1
EXHIBIT 99.1
================================================================================
SALE AND SERVICING AGREEMENT
by and among
--------------------
FORD CREDIT AUTO OWNER TRUST - ,
------ -
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO LLC
as Seller
and
--------------------
FORD MOTOR CREDIT COMPANY,
as Servicer
Dated as of ,
------------ ----
================================================================================
2
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND USAGE .................................................... 1
ARTICLE II
TRUST PROPERTY ........................................................... 2
SECTION 2.1. Conveyance of Trust Property ............................. 2
SECTION 2.2. Representations and Warranties of
the Seller as to the Receivables ........................ 2
SECTION 2.3. Repurchase upon Breach ................................... 7
SECTION 2.4. Custody of Receivable Files .............................. 8
SECTION 2.5. Duties of Servicer as Custodian .......................... 8
SECTION 2.6. Instructions; Authority to Act ........................... 10
SECTION 2.7. Custodian's Indemnification .............................. 10
SECTION 2.8. Effective Period and Termination ......................... 10
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES AND
TRUST PROPERTY ......................................................
SECTION 3.1. Duties of Servicer ........................................ 12
SECTION 3.2. Collection of Receivable Payments ......................... 13
SECTION 3.3. Realization Upon Receivables .............................. 13
SECTION 3.4. [Reserved] ................................................ 13
SECTION 3.5. Maintenance of Security Interests
in Financed Vehicles .................................... 13
SECTION 3.6. Covenants of Servicer ..................................... 14
SECTION 3.7. Purchase of Receivables Upon Breach ....................... 14
SECTION 3.8. Servicer Fee .............................................. 15
SECTION 3.9. Servicer's Certificate .................................... 15
SECTION 3.10. Annual Statement as to Compliance;
Notice of Event of Servicing
Termination ............................................. 16
SECTION 3.11. Annual Independent Certified Public
Accountant's Report ....................................... 17
SECTION 3.12. Access to Certain Documentation
and Information Regarding Receivables ................... 17
SECTION 3.13. Servicer Expenses ......................................... 18
i
3
Page
----
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT; STATEMENTS TO
NOTEHOLDERS AND CERTIFICATEHOLDERS ...................................
SECTION 4.1. Accounts .................................................... 19
SECTION 4.2. Collections ................................................. 23
SECTION 4.3. Application of Collections .................................. 24
SECTION 4.4. Advances .................................................... 24
SECTION 4.5. Additional Deposits ......................................... 25
SECTION 4.6. Distributions ............................................... 26
SECTION 4.7. Reserve Account ............................................. 28
SECTION 4.8. Net Deposits ................................................ 31
SECTION 4.9. Statements to Noteholders and
Certificateholders ........................................ 31
ARTICLE V
YIELD SUPPLEMENT LETTER OF CREDIT; YIELD SUPPLEMENT ACCOUNT
SECTION 5.1. Yield Supplement Letter of Credit
and the Yield Supplement Account .......................... 34
ARTICLE VI
THE SELLER ................................................................
SECTION 6.1. Representations and Warranties of Seller .................... 38
SECTION 6.2. Liability of Seller; Indemnities ............................ 40
SECTION 6.3. Merger or Consolidation of, or
Assumption of the Obligations
of, Seller ................................................ 41
SECTION 6.4. Limitation on Liability of
Seller and Others ......................................... 42
SECTION 6.5. Seller May Own Notes or Certificates ........................ 42
ARTICLE VII
THE SERVICER ..............................................................
SECTION 7.1. Representations of Servicer ................................. 44
SECTION 7.2. Indemnities of Servicer ..................................... 45
SECTION 7.3. Merger or Consolidation of, or
Assumption of the Obligations
of, Servicer .............................................. 48
SECTION 7.4. Limitation on Liability of
Servicer and Others ....................................... 49
SECTION 7.5. Delegation of Duties ........................................ 49
ii
4
Page
----
SECTION 7.6. Ford Credit Not to Resign as Servicer ....................... 50
SECTION 7.7. Servicer May Own Notes or Certificates ...................... 50
ARTICLE VIII
SERVICING TERMINATION .....................................................
SECTION 8.1. Events of Servicing Termination ............................. 51
SECTION 8.2. Appointment of Successor Servicer ........................... 53
SECTION 8.3. Repayment of Advances ....................................... 54
SECTION 8.4. Notification to Noteholders
and Certificateholders .................................... 54
SECTION 8.5. Waiver of Past Events of Servicing
Termination ................................................ 54
ARTICLE IX
TERMINATION ................................................................
SECTION 9.1. Optional Purchase of All Receivables ........................ 56
SECTION 9.2. Succession Upon Satisfaction and
Discharge of Indenture ................................... 56
ARTICLE X
MISCELLANEOUS PROVISIONS ...................................................
SECTION 10.1. Amendment ................................................... 57
SECTION 10.2. Protection of Title to Trust ................................ 58
SECTION 10.3. Governing Law ............................................... 62
SECTION 10.4. Notices ..................................................... 62
SECTION 10.5. Severability of Provisions .................................. 62
SECTION 10.6. Assignment .................................................. 63
SECTION 10.7. Further Assurances .......................................... 63
SECTION 10.8. No Waiver; Cumulative Remedies .............................. 63
SECTION 10.9. Third-Party Beneficiaries ................................... 63
SECTION 10.10. Actions by Noteholders or
Certificateholders ........................................ 64
SECTION 10.11. Agent for Service ........................................... 64
SECTION 10.12. No Bankruptcy Petition; Subordination; Claims Against
Seller .................................................... 64
SECTION 10.13. Limitation of Liability of
Owner Trustee and Indenture Trustee ...................... 64
iii
5
SALE AND SERVICING AGREEMENT, dated as of _______ __, ____ (as from time to
time amended, supplemented or otherwise modified and in effect, this
"Agreement"), by and among FORD CREDIT AUTO OWNER TRUST ____-_ (the "Issuer"), a
Delaware business trust, FORD CREDIT AUTO RECEIVABLES TWO LLC, a Delaware
limited liability company, as seller (the "Seller"), and FORD MOTOR CREDIT
COMPANY, a Delaware corporation, as servicer (the "Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of receivables arising
in connection with motor vehicle retail installment sale contracts generated by
Ford Motor Credit Company in the ordinary course of its business and sold to the
Seller;
WHEREAS, the Seller is willing to sell such receivables to the Issuer; and
WHEREAS, Ford Motor Credit Company, is willing to service such receivables
on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may otherwise
require, capitalized terms used but not otherwise defined herein are defined in
Appendix A hereto, which also contains rules as to usage that shall be
applicable herein.
6
ARTICLE II
TRUST PROPERTY
SECTION 2.1. Conveyance of Trust Property. In consideration of the Issuer's
delivery to, or upon the order of, the Seller of Notes and Certificates, in
aggregate principal amounts equal to the initial principal amount of the Notes
and the Initial Certificate Balance, respectively, the Seller does hereby
irrevocably sell, transfer, assign and otherwise convey to the Issuer without
recourse (subject to the obligations herein) all right, title and interest of
the Seller, whether now owned or hereafter acquired, in and to the Trust
Property. The sale, transfer, assignment and conveyance made hereunder shall not
constitute and is not intended to result in an assumption by the Issuer of any
obligation of the Seller to the Obligors, the Dealers or any other Person in
connection with the Receivables and the other Trust Property or any agreement,
document or instrument related thereto.
It is the intention of the Seller and the Issuer that the transfer of the
Trust Property contemplated herein constitute a sale of the Trust Property,
conveying good title to the Trust Property from the Seller to the Issuer.
However, in the event that such transfer is deemed to be a pledge to secure the
payment of the Notes and the Certificates, the Seller hereby grants to the
Issuer a first priority security interest in all of the Seller's right, title
and interest in, to and under the Trust Property, and all proceeds thereof, to
secure the payment of the Notes and the Certificates, and in such event, this
Agreement shall constitute a security agreement under applicable law.
SECTION 2.2. Representations and Warranties of the Seller as to the
Receivables. The Seller makes the following representations and warranties as to
the Receivables on which the Issuer shall be deemed to have relied in accepting
the Receivables. Such representations and warranties speak as of the execution
and delivery of this Agreement, but shall survive the sale, transfer, assignment
and conveyance of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
2
7
(i) Characteristics of Receivables. Each Receivable (a) shall have been
originated in the United States of America by a Dealer for the retail sale of a
Financed Vehicle in the ordinary course of such Dealer's business, shall have
been fully and properly executed by the parties thereto, shall have been
purchased by the Seller from Ford Credit, which in turn shall have purchased
such Receivable from such Dealer under an existing dealer agreement with Ford
Credit, and shall have been validly assigned by such Dealer to Ford Credit,
which in turn shall have been validly assigned by Ford Credit to the Seller in
accordance with its terms, (b) shall have created or shall create a valid,
subsisting, and enforceable first priority security interest in favor of Ford
Credit in the Financed Vehicle, which security interest has been assigned by
Ford Credit to the Seller, which in turn shall be assignable by the Seller to
the Indenture 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
level payment) that fully amortize the Amount Financed by maturity and yield
interest at the Annual Percentage Rate, (e) shall provide for, in the event that
such contract is prepaid, a prepayment that fully pays the Principal Balance,
and (f) is a Precomputed Receivable or a Simple Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the Schedule of
Receivables shall be true and correct in all material respects as of the opening
of business on the Cutoff Date, and no selection procedures believed to be
adverse to the Noteholders or the Certificateholders shall have been utilized in
selecting the Receivables from those receivables which meet the criteria
contained herein. The computer tape or other listing regarding the Receivables
made available to the Issuer and its assigns (which computer tape or other
listing is required to be delivered as specified herein) is true and correct in
all respects.
3
8
(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 Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z, and State adaptations of the National Consumer Act and of
the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable shall represent the genuine,
legal, valid, and binding payment obligation in writing of the Obligor,
enforceable by the holder thereof in accordance with its terms subject to the
effect of bankruptcy, insolvency, reorganization, or other similar laws
affecting the enforcement of creditors' rights generally.
(v) No Government Obligor. None of the Receivables shall be due from
the United States of America or any State or from any agency, department, or
instrumentality of the United States of America or any State.
(vi) Security Interest in Financed Vehicle. Immediately prior to the
sale, transfer, assignment, and conveyance thereof, each Receivable shall be
secured by a validly perfected first security interest in the Financed Vehicle
in favor of Ford Credit as secured party or all necessary and appropriate
actions shall have been commenced that would result in the valid perfection of a
first security interest in the Financed Vehicle in favor of Ford Credit as
secured party.
(vii) Receivables in Force. No Receivable shall have been satisfied,
subordinated, or rescinded, nor shall any Financed Vehicle have been released
from the lien granted by the related Receivable in whole or in part.
(viii) No Waiver. No provision of a Receivable shall have been waived.
4
9
(ix) No Defenses. No right of rescission, setoff, counterclaim, or
defense shall have been asserted or threatened with respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or claims
shall have been filed for work, labor, or materials relating to a Financed
Vehicle that shall be liens prior to, or equal or coordinate with, the security
interest in the Financed Vehicle granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a period of
not more than [thirty (30)] days as of the Cutoff Date, no default, breach,
violation, or event permitting acceleration under the terms of any Receivable
shall have occurred; and no continuing condition that with notice or the lapse
of time would constitute a default, breach, violation, or event permitting
acceleration under the terms of any Receivable shall have arisen; and the Seller
shall not waive any of the foregoing.
(xii) Insurance. Ford Credit, in accordance with its customary procedures,
shall have determined that the Obligor has obtained or agreed to obtain physical
damage insurance covering the Financed Vehicle.
(xiii) Title. It is the intention of the Seller that the transfer and
assignment herein contemplated constitute a sale of the Receivables from the
Seller to the Issuer and that the beneficial interest in and title to the
Receivables not be part of the Seller's estate in the event of the filing of a
bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned, or pledged by the Seller to any
Person other than the Issuer. Immediately prior to the transfer and assignment
herein contemplated, the Seller had good and marketable title to each Receivable
free and clear of all Liens, encumbrances, security interests, and rights of
others and, immediately upon the transfer thereof, the Issuer shall have good
and marketable title to each Receivable, free and clear of all Liens,
encumbrances, security interests, and rights of others; and the transfer has
been perfected under the UCC.
5
10
(xiv) Valid Assignment. No Receivable shall have been originated in, or
shall be subject to the laws of, any jurisdiction under which the sale,
transfer, assignment and conveyance of such Receivable under this Agreement or
pursuant to transfers of the Notes or the Certificates shall be unlawful, void,
or voidable. The Seller has not entered into any agreement with any account
debtor that prohibits, restricts or conditions the assignment of any portion of
the Receivables.
(xv) All Filings Made. All filings (including, without limitation, UCC
filings) necessary in any jurisdiction to give the Issuer a first perfected
ownership interest in the Receivables, and to give the Indenture Trustee a first
perfected security interest therein, shall have been made.
(xvi) Chattel Paper. Each Receivable constitutes "chattel paper" as
defined in the UCC.
(xvii) One Original. There shall be only one original executed copy of
each Receivable.
(xviii) New and Used Vehicles. Approximately ___% 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.
[(xix) Amortization Type. Approximately ____% of the aggregate Principal
Balance of the Receivables as of the Cutoff Date constitute Precomputed
Receivables, and the remainder of the Receivables constitute Simple Interest
Receivables.]
(xx) Origination. Each Receivable shall have an origination date on or
after ______ __, ____.
(xxi) Maturity of Receivables. Each Receivable shall have an original
maturity of not greater than sixty (60) months.
(xxii) Minimum Annual Percentage Rate. Each Receivable shall have an
Annual Percentage Rate equal to or greater than ___%.
6
11
(xxiii) Scheduled Payments. Each Receivable shall have a first Scheduled
Payment due[, in the case of Precomputed Receivables, or a scheduled due date,
in the case of Simple Interest Receivables,] on or prior to ______ __, ____ and
no Receivable shall have a payment that is more than [thirty (30)] days overdue
as of the Cutoff Date.
(xxiv) Location of Receivable Files. The Receivable Files shall be kept
at one or more of the locations listed in Schedule B hereto.
(xxv) No Extensions. The number of Scheduled Payments shall not have
been extended on any Receivable on or before the Cutoff Date.
(xxvi) Rating Agencies. The rating agencies rating the Notes and the
Certificates are Moody's and Standard & Poor's.
(xxvii) Agreement. The representations and warranties of the Seller in
Section 6.1 are true and correct.
[(xxviii) No Receivables Originated in Alabama or Pennsylvania. No
Receivable shall have been originated in Alabama or Pennsylvania.]
SECTION 2.3. Repurchase upon Breach. The Seller, the Servicer, the Issuer
or the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement, the Indenture Trustee and Ford Credit promptly, in writing, upon the
discovery of any breach of the Seller's representations and warranties made by
the Seller pursuant to Section 2.2. Unless the breach shall have been cured by
the last day of the second Collection Period following the discovery, the
Indenture Trustee shall enforce the obligation of the Seller under this Section
2.3, and, if necessary, the Seller shall enforce the obligation of Ford Credit
under the Purchase Agreement, to repurchase any Receivable materially and
adversely affected by the breach as of such last day (or, at the Seller's
option, the last day of the first Collection Period following the discovery). In
consideration of the purchase of the Receivable, the Seller shall remit the
Purchase Amount, in the manner specified in Section 4.5. The sole remedy of the
Issuer, the Owner Trustee,
7
12
the Indenture Trustee, the Noteholders or the Certificateholders with respect to
a breach of the Seller's representations and warranties pursuant to Section 2.2
shall be to require the Seller to repurchase Receivables pursuant to this
Section 2.3 or to enforce the obligation of Ford Credit to the Seller to
repurchase such Receivables pursuant to the Purchase Agreement. Neither the
Owner Trustee nor the Indenture Trustee shall have any duty to conduct an
affirmative investigation as to the occurrence of any condition requiring the
repurchase of any Receivable pursuant to this Section 2.3 or the eligibility of
any Receivable for purposes of this Agreement.
SECTION 2.4. Custody of Receivable Files. To assure uniform quality in
servicing the Receivables and to reduce administrative costs, the Issuer, upon
the execution and delivery of this Agreement, hereby revocably appoints the
Servicer, and the Servicer hereby accepts such appointment, to act as the agent
of the Issuer and the Indenture Trustee as custodian of the following documents
or instruments, which are hereby constructively delivered to the Indenture
Trustee, as pledgee of the Issuer pursuant to the Indenture, with respect to
each Receivable:
(i) The original of the Receivable.
(ii) The original credit application fully executed by the Obligor or a
photocopy thereof or a record thereof on a computer file or disc or on
microfiche.
(iii) The original certificate of title or such documents that the Servicer
or Ford Credit shall keep on file, in accordance with its customary procedures,
evidencing the security interest of Ford Credit in the Financed Vehicle.
(iv) Any and all other documents (including any computer file or disc or
microfiche) that the Servicer or the Seller shall keep on file, in accordance
with its customary procedures, relating to a Receivable, an Obligor, or a
Financed Vehicle.
The Servicer shall provide an Officer's Certificate to the Issuer and the
Indenture Trustee confirming that the Servicer has received on behalf of the
Issuer
8
13
and the Indenture Trustee all the documents and instruments necessary for the
Servicer to act as the agent of the Issuer and the Indenture Trustee for the
purposes set forth in this Section 2.4, including the documents referred to
herein, and the Issuer, the Owner Trustee and the Indenture Trustee are hereby
authorized to rely on such Officer's Certificate.
SECTION 2.5. Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer shall hold the Receivable Files for the
benefit of the Issuer and the Indenture Trustee and maintain such accurate and
complete accounts, records, and computer systems pertaining to each Receivable
File as shall enable the Servicer and the Issuer to comply with the terms and
conditions of this Agreement, and the Indenture Trustee to comply with the terms
and conditions of the Indenture. In performing its duties as custodian the
Servicer shall act with reasonable care, using that degree of skill and
attention that the Servicer exercises with respect to the receivable files
relating to all comparable automotive receivables that the Servicer services for
itself or others. In accordance with its customary practices with respect to its
retail installment sale contracts, the Servicer shall conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in such a
manner as shall enable the Issuer or the Indenture Trustee to verify the
accuracy of the Servicer's record keeping. The Servicer shall promptly report to
the Owner Trustee and the Indenture Trustee any failure on its part to hold the
Receivable Files and maintain its accounts, records, and computer systems as
herein provided and promptly take appropriate action to remedy any such failure.
Nothing herein shall be deemed to require an initial review or any periodic
review by the Issuer, the Owner Trustee or the Indenture Trustee of the
Receivable Files.
(b) Maintenance of and Access to Records. The Servicer shall maintain each
Receivable File at one of its offices specified in Schedule B to this Agreement,
or at such other office as shall be specified to the Issuer and the Indenture
Trustee by written notice not later than ninety (90) days after any change in
location. The Servicer shall make available to the Issuer and the
9
14
Indenture Trustee or their duly authorized representatives, attorneys, or
auditors a list of locations of the Receivable Files, the Receivable Files, and
the related accounts, records, and computer systems maintained by the Servicer
at such times as the Issuer or the Indenture Trustee shall instruct.
(c) Release of Documents. Upon written instructions from the Indenture
Trustee, the Servicer shall release any document in the Receivable Files to the
Indenture Trustee, the Indenture Trustee's agent, or the Indenture Trustee's
designee, as the case may be, at such place or places as the Indenture Trustee
may designate, as soon thereafter as is practicable. Any document so released
shall be handled by the Indenture Trustee with due care and returned to the
Servicer for safekeeping as soon as the Indenture Trustee or its agent or
designee, as the case may be, shall have no further need therefor.
SECTION 2.6. Instructions; Authority to Act. All instructions from the
Indenture Trustee shall be in writing and signed by an Authorized Officer of the
Indenture Trustee, and the Servicer shall be deemed to have received proper
instructions with respect to the Receivable Files upon its receipt of such
written instructions.
SECTION 2.7. Custodian's Indemnification. The Servicer as custodian shall
indemnify the Issuer, the Owner Trustee and the Indenture Trustee for any and
all liabilities, obligations, losses, compensatory damages, payments, costs, or
expenses of any kind whatsoever that may be imposed on, incurred, or asserted
against the Issuer, the Owner Trustee or the Indenture Trustee as the result of
any improper act or omission in any way relating to the maintenance and custody
by the Servicer as custodian of the Receivable Files; provided, however, that
the Servicer shall not be liable to the Owner Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith, or negligence of
the Indenture Trustee or the Owner Trustee and shall not be liable to the
Indenture Trustee for any portion of any such amount resulting from the willful
misfeasance, bad faith, or negligence of the Indenture Trustee or the Owner
Trustee.
10
15
SECTION 2.8. Effective Period and Termination. The Servicer's appointment
as custodian shall become effective as of the Cutoff Date and shall continue in
full force and effect until terminated pursuant to this Section 2.8. If Ford
Credit shall resign as Servicer in accordance with the provisions of this
Agreement or if all of the rights and obligations of the Servicer shall have
been terminated under Section 8.1, the appointment of the Servicer as custodian
hereunder may be terminated by the Indenture Trustee, or by the Noteholders of
Notes evidencing not less than 25% of the principal amount of the Notes
Outstanding or, with the consent of Noteholders of Notes evidencing not less
than 25% of the principal amount of the Notes Outstanding, by the Owner Trustee
or by Certificateholders of Certificates evidencing not less than 25% of the
Certificate Balance, in the same manner as the Indenture Trustee or such
Securityholders may terminate the rights and obligations of the Servicer under
Section 8.1. As soon as practicable after any termination of such appointment,
the Servicer shall deliver the Receivable Files and the related accounts and
records maintained by the Servicer to the Indenture Trustee or the Indenture
Trustee's agent at such place or places as the Indenture Trustee may reasonably
designate.
11
16
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1. Duties of Servicer. The Servicer shall manage, service,
administer, and make collections on the Receivables with reasonable care, using
that degree of skill and attention that the Servicer exercises with respect to
all comparable receivables that it services for itself or others. The Servicer's
duties shall include collection and posting of all payments, responding to
inquiries of Obligors on such Receivables, investigating delinquencies, sending
payment coupons to Obligors, reporting tax information to Obligors, accounting
for collections, furnishing monthly and annual statements to the Owner Trustee
and the Indenture Trustee with respect to distributions, and making Advances
pursuant to Section 4.4. The Servicer shall follow its customary standards,
policies, and procedures in performing its duties as Servicer. Without limiting
the generality of the foregoing, the Servicer is hereby authorized and empowered
to execute and deliver, on behalf of itself, the Issuer, the Owner Trustee, the
Indenture Trustee, the Noteholders, the Certificateholders, or any of them, any
and all instruments of satisfaction or cancellation, or partial or full release
or discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer shall commence a legal proceeding to enforce a Receivable, the Owner
Trustee (in the case of a Receivable other than a Purchased Receivable) shall
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or legal
proceeding it shall be held that the Servicer may not enforce a Receivable on
the ground that it shall not be a real party in interest or a holder entitled to
enforce the Receivable, the Owner Trustee shall, at the Servicer's expense and
direction, take steps to enforce the Receivable, including bringing suit in its
name or the names of the Indenture Trustee, the Noteholders, the
Certificateholders, or any of them. The Owner Trustee shall furnish the Servicer
with any powers of attorney and other documents reasonably necessary or
appropriate to enable the Servicer to carry out its servicing and administrative
duties hereunder. The Servicer, at its
12
17
expense, shall obtain on behalf of the Issuer or the Owner Trustee all licenses,
if any, required by the laws of any jurisdiction to be held by the Issuer or the
Owner Trustee in connection with ownership of the Receivables, and shall make
all filings and pay all fees as may be required in connection therewith during
the term hereof.
SECTION 3.2. Collection of Receivable Payments. The Servicer shall make
reasonable efforts to collect all payments called for under the terms and
provisions of the Receivables as and when the same shall become due and shall
follow such collection procedures as it follows with respect to all comparable
receivables that it services for itself or others. Subject to Sections 3.6(iii)
and (iv), he Servicer may grant extensions, rebates, or adjustments on a
Receivable; provided, however, that if the Servicer extends the date for final
payment by the Obligor of any Receivable beyond the Final Scheduled Maturity
Date, it shall promptly purchase the Receivable in the manner provided in
Section 3.7. The Servicer may in its discretion waive any late payment charge or
any other fees that may be collected in the ordinary course of servicing a
Receivable.
SECTION 3.3. Realization Upon Receivables. On behalf of the Issuer, the
Servicer shall use reasonable efforts, consistent with its customary servicing
procedures, to repossess or otherwise convert the ownership of the Financed
Vehicle securing any Receivable as to which the Servicer shall have determined
eventual payment in full is unlikely. The Servicer shall follow such customary
and usual practices and procedures as it shall deem necessary or advisable in
its servicing of comparable receivables, which may include reasonable efforts to
realize upon any Dealer Recourse and selling the Financed Vehicle at public or
private sale. The foregoing shall be subject to the provision that, in any case
in which the Financed Vehicle shall have suffered damage, the Servicer shall not
expend funds in connection with the repair or the repossession of such Financed
Vehicle unless it shall determine in its discretion that such repair and/or
repossession will increase the Liquidation Proceeds by an amount greater than
the amount of such expenses.
SECTION 3.4. [Reserved].
13
18
SECTION 3.5. Maintenance of Security Interests in Financed Vehicles. The
Servicer shall, in accordance with its customary servicing procedures, take such
steps as are necessary to maintain perfection of the security interest created
by each Receivable in the related Financed Vehicle. The Issuer hereby authorizes
the Servicer to take such steps as are necessary to re-perfect such security
interest on behalf of the Issuer and the Indenture Trustee in the event of the
relocation of a Financed Vehicle or for any other reason.
SECTION 3.6. Covenants of Servicer. The Servicer shall not (i) release the
Financed Vehicle securing each such Receivable from the security interest
granted by such Receivable in whole or in part except in the event of payment in
full by or on behalf of the Obligor thereunder or repossession, (ii) impair the
rights of the Noteholders or the Certificateholders in the Receivables, (iii)
change the Annual Percentage Rate with respect to any Receivable, or (iv) modify
the Amount Financed or the total number of Scheduled Payments (in the case of a
Precomputed Receivable) or the total number of originally scheduled due dates
(in the case of a Simple Interest Receivable).
SECTION 3.7. Purchase of Receivables Upon Breach. The Seller, the Servicer
or the Owner Trustee, as the case may be, shall inform the other parties to this
Agreement promptly, in writing, upon the discovery of any breach pursuant to
Section 3.2, 3.5 or 3.6. Unless the breach shall have been cured by the last day
of the second Collection Period following such discovery (or, at the Servicer's
election, the last day of the first following Collection Period), the Servicer
shall purchase any Receivable materially and adversely affected by such breach
as determined by the Indenture Trustee (which shall include any Receivable as to
which a breach of Section 3.6 has occurred). In consideration of the purchase of
such Receivable, the Servicer shall remit the Purchase Amount in the manner
specified in Section 4.5. For purposes of this Section 3.7, the Purchase Amount
shall consist in part of a release by the Servicer of all rights of
reimbursement with respect to Outstanding Advances on the Receivable. The sole
remedy of the Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders
or the Certificateholders with respect to a breach pursuant to Section 3.2, 3.5
or 3.6 shall be to require the Servicer to purchase Receivables pursuant to this
Section 3.7.
14
19
SECTION 3.8. Servicer Fee. The Servicer shall be entitled to any interest
earned on the amounts deposited in the Collection Account and the Payahead
Account during each Collection Period plus all late fees, prepayment charges
(including, in the case of a Receivable that provides for payments according to
the "Rule of 78's" and that is prepaid in full, the difference between the
Principal Balance of such Receivable (plus accrued interest to the date of
prepayment) and the principal balance of such Receivable computed according to
the "Rule of 78's"), and other administrative fees and expenses or similar
charges allowed by applicable law with respect to Receivables during each
Collection Period (the "Supplemental Servicing Fee"). The Servicer also shall be
entitled to the Servicing Fee, as provided herein.
calendar month, the Servicer shall deliver to the Owner Trustee, each Note
Paying Agent and Certificate Paying Agent, the Indenture Trustee and the Seller,
with a copy to the Rating Agencies, a Servicer's Certificate containing all
information necessary to make the transfers and distributions pursuant to
Sections 4.3, 4.4, 4.5, 4.6 and 4.7 for the Collection Period preceding the date
of such Servicer's Certificate, together with the written statements to be
furnished by the Owner Trustee to Certificateholders pursuant to Section 4.9 and
by the Indenture Trustee to the Noteholders pursuant to Section 4.9 hereof and
Section 6.6 of the Indenture. Receivables purchased or to be purchased by the
Servicer or the Seller shall be identified by the Servicer by the Seller's
account number with respect to such Receivable (as specified in the Schedule of
Receivables).
15
20
(b) On or about the fifth (but in no event later than the tenth) calendar
day of each calendar month, the Servicer shall deliver to the respective
underwriters of the Notes and the Certificates the Note Pool Factor for each
class of Notes and the Certificate Pool Factor as of the close of business on
the Distribution Date occurring in that month.
SECTION 3.10. Annual Statement as to Compliance; Notice of Event of
Servicing Termination. (a) The Servicer shall deliver to the Owner Trustee, the
Indenture Trustee and each Rating Agency on or before April 30 of each year
beginning April 30, ____, an Officer's Certificate, dated as of December 31 of
the preceding calendar year, stating that (i) a review of the activities of the
Servicer during the preceding 12-month (or shorter) period and of its
performance under the Agreement has been made under such officer's supervision
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all its obligations under this Agreement throughout such
year, or, if there has been a default in the fulfillment of any such obligation,
specifying each such default known to such officer and the nature and status
thereof. A copy of such Officer's Certificate and the report referred to in
Section 3.11 may be obtained by any Certificateholder or Person certifying that
it is a Certificate Owner by a request in writing to the Owner Trustee, or by
any Noteholder or Person certifying that it is a Note Owner by a request in
writing to the Indenture Trustee, in either case addressed to the applicable
Corporate Trust Office. Upon the telephone request of the Owner Trustee, the
Indenture Trustee shall promptly furnish the Owner Trustee a list of Noteholders
as of the date specified by the Owner Trustee.
(b) The Servicer shall deliver to the Owner Trustee, the Indenture Trustee
and each Rating Agency promptly after having obtained knowledge thereof, but in
no event later than five (5) Business Days thereafter, written notice in an
Officer's Certificate of any event which with the giving of notice or lapse of
time, or both, would become an Event of Servicing Termination under Section 9.1.
The Seller shall deliver to the Owner
16
21
Trustee, the Indenture Trustee and each Rating Agency promptly after having
obtained knowledge thereof, but in no event later than five (5) Business Days
thereafter, written notice in an Officer's Certificate of any event which with
the giving of notice or lapse of time, or both, would become an Event of
Servicing Termination under clause (ii) of Section 9.1
SECTION 3.11. Annual Independent Certified Public Accountant's Report. The
Servicer shall cause a firm of independent certified public accountants, who may
also render other services to the Servicer or to the Seller or to Ford Credit,
to deliver to the Owner Trustee and the Indenture Trustee on or before April 30
of each year beginning April 30, ____ with respect to the prior calendar year a
report addressed to the Board of Directors of the Servicer and to the Owner
Trustee and the Indenture Trustee, to the effect that such firm has audited the
financial statements of the Servicer and issued its report thereon and that such
audit (1) was made in accordance with generally accepted auditing standards, (2)
included tests relating to automotive loans serviced for others in accordance
with the requirements of the Uniform Single Audit Program for Mortgage Bankers
(the "Program"), to the extent the procedures in such Program are applicable to
the servicing obligations set forth in this Agreement, and (3) except as
described in the report, disclosed no exceptions or errors in the records
relating to automobile and light truck loans serviced for others that, 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 3.12. Access to Certain Documentation and Information Regarding
Receivables. The Servicer shall provide to the Certificateholders, the Indenture
Trustee and the Noteholders access to the Receivable Files in such cases where
the Certificateholders, the Indenture Trustee or the Noteholders shall be
required by applicable statutes or regulations to review such documentation.
Access shall be afforded without charge, but only upon reasonable request and
during the normal business hours at the respective offices of the Servicer.
17
22
Nothing in this Section 3.12 shall affect the obligation of the Servicer to
observe any applicable law prohibiting disclosure of information regarding the
Obligors, and the failure of the Servicer to provide access to information as a
result of such obligation shall not constitute a breach of this Section 3.12.
SECTION 3.13. Servicer Expenses. The Servicer shall be required to pay all
expenses incurred by it in connection with its activities hereunder, including
fees and disbursements of the Owner Trustee and the Indenture Trustee,
independent accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Noteholders and Certificateholders.
18
23
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1. Accounts. (a) The Servicer shall, prior to the Closing Date,
establish and maintain a segregated trust account in the name of the Indenture
Trustee, at a Qualified Institution or Qualified Trust Institution (which shall
initially be ), which shall be designated as the "Collection Account". The
Collection Account shall be held in trust for the benefit of the Noteholders and
the Certificateholders. The Collection Account shall be under the sole dominion
and control of the Indenture Trustee; provided, that the Servicer may make
deposits to and direct the Indenture Trustee in writing to make withdrawals from
the Collection Account in accordance with the terms of the Basic Documents. All
monies deposited from time to time in the Collection Account shall be held by
the Indenture Trustee as part of the Trust Property and all deposits to and
withdrawals therefrom shall be made only upon the terms and conditions of the
Basic Documents.
If the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2, all amounts held in the Collection Account shall, to
the extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Collection Account in Permitted Investments that mature not
later than the Business Day immediately prior to the Distribution Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Collection Account shall be
withdrawn from the Collection Account at the written direction of the Servicer
and shall be paid to the . In the event that the Collection
Account is no longer to be maintained at , the Servicer shall, with
the Indenture Trustee's or Owner Trustee's assistance as necessary, cause the
Collection Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten (10) Business Days (or such longer period not to exceed
thirty (30) calendar days as to which each Rating Agency may consent).
19
24
(b) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee at a Qualified
Institution or Qualified Trust Institution (which shall initially be ),
which shall be designated as the "Principal Distribution Account". The
Principal Distribution Account shall be held in trust for the benefit of the
Noteholders. The Note Account shall be under the sole dominion and control of
the Indenture Trustee. All monies deposited from time to time in the Principal
Distribution Account pursuant to this Agreement and the Indenture shall be held
by the Indenture Trustee as part of the Trust Property and shall be applied as
provided in the Basic Documents. In the event that the Principal Distribution
Account is no longer to be maintained at , the Servicer shall,
with the Indenture Trustee's assistance as necessary, cause the Principal
Distribution Account to be moved to a Qualified Institution or a Qualified Trust
Institution within ten (10) Business Days (or such longer period not to exceed
thirty (30) calendar days as to which each Rating Agency may consent).
(c) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Owner Trustee at a Qualified
Institution or Qualified Trust Institution (which shall initially be ), which
shall be designated as the "Certificate Distribution Account". Except as
provided in the Trust Agreement, the Certificate Distribution Account shall be
held in trust for the benefit of the Certificateholders. The Certificate
Distribution Account shall be under the sole dominion and control of the Owner
Trustee. All monies deposited from time to time in the Certificate Distribution
Account pursuant to this Agreement and the Indenture shall be held by the Owner
Trustee as part of the Trust Property and shall be applied as provided in the
Basic Documents. In the event that the Certificate Distribution Account is no
longer to be maintained at , the Servicer shall, with the Owner Trustee's
assistance as necessary, cause the Certificate Distribution Account to be moved
to a Qualified Institution or a Qualified Trust Institution within ten (10)
Business Days (or such longer period not to exceed thirty (30) calendar days as
to which each Rating Agency may consent).
20
25
(d) The Servicer shall, prior to the Closing Date, establish and maintain a
segregated trust account in the name of the Indenture Trustee at a Qualified
Institution or Qualified Trust Institution (which shall initially be ), which
shall be designated as the "Payahead Account" (the Payahead Account, together
with the Collection Account and the Note Payment Account, the "Trust Accounts").
The Payahead Account shall be held in trust for the benefit of the
Securityholders. The Payahead Account shall be under the sole dominion and
control of the Indenture Trustee provided, that the Servicer may make deposits
to and direct the Indenture Trustee in writing to make withdrawals from the
Payahead Account in accordance with the Basic Documents. All monies deposited
from time to time in the Payahead Account shall be held by the Indenture Trustee
as part of the Trust Property and all deposits to and withdrawals therefrom
shall be made only upon the terms and conditions of the Basic Documents.
If the Servicer is required to remit collections pursuant to the first
sentence of Section 4.2, all amounts held in the Payahead Account shall, to the
extent permitted by applicable law, rules and regulations, be invested, as
directed in writing by the Servicer, by the bank or trust company then
maintaining the Payahead Account in Permitted Investments that mature not later
than the Business Day immediately prior to the Distribution Date for the
Collection Period to which such amounts relate and such Permitted Investments
shall be held to maturity. All interest and other income (net of losses and
investment expenses) on funds on deposit in the Payahead Account shall be
withdrawn from the Payahead Account at the direction of the Servicer and shall
be paid to . In the event that the Payahead Account is no longer to be
maintained at , the Servicer shall, with the Indenture Trustee's or Owner
Trustee's assistance as necessary, cause the Payahead Account to be moved to a
Qualified Institution or a Qualified Trust Institution within ten (10) Business
Days (or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
(e) Notwithstanding the provisions of clause (d) above and of Section
4.6(a)(ii), for so long as (i) Ford Credit is the Servicer, (ii) the rating of
Ford Credit's short-term unsecured debt is at least P-1 by
21
26
Xxxxx'x and is at least A-1 by Standard & Poor's and (iii) no Event of Servicing
Termination shall have occurred (each, a "Monthly Remittance Condition"),
Payaheads need not be remitted to and deposited in the Payahead Account but
instead may be remitted to and held by the Servicer. So long as each Monthly
Remittance Condition is satisfied, the Servicer shall not be required to
segregate or otherwise hold separate any Payaheads remitted to the Servicer as
aforesaid but shall be required to remit Payaheads to the Collection Account in
accordance with Section 4.6(a)(i). At any time as any Monthly Remittance
Condition is not satisfied, the Servicer shall deposit in the Payahead Account
the amount of any Payaheads then held or received by it (which amount shall be
at least equal to the Payahead Balance as of the close of business on the last
day of the immediately preceding Collection Period). Notwithstanding the
foregoing, if a Monthly Remittance Condition is not satisfied the Servicer may
utilize, with respect to Payaheads, an alternative remittance schedule (which
may include the remittance schedule utilized by the Servicer before the Monthly
Remittance Condition became unsatisfied), if the Servicer provides to the Owner
Trustee and the Indenture Trustee written confirmation from each Rating Agency
that such alternative remittance schedule will not result in the downgrading or
withdrawal by such Rating Agency of the ratings then assigned to the Notes and
the Certificates. The Owner Trustee and the Indenture Trustee shall not be
deemed to have knowledge of any event or circumstance under clause (iii) of the
first sentence of this Section 4.1(e) that would require remittance of the
Payaheads to the Payahead Account unless the Owner Trustee or the Indenture
Trustee has received notice of such event or circumstance from the Seller or the
Servicer in an Officer's Certificate or from the Noteholders of Notes evidencing
not less than 25% of the principal amount of the Notes Outstanding or from the
Certificateholders of Certificates evidencing not less than 25% of the
Certificate Balance or unless a Trustee Officer in the Corporate Trust Office
with knowledge hereof and familiarity herewith has actual knowledge of such
event or circumstance.
SECTION 4.2. Collections. The Servicer shall remit daily to the
Collection Account (i) all payments by or on behalf of the Obligors (including
Payaheads on the Receivables and Rule of 78's Payments, but excluding
22
27
Purchased Receivables) and (ii) all Liquidation Proceeds, both as collected
during the Collection Period. Ford Credit, so long as it is acting as the
Servicer, may make remittances of collections on a less frequent basis than that
specified in the immediately preceding sentence. It is understood that such less
frequent remittances may be made only on the specific terms and conditions set
forth below in this Section 4.2 and only for so long as such terms and
conditions are fulfilled. Accordingly, notwithstanding the provisions of the
first sentence of this Section 4.2, the Servicer shall remit collections
received during a Collection Period to the Collection Account in immediately
available funds on the related Distribution Date but only for so long as each
Monthly Remittance Condition is satisfied. Notwithstanding the foregoing, if a
Monthly Remittance Condition is not satisfied the Servicer may utilize an
alternative remittance schedule (which may include the remittance schedule
utilized by the Servicer before the Monthly Remittance Condition became
unsatisfied), if the Servicer provides to the Owner Trustee and the Indenture
Trustee written confirmation from each Rating Agency that such alternative
remittance schedule will not result in the downgrading or withdrawal by such
Rating Agency of the ratings then assigned to the Notes and the Certificates.
The Owner Trustee or the Indenture Trustee shall not be deemed to have knowledge
of any event or circumstance under clause (iii) of the definition of Monthly
Remittance Condition that would require daily remittance by the Servicer to the
Collection Account unless the Owner Trustee or the Indenture Trustee has
received notice of such event or circumstance from the Seller or the Servicer in
an Officer's Certificate or from the Noteholders of Notes evidencing not less
than 25% of the principal amount of the Notes Outstanding or from the
Certificateholders of Certificates evidencing not less than 25% of the
Certificate Balance or a Trustee Officer in the Corporate Trust Office with
knowledge hereof or familiarity herewith has actual knowledge of such event or
circumstance. For purposes of this Article IV the phrase "payments by or on
behalf of Obligors" shall mean payments made by Persons other than the Servicer
or by other means.
SECTION 4.3. Application of Collections. For the purposes of this
Agreement, as of the close of business on the last day of each Collection
Period, all collections for the Collection Period with respect to each
Receivable (other than a Purchased Receivable) shall be applied by the Servicer
as follows:
23
28
Payments by or on behalf of the Obligor which are not late fees,
prepayment charges, or other administrative fees and expenses, or similar
charges which constitute the Supplemental Servicing Fee shall be applied
first to reduce Outstanding Advances made with respect to such
Receivable, as described in Section 4.4(a) below. Next, any excess shall
be applied (i) in the case of Simple Interest Receivables, to interest
and principal on the Receivable in accordance with the Simple Interest
Method and (ii) in the case of Precomputed Receivables, to the Scheduled
Payment with respect to such Receivable and any remaining excess (except
for partial prepayments which cause a reduction in the Obligor's periodic
payment to below the Scheduled Payment as of the Cutoff Date) shall be
added to the Payahead Balance, and shall be applied to prepay the
Precomputed Receivable but only if the sum of such excess and the
previous Payahead Balance shall be sufficient to prepay the Precomputed
Receivable in full, otherwise such excess shall constitute a Payahead,
and shall increase the Payahead Balance.
SECTION 4.4. Advances. (a) As of the close of business on the last day of
each Collection Period, if the payments by or on behalf of the Obligor on a
Precomputed Receivable (other than a Purchased Receivable) after application
under Section 4.3 shall be less than the Scheduled Payment, whether as a result
of any extension granted to the Obligor or otherwise, the Payahead Balance, if
any, with respect to such Receivables shall be applied by the Indenture Trustee
to the extent of the shortfall, and such Payahead Balance shall be reduced
accordingly. Next, subject to the following sentence, the Servicer shall make an
Advance of any remaining shortfall. 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, shall determine that the Advance shall be recoverable from
subsequent collections or recoveries on any Receivable.
24
29
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 4.5. Additional Deposits. (a) The Servicer shall deposit in the
Collection Account the aggregate Advances pursuant to Section 4.4(a) and the
aggregate advances pursuant to Section 4.4(b). To the extent that the Servicer
fails to make an advance pursuant to Section 4.4(b) on the date required, the
Indenture Trustee shall withdraw such amount from the Reserve Account and
deposit such amount in the Collection Account. The Servicer and the Seller shall
deposit in the Collection Account the aggregate Purchase Amounts with respect to
Purchased Receivables and the Servicer shall deposit therein all amounts to be
paid under Sections 9.1 and 3.7(b). The Indenture Trustee shall deposit in the
Collection Account the aggregate of amounts received pursuant to the Yield
Supplement Agreement, if any, and amounts received from the Letter of Credit
Bank or the Yield Supplement Account, if any, pursuant to Article V. 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.
(b) The Indenture Trustee shall on the Distribution Date relating to each
Collection Period make a withdrawal from the Reserve Account in an amount equal
to the amount (if positive) calculated by the Servicer pursuant to the second
sentence of Section 4.6(b) and shall deposit such funds into the Collection
Account.
25
30
SECTION 4.6. Distributions. (a) On each Distribution Date, the
Indenture Trustee shall cause to be made the following transfers and
distributions in the amounts set forth in the Servicer's Certificate for such
Distribution Date:
(i) From the Payahead Account, or from the Servicer in the event
the provisions of Section 4.1(e) above are applicable, to the Collection
Account, in immediately available funds, (x) the portion of Payaheads
constituting Scheduled Payments or prepayments in full, required by
Sections 4.3 and 4.4(a), and (y) the Payahead Balance, if any, relating to
any Purchased Receivable.
(ii) From the Collection Account to the Payahead Account, or to the
Servicer in the event the provisions of Section 4.1(e) above are
applicable, in immediately available funds, the aggregate Payaheads
required by Section 4.3 for the Collection Period related to such
Distribution Date.
(iii) From the Collection Account to the Servicer, in immediately
available funds, repayment of Outstanding Advances pursuant to Section
4.4(a).
(b) Prior to each Distribution Date, the Servicer shall on each
Determination Date calculate the Available Funds, the Available Interest, the
Available Principal, the Scheduled Principal, the Servicing Fee, the Accrued
Note Interest, the Noteholders' Regular Principal, the Noteholders' Accelerated
Principal, the Principal Distribution Amount, the Accrued Certificate Interest,
the Certificateholders' Regular Principal and the Yield Supplement Amount, if
any. In addition, the Servicer shall calculate on each Determination Date the
difference between the Total Required Payment (together with, after the Notes
have been paid in full, the Certificateholders' Regular Principal) and Available
Funds.
26
31
(c) On each Distribution Date, the Servicer shall instruct the Indenture
Trustee (based on the information contained in the Servicer's Certificate
delivered on the related Determination Date pursuant to Section 3.9), to make
the following withdrawals from the Collection Account and make deposits,
distributions and payments, to the extent of funds on deposit in the Collection
Account, in the following order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Noteholders, the Accrued Note Interest;
(iii) third, to the Principal Distribution Account, the
Noteholders' Regular Principal;
(iv) fourth, to the Certificate Distribution Account, the
Accrued Certificate Interest;
(v) fifth, on or after the Distribution Date on which the
outstanding principal amount of all the Notes is reduced to zero,
to the Certificate Distribution Account, the Certificateholders'
Regular Principal;
(vi) sixth, to the Reserve Account, the amount, if any,
necessary to reinstate the balance in the Reserve Account up to
the Specified Reserve Balance; and
(vii) seventh, to the Seller, any remaining portion of funds
on deposit in the Collection Account.
Notwithstanding the foregoing, following the occurrence and during the
continuation of an Event of Default which has resulted in an acceleration of the
Notes or following an Insolvency Event or a dissolution with respect to the
Seller, the Available Funds remaining after the application of clauses (i) and
(ii) above will be deposited in the Principal Distribution to the extent
necessary to reduce the principal amount of all the Notes to zero, and the
Certificateholders will not receive any distributions until the principal amount
and accrued interest on all the Notes have been paid in full.
27
32
SECTION 4.7. Reserve Account. (a) (i) The Seller shall, prior
to the Closing Date, establish and maintain an account in the name
"__________________ as Indenture Trustee, as secured party from Ford Credit Auto
Owner Trust _______" at a Qualified Institution or Qualified Trust Institution,
which shall be designated as the "Reserve Account" (the Reserve Account,
together with the Collection Account (including the Principal Distribution
Account), the "Trust Accounts"). The Reserve Account shall be under the sole
dominion and control of the Indenture Trustee; provided, that the Servicer may
make deposits to the Reserve Account in accordance with the Basic Documents and
so long as no Default or Event of Default shall have occurred and be continuing
all or a portion of the funds in the Reserve Account shall be invested by the
applicable Qualified Institution or Qualified Trust Institution maintaining such
account at the direction of the Seller in Permitted Investments without
requiring any action from the Indenture Trustee. The Seller shall not direct the
Qualified Institution or Qualified Trust Institution maintaining the Reserve
Account to make any investment of any funds or to sell any investment held in
the Reserve Account unless the security interest Granted and perfected in such
account in favor of the Indenture Trustee will continue to be perfected in such
investment or the proceeds of such sale, in either case without any further
action by any Person, and, in connection with any direction by the Seller to
make any such investment or sale, if requested by the applicable Qualified
Institution or Qualified Trust Institution, the Seller shall deliver to such
Qualified Institution or Qualified Trust Institution an Opinion of Counsel,
acceptable to such Qualified Institution or Qualified Trust Institution, to such
effect. If (i) the Seller shall have failed to give investment directions for
any funds on deposit in the Reserve Account to the Qualified Institution or
Qualified Trust Institution maintaining such account by 11:00 a.m. New York Time
(or such other time as may be agreed by the Issuer and such Qualified
Institution or Qualified Trust Institution) on the Business Day preceding each
Distribution Date, (ii) a Default or Event of Default shall have occurred and be
continuing with respect to the Notes but the Notes shall not have been declared
due and payable pursuant to Section 5.2 of the Indenture or (iii) the Notes
shall have been declared due and payable following an Event of Default, amounts
collected or receivable from the Indenture Trust Estate are being applied in
accordance with Section 5.4 of the Indenture as if there had not been such a
declaration, then the Qualified Institution or Qualified Trust Institution
shall, to the fullest extent practicable, invest and reinvest funds in the
Reserve Account in one or more Permitted Investments described in clause (b) of
the definition thereof. The Reserve Account will be established and maintained
pursuant to an account agreement which specifies New York law as the governing
law. In addition, the Reserve Account shall be established and maintained at a
Qualified Institution or Qualified Trust Institution which agrees in writing
that for so long as the Notes are outstanding it will comply with entitlement
orders (as defined in Article 8 of the UCC) originated by the Indenture Trustee
without further consent of the Issuer. On the Closing Date, the Seller shall
deposit the Reserve Initial Deposit into the Reserve Account from the net
proceeds of the sale of the Notes and the Certificates. The Reserve Account and
all amounts, securities, investments, financial assets and other property
deposited in or credited to the Reserve Account (such amounts, the "Reserve
Account Property") shall be held by the Indenture Trustee as secured party for
the benefit of the Noteholders and, after payment in full of the Notes, as agent
of the Owner Trustee and as part of the Trust Property, and all deposits to and
withdrawals from therefrom shall be made only upon the terms and conditions of
the Basic Documents.
The Reserve Account Property shall, to the extent permitted by
applicable law, rules and regulations, be invested, as directed in writing by
the Seller, by the bank or trust company then maintaining the Reserve Account in
Permitted Investments that mature not later than the Business Day preceding the
next Distribution Date, and such Permitted Investments shall be held to
maturity; provided, however, that upon satisfaction of the Rating Agency
Condition, funds in the Reserve Account may be invested in Permitted Investments
that will not mature prior to the next Distribution Date and will not be
required to be sold or liquidated to meet any shortfalls that may occur. All
interest and other income (net of losses and investment expenses) on funds on
deposit in the Reserve Account shall be deposited therein. In the event the
Reserve Account is no longer to be maintained at the corporate trust department
of ____________, the Seller shall, with the Indenture Trustee's or Owner
Trustee's assistance as necessary, cause the Reserve Account to be moved to a
Qualified Institution or a Qualified Trust Institution within ten (10) Business
Days (or such longer period not to exceed thirty (30) calendar days as to which
each Rating Agency may consent).
28
33
(ii). With respect to Reserve Account Property:
(A) any Reserve Account Property that is a
"financial asset" as defined in Section 8-102(a)(9)
of the UCC shall be physically delivered to, or
credited to an account in the name of, the Qualified
Institution or Qualified Trust Institution
maintaining the Reserve Account in accordance with
such institution's customary procedures such that
such institution establishes a "securities
entitlement" in favor of the Indenture
Trustee with respect thereto; and
(B) any Reserve Account Property that is
held in deposit accounts shall be held solely in the
name of the Indenture Trustee at one or more
depository institutions having the Required Rating
and each such deposit account shall be subject to the
exclusive custody and control of the Indenture
Trustee and the Indenture Trustee shall have sole
signature authority with respect thereto.
(iii). Except for any deposit accounts specified in clause
(ii)(B) above, the Reserve Account shall only be invested in securities
or in other assets which the Qualified Institution or Qualified Trust
Institution maintaining the Reserve Account agrees to treat as
"financial assets" as defined in Section 8-102(a)(9) of the UCC.
(b) If the Servicer pursuant to Section 4.4 determines on or
before any Determination Date that it is required to make an Advance and does
not do so from its own funds, the Servicer shall promptly instruct the Indenture
Trustee in writing to withdraw funds, in an amount specified by the Servicer,
from the Reserve Account and deposit them in the Collection Account to cover any
shortfall. Such payment shall be deemed to have been made by the Servicer
pursuant to Section 4.4 for purposes of making distributions pursuant to this
Agreement, but shall not otherwise satisfy the Servicer's obligation to deliver
the amount of the Advances to the Indenture Trustee, and the Servicer shall
within two Business Days replace any funds in the Reserve Account so used.
(c) Following the payment in full of the aggregate principal
amount of the Notes and the Aggregate Certificate Balance and of all other
amounts owing or to be distributed hereunder or under the Indenture or the Trust
Agreement to Noteholders and Certificateholders and the termination of the
Trust, any remaining Reserve Account Property shall be distributed to the
Seller.
(d) The Seller shall be permitted to sell, transfer, convey or
assign in any manner its rights in the Reserve Account under this Section
4.7(c), together with its rights to receive amounts under Section 4.6(c)(xi) of
this Agreement and Sections 5.4(b)(xiii) and 8.2(c)(xi) of the Indenture,
provided that each of the following:
29
34
(i) the Rating Agency Condition is satisfied with
respect such action;
(ii) such action shall not, as evidenced by an
Opinion of Counsel, cause the Issuer to be characterized for federal or
any then Applicable Tax State income tax purposes as an association
taxable as a corporation; and
(iii) the transferee or assignee agrees in writing to
take positions for federal and any Applicable Tax State income tax
purposes consistent with the tax positions taken previously by the
Seller.
30
35
SECTION 4.8. Net Deposits. For so long as (i) Ford Credit shall be the
Servicer, (ii) the Servicer shall be entitled pursuant to Section 4.2 to remit
collections on a monthly rather than daily basis, and (iii) the Servicer shall
be entitled pursuant to Section 4.1(e) to retain Payaheads rather than deposit
them in the Payahead Account, Ford Credit may make the remittances pursuant to
Sections 4.2 and 4.5 above, net of amounts to be distributed to Ford Credit
pursuant to Section 4.6(c). Nonetheless, the Servicer shall account for all of
the above described remittances and distributions except for the Supplemental
Servicing Fee in the Servicer's Certificate as if the amounts were deposited
and/or transferred separately. The Seller may make the remittances pursuant to
Sections 4.2 and 4.5 above, net of amounts to be distributed to the Seller
pursuant to Sections 4.6(c) and 4.7(c). Nonetheless, the Seller shall account
for all of the above described remittances and distributions as if the amounts
were deposited and/or transferred separately.
SECTION 4.9. Statements to Noteholders and Certificateholders. On each
Distribution Date, the Servicer shall provide to the Indenture Trustee (with
copies to the Rating Agencies and each Note Paying Agent) for the Indenture
Trustee to forward to each Noteholder of record as of the most recent Record
Date and to the Owner Trustee (with copies to the Rating Agencies and to each
Certificate Paying Agent) for the Owner Trustee to forward to each
Certificateholder of record as of the most recent Record Date a statement based
on information in the Servicer's Certificate furnished pursuant to Section 3.9,
setting forth for the Collection Period relating to such Distribution Date the
following information as to the Notes and the Certificates to the extent
applicable:
(i) the amount of such distribution allocable to principal
allocable to the Notes and to the Certificates;
31
36
(ii) the amount of such distribution allocable to interest
allocable to the Notes and the Certificates;
(iii) the amount of such distribution allocable to the Yield
Supplement Amount;
(iv) the Pool Balance as of the close of business on the last day
of the preceding Collection Period;
(v) the amount of the Servicing Fee paid to the Servicer with
respect to the related Collection Period and the amount of any unpaid
Servicing Fees and the change in such amount from that of the prior
Distribution Date;
(vi) the amounts of the Noteholders' Interest Carryover Shortfall,
the Noteholders' Principal Carryover Shortfall, the Certificateholders'
Interest Carryover Shortfall and the Certificateholders' Principal
Carryover Shortfall, if any, on such Distribution Date and the change in
such amounts from the preceding Distribution Date;
(vii) the aggregate outstanding principal amount of each Class of
Notes, the Note Pool Factor for each Class of Notes, the Certificate
Balance and the Certificate Pool Factor as of such Distribution Date;
(viii) the balance of the Reserve Account on such Distribution
Date, after giving effect to distributions made on such Distribution Date
and the change in such balance from the preceding Distribution Date;
(ix) the amount of the aggregate Realized Losses, if any, with
respect to the related Collection Period;
(x) the aggregate Purchase Amount of Receivables repurchased by the
Seller or purchased by the Servicer, if any, with respect to the related
Collection Period; and
32
37
(xi) the amount of Advances, if any, on such Distribution Date.
Each amount set forth on the Distribution Date statement pursuant to
clauses (i), (ii), (v) or (vi) above shall be expressed as a dollar amount per
$1,000 of original principal amount or original Certificate Balance of a Note
or a Certificate, as applicable.
33
38
ARTICLE V
YIELD SUPPLEMENT LETTER OF CREDIT
SECTION 5.1. Yield Supplement Letter of Credit and the Yield Supplement
Account.
(a) The Servicer shall, prior to the Closing Date, establish and maintain
an account in the name of the Indenture Trustee at a Qualified Institution or
Qualified Trust Institution (which shall initially be ),
which shall be designated as the "Yield Supplement Account". Amounts on
deposit in the Yield Supplement Account will be used for the payment of any
Yield Supplement Amounts required to be paid on any Distribution Date pursuant
to the Yield Supplement Agreement which Ford Credit has not paid as of such
Distribution Date. The Yield Supplement Account shall be under the sole
dominion and control of the Indenture Trustee; provided that the Servicer may
make deposits to and direct the Indenture Trustee to make withdrawals from the
Yield Supplement Account in accordance with the Basic Documents. On the
Closing Date, the Seller will deposit the Yield Supplement Initial Deposit into
the Yield Supplement Account from the net proceeds of the sale of the Notes and
the Certificates. To the extent, on any Distribution Date, the amount on
deposit in the Yield Supplement Account (after giving effect to any withdrawals
to be made on such Distribution Date, but exclusive of net investment income)
is greater than the Specified Yield Supplement Balance, then, in such event,
the Servicer shall instruct the Indenture Trustee in writing to pay such excess
amount to the Seller. In the event that the Yield Supplement Account is no
longer to be maintained at ,
the Servicer shall, with the Indenture Trustee's assistance as necessary,
cause the Yield Supplement Account to be moved to a Qualified Institution or a
Qualified Trust Institution within ten (10) Business Days (or such longer
period not to exceed thirty (30) calendar days as to which each Rating Agency
may consent).
The Seller hereby sells, conveys and transfers to the Trust the Yield
Supplement Account, all funds and investments on deposit therein or credited
thereto and all proceeds thereof, subject, however, to the limitations set forth
below.
34
39
Pursuant to the Indenture, the Trust will pledge its rights under the
Yield Supplement Agreement (including its rights to amounts on deposit in the
Yield Supplement Account) to the Indenture Trustee to secure its obligations
under the Notes and the Indenture. Such sale, conveyance and transfer of the
Yield Supplement Account by the Seller to the Trust, and such pledge by the
Trust of its rights to amounts in the Yield Supplement Account to the Indenture
Trustee, shall be subject to the following limitations:
(i) All or a portion of the Yield Supplement Account may be
invested and reinvested in the manner specified in Section 4.1(a) in
accordance with written instructions from the Servicer. All such
investments shall be made in the name of the Indenture Trustee and
all income and gain realized thereon shall be solely for the benefit
of and shall be payable by the Indenture Trustee to
upon written direction of the Servicer in the manner specified in
Section 4.1(a);
(ii) If, with respect to any Collection Period, Ford Credit
shall have failed to make or cause to be made in full the remittance
of the Yield Supplement Amount on the date required by the Yield
Supplement Agreement, the Indenture Trustee on the related
Distribution Date, shall, upon the written direction of the Servicer,
withdraw from the Yield Supplement Account and deposit into the
Collection Account the amount of the shortfall between the amount of
funds that are required to be remitted by Ford Credit with respect to
the Yield Supplement Agreement as set forth in the Servicer's
Certificate and the amount of funds actually so remitted and to the
extent of any remaining shortfall, the Indenture Trustee shall
withdraw an amount equal thereto from the Reserve Account and deposit
such amount in the Collection Account; and
35
40
(iii) Upon termination of this Agreement in accordance with
Section 9.1 or (a) in the event that the Seller obtains a Yield
Supplement Letter of Credit or (b) the Seller otherwise satisfies the
requirements with respect to the Yield Supplement Agreement
established by the Rating Agencies, in either case as evidenced by
satisfaction of the Rating Agency Condition and, in either case,
delivers to the Indenture Trustee an Opinion of Counsel to the effect
that the contemplated action will not adversely affect the status of
the Trust as a partnership for federal income and Applicable Tax
State income and franchise tax purposes and an Officer's Certificate
of the Seller that all conditions precedent to the liquidation of the
Yield Supplement Account have been satisfied, any amounts on deposit
in the Yield Supplement Account shall, upon written request of the
Seller, be paid to the Seller.
(b) If a Yield Supplement Letter of Credit has been obtained by Ford
Credit, and if, with respect to any Collection Period, Ford Credit shall have
failed to make or cause to be made in full the remittance of the Yield
Supplement Amount, upon written notice by the Servicer of such failure (which
notice shall be given on the Distribution Date for such Collection Period), the
Indenture Trustee shall draw on the Yield Supplement Letter of Credit in
accordance with the terms thereof, in the amount of the shortfall between the
amount of funds with respect to the Yield Supplement Amount that are required
to be remitted by Ford Credit with respect to the Yield Supplement Agreement as
set forth in the Servicer's Certificate and the amount of funds actually so
remitted as set forth in the Servicer's Certificate. Any such draw on the
Yield Supplement Letter of Credit shall be made after receipt of the related
Servicer's Certificate on the Distribution Date for such Collection Period.
Upon receipt of a request for a draw by the Indenture Trustee under the Yield
Supplement Letter of Credit, the Letter of Credit Bank is to promptly make a
payment to the Indenture Trustee in an amount equal to the Yield Supplement
Amount (minus payments made on the Yield Supplement Agreement), and the
Indenture Trustee shall deposit into the Collection Account pursuant to Section
4.5 the amount received from the Letter of Credit Bank in
36
41
respect of such drawing. The Servicer shall include in each Servicer's
Certificate, or in an Officer's Certificate provided to the Indenture Trustee
with each Servicer's Certificate, the Stated Amount (as defined in the Yield
Supplement Letter of Credit) of the Yield Supplement Letter of Credit as of the
close of business on the last day of the Collection Period preceding the date
of such Servicer's Certificate. In the event that the rating of the Letter of
Credit Bank declines below the Required Rating, the Servicer shall promptly
notify the Indenture Trustee in writing of such decline, and upon receipt of
such notification, the Indenture Trustee shall, unless a suitable replacement
letter of credit shall have been delivered, promptly draw the full amount
available under the Yield Supplement Letter of Credit and deposit such amount
in the Yield Supplement Account.
37
42
ARTICLE VI
THE SELLER
SECTION 6.1. Representations and Warranties of Seller. The Seller makes
the following representations and warranties on which the Issuer is deemed to
have relied in acquiring the Trust Property. The representations and
warranties speak as of the execution and delivery of this Agreement and shall
survive the sale of the Trust Property to the Issuer and the pledge thereof by
the Issuer to the Indenture Trustee pursuant to the Indenture:
(a) Organization and Good Standing. The Seller shall have been duly
organized and shall be validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties shall be
currently owned and such business is presently conducted, and had at all
relevant times, and shall have, power, authority, and legal right to acquire
and own the Receivables.
(b) Due Qualification. The Seller shall be duly qualified to do business
as a foreign limited liability company in good standing, and shall have obtained
all necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business shall require such
qualifications.
(c) Power and Authority. The Seller shall have the power and authority
to execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms. The Seller shall have full power and
authority to sell and assign the property to be sold and assigned to and
deposited with the Issuer and has duly authorized such sale and assignment to
the Issuer by all necessary action; and the execution, delivery, and
performance of this Agreement and the other Basic Documents to which it is a
party shall have been duly authorized by the Seller by all necessary action.
(d) Valid Sale; Binding Obligation. This Agreement shall evidence a
valid sale, transfer, and assignment of the Receivables and the other Trust
Property
38
43
conveyed by the Seller to the Issuer hereunder, enforceable against
creditors of and purchasers from the Seller; and this Agreement and the other
Basic Documents to which the Seller is a party constitute legal, valid, and
binding obligations of the Seller, enforceable against the Seller in accordance
with their terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) No Violation. The consummation of the transactions contemplated
by this Agreement and the other Basic Documents to which the Seller is a party
and the fulfillment of the terms hereof and thereof will not conflict with,
result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the
Certificate Formation or Limited Liability Company Agreement, any
indenture, agreement, or other instrument to which the Seller is a party or by
which the Seller is bound; nor result in the creation or imposition of any lien
upon any of its properties pursuant to the terms of any such indenture,
agreement, or other instrument; nor violate any law or, to the best of the
Seller's knowledge, any order, rule, or regulation applicable to the Seller of
any federal or State regulatory body, administrative agency, or other
governmental instrumentality having jurisdiction over the Seller or its
properties.
(f) No Proceedings. To the Seller's best knowledge, there are no
proceedings or investigations pending, or threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents,
the Notes or the Certificates, (ii) seeking to prevent the issuance of the
Notes or the Certificates or the consummation of any of the transactions
contemplated by this Agreement, the Indenture or any of the other Basic
Documents, (iii) seeking any determination or ruling that might materially and
adversely affect the performance by the Seller of its obligations under, or the
validity or enforceability of, this Agreement, the Indenture, any of the other
Basic Documents, the Notes or the Certificates, or (iv) relating to the Seller
and which might adversely
39
44
affect the federal or Applicable Tax State income, excise, franchise or similar
tax attributes of the Notes or the Certificates.
SECTION 6.2. Liability of Seller; Indemnities. The Seller shall be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Seller under this Agreement, and hereby agrees to the
following:
(a) The Seller shall indemnify, defend, and hold harmless the Issuer, the
Owner Trustee and the Indenture Trustee from and against any taxes that may at
any time be asserted against any such Person with respect to, and as of the
date of, the sale of the Receivables to the Issuer or the issuance and original
sale of the Notes and the Certificates, including any sales, gross receipts,
general corporation, tangible personal property, privilege, or license taxes
(but, in the case of the Issuer, not including any taxes asserted with respect
to ownership of the Receivables or federal or other Applicable Tax State income
taxes arising out of the transactions contemplated by this Agreement and the
other Basic Documents) and costs and expenses in defending against the same.
(b) The Seller shall indemnify, defend, and hold harmless the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred by
reason of (i) the Seller's willful misfeasance, bad faith, or negligence (other
than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of federal or State
securities laws in connection with the registration or the sale of the Notes or
the Certificates.
(c) The Seller shall indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in the
Trust Agreement, in the case of the Owner Trustee, and in
40
45
the Indenture, in the case of the Indenture Trustee, except to the
extent that such cost, expense, loss, claim, damage or liability: (i) in the
case of the Owner Trustee, shall be due to the willful misfeasance, bad faith
or negligence (except for errors in judgment) of the Owner Trustee or, in the
case of the Indenture Trustee, shall be due to the willful misfeasance, bad
faith or negligence (except for errors in judgment) of the Indenture Trustee;
or (ii) in the case of the Owner Trustee shall arise from the breach by the
Owner Trustee of any of its representations or warranties set forth in Section
7.3 of the Trust Agreement or (iii) in the case of the Indenture Trustee shall
arise from the breach by the Indenture Trustee of any of its representations
and warranties set forth in the Indenture.
(d) The Seller shall pay any and all taxes levied or assessed upon all or
any part of the Owner Trust Estate.
(e) Indemnification under this Section 6.2 shall survive the resignation
or removal of the Owner Trustee or the Indenture Trustee and the termination of
this Agreement and shall include, without limitation, reasonable fees and
expenses of counsel and expenses of litigation. If the Seller shall have made
any indemnity payments pursuant to this Section 6.2 and the Person to or on
behalf of whom such payments are made thereafter shall collect any of such
amounts from others, such Person shall repay such amounts to the Seller,
without interest.
(f) The Seller's obligations under this Section 6.2 are obligations
solely of the Seller and shall not constitute a claim against the Seller to the
extent that the Seller does not have funds sufficient to make payment of such
obligations. If the Seller issues any securities, the Seller agrees that its
obligations under this Section 6.2 shall be fully subordinated to such
securities.
SECTION 6.3. Merger or Consolidation of, or Assumption of the Obligations
of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Seller shall be a party, (iii) succeeding to the business of the
Seller, or (iv) more than 50% of the voting stock of which is owned directly or
indirectly by Ford Motor Company, which Person in any of the foregoing cases
executes an agreement of assumption to perform every obligation of the Seller
under this Agreement, will be the successor to the Seller under this Agreement
without the execution or filing of any document or any further act on the part
of any of the parties to this Agreement; provided, however, that (x) the Seller
shall have delivered to the Owner Trustee and the Indenture
41
46
Trustee an Officer's Certificate and an Opinion of Counsel each stating
that such merger, conversion, consolidation or succession and such agreement of
assumption comply with this Section 6.3 and that all conditions precedent, if
any, provided for in this Agreement relating to such transaction have been
complied with and (y) the Seller shall have delivered to the Owner Trustee and
the Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables and the other Trust Property, and reciting the
details of such filings, or (B) stating that, in the opinion of such counsel,
no such action shall be necessary to preserve and protect such interest. The
Seller shall provide notice of any merger, conversion, consolidation, or
succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the foregoing
agreement of assumption and compliance with clauses (x) or (y) above shall be
conditions to the consummation of the transactions referred to in clauses (i),
(ii) or (iii) above.
SECTION 6.4. Limitation on Liability of Seller and Others. The Seller
and any officer or employee or agent of the Seller may rely in good faith on
the advice of counsel or on any document of any kind, prima facie properly
executed and submitted by any Person respecting any matters arising hereunder.
The Seller shall not be under any obligation to appear in, prosecute, or defend
any legal action that shall not be incidental to its obligations under this
Agreement, and that in its opinion may involve it in any expense or liability.
42
47
SECTION 6.5. Seller May Own Notes or Certificates. The Seller, and any
Affiliate of the Seller, may in its individual or any other capacity become the
owner or pledgee of Notes or Certificates with the same rights as it would have
if it were not the Seller or an Affiliate thereof, except as otherwise expressly
provided herein or in the other Basic Documents. Except as set forth herein or
in the other Basic Documents, Notes and Certificates so owned by or pledged to
the Seller or any such Affiliate shall have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Notes and Certificates.
43
48
ARTICLE VII
THE SERVICER
SECTION 7.1. Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Trust Property. The representations speak as of the execution
and delivery of this Agreement and shall survive the sale of the Trust Property
to the Issuer and the pledge thereof by the Issuer pursuant to the Indenture:
(a) Organization and Good Standing. The Servicer shall have been duly
organized and shall be validly existing as a corporation in good standing under
the laws of the State of its incorporation, with power and authority to own its
properties and to conduct its business as such properties shall be currently
owned and such business is presently conducted, and had at all relevant times,
and shall have, power, authority, and legal right to acquire, own, sell, and
service the Receivables and to hold the Receivable Files as custodian on behalf
of the Owner Trustee and the Indenture Trustee.
(b) Due Qualification. The Servicer shall be duly qualified to do
business as a foreign corporation in good standing, and shall have obtained all
necessary licenses and approvals in all jurisdictions in which the ownership or
lease of property or the conduct of its business (including the servicing of
the Receivables as required by this Agreement) shall require such
qualifications.
(c) Power and Authority. The Servicer shall have the power and authority
to execute and deliver this Agreement and the other Basic Documents to which it
is a party and to carry out their terms, and the execution, delivery and
performance of this Agreement and the other Basic Documents to which it is a
party shall have been duly authorized by the Servicer by all necessary
corporate action.
(d) Binding Obligation. This Agreement and the other Basic Documents to
which the Servicer is a party constitute legal, valid, and binding obligations
of the Servicer, enforceable against the Servicer in accordance with their
terms, subject, as to enforceability, to
44
49
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws and to general equitable
principles.
(e) No Violation. The consummation of the transactions contemplated by
this Agreement and the other Basic Documents to which the Servicer is a party
and the fulfillment of the terms hereof and thereof shall not conflict with,
result in any breach of any of the terms and provisions of, nor constitute
(with or without notice or lapse of time or both) a default under, the articles
of incorporation or by-laws of the Servicer, or any indenture,
agreement, or other instrument to which the Servicer is a party or by which it
shall be bound, nor result in the creation or imposition of any lien upon any
of its properties pursuant to the terms of any such indenture, agreement, or
other instrument (other than this Agreement); nor violate any law or, to the
best of the Servicer's knowledge, any order, rule, or regulation applicable to
the Servicer of any court or any federal or State regulatory body,
administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. There are no proceedings or investigations pending,
or, to the Servicer's best knowledge, threatened, before any court, regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or its properties: (i) asserting the invalidity
of this Agreement, the Indenture, any of the other Basic Documents, the Notes
or the Certificates, (ii) seeking to prevent the issuance of the Notes or the
Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents, the Notes or the Certificates, or (iv) relating to the Servicer and
which might adversely affect the federal or Applicable Tax State income,
excise, franchise or similar tax attributes of the Notes or the Certificates.
SECTION 7.2. Indemnities of Servicer. The Servicer shall be liable in
accordance herewith only to
45
50
the extent of the obligations specifically undertaken by the Servicer under
this Agreement, and hereby agrees to the following:
(a) The Servicer shall defend, indemnify and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs, expenses,
losses, damages, claims and liabilities, arising out of or resulting from the
use, ownership or operation by the Servicer or any Affiliate thereof of a
Financed Vehicle.
(b) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee and the Indenture Trustee from and against any taxes that may
at any time be asserted against any such Person with respect to the
transactions contemplated herein or in the other Basic Documents, if any,
including, without limitation, any sales, gross receipts, general corporation,
tangible personal property, privilege, or license taxes (but, in the case of
the Issuer, not including any taxes asserted with respect to, and as of the
date of, the sale of the Receivables to the Issuer or the issuance and original
sale of the Notes and the Certificates, or asserted with respect to ownership
of the Receivables, or federal or other Applicable Tax State income taxes
arising out of the transactions contemplated by this Agreement and the other
Basic Documents) and costs and expenses in defending against the same.
(c) The Servicer shall indemnify, defend and hold harmless the Issuer,
the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs, expenses,
losses, claims, damages, and liabilities to the extent that such cost, expense,
loss, claim, damage, or liability arose out of, or was imposed upon any such
Person through, the negligence, willful misfeasance, or bad faith (other than
errors in judgment) of the Servicer in the performance of its duties under this
Agreement or any other Basic Document to which it is a party, or by reason of
reckless disregard of its obligations and duties under this Agreement or any
other Basic Document to which it is a party.
46
51
(d) The Servicer shall indemnify, defend, and hold harmless the Owner
Trustee and the Indenture Trustee, as applicable, from and against all costs,
expenses, losses, claims, damages, and liabilities arising out of or incurred in
connection with the acceptance or performance of the trusts and duties contained
herein and in the other Basic Documents, if any, except to the extent that such
cost, expense, loss, claim, damage, or liability: (i) shall be due to the
willful misfeasance, bad faith, or negligence (except for errors in judgment) of
the Owner Trustee or the Indenture Trustee, as applicable; (ii) relates to any
tax other than the taxes with respect to which either the Seller or the Servicer
shall be required to indemnify the Owner Trustee or the Indenture Trustee, as
applicable; (iii) in the case of the Owner Trustee, shall arise from the Owner
Trustee's breach of any of its representations or warranties set forth in
Section 7.3 of the Trust Agreement or, in the case of the Indenture Trustee,
from the Indenture Trustee's breach of any of its representations or warranties
set forth in the Indenture; or (iv) in the case of the Indenture Trustee, shall
arise out of or be incurred in connection with the performance by the Indenture
Trustee of the duties of a successor Servicer hereunder.
In addition to the foregoing indemnities, if the Owner Trustee or the
Indenture Trustee is entitled to indemnification by the Seller pursuant to
Section 6.2 and the Seller is unable for any reason to provide such
indemnification to the Owner Trustee or the Indenture Trustee, then the
Servicer shall be liable for any indemnification that the Owner Trustee or the
Indenture Trustee is entitled to under Section 6.2.
For purposes of this Section 7.2, in the event of the termination of the
rights and obligations of Ford Credit (or any successor thereto pursuant to
Section 8.3) as Servicer pursuant to Section 8.1, 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 Indenture
Trustee) pursuant to Section 8.2.
47
52
Indemnification under this Section 7.2 by Ford Credit (or any successor
thereto pursuant to Section 8.3) 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 or the resignation or removal of the Owner
Trustee or the Indenture Trustee and shall include reasonable fees and expenses
of counsel and expenses of litigation. If the Servicer shall have made any
indemnity payments pursuant to this Section 7.2 and the recipient thereafter
collects any of such amounts from others, the recipient shall promptly repay
such amounts to the Servicer, without interest.
SECTION 7.3. Merger or Consolidation of, or Assumption of the Obligations
of, Servicer. Any Person (i) into which the Servicer may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Servicer shall be a party, (iii) succeeding to the business of the
Servicer, or (iv) so long as Ford Credit acts as Servicer, any corporation more
than 50% of the voting stock of which is owned directly or indirectly by Ford
Motor Company, which Person in any of the foregoing cases executes an agreement
of assumption to perform every obligation of the Servicer under this Agreement,
will be the successor to the Servicer under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties to this Agreement; provided, however, that (x) the Servicer shall have
delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such merger,
conversion, consolidation, or succession and such agreement of assumption
comply with this Section 7.3 and that all conditions precedent provided for in
this Agreement relating to such transaction have been complied with and (y) the
Servicer shall have delivered to the Owner Trustee and the Indenture Trustee an
Opinion of Counsel either (A) stating that, in the opinion of such counsel, all
financing statements and continuation statements and amendments thereto have
been executed and filed that are necessary fully to preserve and protect the
interest of the Issuer and the Indenture Trustee, respectively, in the
Receivables, and reciting the details of such filings, or (B) stating that, in
the opinion of such counsel, no such action shall be necessary to preserve and
48
53
protect such interests. The Servicer shall provide notice of any merger,
conversion, consolidation or succession pursuant to this Section 7.3 to the
Rating Agencies. Notwithstanding anything herein to the contrary, the
execution of the foregoing agreement or assumption and compliance with clauses
(x) and (y) above shall be conditions to the consummation of the transactions
referred to in clauses (i), (ii), or (iii) above.
SECTION 7.4. Limitation on Liability of Servicer and Others. Neither the
Servicer nor any of the directors or officers or employees or agents of the
Servicer shall be under any liability to the Issuer, the Noteholders or the
Certificateholders, except as provided under this Agreement, for any action
taken or for refraining from the taking of any action pursuant to this
Agreement or for errors in judgment; provided, however, that this provision
shall not protect the Servicer or any such Person against any liability that
would otherwise be imposed by reason of willful misfeasance or bad faith in the
performance of duties or by reason of reckless disregard of obligations and
duties under this Agreement, or by reason of negligence in the performance of
its duties under this Agreement (except for errors in judgment). The Servicer
and any director, officer or employee or agent of the Servicer may rely in good
faith on any Opinion of Counsel or on any Officer's Certificate or certificate
of auditors believed to be genuine and to have been signed by the proper party
in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer shall not be under
any obligation to appear in, prosecute, or defend any legal action that shall
not be incidental to its duties to service the Receivables in accordance with
this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement and
the rights and duties of the parties to this Agreement and the interests of the
Noteholders and Certificateholders under this Agreement. In such event, the
legal expenses and costs of such action and any liability resulting therefrom
shall be expenses, costs and liabilities of the Servicer.
49
54
SECTION 7.5. Delegation of Duties. So long as Ford Credit acts as
Servicer, the Servicer may at any time without notice or consent delegate
substantially all its duties under this Agreement to any corporation more than
50% of the voting stock of which is owned, directly or indirectly, by Ford
Motor Company. The Servicer may at any time perform specific duties as
servicer under the Agreement through sub-contractors; provided that no such
delegation or subcontracting shall relieve the Servicer of its responsibilities
with respect to such duties as to which the Servicer shall remain primarily
responsible with respect thereto.
SECTION 7.6. Ford Credit Not to Resign as Servicer. Subject to the
provisions of Section 7.3, Ford Credit shall not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties under this Agreement shall no
longer be permissible under applicable law. Notice of any such determination
permitting the resignation of Ford Credit shall be communicated to the Owner
Trustee and the Indenture Trustee at the earliest practicable time (and, if
such communication is not in writing, shall be confirmed in writing at the
earliest practicable time) and any such determination shall be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation shall become effective until the Indenture Trustee or a successor
Servicer shall have (i) taken the actions required by the last paragraph of
Section 8.1, (ii) assumed the responsibilities and obligations of Ford Credit
in accordance with Section 8.2 and (iii) become the Administrator under the
Administration Agreement pursuant to Section 9 thereof.
50
55
SECTION 7.7. Servicer May Own Notes or Certificates. The Servicer, and
any Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Notes or Certificates with the same rights as it
would have if it were not the Servicer or an Affiliate thereof, except as
otherwise expressly provided herein or in the other Basic Documents. Except as
set forth herein or in the other Basic Documents, Notes and Certificates so
owned by or pledged to the Servicer or such Affiliate shall have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Notes and Certificates.
51
56
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1. Events of Servicing Termination. (a) If any one of the
following events ("Events of Servicing Termination") occur and be continuing:
(i) Any failure by the Servicer or the Seller to deliver to the
Owner Trustee or the Indenture any proceeds or payment required to be so
delivered under the terms of the Notes and the Certificates and this
Agreement that shall continue unremedied for a period of three (3)
Business Days after written notice of such failure is received by the
Servicer or the Seller, as the case may be, from the Owner Trustee or the
Indenture Trustee or after discovery of such failure by an officer of the
Servicer or the Seller, as the case may be; or
(ii) Failure on the part of the Servicer or the Seller duly to
observe or to perform in any material respect any other covenants or
agreements of the Servicer or the Seller (as the case may be) set forth
in the Notes, the Certificates or in this Agreement, which failure shall
(a) materially and adversely affect the rights of Noteholders or
Certificateholders and (b) continue unremedied for a period of ninety
(90) days after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given (1) to the
Servicer by the Owner Trustee or the Indenture Trustee, or (2) to the
Owner Trustee, the Indenture Trustee, the Seller and the Servicer by the
Noteholders of Notes evidencing not less than 25% of the principal amount
of the Notes Outstanding or by the Certificateholders of Certificates
evidencing not less than 25% of the Certificate Balance; or
(iii) The entry of a decree or order by a court or agency or
supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the Servicer in
any insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings, or for the winding up or liquidation
of its respective affairs, and the continuance of any
52
57
such decree or order unstayed and in effect for a period of sixty (60)
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 voluntary suspend payment
of its obligations;
then, and in each and every case, so long as an Event of Servicing Termination
shall not have been remedied, either the Indenture Trustee, or the Noteholders
of Notes evidencing not less than a majority of the principal amount of the
Notes Outstanding, by notice then given in writing to the Servicer (and to the
Indenture Trustee and the Owner Trustee if given by the Noteholders) (with a
copy to the Rating Agencies) may terminate all of the rights and obligations of
the Servicer under this Agreement. On or after the receipt by the Servicer of
such written notice, all authority and power of the Servicer under this
Agreement, whether with respect to the Notes, the Certificates or the Trust
Property or otherwise, shall pass to and be vested in the Indenture Trustee or
such successor Servicer as may be appointed under Section 8.2; and, without
limitation, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer
and endorsement of the Receivables and related documents, or otherwise.
The predecessor Servicer shall cooperate with the Indenture Trustee, the
Owner Trustee and such successor Servicer in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the Indenture Trustee or such successor Servicer for
administration of
53
58
all cash amounts that shall at the time be held by the predecessor Servicer for
deposit, or shall thereafter be received with respect to a Receivable and the
delivery of the Receivable Files and the related accounts and records maintained
by the Servicer. All reasonable costs and expenses (including attorneys' fees)
incurred in connection with transferring the Receivable Files to the successor
Servicer and amending this Agreement to reflect such succession as Servicer
pursuant to this Section 8.1 shall be paid by the predecessor Servicer upon
presentation of reasonable documentation of such costs and expenses.
SECTION 8.2. Appointment of Successor Servicer. (a) Upon the
Servicer's receipt of notice of termination pursuant to Section 8.1 or the
Servicer's resignation in accordance with the terms of this Agreement, the
predecessor Servicer shall continue to perform its functions as Servicer under
this Agreement, in the case of termination, only until the date specified in
such termination notice or, if no such date is specified in a notice of
termination, until receipt of such notice and, in the case of resignation,
until the later of (x) the date 45 days from the delivery to the Trustee of
written notice of such resignation (or written confirmation of such notice) in
accordance with the terms of this Agreement and (y) the date upon which the
predecessor Servicer shall become unable to act as Servicer, as specified in
the notice of resignation and accompanying Opinion of Counsel. In the event of
the Servicer's resignation or termination hereunder, the Trustee shall appoint
a successor Servicer, and the successor Servicer shall accept its appointment
by a written assumption in form acceptable to the Owner Trustee and the
Indenture Trustee. In the event that a successor Servicer has not been
appointed at the time when the predecessor Servicer has ceased to act as
Servicer in accordance with this Section 8.2, the Indenture Trustee without
further action shall automatically be appointed the successor Servicer.
Notwithstanding the above, the Indenture Trustee 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 this Agreement.
54
59
(b) Upon appointment, the successor Servicer shall be the successor in all
respects to the predecessor Servicer and shall be subject to all the
responsibilities, duties, and liabilities arising thereafter relating thereto
placed on the predecessor Servicer, by the terms and provisions of this
Agreement.
(c) In connection with such appointment, the Indenture Trustee may make
such arrangements for the compensation of such successor Servicer out of
payments on Receivables as it and such successor Servicer shall agree;
provided, however, that no such compensation shall be in excess of that
permitted the predecessor Servicer under this Agreement. The Indenture Trustee
and such successor Servicer shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession.
SECTION 8.3. Repayment of Advances. If the identity of the Servicer
shall change, the predecessor Servicer shall be entitled to receive to the
extent of available funds reimbursement for Outstanding Advances pursuant to
Section 4.3 and 4.4, in the manner specified in Section 4.6, with respect to
all Advances made by the predecessor Servicer.
SECTION 8.4. Notification to Noteholders and Certificateholders. Upon
any termination of, or appointment of a successor to, the Servicer pursuant to
this Article VIII, the Indenture Trustee shall give prompt written notice
thereof to Noteholders, and the Owner Trustee shall give prompt written notice
thereof to Certificateholders at their respective addresses of record and to
each Rating Agency.
55
60
SECTION 8.5. Waiver of Past Events of Servicing Termination. The
Noteholders of Notes evidencing not less than a majority of the principal amount
of the Notes Outstanding or the Certificateholders of Certificates evidencing
not less than a majority of the Certificate Balance (in the case of an Event of
Servicing Termination which does not adversely affect the Indenture Trustee or
the Noteholders) may, on behalf of all Noteholders and Certificateholders, waive
any Event of Servicing Termination hereunder and its consequences, except an
event resulting from the failure to make any required deposits to or payments
from any of the Trust Accounts, the Certificate Distribution Account, the Yield
Supplement Account or the Reserve Account in accordance with this Agreement.
Upon any such waiver of a past Event of Servicing Termination, such Event of
Servicing Termination shall cease to exist, and shall be deemed to have been
remedied for every purpose of this Agreement. No such waiver shall extend to
any subsequent or other event or impair any right consequent thereon.
56
61
ARTICLE IX
TERMINATION
SECTION 9.1. Optional Purchase of All Receivables. (a) On the last day
of any Collection Period as of which the Pool Factor shall be less than the
Optional Purchase Percentage, the Servicer shall have the option to purchase
the corpus of the Trust. To exercise such option, the Servicer shall deposit
pursuant to Section 4.5 in the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables, plus the appraised value of any
other property held by the Trust, such value to be determined by an appraiser
mutually agreed upon by the Servicer, the Owner Trustee and the Indenture
Trustee, and shall succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer shall not be permitted to exercise
such option unless the amount to be deposited in the Collection Account
pursuant to the preceding sentence is greater than or equal to the sum of the
outstanding principal amount of the Notes and the Certificate Balance and all
accrued but unpaid interest (including any overdue interest) thereon. The
amount deposited in the Collection Account pursuant to this Section 9.1 shall
be used on the next Distribution Date to make payments in full to Noteholders
and Certificateholders in the manner set forth in Article IV.
SECTION 9.2. Succession Upon Satisfaction and Discharge of Indenture.
Following the satisfaction and discharge of the Indenture and the payment in
full of the principal of and interest on the Notes, the Certificateholders will
succeed to the rights of the Noteholders hereunder, and the Indenture Trustee
will, continue to carry out its obligations hereunder with respect to the
Certificateholders, including without limitation making distributions from the
Payahead Account and the Collection Account in accordance with Section 4.6 and
making withdrawals from the Reserve Account in accordance with Section 4.5(b)
and Section 4.7.
57
62
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Amendment. (a) This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture Trustee
and the Owner Trustee to the extent that their respective rights or obligations
may be affected thereby (which consent may not be unreasonably withheld), but
without the consent of any of the Noteholders or the Certificateholders, to
cure any ambiguity, to correct or supplement any provisions in this Agreement,
or to add any other provisions with respect to matters or questions arising
under this Agreement that shall not be inconsistent with the provisions of this
Agreement; provided, however, that such action shall not, as evidenced by an
Opinion of Counsel delivered to the Owner Trustee and the Indenture Trustee,
adversely affect in any material respect the interests of any Noteholder or
Certificateholder.
(b) This Agreement may also be amended from time to time by the Seller,
the Servicer and the Issuer, with the consent of the Indenture Trustee and the
Owner Trustee to the extent that their respective rights or obligations may be
affected thereby (which consent may not be unreasonably withheld) and with the
consent of (i) the Noteholders of Notes evidencing not less than a majority of
the principal amount of the Notes Outstanding and (ii) the Certificateholders
of Certificates evidencing not less than a majority of the Certificate Balance
(which consent of any Noteholder of a Note or Certificateholder of a
Certificate given pursuant to this Section 10.1 or pursuant to any other
provision of this Agreement shall be conclusive and binding on such Note or
Certificate, as the case may be, and on all future Noteholders of such Note or
Certificateholders of such Certificate, as the case may be, and of any Note or
Certificate, as applicable, issued upon the transfer thereof or in exchange
thereof or in lieu thereof whether or not notation of such consent is made upon
such Note or the Certificate), for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement,
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (a)
increase or reduce in any manner the amount of, or
58
63
accelerate or delay the timing of, or change the allocation or priority
of, collections of payments on Receivables or distributions that shall be
required to be made on any Note or Certificate or change any Note Interest Rate
or the Certificate Rate or the Specified Reserve Balance, without the consent
of all adversely affected Noteholders or Certificateholders or (b) reduce the
aforesaid percentage required to consent to any such amendment, without the
consent of the Noteholders of all Notes and Certificateholders of all
Certificates affected thereby.
(c) Prior to the execution of any such amendment or consent the Servicer
will provide and the Owner Trustee shall distribute written notification of the
substance of such amendment or consent to each Rating Agency.
(d) Promptly after the execution of any such amendment or consent, the
Owner Trustee shall furnish written notification of the substance of such
amendment or consent to each Certificateholder, the Indenture Trustee and each
Rating Agency. It shall not be necessary for the consent of Noteholders or the
Certificateholders pursuant to this Section 10.1 to approve the particular form
of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such
consents (and any other consents of Noteholders and Certificateholders provided
for in this Agreement) and of evidencing the authorization of the execution
thereof by Noteholders and Certificateholders shall be subject to such
reasonable requirements as the Owner Trustee and the Indenture Trustee may
prescribe, including the establishment of record dates pursuant to paragraph
number 2 of the Depository Agreements.
(e) Prior to the execution of any amendment to this Agreement, the Owner
Trustee and the Indenture Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and the Opinion of Counsel referred to in Section
10.2(i)(1). The Owner Trustee or the Indenture Trustee may, but shall not be
obligated to, enter into any such amendment which affects such Owner Trustee's
or Indenture Trustee's own rights, duties or immunities under this Agreement or
otherwise.
59
64
SECTION 10.2. Protection of Title to Trust. (a) The Seller shall
execute and file such financing statements and cause to be executed and filed
such continuation statements, all in such manner and in such places as may be
required by law fully to preserve, maintain, and protect the interest of the
Issuer and the Indenture Trustee for the benefit of the Noteholders in the
Receivables and in the proceeds thereof. The Seller shall deliver (or cause to
be delivered) to the Owner Trustee and the Indenture Trustee file-stamped
copies of, or filing receipts for, any document filed as provided above, as
soon as available following such filing.
(b) Neither the Seller nor the Servicer shall change its name, identity,
or corporate structure in any manner that would, could, or might make any
financing statement or continuation statement filed by the Seller in accordance
with paragraph (a) above seriously misleading within the meaning of Section
9-402(7) of the UCC, unless it shall have given the Owner Trustee and the
Indenture Trustee at least five (5) days' prior written notice thereof and
shall have promptly filed appropriate amendments to all previously filed
financing statements or continuation statements.
(c) The Seller and the Servicer shall give the Owner Trustee and the
Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement
or of any new financing statement and shall promptly file any such amendment or
new financing statement. The Servicer shall at all times maintain each office
from which it shall service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer shall maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader thereof
to know at any time the status of such Receivable, including payments and
recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments
60
65
or recoveries on (or with respect to) each Receivable and the amounts from time
to time deposited in the Collection Account, Payahead Account, the Yield
Supplement Account and the Reserve Account in respect of such Receivable.
(e) The Servicer shall maintain its computer systems so that, from and
after the time of sale under this Agreement of the Receivables to the Issuer,
the Servicer's master computer records (including any back-up archives) that
refer to a Receivable shall indicate clearly the interest of the Issuer and the
Indenture Trustee in such Receivable and that such Receivable is owned by the
Issuer and has been pledged to the Indenture Trustee pursuant to the Indenture.
Indication of the Issuer's and the Indenture Trustee's interest in a
Receivable shall be deleted from or modified on the Servicer's computer systems
when, and only when, the Receivable shall have been paid in full or
repurchased.
(f) If at any time the Seller or the Servicer shall propose to sell,
grant a security interest in, or otherwise transfer any interest in automotive
receivables to any prospective purchaser, lender, or other transferee, the
Servicer shall give to such prospective purchaser, lender, or other transferee
computer tapes, records, or print-outs (including any restored from back-up
archives) that, if they shall refer in any manner whatsoever to any Receivable,
shall indicate clearly that such Receivable has been sold and is owned by the
Issuer and has been pledged to the Indenture Trustee.
(g) The Servicer shall permit the Owner Trustee, the Indenture Trustee
and their respective agents at any time during normal business hours to
inspect, audit, and make copies of and abstracts from the Servicer's records
regarding any Receivable.
(h) Upon request, the Servicer shall furnish to the Owner Trustee and the
Indenture Trustee, within twenty (20) Business Days, a list of all Receivables
(by contract number and name of Obligor) then held as part of the Trust,
together with a reconciliation of such list to the Schedule of Receivables and
to each of the Servicer's Certificates furnished before such request indicating
removal of Receivables from the Trust.
61
66
(i) The Servicer shall deliver to the Owner Trustee and the Indenture
Trustee:
(1) promptly after the execution and delivery of this Agreement
and of each amendment thereto, an Opinion of Counsel either (A)
stating that, in the opinion of such Counsel, all financing
statements and continuation statements have been executed and filed
that are necessary fully to preserve and protect the interest of the
Issuer and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such Counsel, no such action shall be necessary to preserve and
protect such interest; and
(2) within 120 days after the beginning of each calendar year
beginning with the first calendar year beginning more than three
months after the Cutoff Date, an Opinion of Counsel, dated as of a
date during such 120-day period, either (A) stating that, in the
opinion of such counsel, all financing statements and continuation
statements have been executed and filed that are necessary fully to
preserve and protect the interest of the Issuer and the Indenture
Trustee in the Receivables, and reciting the details of such filings
or referring to prior Opinions of Counsel in which such details are
given, or (B) stating that, in the opinion of such Counsel, no such
action shall be necessary to preserve and protect such interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2) above shall
specify any action necessary (as of the date of such opinion) to be taken in
the following year to preserve and protect such interest.
(j) The Seller shall, to the extent required by applicable law, cause the
Notes and the Certificates to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities
Exchange Act of 1934 within the time periods specified in such sections.
62
67
(k) For the purpose of facilitating the execution of this Agreement and
for other purposes, this Agreement may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and
all of which counterparts shall constitute but one and the same instrument.
SECTION 10.3. Governing Law. This Agreement shall be construed in
accordance with the laws of the State of New York and the obligations, rights,
and remedies of the parties under this Agreement shall be determined in
accordance with such laws.
SECTION 10.4. Notices. All demands, notices, and communications under
this Agreement shall be in writing, personally delivered, sent by telecopier,
overnight courier or mailed by certified mail, return receipt requested, and
shall be deemed to have been duly given upon receipt (a) in the case of the
Seller or the Servicer, to the agent for service as specified in Section 10.11
hereof, or at such other address as shall be designated by the Seller or the
Servicer in a written notice to the Owner Trustee and the Indenture Trustee,
(b) in the case of the Owner Trustee, at the Corporate Trust Office of the
Owner Trustee, (c) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee, (d) in the case of Xxxxx'x Investors Service,
Inc., at the following address: Xxxxx'x Investors Service, Inc., ABS
Monitoring Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, and (e) in
the case of Standard & Poor's Ratings Services, at the following address:
Standard & Poor's Ratings Group, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Asset Backed Surveillance Department. Any notice required
or permitted to be mailed to a Noteholder or Certificateholder shall be given
by first class mail, postage prepaid, at the address of such Person as shown in
the Note Register or the Certificate Register, as applicable. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Noteholder or
Certificateholder shall receive such notice.
SECTION 10.5. Severability of Provisions. If any one or more of the
covenants, agreements, provisions, or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions, or
terms shall be deemed severable from the remaining covenants, agreements,
63
68
provisions, or terms of this Agreement and shall in no way affect the validity
or enforceability of the other provisions of this Agreement or of the Notes,
the Certificates or the rights of the holders thereof.
SECTION 10.6. Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.3 and 8.2 and as provided in
the provisions of this Agreement concerning the resignation of the Servicer,
this Agreement may not be assigned by the Seller or the Servicer without the
prior written consent of the Owner Trustee, the Indenture Trustee, the
Noteholders of Notes evidencing not less than 66-2/3% of the principal amount
of the Notes Outstanding and the Certificateholders of Certificates evidencing
not less than 66-2/3% of the Certificate Balance.
SECTION 10.7. Further Assurances. The Seller and the Servicer agree to
do and perform, from time to time, any and all acts and to execute any and all
further instruments required or reasonably requested by the Owner Trustee or
the Indenture Trustee more fully to effect the purposes of this Agreement,
including, without limitation, the execution of any financing statements or
continuation statements relating to the Receivables for filing under the
provisions of the UCC of any applicable jurisdiction.
SECTION 10.8. No Waiver; Cumulative Remedies. No failure to exercise and
no delay in exercising, on the part of the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders, any right, remedy, power or
privilege hereunder, shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege. The rights, remedies, powers and privileges
therein provided are cumulative and not exhaustive of any rights, remedies,
powers and privileges provided by law.
SECTION 10.9. Third-Party Beneficiaries. This Agreement will inure to
the benefit of and be binding upon the parties hereto, the Noteholders, the
Certificateholders, and their respective successors and
64
69
permitted assigns. Except as otherwise provided in this Article X, no other
Person will have any right or obligation hereunder. The parties hereto hereby
acknowledge and consent to the pledge of this Agreement by the Issuer to the
Indenture Trustee for the benefit of the Noteholders pursuant to the Indenture.
SECTION 10.10. Actions by Noteholders or Certificateholders. (a)
Wherever in this Agreement a provision is made that an action may be taken or a
notice, demand, or instruction given by Noteholders or Certificateholders, such
action, notice, or instruction may be taken or given by any Noteholder or
Certificateholder, as applicable, unless such provision requires a specific
percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice, consent,
waiver, or other act by a Noteholder or Certificateholder shall bind such
Noteholder or Certificateholder and every subsequent holder of such Note or
Certificate issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof in respect of anything done or omitted to be done
by the Owner Trustee, the Indenture Trustee or the Servicer in reliance
thereon, whether or not notation of such action is made upon such Note or
Certificate.
SECTION 10.11. Agent for Service. The agent for service of the Seller
and the Servicer in respect of this Agreement shall be ___________________,
Ford Motor Credit Company, Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000.
SECTION 10.12. No Bankruptcy Petition; Subordination; Claims Against
Seller. The Owner Trustee, the Indenture Trustee, the Issuer and the Servicer
each covenants and agrees that;
(a) prior to the date which is one year and one day after the
payment in full of all securities issued by the Seller or by a trust
for which the Seller was the depositor which securities were rated by
any nationally recognized statistical rating organization, it will not
institute against, or join any other Person in instituting against, the
Seller any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or
state bankruptcy or similar law;
(b) any claim that it may have at any time against the Series
Assets of any Series unrelated to the Receivables, and any claim that
it may have at any time against the Seller that it may seek to enforce
against the Series Assets of any Series unrelated to the Receivables,
shall be subordinate to the payment in full, including post-petition
interest, in the event that the Seller becomes a debtor or debtor in
possession in a case under any applicable federal or state bankruptcy,
insolvency or other similar law now or hereafter in effect or otherwise
subject to any insolvency, reorganization, liquidation, rehabilitation
or other similar proceedings, of the claims of the holders of any
Securities related to such unrelated Series and the holders of any
other notes, bonds, contracts or other obligations that are related to
such unrelated Series; and
(c) it hereby irrevocably makes the election afforded by Title
00 Xxxxxx Xxxxxx Code Section 1111(b)(1)(A)(i) to secured creditors to
receive the treatment afforded by Title 00 Xxxxxx Xxxxxx Code Section
1111(b)(2) with respect to any secured claim that it may have at any
time against the Seller. The obligations of the Seller under this
Agreement are limited to the related Series and the related Series
Assets. This Section 10.12 shall survive the resignation or removal of
the Owner Trustee under the Trust Agreement or the Indenture Trustee
under the Indenture or the termination of such Agreement.
70
SECTION 10.13. Limitation of Liability of Owner Trustee and Indenture
Trustee. (a) Notwithstanding anything contained herein to the contrary, this
Agreement has been countersigned by _____ not in its individual capacity but
solely in its capacity as Owner Trustee of the Issuer and in no event shall
_____ in its individual capacity or, except as expressly provided in the Trust
Agreement, as beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer. For all purposes of this Agreement, in the performance of its
duties or obligations hereunder or in the performance of any duties or
obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and
entitled to the benefits of, the terms and provisions of Articles VI, VII and
VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary, this
Agreement has been accepted by _____, not in its individual capacity but solely
as Indenture Trustee, and in no event shall _____ have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder or in any of the certificates, notices or agreements delivered
pursuant hereto, as to all of which recourse shall be had solely to the assets
of the Issuer.
66
71
IN WITNESS WHEREOF, the parties have caused this Sale and Servicing
Agreement to be duly executed by their respective officers thereunto duly
authorized as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES
TWO LLC
as Seller
By:
-----------------------------------
Name:
Title:
FORD CREDIT AUTO OWNER TRUST
- ;
----- --
as Issuer
By:
----------------------,
as Owner Trustee
By:
-----------------------------------
Name:
Title:
FORD MOTOR CREDIT COMPANY,
as Servicer
By:
-----------------------------------
Name:
Title:
67
72
Accepted and agreed:
,
- -------------------------
as Indenture Trustee
By:
-----------------------------
Name:
Title:
,
---------------------------
as Owner Trustee
By:
-----------------------------
Name:
Title:
68
73
SCHEDULE A
[SCHEDULE OF RECEIVABLES]
Delivered to Indenture Trustee at Closing
74
SCHEDULE B
LOCATION OF RECEIVABLES
Indianapolis
0000 Xxxxxx Xxxxx Xxxx. Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000-0000
Detroit-North
000 Xxxxx Xxxxxxxxx
Xxxxx 000
Xxxx, XX 00000
Chicago-North
0000 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Ohio South
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Detroit/West
Xxx XxxxXxxx Xxxx.
Xxxxx 000X
Xxxxxxxx, XX 00000
Chicago South
The Office of Waterfall Xxxx I
Suite 310
000 Xxxxx Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Grand Rapids
0000 Xxxxxxxxxx Xxxxx XX
Xxxxx 000
Xxxxx Xxxxxx, XX 00000
Chicago - East
Xxx Xxxxx Xxxxx, Xxxxx X
Xxxxxxx, XX 00000
75
Akron
000 Xxxxxxxx Xxxx Xxxxxx
Xxxxx 000 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Louisville
000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Milwaukee
00000 X. Xxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Chicago West
0000 X. Xxxxxxx Xx.
Xxxxx 000
Xxxxxxx Xxxxxxx, XX 00000-0000
Saginaw
0000 Xxxxx Xxxxxx Xx.
Xxxxx 000
Xxxxxxx, XX 00000
Findlay
0000 Xxxxx Xxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Cleveland
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxx Xxxxx, XX 00000-0000
Philadelphia
Bay Colony Executive Park
000 X. Xxxxxxxxxx
Xxxxx 000
Xxxxx, XX 00000
New Jersey South
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xx. Xxxxxx, XX 00000
Baltimore-West
0000 Xxxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
X-0
00
Xxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxx
0xx Xxxxx
Xxxxxxxx, XX 00000-0000
Washington, D.C.
0000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, XX 00000-0000
New Haven
000 Xxxxxxxxxx Xxx.
Xxxxx #0
Xxxxx Xxxxx, XX 00000
Norfolk
Greenbrier Pointe
0000 Xxxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
New Jersey North
000 Xxxxxxxxxx Xxxxxxx
0xx Xxxxx
Xxxxxxxx, XX 00000-0000
Pittsburgh
Xxxxxx Xxxxx 0
000 Xxxxxxx Xxxxx
0xx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Richmond
000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Syracuse
0000 Xxxxxxxxxx Xxxx.
XxXxxx, XX 00000
Westchester
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
B-3
77
Mobile
0000 Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxx, XX 00000
Birmingham
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Orlando
0000 Xxxx Xxxxxx Xxxxx
Xxxxx 000, Xxx Xxxxx Xxxx.
Xxxxxxxx, XX 00000
Memphis
0000 Xxxxxx Xxxx
Xxxxx 000
Xxxxxxx, XX 00000
Atlanta - North
North Park Town Center
0000 Xxxxxxxxx Xx. X.X.
Xxxx. 000, Xxxxx 000
Xxxxxxx, XX 00000
Greensboro
0000 Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Charlotte
0000 Xxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Jacksonville
0000 Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Jackson
Highland Village Center
0000 X-00 Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
B-4
78
Columbia
000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Miami
0000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Dothan
0000 Xxxx Xxxx Xxxxxx
Xxxxx 0
Xxxxxx, XX 00000-0000
Nashville
000 Xxxxxxxx Xxxxx
Xxxxx 000, Xxxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Raleigh
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Tampa
Lincoln Pointe, Suite 800
0000 Xxxxx Xxxxx Xxxxx
Xxxxx, XX 00000
Xxxxxx
Xxxxxxx Xxxx Xxxxxx Xxxxxx
Xxxxx 000X
0000 Xxxx Xxx Xxxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Lubbock
Xxxxx 000
0000 00xx Xxxxxx
Xxxxxxx, XX 00000
Dallas
000 X. Xxxxxxxx Xxxx
Xxxxx 000, Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
B-5
79
Austin
0000 Xxxxxxxxx Xxxx.
Xxxxx 000
Xxxxxx, XX 00000
Fort Worth
0000 X. Xxxxxxx Xxx.
Xxxxx 000, Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
Beaumont
0000 Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Houston-West
000 Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Harlingen
0000 Xxxx Xxxxxxxx
Xxxxxxxxx, XX 00000
Corpus Christi
0000 Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxx Xxxxxxx, XX 00000
Little Rock
0000 Xxxxxxxxxx Xx.
Xxxxx 000
Xxxxxx Xxxx, XX 00000
Amarillo
0000 X. Xxxxxxxx
Xxxxx 000 Xxxx. X
Xxxxxxxx, XX 00000
El Paso
0000 Xxxxxx Xxx Xxxxxx
Xxxxx 000
Xx Xxxx, XX 00000
B-6
80
Albuquerque
0000 Xxxxxx Xxxx., XX
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Houston-North
000 X. Xxx Xxxxxxx Xxxx. X.
Xxxxx 000
Xxxxxxx, XX 00000
San Antonio
0000 X.X. Xxxx 000
Xxxxx 000
Xxx Xxxxxxx, XX 00000
Tulsa
0000 Xxxx 00xx Xx.
Xxxxx 000
Xxxxx, XX 00000
Minneapolis
00000 Xxxxxx Xxxxx
Xxxxx 000, One Xxxxxxxxx Xxxxxxxx
Xxxx Xxxxxxx, XX 00000-0000
Wichita
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, XX 00000
St. Louis
0000 Xxxxx Xxxx Xxx.
Xxxxx 000
Xxxxx Xxxx, XX 00000
Jefferson City
000 Xxxxx Xxxxx
Xxxxxxxxx Xxxx, XX 00000
Kansas City
0000 Xxxx 000xx Xxxxxx
Xxxx. #00, Xxxxx 000
Xxxxxxxx Xxxx, XX 00000
X-0
00
Xxx Xxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxx Xxx Xxxxxx, XX 00000
Omaha
00000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxx, XX 00000-0000
Davenport
0000 Xxxx Xxxxx
Xxxxx 000, Xxxxxxxx Exch. Bldg.
Xxxxxxxxxx, XX 00000
Denver
0000 X. Xxxxxxxx Xxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Fargo
0000 00xx Xxx. Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Springfield
0000 X. Xxxxxxxxx
Xxxxxxxxxxx, XX 00000-0000
Waterloo
000 X. Xxx Xxxxxx Xx.
Xxxxxxxx, XX 00000
San Bernadino
0000 Xxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Salt Lake City
000 X. 0000 Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
B-8
82
Honolulu
0000 Xxxxxxxxx Xxxx.
Xxxxx 000, Ala Moano Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Spokane
North 000 Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000-0000
Grand Junction
000 Xxxxxxx Xx.
Xxxxx 000
Xxxxx Xxxxxxxx, XX 00000
San Francisco
0000 Xxxxxxxx Xx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
Portland
00000 X.X. Xxxxxxxxx Xx.
Xxxxx 000
Xxxxxxxx, XX 00000-0000
Sacramento
0000 Xxxxxxx Xxxx Xx.
Xxxxx 000
Xxxxxxxxxx, XX 00000
San Diego
0000 Xxxxxx Xxx Xxx X.
Xxxxx 0000
Xxx Xxxxx, XX 00000
Phoenix
0000 Xxxxx 00xx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
San Xxxx
0000 XxXxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
B-9
83
Seattle
00000 X.X. 00xx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Orange
000 Xxx Xxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Anchorage
0000 X Xxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Appleton
00 Xxxx Xxxxx
Xxxxxxxx, XX 00000-0000
South Bend
0000 Xxxxxx Xxxxx Xxxxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Columbus
000 Xxxxx Xxxxx Xxxxx
Xxxxx 000, Xxxxx X
Xxxxxx, XX 00000-0000
Henderson
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Lansing
0000 Xxxxxxxxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Xxxxxxxx
0000 Xxxxx Xxxxxxxx
Xxxxxxxx, XX 00000
New Jersey-Central
000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
B-10
84
Huntington
0000 X.X. Xxxxx 00 Xxxx
Xxxxxxxxxxxxx, XX 00000
Buffalo
00 Xxxx Xxxx Xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Manchester
0 Xxxxxxx Xxxxx
Xxxxxxx, XX 00000
Harrisburg
0000 Xxxxxx Xxxx
Xxxxxxxxxxxxx, XX 00000
Xxxxxx Xxxxx
Xxxxxxxxx Xxxxx, 0xx Xxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Boston North
Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, XX 00000-0000
Portland
0000 Xxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Albany
0 Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Roanoke
0000 Xxxxxx Xxxxxx Xxxx.
Xxxxxxx, XX 00000
Falls Church
0000 Xxxxxxxxxx Xxxx
Xxxxx 000
XxXxxx, XX 00000
B-11
00
Xxxxxxx
Xxxxxxxx Xxxxxx - Xxxxx X
000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Chattanooga
0000 Xxx Xxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Decatur
000 Xxx Xxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Fayetteville
0000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxxxx, XX 00000
Athens
0000 Xxxxxxx Xxxxxxx
Xxxxxx, XX 00000
Knoxville
0000 Xxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, XX 00000
Macon
0000 Xxxxxxxxx Xxxxx
Xxxxx 000
Xxxxx, XX 00000
Pensacola
00 X. Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xx 00000
Savannah
0000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
B-12
86
Tyler
000 Xxxx XX Xxxx 000
Xxxxx 000
Xxxxx, XX 00000
Oklahoma City
0000 Xxxxxxxxx Xxx Xx.
Xxxxx 000, Xxxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Baltimore-East
Xxxxxxxx Corporate Center One
4940 Campell Blvd., Suite 000
Xxxxxxxxxx Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Billings
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Cheyenne
0000 Xxxxxxxxxxx
Xxxxxxxx, XX 00000
Cape Girardeau
0000 Xxxxxxxxxxxx
Xxxx Xxxxxxxxx, XX 00000
Atlanta -South
0000 Xxxxxxx Xxxx.
Xxxxx 000
Xxxxxxx, XX 00000
Pasadena
000 Xxxx Xxxxxxxx Xxxx.
Xxxxx 000
Xxxxxxxx, XX 00000
Colorado Springs
0000 Xxxx Xxxxxx Xx.
Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
X-00
00
Xxxxx Xxx
000 X. Xxxxx Xxxxxxxxx
Xxxxx 0000
Xxxx Xxxxx, XX 00000
Ventura
000 Xxxxx xxxxx
Xxxxx 000
Xxxxxxx, XX 00000
Las Vegas
0000 Xxxxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Eugene
0000 Xxxxxx Xxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Tupelo
Xxx Xxxxxxxxxxx Xxxxx
Xxxxxx, XX 00000
Charleston
0000 Xxxxxxx Xxxx
Xxxxx 000, Xxxxxxxxx Xxxxxx
Xxxxx Xxxxxxxxxx, XX 00000-0000
Western Carolina
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxxxxxx, XX 00000-0000
B-14
88
New Orleans
0000 X. Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxxx, XX 00000
Xxxxxxxxx
Xxxxxx Xxxxxx Xxxx
Xxxxx 000
000 Xxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Shreveport
Xxxxx Xxxxxx Xxxxxx, Xxxxx 000
0000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
B-15
89
EXHIBIT A
[FORM OF YIELD SUPPLEMENT AGREEMENT]
________, _____
Ford Credit Auto Receivables Two LLC
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Re: Ford Credit Auto Owner Trust -
Ladies and Gentlemen:
We hereby confirm arrangements made as of the date hereof with you to be
effective upon (i) receipt by us of the enclosed copy of this letter agreement
(as from time to time amended, supplemented or otherwise modified and in
effect, the "Yield Supplement Agreement"), executed by you, and (ii) execution
of the Purchase Agreement referred to below and payment of the purchase price
specified thereunder. Capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Purchase Agreement, dated
as of _______, ____ (as from time to time amended, supplemented or otherwise
modified and in effect, the "Purchase Agreement"), between Ford Motor Credit
Company, as seller (the "Seller"), and Ford Credit Auto Receivables Two LLC as
purchaser (the "Purchaser").
1. On or prior to the Determination Date preceding each Distribution Date,
the Servicer shall notify the Purchaser and the Seller of the Yield Supplement
Amount for such Distribution Date.
2. In consideration for the Purchaser entering into the Purchase Agreement
and the purchase price paid to the Seller for the Receivables under the
Purchase Agreement, we agree to make a payment of the Yield Supplement Amount
to the Purchaser, or to the pledgee of the assignee of the Purchaser referred
to in Section 5 hereof, on the Business Day prior to each Distribution Date.
3. All payments pursuant hereto shall be made by federal wire transfer
(same day) funds or in immediately available funds, to such account as the
Purchaser
A-1
90
Ford Credit Auto Receivables Two LLC
______, ____
Page 2
or the pledgee of the assignee of the Purchaser referred to in Section 5
hereof, may designate in writing to the Seller, prior to the relevant
Distribution Date.
4. Our agreements set forth in this Yield Supplement Agreement are our
primary obligations and such obligations are irrevocable, absolute and
unconditional, shall not be subject to any counterclaim, setoff or defense and
shall remain in full force and effect without regard to, and shall not be
released, discharged or in any way affected by, any circumstances or condition
whatsoever.
5. Pursuant to the Sale and Servicing Agreement, the Purchaser will sell,
transfer, assign and convey its interest in this Yield Supplement Agreement to
Ford Credit Auto Owner Trust ____-__ (the "Trust"), and the Seller hereby
acknowledges and consents to such sale, transfer, assignment and conveyance.
Concurrent with such sale, transfer, assignment and conveyance, pursuant to the
Indenture, the Trust will pledge its rights under this Yield Supplement
Agreement, along with certain other assets of the Trust, to __________, as
Indenture Trustee, to secure its obligations under the Notes and the Indenture,
and the Seller hereby acknowledges and consents to such pledge. The Seller
hereby agrees, for the benefit of the Trust, that following such sale,
transfer, assignment, conveyance and pledge, this Yield Supplement Agreement
shall not be amended, modified or terminated without the consent of _________,
as Owner Trustee on behalf of the Trust, and, prior to the payment in full of
the Notes, the Indenture Trustee.
6. This Yield Supplement Agreement will be governed by, and construed in
accordance with, the laws of the State of New York.
7. Except as otherwise provided herein, all notices pursuant to this Yield
Supplement Agreement shall be in writing and shall be effective upon receipt
thereof. All notices shall be directed as set forth below, or to such other
address or to the attention of such other person as the relevant party shall
have designated for such purpose in a written notice.
A-2
91
Ford Credit Auto Receivables Two LLC
______, ____
Page 3
If to the Purchaser:
Ford Credit Auto Receivables Two LLC
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to the Seller:
Ford Motor Credit Company
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
8. This Yield Supplement Agreement may be executed in one or more
counterparts and by the different parties hereto on separate counterparts, all
of which shall be deemed to be one and the same document.
A-3
92
Ford Credit Auto Receivables Two LLC
______,___
Page 4
If the foregoing satisfactorily sets forth the terms and conditions of our
agreement, please indicate your acceptance thereof by signing in the space
provided below and returning to us the enclosed duplicate original of this
letter.
Very truly yours,
FORD MOTOR CREDIT COMPANY,
as Seller
By: _____________________________
Name:
Title:
Agreed and accepted as of
the date first above written:
FORD CREDIT AUTO RECEIVABLES TWO LLC
as Purchaser
By: ____________________________
Name:
Title:
A-4