22
Honolulu
1585 Kapiolani Blvd.
Suite 922, Ala Moano Pacific Center
Honolulu, HI 96814
Spokane
North 901 Monroe
Suite 350
Spokane, WA 99210-2148
Grand Junction
744 Horizon Ct.
Suite 330
Grand Junction, CO 81506
San Francisco
4301 Hacienda Dr.
Suite 400
Pleasanton, CA 94588
Portland
10220 S.W. Greenburg Rd.
Suite 415
Portland, OR 97223-5506
Sacramento
2720 Gateway Oaks Dr.
Suite 200
Sacramento, CA 95833
San Diego
3111 Camino Del Rio N.
Suite 1333
San Diego, CA 92108
Phoenix
4742 North 24th Street
Suite 215
Phoenix, AZ 85016
San Jose
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
B-9
<PAGE> 23
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98006
Orange
765 The City Drive
Suite 200
Orange, CA 92668
Anchorage
3201 C Street
Suite 203
Anglo Building
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
South Bend
4215 Edison Lakes Parkway
Suite 140
Mishawaka, IN 46545
Columbus
655 Metro Place South
Suite 470, Metro V
Dublin, OH 43017-0792
Henderson
618 North Green Street
Henderson, KY 42420
Lansing
2140 University Park Drive
Okemos, MI 48864
Marshall
1408 North Michigan
Marshall, IL 62441
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
B-10
<PAGE> 24
Huntington
3425 U.S. Route 60 East
Barboursville, WV 25504
Buffalo
95 John Muir Drive
Suite 102
Amherst, NY 14228
Manchester
4 Bedford Farms
Bedford, NH 03110
Harrisburg
4900 Ritter Road
Mechanicsburg, PA 17055
Boston South
Southboro Place, 2nd Floor
352 Turnpike Road
Southboro, MA 0772
Boston North
One Tech Drive, 3rd Floor
Andover, MA 01810-2497
Portland
2401 Congress Street
Portland, ME 04102
Albany
5 Pine West Plaza
Albany, NY 12205
Roanoke
5238 Valley Pointe Pkwy.
Roanoke, VA 24019
Falls Church
1420 Springhill Road
Suite 550
McLean, VA 22102
B-11
<PAGE> 25
Bristol
Landmark Center
113 Landmark Lane
Bristol, TN 37625
Chattanooga
6025 Lee Highway
Suite 443
Chattanooga, TN 37421
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Athens
3708 Atlanta Highway
Athens, GA 30604
Knoxville
5500 Lonas Drive
Suite 260
Knoxville, TN 37909
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Pensacola
25 W. Cedar Street
Suite 316
Pensacola, Fl 32501
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
B-12
<PAGE> 26
Tyler
821 East SE Loop 323
Suite 300
Tyler, TX 75701
Oklahoma City
4101 Perimeter Ctr Dr.
Suite 300, Perimeter Center
Oklahoma City, OK 73112-2304
Baltimore-East
Campbell Corporate Center One
4940 Campell Blvd., Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Cheyenne
6234 Yellowstone
Cheyenne, WY 82009
Cape Girardeau
2851 Independence
Cape Girardeau, MO 63701
Atlanta -South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Pasadena
800 East Colorado Blvd.
Suite 400
Pasadena, CA 91109
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
B-13
<PAGE> 27
South Bay
301 E. Ocean Boulevard
Suite 1900
Long Beach, CA 90802
Ventura
260 Maple court
Suite 210
Ventura, CA 93003
Las Vegas
3900 Paradise Road
Suite 239
Las Vegas, NV 89109
Eugene
1600 Valley River Drive
Suite 190
Eugene, OR 97401
Tupelo
1 Mississippi Plaza
Tupelo, MS 38801
Charleston
4975 Lacross Road
Suite 150, Rivergate Center
North Charleston, SC 29418-6518
Western Carolina
215 Thompson Street
Hendersonville, NC 28739-2828
B-14
<PAGE> 28
New Orleans
3330 W. Esplanade Avenue
Suite 200
Metairie, LA 70002
Lafayette
Saloom Office Park
Suite 350
100 Asma Boulevard
Lafayette, LA 70508
Shreveport
South Pointe Centre
3007 Knight Street
Suite 200
Shreveport, LA 71105
B-15
<PAGE> 1
EXHIBIT 4.2
FORD CREDIT AUTO RECEIVABLES CORPORATION
SELLER
FORD MOTOR CREDIT COMPANY
SERVICER
Standard Terms and Conditions of Agreement
Dated as of November 1, 1995
<PAGE> 2
TABLE OF CONTENTS
ARTICLES I-X
RESERVED
ARTICLE XI
INTRODUCTION
Definitions
Section 11.1 Definitions . . . . . . . . . . . . . . . . XI-1
Section 11.2 Usage of Terms . . . . . . . . . . . . . . . XI-16
Section 11.3 Cutoff Date and Record Date . . . . . . . . XI-17
Section 11.4 Section References . . . . . . . . . . . . . XI-17
Section 11.5 Compliance Certificates and Opinions . . . . XI-17
ARTICLE XII
The Receivables
Section 12.1 Representations and Warranties
of Seller . . . . . . . . . . . . . . . . . XII-1
Section 12.2 Repurchase Upon Breach . . . . . . . . . . . XII-5
Section 12.3 Custody of Receivable Files . . . . . . . . XII-6
Section 12.4 Duties of Servicer as Custodian . . . . . . XII-6
Section 12.5 Instructions; Authority to Act . . . . . . . XII-7
Section 12.6 Custodian's Indemnification . . . . . . . . XII-7
Section 12.7 Effective Period and Termination . . . . . . XII-8
ARTICLE XIII
Administration and Servicing of Receivables
Section 13.1 Duties of Servicer . . . . . . . . . . . . XIII-1
Section 13.2 Collection of Receivable Payments . . . . XIII-2
Section 13.3 Realization Upon Receivables . . . . . . . XIII-2
Section 13.4 [Reserved] . . . . . . . . . . . . . . . . XIII-2
Section 13.5 Maintenance of Security Interests
in Financed Vehicles . . . . . . . . . . . XIII-2
Section 13.6 Covenants of Servicer . . . . . . . . . . XIII-3
Section 13.7 Purchase of Receivables Upon
Breach . . . . . . . . . . . . . . . . . . XIII-3
Section 13.8 Servicer Fee . . . . . . . . . . . . . . . XIII-4
Section 13.9 Servicer's Certificate . . . . . . . . . . XIII-4
i
<PAGE> 3
Section Page
------- ----
Section 13.10 Annual Statement as to Compliance;
Notice of Default . . . . . . . . . . . . XIII-5
Section 13.11 Annual Independent Certified
Public Accountant's Report . . . . . . . . XIII-5
Section 13.12 Access to Certain Documentation
and Information Regarding
Receivables . . . . . . . . . . . . . . . XIII-6
Section 13.13 Servicer Expenses . . . . . . . . . . . . XIII-6
ARTICLE XIV
Distributions; Subordination Spread Account;
Statements to Certificateholders
Section 14.1 Accounts . . . . . . . . . . . . . . . . . . XIV-1
Section 14.2 Collections . . . . . . . . . . . . . . . . XIV-3
Section 14.3 Application of Collections . . . . . . . . . XIV-4
Section 14.4 Advances . . . . . . . . . . . . . . . . . . XIV-4
Section 14.5 Additional Deposits . . . . . . . . . . . . XIV-5
Section 14.6 Distributions . . . . . . . . . . . . . . . XIV-5
Section 14.7 Subordination; Subordination
Spread Account; Priority of
Distributions . . . . . . . . . . . . . . XIV-10
Section 14.8 Net Deposits . . . . . . . . . . . . . . . XIV-15
Section 14.9 Statements to Class A
Certificateholders . . . . . . . . . . . . XIV-15
ARTICLE XV
[Intentionally Omitted]
ARTICLE XVI
The Certificates
Section 16.1 The Certificates . . . . . . . . . . . . . . XVI-1
Section 16.2 Authentication of Certificates . . . . . . . XVI-1
Section 16.3 Registration of Transfer and
Exchange of Certificates . . . . . . . . . . XVI-2
Section 16.4 Mutilated, Destroyed, Lost, or Stolen
Certificates . . . . . . . . . . . . . . . . XVI-4
Section 16.5 Persons Deemed Owners . . . . . . . . . . . XVI-4
Section 16.6 Access to List of
Certificateholders' Names
ii
<PAGE> 4
Section Page
------- ----
and Addresses . . . . . . . . . . . . . . . XVI-4
Section 16.7 Maintenance of Office or Agency . . . . . . XVI-5
Section 16.8 Book-Entry Certificates . . . . . . . . . . XVI-5
Section 16.9 Notices to Clearing Agency . . . . . . . . . XVI-7
Section 16.10 Definitive Certificates . . . . . . . . . . XVI-7
ARTICLE XVII
The Seller
Section 17.1 Representations of Seller . . . . . . . . XVII-1
Section 17.2 Liability of Seller; Indemnities . . . . . XVII-3
Section 17.3 Merger or Consolidation of,
or Assumption of the Obligations
of, Seller . . . . . . . . . . . . . . . . XVII-4
Section 17.4 Limitation on Liability of Seller
and Others . . . . . . . . . . . . . . . . XVII-4
Section 17.5 Seller May Own Certificates . . . . . . . XVII-5
ARTICLE XVIII
The Servicer
Section 18.1 Representations of Servicer . . . . . . . XVIII-1
Section 18.2 Indemnities of Servicer . . . . . . . . . XVIII-3
Section 18.3 Merger or Consolidation of, or
Assumption of the Obligations of,
Servicer . . . . . . . . . . . . . . . . . XVIII-5
Section 18.4 Limitation on Liability of
Servicer and Others . . . . . . . . . . . XVIII-5
Section 18.5 Delegation of Duties . . . . . . . . . . . XVIII-6
ARTICLE XIX
Default
Section 19.1 Events of Default . . . . . . . . . . . . . XIX-1
Section 19.2 Appointment of Successor . . . . . . . . . . XIX-3
Section 19.3 Repayment of Advances . . . . . . . . . . . XIX-4
Section 19.4 Notification to Certificateholders . . . . . XIX-4
Section 19.5 Waiver of Past Defaults . . . . . . . . . . XIX-4
iii
<PAGE> 5
Section Page
------- ----
ARTICLE XX
The Trustee
Section 20.1 Duties of Trustee . . . . . . . . . . . . . XX-1
Section 20.2 Trustee's Certificate . . . . . . . . . . . XX-4
Section 20.3 Trustee's Assignment of Purchased
Receivables . . . . . . . . . . . . . . . . XX-4
Section 20.4 Certain Matters Affecting Trustee . . . . . XX-4
Section 20.5 Trustee Not Liable for Certificates
or Receivables . . . . . . . . . . . . . . . XX-7
Section 20.6 Trustee May Own Certificates . . . . . . . . XX-8
Section 20.7 Trustee's Fees and Expenses . . . . . . . . XX-8
Section 20.8 Indemnity of Trustee and
Class A Agent . . . . . . . . . . . . . . . XX-9
Section 20.9 Eligibility Requirements for
Trustee . . . . . . . . . . . . . . . . . . XX-10
Section 20.10 Resignation or Removal of
Trustee . . . . . . . . . . . . . . . . . . XX-10
Section 20.11 Successor Trustee . . . . . . . . . . . . . XX-11
Section 20.12 Merger or Consolidation of Trustee . . . . . XX-12
Section 20.13 Appointment of Co-Trustee or
Separate Trustee . . . . . . . . . . . . . . XX-12
Section 20.14 Representations and Warranties
of Trustee . . . . . . . . . . . . . . . . . XX-14
Section 20.15 Tax Returns . . . . . . . . . . . . . . . . XX-15
Section 20.16 Trustee May Enforce Claims
Without Possession of
Certificates . . . . . . . . . . . . . . . . XX-15
Section 20.17 Suits for Enforcement . . . . . . . . . . . XX-15
Section 20.18 Rights of Certificateholders to
Direct Trustee . . . . . . . . . . . . . . . XX-15
ARTICLE XXI
Termination
Section 21.1 Termination of the Trust . . . . . . . . . . XXI-1
Section 21.2 Optional Purchase of All Receivables . . . . XXI-2
iv
<PAGE> 6
Section Page
------- ----
ARTICLE XXII
Miscellaneous Provisions
Section 22.1 Amendment . . . . . . . . . . . . . . . . XXII-1
Section 22.2 Protection of Title to Trust . . . . . . . XXII-2
Section 22.3 Limitation on Rights of
Certificateholders . . . . . . . . . . . . XXII-5
Section 22.4 Governing Law . . . . . . . . . . . . . . XXII-7
Section 22.5 Notices . . . . . . . . . . . . . . . . . XXII-7
Section 22.6 Severability of Provisions . . . . . . . . XXII-7
Section 22.7 Assignment . . . . . . . . . . . . . . . . XXII-8
Section 22.8 Certificates Nonassessable
and Fully Paid . . . . . . . . . . . . . . XXII-8
Section 22.9 Further Assurances . . . . . . . . . . . . XXII-8
Section 22.10 No Waiver; Cumulative Remedies . . . . . . XXII-8
Section 22.11 Third-Party Beneficiaries . . . . . . . . XXII-8
Section 22.12 Actions by Certificateholders . . . . . . XXII-9
EXHIBITS
Exhibit A - Form of Class A Certificate
Exhibit B - Form of Class B Certificate
Exhibit C - Form of Depository Agreement
Exhibit D-1 - Form of Trustee's Certificate (assignment to
Seller)
Exhibit D-2 - Form of Trustee's Certificate (assignment To
Servicer)
v
<PAGE> 7
FORD CREDIT GRANTOR TRUSTS
STANDARD TERMS AND CONDITIONS OF AGREEMENT
DATED AS OF NOVEMBER 1, 1995
INTRODUCTION
These Standard Terms and Conditions of Agreement shall be
applicable to Ford Credit Grantor Trusts formed on or after the
date hereof, with respect to which a Pooling and Servicing
Agreement incorporating by reference these Standard Terms and
Conditions of Agreement shall have been executed.
ARTICLE I THROUGH X RESERVED
ARTICLE ARTICLE XI
INTRODUCTION
Definitions
Section 11.1 Definitions. Whenever used in the Agreement
(including these Standard Terms and Conditions of Agreement), the
following words and phrases, unless the context otherwise requires,
shall have the following meanings:
"Advance" means the amount, as of the last day of a
Collection Period, which the Servicer is required to advance on
the respective Receivable pursuant to Section 14.4(a).
"Agreement" means the Pooling and Servicing Agreement
executed by the Seller, the Servicer and the Trustee as of the
Cutoff Date, into which these Standard Terms and Conditions of
Agreement shall be incorporated by reference, and all amendments
and supplements thereto.
"Amount Financed" with respect to a Receivable means
the amount advanced under the Receivable toward the purchase
price of the Financed Vehicle and any related costs.
XI-1
<PAGE> 8
"Annual Percentage Rate" or "APR" of a Receivable means
the annual rate of finance charges stated in the Receivable.
"Available Interest" means, for any Distribution Date,
the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on
Receivables allocable to interest (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into
the Payahead Account, in each case to the extent allocable to
interest), (ii) Liquidation Proceeds to the extent allocable to
interest due thereon in accordance with the Servicer's customary
servicing procedures, (iii) all Advances made by the Servicer of
interest due on Receivables and all amounts advanced by the
Servicer pursuant to Section 14.4(b), and (iv) the Purchase
Amount of each Receivable that became a Purchased Receivable
during the related Collection Period to the extent attributable
to accrued interest thereon; provided, however that in
calculat ing the Available Interest the following will be excluded:
(i) amounts received on Receivables to the extent that the
Servicer has previously made an unreimbursed Advance of interest; and
(ii) Liquidation Proceeds with respect to a particular Receivable to
the extent of any unreimbursed Advances of interest.
"Available Principal" means, for any Distribution Date,
the sum of the following amounts with respect to the preceding
Collection Period: (i) that portion of all collections on
Receivables allocable to principal (including amounts withdrawn
from the Payahead Account but excluding amounts deposited into
the Payahead Account, in each case to the extent allocable to
principal), (ii) Liquidation Proceeds attributable to principal
in accordance with the Servicer's customary servicing procedures,
(iii) all Advances made by the Servicer of principal due on the
Receivables, (iv) to the extent attributable to principal, the
Purchase Amount of each Receivable that became a Purchased
Receivable during such Collection Period, and (v) partial
prepayments attributable to any refunded item included in the
Amount Financed, 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 below the
XI-2
<PAGE> 9
Scheduled Payment as of the Cutoff Date; provided, however, that
in calculating the Available Principal the following will be
excluded: (i) amounts received on Receivables to the extent that
the Servicer has previously made an unreimbursed Advance of
principal; and (ii) Liquidation with respect to a particular
Receivable to the extent of any unreimbursed Advances of
principal.
"Book-Entry Certificates" shall mean a beneficial
interest in the Class A Certificates, ownership and transfers of
which shall be made through book entries by a Clearing Agency as
described in Section 16.8.
"Business Day" means any day other than a Saturday, a
Sunday, or a day on which banking institutions or trust companies
in New York, New York shall be authorized or obligated by law,
executive order, or governmental decree to remain closed.
"Certificate" means the Class A Certificate and the
Class B Certificate.
"Certificate Account" means the account designated as
such, established and maintained pursuant to Section 14.1.
"Certificateholder" or "Holder" means the Person in
whose name the respective Certificate shall be registered in the
Certificate Register, except that, solely for the purposes of
giving any consent, waiver, request, or demand pursuant to the
Agreement, the interest evidenced by any Class A Certificate
registered in the name of the Seller, the Servicer, or any Person
controlling, controlled by, or under common control with the
Seller or the Servicer, shall not be taken into account in
determining whether the requisite percentage necessary to effect
any such consent, waiver, request, or demand shall have been
obtained; provided, that the Trustee shall not be liable for the
inclusion in any such determination of any interest evidenced by
any Class A Certificate registered in the name of any Person
controlling, controlled by, or under common control with the
Seller or the Servicer unless a Trust Officer in the Corporate
Trust Office with knowledge hereof and familiarity herewith had
actual knowledge that such Person so controlled, was controlled
by, or was under common con-
XI-3
<PAGE> 10
trol with, the Seller or the Servicer, as the case may be.
"Certificate Owner" shall mean, with respect to a Book-
Entry Certificate, the Person who is the owner of such Book-Entry
Certificate, as reflected on the books of the Clearing Agency, or
on the books of a Person maintaining an account with such
Clearing Agency (directly or as an indirect participant, in accordance
with the rules of such Clearing Agency) and shall mean, with
respect to a Definitive Certificate, the Certificateholder.
"Certificate Register" and "Certificate Registrar" mean
the register maintained and the registrar appointed pursuant to
Section 16.3.
"Class A Agent" shall have the meaning specified in
Section 14.7.
"Class A Certificate" means any one of the Certificates
executed by the Trust and authenticated by the Trustee in
substantially the form set forth in Exhibit A hereto.
"Class A Certificate Balance" shall equal, initially,
the Class A Percentage of the Original Pool Balance and, thereafter,
shall equal the initial Class A Certificate Balance, reduced
by all amounts distributed to the Class A Certificateholders and
allocable to principal.
"Class A Certificate Factor" means, as of a Distribution
Date, a seven-digit decimal figure equal to the Class A Certificate
Balance as of the close of business on such Distribution Date
divided by the Class A Certificate Balance as of the Cutoff Date.
"Class A Distributable Amount" means on any Distribution
Date, the sum of the Class A Principal Distributable Amount
and the Class A Interest Distributable Amount.
"Class A Interest Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class A Interest
Distributable Amount for such Distribution Date plus any
outstanding Class A Interest Carryover Shortfall from the preceding
Distribution Date
XI-4
<PAGE> 11
plus interest on such outstanding Class A Interest Carryover
Shortfall, to the extent permitted by law, at the Pass-Through
Rate from such preceding Distribution Date through the current
Distribution Date, over the amount of interest that the holders
of the Class A Certificates actually received on such current
Distribution Date.
"Class A Interest Distributable Amount" means, for any
Distribution Date, thirty (30) days of interest at the Pass-
Through Rate on the Class A Certificate Balance as of the close
of business on the last day of the preceding Collection Period.
"Class A Principal Carryover Shortfall" means, as of
the close of any Distribution Date, the excess of the Class A
Principal Distributable Amount plus any outstanding Class A
Principal Carryover Shortfall from the preceding Distribution
Date over the amount of principal that the holders of the Class A
Certificates actually received on such current Distribution Date.
"Class A Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class A Percentage
of: (i) the principal portion of all Scheduled Payments due
during the preceding Collection Period; (ii) the principal
portion of all prepayments in full received during the preceding
Collection Period (and certain partial prepayments relating to
rebates of extended warranty contract costs and insurance premiums
or which cause a reduction in the Obligor's periodic payment
to below the Scheduled Payment as of the Cutoff Date) (without
duplication of amounts included in clause (i) above); (iii) the
Principal Balance of each Receivable that became a Purchased
Receivable under an obligation that arose during the preceding
Collection Period (without duplication of amounts referred to in
clauses (i) and (ii) above) and (iv) the Principal Balance of
each Receivable liquidated by the Servicer during the preceding
Collection Period.
"Class B Certificate" means any one of the Certificates
executed by the Trust and authenticated by the Trustee in
substantially the form set forth in Exhibit B hereto.
"Class B Certificate Balance" shall equal, initially,
the Class B Percentage of the Original Pool
XI-5
<PAGE> 12
Balance and, thereafter, shall equal the initial Class B
Certificate Balance, reduced by all amounts distributed to Class B
Certificateholders (or deposited in the Subordination Spread
Account not including the Subordination Initial Deposit) and
allocable to principal and by the Class A Principal Carryover
Shortfall and the Class B Principal Carryover Shortfall.
"Class B Distributable Amount" means, with respect to
any Distribution Date, the sum of the Class B Principal
Distributable Amount and the Class B Interest Distributable Amount.
"Class B Interest Carryover Shortfall" means, as of the
close of any Distribution Date, the excess of the Class B Interest
Distributable Amount plus any outstanding Class B Interest
Carryover Shortfall on the preceding Distribution Date over the
amount of interest that the holders of the Class B Certificates
received (including amounts deposited in the Subordination Spread
Account) on such current Distribution Date.
"Class B Interest Distributable Amount" means, with
respect to any Distribution Date, thirty (30) days of interest at
the Pass-Through Rate on the Class B Certificate Balance as of
the close of business on the last day of the preceding Collection
Period plus the excess, for each Receivable having an APR greater
than the sum of the Pass-Through Rate and the Servicing Fee Rate,
of the interest portion of the Scheduled Payment over the portion
of such interest equal to interest at the sum of the Pass-Through
Rate and the Servicing Fee Rate.
"Class B Principal Carryover Shortfall" means, as of
the close of any Distribution Date, the excess of the Class B
Principal Distributable Amount and any outstanding Class B
Principal Carryover Shortfall on the preceding Distribution Date
over the amount of principal that the holders of the Class B
Certificates received (including amounts deposited in the
Subordination Spread Amount) on such current Distribution Date.
"Class B Principal Distributable Amount" means, with
respect to any Distribution Date, the sum of the Class B Percentage
of: (i) the principal portion of all Scheduled Payments due
during the preceding Collection
XI-6
<PAGE> 13
Period, (ii) the principal portion of all prepayments in full
received during the preceding Collection Period (and certain partial
prepayments relating to rebates of extended warranty contract costs
and insurance premiums or which cause a reduction in the Obligor's
periodic payment to below the Scheduled Payment as of the
Cutoff Date) (without duplication of amounts included in clause (i)
above), (iii) the Principal Balance of each Receivable that became
a Purchased Receivable under an obligation that arose during the
preceding Collection Period (without duplication of amounts included
in clauses (i) and (ii) above) and (iv) the Principal Balance of
each Receivable liquidated by the Servicer during the preceding
Collection Period.
"Clearing Agency" shall mean an organization registered
as a "clearing agency" pursuant to Section 17A of the Securities
Exchange Act of 1934, as amended.
"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.
"Collection Account" means the account designated as
such, established and maintained pursuant to Section 14.1.
"Collection Period" means a calendar month. 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.
"Corporate Trust Office" means the office of the
Trustee at which its corporate trust business shall be
administered, which office at the date of the Agreement shall be
specified therein.
"Cutoff Date" means the date specified as such in the
Agreement.
XI-7
<PAGE> 14
"Dealer" means the dealer who sold a Financed Vehicle
and who originated and assigned the respective Receivable to Ford
Motor Credit Company under an existing agreement between such
dealer and Ford Motor Credit Company.
"Dealer Recourse" means, 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.
"Definitive Certificates" shall have the meaning
specified in Section 16.8.
"Delivery" when used with respect to Subordination
Spread Account Property means:
(a) with respect to bankers' acceptances, commercial paper,
negotiable certificates of deposit and other obligations that
constitute "instruments" within the meaning of Section 9-105(1)(i) of
the UCC and are susceptible of physical delivery, transfer thereof to
the Class A Agent by physical delivery to the Class A Agent in the
State of New York indorsed to, or registered in the name of, the
Class A Agent or indorsed in blank, and, with respect to "money" as
defined in Section 1-201(24) of the UCC, delivery thereof to the
Class A Agent in the State of New York, and with respect to a
"certificated security" (as defined in Section 8-102(1)(a) of the
UCC) transfer thereof (i) by delivery of such certificated security
indorsed to, or registered in the name of, the Class A Agent or
indorsed in blank to a financial intermediary (as defined in Section
8-313(4) of the UCC) and the making by such financial intermediary of
entries on its books and records identifying such certificated
securities as belonging solely and exclusively to the Class A Agent
(acting in its capacity under Section 14.7) and the sending by such
financial intermediary of a confirmation to the Class A Agent of the
purchase of such certificated security by the Class A Agent, or (ii)
by delivery thereof to a "clearing corporation" (as defined in
section 8-102(3) of the UCC) either in bearer form, in registered
form registered to the clearing corporation or
XI-8
<PAGE> 15
to a "custodian bank" (as defined in Section 8-102(4) of the
UCC) or a nominee of either of them subject to the clearing
corporations exclusive control and the making by such clearing
corporation of appropriate entries on its books reducing the
appropriate securities account of the transferor and increasing the
appropriate securities account of a financial intermediary by the
amount of such certificated security, the identification by the
clearing corporation of the certificated securities for the sole and
exclusive account of the financial intermediary, the maintenance in
the State of New York of such certificated securities by such
clearing corporation or a "custodian bank" (as defined in Section
8-102(4) of the UCC) or the nominee of either subject to the clearing
corporation's exclusive control, the indorsement thereof to the
clearing corporation or such custodian bank or a nominee of either of
them subject to the clearing corporation's exclusive control, the
sending of a confirmation to the Class A Agent by the financial
intermediary of the purchase by the Class A Agent of such securities
and the making by such financial intermediary of entries on its books
and records identifying such certificated securities as belonging
solely and exclusively to the Class A Agent (acting in its capacity
under Section 14.7) (all of the foregoing, "Physical Property"), and,
in any event, any such Physical Property in registered form shall be
in the name of the Class A Agent or its nominee; and such additional
or alternative procedures as may hereafter become appropriate to
effect the complete transfer of ownership of any such Subordination
Spread Account Property to the Class A Agent (as defined herein),
consistent with changes in applicable law or regulations or the
interpretation thereof; and
(b) with respect to any securities issued by the U.S.
Treasury, the Federal Home Loan Mortgage Corporation or by the
Federal National Mortgage Association that is a book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations, the following procedures, all in accordance
with applicable law, including applicable federal regulations and
Articles 8 and 9 of the UCC: book-entry registration of such
property to an appropriate book-entry account maintained with a
Federal Reserve Bank by a financial intermediary which is also a
"depositary" pursuant to applicable federal regulations and issuance
by such financial intermediary of a deposit advice or
XI-9
<PAGE> 16
other written confirmation of such book-entry registration to
the Class A Agent of the purchase by the Class A Agent of such book-
entry securities; the making by such financial intermediary of
entries in its books and records identifying such book-entry security
held through the Federal Reserve System pursuant to Federal
book-entry regulations as belonging solely and exclusively to the
Class A Agent acting in its capacity under Section 14.7 and
indicating that such custodian holds such Subordination Spread
Account Property solely as agent for the Class A Agent; and such
additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such
Subordination Spread Account Property to the Class A Agent,
consistent with changes in applicable law or regulations or the
interpretation thereof.
"Depository Agreement" means the agreement among the
Seller, the Trustee, and the initial Clearing Agency, dated as of
the date of the Agreement, substantially in the form attached
hereto as Exhibit C.
"Determination Date" means the eighth Business Day but
not later than the 10th day of each calendar month.
"Distribution Date" means, for each Collection Period,
the 15th day of the following month, or if the 15th day is not a
Business Day, the next following Business Day, commencing with
the date specified in the Agreement.
"Event of Default" means an event specified in Section
19.1.
"Financed Vehicle" means a new or used automobile or
light truck, together with all accessions thereto, securing an
Obligor's indebtedness under the respective Receivable.
"Lien" means 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.
"Liquidated Receivable" means a Receivable which, by
its terms, is in default and as to which the Servicer has
determined, in accordance with its customary
XI-10
<PAGE> 17
servicing procedures, that eventual payment in full is unlikely
or has repossessed and disposed of the Financed Vehicle.
"Liquidation Proceeds" means the monies collected from
whatever source, during the respective Collection Period, on a
Liquidated Receivable, net of the sum of any amounts expended by
the Servicer for the account of the Obligor plus any amounts
required by law to be remitted to the Obligor.
"Monthly Remittance Condition" has the meaning assigned
to such term in Section 14.1(b) hereof.
"Obligor" on a Receivable means 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" means 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
appropriate.
"Opinion of Counsel" means a written opinion of counsel
who may but need not be counsel to the Seller or Servicer, which
counsel shall be acceptable to the Trustee.
"Optional Purchase Percentage" means the percentage
specified in the Agreement.
"Original Pool Balance" means the Pool Balance as of
the Cutoff Date, as specified in the Agreement.
"Outstanding Advances" on a Receivable means the sum,
as of the close of business on the last day of a Collection
Period, of all Advances as reduced by payments as specified in
Section 14.4(a) with respect to such Receivable.
"Pass-Through Rate" means the interest rate payable to
Certificateholders, as specified in the Agreement.
XI-11
<PAGE> 18
"Payahead" on a Receivable means the amount, as of the
close of business on the last day of a Collection Period,
specified in Section 14.3 with respect to such Receivable.
"Payahead Account" means the account designated as
such, established and maintained pursuant to Section 14.1.
"Payahead Balance" on a Receivable means 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
14.3 and 14.4.
"Person" means 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" has the meaning assigned to such
term in the definition of the term "Delivery" in this Section
11.1.
"Pool Balance" as of the close of business of the last
day of a Collection Period means the aggregate Principal Balance
of the Receivables (excluding Purchased Receivables and Liquidated
Receivables); provided, that where the Pool Balance is relevant in
determining whether the requisite percentage of Class A
Certificateholders necessary to effect any consent, waiver, request,
or demand shall have been obtained, the Pool Balance shall be deemed
to be reduced by the amount equal to the Pool Balance (without giving
effect to this provision) represented by the interests evidenced by
any Class A Certificate registered in the name of the Seller, the
Servicer, or any Person controlling, controlled by, or under common
control with the Seller or the Servicer.
XI-12
<PAGE> 19
"Pool Factor" as of the last day of a Collection Period
means a seven-digit decimal figure equal to the Pool Balance
divided by the Original Pool Balance.
"Principal Balance" of a Receivable, as of the close of
business on the last day of a Collection Period, means the Amount
Financed minus the sum of (a) that portion of all Scheduled
Payments due on or prior to such day allocable to principal using
the actuarial or constant yield method, (b) any refunded portion
of extended warranty protection plan costs, or of physical
damage, credit life, or disability insurance premiums included in
the Amount Financed, (c) any payment of the Purchase Amount with
respect to the Receivable allocable to principal and (d) any
prepayment in full or any partial prepayments applied to reduce
the principal balance of the Receivable.
"Program" has the meaning assigned to such term in
Section 13.11 hereof.
"Purchase Amount" means the amount, as of the close of
business on the last day of a Collection Period, required to be
paid by an Obligor to prepay in full the respective Receivable
under the terms thereof (which amount shall include a full
month's interest, in the month of payment, at the Annual
Percentage Rate).
"Purchased Receivable" means a Receivable purchased as
of the close of business on the last day of respective Collection
Period by the Servicer pursuant to Section 13.7 or by the Seller
pursuant to Section 12.2.
"Realized Losses" means, the excess of the Principal
Balance of any Liquidated Receivable (as reduced by any
Payaheads) over Liquidation Proceeds to the extent allocable to
principal received in the Collection Period.
"Receivable" means any retail installment sale contract
which shall appear on Schedule A to the Agreement (which Schedule
A may be in the form of microfiche) and any amendments, modifications
or supplements to such retail installment sale contract which has
not been released by the Trustee from the Trust.
XI-13
<PAGE> 20
"Receivable Files" means the documents specified in
Section 12.3.
"Record Date" means the fourteenth day of the current
calendar month; provided, however, that if Definitive Certificates
are issued pursuant to Section 16.10 hereof, subsequent to
the issuance of such Definitive Certificates the Record Date for
any Distribution Dateshall be the last day of the Collection
Period immediately preceding the month in which such Distribution
Date occurs.
"Required Deposit Rating" means the rating specified in
the Agreement.
"Residual Certificate" has the meaning assigned to such
term in Section 16.1 hereof.
"Scheduled Payment" on a Receivable means that portion
of the payment required to be made by the Obligor during the
respective Collection Period sufficient to amortize the Principal
Balance under the actuarial method over the term of the Receivable
and to provide interest at the APR.
"Seller" means Ford Credit Auto Receivables Corporation
as the seller of the Receivables under the Agreement, and each
successor to Ford Credit Auto Receivables Corporation (in the
same capacity) pursuant to Section 17.3.
"Servicer" means Ford Motor Credit Company as the
servicer of the Receivables, and each successor to Ford Motor
Credit Company (in the same capacity) pursuant to Section 18.3 or
19.2.
"Servicer Fees" means the sum of the Servicing Fee and
the Supplemental Servicing Fee.
"Servicer's Certificate" means 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 13.9.
"Servicing Fee" means, with respect to a Collection
Period, the fee payable to the Servicer for
XI-14
<PAGE> 21
services rendered during the respective Collection Period, which
shall be equal to one-twelfth of the Servicing Fee Rate multiplied
by the Pool Balance as of the first day of the Collection
Period.
"Servicing Fee Rate" means the percentage set forth in
the Agreement.
"Simple Interest Method" means 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" means 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.
"State" means any state or commonwealth of the United
States of America, or the District of Columbia.
"Subordination Initial Deposit" means the amounts, if
any, deposited into the Subordination Spread Account on the date
of initial issuance of the Certificates pursuant to Section 14.7
and specified in the Agreement.
"Subordination Spread Account" means the account
established and maintained pursuant to Section 14.7.
"Subordination Spread Account Property" has the meaning
specified in Section 14.7(a)(ii).
"Supplemental Servicing Fee" means the fee payable to
the Servicer for certain services rendered during the respective
Collection Period, determined pursuant to and defined in Section
13.8.
"Total Available Amount" shall mean, for each
Distribution Date, the sum of the Available Interest and the
Available Principal.
XI-15
<PAGE> 22
"Trust" means the trust created by the Agreement, the
estate of which shall consist of the Receivables (other than
Purchased Receivables) and all monies paid thereon other than
amounts deposited or to be deposited in the Payahead Account, and
all monies due thereon, on or after the Cutoff Date; security
interests in the Financed Vehicles; funds deposited in the
Collection Account and the Certificate Account and proceeds
thereof; any property (including the right to receive Liquidation
Proceeds) that shall have secured a Receivable and that shall
have been acquired by or on behalf of the Trustee; proceeds from
claims on any physical damage, credit life, or disability insurance
policies covering Financed Vehicles or Obligors; any Dealer
Recourse; all right, title and interest of the Seller in and to
the Purchase Agreement; and the proceeds of any and all of the
foregoing.
"Trustee" means the Person acting as Trustee under the
Agreement, its successor in interest, and any successor trustee
pursuant to Section 20.11.
"Trustee Officer" means the chairman or vice-chairman
of the board of directors, the chairman or vice-chairman of the
executive committee of the board of directors, the president, any
vice president, the secretary, any assistant secretary, the
treasurer, any assistant treasurer, the cashier, any assistant
cashier, any trust officer or assistant trust officer, the
controller and any assistant controller, or any other officer of
the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means,
with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his knowledge
of and familiarity with the particular subject.
"Trustee's Certificate" means a certificate completed
and executed by the Trustee by a Trustee Officer pursuant to
Section 20.2, substantially in the form of, in the case of
assignment to the Seller, Exhibit D-1 and in the case of an
assignment to the Servicer, Exhibit D-2.
"UCC" means the Uniform Commercial Code as in effect in
the respective jurisdiction.
XI-16
<PAGE> 23
Section 11.2 Usage of Terms. With respect to
all terms in the Agreement, the singular includes the
plural and the plural the singular; words importing any
gender include the other genders; references to "writing"
include printing, typing, lithography, and other means of
reproducing words in a visible form; references to
agreements and other contractual instruments include all
subsequent amendments thereto or changes therein entered
into in accordance with their respective terms and not
prohibited by the Agreement; references to Persons
include their permitted successors and assigns; and the
term "including" means "including without limitation."
Section 11.3 Cutoff Date and Record Date. All
references to the Record Date prior to the first Record
Date in the life of the Trust shall be to the Cutoff
Date.
Section 11.4 Section References. All section
references shall be to Sections in these Standard Terms
and Conditions of Agreement.
Section 11.5 Compliance Certificates and
Opinions. Upon any application or request by the Seller
or the Servicer to the Trustee to take any action under
any provision herein, the Seller or the Servicer (as the
case may be) shall furnish to the Trustee an Officer's
Certificate stating that all conditions precedent, if
any, provided for herein relating to the proposed action
have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, 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 Agreement relating to
such particular application or request, no additional
certificate or opinion need be furnished.
Every certificate or opinion with respect to
compliance with a condition or covenant provided herein
shall include:
(1) a statement that each
individual signing such certificate or opinion
has read such covenant or condition and the
definitions herein relating thereto;
XI-17
<PAGE> 24
(2) 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;
(3) a statement that, in
the opinion of each such individual, he has
made such examination or investigation as is
necessary to enable him to express an informed
opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to
whether or not, in the opinion of each such
individual, such condition or covenant has been
complied with.
XI-18
<PAGE> 25
ARTICLE XII
The Receivables
Section 12.1 Representations and Warranties of
Seller. The Seller makes the following representations
and warranties as to the Receivables on which the Trustee
relies in accepting the Receivables in trust and executing
and authenticating the Certificates. Such representations
and warranties speak as of the execution and
delivery of the Agreement, but shall survive the sale,
transfer, and assignment of the Receivables to the Trustee
and, if applicable, any subsequent assignment or transfer
pursuant to Article XV:
(i) Characteristics of Receivables.
Each Receivable (a) shall have been originated in
the United States of America by a Dealer for the
retail sale of a Financed Vehicle in the ordinary
course of such Dealer's business, shall have been
fully and properly executed by the parties thereto,
shall have been purchased by the Seller from Ford Motor
Credit Company, which in turn shall have purchased
such Receivable from such Dealer under an existing
dealer agreement with Ford Motor Credit Company, and
shall have been validly assigned by such Dealer to Ford
Motor Credit Company, which in turn shall have been
validly assigned by Ford Motor Credit Company 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 Motor Credit Company
in the Financed Vehicle, which security interest
has been assigned by Ford Motor Credit
Company to the Seller, which in turn shall be
assignable by the Seller to the Trustee, (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
XII-1
<PAGE> 26
level payment) that fully amortize the Amount
Financed by maturity and yield interest at the
Annual Percentage Rate, and (e) shall provide
for, in the event that such contract is prepaid,
a prepayment that fully pays the Principal Balance.
(ii) Schedule of Receivables.
The information set forth in Schedule A to the
Agreement 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 Certificateholders
shall have been utilized in selecting the
Receivables.
(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 the
Agreement shall comply in all material respects
with all requirements of applicable federal,
State, and local laws, and regulations thereunder,
including, without limitation, usury laws,
the Federal Truth-in-Lending Act, the Equal
Credit Opportunity Act, the Fair Credit Reporting
Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the
Magnuson-Moss Warranty Act, the Federal Reserve
Board's Regulations B and Z, and State adaptations
of the National Consumer Act and of the
Uniform Consumer Credit Code, and other consumer
credit laws and equal credit opportunity and
disclosure laws.
(iv) Binding Obligation. Each
Receivable shall represent the genuine, legal,
valid, and binding payment obligation in writing
of the Obligor, enforceable by the holder thereof
in accordance with its terms subject to the effect
of bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of
creditors' rights generally.
(v) No Government Obligor.
None of the Receivables shall be due from the
United States of America or any State or from
XII-2
<PAGE> 27
any agency, department, or instrumentality of
the United States of America or any State.
(vi) Security Interest in Financed
Vehicle. Immediately prior to the sale, assignment,
and transfer thereof, each Receivable shall be
secured by a validly perfected first security interest
in the Financed Vehicle in favor of Ford Motor
Credit Company as secured party or all necessary
and appropriate actions shall have been commenced that
would result in the valid perfection of a first security
interest in the Financed Vehicle in favor of Ford
Motor Credit Company as secured party.
(vii) Receivables in Force. No
Receivable shall have been satisfied, subordinated,
or rescinded, nor shall any Financed Vehicle have
been released from the lien granted by the related
Receivable in whole or in part.
(viii) No Waiver. No provision
of a Receivable shall have been waived.
(ix) No Defenses. No right of
rescission, setoff, counterclaim, or defense shall
have been asserted or threatened with respect to
any Receivable.
(x) No Liens. To the best of
the Seller's knowledge, no liens or claims
shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be
liens prior to, or equal or coordinate with,
the security interest in the Financed Vehicle
granted by the Receivable.
(xi) No Default. Except for
payment defaults continuing for a period of not
more than thirty 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
XII-3
<PAGE> 28
terms of any Receivable shall have arisen; and
the Seller shall not waive any of the
foregoing.
(xii) Insurance. Ford Motor
Credit Company, in accordance with its
customary procedures, shall have determined that
the Obligor has obtained or agreed to obtain
physical damage insurance covering the Financed
Vehicle.
(xiii) Title. It is the
intention of the Seller that the transfer and
assignment herein contemplated constitute a sale
of the Receivables from the Seller to the Trust
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, or pledged by the
Seller to any Person other than the Trustee.
Immediately prior to the transfer and assignment
herein contemplated, the Seller had good
and marketable title to each Receivable free
and clear of all Liens, encumbrances, security
interests, and rights of others and, immediately
upon the transfer thereof, the Trustee for
the benefit of the Certificateholders shall
have good and marketable title to each
Receivable, free and clear of all Liens,
encumbrances, security interests, and rights of others;
and the transfer has been perfected under the
UCC.
(xiv) Valid Assignment. No
Receivable shall have been originated in, or
shall be subject to the laws of, any jurisdiction
under which the sale, transfer, and assignment
of such Receivable under the Agreement
or pursuant to transfers of 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.
XII-4
<PAGE> 29
(xv) All Filings Made. All
filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give
the Trustee a first perfected ownership interest
in the Receivables shall have been made.
(xvi) Chattel Paper. Each
Receivable constitutes "chattel paper" as defined
in the UCC.
(xvii) No Simple Interest
Receivables. None of the Receivables are Simple
Interest Receivables.
(xviii) One Original. There
shall be only one original executed copy of
each Receivable.
(xix) Agreement. The
representations and warranties in the Agreement
shall be true.
Section 12.2 Repurchase Upon Breach. The
Seller, the Servicer, or the Trustee, as the case may be,
shall inform the other parties to the Agreement and Ford
Motor Credit Company promptly, in writing, upon the
discovery of any breach of the Seller's representations
and warranties pursuant to Section 12.1. Unless the
breach shall have been cured by the last day of the
second Collection Period following the discovery, the
Trustee shall enforce the obligation of the Seller under
the Purchase Agreement, and, if necessary, the Seller
shall enforce the obligation of Ford Motor Credit Company
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 14.5. The sole remedy of the
Trustee, the Trust, or the Certificateholders with
respect to a breach of the Seller's representations and
warranties pursuant to Section 12.1 shall be to require
the Seller to repurchase Receivables pursuant to this
Section 12.2 or to enforce the obligation of Ford Motor
Credit Company to the Seller to repurchase such Receivables
pursuant to the Purchase Agreement.
XII-5
<PAGE> 30
Section 12.3 Custody of Receivable Files. To
assure uniform quality in servicing the Receivables and
to reduce administrative costs, the Trustee, upon the
execution and delivery of the Agreement, hereby revocably
appoints the Servicer, and the Servicer hereby accepts
such appointment, to act as the agent of the Trustee as
custodian of the following documents or instruments which
are hereby constructively delivered to the Trustee with
respect to each Receivable:
(i) The original of the
Receivable.
(ii) The original credit application
fully executed by the Obligor or a photocopy thereof.
(iii) The original certificate
of title or such documents that the Servicer or
Ford Motor Credit Company shall keep on file,
in accordance with its customary procedures,
evidencing the security interest of Ford Motor
Credit Company in the Financed Vehicle.
(iv) Any and all other documents
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 Trustee confirming that the Servicer has
received on behalf of the Trustee all the documents and
instruments necessary for the Servicer to act as the
agent of the Trustee for the purposes set forth in this
Section, including the documents referred to herein, and
the Trustee is hereby authorized to rely on such
Officer's Certificate.
Section 12.4 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold
the Receivable Files on behalf of the Trustee for the use
and benefit of all present and future Certificateholders,
and maintain such accurate and complete accounts, re-
XII-6
<PAGE> 31
cords, and computer systems pertaining to each Receivable
File as shall enable the Trustee to comply with these
Standard Terms and Conditions of Agreement. In performing
its duties as custodian the Servicer shall act with
reasonable care, using that degree of skill and attention
that the Servicer exercises with respect to the receivable
files relating to all comparable automotive receivables
that the Servicer services for itself or others.
In accordance with its customary practices with respect
to its retail installment sale contracts, the Servicer
shall conduct, or cause to be conducted, periodic audits
of the Receivable Files held by it under the Agreement,
and of the related accounts, records, and computer systems,
in such a manner as shall enable the Trustee to
verify the accuracy of the Servicer's record keeping.
The Servicer shall promptly report to the 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 Trustee of the Receivable Files.
(b) Maintenance of and Access to Records.
The Servicer shall maintain each Receivable File at one
of its offices specified in Schedule B to the Agreement,
or at such other office as shall be specified to the
Trustee by written notice not later than 90 days after
any change in location. The Servicer shall make available
to the Trustee or its 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 Trustee shall instruct.
Section 12.5 Instructions; Authority to Act.
All instructions from the Trustee shall be in writing and
signed by a Trust Officer, 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 12.6 Custodian's Indemnification. The
Servicer as custodian shall indemnify the 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
XII-7
<PAGE> 32
against the 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 for any portion of any such amount resulting from
the willful misfeasance, bad faith, or negligence of the
Trustee.
Section 12.7 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 12.7. If Ford Motor Credit Company shall resign
as Servicer in accordance with the provisions of the
Agreement or if all of the rights and obligations of the
Servicer shall have been terminated under Section 19.1,
the appointment of the Servicer as custodian shall be
terminated by the Trustee, or by the Holders of Class A
Certificates evidencing not less than 25% of the Class A
Certificate Balance, in the same manner as the Trustee or
such Holders may terminate the rights and obligations of
the Servicer under Section 19.1. As soon as practicable
after any termination of such appointment, the Servicer
shall deliver the Receivable Files and the related accounts
and records maintained by the Servicer to the Trustee or
the Trustee's agent at such place or places as the Trustee
may reasonably designate.
XII-8
<PAGE> 33
ARTICLE XIII
Administration and Servicing of Receivables
Section 13.1 Duties of Servicer. The Servicer shall manage, service,
administer, and make collections on the Receivables with reasonable care,
using that degree of skill and attention that the Servicer exercises with
respect to all comparable receivables that it services for itself or
others. The Servicer's duties shall include collection and posting of all
payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting
tax information to Obligors, accounting for collections, furnishing monthly
and annual statements to the Trustee with respect to distributions, and
making Advances pursuant to Section 14.4. 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 authorized and empowered by the Trustee to execute and deliver, on
behalf of itself, the Trust, the Certificateholders, or the Trustee 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 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 Trustee shall, at the Servicer's expense and direction,
take steps to enforce the Receivable, including bringing suit in its name
or the name of the Certificateholders. The Trustee shall furnish the
Servicer with any powers of attorney and other documents reasonably
necessary or appropriate to enable the Servicer to carry out its servicing
and administrative duties hereunder. The Servicer, at its expense, shall
obtain on behalf of the Trust all licenses, if any, required by the laws of
any jurisdiction to be held by the Trust in connection with
XIII-1
<PAGE> 34
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 13.2 Collection of Receivable Payments. The Servicer shall
make reasonable efforts to collect all payments called for under the terms
and provisions of such 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. The
Servicer may grant extensions, rebates, or adjustments on a Receivable,
which shall not, for the purposes of the Agreement (other than Section
13.6 hereof), modify the original due dates and amounts of the Scheduled
Payments. 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 13.3 Realization Upon Receivables. On behalf of the Trust,
the Servicer shall use reasonable efforts, consistent with its customary
servicing procedures, to repossess or otherwise convert the ownership of
the Financed Vehicle securing any Receivable as to which the Servicer
shall have determined eventual payment in full is unlikely. The Servicer
shall follow such customary and usual practices and procedures as it shall
deem necessary or advisable in its servicing of comparable receivables,
which may include reasonable efforts to realize upon any Dealer Recourse
and selling the Financed Vehicle at public or private sale. The foregoing
shall be subject to the provision that, in any case in which the Financed
Vehicle shall have suffered damage, the Servicer shall not expend funds in
connection with the repair or the repossession of such Financed Vehicle
unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater
than the amount of such expenses.
Section 13.4 [Reserved]
Section 13.5 Maintenance of Security Interests in Financed Vehicles.
The Servicer shall, in accordance with its customary servicing procedures,
take such steps as are necessary to maintain perfection of the security
interest created by each Receivable in the related Fi-
XIII-2
<PAGE> 35
nanced Vehicle. The Trustee hereby authorizes the Servicer to take such
steps as are necessary to re-perfect such security interest on behalf of
the Trust in the event of the relocation of a Financed Vehicle or for any
other reason.
Section 13.6 Covenants of Servicer. The Servicer shall not 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, nor shall the Servicer impair the rights of the
Certificateholders in the Receivables, nor shall the Servicer change the
Annual Percentage Rate with respect to any Receivable, nor shall the
Servicer modify the number or amount of Scheduled Payments under a
Receivable.
Section 13.7 Purchase of Receivables Upon Breach. (a) The Servicer
or the Trustee shall inform the other party promptly, in writing, upon the
discovery of any breach pursuant to Section 13.2, 13.5 or 13.6. 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 Trustee (which shall include any Receivable as to which
a breach of Section 13.6 has occurred). In consideration of the purchase
of such Receivable, the Servicer shall remit the Purchase Amount in the
manner specified in Section 14.5. For purposes of this Section 13.7, 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 Trustee, the Trust, or the
Certificateholders with respect to a breach pursuant to Section 13.2, 13.5
or 13.6 shall be to require the Servicer to purchase Receivables pursuant
to this Section 13.7.
(b) In the event that the Obligor with respect to a
Receivable shall have been declared bankrupt and at such time or
thereafter the Servicer's records relating to such Receivable shall
record that the periodic payment thereon has been reduced at or since
such declaration and that such Receivable has been extended
XIII-3
<PAGE> 36
beyond __________ __, ____, the Servicer shall pay an amount equal to
the amount of a prepayment which would cause such a reduction in the
amount of the new periodic payment over the remainder of the original
scheduled life of the Receivable.
Section 13.8 Servicer Fee. The Servicer shall be entitled to any
interest earned on the amounts deposited in the Collection Account and
the Payahead Account during such Collection Period plus all late fees,
prepayment charges (including, in the case of a Receivable that provides
for payments according to the "Rule of 78's" and that is prepaid in full,
the difference between the Principal Balance of such Receivable (plus
accrued interest to the date of prepayment) and the principal balance of
such Receivable computed according to the "Rule of 78's"), and other
administrative fees and expenses or similar charges allowed by applicable
law with respect to Receivables during such Collection Period (the
"Supplemental Servicing Fee"). The Servicer also shall be entitled to
the Servicing Fee, as provided herein.
Section 13.9 Servicer's Certificate. (a) On or about the tenth day
of each calendar month, the Servicer shall deliver to the Trustee (with a
copy to each of the rating agencies requested to provide a rating on the
Class A Certificates) a Servicer's Certificate containing all information
necessary to make the distributions pursuant to Section 14.6 (including,
if required, withdrawals from or deposits to the Payahead Account and
Advances by the Servicer pursuant to Section 14.4) for the Collection
Period preceding the date of such Servicer's Certificate, and all
information necessary for the Trustee to send statements to
Certificateholders pursuant to Section 14.9. 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 Schedule A of the Agreement).
(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 underwriter(s) of the Class A Certificates the Class A Certificate
Factor as of the close of business on the Distribution Date occurring in
that month.
XIII-4
<PAGE> 37
Section 13.10 Annual Statement as to Compliance; Notice of Default.
(a) The Servicer shall deliver to the Trustee and to each of the rating
agencies requested by the Seller or an affiliate to provide a rating on
the Class A Certificates which is then rating the Class A Certificates, on
or before April 30 of each year beginning April 30, 1996, an Officer's
Certificate, dated as of December 31 of the preceding calendar year,
stating that (i) a review of the activities of the Servicer during the
preceding 12-month (or shorter) period and of its performance under the
Agreement has been made under such officer's supervision and (ii) to the
best of such officer's knowledge, based on such review, the Servicer has
fulfilled all its obligations under the Agreement throughout such year,
or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and
status thereof. A copy of such certificate and the report referred to in
Section 13.11 may be obtained by any Certificateholder by a request in
writing to the Trustee addressed to the Corporate Trust Office.
(b) The Servicer shall deliver to the Trustee and to each of
the rating agencies requested by the Seller or an affiliate to provide a
rating on the Class A Certificates which is then rating the Class A
Certificates, promptly after having obtained knowledge thereof, but in no
event later than 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 Default under Section
19.1. The Seller shall deliver to the Trustee and to each of such rating
agencies then rating the Class A Certificates, promptly after having
obtained knowledge thereof, but in no event later than 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 Default under clause (ii) of Section 19.1.
Section 13.11 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 Motor Credit Company, to deliver to the Trustee and each
of the rating agencies then rating the Class A Certificates on or before
April 30 of each year
XIII-5
<PAGE> 38
beginning April 30, 1996 with respect to the prior calendar
year a report addressed to the Board of Directors of
the Servicer and to the 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 Audit Program for Mortgage
Bankers (the "Program"), to the extent the procedures in
such Program are applicable to the servicing obligations
set forth in the Agreement, and (3) except as described
in the report, disclosed no exceptions or errors in the
records relating to automobile and light truck loans
serviced for others that, in the firm's opinion, paragraph
four of such Program requires such firm to report.
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 13.12 Access to Certain Documentation
and Information Regarding Receivables. The Servicer
shall provide to the Certificateholders access to the
Receivables Files in such cases where the Certificateholder
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 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
13.12.
Section 13.13 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 independent accountants, taxes
imposed on the Servicer and expenses incurred in connection
with distributions and reports to Certificateholders.
XIII-6
<PAGE> 39
ARTICLE XIV
Distributions; Subordination Spread Account;
Statements to Certificateholders
Section 14.1 Accounts. (a) The Servicer
shall establish the Collection Account and the Certificate
Account in the name of the Trustee for the benefit
of the Certificateholders, and shall establish the
Payahead Account in the name of the Trustee on behalf of
the Obligors. The Collection Account and the Payahead
Account shall be segregated trust accounts initially
established with the Trustee and maintained with the
Trustee so long as (i) the deposits of the Trustee have
the Required Deposit Rating or (ii) the Collection Account
and the Payahead Account are maintained in the
Corporate Trust Department of the Trustee; provided,
however, that all amounts held in the Collection Account
and the Payahead Account shall, to the extent permitted
by applicable laws, rules, and regulations, be invested
as directed by the Servicer by the bank or trust company
then maintaining the accounts in interest-bearing time
deposits of such bank or trust company (provided that
such investments shall have the Required Deposit Rating)
that mature not later than the Distribution Date for the
Collection Period to which such amounts relate and any
such time deposits so acquired shall be held until maturity
and provided, further that if the Servicer is required
to remit collections daily to the Collection
Account pursuant to Section 14.2 then such remittances,
and any remittances to the Payahead Account, shall be
invested at the written direction of the Servicer as to
specific investments in investments rated A-1+ by Standard
& Poor's Ratings Group and P-1 by Moody's Investors
Service, Inc. or in other investments as may be permitted
by each of such rating agencies, in each case maturing in
immediately available funds on the Distribution Date next
succeeding the date of investment. Such written direction
shall certify that any such investment is authorized
by this Section. The Certificate Account shall be a
segregated trust account established and maintained with
the Trustee, and the amounts in such account shall not be
invested. Should the short-term unsecured debt obligations
of the Trustee no longer have the Required Deposit
Rating then, unless the Collection Account and the
Payahead Account are maintained in the Corporate Trust
Department of the Trustee, the Servicer shall as soon as
XIV-1
<PAGE> 40
is reasonably practical, with the Trustee's assistance as
necessary, cause the Collection Account and the Payahead
Account (i) to be moved to a bank or trust company, the
short-term unsecured debt obligations of which shall have
the Required Deposit Rating or (ii) to be moved to the
Corporate Trust Department of the Trustee.
(b) Notwithstanding the provisions
of clause (a) above and of the third paragraph of Section
14.6(a), for so long as (i) Ford Motor Credit Company is
the Servicer, (ii) the rating of Ford Motor Credit
Company's short-term unsecured debt is at least P-1 by
Moody's Investors Service, Inc. and is at least A-1 by
Standard & Poor's Ratings Group and (iii) no Event of Default
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 Certificate Account
in accordance with Section 14.6(a)(ii). At any time as
any Monthly Remittance Condition is not satisfied, the
Servicer shall deposit in the Payahead Account the amount
of any Payaheads then held or received by it (which
amount shall be at least equal to the Payahead Balance as
of the close of business on the last day of the immediately
preceding Collection Period). Notwithstanding the
foregoing, if a Monthly Remittance Condition is not
satisfied the Servicer may utilize, with respect to
Payaheads, an alternative remittance schedule (which may
include the remittance schedule utilized by the Servicer
before the Monthly Remittance Condition became unsatisfied),
if the Servicer provides to the Trustee written
confirmation from each rating agency which has an
outstanding rating on the Class A Certificates and was
requested by the Seller or an affiliate to rate the Class
A Certificates that such alternative remittance schedule
will not result in the downgrading or withdrawal by such
rating agencies of the ratings then assigned to the Class
A Certificates. The Trustee shall not be deemed to have
knowledge of any event or circumstance under clause (iii)
of the first sentence of this Section 14.1(b) that would
require remittance of the Payaheads to the Payahead
Account unless the Trustee has received notice of such
event or circumstance from the Seller or the Servicer in
XIV-2
<PAGE> 41
an Officer's Certificate or from the Holders of Class A
Certificates evidencing not less than 25% of the Class A
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 14.2 Collections. The Servicer shall
remit daily to the Collection Account (i) all payments by
or on behalf of the Obligors (including Payaheads on the
Receivables but excluding Purchased Receivables) and (ii)
all Liquidation Proceeds, both as collected during the
Collection Period. Ford Motor Credit Company, 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 14.2 and only for so long as such terms and
conditions are fulfilled. Accordingly, notwithstanding
the provisions of the first sentence of this Section
14.2, the Servicer shall remit collections received
during a Collection Period to the Collection Account in
immediately available funds 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
Trustee written confirmation from each rating agency
which has an outstanding rating on the Class A
Certificates and was requested by the Seller or an affiliate to
rate the Class A Certificates that such alternative
remittance schedule will not result in the downgrading or
withdrawal by such rating agencies of the ratings then
assigned to the Class A Certificates. The 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 daily remittance
by the Servicer to the Collection Account unless the
Trustee has received notice of such event or circumstance
from the Seller or the Servicer in an Officer's
Certificate or from the Holders of Class A Certificates
evidencing not less than 25% of the Class A Certificate Balance
or a Trustee Officer in the Corporate Trust Office with
XIV-3
<PAGE> 42
knowledge hereof or familiarity herewith has actual
knowledge of such event or circumstance. For purposes of
this Article XIV the phrase "payments by or on behalf of
Obligors" shall mean payments made by Persons other than
the Servicer or by other means.
Section 14.3 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, applied in accordance with
Section 13.8 shall be applied first to reduce
Outstanding Advances made with respect to such
Receivable, as described in Section 14.4(a)
below. Next, any excess shall be applied to
the Scheduled Payment with respect to such
Receivable. Finally, any remaining excess
(except 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 Receivable,
but only if the sum of such excess and the
previous Payahead Balance shall be sufficient
to prepay the Receivable in full. Otherwise,
any remaining excess payments shall constitute
a Payahead, and shall increase the Payahead
Balance.
Section 14.4 Advances. (a) As of the close
of business on the last day of each Collection Period, if
the payments by or on behalf of the Obligor on a
Receivable (other than a Purchased Receivable) after
application under 14.3 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
Servicer 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. The Servicer
XIV-4
<PAGE> 43
will be obligated to make an Advance in respect of a
Receivable only to the extent that the Servicer, in its
sole discretion, shall determine that the Advance shall
be recoverable from subsequent collections or recoveries
on any Receivable. With respect to each Receivable, the
Advance shall increase Outstanding Advances. Outstanding
Advances shall be reduced by subsequent payments by or on
behalf of the Obligor, collections of Liquidation
Proceeds and payments of the Purchase Amount.
If the Servicer shall determine that
an Outstanding Advance with respect to any Receivable
shall not be recoverable, the Servicer shall be
reimbursed from any collections made on other Receivables in
the Trust, and Outstanding Advances with respect to such
Receivable shall be reduced accordingly.
(b) 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 Annual
Percentage Rate, the Servicer shall make an
unreimbursable advance of the amount of such interest.
Section 14.5 Additional Deposits. The
Servicer shall deposit in the Collection Account the
aggregate Advances pursuant to Section 14.4(a) and the
aggregate advances pursuant to Section 14.4(b). To the
extent that the Servicer fails to make an advance
pursuant to Section 14.4(b) on the date required, the Class A
Agent shall withdraw such amount from the Subordination
Spread Account and deposit such amount in the Collection
Account. The Servicer and the Seller shall deposit in
the Collection Account the aggregate Purchase Amount with
respect to Purchased Receivables and the Servicer shall
deposit therein all amounts to be paid under Sections
21.2 and 13.7(b). All such deposits with respect to a
Collection Period shall be made, in immediately available
funds, on the Distribution Date related to such
Collection Period.
Section 14.6 Distributions.
(a) On each Distribution Date, the
Trustee shall cause to be made the following transfers and
distributions in the amounts set forth in the Servicer's
Certificate for such Distribution Date:
XIV-5
<PAGE> 44
(i) From the Collection Account
to the Certificate Account, in immediately
available funds, the entire amount then on
deposit in the Collection Account; provided,
however, that in the event that the Servicer is
required to make deposits to the Collection
Account on a daily basis pursuant to Section
14.2, the amount of the funds transferred from
the Collection Account to the Certificate
Account will include only those funds that were
deposited in the Collection Account for the
Collection Period related to such Distribution
Date.
(ii) From the Payahead Account,
or from the Servicer in the event the
provisions of Section 14.1(b) above are applicable,
to the Certificate Account, in immediately
available funds, (x) the portion of Payaheads
constituting Scheduled Payments or prepayments
in full, required by Sections 14.3 and 14.4(a),
and (y) the Payahead Balance, if any, relating
to any Purchased Receivable.
(iii) From the Certificate
Account to the Payahead Account, or to the
Servicer in the event the provisions of
Sections 14.1(b) above are applicable, in
immediately available funds, the aggregate Payaheads
required by Section 14.3 for the Collection
Period related to such Distribution Date.
(iv) From the Certificate
Account to the Servicer, in immediately available
funds, repayment of Outstanding Advances
pursuant to Section 14.4(a).
(b) Prior to each Distribution Date, the
Servicer shall on each Determination Date calculate the
Total Available Amount, the Available Interest, the
Available Principal, the Class A Distributable Amount and
the Class B Distributable Amount and, based on the Total
Available Amount and the other distributions to be made
on such Distribution Date, determine the amount
distributable to Certificateholders of each Class.
XIV-6
<PAGE> 45
(c) On each Distribution Date, the Trustee
(based on the information contained in the Servicer's
Certificate delivered on the related Determination Date
pursuant to Section 13.9) shall, subject to subsection
(d) hereof, make the following distributions in the
following order of priority:
(i) first, to the Servicer,
from the Available Interest, the Servicer Fee
and all unpaid Servicer Fees from prior Collection Periods;
(ii) second, to the Class A
Certificateholders:
(A) from the Class A Percentage
of the Available Interest (except as provided in
the proviso to subsection (d)(i) below) (as such
Available Interest has been reduced by Servicer
Fee payments), an amount equal to the sum of the
Class A Interest Distributable Amount and any
outstanding Class A Interest Carryover Shortfall
as of the close of the preceding Distribution Date
(plus, to the extent not otherwise provided for,
interest on such Class A Interest Carryover Shortfall at
the Pass-Through Rate from such preceding Distribution
Date through the current Distribution Date, to the
extent permitted by law);
(B) from the Class A Percentage
of the Available Principal, an amount equal to the
sum of the Class A Principal Distributable Amount
and any outstanding Class A Principal Carryover
Shortfall as of the close of the preceding Distribution
Date;
(iii) third, to the Class B
Certificateholders subject to Section 14.7(d)
below:
(A) from the Available
Interest (as such Available Interest has been
reduced by payments pursuant to clauses (i) and
(ii) above), an amount equal to the sum of the
Class B Interest Distributable Amount and any
outstanding Class B Interest Carryover Short-
XIV-7
<PAGE> 46
fall as of the close of the preceding Distribution
Date; and
(B) from the Class B
Percentage of the Available Principal, an amount
equal to the sum of the Class B Principal
Distributable Amount and any outstanding Class B
Principal Carryover Shortfall as of the close
of the preceding Distribution Date;
provided, however, that amounts otherwise distributable
to the Class B Certificateholders shall instead be deposited
by the Trustee in the Subordination Spread Account
to the extent provided in Section 14.7(c) hereof to cover
any Subordination Spread Account deficiency resulting
from payments on such Distribution Date from the Subordination
Spread Account pursuant to Section 14.6(d) or otherwise.
(d) The rights of the Class B
Certificateholders to receive distributions in respect of the
Class B Certificates shall be and hereby are subordinated
to the rights of the Class A Certificateholders to receive
distributions in respect of the Class A Certificates
and the rights of the Servicer to receive the
Servicing Fee (and any accrued and unpaid Servicer Fees
from prior Collection Periods) in the event of delinquency
or defaults on the Receivables. Such subordination
shall be effected as follows, and all payments shall be
effected pursuant to clause (i) below prior to any payments
pursuant to clause (ii):
(i) If the Class A Percentage
of the Available Interest (as such Available
Interest has been reduced by Servicer Fee payments)
is less than the sum of the Class A Interest
Distributable Amount and any Class A
Interest Carryover Shortfall (including interest
on such Shortfall as provided in paragraph
(c)(ii)(A) above) from the preceding Distribution
Date, the Class A Certificateholders shall
be entitled to receive distributions in respect
of such deficiency first, from the Class B
Percentage of the Available Interest; second,
if such amounts are insufficient, from amounts
on deposit in the Subordination Spread Account;
and third, if such amounts are insufficient,
XIV-8
<PAGE> 47
from the Class B Percentage of the Available
Principal; provided, however, that if the
amount required to be advanced by the Servicer
pursuant to Section 14.4(b) for the Collection
Period shall not have been advanced by the
Servicer, the resulting shortfall shall be
allocated pro rata among the Class A Certificates
and the Class B Certificates and any such
shortfall with respect of the Class A Certificates
(and any Class A Carryover Shortfalls
attributable thereto) shall be paid only from
amounts that are or become available in the
Subordination Spread Account after giving effect
to any deposit thereto on such day. Upon
either the written instructions of the Servicer
or the written instructions of the Trustee
(based solely on the information contained in
the Servicer's Certificate delivered on the
related Determination Date pursuant to Section
13.9), the Class A Agent shall release from the
amounts available in the Subordination Spread
Account the amounts required pursuant to Section
14.6(c)(ii) above and distribute such
amounts to the Trustee.
(ii) If the Class A Percentage
of the Available Principal is less than the sum
of the Class A Principal Distributable Amount
and any Class A Principal Carryover Shortfall
from the preceding Distribution Date, the Class
A Certificateholders shall be entitled to receive
distributions in respect of such deficiency
first, from the Class B Percentage of
the Available Principal; second, if such
amounts are insufficient, from amounts on deposit
in the Subordination Spread Account; and
third, if such amounts are insufficient, from
the Class B Percentage of the Available Interest.
Upon either the written instructions of
the Servicer or the written instructions of the
Trustee (based solely on the information contained
in the Servicer's Certificate delivered
on the related Determination Date pursuant to
Section 13.9), the Class A Agent shall release
from the amounts available in the Subordination
Spread Account the amounts required pursuant to
XIV-9
<PAGE> 48
Section 14.6(c)(ii) above and distribute such
amounts to the Trustee.
(e) Subject to Section 21.1 respecting
the final payment upon retirement of each Certificate,
the Servicer shall on each Distribution Date instruct the
Trustee to distribute to each Certificateholder of any
Class of record on the preceding Record Date either by
wire transfer, in immediately available funds to the
account of such holder at a bank or other entity having
appropriate facilities therefor, if such Certificateholder
is the Seller or a Clearing Agency and shall have
provided to the Servicer appropriate instructions prior
to such Distribution Date, or, if not, by check mailed to
such Certificateholder (such check to be mailed as soon
as reasonably practicable on or after such Distribution
Date) at the address of such holder appearing in the
Certificate Register, the amounts to be distributed to
such Certificateholder pursuant to such holder's Certificates.
Section 14.7 Subordination; Subordination
Spread Account; Priority of Distributions.
(a) (i) In order to effectuate the
subordination provided for herein, there shall be established
and maintained with the Class A Agent a separate
trust account (the "Subordination Spread Account") to
include the money and other property deposited and held
therein pursuant to this subsection 14.7(a)(i) and subsection
14.7(a)(ii). The Subordination Spread Account
shall be maintained in the name "Chemical Bank, as Class
A Agent." On the date of issuance of the Certificates,
the Seller shall deposit the Subordination Initial Deposit,
if any, into the Subordination Spread Account. The
Subordination Spread Account shall not be part of the
Trust. Each of the Class A Certificateholders, on behalf
of itself and its successors and assigns (including, but
not limited to, any future Holder of a Class A Certificate)
hereby appoints Chemical Bank, acting in its capacity
as agent for the purposes of this Section 14.7 and
not as Trustee, with respect to the Subordination Spread
Account and the Subordination Spread Account Property
(the "Class A Agent"), and the Class A Agent hereby
accepts such appointment.
XIV-10
<PAGE> 49
(ii) In order to provide for the
prompt payment to the Class A Certificateholders and
the Servicer, in accordance with subsections 14.6(c)
and 14.6(d), to give effect to the subordination
provided for herein, and to assure availability of
the amounts maintained in the Subordination Spread
Account:
(A) The Seller, as initial
holder of the Class B Certificates, hereby
sells, conveys, and transfers to the Class A
Agent and its successors and assigns, the
Subordination Initial Deposit and all proceeds
thereof, subject, however, to the limitations
set forth below, and solely for the purpose of
providing for payment of the Class A Distributable
Amount provided for in Section 14.6 and
this Section; and
(B) The Seller, as initial
holder of the Class B Certificates, on behalf
of itself and its successors and assigns hereby
sells, conveys, and transfers to the Class A
Agent, all its right, title, and interest in
and to the Subordination Spread Account, subject,
however, to the limitations set forth
below, and all proceeds of the foregoing,
including, without limitation, all other amounts
and investments held from time to time in the
Subordination Spread Account (whether in the
form of deposit accounts, Physical Property,
book-entry securities, or otherwise) subject,
however, to the limitations set forth below,
and solely for the purpose of providing for
payment of the Class A Distributable Amount
provided for in Section 14.6 and this Section;
(all of the foregoing, subject to the limitations set
forth below, the "Subordination Spread Account Property"),
to have and to hold all the aforesaid property,
rights and privileges unto the Class A Agent, its successors
and assigns, in trust for the uses and purposes, and
subject to the terms and provisions, set forth in this
Section 14.7. The Class A Agent hereby acknowledges such
transfer and accepts the trust hereunder and shall hold
and distribute the Subordination Spread Account Property
XIV-11
<PAGE> 50
in accordance with the terms and provisions of this
Section 14.7.
(i) The trust established pursuant
to this Section 14.7 shall not under any
circumstances be deemed to be part of or otherwise
includable in the Trust.
(b) On each Distribution Date, if the
amount of the Subordination Spread Account (after giving
effect to all payments to be made from such Account
pursuant to Section 14.6(d) on such Date) is less than
the Specified Subordination Spread Account Balance for
such Distribution Date, the Servicer shall instruct the
Trustee, after payment of any amounts required to be
distributed to Class A Certificateholders and the
Servicer, to withhold from amounts otherwise distributable
to the Class B Certificateholders and not otherwise
distributed to Class A Certificateholders or the Servicer
and deposit in the Subordination Spread Account all such
amounts, or such lesser amounts as are sufficient to
restore the amount in the Subordination Spread Account to
the Specified Subordination Spread Account Balance. For
purposes of calculating the Class B Certificate Balance,
any amounts so deposited will be deemed to have been paid
to the Class B Certificateholders. Subject to Section
14.7(d), if the amount of the Subordination Spread Account
(after taking into account any withdrawals therefrom
pursuant to Section 14.7(e)) is greater than the
Specified Subordination Spread Account Balance for such
Distribution Date, the Class A Agent shall upon the
written instruction of the Servicer release to the Trustee
and, the Trustee at the instruction of the Servicer,
shall distribute the amount of the excess to the Class B
Certificateholders on a pro rata basis in accordance with
their ownership of the Class B Certificates. Amounts
properly distributed to the Class B Certificateholders
pursuant to this Section 14.7(c), either directly from
the Certificate Account without deposit in the Subordination
Spread Account or from the Subordination Spread
Account, shall be deemed released from the trust established
by this Section 14.7, and Class B Certificateholders
shall in no event thereafter be required to refund any
such distributed amounts.
(c) (i) Amounts held in the Subordination
Spread Account shall be invested in the manner
XIV-12
<PAGE> 51
specified in Section 14.1(a), in accordance with written
instructions from the holders of Class B Certificates
evidencing not less than 51% of the Class B Certificate
Balance or their designee, and such investments shall not
be sold or disposed of prior to their maturity. All such
investments shall be made in the name of the Class A
Agent or its nominee and all income and gain realized
thereon shall be solely for the benefit of the Class B
Certificateholders and shall be payable by the Class A
Agent to the Class B Certificateholders on each Distribution Date.
(ii) With respect to the Subordination
Spread Account Property, the Class B Certificateholders
and the Class A Agent agree that:
(A) Any Subordination
Spread Account Property that is held in deposit
accounts shall be held solely in the name of
the Class A Agent at one or more depository
institutions having the Required Deposit Rating.
Each such Deposit Account shall be subject to the
exclusive custody and control of the Class A Agent,
and the Class A Agent shall have sole signature
authority with respect thereto.
(B) Any Subordination
Spread Account Property that constitutes Physical
Property shall be delivered to the Class A
Agent in accordance with paragraph (a) of the
definition of "Delivery" and shall be held,
pending maturity or disposition, solely by the
Class A Agent or a financial intermediary (as
such term is defined in Section 8-313(4) of the
UCC) acting solely for the Class A Agent.
(C) Any Subordination
Spread Account Property that is a book-entry
security held through the Federal Reserve System
pursuant to federal book-entry regulations
shall be delivered in accordance with paragraph
(b) of the definition of "Delivery" and shall
be maintained by the Class A Agent, pending
maturity or disposition, through continued
book-entry registration of such Subordination
XIV-13
<PAGE> 52
Spread Account Property as described in such
paragraph.
(D) Property of a type
which is not capable of being delivered to the
Class A Agent in accordance with the definition
of "Delivery" shall not constitute Subordination
Spread Account Property.
Effective upon Delivery of any Subordination
Spread Account Property in the form of Physical Property
or book-entry securities, the Class A Agent shall be
deemed to have represented that it has purchased such
Subordination Spread Account Property for value, in good
faith, and without notice of any adverse claim thereto.
(iii) Investment earnings
attributable to the Subordination Spread Account
Property and proceeds therefrom shall be held
by the Class A Agent for the benefit of the
Class B Certificateholders. Investment earnings
attributable to the Subordination Spread
Account Property shall not be available to
satisfy the subordination provisions of this
Agreement and shall not otherwise be subject to
any claims or rights of the Class A Certificateholders
or the Servicer. The Class A Agent shall cause
all investment earnings attributable to the
Subordination Spread Account to be distributed
on each Distribution Date to the Class B Certificateholders.
Notwithstanding the foregoing, the Subordination Spread
Account may contain at any time uninvested cash in an
amount not to exceed the maximum amount insured
by the FDIC without giving rise to any obligation
to withdraw such cash from the Subordination
Spread Account. Realized losses, if any,
on investment of the Subordination Spread Account
Property shall be charged first against
undistributed investment earnings attributable
to the Subordination Spread Account Property
and then against the Subordination Spread Account
Property.
(iv) The Class A Agent shall not enter
into any subordination or
XIV-14
<PAGE> 53
intercreditor agreement with respect to the
Subordination Spread Account Property.
(d) If the Servicer pursuant to Section
14.4 determines on 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 Class
A Agent in writing to withdraw funds, in an amount specified
by the Servicer, from the Subordination Spread
Account and deposit them in the Certificate Account
maintained with the Trustee to cover any shortfall. Such
payment shall be deemed to have been made by the Servicer
pursuant to Section 14.4 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 Class A Agent, and the
Servicer shall within two Business Days replace any funds
in the Subordination Spread Account so used.
(e) Upon termination of this Agreement in
accordance with Section 21.2, any amounts on deposit in
the Subordination Spread Account shall be paid to the
then holders of the Class B Certificates.
Section 14.8 Net Deposits. For so long as (i)
Ford Motor Credit Company shall be the Servicer, (ii) the
Servicer shall be entitled pursuant to Section 14.2 to
remit collections on a monthly rather than daily basis,
and (iii) the Servicer shall be entitled pursuant to
Section 14.1(b) to retain Payaheads rather than deposit
them in the Payahead Account, Ford Motor Credit Company
(in whatever capacity) may make the remittances pursuant
to Sections 14.2 and 14.5 above, net of amounts to be
distributed to Ford Motor Credit Company (in whatever
capacity) pursuant to Section 14.6(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 14.9 Statements to Class A
Certificateholders. On each Distribution Date, the Trustee
shall include with each distribution to each Class A
Certificateholder, a statement (which statement shall
also be provided to each rating agency then rating the
Class A Certificates) based on information in the
Servicer's Certificate furnished pursuant to Section
XIV-15
<PAGE> 54
13.9, setting forth for the Collection Period relating to
such Distribution Date the following information:
(i) the amount of such distribution
allocable to principal;
(ii) the amount of such distribution
allocable to interest;
(iii) the Pool Balance as of the
close of business on the last day of the preceding
Collection Period;
(iv) the amount of the Servicing
Fee paid to the Servicer with respect to the
related Collection Period and the Class A
Certificateholder's Class A Percentage of the
Servicing Fee and the amount of any unpaid
Servicing Fees and the change in such amount
from that of the prior Distribution Date;
(v) the amount of the Class A
Principal and Interest Carryover Shortfalls, if
any, on such Distribution Date and the change
in the Class A Principal and Interest Carryover
Shortfalls from the preceding Distribution
Date;
(vi) the Class A Certificate
Factor and Class B Certificate Balance as of
such Distribution Date;
(vii) the amount otherwise
distributable to the Class B Certificateholders
that is distributed to Class A Certificateholders
on such Distribution Date;
(viii) the balance of the Subordination
Spread 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;
(ix) the aggregate Payahead
Balance and the change in such balance from the
preceding Distribution Date; and
XIV-16
<PAGE> 55
(x) the amount of Advances on
such Distribution Date.
Each amount set forth pursuant to subclauses (i), (ii),
(iv) or (v) above shall be expressed as a dollar amount
per $1,000 of original principal balance of a Class A
Certificate.
Within the prescribed period of time for tax
reporting purposes after the end of each calendar year
during the term of the Agreement, the Trustee shall mail,
to each Person who at any time during such calendar year
shall have been a holder of a Class A Certificate, a
statement containing the sum of the amounts set forth in
clauses (i), (ii), (iv) and (v) and such other information,
if any, as the Servicer determines is necessary to
ascertain the Class A Certificateholder's share of the
gross income and deductions of the Trust (exclusive of
the Supplemental Servicing Fee), for such calendar year
or, in the event such Person shall have been a holder of
a Class A Certificate during a portion of such calendar
year, for the applicable portion of such year, for the
purposes of such Certificateholder's preparation of
federal income tax returns.
XIV-17
<PAGE> 56
ARTICLE XV
[Intentionally Omitted]
ARTICLE XVI
The Certificates
Section 16.1 The Certificates. The Class A
Certificates shall be issued in denominations of $1,000;
the Class B Certificates shall be issued in denominations
of $100,000 or in any amount in excess thereof each in
fully registered form and integral multiples thereof;
provided, however, that one Class A Certificate and one
Class B Certificate may be issued in a denomination equal
to the residual amount (the "Residual Certificate"). The
Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of the chairman of the
board, vice chairman of the board, any vice president, or
any authorized Trust Officer of the Trustee under the
Trustee's seal imprinted thereon and attested on behalf
of the Trust by the manual or facsimile signature of the
Secretary, any Assistant Secretary or any Trust Officer
of the 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 valid and binding
obligations of the Trust, 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 such Certificates.
Section 16.2 Authentication of Certificates.
The Trustee shall cause the Certificates to be executed
on behalf of the Trust, authenticated, and delivered to
or upon the written order of the Seller, signed by its
chairman of the board, its president, or any vice president,
without further corporate action by the Seller, in
authorized denominations, pursuant to the Agreement. No
Certificate shall entitle its holder to any benefit under
the 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
XVI-1
<PAGE> 57
Exhibit A or Exhibit B hereto executed by the 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 16.3 Registration of Transfer and
Exchange of Certificates. The Certificate Registrar
shall keep or cause to be kept, at the office or agency
maintained pursuant to Section 16.7, a Certificate Register
in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges
of Certificates as herein provided. The Trustee
shall be the initial Certificate Registrar.
The Class B Certificates shall initially be
retained by the Seller. No transfer of a Class B Certificate
shall be made unless the registration requirements
of the Securities Act of 1933, as amended, and any applicable
State securities laws are complied with, or such
transfer is exempt from the registration requirements
under said Act and laws. In the event that a transfer is
to be made in reliance upon an exemption from said Act or
laws, the Class B Certificateholder desiring to effect
such transfer and such Certificateholder's prospective
transferee must each certify in writing to the Seller and
the Trustee the facts surrounding such transfer and
provide both the Seller and the Trustee with a written
Opinion of Counsel in form and substance satisfactory to
the Seller and the Trustee that such transfer may be made
pursuant to an exemption from said Act or laws, which
Opinion of Counsel shall not be an expense of the Seller
or the Trustee. Neither the Seller nor the Trustee is
under an obligation to register the Class B Certificates
under said Act or any other securities law.
No transfer of a Class B Certificate shall be
made unless the Class B Certificateholder desiring to
effect such transfer shall have given each rating agency
requested by the Seller or an affiliate to rate the Class
A Certificates and which then has an outstanding rating
thereon, the Seller and the Trustee prior written notice
of such proposed transfer, and such rating agencies shall
have notified such Class B Certificateholder, the Seller
and the Trustee, in writing, that such proposed transfer
will not result in the qualification, downgrading or
XVI-2
<PAGE> 58
withdrawal of the rating then assigned to the Class A Certificates by
such rating agencies.
In addition to the restrictions on transfer of Class B
Certificates set forth in the two immediately preceding paragraphs, no
transfer of a Class B Certificate shall be made unless prior to such
transfer the Holder of such Class B Certificate delivers to the
Seller and the Trustee either a ruling of the Internal Revenue Service or
an Opinion of Counsel, which shall be independent outside counsel,
satisfactory to the Trustee and each rating agency requested by the Seller
or an affiliate to rate the Class A Certificates and which has an
outstanding rating thereon in either case to the effect that the proposed
transfer (x) will not result in the arrangement contemplated by this
Agreement being treated as an association (or publicly traded partnership)
taxable as a corporation under either (I) the Code, as from time to time
in force or (II) the tax laws of the State of New York and (y) will not
have any adverse effect on the Federal income taxation of the Trust or the
Class A Certificateholders. The Class B Certificate shall not be
transferred separately from the right to receive all amounts in the
Subordination Spread Account, unless the ruling of the Internal Revenue
Service or the Opinion of Counsel referred to in the preceding sentence
would permit such transfer.
Upon surrender for registration of transfer of any Certificate
at the Corporate Trust Office, the 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 aggregate
amount dated the date of authentication by the Trustee. At the option of
a Holder, Certificates may be exchanged for other Certificates of
authorized denominations of a like aggregate amount upon surrender of
the Certificates to be exchanged at the Corporate Trust Office.
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 Trustee and the Certificate Registrar
duly executed by the holder or his attorney duly authorized in writing.
Each Certificate surrendered for registration
XVI-3
<PAGE> 59
of transfer and exchange shall be cancelled and subsequently disposed of
by the Trustee.
No service charge shall be made for any registration of
transfer or exchange of Certificates, but the Trustee 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.
Section 16.4 Mutilated, Destroyed, Lost, or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to
the Certificate Registrar, or if the Certificate Registrar shall receive
evidence to its satisfaction of the destruction, loss, or theft of any
Certificate and (b) there shall be delivered to the Certificate Registrar
and the 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 bona fide purchaser, the
Trustee on behalf of the Trust shall execute and the Trustee shall
authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost, or stolen Certificate, a new Certificate
of like tenor and denomination. In connection with the issuance of any
new Certificate under this Section 16.4, the Trustee and 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 16.4 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 16.5 Persons Deemed Owners. The Trustee or the
Certificate Registrar may treat the Person in whose name any Certificate
shall be registered as the owner of such Certificate for the purpose of
receiving distributions pursuant to Section 14.6 and for all other purposes
whatsoever, and neither the Trustee nor the Certificate Registrar shall be
bound by any notice to the contrary.
Section 16.6 Access to List of Certificateholders' Names and
Addresses. The Trustee shall furnish or cause to be furnished to the
Servicer, within 15 days
XVI-4
<PAGE> 60
after receipt by the Trustee of a request therefor from the Servicer in
writing, a list, in such form as the Servicer 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 Holders
of Class A Certificates aggregating not less than 25% of the Class A
Certificate Balance, apply in writing to the Trustee, and such application
states that the applicants desire to communicate with other
Certificateholders of such Class with respect to their rights under the
Agreement or under the Certificates and such application shall be
accompanied by a copy of the communication that such applicants propose to
transmit, then the Trustee shall, within five Business Days after the
receipt for such application, request from the Clearing Agency and make
available to such Certificateholders access during normal business hours
to the current list of Certificateholders. Each Holder, by receiving and
holding a Certificate, shall be deemed to have agreed to hold neither the
Servicer nor the Trustee accountable by reason of the disclosure of its
name and address, regardless of the source from which such information
was derived.
Section 16.7 Maintenance of Office or Agency. The Trustee shall
maintain in the Borough of Manhattan, The City 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 Trustee in respect of the Certificates and the Agreement may be
served. The Trustee initially designates the Corporate Trust Office as
specified in the Agreement as its office for such purposes. The Trustee
shall give prompt written notice to the Servicer and to Certificateholders
of any change in the location of the Certificate Register or any such
office or agency.
Section 16.8 Book-Entry Certificates. The Class A
Certificates, upon original issuance, (except for the Residual
Certificate) will be issued in the form of typewritten Certificates
representing the Book-Entry Certificates, to be delivered to The
Depository Trust Company, the initial Clearing Agency, by, or on behalf
of, the Seller. The Class A Certificates delivered to The Depository
Trust Company shall initially be registered on the Certificate Register in
the name of CEDE &
XVI-5
<PAGE> 61
Co., the nominee of the initial Clearing Agency, and no
Certificate Owner will receive a definitive certificate
representing such Certificate Owner's interest in the
Class A Certificates, except as provided in Section
16.10. Unless and until definitive, fully registered
Class A Certificates (the "Definitive Certificates") have
been issued to Certificate Owners pursuant to Section
16.10:
(i) the provisions of this
Section 16.8 shall be in full force and effect;
(ii) the Seller, the Servicer,
the Certificate Registrar, and the Trustee may
deal with the Clearing Agency for all purposes
(including the making of distributions on the
Class A Certificates) as the authorized
representative of the Certificate Owners;
(iii) to the extent that the
provisions of this Section 16.8 conflict with
any other provisions of this Agreement, the
provisions of this Section 16.8 shall control;
(iv) the rights of Certificate
Owners shall be exercised only through the
Clearing Agency and shall be limited to those
established by law and agreements between such
Certificate Owners and the Clearing Agency
and/or the Clearing Agency Participants.
Pursuant to the Depository Agreement, unless and
until Definitive Certificates are issued
pursuant to Section 16.10, the initial Clearing
Agency will make book-entry transfers among the
Clearing Agency Participants and receive and
transmit distributions of principal and
interest on the Class A Certificates to such
Clearing Agency Participants; and
(v) whenever this Agreement
requires or permits actions to be taken based
upon instructions or directions of Holders of
Class A Certificates evidencing a specified
percentage of the Class A Certificate Balance
the Clearing Agency shall be deemed to
represent such percentage only to the extent that
it has received instructions to such effect from
XVI-6
<PAGE> 62
Certificate Owners and/or Clearing Agency
Participants owning or representing, respectively,
such required percentage of the beneficial
interest in Class A Certificates and has
delivered such instructions to the Trustee.
Section 16.9 Notices to Clearing Agency.
Whenever notice or other communication to the Class A
Certificateholders is required under this Agreement,
other than to the Holder of the Residual Certificate,
unless and until Definitive Certificates shall have been
issued to Certificate Owners pursuant to Section 16.10,
the Trustee and the Servicer shall give all such notices
and communications specified herein to be given to
Holders of the Class A Certificates to the Clearing Agency.
Section 16.10 Definitive Certificates. If
(i)(A) the Seller advises the Trustee in writing that the
Clearing Agency is no longer willing or able to properly
discharge its responsibilities under the Depository
Agreement, and (B) the Trustee or the Seller is unable to
locate a qualified successor, (ii) the Seller at its
option, advises the 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, Certificate Owners representing beneficial
interests aggregating not less than 51% of the Class A
Certificate Balance advise the Trustee and the Clearing
Agency through the Clearing Agency Participants in
writing that the continuation of a book-entry system through
the Clearing Agency is no longer in the best interests of
the Certificate Owners, then the Trustee shall notify the
Clearing Agency and request that the Clearing Agency
notify all Certificate Owners of the occurrence of any
such event and of the availability of Definitive Certificates
to Certificate Owners requesting the same and that
the Record Date for any Distribution Date subsequent to
the issuance of Definitive Certificates will be the last
day of the Collection Period immediately preceding the
month in which such Distribution Date occurs. Prior to
the issuance of Definitive Certificates, the Trustee
shall provide written notice to Salomon Brothers Inc, CS
First Boston Corporation, Goldman, Sachs & Co., Merrill
Lynch, Pierce, Fenner & Smith Incorporated and J.P.
Morgan Securities Inc. that, upon the issuance of Definitive
Certificates, the Record Date for any Distribution
Date will be the last day of the Collection Period imme-
XVI-7
<PAGE> 63
diately preceding the month in which such Distribution
Date occurs. Upon surrender to the Trustee of the Class
A Certificates by the Clearing Agency, accompanied by
registration instructions from the Clearing Agency for
registration, the Trustee shall issue the Definitive
Certificates and deliver such Definitive Certificates in
accordance with the instructions of the Clearing Agency.
Neither the Seller, the Certificate Registrar nor the
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 Certificates, the Trustee shall
recognize the Holders of the Definitive Certificates as
Certificateholders hereunder. The Trustee shall not be
liable if the Trustee or the Seller is unable to locate a
qualified successor Clearing Agency.
XVI-8
<PAGE> 64
ARTICLE XVII
The Seller
Section 17.1 Representations of Seller. The
Seller makes the following representations on which the
Trustee relied in accepting the Receivables in trust and
executing and authenticating the Certificates. The
representations speak as of the execution and delivery of
the Agreement and shall survive the sale of the Receivables
to the Trustee and, if applicable, any subsequent assignment
or transfer pursuant to Article XV:
(i) Organization and Good
Standing. The Seller shall have been duly
organized and shall be validly existing as a
corporation in good standing under the laws of
the State of Delaware, with power and authority
to own its properties and to conduct its
business as such properties shall be currently
owned and such business is presently conducted,
and had at all relevant times, and shall have,
power, authority, and legal right to acquire
and own the Receivables.
(ii) Due Qualification. The
Seller 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 shall require such
qualifications.
(iii) Power and Authority. The
Seller shall have the power and authority to
execute and deliver the Agreement and to carry
out its terms. The Seller shall have full
power and authority to sell and assign the
property to be sold and assigned to and
deposited with the Trustee as part of the Trust
and shall have duly authorized such sale and
assignment to the Trustee by all necessary
corporate action; and the execution, delivery,
and performance of the Agreement shall have been
XVII-1
<PAGE> 65
duly authorized by the Seller by all necessary
corporate action.
(iv) Valid Sale; Binding Obligations.
The Agreement shall evidence a valid sale, transfer,
and assignment of the Receivables, enforceable
against creditors of and purchasers from the
Seller; and a legal, valid and binding obligation
of the Seller enforceable in accordance with its terms.
(v) No Violation. The
consummation of the transactions contemplated by the
Agreement and the fulfillment of the terms hereof
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) a default
under, the articles of incorporation or by-laws
of the Seller, or any indenture, agreement, or
other instrument to which the Seller is a party or
by which it shall be bound; nor result in the creation or
imposition of any Lien upon any of its properties
pursuant to the terms of any such indenture,
agreement, or other instrument; nor violate
any law or, to the best of the Seller's
knowledge, any order, rule, or regulation
applicable to the Seller of any court or of any
federal or state regulatory body, administrative
agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties.
(vi) No Proceedings. To the
Seller's best knowledge, there are no proceedings
or investigations pending, or threatened,
before any court, regulatory body, administrative
agency, or other governmental instrumentality
having jurisdiction over the Seller or
its properties: A) asserting the invalidity of
the Agreement or the Certificates; B) seeking
to prevent the issuance of the Certificates or
the consummation of any of the transactions
contemplated by the Agreement; C) seeking any
determination or ruling that might materially
and adversely affect the performance by the
Seller of its obligations under, or the validi-
XVII-2
<PAGE> 66
ty or enforceability of, the Agreement or the
Certificates; or D) relating to the Seller and
which might adversely affect the federal income
tax attributes of the Certificates.
Section 17.2 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 the Agreement.
(i) The Seller shall indemnify,
defend, and hold harmless the Trustee and the
Trust from and against any taxes that may at
any time be asserted against the Trustee or the
Trust with respect to, and as of the date of,
the sale of the Receivables to the Trust or the
issuance and original sale of the Certificates,
including any sales, gross receipts, general
corporation, tangible personal property, privilege,
or license taxes (but, in the case of the Trust,
not including any taxes asserted with respect
to ownership of the Receivables or federal or
other income taxes arising out of the transactions
contemplated by the Agreement) and costs and
expenses in defending against the same.
(ii) The Seller shall indemnify,
defend, and hold harmless the Trustee from and
against any loss, liability, or expense incurred
by reason of (a) the Seller's willful
misfeasance, bad faith, or negligence (other
than errors in judgment) in the performance of
its duties under the Agreement, or by reason of
reckless disregard of its obligations and duties
under the Agreement and (b) the Seller's
violation of federal or state securities laws
in connection with the registration or the sale
of the Certificates.
Indemnification under this Section 17.2 shall
survive 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 payment to the Trustee
pursuant to this Section and the Trustee thereafter shall
XVII-3
<PAGE> 67
collect any of such amounts from others, the Trustee
shall repay such amounts to the Seller, without interest.
Section 17.3 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 Trustee an Officer's Certificate
and an Opinion of Counsel each stating that such
consolidation, merger, or succession and such agreement or
assumption comply with this Section 17.3 and that all
conditions precedent, if any, provided for in the Agreement
relating to such transaction have been complied with
and (y) the Seller shall have delivered to the 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 Trustee 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 interest. The Seller shall
provide notice of any merger, consolidation, or succession
pursuant to this Section 17.3 to each rating agency then
providing a rating for the Certificates. Notwithstanding
anything herein to the contrary, the execution of the
foregoing agreement or assumption and compliance with clauses
(x) or (y) above shall be conditions to the consummation of
the transactions referred to in clauses (i), (ii), or (iii) above.
Section 17.4 Limitation on Liability of Seller
and Others. The Seller and any director or 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
XVII-4
<PAGE> 68
shall not be under any obligation to appear in, prosecute,
or defend any legal action that shall not be incidental
to its obligations under the Agreement, and that in its
opinion may involve it in any expense or liability.
Section 17.5 Seller May Own Certificates. The
Seller and any Person controlling, controlled by, or
under common control with the Seller may in its individual
or any other capacity become the owner or pledgee of
Certificates with the same rights as it would have if it
were not the Seller or an affiliate thereof, except as
otherwise provided in the definition of "Certificateholder"
specified in Section 11.1 and except as otherwise
specifically provided herein. Certificates so owned by
or pledged to the Seller or such controlling or commonly
controlled Person shall have an equal and proportionate
benefit under the provisions of the Agreement, without
preference, priority, or distinction as among all of the
Certificates.
XVII-5
<PAGE> 69
ARTICLE XVIII
The Servicer
Section 18.1 Representations of Servicer. The
Servicer makes the following representations on which the
Trustee relies in accepting the Receivables in trust and
executing and authenticating the Certificates. The
representations speak as of the execution and delivery of
the Agreement and shall survive the sale of the Receivables
to the Trustee and, if applicable, any subsequent assignment
or transfer pursuant to Article XV:
(i) 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 Trustee;
(ii) 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 the Agreement) shall
require such qualifications;
(iii) Power and Authority. The
Servicer shall have the power and authority to
execute and deliver the Agreement and to carry
out its terms; and the execution, delivery, and
performance of the Agreement shall have been
duly authorized by the Servicer by all necessary
corporate action;
XVIII-1
<PAGE> 70
(iv) Binding Obligation. The
Agreement shall constitute a legal, valid, and
binding obligation of the Servicer enforceable
in accordance with its terms;
(v) No Violation. The
consummation of the transactions contemplated by
the Agreement and the fulfillment of the terms
hereof 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) a default under, the articles of
incorporation or by-laws of the Servicer, or any
indenture, agreement, or other instrument to
which the Servicer is a party or by which it
shall be bound; nor result in the creation or
imposition of any Lien upon any of its
properties pursuant to the terms of any such
indenture, agreement, or other instrument (other
than the 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 of any federal or
state regulatory body, administrative agency,
or other governmental instrumentality having
jurisdiction over the Servicer or its
properties; and
(vi) 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: A) asserting the
invalidity of the Agreement or the Certificates,
B) seeking to prevent the issuance of the Certificates
or the consummation of any of the transactions
contemplated by the Agreement, C) 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, the Agreement or
the Certificates, or D) relating to the
Servicer and which might adversely affect the
federal income tax attributes of the
Certificates.
XVIII-2
<PAGE> 71
Section 18.2 Indemnities of Servicer. The
Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically undertaken by
the Servicer under the Agreement.
(i) The Servicer shall defend,
indemnify, and hold harmless the Trustee, the
Trust, and the Certificateholders 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.
(ii) The Servicer shall
indemnify, defend, and hold harmless the Trustee and
the Trust from and against any taxes that may
at any time be asserted against the Trustee or
the Trust with respect to the transactions
contemplated herein, including, without
limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege,
or license taxes (but, in the case of the
Trust, not including any taxes asserted with
respect to, and as of the date of, the sale of
the Receivables to the Trust or the issuance
and original sale of the Certificates, or
asserted with respect to ownership of the
Receivables, or federal or other income taxes arising
out of the transactions contemplated by the
Agreement) and costs and expenses in defending
against the same.
(iii) The Servicer shall
indemnify, defend, and hold harmless the Trustee, the
Trust, and the Certificateholders 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 Trustee, the Trust, or the Certificateholders
through, the negligence, willful misfeasance, or
bad faith of the Servicer in the performance of
its duties under the Agreement or by reason of
reckless disregard of its obligations and duties
under the Agreement.
XVIII-3
<PAGE> 72
(iv) The Servicer shall indemnify,
defend, and hold harmless the Trustee 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 herein
contained, except to the extent that such cost,
expense, loss, claim, damage, or liability:
(a) shall be due to the willful misfeasance,
bad faith, or negligence (except for errors in
judgment) of the Trustee; (b) relates to any
tax other than the taxes with respect to which
either the Seller or the Servicer shall be
required to indemnify the Trustee; (c) shall
arise from Trustee's breach of any of its
representations or warranties set forth in Section
20.14; (d) shall be one as to which the Seller
is required to indemnify the Trustee; or (e)
shall arise out of or be incurred in connection
with the performance by the Trustee of the
duties of successor Servicer hereunder.
In addition to the foregoing indemnities, if
the Trustee is entitled to indemnification by the Seller
pursuant to Section 17.2 and the Seller is unable for any
reason to provide such indemnification to the Trustee,
then the Servicer shall be liable for any indemnification
that the Trustee is entitled to under Section 17.2.
For purposes of this Section, in the event of
the termination of the rights and obligations of Ford
Motor Credit Company (or any successor thereto pursuant
to Section 18.3) as Servicer pursuant to Section 19.1, or
a resignation by such Servicer pursuant to this
Agreement, such Servicer shall be deemed to be the Servicer
pending appointment of a successor Servicer (other than
the Trustee) pursuant to Section 19.2.
Indemnification under this Section 18.2 by Ford
Motor Credit Company (or any successor thereto pursuant
to Section 18.3) 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 and shall include
reasonable fees and expenses of counsel and expenses of
litigation. If the Servicer shall have made any indemnity
XVIII-4
<PAGE> 73
payments pursuant to this Section and the recipient
thereafter collects any of such amounts from others, the
recipient shall promptly repay such amounts to the
Servicer, without interest.
Section 18.3 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, or
(iii) succeeding to the business of the Servicer, or so
long as Ford Motor Credit Company acts as Servicer, any
corporation more than 50% of the voting stock of which is
owned directly or indirectly by Ford Motor Company, which
corporation 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 Trustee an Officer's Certificate and an Opinion of
Counsel each stating that such consolidation, merger or
succession and such agreement of assumption comply with
this Section 18.3 and that all conditions precedent
provided for in the Agreement relating to such
transaction have been complied with and (y) the Servicer
shall have delivered to the 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 Trustee 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 interest. The Servicer shall
provide notice of any merger, consolidation or succession
pursuant to this Section 18.3 to each rating agency then
providing a rating for the Certificates. Notwithstanding
anything herein to the contrary, the execution of the
foregoing agreement or assumption and compliance with
clauses (x) or (y) above shall be conditions to the
consummation of the transactions referred to in clauses
(i), (ii), or (iii) above.
Section 18.4 Limitation on Liability of
Servicer and Others. Neither the Servicer nor any of the
XVIII-5
<PAGE> 74
directors or officers or employees or agents of the
Servicer shall be under any liability to the Trust or the
Certificateholders, except as provided under the Agreement,
for any action taken or for refraining from the
taking of any action pursuant to the Agreement or for
errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such person
against any liability that would otherwise be imposed by
reason of willful misfeasance or bad faith in the performance
of duties or by reason of reckless disregard of
obligations and duties under the Agreement, or by reason
of negligence in the performance of its duties under the
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 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.
Except as provided in the 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 the 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 the Agreement and the rights and duties of the parties
to the Agreement and the interests of the Certificateholders
under the 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 18.5 Delegation of Duties. So long as
Ford Motor Credit Company acts as Servicer, the Servicer
may at any time without notice or consent delegate
substantially all its duties under this Agreement to any
corporation more than 50% of the voting stock of which is
owned, directly or indirectly, by Ford Motor Company.
The Servicer may at any time perform specific duties as
servicer under the Agreement through sub-contractors;
provided that no such delegation or subcontracting shall
relieve the Servicer of its responsibilities with respect
to such duties as to which the Servicer shall remain
primarily responsible with respect thereto.
XVIII-6
<PAGE> 75
ARTICLE XIX
Default
Section 19.1 Events of Default. If any one of
the following events ("Events of Default") shall occur
and be continuing:
(i) Any failure by the Servicer
to deliver to the Trustee for distribution to
Certificateholders or deposit in the Subordination
Spread Account any proceeds or payment
required to be so delivered under the terms of
the Certificates and the Agreement that shall
continue unremedied for a period of three Business
Days after written notice of such failure
is received by the Servicer from the Trustee or
after discovery of such failure by an officer
of the Servicer; 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
Certificates or in the Agreement, which failure
shall (a) materially and adversely affect the
rights of Certificateholders and (b) continue
unremedied for a period of 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 Trustee, or (2) to
the Servicer or the Seller (as the case may
be), and to the Trustee by the Holders of Class
A Certificates evidencing not less than 25% of
the Class A Certificate Balance; or
(iii) The entry of a decree or
order by a court or agency or supervisory
authority having jurisdiction in the premises for
the appointment of a conservator, receiver, or
liquidator for the Servicer in any insolvency,
readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the
winding up or liquidation of its respective
XIX-1
<PAGE> 76
affairs, and the continuance of any such decree
or order unstayed and in effect for a period of
90 consecutive days; or
(iv) The consent by the Servicer
to the appointment of a conservator or receiver
or liquidator in any insolvency, readjustment
of debt, marshalling of assets and liabilities,
or similar proceedings of or relating to the
Servicer of or relating to substantially all of
its property; or the Servicer shall admit in
writing its inability to pay its debts generally
as they become due, file a petition to take
advantage of any applicable insolvency or
reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend
payment of its obligations;
then, and in each and every case, so long as an Event of
Default shall not have been remedied, either the Trustee,
or the Holders of the Class A Certificates evidencing not
less than 51% of the Class A Certificate Balance, by
notice then given in writing to the Servicer (and to the
Trustee if given by the Certificateholders) (with a copy
to each rating agency requested to provide a rating on
the Certificates) may terminate all of the rights and
obligations of the Servicer under the Agreement. On or
after the receipt by the Servicer of such written notice,
all authority and power of the Servicer under the Agreement,
whether with respect to the Certificates or the
Receivables or otherwise, shall, without further action,
pass to and be vested in the Trustee or such successor
Servicer as may be appointed under Section 19.2; and,
without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the
predecessor Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or
accomplish all other acts or things necessary or appropriate
to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement of
the Receivables and related documents, or otherwise.
The predecessor Servicer shall cooperate with
the successor Servicer and the Trustee in effecting the
termination of the responsibilities and rights of the
predecessor Servicer under the Agreement, including the
transfer to the successor Servicer for administration by
XIX-2
<PAGE> 77
it of all cash amounts that shall at the time be held by
the predecessor Servicer for deposit, or shall thereafter
be received with respect to a Receivable and the delivery
of the Receivable Files, and the related accounts and records
maintained by the Servicer. All reasonable costs
and expenses (including attorneys' fees) incurred in
connection with transferring the Receivable Files to the
successor Servicer and amending the Agreement to reflect
such succession as Servicer pursuant to this Section 19.1
shall be paid by the predecessor Servicer upon presentation
of reasonable documentation of such costs and expenses.
Section 19.2 Appointment of Successor. (a)
Upon the Servicer's receipt of notice of termination pursuant
to Section 19.1 or the Servicer's resignation in
accordance with the terms of the Agreement, the predecessor
Servicer shall continue to perform its functions as
Servicer under the Agreement, in the case of termination,
only until the date specified in such termination notice
or, if no such date is specified in a notice of termination,
until receipt of such notice and, in the case of
resignation, until the later of (x) the date 45 days from
the delivery to the Trustee of written notice of such
resignation (or written confirmation of such notice) in
accordance with the terms of the Agreement and (y) the
date upon which the predecessor Servicer shall become unable
to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. In the
event of the Servicer's resignation or termination
hereunder, the Trustee shall appoint a successor Servicer,
and the successor Servicer shall accept its appointment
by a written assumption in form acceptable to the Trustee.
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
19.2, the Trustee without further action shall automatically
be appointed the successor Servicer. Notwithstanding
the above, the Trustee shall, if it shall be legally
unable so to act, 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 the Agreement.
XIX-3
<PAGE> 78
(b) Upon appointment, the successor
Servicer shall be the successor in all respects to the
predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter
relating thereto placed on the predecessor Servicer,
and shall be entitled to the Servicer Fees and
all of the rights granted to the predecessor Servicer,
by the terms and provisions of the Agreement.
(c) In connection with such appointment,
the 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
the Agreement. The Trustee and such successor Servicer
shall take such action, consistent with the Agreement, as
shall be necessary to effectuate any such succession.
Section 19.3 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 14.3 and 14.4, in the manner specified
in Section 14.6, with respect to all Advances made
by the predecessor Servicer.
Section 19.4 Notification to Certificateholders.
Upon any termination of, or appointment of a successor
to, the Servicer pursuant to this Article XIX, the
Trustee shall give prompt written notice thereof to
Certificateholders at their respective addresses appearing
in the Certificate Register and to each of the rating
agencies then rating the Certificates.
Section 19.5 Waiver of Past Defaults. The
Holders of Class A Certificates evidencing not less than
51% of the Class A Certificate Balance may, on behalf of
all Holders of Certificates, waive any default by the
Servicer in the performance of its obligations hereunder
and its consequences, except a default in making any
required deposits to or payments from the Collection
Account or the Certificate Account in accordance with the
Agreement. Upon any such waiver of a past default, such
default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been remedied
for every purpose of the Agreement. No such waiver shall
XIX-4
<PAGE> 79
extend to any subsequent or other default or impair any
right consequent thereon.
XIX-5
<PAGE> 80
ARTICLE XX
The Trustee
Section 20.1 Duties of Trustee. The Trustee,
both prior to the occurrence of an Event of Default and
after an Event of Default shall have been cured or
waived, shall undertake to perform such duties as are
specifically set forth in the Agreement. If an Event of
Default shall have occurred and shall not have been cured
or waived and, in the case of an Event of Default described
in Section 19.1, the Trustee has received notice
of such Event of Default pursuant to Section 13.10(b),
the Trustee shall exercise such of the rights and powers
vested in it by the Agreement, and shall 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 his own affairs; provided, however, that
if the Trustee shall assume the duties of the Servicer
pursuant to Section 19.2, the Trustee in performing such
duties shall use the degree of skill and attention
customarily exercised by a servicer with respect to
automobile receivables that it services for itself or others.
The Trustee, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents,
orders, or other instruments furnished to the Trustee
that shall be specifically required to be furnished
pursuant to any provision of the Agreement, shall examine
them to determine whether they conform to the requirements
of the Agreement.
The Trustee shall take and maintain custody of
the Schedule of Receivables included as an exhibit to the
Agreement and shall retain all Servicer's Certificates
identifying Receivables that become Purchased Receivables.
No provision of the Agreement shall be construed
to relieve the Trustee from liability for its own
negligent action, its own negligent failure to act (other
than errors in judgment), or its own bad faith; provided,
however, that:
XX-1
<PAGE> 81
(i) Prior to the occurrence of
an Event of Default, and after the curing or
waiving of all such Events of Default that may
have occurred, the duties and obligations of
the Trustee shall be determined solely by the
express provisions of the Agreement, the Trustee
shall not be liable except for the performance
of such duties and obligations as shall
be specifically set forth in the Agreement, no
implied covenants or obligations shall be read
into the Agreement against the Trustee and, in
the absence of bad faith on the part of the
Trustee, the Trustee may conclusively rely on
the truth of the statements and the correctness
of the opinions expressed upon any certificates
or opinions furnished to the Trustee and conforming
to the requirements of the Agreement;
(ii) The Trustee shall not be
liable for an error of judgment made in good
faith by a Trustee Officer, unless it shall be
proved that the Trustee shall have been negligent
in ascertaining the pertinent facts;
(iii) The Trustee shall not be
liable with respect to any action taken, suffered,
or omitted to be taken in good faith in
accordance with the Agreement or at the direction
of the Holders of Class A Certificates
evidencing not less than 25% of the Class A
Certificate Balance relating to the time, method,
and place of conducting any proceeding for
any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee,
under the Agreement;
(iv) The Trustee shall not be
charged with knowledge of any failure by the
Servicer to comply with the obligations of the
Servicer referred to in Section 19.1, or of any
failure by the Seller to comply with the obligations
of the Seller referred to in Section 19.1, unless
a Trustee Officer assigned to the Trustee's
Corporate Trust Department obtains actual
knowledge of such failure (it being
understood that knowledge of the Servicer or
the Servicer as custodian, in its capacity as
XX-2
<PAGE> 82
agent for the Trustee, is not attributable to
the Trustee) or the Trustee receives written
notice of such failure from the Servicer or the
Seller, as the case may be, or the Holders of
Class A Certificates evidencing not less than
25% of the Class A Certificate Balance; and
(v) Without limiting the
generality of this Section or Section 20.4, the
Trustee shall have no duty (i) to see to any
recording, filing, or depositing of the Agreement,
any agreement referred to therein, or any
financing statement or continuation statement
evidencing a security interest in the Receivables
or the Financed Vehicles, or to see to
the maintenance of any such recording, filing,
or depositing or to any rerecording, refiling
or redepositing of any thereof, (ii) to see to
any insurance of the Financed Vehicles or
Obligors or to effect or maintain any such
insurance, (iii) to see to the payment or
discharge of any tax, assessment, or other
governmental charge or any Lien or encumbrance of
any kind owing with respect to, assessed or levied
against, any part of the Trust, (iv) to confirm
or verify the contents of any reports or
certificates of the Servicer delivered to the
Trustee pursuant to the Agreement believed by
the Trustee to be genuine and to have been
signed or presented by the proper party or
parties, or (v) to inspect the Financed Vehicles
at any time or ascertain or inquire as to
the performance or observance of any of the
Seller's or the Servicer's representations,
warranties, or covenants or the Servicer's
duties and obligations as Servicer and as
custodian of the Receivable Files under the
Agreement.
The Trustee shall not be required 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 there
shall be reasonable ground for believing that the repayment
of such funds or adequate indemnity against such
risk or liability shall not be reasonably assured to it,
and none of the provisions contained in the Agreement
XX-3
<PAGE> 83
shall in any event require the Trustee to perform, or be
responsible for the manner of performance of, any of the
obligations of the Servicer under the Agreement except
during such time, if any, as the Trustee shall be the
successor to, and be vested with the rights, duties,
powers, and privileges of, the Servicer in accordance
with the terms of the Agreement.
Section 20.2 Trustee's Certificate. Upon
request of the Seller or Servicer, on or as soon as
practicable after each Distribution Date on which Receivables
shall be assigned to the Seller or the Servicer, as
applicable, pursuant to Section 20.3, the Trustee shall
execute a Trustee's Certificate (in the form of Exhibit
D-1 or D-2, as applicable), based on the information
contained in the Servicer's Certificate for the related
Collection Period, amounts deposited to the Certificate
Account and notices received pursuant to the Agreement,
identifying the Receivables repurchased by the Seller
pursuant to Section 12.2 or purchased by the Servicer
pursuant to Section 13.7 or 21.2 during such Collection
Period, and shall deliver such Trustee's Certificate,
accompanied by a copy of the Servicer's Certificate for
such Collection Period to the Seller or the Servicer, as
the case may be. The Trustee's Certificate submitted
with respect to such Distribution Date shall operate, as
of such Distribution Date, as an assignment, without
recourse, representation, or warranty, to the Seller or
the Servicer, as the case may be, of all the Trustee's
right, title, and interest in and to such repurchased
Receivable, and all security and documents relating
thereto, such assignment being an assignment outright and
not for security.
Section 20.3 Trustee's Assignment of Purchased
Receivables. With respect to all Receivables repurchased
by the Seller pursuant to Section 12.2 or purchased by
the Servicer pursuant to Section 13.7 or 21.2, the
Trustee shall by a Trustee's Certificate (in the form of
Exhibit D-1 or D-2, as applicable) assign, without
recourse, representation, or warranty, to the Seller or
the Servicer (as the case may be) all the Trustee's right,
title, and interest in and to such Receivables, and all
security and documents relating thereto.
Section 20.4 Certain Matters Affecting Trustee.
Except as otherwise provided in Section 20.1:
XX-4
<PAGE> 84
(i) The Trustee may rely and
shall be protected in acting or refraining from
acting upon any resolution, Officer's Certificate,
Servicer's Certificate, certificate of
auditors, or any other certificate, statement,
instrument, opinion, report, notice, request,
consent, order, appraisal, bond, or other paper
or document believed by it to be genuine and to
have been signed or presented by the proper
party or parties.
(ii) The Trustee may consult
with counsel and any Opinion of Counsel shall
be full and complete authorization and protection
in respect of any action taken or suffered
or omitted by it under the Agreement in good
faith and in accordance with such Opinion of
Counsel.
(iii) The Trustee shall be under
no obligation to exercise any of the rights or
powers vested in it by the Agreement, or to
institute, conduct, or defend any litigation
under the Agreement or in relation to the
Agreement, at the request, order, or direction
of any of the Certificateholders pursuant to
the provisions of the Agreement, unless such
Certificateholders shall have offered to the
Trustee reasonable security or indemnity
against the costs, expenses, and liabilities
that may be incurred therein or thereby; nothing
contained in the Agreement, however, shall
relieve the Trustee of the obligations, upon
the occurrence of an Event of Default (that
shall not have been cured or waived), to exercise
such of the rights and powers vested in it
by the Agreement, and to use the same degree of
care and skill in their exercise as a prudent
man would exercise or use under the circumstances
in the conduct of his own affairs.
(iv) The Trustee shall not be
liable for any action taken, suffered or omitted
by it in good faith and reasonably believed
by it to be authorized or within the discretion
or rights or powers conferred upon it by the
Agreement.
XX-5
<PAGE> 85
(v) Prior to the occurrence of
an Event of Default and after the curing or
waiving of all Events of Default that may have
occurred, the Trustee shall not be bound to
make any investigation into the facts of
matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice,
request, consent, order, approval, bond, or
other paper or document, unless requested in
writing so to do by Holders of Class A
Certificates evidencing not less than 25% of
the Class A Certificate Balance; provided, however,
that if the payment within a reasonable time to
the Trustee of the costs, expenses, or liabilities
likely to be incurred by it in the making
of such investigation shall be, in the opinion
of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the
terms of the Agreement, the Trustee may require
reasonable indemnity against such cost,
expense, or liability as a condition to so
proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or,
if paid by the Trustee, shall be reimbursed by
the Servicer upon demand. Nothing in this
clause (v) shall affect the obligation of the
Servicer to observe any applicable law
prohibiting disclosure of information regarding
the Obligors.
(vi) The Trustee may execute any
of the trusts or powers hereunder or perform
any duties under the Agreement either directly
or by or through agents or attorneys or a
custodian. The Trustee shall not be responsible
for any misconduct or negligence of any such
agent or custodian appointed with due care by
it hereunder or of the Servicer in its capacity
as Servicer or custodian.
(vii) Subsequent to the sale of
the Receivables by the Seller to the Trustee,
the Trustee shall have no duty of independent
inquiry, except as may be required by Section
20.1, and the Trustee may rely upon the
representations and warranties and covenants of the
Seller and the Servicer contained in the Agree-
XX-6
<PAGE> 86
ment with respect to the Receivables and the
Receivable Files.
Section 20.5 Trustee Not Liable for
Certificates or Receivables. The recitals contained herein
and in the Certificates (other than the certificate of
authentication on the Certificates) shall be taken as the
statements of the Seller or the Servicer, as the case may
be, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee shall make no
representations as to the validity or sufficiency of the
Agreement or of the Certificates (other than the certificate
of authentication on the Certificates), or of any
Receivable or related document. The Trustee shall at no time
have any responsibility or liability for or with respect
to the legality, validity, and enforceability of any
security interest in any Financed Vehicle or any
Receivable, or the perfection and priority of such a security
interest or the maintenance of any such perfection and
priority, or for or with respect to the efficacy of the
Trust or its ability to generate the payments to be
distributed to Certificateholders under the Agreement,
including, without limitation: the existence, condition,
location, and ownership of any Financed Vehicle; the
review of any Receivable File therefor; the existence and
enforceability of any physical damage insurance thereon;
the existence and contents of any Receivable or any
Receivable File or any computer or other record thereof;
the validity of the assignment of any Receivable to the
Trust or of any intervening assignment; the completeness
of any Receivable or any Receivable File; the performance
or enforcement of any Receivable; the compliance by the
Seller or the Servicer with any warranty or representation
made under the Agreement or in any related document
and the accuracy of any such warranty or representation
prior to the Trustee's receipt of notice or other
discovery of any noncompliance therewith or any breach thereof;
any investment of monies by the Servicer or any loss
resulting therefrom (it being understood that the Trustee
shall remain responsible for any Trust property that it
may hold); the acts or omissions of the Seller, the
Servicer, or any Obligor; an action of the Servicer taken
in the name of the Trustee; or any action by the Trustee
taken at the instruction of the Servicer; provided,
however, that the foregoing shall not relieve the Trustee
of its obligation to perform its duties under the
Agreement. Except with respect to a claim based on the fail-
XX-7
<PAGE> 87
ure of the Trustee to perform its duties under the
Agreement or based on the Trustee's negligence or willful
misconduct, no recourse shall be had for any claim based
on any provision of the Agreement, the Certificates, or
any Receivable or assignment thereof against the Trustee
in its individual capacity, the Trustee shall not have
any personal obligation, liability, or duty whatsoever to
any Certificateholder or any other Person with respect to
any such claim, and any such claim shall be asserted
solely against the Trust or any indemnitor who shall
furnish indemnity as provided in the Agreement. The
Trustee shall not be accountable for the use or application
by the Seller of any of the Certificates or of the
proceeds of such Certificates, or for the use or application
of any funds paid to the Servicer in respect of the
Receivables. Any obligation of the Trustee to give any
notice or statement to any rating agency hereunder shall
constitute only a best efforts obligation and such notice
or statement shall be so provided only as a matter of
courtesy and accommodation, the Trustee having no
liability to any rating agency or any other Person for any
failure to so provide such notice or statement. The
Trustee may rely on the accuracy of such certification
until it receives from the Seller an Officer's
Certificate superseding such certification.
Section 20.6 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may
become the owner or pledgee of Certificates and may deal
with the Seller and the Servicer in banking transactions
with the same rights as it would have if it were not
Trustee.
Section 20.7 Trustee's Fees and Expenses. The
Servicer shall pay to the Trustee, and the Trustee shall
be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the
compensation of a trustee of an express trust) for all
services rendered by it in the execution of the trusts
created by the Agreement and in the exercise and
performance of any of the Trustee's powers and duties under
the Agreement, and the Servicer, shall pay or reimburse the
Trustee upon its request for all reasonable expenses,
disbursements, and advances (including the reasonable
compensation and the expenses and disbursements of its
counsel and of all persons not regularly in its employ)
incurred or made by the Trustee in accordance with any
XX-8
<PAGE> 88
provisions of the Agreement except any such expense,
disbursement, or advance as may be attributable to its
willful misfeasance, negligence, or bad faith, and the
Servicer shall indemnify the Trustee for, and hold it
harmless against any loss, liability, or expense incurred
without willful misfeasance, negligence, or bad faith on
its part, arising out of or in connection with the acceptance
or administration of the Trust, 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 under the Agreement.
Additionally, the Seller, pursuant to Section 17.2, and
the Servicer, pursuant to Section 18.2, respectively,
shall indemnify the Trustee with respect to certain
matters, and Certificateholders, pursuant to Section 20.4
shall, upon the circumstances therein set forth, indemnify
the Trustee under certain circumstances. The provisions
of this Section 20.7 shall survive the termination
of this Agreement.
Section 20.8 Indemnity of Trustee and Class A
Agent. The Trustee shall be indemnified by the Servicer
and held harmless against any loss, liability, fee,
disbursement, or expense (including any compensation or
expense referred to in Section 20.7) arising out of or
incurred in connection with the acceptance or performance
of the trusts and duties contained in the Agreement to
the extent that (i) the Trustee shall not be entitled to
indemnity for such loss, liability, fee, disbursement, or
expense by the Seller pursuant to Section 17.2 or Section
20.7, the Servicer pursuant to Section 18.2, or the
Certificateholders pursuant to Section 20.4; (ii) such
loss, liability, fee, disbursement, or expense shall not
have been incurred by reason of the Trustee's willful
misfeasance, bad faith, or negligence (except for errors
in judgment); and (iii) such loss, liability, fee,
disbursement, or expense shall not have been incurred by
reason of the Trustee's breach of its representations and
warranties pursuant to Section 20.14. The Class A Agent
shall be indemnified by the Servicer and held harmless
against any loss, liability, fee, disbursement, or
expense arising out of or incurred in connection with the
acceptance or performance of its duties contained in the
Agreement except to the extent that such loss, liability,
fee, disbursement, or expense shall have been incurred by
reason of the Class A Agent's willful misfeasance or
gross negligence; provided, however, that notwithstanding
XX-9
<PAGE> 89
the foregoing, the Class A Agent shall be entitled to
indemnification pursuant to this Section 20.8 with respect
to any actions of the Class A Agent taken in accordance with
the written instructions of the Servicer or of the Trustee
pursuant to Sections 14.7(d)(i) or 14.7(d)(ii).
Section 20.9 Eligibility Requirements for
Trustee. The Trustee under the Agreement shall at all
times be a corporation having an office in the same state
as the location of the Corporate Trust Office as specified
in the Agreement; organized and doing business under
the laws of such state or the United States of America;
authorized under such laws to exercise corporate trust
powers; and having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination
by federal or state authorities. 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 20.9, 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 Trustee shall cease to be eligible in accordance
with the provisions of this Section 20.9, the Trustee
shall resign immediately in the manner and with the
effect specified in Section 20.10.
Section 20.10 Resignation or Removal of Trustee.
The Trustee may at any time resign and be discharged
from the trusts hereby created by giving written notice
thereof to the Servicer. Upon receiving such notice of
resignation, the Servicer shall promptly appoint a
successor Trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the
resigning Trustee and one copy to the successor Trustee.
If no successor Trustee shall have been so appointed and
have accepted appointment within 30 days after the giving
of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the
appointment of a successor Trustee.
If at any time the Trustee shall cease to be
eligible in accordance with the provisions of Section
20.9 and shall fail to resign after written request
therefor by the Servicer, or if at any time the Trustee
XX-10
<PAGE> 90
shall be legally unable to act, or shall be adjudged
bankrupt or insolvent, or a receiver of the trustee or of
its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its
property or affairs for the purpose of rehabilitation,
conservation, or liquidation, then the Servicer may
remove the Trustee. If it shall remove the Trustee under
the authority of the immediately preceding sentence, the
Servicer shall promptly appoint a successor Trustee by
written instrument, in duplicate, one copy of which
instrument shall be delivered to the Trustee so removed
and one copy to the successor Trustee and shall promptly
pay all fees owed to the outgoing Trustee.
Any resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to any of the
provisions of this Section 20.10 shall not become effective
until acceptance of appointment by the successor
Trustee pursuant to Section 20.11 and payment of all fees
and expenses owed and any other amounts due hereunder to
the outgoing Trustee. The Servicer shall provide notice
of such resignation or removal of the Trustee to each of
the rating agencies then rating the Certificates.
Section 20.11 Successor Trustee. Any successor
Trustee appointed pursuant to Section 20.10 shall
execute, acknowledge, and deliver to the Servicer and to
its predecessor Trustee an instrument accepting such
appointment under the Agreement, and thereupon the resignation
or removal of the predecessor Trustee shall become
effective and such successor Trustee, without any further
act, deed, or conveyance, shall become fully vested with
all the rights, powers, duties, and obligations of its
predecessor under the Agreement, with like effect as if
originally named as Trustee. The predecessor Trustee
shall upon payment of its fees and expenses and any other
amounts due it hereunder deliver to the successor Trustee
all documents and statements and monies held by it under
the Agreement; and the Servicer and the predecessor
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
Trustee all such rights, powers, duties, and obligations.
No successor Trustee shall accept appointment
as provided in this Section 20.11 unless at the time of
XX-11
<PAGE> 91
such acceptance such successor Trustee shall be eligible
pursuant to Section 20.9.
Upon acceptance of appointment by a successor
Trustee pursuant to this Section 20.11, the Servicer
shall mail notice of the successor of such Trustee under
the Agreement to all Holders of Certificates at their
addresses as shown in the Certificate Register. If the
Servicer shall fail to mail such notice within 10 days
after acceptance of appointment by the successor Trustee,
the successor Trustee shall cause such notice to be
mailed at the expense of the Servicer.
Section 20.12 Merger or Consolidation of
Trustee. Any corporation into which the 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 Trustee shall be a party,
or any corporation succeeding to all or substantially all
of the corporate trust business of the Trustee, shall be
the successor of the Trustee hereunder, provided such
corporation shall be eligible pursuant to Section 20.9,
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.
Section 20.13 Appointment of Co-Trustee or
Separate Trustee. Notwithstanding any other provisions
of the Agreement, at any time, for the purpose of meeting
any legal requirements of any jurisdiction in which any
part of the Trust or any Financed Vehicle may at the time
be located, the Servicer and the Trustee acting jointly
shall have the power and shall execute and deliver all
instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee, jointly with the Trustee,
or separate trustee or separate trustees, of all or
any part of the Trust, and to vest in such Person, in
such capacity and for the benefit of the Certificateholders,
such title to the Trust, or any part thereof, and,
subject to the other provisions of this Section 20.13,
such powers, duties, obligations, rights, and trusts as
the Servicer and the Trustee may consider necessary or
desirable. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a
request so to do, or in the case an Event of Default
shall have occurred and be continuing, the Trustee alone
shall have the power to make such appointment. No co-
XX-12
<PAGE> 92
trustee or separate trustee under the Agreement shall be
required to meet the terms of eligibility as a successor
trustee pursuant to Section 20.9 and no notice of a
successor trustee pursuant to Section 20.11 and no notice
to Certificateholders of the appointment of any co-trustee
or separate trustee shall be required pursuant to
Section 20.11.
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
Trustee shall be conferred upon and exercised
or performed by the 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
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 (whether as Trustee under the Agreement
or as successor to the Servicer under the
Agreement), the 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 Trustee;
(ii) No trustee under the Agreement
shall be personally liable by reason of any act or
omission of any other trustee under the Agreement;
(iii) The Servicer and the Trustee
acting jointly may at any time accept the
resignation of or remove any separate trustee
or co-trustee; and
(iv) All duties owed hereunder
to the Trustee by the Servicer shall be deemed
to be owed to each separate trustee and co-trustee.
XX-13
<PAGE> 93
Any notice, request, or other writing given to
the 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 the Agreement and the conditions of this Article XX.
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 Trustee or separately, as may be
provided therein, subject to all the provisions of the
Agreement, specifically including every provision of the
Agreement relating to the conduct of, affecting the
liability of, or affording protection to, the Trustee.
Each such instrument shall be filed with the Trustee and
a copy thereof given to the Servicer.
Any separate trustee or co-trustee may at any
time appoint the 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
the 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 Trustee, to the extent permitted
by law, without the appointment of a new or successor
trustee.
Section 20.14 Representations and Warranties
of Trustee. The Trustee shall make the following representations
and warranties on which the Seller and Certificateholders
shall rely:
(i) The Trustee is a New York
corporation duly organized, validly existing,
and in good standing under the laws of the
State of New York.
(ii) The Trustee has full corporate
power, authority, and legal right to execute,
deliver, and perform the Agreement, and
shall have taken all necessary action to authorize
the execution, delivery, and performance by it of
the Agreement.
XX-14
<PAGE> 94
(iii) The Agreement shall have
been duly executed and delivered by the
Trustee.
Section 20.15 Tax Returns. The Servicer shall
prepare or shall cause to be prepared any tax returns
required to be filed by the Trust and shall remit such
returns to the Trustee for signature at least five days
before such returns are due to be filed. The Trustee,
upon request, will furnish the Servicer with all such
information known to the Trustee as may be reasonably
required in connection with the preparation of all tax
returns of the Trust, and shall, upon request, execute
such returns.
Section 20.16 Trustee May Enforce Claims
Without Possession of Certificates. All rights of action
and claims under this Agreement or the Certificates may
be prosecuted and enforced by the Trustee without the
possession of any of the Certificates or the production
thereof in any proceeding relating thereto, and any such
proceeding instituted by the Trustee shall be brought in
its own name as trustee. Any recovery of judgment shall,
after provision for the payment of the reasonable
compensation, expenses, disbursements, and advances of the
Trustee, its agents and counsel, be for the ratable
benefit of the Certificateholders in respect of which
such judgment has been obtained.
Section 20.17 Suits for Enforcement. If an
Event of Default shall occur and be continuing, the
Trustee, in its discretion may, subject to the provisions
of Section 20.1, proceed to protect and enforce its
rights and the rights of the Certificateholders under
this Agreement by a suit, action, or proceeding in
equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this
Agreement or in aid of the execution of any power granted
in this Agreement or for the enforcement of any other
legal, equitable, or other remedy as the Trustee, being
advised by counsel, shall deem most effectual to protect
and enforce any of the rights of the Trustee or the
Certificateholders.
Section 20.18 Rights of Certificateholders to
Direct Trustee. Holders of Class A Certificates evidencing
not less than 51% of the Class A Certificate Balance
XX-15
<PAGE> 95
shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or
power conferred on the Trustee; provided, however, that,
subject to Section 20.1, the Trustee shall have the right to
decline to follow any such direction if the Trustee being
advised by counsel determines that the action so directed
may not lawfully be taken, or if the Trustee in good
faith shall, by a Trustee Officer, determine that the
proceedings so directed would be illegal or subject it to
personal liability or be unduly prejudicial to the rights
of Certificateholders not parties to such direction; and
provided further that nothing in this Agreement shall
impair the right of the Trustee to take any action deemed
proper by the Trustee and which is not inconsistent with
such direction by the Certificateholders.
XX-16
<PAGE> 96
ARTICLE XXI
Termination
Section 21.1 Termination of the Trust. The
respective obligations and responsibilities of the
Seller, the Servicer, and the Trustee created hereby and the
Trust created by the Agreement shall terminate upon (i)
the purchase as of the last day of any Collection Period
by the Servicer at its option, pursuant to Section 21.2,
of the corpus of the Trust and the subsequent distribution
to Certificateholders pursuant to Section 14.6 of
the amount required to be deposited pursuant to Section
21.2 or (ii) the payment to Certificateholders of all
amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held as
part of the Trust; provided, however, that in no event
shall the trust created by the Agreement continue beyond
the expiration of 21 years from the death of the last
survivor of the descendants of Hurley David Smith,
currently residing in Clarkston, Michigan, living on the
date of the Agreement. The Servicer shall promptly
notify the Trustee of any prospective termination
pursuant to this Section 21.1.
Notice of any termination, specifying the
Distribution Date upon which the Certificateholders may
surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be
given promptly by the Trustee by letter to Certificate
holders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the
specified Distribution Date stating (A) the Distribution
Date upon which final payment of the Certificates shall
be made upon presentation and surrender of the Certificates
at the office of the Trustee therein designated,
(B) the amount of any such final payment, and (C) if
applicable, 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 Trustee therein specified.
The Trustee shall give such notice to the Certificate
Registrar (if other than the Trustee) at the time such
notice is given to Certificateholders. Upon presentation
and surrender of the Certificates, the Trustee shall
cause to be distributed to Certificateholders amounts
XXI-1
<PAGE> 97
distributable on such Distribution Date pursuant to
Section 14.6.
In the event that all of the Certificateholders
shall not surrender their Certificates for cancellation
within six months after the date specified in the
abovementioned written notice, the 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
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 the
Agreement. Any funds remaining in the Trust after
exhaustion of such remedies shall be distributed by the
Trustee to the Edison Institute, Dearborn, Michigan.
Section 21.2 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
14.5 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 and the Trustee, and shall
succeed to all interests in and to the Trust.
XXI-2
<PAGE> 98
ARTICLE XXII
Miscellaneous Provisions
Section 22.1 Amendment. The Agreement may be
amended by the Seller, the Servicer, the Trustee and the
Class A Agent, without the consent of any of the
Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in the Agreement, or to add any
other provisions with respect to matters or questions arising
under the Agreement that shall not be inconsistent with
the provisions of the Agreement; provided, however, that
such action shall not, as evidenced by an Opinion of
Counsel, adversely affect in any material respect the
interests of any Certificateholder. The Agreement also
may be amended by the Seller, the Servicer, the Trustee
and the Class A Agent, without the consent of any of the
Certificateholders, to provide for the transfer of the
Class B Certificates; provided, however, that the
conditions specified in the third and fourth paragraphs of
Section 16.3 shall be satisfied prior to such transfer;
provided, further, that such amendment shall not change
the timing of or the amount of any distributions that the
Class A Certificateholders are entitled to receive hereunder.
The Agreement may also be amended from time to
time by the Seller, the Servicer, the Trustee and the
Class A Agent with the consent of the Holders of Class A
Certificates and Class B Certificates, each voting as a
Class (which consent of any Holder of a Certificate given
pursuant to this Section or pursuant to any other provision
of this Agreement shall be conclusive and binding on
such Holder and on all future Holders of such Certificate
and of any Certificate issued upon the transfer thereof
or in exchange thereof or in lieu thereof whether or not
notation of such consent is made upon the Certificate),
evidencing not less than 51% of the Class A Certificate
Balance and Class B Certificate Balance, respectively,
for the purpose of adding any provisions to or changing
in any manner or eliminating any of the provisions of the
Agreement, or of modifying in any manner the rights of
the Holders of Certificates; provided, however, that no
such amendment shall (a) increase or reduce in any manner
the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions
XXII-1
<PAGE> 99
that shall be required to be made on any Certificate or
change the Pass Through Rate or the Specified Subordinated
Spread Account Balance or (b) reduce the aforesaid
percentage required to consent to any such amendment,
without the consent of the Holders of all Certificates
then outstanding.
Prior to the execution of any such amendment or
consent, the Servicer will provide and the Trustee shall
distribute written notification of the substance of such
amendment or consent to each of the rating agencies then
rating the Certificates.
Promptly after the execution of any such
amendment or consent, the Trustee shall furnish written
notification of the substance of such amendment or consent to
each Certificateholder.
It shall not be necessary for the consent of
Certificateholders pursuant to this Section 22.1 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) and of evidencing the
authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements
as the Trustee may prescribe, including the establishment
of record dates pursuant to paragraph number 2 of the
Depository Agreement.
Prior to the execution of any amendment to the
Agreement, the 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 the
Agreement and the Opinion of Counsel referred to in
Section 22.2(i)(1). The Trustee may, but shall not be
obligated to, enter into any such amendment which affects
the Trustee's own rights, duties or immunities under the
Agreement or otherwise.
Section 22.2 Protection of Title to Trust.
(a) The Seller shall execute and file
such financing statements and cause to be executed and
filed such continuation statements, all in such manner
XXII-2
<PAGE> 100
and in such places as may be required by law fully to
preserve, maintain, and protect the interest of the
Certificateholders and the Trustee in the Receivables and
in the proceeds thereof. The Seller shall deliver (or
cause to be delivered) to the 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 # 9-402(7) of the UCC,
unless it shall have given the Trustee at least five
days' prior written notice thereof 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 Trustee at least 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. The Servicer shall at all times
maintain each office from which it shall service Receivables,
and its principal executive office, within the United States
of America.
(d) The Servicer shall maintain accounts
and records as to each Receivable accurately and in
sufficient detail to permit (i) the reader thereof to
know at any time the status of such Receivable, including
payments and recoveries made and payments owing (and the
nature of each) and (ii) reconciliation between payments
or recoveries on (or with respect to) each Receivable and
the amounts from time to time deposited in the Certificate
Account and Payahead Account in respect of such Receivable.
(e) The Servicer shall maintain its
computer systems so that, from and after the time of sale
under the Agreement of the Receivables to the Trust, the
Servicer's master computer records (including any back-up
archives) that refer to a Receivable shall indicate
XXII-3
<PAGE> 101
clearly the interest of the particular grantor trust in
such Receivable and that such Receivable is owned by the
Trust. Indication of the Trust's ownership of a Receivable
shall be deleted from or modified on the Servicer's
computer systems when, and only when, the Receivable
shall have been paid in full or repurchased.
(f) If at any time the Seller or the
Servicer shall propose to sell, grant a security interest
in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or
other transferee, the Servicer shall give to such
prospective purchaser, lender, or other transferee computer
tapes, records, or print-outs (including any restored
from back-up archives) that, if they shall refer in any
manner whatsoever to any Receivable, shall indicate
clearly that such Receivable has been sold and is owned
by the Trust.
(g) The Servicer shall permit the Trustee
and its agents at any time during normal business hours
to inspect, audit, and make copies of and abstracts from
the Servicer's records regarding any Receivable.
(h) Upon request, the Servicer shall
furnish to the Trustee, within twenty 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
Trustee:
(1) promptly after the
execution and delivery of the 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 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
XXII-4
<PAGE> 102
that, in the opinion of such Counsel, no such
action shall be necessary to preserve and protect
such interest; and
(2) within 90 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 90-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 Trustee in the Receivables, and reciting
the details of such filings or referring to
prior Opinions of Counsel in which such details
are given, or (B) stating that, in the opinion
of such Counsel, no such action shall be
necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause
(i)(1) or (i)(2) above shall specify any action necessary
(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 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 the Agreement and for other purposes, the
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 22.3 Limitation on Rights of Certificateholders.
The death or incapacity of any Certificateholder shall not
operate to terminate the Agreement or the Trust, nor entitle
such Certificateholder's legal representatives or heirs to
claim an accounting or to take any action or commence any
proceeding in any court for a partition or winding up of the
Trust, nor otherwise
XXII-5
<PAGE> 103
affect the rights, obligations, and liabilities of the
parties to the Agreement or any of them.
No Certificateholder shall have any right to
vote (except as provided in Section 22.1 or 19.5) or in
any manner otherwise control the operation and management
of the Trust, or the obligations of the parties to the
Agreement, nor shall anything in the Agreement set forth,
or contained in the terms of the Certificates, be construed
so as to constitute the Certificateholders from
time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to
any third person by reason of any action taken pursuant
to any provision of the Agreement.
No Certificateholder shall have any right by
virtue or by availing itself of any provisions of the
Agreement to institute any suit, action, or proceeding in
equity or at law upon or under or with respect to the
Agreement, unless such Holder previously shall have given
to the Trustee a written notice of default and of the
continuance thereof, and unless also (i) the default
arises from the Seller's or the Servicer's failure to
remit payments when due hereunder, or (ii) the Holders of
Class A Certificates evidencing not less than 25% of the
Class A Certificate Balance shall have made written
request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee under the Agreement
and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and
the Trustee, for 30 days after its receipt of such notice,
request, and offer of indemnity, shall have neglected or
refused to institute any such action, suit or proceeding and
during such 30-day period no request or waiver inconsistent
with such written request has been given to the Trustee
pursuant to this Section or Section 19.5; no one or more
Holders of Certificates shall have any right in any manner
whatever by virtue or by availing itself or themselves of
any provisions of the Agreement to affect, disturb, or
prejudice the rights of the Holders of any other of the
Certificates, or to obtain or seek to obtain priority over
or preference to any other such Holder, or to enforce
any right, under the Agreement except in the manner
provided in the Agreement and for the equal, ratable, and
common benefit of all Certificateholders. For the protection
and enforcement
XXII-6
<PAGE> 104
of the provisions of this Section 22.3, each
Certificateholder and the Trustee shall be entitled to
such relief as can be given either at law or in equity.
Section 22.4 GOVERNING LAW. THE 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 THE AGREEMENT SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 22.5 Notices. All demands, notices,
and communications upon or to the Seller, the Servicer,
the Trustee, or any rating agency under the Agreement
shall be in writing, personally delivered 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 the Agreement, or at such other
address as shall be designated by the Seller or the
Servicer in a written notice to the Trustee, (b) in the
case of the Trustee, at the Corporate Trust Office, (c)
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, and (d) in the case of Standard & Poor's
Ratings Group, at the following address: Standard &
Poor's Ratings Group, 25 Broadway, 20th Floor, New York,
New York 10004, Attention: Asset Backed Surveillance
Department. Any notice required or permitted to be
mailed to a Certificateholder shall be given by first
class mail, postage prepaid, at the address of such
Holder as shown in the Certificate Register. Any notice
so mailed within the time prescribed in the Agreement
shall be conclusively presumed to have been duly given,
whether or not the Certificateholder shall receive such
notice.
Section 22.6 Severability of Provisions. If
any one or more of the covenants, agreements, provisions,
or terms of the 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
the Agreement and shall in no way affect the validity or
enforceability of the other provisions of the Agreement
or of the Certificates or the rights of the Holders
thereof.
XXII-7
<PAGE> 105
Section 22.7 Assignment. Notwithstanding
anything to the contrary contained herein, except as
provided in Sections 17.3 and 18.3 and as provided in the
provisions of the Agreement concerning the resignation of
the Servicer, the Agreement may not be assigned by the
Seller or the Servicer without the prior written consent
of the Trustee and the Holders of Class A Certificates
evidencing not less than 66-2/3% of the Class A
Certificate Balance.
Section 22.8 Certificates Nonassessable and
Fully Paid. Certificateholders shall not be personally
liable for obligations of the Trust. The interests
represented by the Certificates shall be nonassessable
for any losses or expenses of the Trust or for any reason
whatsoever, and, upon authentication thereof by the
Trustee pursuant to Section 16.2 or Section 16.3,
Certificates shall be deemed fully paid.
Section 22.9 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
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
Uniform Commercial Code of any applicable jurisdiction.
Section 22.10 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the
part of the Trustee 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 22.11 Third-Party Beneficiaries. This
Agreement will inure to the benefit of and be binding
upon the parties hereto, the Certificateholders, and
their respective successors and permitted assigns.
Except as otherwise provided in this Article XXII, no
other person will have any right or obligation hereunder.
XXII-8
<PAGE> 106
Section 22.12 Actions by Certificateholders.
(a) Wherever in this Agreement a provision is made that
an action may be taken or a notice, demand, or instruction
given by Certificateholders, such action, notice, or
instruction may be taken or given by any Certificateholder,
unless such provision requires a specific percentage
of Certificateholders.
(b) Any request, demand, authorization,
direction, notice, consent, waiver, or other act by a
Certificateholder shall bind such Certificateholder and
every subsequent holder of such 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 Trustee or the Servicer in
reliance thereon, whether or not notation of such action
is made upon such Certificate.
* * * *
XXII-9
<PAGE> 107
EXHIBIT A
[FORM OF CLASS A CERTIFICATE -- SEE REVERSE FOR CERTAIN DEFINITIONS]
[The following legend to be inserted if this Certificate is issued to CEDE &
Co.:]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION, TO THE ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY), 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.
FORD CREDIT 1995-B GRANTOR TRUST
______% ASSET BACKED CERTIFICATE, CLASS A
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used automobiles and light trucks and sold to the Trust by
Ford Credit Auto Receivables Corporation.
(This Certificate does not represent an interest in or obligation of Ford
Credit Auto Receivables Corporation or Ford Motor Credit Company or any of
their respective affiliates, except to the extent described below.)
NUMBER [R-] CUSIP ___________
$_____________
THIS CERTIFIES THAT ____________ is the registered owner of a
___________________________ dollars nonassessable, fully-paid, fractional
undivided interest in the Ford Credit 1995-B Grantor Trust (the "Trust") formed
by Ford Credit Auto
<PAGE> 108
Receivables Corporation, a Delaware corporation (the "Seller"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of November 1,
1995 (the "Agreement"), among the Seller, Ford Motor Credit Company, as
Servicer (the "Servicer"), and Chemical Bank, as Trustee (the "Trustee") and as
Class A Agent, 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 Agreement. This
Certificate is one of the duly authorized Certificates designated as "____%
Asset Backed Certificates, Class A" (herein called the "Class A Certificates").
Also issued under the Agreement are Certificates designated as "____% Asset
Backed Certificates, Class B" (the "Class B Certificates"). The Class B
Certificates and the Class A Certificates are hereinafter collectively called
the "Certificates." The aggregate undivided interest in the Trust evidenced by
all Class A Certificates is 93.5%. This Class A Certificate is issued under
and is subject to the terms, provisions, and conditions of the Agreement, to
which Agreement the holder of this Class A Certificate by virtue of the
acceptance hereof assents and by which such holder is bound. The property of
the Trust includes (as more fully described in the Agreement) a pool of retail
installment sale contracts for new and used automobiles and light trucks (the
"Receivables"), certain monies due thereunder on or after November 1, 1995,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, property (including the right to receive Liquidation
Proceeds) securing the Receivables and held by the Trustee, proceeds from
claims on physical damage, credit life and disability insurance policies
covering vehicles financed thereby and the obligors thereunder, certain other
items financed by the obligors, certain interests of the Seller in Dealer
Recourse, all right, title and interest of the Seller in and to the Purchase
Agreement and any and all proceeds of the foregoing.
Under the Agreement, there will be distributed on the 15th day of
each month or, if such 15th day is not a Business Day, the next Business Day
(the "Distribution Date"), commencing on December 15, 1995 to the person in
whose name this Class A Certificate is registered at either the close of
business on the fourteenth day of the current calendar month or, after the
issuance of Definitive Certificates pursuant to the Agreement, the last day of
the Collection Period immediately preceding the month in which such
Distribution Date occurs (the "Record Date"), such Class A Certificateholder's
A-2
<PAGE> 109
fractional undivided interest in the lesser of (a) the sum of the Class A
Distributable Amount and any outstanding Class A Interest Carryover Shortfall
from the preceding Distribution Date (plus, to the extent not otherwise
provided for, interest on such Class A Interest Carryover Shortfall at the
Pass-Through Rate from such preceding Distribution Date through the current
Distribution Date, to the extent permitted by law and, with respect to the
Class A Interest Distributable Amount only, to the extent provided in the
Agreement) and any Class A Principal Carryover Shortfall and (b) the sum of (i)
the Total Available Amount (but with respect to the Class A Interest
Distributable Amount only to the extent provided in the Agreement) and (ii)
amounts available in the Subordination Spread Account.
The holder of this Class A Certificate by virtue of the acceptance
hereof assents to the appointment, pursuant to Section 14.7 of the Agreement,
of Chemical Bank acting solely as agent, and not as Trustee, for such holder
with respect to the Subordination Spread Account and the Subordination Spread
Account Property.
Distributions on this Class A Certificate will be made by the
Trustee by check or money order mailed to the Class A Certificateholder of
record in the Certificate Register without the presentation or surrender of
this Class A Certificate or the making of any notation hereon except that with
respect to Class A Certificates registered in the name of Cede & Co., the
nominee for the Clearing Agency, distributions will be made in the form of
immediately available funds. Except as otherwise provided in the Agreement and
notwithstanding the above, the final distribution on this Class A Certificate
will be made after due notice by the Trustee of the pendency of such
distribution and only upon presentation and surrender of this Class A
Certificate at the office or agency maintained for that purpose by the Trustee
in the Borough of Manhattan, The City of New York. The Record Date otherwise
applicable to such distribution shall not be applicable.
Reference is hereby made to the further provisions of this Class A
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 Trustee, by manual signature, this
Class A Certificate shall not
A-3
<PAGE> 110
entitle the holder hereof to any benefit under the Agreement or be valid for
any purpose.
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in
its individual capacity has caused this Class A Certificate to be duly
executed.
FORD CREDIT 1995-B GRANTOR
TRUST
By: CHEMICAL BANK, as Trustee
By: ___________________________
Name:
Title:
DATED:
[SEAL]
ATTEST:
_________________________
TRUST OFFICER
This is one of the Class A Certificates referred to
in the within-mentioned Agreement.
CHEMICAL BANK, as Trustee
By: _______________________
Authorized Officer
A-4
<PAGE> 111
[Reverse of Certificate]
The Certificates do not represent an obligation of, or an interest
in, the Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in
the Agreement. A copy of the Agreement may be examined during normal business
hours at the principal office of the Seller, and at such other places, if any,
designated by the Seller, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller and the Trustee with the consent of the Holders of Class A
Certificates and Class B Certificates, each voting as a Class, evidencing not
less than 51% of the Class A Certificate Balance and Class B Certificate
Balance, respectively. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and on all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations set
forth therein, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies maintained by the Trustee in its capacity
as Certificate Registrar, or by any successor Certificate Registrar, in the
Borough of Manhattan, The City of New York, accompanied by a written instrument
of transfer in form satisfactory to the 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.
A-5
<PAGE> 112
The Class A Certificates are issuable only as registered
Certificates without coupons in denominations of $1,000 and integral multiples
thereof; however, one Certificate may be issued in a denomination equal to the
residual amount. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of authorized denominations evidencing the same aggregate
denomination, as requested by the holder surrendering the same. No service
charge will be made for any such registration of transfer or exchange, but the
Trustee may require payment of a sum sufficient to cover any tax or
governmental charges payable in connection therewith.
The Trustee, the Certificate Registrar, and any agent of the
Trustee or the Certificate Registrar may treat the person in whose name this
Class A Certificate is registered as the owner hereof for all purposes, and
neither the Trustee, the Certificate Registrar, nor any such agent shall be
affected by any notice to the contrary.
The obligations and responsibilities created by the Agreement and
the Trust created thereby shall terminate upon the payment to
Certificateholders of all amounts required to be paid to them pursuant to the
Agreement and the disposition of all property held as part of the Trust. The
Servicer of the Receivables may at its option purchase the corpus of the Trust
at a price specified in the Agreement, and such purchase of the Receivables and
other property of the Trust will effect early retirement of 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 10% of the original
aggregate principal balance of the Receivables.
The recitals contained herein (other than the certificate of
authentication herein) shall be taken as the statements of the Seller or the
Servicer, as the case may be, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity
or sufficiency of this Certificate (other than the certificate of
authentication herein), or of any Receivable or related document.
A-6
<PAGE> 113
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 typewrite 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 Certifi-
cate Registrar, with full power of
substution 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-7
<PAGE> 114
EXHIBIT B
[FORM OF CLASS B CERTIFICATE -- SEE REVERSE FOR CERTAIN DEFINITIONS]
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
PURSUANT TO THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR SOLD
UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR AN OPINION OF COUNSEL
THAT SUCH REGISTRATION IS NOT REQUIRED AND THE SATISFACTION OF CERTAIN OTHER
REQUIREMENTS SPECIFIED IN THE AGREEMENT. EACH HOLDER OF THIS CERTIFICATE
ACKNOWLEDGES AND AGREES THAT IT HAS ASSIGNED, SOLD, CONVEYED AND TRANSFERRED
ALL ITS RIGHT, TITLE AND INTEREST IN AND TO THE SUBORDINATION SPREAD ACCOUNT
AND THE SUBORDINATION SPREAD ACCOUNT PROPERTY IN ACCORDANCE WITH SECTION 14.7
OF THE AGREEMENT.
FORD CREDIT 1995-B GRANTOR TRUST
____% ASSET BACKED CERTIFICATE, CLASS B
evidencing a fractional undivided interest in the Trust, as defined below,
the property of which includes a pool of retail installment sale contracts
secured by new and used automobiles and light trucks and sold to the Trust
by Ford Credit Auto Receivables Corporation.
(This Certificate does not represent an interest in or obligation of Ford
Credit Auto Receivables Corporation or Ford Motor Credit Company or any of
their respective affiliates, except to the extent described
below.)
NUMBER
R1
$_________
THIS CERTIFIES THAT Ford Credit Auto Receivables Corporation is the
registered owner of a ______________________________ dollars and ________ cents
nonassessable, fully-paid, fractional undivided interest
<PAGE> 115
in the Ford Credit 1995-B Grantor Trust (the "Trust") formed by Ford Credit Auto
Receivables Corporation, a Delaware corporation (the "Seller"). The Trust was
created pursuant to a Pooling and Servicing Agreement dated as of November 1,
1995 (the "Agreement"), among the Seller, Ford Motor Credit Company, as
Servicer (the "Servicer"), and Chemical Bank, as Trustee (the "Trustee") and as
Class A Agent, 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 Agreement. This
Certificate is one of the duly authorized Certificates designated as "____%
Asset Backed Certificates, Class B" (herein called the "Class B Certificates").
Also issued under the Agreement are Certificates designated as "____% Asset
Backed Certificates, Class A" (the "Class A Certificates"). The Class B
Certificates and the Class A Certificates are hereinafter collectively called
the "Certificates." The aggregate undivided interest in the Trust evidenced by
all Class B Certificates is 6.5%. This Class B Certificate is issued under and
is subject to the terms, provisions, and conditions of the Agreement, to which
Agreement the holder of this Class B Certificate by virtue of the acceptance
hereof assents and by which such holder is bound. The property of the Trust
includes (as more fully described in the Agreement) a pool of retail
installment sale contracts for new and used automobiles and light trucks (the
"Receivables"), certain monies due thereunder on or after November 1, 1995,
security interests in the vehicles financed thereby, certain bank accounts and
the proceeds thereof, property (including the right to receive Liquidation
Proceeds) securing the Receivables, proceeds from claims on physical damage,
credit life and disability insurance policies covering vehicles financed
thereby and the obligors thereunder, certain other items financed by the
obligors, certain interests of the Seller in Dealer Recourse, all right, title
and interest of the Seller in and to the Purchase Agreement and any and all
proceeds of the foregoing. The rights of the holders of the Class B
Certificates are subordinated to the rights of the holders of the Class A
Certificates, as set forth in the Agreement.
Under the Agreement, there will be distributed on the 15th day of each
month or, if such 15th day is not a Business Day, the next Business Day (the
"Distribution
B-2
<PAGE> 116
Date"), commencing on December 15, 1995, to the person in whose name this Class
B Certificate is registered at either the close of business on the fourteenth
day of the current calendar month or, after the issuance of Definitive
Certificates pursuant to the Agreement, the last day of the Collection Period
immediately preceding the month in which such Distribution Date occurs (the
"Record Date"), such Class B Certificateholder's fractional undivided interest
in the lesser of (a) the sum of the Class B Distributable Amount and any
outstanding Class B Interest Carryover Shortfall and any Class B Principal
Carryover Shortfall and (b) the sum of (i) the Total Available Amount and (ii)
amounts available in the Subordination Spread Account in excess of the
Specified Subordinated Spread Account Balance for the next succeeding
Distribution Date, in each case after giving effect to (A) the amounts required
to be distributed to the holders of Class A Certificates pursuant to the
subordination of the rights of the holders of Class B Certificates and (B) the
amounts required to be deposited in the Subordination Spread Account and to pay
the Servicing Fee (including any unpaid Servicing Fees with respect to prior
Collection Periods) payable to the Servicer on such Distribution Date.
Each holder of this Class B Certificate acknowledges and agrees that its
rights to receive distributions in respect of this Class B Certificate are
subordinated to the rights of the Class A Certificateholders to receive
distributions in respect of the Class A Certificates and the rights of the
Servicer to receive the Servicing Fee (and any unpaid Servicing Fees from prior
Collection Periods) in the event of delinquency or defaults on the Receivables.
Each holder of this Class B Certificate acknowledges and agrees that, in order
to give effect to the subordination provisions provided in the Agreement, it
has assigned, sold, conveyed and transferred all its right, title and interest
in and to the Subordination Spread Account on the terms and conditions set
forth in the Agreement.
Distributions on this Class B Certificate will be made by the Trustee by
wire transfer, check or money order mailed to the Class B Certificateholder of
record in the Certificate Register without the presentation or surrender of
this Class B Certificate or the making of any notation hereon. Except as
otherwise provided in the
B-3
<PAGE> 117
Agreement and notwithstanding the above, the final distribution on this Class B
Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Class B
Certificate at the office or agency maintained for that purpose by the Trustee
in the Borough of Manhattan, The City of New York.
Reference is hereby made to the further provisions of this Class B
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 Trustee, by manual signature, this Class B
Certificate shall not entitle the holder hereof to any benefit under the
Agreement or be valid for any purpose.
B-4
<PAGE> 118
IN WITNESS WHEREOF, the Trustee on behalf of the Trust and not in its
individual capacity has caused this Class B Certificate to be duly executed.
FORD CREDIT 1995-B GRANTOR TRUST
CHEMICAL BANK, as Trustee
DATED:__________ By: ______________________________
Name:
Title:
[SEAL]
ATTEST:
__________________
Trust Officer
This is one of the Class B Certificates referred to
in the within-mentioned Agreement.
CHEMICAL BANK, as Trustee
By: ___________________________
Authorized Officer
B-5
<PAGE> 119
[Reverse of Certificate]
The Certificates do not represent an obligation of, or an interest in, the
Seller, the Servicer, the Trustee or any affiliate of any of them. The
Certificates are limited in right of payment to certain collections and
recoveries respecting the Receivables, all as more specifically set forth in
the Agreement. A copy of the Agreement may be examined during normal business
hours at the principal office of the Seller, and at such other places, if any,
designated by the Seller, by any Certificateholder upon request.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Seller and the rights of the Certificateholders under the Agreement at any time
by the Seller and the Trustee with the consent of the Holders of Class A
Certificates and Class B Certificates, each voting as a Class, evidencing not
less than 51% of the Class A Certificate Balance and Class B Certificate
Balance, respectively. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and on all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof,
in certain limited circumstances, without the consent of the Holders of any of
the Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies maintained by the Trustee in its capacity as Certificate
Registrar, or by any successor Certificate Registrar, in the Borough of
Manhattan, The City of New York, accompanied by a written instrument of
transfer in form satisfactory to the 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 Class B Certificates are issuable only as registered Certificates
without coupons in denominations of $100,000 and integral multiples thereof;
however, one Certificate may be issued in a denomination equal to the residual
amount. As provided in the Agreement and subject to certain limitations
therein set forth, Certificates are exchangeable for new Certificates of
authorized denominations evidencing the same aggregate denomination, as
B-6
<PAGE> 120
requested by the holder surrendering the same. No service charge will be made
for any such registration of transfer or exchange, but the Trustee may require
payment of a sum sufficient to cover any tax or governmental charges payable in
connection therewith.
The Trustee, the Certificate Registrar, and any agent of the Trustee or
the Certificate Registrar may treat the person in whose name this Class B
Certificate is registered as the owner hereof for all purposes, and neither the
Trustee, the Certificate Registrar, nor any such agent shall be affected by any
notice to the contrary.
The obligations and responsibilities created by the Agreement and the
Trust created thereby shall terminate upon the payment to Certificateholders of
all amounts required to be paid to them pursuant to the Agreement and the
disposition of all property held as part of the Trust. The Servicer of the
Receivables may at its option purchase the corpus of the Trust at a price
specified in the Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of 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 10% of the original
aggregate principal balance of the Receivables.
The recitals contained herein (other than the certificate of
authentication herein) shall be taken as the statements of the Seller or the
Servicer, as the case may be, and the Trustee assumes no responsibility for the
correctness thereof. The Trustee makes no representations as to the validity
or sufficiency of this Certificate (other than the certificate of
authentication herein), or of any Receivable or related document.
B-7
<PAGE> 121
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 typewrite 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-8
<PAGE> 122
EXHIBIT C
[DTC LOGO]
BOOK-ENTRY-ONLY COLLATERALIZED MORTGAGE OBLIGATIONS (CMOS)
(WITHOUT OWNER OPTION TO REDEEM)/
OTHER ASSET-BACKED SECURITIES/AND PASS-THROUGH CERTIFICATES
Letter of Representations
[To be Completed by Issuer and Trustee]
___________________________
[Name of Issuer]
_______________________________
[Name of Trustee]
____ __, 199_
Attention: General Counsel's Office
THE DEPOSITORY TRUST COMPANY
55 Water Street; 49th Floor
New York, NY 10041-0099
Re: ______________________________________________
______________________________________________
______________________________________________
Ladies and Gentlemen:
This letter sets forth our understanding with respect to certain
matters relating to the above-referenced issue (the "Securities"). Trustee
will act as trustee with respect to the Securities pursuant to a trust
indenture dated ____ __, 199_ (the "Document"). _______________________
("Underwriter") is distributing the Securities through The Depository Trust
Company ("DTC").
To induce DTC to accept the Securities as eligible for deposit
at DTC, and to act in accordance with its Rules with respect to the Securities,
Issuer and Trustee make the following representations to DTC:
1. Prior to closing on the Securities on ____ __, ____,
there shall be deposited with DTC one Security certificate registered in the
name of DTC's nominee, Cede & Co., for each stated maturity of the Securities
in the face amounts set forth on Schedule A hereto, the total of which
represents
<PAGE> 123
The Depository Trust Company
____ __, 199_
Page 2
100% of the principal amount of such Securities. If, however, the aggregate
principal amount of any maturity exceeds $150 million, one certificate will be
issued with respect to each $150 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount. Each $150 million certificate shall bear the
following legend:
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation
("DTC"), to Issuer or its agent for registration of transfer,
exchange, or payment, and any certificate 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.
2. In the event of any solicitation of consents from or
voting by holders of the Securities, Issuer or Trustee shall establish a record
date for such purposes (with no provision for revocation of consents or votes
by subsequent holders) and shall, to the extent possible, send notice of such
record date to DTC not less than 15 calendar days in advance of such record
date. Notices to DTC pursuant to this Paragraph by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-6896 or (212) 709-6897, and
receipt of such notices shall be confirmed by telephoning (212) 709-6870.
Notices to DTC pursuant to this Paragraph by mail or by any other means shall
be sent to DTC's Reorganization Department as indicated in Paragraph 4.
3. In the event of a full or partial redemption, Issuer or
Trustee shall send a notice to DTC specifying: (a) the amount of the redemption
or refunding; (b) in the case of a refunding, the maturity date(s) established
under the refunding; and (c) the date such notice is to be mailed to Security
holders or published (the "Publication Date"). Such notice shall be sent to
DTC by a secure means (e.g., legible telecopy, registered or certified mail,
overnight delivery) in a timely manner designed to assure that such notice is
in DTC's possession no later than the close of business on the business day
before or, if possible, two business days before the Publication Date. Issuer
or Trustee shall forward such notice either in a separate secure transmission
for each CUSIP number or in a secure transmission for multiple CUSIP numbers
(if applicable) which includes a manifest or list of each CUSIP number
submitted in that transmission. (The party sending such notice shall have a
method to verify subsequently the use of such means and the timeliness of such
notice.) The Publication Date shall be not less than 30 days nor more than 60
days prior to the redemption date or, in the case of an advance refunding, the
date that the proceeds are deposited in escrow. Notices to DTC pursuant to
this Paragraph by telecopy shall be sent to DTC's Call Notification Department
at (516) 227-4039 or (516) 227-4190. If the party sending the notice does not
receive a telecopy receipt from DTC confirming that the notice has been
received, such party shall telephone (516) 227-4070. Notices to DTC pursuant
to this Paragraph by mail or by any other means shall be sent to:
2
<PAGE> 124
The Depository Trust Company
____ __, 199_
Page 3
Manager: Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, NY 11530-4719
4. In the event of an invitation to tender the Securities,
notice by Issuer or Trustee to Security holders specifying the terms of the
tender and the Publication Date of such notice shall be sent to DTC by a secure
means in the manner set forth in the preceding Paragraph. Notices to DTC
pursuant to this Paragraph and notices of other corporate actions (including
mandatory tenders, exchanges and capital changes) by telecopy shall be sent to
DTC's Reorganization Department at (212) 709-1093 or (212) 709-1094, and
receipt of such notices shall be confirmed by telephoning (212) 709-6884.
Notices to DTC pursuant to the above by mail or by any other means shall be
sent to:
Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, NY 10004-2695
5. All notices and payment advices sent to DTC shall
contain the CUSIP number of the Securities.
6. Trustee shall send DTC written notice with respect to
the dollar amount per $1,000 original face value (or other minimum authorized
denomination if less than $1,000 face value) payable on each payment date
allocated as to the interest and principal portions thereof preferably 5, but
not less than 2, business days prior to such payment date. Such notices, which
shall also contain the current pool factor and Trustee contact's name and
telephone number, shall be sent by telecopy to DTC's Dividend Department at
(212) 709-1723, or if by mail or by any other means to:
Manager: Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square; 22nd Floor
New York, NY 10004-2695
7. [NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND
CROSS OUT THE OTHER:] [The interest accrual period is record date to record
date.] [The interest accrual period is payment date to payment date.]
8. Interest payments and principal payments that are part
of periodic principal-and-interest payments shall be received by Cede & Co., as
nominee of DTC, or its registered assigns in same-day funds on each payment
date (or the equivalent in accordance with existing arrangements between Issuer
or trustee and DTC). Such payments shall be made payable to the order of Cede
& Co. Absent any other existing arrangements, such payments shall be addressed
as follows:
C-3
<PAGE> 125
The Depository Trust Company
____ __, 199_
Page 4
Manager; Cash Receipts
Dividend Department
The Depository Trust Company
7 Hanover Square; 24th Floor
New York, NY 10004-2695
9. [NOTE: ISSUER MUST REPRESENT ONE OF THE FOLLOWING, AND
CROSS OUT THE OTHER:]
Securities Eligible for DTC's Same-Day Funds Settlement
("SDFS") System. Other principal payments (redemption payments) shall be made
in same-day funds by Trustee in the manner set forth in the SDFS Paying Agent
Operating Procedures, a copy of which previously has been furnished to Trustee.
Securities Eligible for DTC's Next-Day Funds Settlement
("NDFS") System. Other principal payments (redemption payments) shall be made
in next-day funds by Trustee to Cede & Co., as nominee of DTC, or its
registered assigns, on each payment date. Such payments shall be made payable
to the order of Cede & Co., and shall be addressed as follows:
NDFS Redemptions Manager
Reorganization/Redemptions Department
The Depository Trust Company
7 Hanover Square; 23rd Floor
New York, NY 10004-2695
10. DTC may direct Issuer or Trustee to use any other number
or address as the number or address to which notices or payments of interest or
principal may be sent.
11. In the event of a redemption, acceleration, or any other
similar transaction (e.g., tender made and accepted in response to Issuer's or
Trustee's invitation) necessitating a reduction in the aggregate principal
amount of Securities outstanding or an advance refunding of part of the
Securities outstanding, DTC, in its discretion: (a) may request Issuer or
Trustee to issue and authenticate a new Security certificate; or (b) may make
an appropriate notation on the Security certificate indicating the date and
amount of such reduction in principal except in the case of final maturity, in
which case the certificate will be presented to Issuer or Trustee prior to
payment, if required.
12. In the event that Issuer determines that beneficial
owners of Securities shall be able to obtain certificated Securities, Issuer or
Trustee shall notify DTC of the availability of certificates. In such event,
Issuer or Trustee shall issue, transfer, and exchange certificates in
appropriate amounts, as required by DTC and others.
13. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to Issuer or Trustee (at which time DTC will confirm with Issuer or
Trustee the aggregate principal amount of Securities outstanding). Under such
circumstances, at DTC's request Issuer and Trustee shall cooperate fully with
DTC by taking appropriate
C-4
<PAGE> 126
The Depository Trust Company
____ __, 199_
Page 5
action to make available one or more separate certificates evidencing
Securities to any DTC Participant having Securities credited to its DTC
accounts.
14. Issuer: (a) understands that DTC has no obligation to,
and will not, communicate to its Participants or to any person having an
interest in the Securities any information contained in the security
certificate(s); and (b) acknowledges that neither DTC's Participants nor any
person having an interest in the Securities shall be deemed to have notice of
the provisions of the Security certificates by virtue of submission of such
certificate(s) to DTC.
15. Nothing herein shall be deemed to require Trustee to
advance funds on behalf of Issuer.
<TABLE>
<S> <C>
Notes: Very truly yours,
- -----
A. If there is a Trustee (as defined in this Letter of
Representations), Trustee as well as Issuer must sign this __________________________________________
Letter. If there is no Trustee, in signing this Letter (Issuer)
Issuer itself undertakes to perform all of the obligations
set forth herein. By:
---------------------------------------
(Authorized Officer's Signature)
B. Schedule B contains statements that DTC believes
accurately describe DTC, the method of effecting book-entry
transfers of securities distributed through DTC, and ___________________________________________
certain related matters. (Trustee)
By:
---------------------------------------
(Authorized Officer's Signature)
</TABLE>
Received and Accepted:
THE DEPOSITORY TRUST COMPANY
By:
----------------------------------------
cc: Underwriter
Underwriter's Counsel
C-5
<PAGE> 127
SCHEDULE A
(Describe Issue)
CUSIP Principal Amount Maturity Date Interest Rate
- ----- ---------------- ------------- -------------
C-6
<PAGE> 128
SCHEDULE B
SAMPLE OFFERING DOCUMENT LANGUAGE
DESCRIBING BOOK-ENTRY-ONLY ISSUANCE
(PREPARED BY DTC--BRACKETED MATERIAL MAY BE
APPLICABLE ONLY TO CERTAIN ISSUES)
1. The Depositary Trust Company ("DTC"), New York, NY, will
act as securities depository for the securities (the "Securities"). The
Securities will be issued as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One fully-registered Security
certificate will be issued for [each issue of] the Securities, [each] in the
aggregate principal amount of such issue, and will be deposited with DTC. [If,
however, the aggregate principal amount of [any] issue exceeds $150 million,
one certificate will be issued with respect to each $150 million of principal
amount and an additional certificate will be issued with respect to any
remaining principal amount of such issue.]
2. DTC is a limited-purpose trust company organized under
the New York Banking Law, a "banking organization" within the meaning of the
New York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934. DTC holds securities that its participants
("Participants") deposit with DTC. DTC also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. Direct Participants include securities brokers and
dealers, banks, trust companies, clearing corporations, and certain other
organizations. DTC is owned by a number of its Direct Participants and by the
New York Stock Exchange, Inc., the American Stock Exchange, Inc., and the
National Association of Securities Dealers, Inc. Access to the DTC system is
also available to others such as securities brokers and dealers, banks, and
trust companies that clear through or maintain a custodial relationship with a
Direct Participant, either directly or indirectly ("Indirect Participants").
The Rules applicable to DTC and its Participants are on file with the
Securities and Exchange Commission.
3. Purchases of Securities under the DTC system must be
made by or through Direct Participants, which will receive a credit for the
Securities on DTC's records. The ownership interest of each actual purchaser
of each Security ("Beneficial Owner") is in turn to be recorded on the Direct
and Indirect Participants' records. Beneficial Owners will not receive written
confirmation from DTC of their purchase, but Beneficial Owners are expected to
receive written confirmations providing details of the transaction, as well as
periodic statements of their holdings, from the Direct or Indirect Participant
through which the Beneficial Owner entered into the transaction. Transfers of
ownership interests in the Securities are to be accomplished by entries made on
the books of Participants acting on behalf of Beneficial Owners. Beneficial
Owners will not receive certificates representing their ownership interests in
Securities, except in the event that use of the book-entry system for the
securities is discontinued.
4. To facilitate subsequent transfers, all Securities
deposited by Participants with DTC are registered in the name of DTC's
partnership nominee, Cede & Co. The deposit of Securities with DTC and their
registration in the name of Cede & Co. effect no change in beneficial
ownership. DTC has no knowledge of the actual Beneficial Owners of the
Securities; DTC's records reflect only the identity of the Direct Participants
to whose accounts such Securities are credited, which may or may not be the
Beneficial Owners. The Participants will remain responsible for keeping
account of their holdings on behalf of their customers.
C-7
<PAGE> 129
5. Conveyances of notices and other communications by DTC
to Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners will be
governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
[6. Redemption notices shall be sent to Cede & Co. If less
than all of the Securities within an issue are being redeemed, DTC's practice
is to determine by lot the amount of the interest of each Direct Participant in
such issue to be redeemed.]
7. Neither DTC nor Cede & Co. will consent or vote with
respect to Securities. Under its usual procedures, DTC mails an Omnibus Proxy
to the Issuer as soon as possible after the record date. The Omnibus Proxy
assigns Cede & Co.'s consenting or voting rights to those Direct Participants
to whose accounts the Securities are credited on the record date (identified in
a listing attached to the Omnibus Proxy).
8. Principal and interest payments on the Securities will
be made to DTC. DTC's practice is to credit Direct Participants' accounts on
payable date in accordance with their respective holdings shown on DTC's
records unless DTC has reason to believe that it will not receive payment on
payable date. Payments by Participants to Beneficial Owners will be governed
by standing instructions and customary practices, as is the case with
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such Participant and not of
DTC, the Agent, or the Issuer, subject to any statutory or regulatory
requirements as may be in effect from time to time. Payment of principal and
interest to DTC is the responsibility of the Issuer or the Agent, disbursement
of such payments to Direct Participants shall be the responsibility of DTC, and
disbursement of such payments to the Beneficial Owners shall be the
responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have
its Securities purchased or tendered, through its Participant, to the
[Tender/Remarketing] Agent, and shall effect delivery of such Securities by
causing the Direct Participant to transfer the Participant's interest in the
Securities, on DTC's records, to the [Tender/Remarketing] Agent. The
requirement for physical delivery of Securities in connection with a demand for
purchase or a mandatory purchase will be deemed satisfied when the ownership
rights in the Securities are transferred by Direct Participants on DTC's
records.]
10. DTC may discontinue providing its services as securities
depository with respect to the Securities at any time by giving reasonable
notice to the Issuer or the Agent. Under such circumstances, in the event that
a successor securities depository is not obtained, Security certificates are
required to be printed and delivered.
11. The Issuer may decide to discontinue use of the system
of book-entry transfer through DTC (or a successor securities depository). In
that event, Security certificates will be printed and delivered.
12. The information in this section concerning DTC and DTC's
book-entry system has been obtained from sources that the Issuer believes to be
reliable, but the Issuer takes no responsibility for the accuracy thereof.
C-8
<PAGE> 130
EXHIBIT D-1
Trustee's Certificate
pursuant to Section 20.3
of the Pooling and Servicing
Agreement
Chemical Bank, as trustee (the "Trustee") of the Ford Credit 1995-B
Grantor Trust created pursuant to the Pooling and Servicing Agreement
(including the Standard Terms and Conditions of Agreement incorporated by
reference therein, the "Pooling and Servicing Agreement") dated as of November
1, 1995, among Ford Credit Auto Receivables Corporation, as Seller (the
"Seller"), Ford Motor Credit Company, as Servicer and the Trustee, does hereby
sell, transfer, assign, and otherwise convey to the Seller, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Pooling and Servicing
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which are to be repurchased by the Seller pursuant to Section
12.2 and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
__________, 19__.
___________________________
<PAGE> 131
EXHIBIT D-2
Trustee's Certificate
pursuant to Section 20.3
of the Pooling and Servicing
Agreement
Chemical Bank, as trustee (the "Trustee") of the Ford Credit 1995-B
Grantor Trust created pursuant to the Pooling and Servicing Agreement
(including the Standard Terms and Conditions of Agreement incorporated by
reference therein, the "Pooling and Servicing Agreement") dated as of November
1, 1995, among Ford Credit Auto Receivables Corporation, as Seller, Ford Motor
Credit Company, as Servicer (the "Servicer") and the Trustee, does hereby sell,
transfer, assign, and otherwise convey to the Servicer, without recourse,
representation, or warranty, all of the Trustee's right, title, and interest in
and to all of the Receivables (as defined in the Pooling and Servicing
Agreement) identified in the attached Servicer's Certificate as "Purchased
Receivables," which are to be purchased by the Servicer pursuant to Section
13.7 or 21.2, and all security and documents relating thereto.
IN WITNESS WHEREOF I have hereunto set my hand this ____ day of
__________, 19__.
___________________________
<PAGE> 1
EXHIBIT 5.1
[FORD LOGO]
Ford Credit Auto Receivables Corporation The American Road
P.O. Box 6044
Hurley D. Smith Dearborn, MI 48121-6044
Secretary and Corporate Counsel
313-594-9876
Ford Credit Auto Receivables Corporation November 7, 1995
The American Road
Dearborn, Michigan 48121
Dear Sirs:
The undersigned, Secretary and Corporate Counsel of Ford Credit Auto
Receivables Corporation (the "Company"), has acted as counsel for the Company
in connection with Registration Statement No. 33-63345, as amended (the
"Registration Statement"), filed by the Company on behalf of the Ford Credit
1995-B Grantor Trust (the "Trust") with the Securities and Exchange Commission
under the Securities Act of 1933, as amended, respecting the issuance by the
Trust of certificates representing fractional undivided interests in the Trust.
The Certificates are to be issued pursuant to a Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), to be entered into among the Company,
Ford Motor Credit Company and Chemical Bank, as trustee (the "Trustee").
In that connection, I have examined, or caused to be examined,
originals, or copies certified or otherwise identified to my satisfaction, of
such documents, corporate records and other instruments as I have deemed
necessary or appropriate for the purposes of this opinion. Based upon the
foregoing, I am of the opinion that the Certificates, when duly executed and
authenticated by the Trustee in accordance with the terms of the Pooling and
Servicing Agreement and issued and delivered against payment therefor, will be
legally issued, fully paid and nonassessable.
I hereby consent to the use of this opinion as Exhibit 5.1 to the
Registration Statement. In giving this consent, I do not admit that I am in the
category of persons whose consent is required under Section 7 of the Securities
Act or the Rules and Regulations of the Commission issued thereunder.
Very truly yours,
/s/ Hurley D. Smith
Hurley D. Smith
<PAGE> 1
EXHIBIT 8.1
November 7, 1995
Ford Credit Auto Receivables Corporation
The American Road
Dearborn, Michigan 48121
Re: Ford Credit 1995-B Grantor Trust
Asset Backed Certificates, Class A
Ladies and Gentlemen:
We are members of the New York Bar and have acted as special counsel
to Ford Credit Auto Receivables Corporation, a Delaware corporation, as seller
(the "Seller"), in connection with (a) the sale and assignment of certain
retail installment sale contracts for new and used automobiles and light trucks
(the "Receivables") by the Seller to Chemical Bank, as trustee (the "Trustee")
of a grantor trust (the "Trust") to be formed pursuant to a Pooling and
Servicing Agreement, dated as of November 1, 1995 (the "Pooling and Servicing
Agreement"), among the Seller, Ford Motor Credit Company, as servicer (the
"Servicer"), the Trustee and the Class A Agent, in exchange for Ford Credit
1995-B Grantor Trust Asset Backed Certificates, Class A (the "Class A
Certificates") and for Ford Credit 1995-B Grantor Trust Asset Backed
Certificates, Class B (the "Class B Certificates", and together with the
Class A Certificates, the "Certificates") and (b) the sale of the Class A
Certificates to the several underwriters.
We are admitted to the Bar of the State of New York and we express no
opinion as to the laws of any other jurisdiction except the laws of the United
States of America to the extent specifically referred to herein.
In connection with our engagement, we have examined and relied upon
the registration statement on
<PAGE> 2
Ford Credit Auto Receivables Corporation
November 7, 1995
Page 2
Form S-3, No. 33-63345, filed with the Securities and Exchange Commission (the
"Commission") on October 11, 1995, and Amendment No. 1 thereto, filed with the
Commission on November 7, 1995 (collectively, the "Registration Statement"),
for the Ford Credit 1995-B Grantor Trust, the form of Pooling and Servicing
Agreement, and such other documents as we have deemed necessary. In addition,
we have examined and considered executed originals or counterparts, or
certified or other copies identified to our satisfaction as being true copies
of such certificates, instruments, documents and other corporate records of the
Seller and such matters of fact and law as we deem necessary for the purposes
of the opinion expressed below. Capitalized terms not otherwise defined herein
have the meanings given to them in the Pooling and Servicing Agreement.
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
and representations of officers and other representatives of the Seller, Ford
Motor Credit Company, and others.
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, regulations, and such other authorities as we have deemed
appropriate. The statutory provisions, 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.
Based on and subject to the foregoing, we are of the opinion that for
federal income tax purposes, the Trust created by the Pooling and Servicing
Agreement will
<PAGE> 3
Ford Credit Auto Receivables Corporation
November 7, 1995
Page 3
not be classified as an association taxable as a corporation and, instead,
under subpart E, part I of subchapter J of the Code, the Trust will be treated
as a grantor trust and, subject to characterization of certain fees and other
amounts payable to the Seller, the Class B Certificateholder, or the Servicer
by the Trust as stripped coupons, each Class A Certificateholder will be
treated as the owner of an undivided interest in the income and corpus of the
Trust.
Except for the opinion expressed above, we express no opinion as to
any other tax consequences of the transaction to any party under federal,
state, local, or foreign laws. We consent to the filing of this opinion as an
exhibit to the Registration Statement and to the reference to Skadden, Arps,
Slate, Meagher & Flom under the caption "Legal Opinions" in the prospectus
included in the Registration Statement.
Very truly yours,
Skadden, Arps, Slate,
Meagher & Flom
<PAGE> 1
EXHIBIT 10.1
PURCHASE AGREEMENT
This PURCHASE AGREEMENT is made as of this 1st day of November 1995,
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 CORPORATION, a
Delaware corporation (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 duty trucks from motor vehicle dealers.
WHEREAS, the Seller and the Purchaser wish to set forth the terms
pursuant to which the Receivables (as hereinafter defined) are to be sold by
the Seller to the Purchaser, which Receivables will be transferred by the
Purchaser, pursuant to the Pooling and Servicing Agreement (as hereinafter
defined) to the Ford Credit 1995-B Grantor Trust to be created thereunder,
which Trust will issue certificates representing fractional undivided interests
in such Receivables and the other property of the Trust (the "Certificates").
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
CERTAIN DEFINITIONS
Terms not defined in this Agreement shall have the meaning set forth
in the Pooling and Servicing Agreement. As used in this Agreement, the
following terms shall, unless the context otherwise requires, have the
following meanings (such meanings to be equally applicable to the singular and
plural forms of the terms defined):
<PAGE> 2
"Agreement" shall mean this Purchase Agreement and all amendments
hereof and supplements hereto.
"Assignment" shall mean the document of assignment attached to this
Agreement as Exhibit A.
"Class A Certificate" shall have the meaning specified in the Pooling
and Servicing Agreement.
"Class B Certificate" shall have the meaning specified in the Pooling
and Servicing Agreement.
"Closing Date" shall mean November 15, 1995.
"Collections" shall mean all amounts collected by the Servicer (from
whatever source) on or with respect to the Receivables.
"Cut-Off Date" shall mean November 1, 1995.
"Distribution Date" shall mean, for each Collection Period, the 15th
day of the following month or, if such fifteenth day is not a Business Day, the
next succeeding Business Day.
"Obligor" shall have the meaning specified in the Pooling and
Servicing Agreement.
"Person" shall have the meaning specified in the Pooling and
Servicing Agreement.
"Pooling and Servicing Agreement" shall mean the Pooling and
Servicing Agreement by and among the Seller, as servicer, the Purchaser, as
seller, and Chemical Bank, as trustee and as agent for the holders of the Class
A Certificates, dated as of November 1, 1995.
"Prospectus" shall have the meaning assigned to such term in the
Underwriting Agreement.
"Purchaser" shall mean Ford Credit Auto Receivables Corporation, a
Delaware corporation, its successors and assigns.
"Rating Agency" shall mean Moody's Investors Service, Inc. and
Standard & Poor's Ratings Group or any successors thereto.
2
<PAGE> 3
"Receivable" shall mean any retail installment sale contract which
appears on Exhibit B hereto and any amendments, modifications or supplements to
such retail installment sale contract.
"Receivable Files" shall have the meaning specified in the Pooling
and Servicing Agreement.
"Receivables Purchase Price" shall mean $___________________.
"Repurchase Event" shall have the meaning specified in Section 6.2
hereof.
"Schedule of Receivables" shall mean the list of Receivables annexed
hereto as Exhibit B.
"Seller" shall mean Ford Motor Credit Company, a Delaware
corporation, its successors and assigns.
"Servicing Fee" shall have the meaning specified in the Pooling and
Servicing Agreement.
"Trust" shall mean the Ford Credit 1995-B Grantor Trust.
"UCC" shall mean the Uniform Commercial Code, as in effect from time
to time in the relevant jurisdictions.
"Underwriting Agreement" shall mean the Underwriting Agreement by and
between Goldman, Sachs & Co., as representatives of the several underwriters,
and the Purchaser, as seller, dated November 8, 1995.
ARTICLE II
PURCHASE AND SALE OF RECEIVABLES
2.1 Purchase and Sale 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
3
<PAGE> 4
from the Seller, the Receivables and the other property relating thereto (as
defined below).
(a) Sale of Receivables. Effective as of the Closing Date and
simultaneously with the transactions pursuant to the Pooling and Servicing
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: (i) the
Receivables, and all monies paid thereon and due thereon on or after the
Cut-Off Date (including any monies received prior to the Cut-Off Date that are
due on or after the Cut-Off Date and were not used to reduce the principal
balance of the Receivable); (ii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables; (iii) any proceeds
from claims on any physical damage, credit life, credit disability, or other
insurance policies covering Financed Vehicles or Obligors; (iv) Dealer
Recourse; (v) rebates of premiums and other amounts relating to insurance
policies and other items financed under the Receivables in effect as of the
Cut-Off Date; and (vi) the proceeds of any and all of the foregoing.
(b) Receivables Purchase Price. In consideration for the
Receivables and other properties described in Section 2.1(a), the Purchaser
shall, on the Closing Date, pay to the Seller the Receivables Purchase Price.
An amount equal to approximately ____________% (representing the proceeds from
the sale of the Class A Certificates less the Subordination Initial Deposit) of
the Receivables Purchase Price shall be paid to the Seller in cash. The
remaining approximately ___________% of the Receivables Purchase Price shall be
deemed paid and returned to the Purchaser and be considered a contribution to
capital. The portion of the Receivables Purchase Price to be paid in cash
shall be by federal wire transfer (same day) funds.
2.2 The Closing. The sale and purchase of the Receivables shall
take place at a closing (the "Closing") at the offices of Skadden, Arps, Slate,
Meagher & Flom, 919 Third Avenue, New York, New York 10022 on the Closing Date,
simultaneously with the closings under: (a) the Pooling and Servicing
Agreement pursuant to which (i) the Purchaser will assign all of its right,
title and inter-
4
<PAGE> 5
ests in and to the Receivables and other property to the Trustee for the
benefit of the Certificateholders; and (ii) the Purchaser will deposit the
foregoing into the Trust in exchange for the Class A Certificates and Class B
Certificates; and (b) the Underwriting Agreement, pursuant to which the
Purchaser will sell to the underwriters named therein (the "Underwriters") the
Class A Certificates.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 Warranties of the Purchaser. The Purchaser hereby represents
and warrants to the Seller as of the date hereof and as of the Closing Date:
(a) Organization, etc. The Purchaser has been duly
incorporated and is validly existing as a corporation in good standing under
the laws of the State of Delaware, and has full corporate power and authority
to execute and deliver this Agreement and to perform the terms and provisions
hereof and thereof.
(b) Due Authorization and No Violation. This Agreement has
been duly authorized, executed and delivered by the Purchaser, and is the
valid, binding and enforceable obligation of the Purchaser except as the same
may be limited by insolvency, bankruptcy, reorganization or other laws relating
to or affecting the enforcement of creditors' rights or by general equity
principles. The consummation of the transactions contemplated by this
Agreement, and the fulfillment of the terms thereof, 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
Incorporation or the By-laws of the Purchaser.
5
<PAGE> 6
(c) No Litigation. No legal or governmental proceedings are
pending to which the Purchaser is a party or of which any property of the
Purchaser is the subject, and no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, other than
such proceedings which will not have a material adverse effect upon the general
affairs, financial position, net worth or results of operations (on an annual
basis) of the Purchaser and will not materially and adversely affect the
performance by the Purchaser of its obligations under, or the validity and
enforceability of, this Agreement.
3.2 Representations and Warranties of the Seller.
(a) The Seller hereby represents and warrants to the Purchaser
as of the date hereof and as of the Closing Date:
(i) Organization, etc. The Seller has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the State of Delaware, and is duly qualified to transact
business and is in good standing in each jurisdiction in the United States
of America in which the conduct of its business or the ownership of its
property requires such qualification.
(ii) Power and Authority. The Seller has full power and
authority to sell and assign the property sold and assigned to the
Purchaser hereunder and has duly authorized such sale and assignment to
the Purchaser by all necessary corporate action. This Agreement has been
duly authorized, executed and delivered by the Seller and shall constitute
the legal, valid and binding obligation of the Seller except as the same
may be limited by insolvency, bankruptcy, reorganization or other laws
relating to or affecting the enforcement of creditors' rights or by
general equity principles.
(iii) No Violation. The consummation of the transactions
contemplated by this Agreement, and the fulfillment of the terms thereof,
will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a
6
<PAGE> 7
default under (in each case material to the Seller and its subsidiaries
considered as a whole), or result in the creation or imposition of any
lien, charge or encumbrance (in each case material to the Seller and its
subsidiaries considered as a whole) upon any of the property or assets of
the Seller pursuant to the terms of, any indenture, mortgage, deed of
trust, loan agreement, guarantee, lease financing agreement or similar
agreement or instrument under which the Seller is a debtor or guarantor,
nor will such action result in any violation of the provisions of the
Certificate of Incorporation or the By-Laws of the Seller.
(iv) No Proceedings. No legal or governmental proceedings
are pending to which the Seller is a party or of which any property of the
Seller is the subject, and no such proceedings are threatened or
contemplated by governmental authorities or threatened by others, other
than such proceedings which will not have a material adverse effect upon
the general affairs, financial position, net worth or results of
operations (on an annual basis) of the Seller and its subsidiaries
considered as a whole and will not materially and adversely affect the
performance by the Seller of its obligations under, or the validity and
enforceability of, this Agreement.
(b) The Seller makes the following representations and
warranties as to the Receivables on which the Purchaser relies in accepting the
Receivables. Such representations and warranties speak as of the execution and
delivery of this Agreement, but shall survive the sale, transfer, and
assignment of the Receivables to the Purchaser and the subsequent assignment
and transfer pursuant to the Pooling and Servicing Agreement:
(i) Characteristics of Receivables. Each Receivable (a)
shall have been originated in the United States of America by a Dealer for
the retail sale of a Financed Vehicle in the ordinary course of such
Dealer's business, shall have been fully and properly executed by the
parties thereto, shall have been purchased by the Seller from such Dealer
under an existing dealer agreement with the Seller, shall have been
validly assigned by such
7
<PAGE> 8
Dealer to the Seller, (b) shall have created or shall create a valid,
subsisting, and enforceable first priority security interest in favor of
the Seller in the Financed Vehicle, which security interest shall be
assignable by the Seller to the Purchaser, (c) shall contain customary and
enforceable provisions such that the rights and remedies of the holder
thereof shall be adequate for realization against the collateral of the
benefits of the security, (d) shall provide for level monthly payments
(provided that the payment in the first or last month in the life of the
Receivable may be minimally different from the level payment) that fully
amortize the Amount Financed by maturity and yield interest at the Annual
Percentage Rate, and (e) shall provide for, in the event that such
contract is prepaid, a prepayment that fully pays the Principal Balance.
(ii) Schedule of Receivables. The information set forth in
Exhibit B to this Agreement shall be true and correct in all material
respects as of the opening of business on the Cut-Off Date, and no
selection procedures believed to be adverse to the Certificateholders
shall have been utilized in selecting the Receivables from those
receivables which meet the criteria contained herein. The computer tape
regarding the Receivables made available to the Purchaser and its assigns
is true and correct in all respects.
(iii) Compliance with Law. Each Receivable and the
sale of the Financed Vehicle shall have complied at the time it was
originated or made and at the execution of this Agreement shall comply in
all material respects with all requirements of applicable federal, state,
and local laws, and regulations thereunder, including, without limitation,
usury laws, the Federal Truth-in-Lending Act, the Equal Credit Opportunity
Act, the Fair Credit Reporting Act, the Fair Debt Collection Practices
Act, the Federal Trade Commission Act, the Magnuson-Moss Warranty Act, the
Federal Reserve Board's Regulations B and Z, and state adaptations of the
National Consumer Act and of the Uniform Consumer Credit Code, and other
consumer credit laws and equal credit opportunity and disclosure laws.
8
<PAGE> 9
(iv) Binding Obligation. Each Receivable shall represent
the genuine, legal, valid, and binding payment obligation in writing of
the Obligor, enforceable by the holder thereof in accordance with its
terms subject to the effect of bankruptcy, insolvency, reorganization, or
other similar laws affecting the enforcement of creditors' rights
generally.
(v) No Government Obligor. None of the Receivables shall
be due from the United States of America or any state or from any agency,
department, or instrumentality of the United States of America or any
state.
(vi) Security Interest in Financed Vehicle. Immediately
prior to the sale, assignment, and transfer thereof, each Receivable shall
be secured by a validly perfected first security interest in the Financed
Vehicle in favor of the Seller as secured party or all necessary and
appropriate actions shall have been commenced that would result in the
valid perfection of a first security interest in the Financed Vehicle in
favor of the Seller as secured party.
(vii) Receivables in Force. No Receivable shall have been
satisfied, subordinated, or rescinded, nor shall any Financed Vehicle have
been released from the lien granted by the related Receivable in whole or
in part.
(viii) No Waiver. No provision of a Receivable shall have
been waived.
(ix) No Defenses. No right of rescission, setoff,
counterclaim, or defense shall have been asserted or threatened with
respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no
liens or claims shall have been filed for work, labor, or materials
relating to a Financed Vehicle that shall be liens prior to, or equal or
coordinate with, the security interest in the Financed Vehicle granted by
the Receivable.
9
<PAGE> 10
(xi) No Default. Except for payment defaults continuing
for a period of not more than thirty days as of the Cut-Off Date, no
default, breach, violation, or event permitting acceleration under the
terms of any Receivable shall have occurred; and no continuing condition
that with notice or the lapse of time would constitute a default, breach,
violation, or event permitting acceleration under the terms of any
Receivable shall have arisen; and the Seller shall not waive any of the
foregoing.
(xii) Insurance. The Seller, in accordance with its
customary procedures, shall have determined that the Obligor has obtained
or agreed to obtain physical damage insurance covering the Financed
Vehicle.
(xiii) Title. It is the intention of the Seller that the
transfer and assignment herein contemplated constitute a sale 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, or pledged by the Seller to any Person other than
the Purchaser. Immediately prior to the transfer and assignment herein
contemplated, the Seller had good and marketable title to each Receivable
free and clear of all Liens, encumbrances, security interests, and rights
of others and, immediately upon the transfer thereof, the Purchaser shall
have good and marketable title to each Receivable, free and clear of all
Liens, encumbrances, security interests, and rights of others; and the
transfer has been perfected under the UCC.
(xiv) Valid Assignment. No Receivable shall have been
originated in, or shall be subject to the laws of, any jurisdiction under
which the sale, transfer, and assignment of such Receivable under this
Agreement 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.
10
<PAGE> 11
(xv) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the
Purchaser a first perfected ownership interest in the Receivables shall
have been made.
(xvi) One Original. There shall be only one original
executed copy of each Receivable.
(xvii) New and Used Vehicles. Approximately _____% of the
aggregate Principal Balance of the Receivables, constituting _____% 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.
(xviii) Origination. Each Receivable shall have an
origination date on or after November 1, 1994.
(xix) Maturity of Receivables. Each Receivable shall have
an original maturity of not greater than 60 months.
(xx) Minimum Annual Percentage Rate. Each Receivable shall
have an Annual Percentage Rate equal to or greater than ____%.
(xxi) Scheduled Payments. Each Receivable shall have a
first Scheduled Payment due on or prior to November 30, 1995 and no
Receivable shall have a payment that is more than 30 days overdue as of
the Cut-Off Date.
(xxii) Location of Receivable Files. The Receivable Files
shall be kept at one or more of the locations listed in Schedule A hereto.
(xxiii) No Extensions. The number of Scheduled Payments
shall not have been extended on any Receivable on or before the Cut-Off
Date.
(xxiv) Other Data. The numerical data relating to the
characteristics of the Receivables contained in the Prospectus are true
and correct in all material respects.
11
<PAGE> 12
(xxv) Chattel Paper. Each Receivable constitutes "chattel
paper" as defined in the UCC.
(xxvi) No Simple Interest Receivables. None of the
Receivables are Simple Interest Receivables.
(xxvii) Agreement. The representations and warranties in
this Agreement shall be true.
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 shall, at its own
expense, on or prior to the Closing Date, indicate in its computer files that
the Receivables have been sold to the Purchaser pursuant to this Agreement and
deliver to the Purchaser the Schedule of Receivables certified by an officer of
the Seller to be true, correct and complete.
(c) Documents to be delivered by the Seller at the Closing.
(i) The Assignment. At the Closing, the Seller will
execute and deliver the Assignment. The Assignment shall be
substantially in the form of Exhibit A hereto.
(ii) Evidence of UCC Filing. On or prior to the Closing
Date, the Seller shall record
12
<PAGE> 13
and file, at its own expense, a UCC-1 financing statement in each
jurisdiction in which required by applicable law, executed by the Seller,
as seller or debtor, and naming the Purchaser, as purchaser or secured
party, naming the Receivables and the other property conveyed hereunder as
collateral, meeting the requirements of the laws of each such jurisdiction
and in such manner as is necessary to perfect the sale, 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
Pooling and Servicing Agreement shall be consummated on the Closing Date.
4.2 Conditions to Obligation of the Seller. The obligation of the
Seller to sell the Receivables to the Purchaser is subject to the satisfaction
of the following conditions:
(a) Representations and Warranties True. The representations
and warranties of the Purchaser hereunder shall be true and correct on the
Closing Date with the same effect as if then made, and the Purchaser shall have
performed all obligations to be performed by it hereunder on or prior to the
Closing Date.
(b) Receivables Purchase Price. At the Closing Date, the
Purchaser will deliver to the Seller the Receivables Purchase Price, as
provided in Section 2.1(b).
13
<PAGE> 14
ARTICLE V
COVENANTS OF THE SELLER
The Seller covenants and agrees with the Purchaser as follows,
provided, however, that to the extent that any provision of this ARTICLE V
conflicts with any provision of the Pooling and Servicing Agreement, the
Pooling and Servicing Agreement shall govern:
5.1 Protection of Right, Title and Interest.
(a) The Seller shall execute and file such financing statements
and cause to be executed and filed such continuation statements, all in such
manner and in such places as may be required by law fully to preserve,
maintain, and protect the interest of the Purchaser in the Receivables and in
the proceeds thereof. The Seller shall deliver (or cause to be delivered) to
the Purchaser file-stamped copies of, or filing receipts for, any document
filed as provided above, as soon as available following such filing.
(b) The Seller shall not change its name, identity, or
corporate structure in any manner that would, could, or might make any
financing statement or continuation statement filed by the Seller in accordance
with paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Purchaser at least five
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 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. The Seller shall at all times maintain each office from which it
shall service Receivables, and its principal executive office, within the
United States of America.
14
<PAGE> 15
(d) The Seller shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit the reader thereof to
know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each).
(e) The Seller shall maintain its computer systems so that,
from and after the time of sale hereunder of the Receivables to the Purchaser,
the Seller's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly the interest of the Purchaser in
such Receivable and that such Receivable is owned by the Purchaser. Indication
of the Purchaser's ownership of a Receivable shall be deleted from or modified
on the Seller's computer systems when, and only when, the Receivable shall have
been paid in full or repurchased.
(f) If at any time the Seller shall propose to sell, grant a
security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Seller shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Purchaser.
(g) The Seller shall permit the Purchaser and its agents at any
time during normal business hours to inspect, audit, and make copies of and
abstracts from the Seller's records regarding any Receivable.
(h) Upon request, the Seller shall furnish to the Purchaser,
within twenty 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 Pooling and Servicing Agreement, 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
15
<PAGE> 16
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 Pooling and Servicing Agreement.
5.3 Costs and Expenses. The Seller agrees to pay all reasonable
costs and disbursements in connection with the perfection, as against all third
parties, of the Purchaser's right, title and interest in and to the
Receivables.
5.4 Indemnification.
(a) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from the failure of a
Receivable to be originated in compliance with all requirements of law and for
any breach of any of the Seller's representations and warranties contained
herein.
(b) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, damages,
claims, and liabilities, arising out of or resulting from the use, ownership,
or operation by the Seller or any affiliate thereof of a Financed Vehicle.
(c) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all taxes that may at any time be asserted
against the Purchaser with respect to the transactions contemplated herein,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege, or license taxes and costs and expenses
in defending against the same.
(d) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against any and all costs, expenses, losses, claims,
damages, and liabilities to the extent that such cost, expense, loss, claim,
damage, or liability arose out of, or was imposed upon the Purchaser through,
the negligence, willful misfeasance, or bad faith of the Seller in the
performance of
16
<PAGE> 17
its duties under this Agreement or by reason of reckless disregard of the
Seller's obligations and duties under the Agreement.
(e) The Seller shall defend, indemnify, and hold harmless the
Purchaser from and against all costs, expenses, losses, claims, damages, and
liabilities arising out of or incurred in connection with the acceptance or
performance of the Seller's trusts and duties as Servicer under the Pooling 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 Sale. Seller agrees to treat this conveyance for all purposes
(including without limitation tax and financial accounting purposes) as a sale
on all relevant books, records, tax returns, financial statements and other
applicable documents.
ARTICLE VI
MISCELLANEOUS PROVISIONS
6.1 Obligations of Seller. The obligations of the Seller under this
Agreement shall not be affected by reason of any invalidity, illegality or
irregularity of any Receivable.
6.2 Repurchase Events. The Seller hereby covenants and agrees with
the Purchaser for the benefit of the Purchaser, the Trustee and the
Certificateholders, that the occurrence of a breach of any of the Seller's
representations and warranties contained in Section 3.2(b) hereof shall
constitute events obligating the Seller to repurchase Receivables hereunder
("Repurchase Events"), at the Purchase Amount from the Purchaser or from the
Trust. The repurchase obligation of the Seller shall constitute the sole
remedy to the Certificateholders, or to the Trustee, or to the Purchaser
against the Seller with respect to any Repurchase Event.
17
<PAGE> 18
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: the Purchaser will,
pursuant to the Pooling and Servicing Agreement, sell the Receivables to the
Trust and assign its rights under this Agreement to the Trustee for the benefit
of 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 such Trust and any Certificateholder.
The Seller hereby consents to such sales and assignments.
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 Certificateholders under the Pooling and Servicing Agreement
must be consented to by the Holders of 51% of the Class A Certificate Balance
and 51% of the Class B Certificate Balance.
6.6 Accountants' Letters.
(a) Coopers & Lybrand L.L.P. will review the characteristics of
the Receivables described in the Schedule of Receivables set forth as Exhibit B
hereto and will compare those characteristics to the information with respect
to the Receivables contained in the Prospectus.
(b) Seller will cooperate with the Purchaser and Coopers &
Lybrand L.L.P. in making available all information and taking all steps
reasonably necessary to permit such accountants to complete the review set
forth in Section 6.6(a) above and to deliver the letters required of them under
the Underwriting Agreement.
(c) Coopers & Lybrand L.L.P. will deliver to the Purchaser a
letter, dated the Closing Date, in the form previously agreed to by the Seller
and the Purchaser,
18
<PAGE> 19
with respect to the financial and statistical information contained in the
Prospectus under the caption "Delinquencies, Repossessions and Net Losses" and
with respect to such other information as may be agreed in the form of letter.
6.7 Waivers. No failure or delay on the part of the Purchaser in
exercising any power, right or remedy under this Agreement or the Assignment
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or remedy preclude any other or further exercise thereof
or the exercise of any other power, right or remedy.
6.8 Notices. All communications and notices pursuant hereto to
either party shall be in writing or by telegraph or telex and addressed or
delivered to it at its address (or in case of telex, at its telex number at
such address) shown in the opening portion of this Agreement or at such other
address as may be designated by it by notice to the other party and, if mailed
or sent by telegraph or telex, shall be deemed given when mailed, communicated
to the telegraph office or transmitted by telex.
6.9 Costs and Expenses. The Seller will pay all expenses incident
to the performance of its obligations under this Agreement and the Seller
agrees to pay all reasonable out-of-pocket costs and expenses of the Purchaser,
excluding fees and expenses of counsel, in connection with the perfection as
against third parties of the Purchaser's right, title and interest in and to
the Receivables and the enforcement of any obligation of the Seller hereunder.
6.10 Representations to the Seller. The respective agreements,
representations, warranties and other statements by the Seller and the
Purchaser set forth in or made pursuant to this Agreement shall remain in full
force and effect and will survive the closing under Section 2.2 hereof.
6.11 Confidential Information. The Purchaser agrees that it will
neither use nor disclose to any person the names and addresses of the Obligors,
except in connection with the enforcement of the Purchaser's rights hereunder,
under the Receivables, under any Pooling and Servicing Agreement or as required
by law.
19
<PAGE> 20
6.12 Headings and Cross-References. The various headings in this
Agreement are included for convenience only and shall not affect the meaning or
interpretation of any provision of this Agreement. References in this
Agreement to Section names or numbers are to such Sections of this Agreement.
6.13 GOVERNING LAW. THIS AGREEMENT AND THE ASSIGNMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
NEW YORK.
6.14 Counterparts. This Agreement may be executed in two or more
counterparts and by different parties on separate counterparts, each of which
shall be an original, but all of which together shall constitute one and the
same instrument.
20
<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: _________________________
Name:
Title:
FORD CREDIT AUTO RECEIVABLES
CORPORATION
By: _________________________
Name:
Title:
21
<PAGE> 22
Exhibit A
ASSIGNMENT
For value received, in accordance with the Purchase Agreement dated
as of November 1, 1995 (the "Purchase Agreement"), between the undersigned and
FORD CREDIT AUTO RECEIVABLES CORPORATION (the "Purchaser"), the undersigned
does hereby sell, 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, and
all monies paid thereon and due thereon on or after the Cut-Off Date (including
any monies received prior to the Cut-Off Date that are due on or after the
Cut-Off Date and were not used to reduce the principal balance of the
Receivables); (ii) the security interests in the Financed Vehicles granted by
Obligors pursuant to the Receivables; (iii) any proceeds from claims on any
physical damage, credit life, credit disability, or other insurance policies
covering Financed Vehicles or Obligors; (iv) Dealer Recourse; (v) rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cut-Off Date; and (vi) the
proceeds of any and all of the foregoing. The foregoing sale does not
constitute and is not intended to result in any assumption by the Purchaser of
any obligation of the undersigned to the Obligors, insurers or any other person
in connection with the Receivables, Receivable Files, any insurance policies or
any agreement or instrument relating to any of them.
This Assignment is made pursuant to and upon the representations,
warranties and agreements on the part of the undersigned contained in the
Purchase Agreement and is to be governed by the Purchase Agreement.
<PAGE> 23
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 November 1, 1995.
FORD MOTOR CREDIT COMPANY
By: _____________________
Name:
Title:
2
<PAGE> 24
Exhibit B
Schedule of Receivables
DELIVERED TO PURCHASER
AT CLOSING
<PAGE> 25
Schedule A
Location of Receivable Files
Indianapolis
5875 Castle Creek Pkwy. North Drive
Suite 240
Indianapolis, IN 46250-4308
Detroit-North
580 Kirts Boulevard
Suite 300
Troy, MI 48084
Chicago-North
9700 Higgins Road
Suite 720
Rosemont, IL 60018
Ohio South
9797 Springboro Pike
Suite 302
Miamisburg, OH 45343
Detroit/West
One ParkLane Blvd.
Suite 405E
Dearborn, MI 48126
Chicago South
The Office of Waterfall Glen I
Suite 310
900 South Frontage Road
Woodridge, IL 60517
Grand Rapids
2851 Charlevoix Drive SE
Suite 300
Grand Rapids, MI 49546
Chicago - East
One River Place, Suite A
Lansing, IL 60438
<PAGE> 26
Akron
175 Montroes West Avenue
Suite 300 Crown Pointe
Copley, OH 44321
Louisville
502 Executive Park
Louisville, KY 40207
Milwaukee
10850 W. Park Place
Suite 110
Milwaukee, WI 53224
Chicago West
2500 W. Higgins Rd.
Suite 280
Hoffman Estates, IL 60195-2008
Saginaw
4901 Towne Centre Rd.
Suite 200
Saginaw, MI 48605
Findlay
3500 North Main Street
Findlay, OH 45840-1447
Cleveland
5700 Lombardo Centre
Suite 101
Seven Hills, OH 44131-2581
Philadelphia
Bay Colony Executive Park
575 E. Swedesford
Suite 100
Wayne, PA 19087
New Jersey South
5000 Dearborn Circle
Suite 200
Mt. Laurel, NJ 08054
A-2
<PAGE> 27
Baltimore-West
1829 Reistertown Road
Baltimore, MD 21208-8861
Long Island
972 Brush Hollow Road
5th Floor
Westbury, NY 11590-1740
Washington, D.C.
2440 Research Blvd.
Suite 150
Rockville, MD 20850-3293
New Haven
116 Washington Ave.
Floor #4
North Haven, CT 06473
Norfolk
Greenbrier Pointe
1401 Greenbrier Pkwy.
Suite 350
Chesapeake, VA 23320
New Jersey North
103 Eisenhower Parkway
4th Floor
Roseland, NJ 07068-1069
Pittsburgh
Foster Plaza 9
750 Holiday Drive
4th Floor, Suite 420
Pittsburgh, PA 15220-2783
Richmond
300 Arboretum Place
Suite 320
Richmond, VA 23236
Syracuse
5788 Widewaters Pkwy.
DeWitt, NY 13214
A-3
<PAGE> 28
Westchester
660 White Plains Road
Tarrytown, NY 10591-0010
Mobile
1201 Montlimar Dr.
Suite 700
Mobile, AL 36609
Birmingham
3535 Grandview Parkway
Suite 340
Birmingham, AL 35243
Orlando
2600 Lake Lucien Drive
Suite 306, The Forum Bldg.
Maitland, FL 32751
Memphis
6555 Quince Road
Suite 300
Memphis, TN 38119
Atlanta - North
North Park Town Center
1000 Abernathy Rd. N.E.
Bldg. 400, Suite 180
Atlanta, GA 30328
Greensboro
1500 Pinecroft Rd.
Suite 220
Greensboro, NC 27407
Charlotte
5832 Farm Pond Lane
Suite 200
Charlotte, NC 28212
Jacksonville
9485 Regency Square Boulevard
Jacksonville, FL 32225
A-4
<PAGE> 29
Jackson
Highland Village Center
4500 I-55 North
Suite 292
Jackson, MS 39211
Columbia
250 Berryhill Road
Suite 201
Columbia, SC 29210
Miami
6303 Blue Lagoon Drive
Suite 200
Miami, FL 33126
Dothan
3160 West Main Street
Suite 1
Dothan, AL 36301-1180
Nashville
565 Marriott Drive
Suite 190, Highland Ridge
Nashville, TN 37210
Raleigh
3651 Trust Drive
Raleigh, NC 27604
Tampa
Lincoln Pointe, Suite 800
2502 Rocky Point Drive
Tampa, FL 33607
Odessa
Ashford Park Office Center
Suite 201A
2626 John Ben Sheppard Parkway
Odessa, TX 79762
Lubbock
Suite 200
4010 82nd Street
Lubbock, TX 79424
A-5
<PAGE> 30
Dallas
801 E. Campbell Road
Suite 600, Campbell Forum
Richardson, TX 75801
Austin
1701 Directors Blvd.
Suite 320
Austin, TX 78744
Fort Worth
2350 W. Airport Hwy.
Suite 400, Center Park Tower
Bedford, TX 76022
Beaumont
2615 Calder
Suite 715
Beaumont, TX 77704
Houston-West
820 Gessner
Suite 700
Houston, TX 77024
Harlingen
1916 East Harrison
Harlingen, TX 78550
Corpus Christi
5350 South Staples
Suite 225
Corpus Christi, TX 78411
Little Rock
1701 Centerview Dr.
Suite 301
Little Rock, AR 72211
Amarillo
1616 S. Kentucky
Suite 130 Bldg. D
Amarillo, TX 79102
A-6
<PAGE> 31
El Paso
1200 Golden Key Circle
Suite 104
El Paso, TX 79925
Albuquerque
6100 Uptown Blvd., NE
Suite 300
Albuquerque, NM 87110
Houston-North
363 N. Sam Houston Pkwy. E.
Suite 700
Houston, TX 77060
San Antonio
1600 N.E. Loop 410
Suite 200
San Antonio, TX 78209
Tulsa
9820 East 41st St.
Suite 300
Tulsa, OK 74145
Minneapolis
11095 Viking Drive
Suite 308, One Southwest Crossing
Eden Prairie, MN 55344-7290
Wichita
7570 West 21st Street
Wichita, KS 67212
St. Louis
4227 Earth City Exp.
Suite 100
Earth City, MO 63045
Jefferson City
210 Prodo Drive
Jefferson City, MO 65109
Kansas City
8717 West 110th Street
Bldg. #14, Suite 550
Overland Park, KS 66210
A-7
<PAGE> 32
Des Moines
4200 Corporate Drive
Suite 107
West Des Moines, IA 50266
Omaha
10040 Regency Circle
Suite 100
Omaha, NE 68114-3786
Davenport
2535 Tech Drive
Suite 300, Commerce Exch. Bldg.
Bettendorf, IA 52722
Denver
6300 S. Syracuse Way
Suite 195
Englewood, CO 80111
Fargo
3100 13th Ave. South
Suite 304
Fargo, ND 58103
Springfield
3275 E. Ridgeview
Springfield, MO 65804-1816
Waterloo
211 E. San Marnan Dr.
Waterloo, IA 50702
San Bernadino
1615 Orange Tree Lane
Suite 215
Redlands, CA 92374
Salt Lake City
310 E. 4500 South
Suite 340
Murray, UT 84017
Honolulu
1585 Kapiolani Blvd.
Suite 922, Ala Moano Pacific Center
Honolulu, HI 96814
A-8
<PAGE> 33
Spokane
North 901 Monroe
Suite 350
Spokane, WA 99210-2148
Grand Junction
744 Horizon Ct.
Suite 330
Grand Junction, CO 81506
San Francisco
4301 Hacienda Dr.
Suite 400
Pleasanton, CA 94588
Portland
10220 S.W. Greenburg Rd.
Suite 415
Portland, OR 97223-5506
Sacramento
2720 Gateway Oaks Dr.
Suite 200
Sacramento, CA 95833
San Diego
3111 Camino Del Rio N.
Suite 1333
San Diego, CA 92108
Phoenix
4742 North 24th Street
Suite 215
Phoenix, AZ 85016
San Jose
1900 McCarthy Blvd.
Suite 400
Milpitas, CA 95035
Seattle
13555 S.E. 36th Street
Suite 350
Bellevue, WA 98006
A-9
<PAGE> 34
Orange
765 The City Drive
Suite 200
Orange, CA 92668
Anchorage
3201 C Street
Suite 203
Anglo Building
Anchorage, AK 99503
Appleton
54 Park Place
Appleton, WI 54915-8861
South Bend
4215 Edison Lakes Parkway
Suite 140
Mishawaka, IN 46545
Columbus
655 Metro Place South
Suite 470, Metro V
Dublin, OH 43017-0792
Henderson
618 North Green Street
Henderson, KY 42420
Lansing
2140 University Park Drive
Okemos, MI 48864
Marshall
1408 North Michigan
Marshall, IL 62441
New Jersey-Central
101 Interchange Plaza
Cranbury, NJ 08512
Huntington
3425 U.S. Route 60 East
Barboursville, WV 25504
Buffalo
95 John Muir Drive
A-10
<PAGE> 35
Suite 102
Amherst, NY 14228
Manchester
4 Bedford Farms
Bedford, NH 03110
Harrisburg
4900 Ritter Road
Mechanicsburg, PA 17055
Boston South
Southboro Place, 2nd Floor
352 Turnpike Road
Southboro, MA 0772
Boston North
One Tech Drive, 3rd Floor
Andover, MA 01810-2497
Portland
2401 Congress Street
Portland, ME 04102
Albany
5 Pine West Plaza
Albany, NY 12205
Roanoke
5238 Valley Pointe Pkwy.
Roanoke, VA 24019
Falls Church
1420 Springhill Road
Suite 550
McLean, VA 22102
Bristol
Landmark Center
113 Landmark Lane
Bristol, TN 37625
Chattanooga
6025 Lee Highway
Suite 443
Chattanooga, TN 37421
A-11
<PAGE> 36
Decatur
401 Lee Street
Suite 500
Decatur, AL 35602
Fayetteville
4317 Ramsey Street
Suite 300
Fayetteville, NC 28311
Athens
3708 Atlanta Highway
Athens, GA 30604
Knoxville
5500 Lonas Drive
Suite 260
Knoxville, TN 37909
Macon
5400 Riverside Drive
Suite 201
Macon, GA 31210
Pensacola
25 W. Cedar Street
Suite 316
Pensacola, Fl 32501
Savannah
6600 Abercorn Street
Suite 206
Savannah, GA 31405
Tyler
821 East SE Loop 323
Suite 300
Tyler, TX 75701
Oklahoma City
4101 Perimeter Ctr Dr.
Suite 300, Perimeter Center
Oklahoma City, OK 73112-2304
A-12
<PAGE> 37
Baltimore-East
Campbell Corporate Center One
4940 Campell Blvd., Suite 140
Whitemarsh Business Community
Baltimore, MD 21236
Billings
1643 Lewis Avenue
Suite 201
Billings, MT 59102
Cheyenne
6234 Yellowstone
Cheyenne, WY 82009
Cape Girardeau
2851 Independence
Cape Girardeau, MO 63701
Atlanta -South
1691 Phoenix Blvd.
Suite 300
Atlanta, GA 30349
Pasadena
800 East Colorado Blvd.
Suite 400
Pasadena, CA 91109
Colorado Springs
5575 Tech Center Dr.
Suite 220
Colorado Springs, CO 80919
South Bay
301 E. Ocean Boulevard
Suite 1900
Long Beach, CA 90802
Ventura
260 Maple court
Suite 210
Ventura, CA 93003
A-13
<PAGE> 38
Las Vegas
3900 Paradise Road
Suite 239
Las Vegas, NV 89109
Eugene
1600 Valley River Drive
Suite 190
Eugene, OR 97401
Tupelo
1 Mississippi Plaza
Tupelo, MS 38801
Charleston
4975 Lacross Road
Suite 150, Rivergate Center
North Charleston, SC 29418-6518
Western Carolina
215 Thompson Street
Hendersonville, NC 28739-2828
New Orleans
3330 W. Esplanade Avenue
Suite 200
Metairie, LA 70002
Lafayette
Saloom Office Park
Suite 350
100 Asma Boulevard
Lafayette, LA 70508
Shreveport
South Pointe Centre
3007 Knight Street
Suite 200
Shreveport, LA 71105
A-14