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EXHIBIT 4.2
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AMENDED AND RESTATED
TRUST AGREEMENT
between
FORD CREDIT AUTO RECEIVABLES TWO L.P.
as Depositor,
and
PNC BANK, DELAWARE,
as Owner Trustee
Dated as of February 1, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND USAGE
ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.2. Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.3. Purposes and Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
SECTION 2.4. Appointment of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.5. Capital Contribution of Owner
Trust Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.6. Declaration of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SECTION 2.7. Liability of the Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
SECTION 2.8. Title to Trust Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.9. Situs of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.10. Representations and Warranties of
the Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
SECTION 2.11. Federal Income Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.2. Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 3.3. The Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.4. Authentication of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 3.5. Registration of Certificates;
Transfer and Exchange of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SECTION 3.6. Mutilated, Destroyed, Lost or
Stolen Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.7. Persons Deemed Owners of
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.8. Access to List of Certificate-
holders' Names and Addresses . . . . . . . . . . . . . . . . . . . . . . . . . . 18
SECTION 3.9. Maintenance of Office or
Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.10. Appointment of Certificate
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 3.11. Certain Rights of Depositor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificate-
holders with Respect to
Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
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SECTION 4.2. Action by Certificateholders with
Respect to Certain Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.3. Action by Certificateholders with
Respect to Bankruptcy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.4. Restrictions on Certificate-
holders' Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 4.5. Majority Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate
Distribution Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.2. Application of Trust Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 5.3. Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.4. No Segregation of Monies; No
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.5. Accounting and Reports to
Noteholders, Certificate-
holders, Internal Revenue
Service and Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 5.6. Signature on Returns; Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.2. General Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 6.3. Action upon Instruction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
SECTION 6.4. No Duties Except as Specified in this Agreement or in
Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 6.5. No Action Except Under Specified
Documents or Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 6.6. Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 7.2. Furnishing of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.3. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.4. Reliance; Advice of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 7.5. Not Acting in Individual
Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 7.6. Owner Trustee Not Liable for Certificates or Receivables. . . . . . . . . . . . . . . . . . 37
SECTION 7.7. Bank May Own Certificates and Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
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ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.2. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
SECTION 8.3. Payments to Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 9.2. Dissolution upon Insolvency or Dissolution of Depositor or
General Partner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 9.3. Prepayment of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.2. Resignation or Removal of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SECTION 10.3. Successor Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 10.4. Merger or Consolidation of Owner Trustee . . . . . . . . . . . . . . . . . . . . . . . . . 49
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee . . . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
SECTION 11.2. No Legal Title to Owner Trust Estate in Certificateholders . . . . . . . . . . . . . . . . 54
SECTION 11.3. Limitation on Rights of Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.4. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 11.5. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.6. Separate Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.7. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.8. No Petition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 11.9. No Recourse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.10. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
SECTION 11.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
EXHIBIT A Form of Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
EXHIBIT B Form of Certificate of Trust . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
EXHIBIT C Form of Investment Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
EXHIBIT D Form of Investment Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-1
EXHIBIT E Form of Investment Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-1
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EXHIBIT F Form of Rule 144A Transferor
Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
EXHIBIT G Form of Certificate of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . G-1
APPENDIX A Definitions and Usage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . AA-1
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of February 1,
1998 (as from time to time amended, supplemented or otherwise modified and in
effect, this "Agreement"), between FORD CREDIT AUTO RECEIVABLES TWO L.P., a
Delaware limited partnership, as Depositor, having its principal executive
xxxxxx xx Xxx Xxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000; and PNC BANK, DELAWARE,
a Delaware banking corporation (the "Bank"), not in its individual capacity but
solely as trustee under this Agreement (in such capacity, the "Owner Trustee"),
having its principal corporate trust office at 000 Xxxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx 00000.
WHEREAS, the parties hereto intend to amend and restate that
certain Trust Agreement, dated as of February 1, 1998, between the Depositor
and the Owner Trustee, on the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the receipt and sufficiency of which are hereby
acknowledged, the Depositor and the Owner Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein are
defined in Appendix A hereto, which also contains rules as to usage that shall
be applicable herein.
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ARTICLE II
ORGANIZATION OF THE TRUST
SECTION 2.1. Name. The Trust created hereby shall be known
as "Ford Credit Auto Owner Trust 1998-A", in which name the Owner Trustee may
conduct the business of the Trust, make and execute contracts and other
instruments on behalf of the Trust and xxx and be sued.
SECTION 2.2. Office. The office of the Trust shall be in
care of the Owner Trustee at the Corporate Trust Office or at such other
address in the State of Delaware as the Owner Trustee may designate by written
notice to the Certificateholders and the Depositor.
SECTION 2.3. Purposes and Powers. (a) The purpose of the
Trust is, and the Trust shall have the power and authority, to engage in the
following activities:
(i) to issue the Notes pursuant to the Indenture, and the
Certificates pursuant to this Agreement, and to sell the Notes and the
Certificates upon the written order of the Depositor;
(ii) with the proceeds of the sale of the Notes and the
Certificates, to fund the Reserve Account, to pay the organizational,
start-up and transactional expenses of the Trust, and to pay the
balance to the Depositor pursuant to the Sale and Servicing Agreement;
(iii) to pay interest on and principal of the Notes and
distributions on the Certificates;
(iv) to Grant the Owner Trust Estate (other than the
Certificate Distribution Account and the proceeds thereof) to the
Indenture Trustee pursuant to the Indenture;
(v) to enter into and perform its obligations under the Basic
Documents to which it is to be a party;
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(vi) to engage in those activities, including entering into
agreements, that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith; and
(vii) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with
conservation of the Owner Trust Estate and the making of distributions
to the Noteholders and the Certificateholders.
The Trust is hereby authorized to engage in the foregoing activities. The
Trust shall not engage in any activity other than in connection with the
foregoing or other than as required or authorized by the terms of this
Agreement or the other Basic Documents.
SECTION 2.4. Appointment of Owner Trustee. The Depositor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the
date hereof, to have all the rights, powers and duties set forth herein.
SECTION 2.5. Capital Contribution of Owner Trust Estate. As
of February 1, 1998, the Depositor sold, assigned, transferred, conveyed and
set over to the Owner Trustee the sum of $1. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of such date, of the
foregoing contribution, which shall constitute the initial Owner Trust Estate
and shall be deposited in the Certificate Distribution Account. The Depositor
shall pay the organizational expenses of the Trust as they may arise or shall,
upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for
any such expenses paid by the Owner Trustee. On the Closing Date, the
Depositor shall convey to the Trust the Trust Property and the Owner Trustee
shall convey to the Depositor the Notes and the Certificates.
SECTION 2.6. Declaration of Trust. The Owner Trustee hereby
declares that it will hold the Owner Trust Estate in trust upon and subject to
the conditions set forth herein for the use and benefit of the
Certificateholders, subject to the obligations of the Trust under the Basic
Documents. It is the intention of the parties hereto that (i) the Trust
constitute a business trust under the Business Trust Statute and that this
Agreement constitute the governing instrument of such
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business trust and (ii) for income and franchise tax purposes, the Trust shall
be treated as a partnership, with the assets of the partnership being the
Receivables and other assets held by the Trust, the partners of the partnership
being the Certificateholders and the Depositor and the Notes constituting
indebtedness of the partnership. The parties agree that, unless otherwise
required by the appropriate tax authorities, the Depositor, on behalf of the
Trust, will file or cause to be filed annual or other necessary returns,
reports and other forms consistent with the characterization of the Trust as a
partnership for such tax purposes. Effective as of the date hereof, the Owner
Trustee shall have the rights, powers and duties set forth herein and in the
Business Trust Statute with respect to accomplishing the purposes of the Trust.
The Owner Trustee has filed the Certificate of Trust with the Secretary of
State.
SECTION 2.7. Liability of the Depositor. (a)
Notwithstanding Section 3803 of the Business Trust Statute, the Depositor in
its capacity as the holder of the interests described in Section 3.11 shall be
liable directly to, and will indemnify each injured party for, all losses,
claims, damages, liabilities and expenses of the Trust (including Expenses, to
the extent that the assets of the Trust that would remain if all of the Notes
were paid in full would be insufficient to pay any such losses, claims,
damages, liabilities or expenses, or to the extent that such losses, claims,
damages, liabilities and expenses in fact are not paid out of the Owner Trust
Estate) that the Depositor would be liable for if the Trust were a partnership
under the Limited Partnership Act in which the Depositor were a general
partner; provided, however, that the Depositor shall not be liable to or
indemnify Noteholders or Note Owners for any losses incurred by Noteholders or
Note Owners in their capacity as holders of or beneficial owners of interests
in limited recourse debt secured by the Owner Trust Estate or be liable to or
indemnify Certificateholders for any losses incurred by the Certificateholders
if such losses would nevertheless have been incurred if the Certificates were
limited recourse debt secured by the Owner Trust Estate. In addition, any
third-party creditors of the Trust, or the arrangement between the Depositor
and the Trust (other than in connection with the obligations described in the
preceding sentence for which the Depositor
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shall not be liable), shall be deemed third-party beneficiaries of this
paragraph.
(b) No Certificateholder other than the Depositor to the
extent set forth in paragraph (a) of this Section 2.7, shall have any personal
liability for any liability or obligation of the Trust.
SECTION 2.8. Title to Trust Property. Legal title to the
entirety of the Owner Trust Estate shall be vested at all times in the Trust as
a separate legal entity, except where applicable law in any jurisdiction
requires title to any part of the Owner Trust Estate to be vested in a trustee
or trustees, in which case title shall be deemed to be vested in the Owner
Trustee, a co-trustee and/or a separate trustee, as the case may be.
SECTION 2.9. Situs of Trust. The Trust shall be located and
administered in the State of Delaware. All bank accounts maintained by the
Owner Trustee on behalf of the Trust shall be located in the State of Delaware
or the State of New York. The Trust shall not have any employees in any state
other than the State of Delaware; provided, however, that nothing herein shall
restrict or prohibit the Bank or the Owner Trustee from having employees within
or without the State of Delaware. Payments will be received by the Trust only
in Delaware or New York, and payments will be made by the Trust only from
Delaware or New York. The only office of the Trust will be at the Corporate
Trust Office in the State of Delaware.
SECTION 2.10. Representations and Warranties of the
Depositor. The Depositor hereby represents and warrants to the Owner Trustee
that:
(a) The Depositor is duly organized and validly existing as a
limited partnership in good standing under the laws of the State of Delaware,
with power and authority to own its properties and to conduct its business as
such properties are currently owned and such business is presently conducted.
(b) The Depositor is duly qualified to do business as a
foreign limited partnership in good standing, and has obtained all necessary
licenses and approvals in all jurisdictions in which the ownership or lease
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of property or the conduct of its business shall require such qualifications.
(c) The Depositor has the power and authority to execute and
deliver this Agreement and to carry out its terms, and the Depositor has full
power and authority to sell and assign the property to be sold and assigned to,
and deposited with, the Trust, and the Depositor has duly authorized such sale
and assignment and deposit to the Trust; and the execution, delivery and
performance of this Agreement has been duly authorized by the Depositor.
(d) This Agreement constitutes a legal, valid, and binding
obligation of the Depositor, enforceable against the Depositor in accordance
with its terms, subject, as to enforceability, to applicable bankruptcy,
insolvency, reorganization, conservatorship, receivership, liquidation and
other similar laws and to general equitable principles.
(e) The consummation of the transactions contemplated by this
Agreement and the fulfillment of the terms hereof do not conflict with, result
in any breach of any of the terms and provisions of, or constitute (with or
without notice or lapse of time or both) a default under, the Certificate of
Limited Partnership or the Limited Partnership Agreement, or any indenture,
agreement or other instrument to which the Depositor is a party or by which it
is bound; nor result in the creation or imposition of any lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law
or, to the best of the Depositor's knowledge, any order, rule or regulation
applicable to the Depositor of any court or of any federal or state regulatory
body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties.
(f) There are no proceedings or investigations pending or, to
the Depositor's best knowledge, threatened before any court, regulatory body,
administrative agency or other governmental instrumentality having jurisdiction
over the Depositor or its properties: (i) asserting the invalidity of this
Agreement, the Indenture, any of the other Basic Documents, the Notes or the
Certificates, (ii) seeking to prevent the issuance of the Notes or the
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Certificates or the consummation of any of the transactions contemplated by
this Agreement, the Indenture or any of the other Basic Documents, (iii)
seeking any determination or ruling that might materially and adversely affect
the performance by the Depositor of its obligations under, or the validity or
enforceability of, this Agreement or (iv) which might adversely affect the
federal income tax attributes, or Applicable Tax State franchise or income tax
attributes, of the Notes and the Certificates.
(g) The representations and warranties of the Depositor in
Section 3.1 of the Purchase Agreement are true and correct.
SECTION 2.11. Federal Income Tax Matters. The
Certificateholders acknowledge that it is their intent and that they understand
it is the intent of the Depositor and the Servicer that, for purposes of
federal income, state and local income and franchise tax and any other income
taxes, the Trust will be treated as a partnership and the Certificateholders
and the Depositor will be treated as partners in that partnership. The
Depositor hereby agrees and the Certificateholders by acceptance of a
Certificate agree to such treatment and each agrees to take no action
inconsistent with such treatment. For purposes of federal income, State and
local income and franchise tax and any other income taxes each month:
(a) amounts paid to any Certificateholder pursuant to
Section 5.2(a)(i) shall be treated as a guaranteed payment within the
meaning of Section 707(c) of the Code;
(b) to the extent the characterization provided for in
paragraph (a) of this Section 2.11 is not respected, gross ordinary
income of the Trust for such month as determined for federal income
tax purposes shall be allocated among the Certificate-holders of each
Class of Certificates as of the Record Date occurring within such
month, in proportion to their ownership of the Aggregate Certificate
Balance on such date, in an amount up to the sum of (i) the Accrued
Class C Certificate Interest or Accrued Class D Certificate Interest,
as applicable, for such Class for such month, (ii) the portion of
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the market discount on the Receivables accrued during such month that
is allocable to the excess, if any, of the aggregate Initial
Certificate Balance of such class of Certificates over the initial
aggregate issue price of such Class of Certificates and (iii) any
amount expected to be distributed to the Certificateholders of such
Class pursuant to Sections 4.6(c) and (d) of the Sale and Servicing
Agreement (to the extent not previously allocated pursuant to this
paragraph (b)) to the extent necessary to reverse any net loss
previously allocated to Certificateholders of such Class (to the
extent not previously reversed pursuant to this clause (iii)); and
(c) thereafter all remaining net income of the Trust
(subject to the modifications set forth below) for such month as
determined for federal income tax purposes (and each item of income,
gain, credit, loss or deduction entering into the computation thereof)
shall be allocated to the Depositor, to the extent thereof.
If the gross ordinary income of the Trust for any month is insufficient for the
allocations described in paragraph (b) above, subsequent gross ordinary income
shall first be allocated to make up such shortfall before any allocation
pursuant to paragraph (c) above. Net losses of the Trust, if any, for any
month as determined for federal income tax purposes (and each item of income,
gain, credit, loss or deduction entering into the computation thereof) shall be
allocated to the Depositor to the extent the Depositor, in its capacity as
"general partner," is reasonably expected to bear the economic burden of such
net losses, and any remaining net losses shall be allocated among the
Certificateholders as of the Record Date occurring within such month in
proportion to their ownership of the Aggregate Certificate Balance on such
Record Date. The Depositor is authorized to modify the allocations in this
paragraph if necessary or appropriate, in its sole discretion, for the
allocations to fairly reflect the economic income, gain or loss to the
Depositor or the Certificateholders or as otherwise required by the Code.
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ARTICLE III
TRUST CERTIFICATES AND TRANSFER OF INTERESTS
SECTION 3.1. Initial Beneficial Ownership. Upon the
formation of the Trust by the contribution by the Depositor pursuant to Section
2.5 and until the issuance of the Certificates, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 3.2. Capital Accounts. (a) The Owner Trustee shall
establish and maintain a separate bookkeeping account (a "Capital Account") for
the Depositor and each Certificateholder. The initial balance of the Capital
Account for (i) each Certificateholder shall be the amount initially paid for
such Certificateholder's Certificates and (ii) the Depositor shall be (x) the
fair market value of the Receivables minus (y) the proceeds of the sale of
Notes and Certificates net of the Reserve Initial Deposit. The Capital Account
of the Depositor or each Certificateholder shall also be increased by (i) the
dollar amount of any additional cash contributions made by the Depositor or
such Certificateholder, as the case may be, (ii) the fair market value of any
property (other than cash) contributed to the Trust by the Depositor or such
Certificateholder, as the case may be (net of any liabilities to which the
property is subject), and (iii) allocations to the Depositor or such
Certificateholder, as the case may be, of income and gain (including income
exempt from tax). The Capital Account of the Depositor or each
Certificateholder shall be decreased by (i) the dollar amount of any cash
distributions made to the Depositor or such Certificateholder, as the case may
be, (ii) the fair market value of any property (other than cash) distributed to
the Depositor or such Certificateholder, as the case may be (net of any
liabilities to which the property is subject), (iii) allocations to the
Depositor or such Certificateholder, as the case may be, of loss or deductions
(or items thereof), and (iv) any allocations of expenditures of the Trust
described in Section 705(a)(2)(B) of the Code.
(b) Notwithstanding any other provision of this
Agreement to the contrary, the foregoing provisions of this Section 3.2
regarding the maintenance of Capital Accounts shall be construed so as to
comply with the provisions of the Treasury Regulations promulgated
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pursuant to Section 704 of the Code. The Depositor is hereby authorized to
modify these provisions to the minimum extent necessary to comply with such
regulations.
SECTION 3.3. The Certificates. The Class C Certificates and
the Class D Certificates shall each be issued in one or more registered,
definitive, physical certificates, in the form set forth in Exhibit A and
Exhibit B, respectively, in denominations of at least $20,000 and in integral
multiples of $1,000 in excess thereof. No Certificate may be sold,
transferred, assigned, participated, pledged, or otherwise disposed of (any
such act, a "Transfer") to any Person except in accordance with the provisions
of Section 3.5 and any attempted Transfer in violation of Section 3.5 shall be
null and void (each a "Void Transfer").
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature of an authorized officer of the Owner Trustee.
Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures shall have been affixed, authorized to
sign on behalf of the Trust, shall be validly issued and entitled to the
benefits of this Agreement, notwithstanding that such individuals or any of
them shall have ceased to be so authorized prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates.
If Transfer of the Certificates is permitted pursuant to
Section 3.5, a transferee of a Certificate shall become a Certificateholder,
and shall be entitled to the rights and subject to the obligations of a
Certificateholder hereunder upon such transferee's acceptance of a Certificate
duly registered in such transferee's name pursuant to Section 3.5.
SECTION 3.4. Authentication of Certificates. Concurrently
with the initial sale of the Receivables to the Trust pursuant to the Sale and
Servicing Agreement, the Owner Trustee shall cause the Class C Certificates, in
an aggregate principal balance equal to the Initial Certificate Balance of such
Class C Certificates, and the Class D Certificates, in an aggregate principal
balance equal to the Initial Certificate Balance of such Class D Certificates,
to be executed on behalf of the Trust,
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authenticated and delivered to or upon the written order of the Depositor,
signed by the chairman of the board, the president, any executive vice
president, any vice president, the secretary, any assistant secretary, the
treasurer or any assistant treasurer of the General Partner, without further
action by the Depositor, in authorized denominations. No Certificate shall
entitle its Certificateholder to any benefit under this Agreement, or shall be
valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A
or Exhibit B, as applicable, attached hereto executed by the Owner Trustee by
manual signature; such authentication shall constitute conclusive evidence that
such Certificate shall have been duly authenticated and delivered hereunder.
All Certificates shall be dated the date of their authentication.
SECTION 3.5. Registration of Certificates; Transfer and
Exchange of Certificates. (a) The Certificate Registrar shall keep or cause
to be kept, at the office or agency maintained pursuant to Section 3.9, a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trust shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. The Bank shall be
the initial Certificate Registrar. No Transfer of a Certificate shall be
recognized except upon registration of such Transfer in the Certificate
Register.
(b) No Transfer of any Class C Certificate shall be
permitted, recognized or recorded unless the prospective transferee of such
Class C Certificate shall provide a letter in the form of Exhibit C hereof to
the Trust, the Owner Trustee and the Certificate Registrar, in which such
prospective transferee shall represent the following:
(i) It is not, and each account (if any) for which it is
purchasing the Class C Certificates is not, (A) an employee benefit
plan, as defined in Section 3(3) of ERISA, that is subject to Title I
of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that
is subject to Section 4975 of the Code, (C) a governmental plan, as
defined in Section 3(32) of ERISA, subject to any federal, State or
local law which is, to a material extent, similar to
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the provisions of Section 406 of ERISA or Section 4975 of the Code,
(D) an entity whose underlying assets include plan assets by reason of
a plan's investment in the entity (within the meaning of Department of
Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under
ERISA) or (E) a person investing "plan assets" of any such plan
(including without limitation, for purposes of this clause (E), any
insurance company general account, but excluding any entity registered
under the Investment Company Act of 1940, as amended).
(ii) It is, and each account (if any) for which it is
purchasing the Class C Certificates is, a Person who is (A) a citizen
or resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (C) an estate the income of which is includible
in gross income for United States tax purposes, regardless of its
source, (D) a trust if a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more
Persons meeting the conditions of clause (A), (B), (C) or (E) of this
paragraph (ii) has the authority to control all substantial decisions
of the trust or (E) a Person not described in clauses (A) through (D)
above whose ownership of the Class C Certificates is effectively
connected with such Person's conduct of a trade or business within the
United States (within the meaning of the Code) and who provides the
Owner Trustee and the Depositor with an IRS Form 4224 (and such other
certifications, representations, or opinions of counsel as may be
requested by the Owner Trustee or the Depositor).
(iii) It understands that any purported Transfer of any Class
C Certificate (or any interest therein) to any Person who does not
meet the conditions of paragraphs (i) and (ii) above shall be a Void
Transfer, and the purported transferee in a Void Transfer shall not be
recognized by the Trust or any other Person as a Certificateholder for
any purpose.
(iv) It agrees that if it determines to Transfer any of the
Class C Certificates it will cause
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its proposed transferee to provide to the Trust, the Owner Trustee and
the Certificate Registrar a letter substantially in the form of
Exhibit C hereof or such other written statement as the Depositor
shall prescribe.
(c) Each Class D Certificate shall bear a legend to the
following effect unless determined otherwise by the Administrator (as certified
to the Owner Trustee in an Officer's Certificate) and the Owner Trustee
consistent with applicable law:
"THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER
ANY STATE SECURITIES OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE
TRUST AND THE DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED
OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER
APPLICABLE LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A") TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR
ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN
EACH CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT F TO THE TRUST AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT
D TO THE TRUST AGREEMENT, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE
RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE CERTIFICATE REGISTRAR OF
SUCH EVIDENCE ACCEPTABLE TO THE TRUST AND THE INITIAL PURCHASER THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT
AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN
THE FORM ATTACHED AS EXHIBIT E TO
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THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND
THE CERTIFICATE REGISTRAR OF SUCH OTHER EVIDENCE ACCEPTABLE TO THE TRUST AND
THE INITIAL PURCHASER THAT SUCH REOFFER, RESALE, PLEDGE OR TRANSFER IS IN
COMPLIANCE WITH THE TRUST AGREEMENT AND THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, OR (4) TO THE DEPOSITOR OR ITS AFFILIATES, IN EACH CASE IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE UNITED STATES AND SECURITIES AND
BLUE SKY LAWS OF THE STATES OF THE UNITED STATES."
As a condition to the registration of any Transfer of a Class
D Certificate, the prospective transferee of such a Class D Certificate shall
be required to represent in writing to the Owner Trustee, the Certificate
Registrar and the Initial Purchaser the following:
(i) It understands that no subsequent Transfer of
the Class D Certificates is permitted unless it causes its proposed
transferee to provide to the Trust, the Certificate Registrar and the
Initial Purchaser a letter substantially in the form of Exhibit D or
Exhibit E hereof, as applicable, or such other written statement as
the Depositor shall prescribe.
(ii) It is not (A) an employee benefit plan, as
defined in Section 3(3) of ERISA, that is subject to Title I of ERISA,
(B) a plan described in Section 4975(e)(1) of the Code that is subject
to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, State or local law
which is, to a material extent, similar to the provisions of Section
406 of ERISA or Section 4975 of the Code, (D) an entity whose
underlying assets include plan assets by reason of a plan's investment
in the entity (within the meaning of Department of Labor Regulation 29
C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a person
investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company
general account, but excluding any entity registered under the
Investment Company Act of 1940, as amended).
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(iii) It is a person who is (A) a citizen or
resident of the United States, (B) a corporation or partnership
organized in or under the laws of the United States or any political
subdivision thereof, (c) an estate the income of which is includible
in gross income for United States tax purposes, regardless of its
source, (D) a trust if a U.S. court is able to exercise primary
supervision over the administration of such trust and one or more
persons described in clause (A), (B), (C) or (E) of this paragraph
(iii) has the authority to control all substantial decisions of the
trust or (E) a person not described in clauses (A) though (D) of this
paragraph (iii) whose ownership of the Class D Certificates is
effectively connected with such person's conduct of a trade or
business within the United States (within the meaning of the Code) and
who provides the Trust and the Depositor with an IRS Form 4224 (and
such other certifications, representations, or opinions of counsel as
may be requested by the Trust or the Depositor).
(iv) It understands that any purported Transfer of
any Class D Certificate (or any interest therein) in contravention of
any of the restrictions and conditions contained in this Section will
be a Void Transfer, and the purported transferee in a Void Transfer
will not be recognized by the Trust or any other person as a
Certificateholder for any purpose.
(d) By acceptance of any Class D Certificate, the
Certificateholder thereof specifically agrees with and represents to the
Depositor, the Trust and the Certificate Registrar, that no Transfer of such
Class D Certificate shall be made unless the registration requirements of the
Securities Act and any applicable State securities laws are complied with, or
such Transfer is exempt from the registration requirements under the Securities
Act because the Transfer satisfies one of the following:
(i) such Transfer is in compliance with Rule 144A
under the Securities Act ("Rule 144A"), to a transferee who the
transferor reasonably believes is a Qualified Institutional Buyer that
is purchasing for its own account or for the account of a
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Qualified Institutional Buyer and to whom notice is given that such
Transfer is being made in reliance upon Rule 144A under the Securities
Act and (x) the transferor executes and delivers to the Trust and the
Certificate Registrar, a Rule 144A transferor certificate
substantially in the form attached as Exhibit F and (y) the transferee
executes and delivers to the Trust and the Certificate Registrar an
investment letter substantially in the form attached as Exhibit D.
(ii) after the appropriate holding period, such
Transfer is pursuant to an exemption from registration under the
Securities Act provided by Rule 144 under the Securities Act and the
transferee, if requested by the Trust, the Certificate Registrar or
the Initial Purchaser, delivers an Opinion of Counsel in form and
substance satisfactory to the Trust and the Initial Purchaser; and
(iii) such Transfer is to an institutional accredited
investor as defined in rule 501(a)(1), (2), (3) or (7) of Regulation D
promulgated under the Securities Act in a transaction exempt from the
registration requirements of the Securities Act, such Transfer is in
accordance with any applicable securities laws of any State of the
United States or any other jurisdiction, and such investor executes
and delivers to the Trust and the Certificate Registrar an investment
letter substantially in the form attached as Exhibit E.
(e) The Owner Trustee shall make available to the
prospective transferor and transferee of a Class D Certificate information
requested to satisfy the requirements of paragraph (d)(4) of Rule 144A (the
"Rule 144A Information"). The Rule 144A Information shall include any or all
of the following items requested by the prospective transferee:
(i) the private placement memorandum relating to the
Class D Certificates dated February 19, 1998, and any amendments or
supplements thereto;
(ii) each statement delivered to Certificateholders
pursuant to Section 5.2(b) on each Distribution Date preceding such
request; and
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(iii) such other information as is reasonably
available to the Owner Trustee in order to comply with requests for
information pursuant to Rule 144A under the Securities Act.
None of the Depositor, the Certificate Registrar or the Owner
Trustee is under an obligation to register any Class D Certificate under the
Securities Act or any other securities law.
(f) Upon surrender for registration of Transfer of any
Certificate at the office or agency maintained pursuant to Section 3.9 and upon
compliance with any provisions of this Agreement relating to such Transfer, the
Owner Trustee shall execute, authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates in
authorized denominations of a like Class and aggregate amount dated the date of
authentication by the Owner Trustee or any authenticating agent. At the option
of a Certificateholder, Certificates may be exchanged for other Certificates
of authorized denominations of a like Class and aggregate amount upon surrender
of the Certificates to be exchanged at the office or agency maintained pursuant
to Section 3.9.
Every Certificate presented or surrendered for registration of
Transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Owner Trustee and the Certificate Registrar, duly
executed by the Certificateholder or his attorney duly authorized in writing,
with such signature guaranteed by a member firm of the New York Stock Exchange
or a commercial bank or trust company. Each Certificate surrendered for
registration of Transfer or exchange shall be cancelled and subsequently
disposed of by the Certificate Registrar in accordance with its customary
practice.
No service charge shall be made for any registration of
Transfer or exchange of Certificates, but the Owner Trustee or the Certificate
Registrar may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any Transfer or
exchange of Certificates.
The preceding provisions of this Section 3.5 notwithstanding,
the Owner Trustee shall not make and the
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Certificate Registrar need not register any Transfer or exchange of
Certificates for a period of fifteen (15) days preceding any Distribution Date
for any payment with respect to the Certificates.
SECTION 3.6. Mutilated, Destroyed, Lost or Stolen
Certificates. If (a) any mutilated Certificate shall be surrendered to the
Certificate Registrar, or if the Certificate Registrar shall receive evidence
to its satisfaction of the destruction, loss or theft of any Certificate and
(b) there shall be delivered to the Certificate Registrar and the Owner Trustee
such security or indemnity as may be required by them to save each of them
harmless, then, in the absence of notice that such Certificate shall have been
acquired by a protected purchaser, the Owner Trustee on behalf of the Trust
shall execute and the Owner Trustee shall authenticate and deliver, in exchange
for, or in lieu of, any such mutilated, destroyed, lost or stolen Certificate a
new Certificate of like Class, tenor and denomination. In connection with the
issuance of any new Certificate under this Section 3.6, the Owner Trustee or
the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section 3.6 shall
constitute conclusive evidence of ownership in the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Certificate shall be found
at any time.
SECTION 3.7. Persons Deemed Owners of Certificates. Prior to
due presentation of a Certificate for registration of Transfer, the Owner
Trustee, the Certificate Registrar and any Certificate Paying Agent may treat
the Person in whose name any Certificate shall be registered in the Certificate
Register as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 5.2 and for all other purposes whatsoever,
and none of the Owner Trustee, the Certificate Registrar or any Certificate
Paying Agent shall be bound by any notice to the contrary.
SECTION 3.8. Access to List of Certificate-holders' Names and
Addresses. The Owner Trustee shall furnish or cause to be furnished to the
Servicer and the Depositor, or to the Indenture Trustee, within fifteen (15)
days after receipt by the Owner Trustee of a written
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request therefor from the Servicer or the Depositor, or the Indenture Trustee,
as the case may be, a list, in such form as the requesting party may reasonably
require, of the names and addresses of the Certificateholders as of the most
recent Record Date. If three or more Certificateholders or one or more
Certificateholders of Certificates evidencing not less than 25% of the
Aggregate Certificate Balance apply in writing to the Owner Trustee, and such
application states that the applicants desire to communicate with other
Certificateholders with respect to their rights under this Agreement or under
the Certificates and such application is accompanied by a copy of the
communication that such applicants propose to transmit, then the Owner Trustee
shall, within five (5) Business Days after the receipt of such application,
afford such applicants access during normal business hours to the current list
of Certificateholders. Each Certificateholder, by receiving and holding a
Certificate, shall be deemed to have agreed not to hold any of the Depositor,
the Certificate Registrar or the Owner Trustee accountable by reason of the
disclosure of its name and address, regardless of the source from which such
information was derived.
SECTION 3.9. Maintenance of Office or Agency. The Owner
Trustee shall maintain in the State of Delaware, an office or offices or agency
or agencies where Certificates may be surrendered for registration of Transfer
or exchange and where notices and demands to or upon the Owner Trustee in
respect of the Certificates and the Basic Documents may be served. The Owner
Trustee initially designates PNC Bank, Delaware, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000, Attention: Xxxxxxx X. XxXxxxxx as its principal
corporate trust office for such purposes. The Owner Trustee shall give prompt
written notice to the Depositor and to the Certificateholders of any change in
the location of the Certificate Registrar or any such office or agency.
SECTION 3.10. Appointment of Certificate Paying Agent. The
Certificate Paying Agent shall make distributions to Certificateholders from
each Certificate Distribution Account pursuant to Section 5.2 and shall report
the amounts of such distributions to the Owner Trustee. Any Certificate Paying
Agent shall have the revocable power to withdraw funds from each Certificate
Distribution Account for the purpose of making the distributions
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referred to above. The Owner Trustee may revoke such power and remove the
Certificate Paying Agent if the Owner Trustee determines in its sole discretion
that the Certificate Paying Agent shall have failed to perform its obligations
under this Agreement in any material respect. The Certificate Paying Agent
shall initially be the Owner Trustee, and any co-paying agent chosen by the
Owner Trustee. The Owner Trustee shall be permitted to resign as Certificate
Paying Agent upon thirty (30) days' written notice to the Owner Trustee. In
the event that the Bank shall no longer be the Certificate Paying Agent, the
Owner Trustee shall appoint a successor to act as Certificate Paying Agent
(which shall be a bank or trust company). The Owner Trustee shall cause such
successor Certificate Paying Agent or any additional Certificate Paying Agent
appointed by the Owner Trustee to execute and deliver to the Owner Trustee an
instrument in which such successor Certificate Paying Agent or additional
Certificate Paying Agent shall agree with the Owner Trustee that as Certificate
Paying Agent, such successor Certificate Paying Agent or additional Certificate
Paying Agent will hold all sums, if any, held by it for payment to the
Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. The
Certificate Paying Agent shall return all unclaimed funds to the Owner Trustee
and upon removal of a Certificate Paying Agent such Certificate Paying Agent
shall also return all funds in its possession to the Owner Trustee. The
provisions of Sections 7.1, 7.3, 7.4 and 8.1 shall apply to the Owner Trustee
also in its role as Certificate Paying Agent, for so long as the Owner Trustee
shall act as Certificate Paying Agent and, to the extent applicable, to any
other paying agent appointed hereunder. Any reference in this Agreement to the
Certificate Paying Agent shall include any co-paying agent unless the context
requires otherwise.
SECTION 3.11. Certain Rights of Depositor. The Depositor
shall be entitled to any amounts not needed on any Distribution Date to make
payments on the Notes or the Certificates or to make deposits to the Reserve
Account pursuant to Section 4.6 of the Sale and Servicing Agreement, and to
receive amounts remaining in the Reserve Account following the payment in full
of the aggregate principal amount of the Notes and the Aggregate Certificate
Balance and of all other amounts owing or to
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be distributed hereunder or under the Indenture or the Sale and Servicing
Agreement to Noteholders and Certificateholders and the termination of the
Trust. The Depositor may not Transfer any such rights unless it shall have
received an Opinion of Counsel that such Transfer shall not cause the Trust to
be classified as an association (or publicly traded partnership) taxable as a
corporation.
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ARTICLE IV
ACTIONS BY OWNER TRUSTEE
SECTION 4.1. Prior Notice to Certificateholders with Respect
to Certain Matters. With respect to the following matters, the Owner Trustee
shall not take action unless, (I) at least thirty (30) days before the taking
of such action, the Owner Trustee shall have notified the Certificateholders
and the Rating Agencies in writing of the proposed action and (II)
Certificate-holders holding not less than a majority of the Aggregate
Certificate Balance shall not have notified the Owner Trustee in writing prior
to the 30th day after such notice is given that such Certificateholders have
withheld consent or provided alternative direction:
(a) the initiation of any material claim or lawsuit by
the Trust (except claims or lawsuits brought by the Servicer in
connection with the collection of the Receivables) and the settlement
of any material action, claim or lawsuit brought by or against the
Trust (except with respect to the aforementioned claims or lawsuits
for collection by the Servicer of the Receivables);
(b) the election by the Trust to file an amendment to the
Certificate of Trust (unless such amendment is required to be filed
under the Business Trust Statute);
(c) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is
required;
(d) the amendment of the Indenture by a supplemental
indenture in circumstances where the consent of any Noteholder is not
required and such amendment materially adversely affects the interests
of the Certificateholders;
(e) the amendment, change or modification of the Sale and
Servicing Agreement or the Administration Agreement, except to cure
any ambiguity or to amend or supplement any provision in a manner or
to add any provision that would not materially adversely
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affect the interests of the Certificateholders; or
(f) the appointment pursuant to the Indenture of a
successor Note Registrar, Note Paying Agent or Indenture Trustee, or
pursuant to this Agreement of a successor Certificate Registrar, or
the consent to the assignment by the Note Registrar, Note Paying Agent
or Indenture Trustee or Certificate Registrar of its obligations under
the Indenture or this Agreement, as applicable.
SECTION 4.2. Action by Certificateholders with Respect to
Certain Matters. The Owner Trustee may not, except upon the occurrence of an
Event of Servicing Termination subsequent to the payment in full of the Notes
and in accordance with the written direction of Certificateholders holding not
less than a majority of the Aggregate Certificate Balance, (a) remove the
Servicer under the Sale and Servicing Agreement pursuant to Article VIII
thereof, (b) appoint a successor Servicer pursuant to Article VIII of the Sale
and Servicing Agreement, (c) remove the Administrator under the Administration
Agreement pursuant to Section 9 thereof or (d) appoint a successor Administrator
pursuant to Section 9 of the Administration Agreement.
SECTION 4.3. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to commence a voluntary
proceeding in bankruptcy relating to the Trust unless the Notes have been paid
in full and each Certificateholder (other than the Depositor) approves of such
commencement in advance and delivers to the Owner Trustee a certificate
certifying that such Certificateholder reasonably believes that the Trust is
insolvent.
SECTION 4.4. Restrictions on Certificateholders' Power. The
Certificateholders shall not direct the Owner Trustee to take or refrain from
taking any action if such action or inaction would be contrary to any
obligation of the Trust or the Owner Trustee under this Agreement or any of the
other Basic Documents or would be contrary to Section 2.3, nor shall the Owner
Trustee be obligated to follow any such direction, if given.
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SECTION 4.5. Majority Control. Except as expressly provided
herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the Certificateholders of Certificates evidencing not
less than a majority of the Aggregate Certificate Balance. Except as expressly
provided herein, any written notice of the Certificateholders delivered
pursuant to this Agreement shall be effective if signed by Certificateholders
of Certificates evidencing not less than a majority of the Aggregate
Certificate Balance at the time of the delivery of such notice.
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ARTICLE V
APPLICATION OF TRUST FUNDS; CERTAIN DUTIES
SECTION 5.1. Establishment of Certificate Distribution
Account. Pursuant to Section 4.1(c) of the Sale and Servicing Agreement, there
has been established and there shall be maintained two segregated trust
accounts, each in the name of "PNC Bank, Delaware, as Owner Trustee" at a
Qualified Institution or Qualified Trust Institution (which shall initially be
the corporate trust department of the Bank), which shall be designated as the
"Certificate Interest Distribution Account" and the "Certificate Principal
Distribution Account," respectively (each of the Certificate Interest
Distribution Account and the Certificate Principal Distribution Account, a
"Certificate Distribution Account"). Except as expressly provided in Section
3.10, the Certificate Distribution Account shall be under the sole dominion and
control of the Owner Trustee. All monies deposited from time to time in each
Certificate Distribution Account pursuant to the Sale and Servicing Agreement
shall be applied as provided in the Basic Documents. In the event that either
Certificate Distribution Account is no longer to be maintained at the corporate
trust department of the Bank, the Servicer shall, with the Owner Trustee's
assistance as necessary, cause such Certificate Distribution Account to be
moved to a Qualified Institution or a Qualified Trust Institution within ten
(10) Business Days (or such longer period not to exceed thirty (30) calendar
days as to which each Rating Agency may consent). Each Certificate
Distribution Account will be established and maintained pursuant to an account
agreement which specifies New York law as the governing law.
SECTION 5.2. Application of Trust Funds. (a) On each
Distribution Date, the Owner Trustee shall, based on the information contained
in the Servicer's Certificate delivered on the relevant Determination Date
pursuant to Section 3.9 of the Sale and Servicing Agreement:
(i) withdraw the amounts deposited into the
Certificate Interest Distribution Account pursuant to Section
4.6(c) of the Sale and Servicing Agreement on or prior to such
Distribution Date and make or cause to be made distributions
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and payments in the following order of priority:
(1) first, to the Certificateholders of
Class C Certificates, an amount equal to the Accrued
Class C Certificate Interest, provided that if there
are not sufficient funds available to pay the entire
amount of the Accrued Class C Certificate Interest,
the amounts available shall be applied to the payment
of such interest on the Class C Certificates on a pro
rata basis;
(2) second, to the Certificateholders of
Class D Certificates, an amount equal to the Accrued
Class D Certificate Interest; provided that if there
are not sufficient funds available to pay the entire
amount of the Accrued Class D Certificate Interest,
the amounts available shall be applied to the payment
of such interest on the Class D Certificates on a pro
ratabasis; and
(3) third, to the Depositor, any funds
remaining on deposit in the Certificate Interest
Distribution Account.
(ii) withdraw the amounts deposited into the
Certificate Principal Distribution Account pursuant to
Section 4.6(c) and (d) of the Sale and Servicing Agreement on
or prior to such Distribution Date and make or cause to be
made distributions and payments in the following order of
priority:
(1) first, to the Certificateholders of the
Class C Certificates in reduction of the Certificate
Balance of the Class C Certificates, until the
Certificate Balance of the Class C Certificates has
been reduced to zero; provided that if there are not
sufficient funds available to reduce the Certificate
Balance of the Class C Certificates to zero, the
amounts available shall be applied to the reduction
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of the Certificate Balance of the Class C
Certificates on a pro rata basis;
(2) second, to the Certificateholders of
the Class D Certificates in reduction of the
Certificate Balance of the Class D Certificates,
until the Certificate Balance of the Class D
Certificates has been reduced to zero; provided that
if there are not sufficient funds available to reduce
the Certificate Balance of the Class D Certificates
to zero, the amounts available shall be applied o the
reduction of the Certificate Balance of the Class D
Certificates on pro rata basis; and
(3) third, to the Depositor, any funds
remaining on deposit in the Certificate Principal
Distribution Account.
(b) On each Distribution Date, the Owner Trustee shall, or
shall cause the Certificate Paying Agent to, send to each Certificateholder as
of the related Record Date the statement provided to the Owner Trustee by the
Servicer pursuant to Section 4.9 of the Sale and Servicing Agreement with
respect to such Distribution Date.
(c) In the event that any withholding tax is imposed on the
Trust's payment (or allocations of income) to a Certificateholder, such tax
shall reduce the amount otherwise distributable to such Certificateholder in
accordance with this Section 5.2. The Owner Trustee and each Certificate
Paying Agent is hereby authorized and directed to retain from amounts otherwise
distributable to the Certificateholders sufficient funds for the payment of any
such withholding tax that is legally owed by the Trust (but such authorization
shall not prevent the Owner Trustee from contesting any such tax in appropriate
proceedings, and withholding payment of such tax, if permitted by law, pending
the outcome of such proceedings). The amount of any withholding tax imposed
with respect to a Certificateholder shall be treated as cash distributed to
such Certificateholder at the time it is withheld by the Trust and remitted to
the appropriate taxing authority. If there is a possibility that withholding
tax is payable with respect to a distribution
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(such as a distribution to a non-U.S. Certificateholder), the Owner Trustee
may, in its sole discretion, withhold such amounts in accordance with this
paragraph (c). In the event that a Certificateholder wishes to apply for a
refund of any such withholding tax, the Owner Trustee shall reasonably
cooperate with such Certificateholder in making such claim so long as such
Certificateholder agrees to reimburse the Owner Trustee for any out-of-pocket
expenses incurred.
SECTION 5.3. Method of Payment. Subject to Section 9.1(c),
distributions required to be made to Certificateholders on any Distribution
Date shall be made to each Certificateholder of record on the preceding Record
Date either by wire transfer, in immediately available funds, to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if (i) such Certificateholder shall have provided to the Certificate
Registrar appropriate written instructions at least five (5) Business Days
prior to such Distribution Date and such Certificateholder's Certificates in
the aggregate evidence a denomination of not less than $1,000,000, or (ii) such
Certificateholder is the Depositor or, if not, by check mailed to such
Certificateholder at the address of such Certificateholder appearing in the
Certificate Register. Notwithstanding the foregoing, the final distribution in
respect of any Certificate (whether on the applicable Final Scheduled
Distribution Date or otherwise) will be payable only upon presentation and
surrender of such Certificate at the office or agency maintained for that
purpose by the Owner Trustee pursuant to Section 3.9.
SECTION 5.4. No Segregation of Monies; No Interest. Subject
to Sections 5.1 and 5.2, monies received by the Owner Trustee hereunder need
not be segregated in any manner except to the extent required by law, the
Indenture or the Sale and Servicing Agreement, and may be deposited under such
general conditions as may be prescribed by law, and the Owner Trustee shall not
be liable for any interest thereon.
SECTION 5.5. Accounting and Reports to Noteholders,
Certificateholders, Internal Revenue Service and Others. The Owner Trustee
shall, based on information provided by or on behalf of the Depositor, (a)
maintain (or cause to be maintained) the books of the
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Trust on a calendar year basis on the accrual method of accounting, (b) deliver
(or cause to be delivered) to each Certificateholder, as may be required by the
Code and applicable Treasury Regulations, such information as may be required
(including Schedule K-1) to enable each Certificateholder to prepare its
federal and State income tax returns, (c) file (or cause to be filed) such tax
returns relating to the Trust (including a partnership information return, IRS
Form 1065), and make such elections as may from time to time be required or
appropriate under any applicable State or federal statute or rule or regulation
thereunder so as to maintain the Trust's characterization as a partnership for
federal income tax purposes, (d) cause such tax returns to be signed in the
manner required by law and (e) collect (or cause to be collected) any
withholding tax as described in and in accordance with Section 5.2(c) with
respect to income or distributions to Certificateholders. The Owner Trustee
shall elect under Section 1278 of the Code to include in income currently any
market discount that accrues with respect to the Receivables. The Owner
Trustee shall not make the election provided under Section 754 of the Code.
SECTION 5.6. Signature on Returns; Tax Matters Partner. (a)
The Depositor, as general partner for income tax purposes, shall prepare (or
cause to be prepared) and sign, on behalf of the Trust, the tax returns of the
Trust.
(b) The Depositor shall be designated the "tax matters
partner" of the Trust pursuant to Section 6231(a)(7)(A) of the Code and
applicable Treasury Regulations.
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ARTICLE VI
AUTHORITY AND DUTIES OF OWNER TRUSTEE
SECTION 6.1. General Authority. The Owner Trustee is
authorized and directed to execute and deliver the Basic Documents to which the
Trust is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Trust is to be a
party and any amendment or other agreement, in each case, in such form as the
Depositor shall approve, as evidenced conclusively by the Owner Trustee's
execution thereof and the Depositor's execution of this Agreement, and to
direct the Indenture Trustee to authenticate and deliver (i) Class A-1 Notes in
the aggregate principal amount of $647,000,000, (ii) Class A-2 Notes in the
aggregate principal amount of $535,000,000, (iii) Class A-3 Notes in the
aggregate principal amount of $691,500,000, (iv) Class A-4 Notes in the
aggregate principal amount of $300,000,000 and (v) Class B Notes in the
aggregate principal amount of $80,500,000. In addition to the foregoing, the
Owner Trustee is authorized to take all actions required of the Trust pursuant
to the Basic Documents. The Owner Trustee is further authorized from time to
time to take such action on behalf of the Trust as is permitted by the Basic
Documents and which the Servicer or the Administrator recommends with respect
to the Basic Documents, except to the extent that this Agreement expressly
requires the consent of Certificateholders for such action.
SECTION 6.2. General Duties. It shall be the duty of the
Owner Trustee to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the other Basic
Documents to which the Trust is a party and to administer the Trust in the
interest of the Certificateholders, subject to the lien of the Indenture and in
accordance with the provisions of this Agreement and the other Basic Documents.
Notwithstanding the foregoing, the Owner Trustee shall be deemed to have
discharged its duties and responsibilities hereunder and under the Basic
Documents to the extent the Administrator is required in the Administration
Agreement to perform any act or to discharge such duty of the Owner Trustee or
the Trust hereunder or under any other Basic Document, and the Owner Trustee
shall not be held liable for the default or failure of the Administrator to
carry
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out its obligations under the Administration Agreement. Except as expressly
provided in the Basic Documents, the Owner Trustee shall have no obligation to
administer, service or collect the Receivables or to maintain, monitor or
otherwise supervise the administration, servicing or collection of the
Receivables.
SECTION 6.3. Action upon Instruction. (a) Subject to
Article IV, and in accordance with the terms of the Basic Documents, the
Certificateholders may, by written instruction, direct the Owner Trustee in the
management of the Trust.
(b) The Owner Trustee shall not be required to take any
action hereunder or under any Basic Document if the Owner Trustee shall have
reasonably determined, or shall have been advised by counsel, that such action
is likely to result in liability on the part of the Owner Trustee or is
contrary to the terms hereof or of any other Basic Document or is otherwise
contrary to law.
(c) Whenever the Owner Trustee is unable to decide
between alternative courses of action permitted or required by the terms of
this Agreement or any other Basic Document, the Owner Trustee shall promptly
give notice (in such form as shall be appropriate under the circumstances) to
the Certificateholders requesting instruction as to the course of action to be
adopted, and to the extent the Owner Trustee acts in good faith in accordance
with any written instruction of the Certificateholders received, the Owner
Trustee shall not be liable on account of such action to any Person. If the
Owner Trustee shall not have received appropriate instruction within ten (10)
days of such notice (or within such shorter period of time as reasonably may be
specified in such notice or may be necessary under the circumstances) it may,
but shall be under no duty to, take or refrain from taking such action, not
inconsistent with this Agreement or the other Basic Documents, as it shall deem
to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction.
(d) In the event the Owner Trustee is unsure as to the
application of any provision of this Agreement or any other Basic Document or
any such provision is ambiguous as to its application, or is, or appears to be,
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in conflict with any other applicable provision, or in the event that this
Agreement permits any determination by the Owner Trustee or is silent or is
incomplete as to the course of action that the Owner Trustee is required to
take with respect to a particular set of facts, the Owner Trustee may give
notice (in such form as shall be appropriate under the circumstances) to the
Certificateholders requesting instruction and, to the extent that the Owner
Trustee acts or refrains from acting in good faith in accordance with any such
instruction received, the Owner Trustee shall not be liable, on account of such
action or inaction, to any Person. If the Owner Trustee shall not have
received appropriate instruction within ten (10) days of such notice (or within
such shorter period of time as reasonably may be specified in such notice or
may be necessary under the circumstances) it may, but shall be under no duty
to, take or refrain from taking such action not inconsistent with this
Agreement or the other Basic Documents, as it shall deem to be in the best
interests of the Certificateholders, and shall have no liability to any Person
for such action or inaction.
SECTION 6.4. No Duties Except as Specified in this Agreement
or in Instructions. The Owner Trustee shall not have any duty or obligation to
manage, make any payment with respect to, register, record, sell, dispose of,
or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain
from taking any action under, or in connection with, any document contemplated
hereby to which the Owner Trustee or the Trust is a party, except as expressly
provided by the terms of this Agreement or in any document or written
instruction received by the Owner Trustee pursuant to Section 6.3; and no
implied duties or obligations shall be read into this Agreement or any other
Basic Document against the Owner Trustee. The Owner Trustee shall have no
responsibility for filing any financing or continuation statement in any public
office at any time or to otherwise perfect or maintain the perfection of any
security interest or lien granted to it hereunder or to prepare or file any
Commission filing for the Trust or to record this Agreement or any other Basic
Document. The Owner Trustee nevertheless agrees that it will, at its own cost
and expense, promptly take all action as may be necessary to discharge any lien
(other than the lien of the Indenture) on any part of the Owner Trust Estate
that results from actions
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by, or claims against, the Owner Trustee that are not related to the ownership
or the administration of the Owner Trust Estate.
SECTION 6.5. No Action Except Under Specified Documents or
Instructions. The Owner Trustee shall not manage, control, use, sell, dispose
of or otherwise deal with any part of the Owner Trust Estate except (i) in
accordance with the powers granted to and the authority conferred upon the
Owner Trustee pursuant to this Agreement, (ii) in accordance with the other
Basic Documents to which the Trust or the Owner Trust is a party and (iii) in
accordance with any document or instruction delivered to the Owner Trustee
pursuant to Section 6.3.
SECTION 6.6. Restrictions. The Owner Trustee shall not take
any action (a) that is inconsistent with the purposes of the Trust set forth in
Section 2.3 or (b) that, to the actual knowledge of the Owner Trustee, would
(i) affect the treatment of the Notes as indebtedness for federal income or
Applicable Tax State income or franchise tax purposes, (ii) be deemed to cause
a taxable exchange of the Notes for federal income or Applicable Tax State
income or franchise tax purposes or (iii) cause the Trust or any portion
thereof to be taxable as an association (or publicly traded partnership)
taxable as a corporation for federal income or Applicable Tax State income or
franchise tax purposes. The Certificateholders shall not direct the Owner
Trustee to take action that would violate the provisions of this Section 6.6.
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ARTICLE VII
REGARDING THE OWNER TRUSTEE
SECTION 7.1. Acceptance of Trusts and Duties. The Owner
Trustee accepts the trusts hereby created and agrees to perform its duties
hereunder with respect to such trusts but only upon the terms of this
Agreement. The Owner Trustee also agrees to disburse all monies actually
received by it constituting part of the Owner Trust Estate upon the terms of
this Agreement to which the Trust or Owner Trustee is a party and the other
Basic Documents. The Owner Trustee shall not be answerable or accountable
hereunder or under any other Basic Document under any circumstances, except (i)
for its own willful misconduct, bad faith or negligence or (ii) in the case of
the inaccuracy of any representation or warranty contained in Section 7.3
expressly made by the Owner Trustee. In particular, but not by way of
limitation (and subject to the exceptions set forth in the preceding sentence):
(a) the Owner Trustee shall not be liable for any error
of judgment made by a responsible officer of the Owner Trustee;
(b) the Owner Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in accordance with the
instructions of any Certificateholder, the Indenture Trustee, the
Depositor, the Administrator or the Servicer;
(c) no provision of this Agreement or any other Basic
Document shall require the Owner Trustee to expend or risk funds or
otherwise incur any financial liability in the performance of any of
its rights or powers hereunder or under any other Basic Document if
the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured or provided to it;
(d) under no circumstances shall the Owner Trustee be
liable for indebtedness evidenced by or arising under any of the Basic
Documents, including the principal of and interest on the Notes or
amounts distributable on the Certificates;
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(e) the Owner Trustee shall not be responsible for or in
respect of the validity or sufficiency of this Agreement or for the
due execution hereof by the Depositor or for the form, character,
genuineness, sufficiency, value or validity of any of the Owner Trust
Estate or for or in respect of the validity or sufficiency of the
other Basic Documents, other than the certificate of authentication on
the Certificates, and the Owner Trustee shall in no event assume or
incur any liability, duty, or obligation to any Noteholder or to any
Certificateholder, other than as expressly provided for herein and in
the other Basic Documents;
(f) the Owner Trustee shall not be liable for the default
or misconduct of the Servicer, the Administrator, the Depositor or the
Indenture Trustee under any of the Basic Documents or otherwise and
the Owner Trustee shall have no obligation or liability to perform the
obligations of the Trust under this Agreement or the other Basic
Documents that are required to be performed by the Administrator under
the Administration Agreement, the Servicer under the Sale and
Servicing Agreement or the Indenture Trustee under the Indenture; and
(g) the Owner Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement,
or to institute, conduct or defend any litigation under this Agreement
or otherwise or in relation to this Agreement or any other Basic
Document, at the request, order or direction of any of the
Certificateholders, unless such Certificateholders have offered to the
Owner Trustee security or indemnity satisfactory to it against the
costs, expenses and liabilities that may be incurred by the Owner
Trustee therein or thereby. The right of the Owner Trustee to perform
any discretionary act enumerated in this Agreement or in any other
Basic Document shall not be construed as a duty, and the Owner Trustee
shall not be answerable for other than its willful misconduct, bad
faith or negligence in the performance of any such act.
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SECTION 7.2. Furnishing of Documents. The Owner Trustee
shall furnish to the Certificateholders, promptly upon receipt of a written
request therefor, duplicates or copies of all reports, notices, requests,
demands, certificates, financial statements and any other instruments furnished
to the Owner Trustee under the Basic Documents.
SECTION 7.3. Representations and Warranties. The Owner
Trustee hereby represents and warrants to the Depositor, for the benefit of the
Certificateholders, that:
(a) It is a banking corporation duly organized and
validly existing in good standing under the laws of the State of
Delaware. It has all requisite corporate power and authority to
execute, deliver and perform its obligations under this Agreement.
(b) It has taken all corporate action necessary to
authorize the execution and delivery by it of this Agreement, and this
Agreement will be executed and delivered by one of its officers who is
duly authorized to execute and deliver this Agreement on its behalf.
(c) Neither the execution nor the delivery by it of this
Agreement, nor the consummation by it of the transactions contemplated
hereby nor compliance by it with any of the terms or provisions hereof
will contravene any federal or Delaware State law, governmental rule
or regulation governing the banking or trust powers of the Owner
Trustee or any judgment or order binding on it, or constitute any
default under its charter documents or by-laws or any indenture,
mortgage, contract, agreement or instrument to which it is a party or
by which any of its properties may be bound.
SECTION 7.4. Reliance; Advice of Counsel. (a) The Owner
Trustee may rely upon, shall be protected in relying upon, and shall incur no
liability to anyone in acting upon any signature, instrument, notice,
resolution, request, consent, order, certificate, report, opinion, bond, or
other document or paper believed by it to be genuine and believed by it to be
signed by the proper party or parties. The Owner Trustee may accept a
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certified copy of a resolution of the board of directors or other governing
body of any corporate party as conclusive evidence that such resolution has
been duly adopted by such body and that the same is in full force and effect.
As to any fact or matter the method of the determination of which is not
specifically prescribed herein, the Owner Trustee may for all purposes hereof
rely on a certificate, signed by the president or any vice president or by the
treasurer or other authorized officers of the relevant party, as to such fact
or matter and such certificate shall constitute full protection to the Owner
Trustee for any action taken or omitted to be taken by it in good faith in
reliance thereon.
(b) In the exercise or administration of the trusts
hereunder and in the performance of its duties and obligations under this
Agreement or the other Basic Documents, the Owner Trustee (i) may act directly
or through its agents or attorneys pursuant to agreements entered into with any
of them, and the Owner Trustee shall not be liable for the conduct or
misconduct of such agents or attorneys if such agents or attorneys shall have
been selected by the Owner Trustee with reasonable care, and (ii) may consult
with counsel, accountants and other skilled Persons to be selected with
reasonable care and employed by it. The Owner Trustee shall not be liable for
anything done, suffered or omitted in good faith by it in accordance with the
written opinion or advice of any such counsel, accountants or other such
Persons and not contrary to this Agreement or any other Basic Document.
SECTION 7.5. Not Acting in Individual Capacity. Except as
provided in this Article VII, in accepting the trusts hereby created, the Bank
acts solely as Owner Trustee hereunder and not in its individual capacity, and
all Persons having any claim against the Owner Trustee by reason of the
transactions contemplated by this Agreement or any other Basic Document shall
look only to the Owner Trust Estate for payment or satisfaction thereof.
SECTION 7.6. Owner Trustee Not Liable for Certificates or
Receivables. The recitals contained herein and in the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates)
shall be taken as the statements of the Depositor,
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and the Owner Trustee assumes no responsibility for the correctness thereof.
The Owner Trustee makes no representations as to the validity or sufficiency of
this Agreement, of any other Basic Document or of the Certificates (other than
the signature and countersignature of the Owner Trustee on the Certificates) or
the Notes, or of any Receivable or related documents. The Owner Trustee and
the Bank shall at no time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Receivable, or the
perfection and priority of any security interest created by any Receivable in
any Financed Vehicle or the maintenance of any such perfection and priority, or
for or with respect to the sufficiency of the Owner Trust Estate or its ability
to generate the payments to be distributed to Certificateholders under this
Agreement or the Noteholders under the Indenture, including, without
limitation: the existence, condition and ownership of any Financed Vehicle;
the existence and enforceability of any insurance thereon; the existence and
contents of any Receivable on any computer or other record thereof; the
validity of the assignment of any Receivable to the Trust or any intervening
assignment; the completeness of any Receivable; the performance or enforcement
of any Receivable; the compliance by the Depositor or the Servicer with any
warranty or representation made under any Basic Document or in any related
document, or the accuracy of any such warranty or representation or any action
of the Indenture Trustee, the Administrator or the Servicer or any subservicer
taken in the name of the Owner Trustee.
SECTION 7.7. Bank May Own Certificates and Notes. The Bank,
in its individual or any other capacity, may become the owner or pledgee of
Certificates or Notes and may deal with the Depositor, the Servicer, the
Administrator and the Indenture Trustee in banking transactions with the same
rights as it would have if it were not Owner Trustee.
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ARTICLE VIII
COMPENSATION AND INDEMNITY OF OWNER TRUSTEE
SECTION 8.1. Owner Trustee's Fees and Expenses. The Owner
Trustee shall receive as compensation for its services hereunder such fees as
have been separately agreed upon before the date hereof between the Depositor
and the Owner Trustee, and the Owner Trustee shall be entitled to and
reimbursed by the Depositor for its other reasonable expenses hereunder,
including the reasonable compensation, expenses and disbursements of such
agents, representatives, experts and counsel as the Owner Trustee may employ in
connection with the exercise and performance of its rights and its duties
hereunder. Such amounts shall be treated for tax purposes as having been
contributed to the Trust by the Depositor and the tax deduction for such
amounts shall be allocated to the Depositor.
SECTION 8.2. Indemnification. The Depositor shall be liable
as prime obligor for, and shall indemnify the Owner Trustee, the Bank and their
respective successors, assigns, agents and servants (collectively, the
"Indemnified Parties") from and against, any and all liabilities, obligations,
losses, damages, taxes, claims, actions and suits, and any and all reasonable
costs, expenses and disbursements (including reasonable legal fees and
expenses) of any kind and nature whatsoever (collectively, "Expenses") which
may at any time be imposed on, incurred by, or asserted against the Owner
Trustee, the Bank or any Indemnified Party in any way relating to or arising
out of this Agreement, the other Basic Documents, the Owner Trust Estate, the
administration of the Owner Trust Estate or the action or inaction of the Owner
Trustee hereunder; provided that the Depositor shall not be liable for or
required to indemnify an Indemnified Party from and against Expenses arising or
resulting from (i) the Indemnified Party's own willful misconduct, bad faith or
negligence, or (ii) the inaccuracy of any representation or warranty contained
in Section 7.3 expressly made by the Indemnified Party. The indemnities
contained in this Section 8.2 shall survive the resignation or termination of
the Owner Trustee or the termination of this Agreement. In the event of any
claim, action or proceeding for which indemnity will be sought pursuant to this
Section 8.2, the Owner Trustee's
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choice of legal counsel shall be subject to the approval of the Depositor,
which approval shall not be unreasonably withheld.
SECTION 8.3. Payments to Owner Trustee. Any amounts paid to
the Owner Trustee pursuant to this Article VIII shall be deemed not to be a
part of the Owner Trust Estate immediately after such payment.
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ARTICLE IX
TERMINATION
SECTION 9.1. Termination of Trust Agreement. (a) This
Agreement (other than the provisions of Article VIII) shall terminate and be of
no further force or effect and the Trust shall dissolve, (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation, (ii) upon the payment
to the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the terms of the Indenture, the Sale and Servicing
Agreement and Article V or (iii) at the time provided in Section 9.2. Any
Insolvency Event, liquidation, dissolution, death or incapacity with respect to
any Certificateholder, other than the Depositor as described in Section 9.2,
shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle
such Certificateholder's legal representatives or heirs to claim an accounting
or to take any action or proceeding in any court for a partition or winding up
of all or any part of the Trust or Owner Trust Estate nor (z) otherwise affect
the rights, obligations and liabilities of the parties hereto. Upon
dissolution of the Trust, the Owner Trustee shall wind up the business and
affairs of the Trust as required by Section 3808 of the Business Trust Statute.
(b) Except as provided in Section 9.1(a), neither the
Depositor nor any Certificateholder shall be entitled to revoke or terminate
the Trust.
(c) Notice of any termination of the Trust, specifying
the Distribution Date upon which the Certificateholders shall surrender their
Certificates to the Certificate Paying Agent for payment of the final
distribution and cancellation, shall be given by the Owner Trustee by letter to
Certificateholders mailed within five (5) Business Days of receipt of notice of
such termination from the Servicer, stating (i) the Distribution Date upon or
with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Certificate
Paying Agent therein designated, (ii) the amount of any such final payment
(after reservation of sums sufficient to pay all claims and obligations, if
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any, known to the Owner Trustee and payable by the Trust) and (iii) that the
Record Date otherwise applicable to such Distribution Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at
the office of the Certificate Paying Agent therein specified. The Owner
Trustee shall give such notice to the Certificate Registrar (if other than the
Owner Trustee) and the Certificate Paying Agent at the time such notice is
given to Certificateholders. Upon presentation and surrender of the
Certificates, the Certificate Paying Agent shall cause to be distributed to
Certificateholders amounts distributable on such Distribution Date pursuant to
Section 5.2. Upon the satisfaction and discharge of the Indenture, and receipt
of a certificate from the Indenture Trustee stating that all Noteholders have
been paid in full and that the Indenture Trustee is aware of no claims
remaining against the Trust in respect of the Indenture and the Notes, the
Owner Trustee, in the absence of actual knowledge of any other claim against
the Trust, shall be deemed to have made reasonable provision to pay all claims
and obligations (including conditional, contingent or unmatured obligations)
for purposes of Section 3808(e) of the Business Trust Statute.
In the event that all of the Certificateholders shall not
surrender their Certificates for cancellation within six (6) months after the
date specified in the above mentioned written notice, the Owner Trustee shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within one year after the second notice all the
Certificates shall not have been surrendered for cancellation, the Owner
Trustee may take appropriate steps, or may appoint an agent to take appropriate
steps, to contact the remaining Certificateholders concerning surrender of
their Certificates and the cost thereof shall be paid out of the funds and
other assets that shall remain subject to this Agreement. Subject to
applicable escheat laws, any funds remaining in the Trust after exhaustion of
such remedies shall be distributed by the Owner Trustee to the Depositor.
(d) Upon final distribution of any funds remaining in the
Trust, the Owner Trustee shall cause the Certificate of Trust to be cancelled
by filing a certificate
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of cancellation with the Secretary of State in accordance with the provisions
of Section 3810(c) of the Business Trust Statute.
SECTION 9.2. Dissolution upon Insolvency or Dissolution of
Depositor or General Partner. Notwithstanding the provisions of Section 3808
of the Business Trust Statute, in the event that an Insolvency Event or a
dissolution shall occur with respect to the Depositor or the General Partner,
the Receivables shall be sold and this Agreement and the Trust shall be
terminated in accordance with Section 9.1 ninety (90) days after the date of
such Insolvency Event or the event giving rise to such dissolution, unless,
before the end of such 90-day period, the Owner Trustee shall have received
written instructions from (a) the Certificateholders (other than the Depositor)
of each Class of Certificates evidencing not less than a majority of the
Certificate Balance of such Class and a majority of the right to receive
distributions in respect of interest on the Certificate Balance of such Class
(including in each case the Certificate Balance of Certificates owned by the
Servicer and any of its Affiliates other than the Depositor), (b) the
Noteholders (other than the Depositor) of each Class of Notes evidencing not
less than a majority of the principal amount of the outstanding Notes of such
Class and a majority of the right to receive interest on the outstanding Notes
of such Class (including in each case the Notes owned by the Servicer and any
of its Affiliates other than the Depositor), with each of the Class A-1 Notes,
the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes and the Class B
Notes treated as a separate Class of Notes for this purpose, and (c) holders of
other interests, if any (the existence of which interests the Administrator
will have advised the Owner Trustee in writing), in the Reserve Account (other
than the Depositor) having interests with a value not less than a majority of
the value of all interests in the Reserve Account (other than any such
interests held by the Depositor), to the effect that each such party
disapproves of the liquidation of the Receivables and termination of the Trust
and in connection therewith the Indenture Trustee (i) appoints an entity
acceptable to Ford Credit to acquire an interest in the Trust and to act as
substitute "general partner" of the Trust for federal income tax purposes and
(ii) obtains an Opinion of Counsel that the Trust will not thereafter be
classified as an association
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(or publicly traded partnership) taxable as a corporation for federal income
tax and Applicable Tax State purposes. Promptly after the occurrence of any
Insolvency Event or dissolution with respect to the Depositor or the General
Partner, (A) the Depositor shall give the Indenture Trustee and the Owner
Trustee written notice of such Insolvency Event, (B) the Owner Trustee shall,
upon the receipt of such written notice from the Depositor, give prompt written
notice to the Certificateholders, holders of interests, if any, in the Reserve
Account and the Indenture Trustee, of the occurrence of such event, (C) the
Indenture Trustee shall, upon receipt of written notice of such Insolvency
Event or dissolution from the Owner Trustee or the Depositor, give prompt
written notice to the Noteholders of the occurrence of such event, and (D) the
Owner Trustee shall, upon receipt of written instructions from the applicable
percentages of Noteholders, Certificateholders and holders of interests, if
any, in the Reserve Account disapproving of liquidation and termination, give
prompt written notice thereof to the Indenture Trustee; provided, however, that
any failure to give a notice required by this sentence shall not prevent or
delay, in any manner, a termination of the Trust pursuant to the first sentence
of this Section 9.2. Upon a termination pursuant to this Section 9.2, the
Owner Trustee shall direct the Indenture Trustee promptly to sell the assets of
the Trust (other than the Trust Accounts and the Certificate Distribution
Account) in a commercially reasonable manner and on commercially reasonable
terms. The proceeds of such a sale of the assets of the Trust shall be treated
as collections of Receivables under the Sale and Servicing Agreement and
deposited in the Collection Account and the Notes and Certificates shall be
paid in accordance with Section 4.6 of the Sale and Servicing Agreement.
SECTION 9.3. Prepayment of Certificates. (a) The
Certificates shall be prepaid in whole, but not in part, at the direction of
the Servicer pursuant to Section 9.1 of the Sale and Servicing Agreement, on
any Distribution Date on which the Servicer exercises its option to purchase
the assets of the Trust pursuant to said Section 9.1, and the amount paid by
the Servicer shall be treated as collections of Receivables and applied to pay
the unpaid principal amount of the Notes and the Aggregate Certificate Balance
plus accrued and unpaid interest (including any overdue interest) thereon. The
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Servicer shall furnish the Rating Agencies and the Certificateholders notice of
such prepayment. If the Certificates are to be prepaid pursuant to this
Section 9.3(a), the Servicer shall furnish notice of such election to the Owner
Trustee not later than twenty (20) days prior to the Prepayment Date and the
Trust shall deposit by 10:00 A.M. (New York City time) on the Prepayment Date
in the Certificate Distribution Account the Prepayment Price of the
Certificates to be redeemed, whereupon all such Certificates shall be due and
payable on the Prepayment Date.
(b) Notice of prepayment under Section 9.3(a) shall be given
by the Owner Trustee by first-class mail, postage prepaid, or by facsimile
mailed or transmitted immediately following receipt of notice from the Trust or
Servicer pursuant to Section 9.3(a), but not later than ten (10) days prior to
the applicable Prepayment Date, to each Certificateholder as of the close of
business on the Record Date preceding the applicable Prepayment Date, at such
Certificateholder's address or facsimile number appearing in the Certificate
Register.
All notices of prepayment shall state:
(i) the Prepayment Date;
(ii) the Prepayment Price; and
(iii) the place where such Certificates are to be
surrendered for payment of the Prepayment Price (which
shall be the office or agency of the Owner Trustee to be
maintained as provided in Section 3.9).
Notice of prepayment of the Certificates shall be given by the Owner Trustee in
the name and at the expense of the Trust. Failure to give notice of
prepayment, or any defect therein, to any Certificateholder shall not impair or
affect the validity of the prepayment of any other Certificate.
(c) Following notice of prepayment as required by Section
9.3(b), the Certificates shall on the Prepayment Date be paid by the Trust at
the Prepayment Price and (unless the Trust shall default in the payment of the
Prepayment Price) no interest shall accrue on the Prepay-
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ment Price for any period after the date to which accrued interest is
calculated for purposes of calculating the Prepayment Price. Following payment
in full of the Prepayment Price, this Agreement and the Trust shall terminate.
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ARTICLE X
SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES
SECTION 10.1. Eligibility Requirements for Owner Trustee.
The Owner Trustee shall at all times (i) be a corporation satisfying the
provisions of Section 3807(a) of the Business Trust Statute; (ii) be authorized
to exercise corporate trust powers; (iii) have a combined capital and surplus
of at least $50,000,000 and shall be subject to supervision or examination by
federal or state authorities; and (iv) shall have (or shall have a parent that
has) a long-term debt rating of investment grade by each of the Rating Agencies
or be otherwise acceptable to the Rating Agencies. If such corporation shall
publish reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for
the purpose of this Section 10.1, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. In case at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of
this Section 10.1, the Owner Trustee shall resign immediately in the manner and
with the effect specified in Section 10.2.
SECTION 10.2. Resignation or Removal of Owner Trustee. The
Owner Trustee may at any time resign and be discharged from the trusts hereby
created by giving written notice thereof to the Administrator. Upon receiving
such notice of resignation, the Administrator shall promptly appoint a
successor Owner Trustee by written instrument, in duplicate, one copy of which
instrument shall be delivered to the resigning Owner Trustee and one copy to
the successor Owner Trustee. If no successor Owner Trustee shall have been so
appointed and have accepted appointment within thirty (30) days after the
giving of such notice of resignation, the resigning Owner Trustee may petition
any court of competent jurisdiction for the appointment of a successor Owner
Trustee; provided, however, that such right to appoint or to petition for the
appointment of any such successor shall in no event relieve the resigning Owner
Trustee from any obligations otherwise imposed on it under the Basic Documents
until such successor has in fact assumed such appointment.
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If at any time the Owner Trustee shall cease to be eligible in
accordance with the provisions of Section 10.1 and shall fail to resign after
written request therefor by the Administrator, or if at any time the Owner
Trustee shall be legally unable to act, or if at any time an Insolvency Event
with respect to the Owner Trustee shall have occurred and be continuing, then
the Administrator may remove the Owner Trustee. If the Administrator shall
remove the Owner Trustee under the authority of the immediately preceding
sentence, the Administrator shall promptly appoint a successor Owner Trustee by
written instrument, in duplicate, one copy of which instrument shall be
delivered to the outgoing Owner Trustee so removed and one copy to the
successor Owner Trustee, and shall pay all fees owed to the outgoing Owner
Trustee.
Any resignation or removal of the Owner Trustee and
appointment of a successor Owner Trustee pursuant to any of the provisions of
this Section 10.2 shall not become effective until acceptance of appointment by
the successor Owner Trustee pursuant to Section 10.3, payment of all fees and
expenses owed to the outgoing Owner Trustee and the filing of a certificate of
amendment to the Certificate of Trust if required by the Business Trust
Statute. The Administrator shall provide notice of such resignation or removal
of the Owner Trustee to the Certificateholders, the Indenture Trustee, the
Noteholders and each of the Rating Agencies.
SECTION 10.3. Successor Owner Trustee. Any successor Owner
Trustee appointed pursuant to Section 10.2 shall execute, acknowledge and
deliver to the Administrator and to its predecessor Owner Trustee an instrument
accepting such appointment under this Agreement. Upon the resignation or
removal of the predecessor Owner Trustee becoming effective pursuant to Section
10.2, such successor Owner Trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties, and
obligations of its predecessor under this Agreement, with like effect as if
originally named as Owner Trustee. The predecessor Owner Trustee shall, upon
payment of its fees and expenses, deliver to the successor Owner Trustee all
documents and statements and monies held by it under this Agreement, and the
Administrator and the predecessor Owner Trustee shall execute and deliver such
instruments and do such
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other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Owner Trustee all such rights, powers, duties, and
obligations.
No successor Owner Trustee shall accept appointment as
provided in this Section 10.3 unless, at the time of such acceptance, such
successor Owner Trustee shall be eligible pursuant to Section 10.1.
Upon acceptance of appointment by a successor Owner Trustee
pursuant to this Section 10.3, the Administrator shall mail notice of the
successor of such Owner Trustee to all Certificateholders, the Indenture
Trustee, the Noteholders and the Rating Agencies. If the Administrator shall
fail to mail such notice within ten (10) days after acceptance of appointment
by the successor Owner Trustee, the successor Owner Trustee shall cause such
notice to be mailed at the expense of the Administrator.
SECTION 10.4. Merger or Consolidation of Owner Trustee. Any
corporation into which the Owner Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Owner Trustee, shall, without the execution or filing of any
instrument or any further act on the part of any of the parties hereto,
anything herein to the contrary notwithstanding, be the successor of the Owner
Trustee hereunder; provided that such corporation shall be eligible pursuant to
Section 10.1; and provided further, that the Owner Trustee shall mail notice of
such merger or consolidation to the Rating Agencies not less than fifteen (15)
days prior to the effective date thereof.
SECTION 10.5. Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Owner Trust Estate or any Financed Vehicle may at the time be located,
the Administrator and the Owner Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Owner Trustee to act as co-trustee, jointly with the Owner
Trustee, or separate
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trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person, in such capacity, such title to the Owner Trust Estate, or any
part thereof, and, subject to the other provisions of this Section 10.5, such
powers, duties, obligations, rights and trusts as the Administrator and the
Owner Trustee may consider necessary or desirable. If the Administrator shall
not have joined in such appointment within fifteen (15) days after the receipt
by it of a request so to do, the Owner Trustee alone shall have the power to
make such appointment. No co-trustee or separate trustee under this Agreement
shall be required to meet the terms of eligibility as a successor trustee
pursuant to Section 10.1 and no notice of the appointment of any co-trustee or
separate trustee shall be required pursuant to Section 10.3.
Each separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties, and obligations conferred or
imposed upon the Owner Trustee shall be conferred upon and exercised
or performed by the Owner Trustee and such separate trustee or
co-trustee jointly (it being understood that such separate trustee or
co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law
of any jurisdiction in which any particular act or acts are to be
performed, the Owner Trustee shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties,
and obligations (including the holding of title to the Trust or any
portion thereof in any such jurisdiction) shall be exercised and
performed singly by such separate trustee or co-trustee, but solely at
the direction of the Owner Trustee;
(ii) no trustee under this Agreement shall be personally
liable by reason of any act or omission of any other trustee under
this Agreement; and
(iii) the Administrator and the Owner Trustee acting jointly
may at any time accept the resignation of or remove any separate
trustee or co-trustee.
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Any notice, request or other writing given to the Owner
Trustee shall be deemed to have been given to each of the then separate
trustees and co-trustees, as effectively as if given to each of them. Every
instrument appointing any separate trustee or co-trustee shall refer to this
Agreement and the conditions of this Article X. Each separate trustee and
co-trustee, upon its acceptance of the trusts conferred, shall be vested with
the estates or property specified in its instrument of appointment, either
jointly with the Owner Trustee or separately, as may be provided therein,
subject to all the provisions of this Agreement, specifically including every
provision of this Agreement relating to the conduct of, affecting the liability
of, or affording protection to, the Owner Trustee. Each such instrument shall
be filed with the Owner Trustee and a copy thereof given to the Administrator.
Any separate trustee or co-trustee may at any time appoint the
Owner Trustee as its agent or attorney-in-fact with full power and authority,
to the extent not prohibited by law, to do any lawful act under or in respect
of this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Owner Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.
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ARTICLE XI
MISCELLANEOUS
SECTION 11.1. Supplements and Amendments. (a) This
Agreement may be amended by the Depositor and the Owner Trustee, with prior
written notice to the Rating Agencies, without the consent of any of the
Noteholders or the Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement inconsistent with any other
provision of this Agreement or for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions in this Agreement;
provided, however, that such action shall not, as evidenced by an Opinion of
Counsel satisfactory to the Owner Trustee and the Indenture Trustee adversely
affect in any material respect the interests of any Noteholder or
Certificateholder; and provided further that an Opinion of Counsel shall be
furnished to the Indenture Trustee and the Owner Trustee to the effect that
such amendment (A) will not materially adversely affect the federal or any
Applicable Tax State income or franchise taxation of any outstanding Note or
Certificate, or any Noteholder or Certificateholder and (B) will not cause the
Trust to be taxable as a corporation for federal or any Applicable Tax State
income or franchise tax purposes.
(b) This Agreement may also be amended from time to time by
the Depositor and the Owner Trustee, with prior written notice to the Rating
Agencies, with the consent of (i) the Noteholders of Notes evidencing not less
than a majority of the principal amount of the Notes Outstanding and (ii) the
Certificateholders of Certificates evidencing not less than a majority of the
Aggregate Certificate Balance, for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Noteholders or the
Certificateholders; provided, however, that no such amendment shall (i)
increase or reduce in any manner the amount of, or accelerate or delay the
timing of, or change the allocation or priority of, collections of payments on
Receivables or distributions that are required to be made for the benefit of
the Noteholders or the Certificateholders, or (ii) reduce the aforesaid
percentage of the principal amount of the Notes Outstanding
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and the Aggregate Certificate Balance required to consent to any such
amendment, without the consent of all the Noteholders and Certificateholders
affected thereby; and provided further, that an Opinion of Counsel shall be
furnished to the Indenture Trustee and the Owner Trustee to the effect that
such amendment (A) will not materially adversely affect the federal or any
Applicable Tax State income or franchise taxation of any outstanding Note or
Certificate, or any Noteholder or Certificateholder and (B) will not cause the
Trust to be taxable as a corporation for federal or any Applicable Tax State
income or franchise tax purposes.
(c) Promptly after the execution of any such amendment or
consent, the Owner Trustee shall furnish written notification of the substance
of such amendment or consent to each Certificateholder, the Indenture Trustee
and each of the Rating Agencies.
(d) It shall not be necessary for the consent of
Certificateholders, the Noteholders or the Indenture Trustee pursuant to this
Section 11.1 to approve the particular form of any proposed amendment or
consent, but it shall be sufficient if such consent shall approve the substance
thereof. The manner of obtaining such consents (and any other consents of
Certificateholders provided for in this Agreement or in any other Basic
Document) and of evidencing the authorization of the execution thereof by
Certificateholders shall be subject to such reasonable requirements as the
Owner Trustee may prescribe.
(e) Promptly after the execution of any amendment to the
Certificate of Trust, the Owner Trustee shall cause the filing of such
amendment with the Secretary of State.
(f) Prior to the execution of any amendment to this Agreement
or the Certificate of Trust, the Owner Trustee shall be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment is
authorized or permitted by this Agreement. The Owner Trustee may, but shall
not be obligated to, enter into any such amendment which affects the Owner
Trustee's own rights, duties or immunities under this Agreement or otherwise.
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(g) In connection with the execution of any amendment to this
Agreement or any amendment to any other agreement to which the Trust is a
party, the Owner Trustee shall be entitled to receive and conclusively rely
upon an Opinion of Counsel to the effect that such amendment is authorized or
permitted by the Basic Documents and that all conditions precedent in the Basic
Documents for the execution and delivery thereof by the Trust or the Owner
Trustee, as the case may be, have been satisfied.
SECTION 11.2. No Legal Title to Owner Trust Estate in
Certificateholders. The Certificateholders shall not have legal title to any
part of the Owner Trust Estate. The Certificateholders shall be entitled to
receive distributions with respect to their beneficial interests therein only
in accordance with Articles V and IX. No transfer, by operation of law or
otherwise, of any right, title, or interest of the Certificateholders to and in
their beneficial interest in the Owner Trust Estate shall operate to terminate
this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner
Trust Estate.
SECTION 11.3. Limitation on Rights of Others. Except for
Section 2.7, the provisions of this Agreement are solely for the benefit of the
Owner Trustee, the Depositor, the Administrator, the Certificateholders, the
Servicer and, to the extent expressly provided herein, the Indenture Trustee
and the Noteholders, and nothing in this Agreement (other than Section 2.7),
whether express or implied, shall be construed to give to any other Person any
legal or equitable right, remedy or claim in the Owner Trust Estate or under or
in respect of this Agreement or any covenants, conditions or provisions
contained herein.
SECTION 11.4. Notices. (a) Unless otherwise expressly
specified or permitted by the terms hereof, all notices shall be in writing and
shall be deemed given upon receipt by the intended recipient or three (3)
Business Days after mailing if mailed by certified mail, postage prepaid
(except that notice to the Owner Trustee shall be deemed given only upon actual
receipt by the Owner Trustee), if to the Owner Trustee, addressed to the
Corporate Trust Office; if to the Depositor, addressed to
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Ford Credit Auto Receivables Two L.P. at the address of its principal executive
office first above written; or, as to each party, at such other address as
shall be designated by such party in a written notice to each other party.
(b) Any notice required or permitted to be given to a
Certificateholder shall be given by first-class mail, postage prepaid, at the
address of such Certificateholder as shown in the Certificate Register. Any
notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
SECTION 11.5. Severability. Any provision of this Agreement
that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 11.6. Separate Counterparts. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute but one and the same instrument.
SECTION 11.7. Successors and Assigns. All covenants and
agreements contained herein shall be binding upon, and inure to the benefit of,
the Depositor, the Owner Trustee and its successors and each Certificateholder
and its successors and permitted assigns, all as herein provided. Any request,
notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such
Certificateholder.
SECTION 11.8. No Petition. The Owner Trustee (not in its
individual capacity but solely as Owner Trustee), by entering into this
Agreement, and each Certificateholder, by accepting a Certificate, hereby
covenant and agree that they will not, until after the Notes have been paid in
full, institute against the
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Depositor, the General Partner or the Trust, or join in any institution against
the Depositor, the General Partner or the Trust of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or State bankruptcy or similar law
in connection with any obligations relating to the Certificates, the Notes,
this Agreement or any of the other Basic Documents.
SECTION 11.9. No Recourse. Each Certificateholder, by
accepting a Certificate, acknowledges that such Certificateholder's
Certificates represent beneficial interests in the Trust only and do not
represent interests in or obligations of the Depositor, the General Partner,
the Servicer, the Administrator, the Owner Trustee, the Indenture Trustee or
any Affiliate thereof, and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated in this Agreement,
the Certificates or the other Basic Documents.
SECTION 11.10. Headings. The headings of the various
Articles and Sections herein are for convenience of reference only and shall
not define or limit any of the terms or provisions hereof.
SECTION 11.11. Governing Law. This Agreement shall be
construed in accordance with the laws of the State of Delaware and the
obligations, rights and remedies of the parties hereunder shall be determined
in accordance with such laws.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES
TWO L.P., as Depositor
By: FORD CREDIT AUTO RECEIVABLES
TWO, INC.,
as General Partner
By: /s/ X. X. Xxxxxx
---------------------------
Name: X. X. Xxxxxx
Title: Assistant Secretary
PNC BANK, DELAWARE,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxxxxxx X. XxXxxxxx
----------------------------
Name: Xxxxxxx X. XxXxxxxx
Title: Vice President
63
EXHIBIT A
[FORM OF CLASS C CERTIFICATE]
NUMBER $________
R-_____ CUSIP NO. 00000XXX0
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE TRUST
AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO OWNER TRUST 1998-A
CLASS C 6.20% ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined
below, which property includes a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed
thereby, conveyed to Ford Credit Auto Receivables Two L.P. by Ford Motor Credit
Company and conveyed by Ford Credit Auto Receivables Two L.P. to the Trust.
The property of the Trust has been pledged to the Indenture Trustee pursuant to
the Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of Ford Motor
Credit Company, Ford Credit Auto Receivables Two L.P. or any of their
respective Affiliates, except to the extent described below.)
THIS CERTIFIES THAT __________ is the registered owner of
___________ DOLLARS nonassessable, fully-paid, beneficial interest in Class C
Certificates of Ford Credit Auto Owner Trust 1998-A (the "Trust") formed by
Ford Credit Auto Receivables Two L.P., a Delaware limited partnership (the
"Depositor"). The Class C Certificates have an aggregate Initial Certificate
Balance of $46,000,000 and bear interest at a rate of 6.20% per annum (the
"Class C Rate").
A-1
64
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class C Certificates referred to in the
within-mentioned Trust Agreement.
Dated: February 26, 1998
PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By:
---------------------------------
Authorized Officer
65
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of February 1, 1998 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), by
and between the Depositor and PNC Bank, Delaware, not in its individual
capacity but solely as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Class C 6.20% Asset Backed Certificates" (herein called the
"Class C Certificates") which, together with the Certificates designated as
"Class D 7.50% Asset Backed Certificates" (the "Class D Certificates" and,
together with the Class C Certificates, the "Certificates") are issued under
and are subject to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the Certificateholder of this Certificate by virtue of
the acceptance hereof assents and by which such Certificateholder is bound.
Also issued under the Indenture, dated as of February 1, 1998 (as from time to
time amended, supplemented or otherwise modified and in effect, the
"Indenture"), between the Trust and The Chase Manhattan Bank, as indenture
trustee (in such capacity, the "Indenture Trustee"), are the Notes designated
as "Class A-1 5.545% Asset Backed Notes", "Class A-2 5.60% Asset Backed Notes",
"Class A-3 5.65% Asset Backed Notes", "Class A-4 5.70% Asset Backed Notes" and
"Class B 5.95% Asset Backed Notes" (collectively, the "Notes"). The property of
the Trust includes (i) a pool of motor vehicle retail installment sale
contracts for new and used automobiles and light trucks and certain rights and
obligations thereunder (the "Receivables"); (ii) with respect to Precomputed
Receivables, all monies due thereunder on or after the Cutoff Date and, with
respect to Simple Interest Receivables, all monies due or received thereunder
on or after the Cutoff Date; (iii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other interest
of the Trust in the Financed Vehicles; (iv) rights to proceeds from claims on
certain physical damage, credit life, credit disability or other insurance
policies, if any, covering Financed Vehicles or Obligors; (v) Dealer
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Recourse; (vi) all of the Seller's rights to the Receivable Files; (vii) such
amounts as from time to time may be held in one or more accounts maintained
pursuant to the Sale and Servicing Agreement, dated as of February 1, 1998 (as
from time to time amended, supplemented or otherwise modified and in effect,
the "Sale and Servicing Agreement"), by and among the Trust, the Depositor, as
seller (in such capacity, the "Seller"), and Ford Motor Credit Company, as
servicer (the "Servicer"), including the Reserve Account; (viii) the Seller's
rights under the Sale and Servicing Agreement; (ix) the Seller's rights under
the Purchase Agreement; (x) payments and proceeds with respect to the
Receivables held by the Servicer; (xi) all property (including the right to
receive Liquidation Proceeds) securing a Receivable (other than a Receivable
repurchased by the Servicer or purchased by the Seller); (xii) rebates of
premiums and other amounts relating to insurance policies and other items
financed under the Receivables in effect as of the Cutoff Date; and (xiii) any
and all proceeds of the foregoing. THE RIGHTS OF THE OWNER TRUSTEE IN THE
FOREGOING PROPERTY OF THE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO
SECURE THE PAYMENT OF THE NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day,
the next Business Day (each, a "Distribution Date"), commencing March 16, 1998,
to the Person in whose name this Certificate is registered at the close of
business on the last day of the preceding month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to
Class C Certificateholders on such Distribution Date; provided, however, that
principal will be distributed to the Class C Certificateholders on each
Distribution Date on (to the extent of funds remaining after all classes of the
Notes have been paid in full) and after the date on which all classes of the
Notes have been paid in full. Notwithstanding the foregoing, following the
occurrence and during the continuation of an event of default under the
Indenture which has resulted in an acceleration of the Notes or following
certain events of insolvency or a dissolution with respect to the Depositor or
the General Partner, no distributions of principal or interest will be made on
the Certificates
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until all principal and interest on the Notes has been paid in full.
THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS OF THE NOTEHOLDERS AS DESCRIBED IN THE SALE AND
SERVICING AGREEMENT, THE INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
franchise and income tax and any other income taxes, the Trust will be treated
as a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Certificate agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until after the
Notes have been paid in full, institute against the Depositor, the General
Partner or the Trust, or join in any institution against the Depositor, the
General Partner or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Certificates, the Trust Agreement or any
of the other Basic Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at
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the office or agency maintained for the purpose by the Owner Trustee in
Wilmington, Delaware.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Certificateholder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
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In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Class C Certificate to be
duly executed.
FORD CREDIT AUTO OWNER
TRUST 1998-A
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By:
-------------------------------------
Authorized Officer
70
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the General Partner, the Servicer, the
Administrator, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. A registration statement, which includes the Trust
Agreement as an exhibit thereto, has been filed with the Securities and
Exchange Commission with respect to the Notes and the Class C Certificates.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Noteholders and the Certificateholders evidencing not less than
a majority of the principal amount of the Notes Outstanding and the Aggregate
Certificate Balance, respectively. Any such consent by the Certificateholder
of this Certificate shall be conclusive and binding on such Certificateholder
and on all future Certificateholders of this Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of any of the
Certificateholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the Transfer of the Certificates are registrable
in the Certificate Register upon surrender of this Certificate for registration
of Transfer at the offices or agencies maintained by PNC Bank, Delaware in its
capacity as Certificate Registrar, or by any successor Certificate Registrar,
in Wilmington, Delaware, accompanied by a written instrument
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of transfer in form satisfactory to the Owner Trustee and the Certificate
Registrar duly executed by the holder hereof or such holder's attorney duly
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same aggregate interest in the Trust will be
issued to the designated transferee.
The Certificates are issuable as registered Certificates
without coupons in denominations of at least $20,000 and in integral multiples
of $1,000 in excess thereof. Certificates are exchangeable for new
Certificates of like Class and authorized denominations evidencing the same
aggregate denomination, as requested by the Certificateholder surrendering the
same. No service charge will be made for any such registration of Transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or on behalf of (A) an
employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department
of Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or
(E) a person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company general
account, but excluding any entity registered under the Investment Company Act
of 1940, as amended).
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In addition, the Certificates may not be acquired by or on
behalf of a Person other than (A) a citizen or resident of the United States,
(B) a corporation or partnership organized in or under the laws of the United
States or any political subdivision thereof, (C) an estate the income of which
is includible in gross income for United States tax purposes, regardless of its
source, (D) a trust if a U.S. court is able to exercise primary supervision
over the administration of such trust and one or more Persons meeting the
conditions of this paragraph has the authority to control all substantial
decisions of the trust or (E) a Person not described in clauses (A) through (D)
above whose ownership of the Certificates is effectively connected with such
Person's conduct of a trade or business within the United States (within the
meaning of the Code) and who provides the Owner Trustee and the Depositor with
an IRS Form 4224 (and such other certifications, representations, or opinions
of counsel as may be requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation or (ii) upon the payment
to the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the Indenture, the Trust Agreement and the Sale and
Servicing Agreement, and upon such termination any remaining assets of the
Trust shall be distributed to the Depositor. The Servicer of the Receivables
may at its option purchase the assets of the Trust at a price specified in the
Sale and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Notes and the
Certificates; however, such right of purchase is exercisable only as of the
last day of any Collection Period as of which the Pool Balance is less than or
equal to 10% of the Initial Pool Balance.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
------------------------------------------------------------------ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
*/
-----------------------------------
Signature Guaranteed:
*/
-----------------------------------
-----------------------------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
X-00
00
XXXXXXX X
[FORM OF CLASS D CERTIFICATE]
NUMBER $________
R-_____ Xxxxxxx Xxxxxxxxx
Xx. 00000XXX0
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER ANY STATE SECURITIES
OR BLUE SKY LAW OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY
PURCHASING THIS CERTIFICATE, AGREES FOR THE BENEFIT OF THE TRUST AND THE
DEPOSITOR THAT THIS CERTIFICATE MAY BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE
TRANSFERRED ONLY IN COMPLIANCE WITH THE SECURITIES ACT AND OTHER APPLICABLE
LAWS, AND ONLY (1) PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A")
TO A PERSON THAT THE HOLDER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER, WITHIN THE MEANING OF RULE 144A (A "QIB"), PURCHASING FOR ITS OWN
ACCOUNT OR FOR THE ACCOUNT OF A QIB, WHOM THE HOLDER HAS INFORMED, IN EACH
CASE, THAT THE REOFFER, RESALE, PLEDGE, OR OTHER TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, SUBJECT TO (A) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A CERTIFICATE SUBSTANTIALLY IN THE FORM ATTACHED AS
EXHIBIT F TO THE TRUST AGREEMENT AND (B) THE RECEIPT BY THE TRUST AND THE
CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN THE FORM ATTACHED AS EXHIBIT
D TO THE TRUST AGREEMENT, (2) PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), SUBJECT TO THE
RECEIPT BY THE TRUST, THE INITIAL PURCHASER AND THE CERTIFICATE REGISTRAR OF
SUCH EVIDENCE ACCEPTABLE TO THE TRUST AND THE INITIAL PURCHASER THAT SUCH
REOFFER, RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT
AND THE SECURITIES ACT AND OTHER APPLICABLE LAWS, (3) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING THEREOF IN RULE 501(a)(1), (2), (3) OR
(7) OF REGULATION D UNDER THE SECURITIES ACT PURSUANT TO ANY OTHER EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO (A) THE
RECEIPT BY THE TRUST AND THE CERTIFICATE REGISTRAR OF A LETTER SUBSTANTIALLY IN
THE FORM ATTACHED AS EXHIBIT E TO THE TRUST AGREEMENT OR (B) THE RECEIPT BY THE
TRUST, THE INITIAL PURCHASER AND THE CERTIFICATE REGISTRAR OF SUCH OTHER
EVIDENCE ACCEPTABLE TO THE TRUST AND THE INITIAL PURCHASER THAT SUCH REOFFER,
RESALE, PLEDGE OR TRANSFER IS IN COMPLIANCE WITH THE TRUST AGREEMENT AND THE
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SECURITIES ACT AND OTHER APPLICABLE LAWS, OR (4) TO THE DEPOSITOR OR ITS
AFFILIATES, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF
THE UNITED STATES AND SECURITIES AND BLUE SKY LAWS OF THE STATES OF THE UNITED
STATES.
THE PRINCIPAL OF THIS CERTIFICATE IS DISTRIBUTABLE AS SET FORTH IN THE TRUST
AGREEMENT. ACCORDINGLY, THE OUTSTANDING PRINCIPAL BALANCE OF THIS CERTIFICATE
AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF.
FORD CREDIT AUTO OWNER TRUST 1998-A
CLASS D 7.50% ASSET BACKED CERTIFICATE
evidencing a beneficial interest in the property of the Trust, as defined
below, which property includes a pool of motor vehicle retail installment sale
contracts, secured by security interests in the motor vehicles financed
thereby, conveyed to Ford Credit Auto Receivables Two L.P. by Ford Motor Credit
Company and conveyed by Ford Credit Auto Receivables Two L.P. to the Trust.
The property of the Trust has been pledged to the Indenture Trustee pursuant to
the Indenture to secure the payment of the Notes issued thereunder.
(This Certificate does not represent an interest in or obligation of Ford Motor
Credit Company, Ford Credit Auto Receivables Two L.P. or any of their
respective Affiliates, except to the extent described below.)
THIS CERTIFIES THAT __________ is the registered owner of
___________ DOLLARS nonassessable, fully-paid, beneficial interest in Class D
Certificates of Ford Credit Auto Owner Trust 1998-A (the "Trust") formed by
Ford Credit Auto Receivables Two L.P., a Delaware limited partnership (the
"Depositor"). The Class D Certificates have an aggregate Initial Certificate
Balance of $46,000,000 and bear interest at a rate of 7.50% per annum (the
"Class D Rate").
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76
OWNER TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Class D Certificates referred to in the
within-mentioned Trust Agreement.
Dated: February 26, 1998
PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By:
---------------------------------
Authorized Officer
77
The Trust was created pursuant to an Amended and Restated
Trust Agreement, dated as of February 1, 1998 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Trust Agreement"), by
and between the Depositor and PNC Bank, Delaware, not in its individual
capacity but solely as owner trustee (the "Owner Trustee"), a summary of
certain of the pertinent provisions of which is set forth below. To the extent
not otherwise defined herein, the capitalized terms used herein have the
meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as "Class D 7.50% Asset Backed Certificates" (herein called the
"Class D Certificates") which, together with the Certificates designated as
"Class C 6.20% Asset Backed Certificates" (the "Class C Certificates" and,
together with the Class D Certificates, the "Certificates") are issued under
and are subject to the terms, provisions and conditions of the Trust Agreement,
to which Trust Agreement the Certificateholder of this Certificate by virtue of
the acceptance hereof assents and by which such Certificateholder is bound.
Also issued under the Indenture, dated as of February 1, 1998 (as from time to
time amended, supplemented or otherwise modified and in effect, the
"Indenture"), between the Trust and The Chase Manhattan Bank, as indenture
trustee (in such capacity, the "Indenture Trustee"), are the Notes designated
as "Class A-1 5.545% Asset Backed Notes", "Class A-2 5.60% Asset Backed Notes",
"Class A-3 5.65% Asset Backed Notes", "Class A-4 5.70% Asset Backed Notes" and
"Class B 5.95% Asset Backed Notes" (collectively, the "Notes"). The property
of the Trust includes (i) a pool of motor vehicle retail installment sale
contracts for new and used automobiles and light trucks and certain rights and
obligations thereunder (the "Receivables"); (ii) with respect to Precomputed
Receivables, all monies due thereunder on or after the Cutoff Date and, with
respect to Simple Interest Receivables, all monies due or received thereunder
on or after the Cutoff Date; (iii) the security interests in the Financed
Vehicles granted by Obligors pursuant to the Receivables and any other interest
of the Trust in the Financed Vehicles; (iv) rights to proceeds from claims on
certain physical damage, credit life, credit disability or other insurance
policies, if any, covering Financed Vehicles or Obligors; (v) Dealer Recourse;
(vi) all of the Seller's rights to the Receivable Files; (vii) such amounts as
from time to time may
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be held in one or more accounts maintained pursuant to the Sale and Servicing
Agreement, dated as of February 1, 1998 (as from time to time amended,
supplemented or otherwise modified and in effect, the "Sale and Servicing
Agreement"), by and among the Trust, the Depositor, as seller (in such
capacity, the "Seller"), and Ford Motor Credit Company, as servicer (the
"Servicer"), including the Reserve Account; (viii) the Seller's rights under
the Sale and Servicing Agreement; (ix) the Seller's rights under the Purchase
Agreement; (x) payments and proceeds with respect to the Receivables held by
the Servicer; (xi) all property (including the right to receive Liquidation
Proceeds) securing a Receivable (other than a Receivable repurchased by the
Servicer or purchased by the Seller); (xii) rebates of premiums and other
amounts relating to insurance policies and other items financed under the
Receivables in effect as of the Cutoff Date; and (xiii) any and all proceeds of
the foregoing. THE RIGHTS OF THE OWNER TRUSTEE IN THE FOREGOING PROPERTY OF
THE TRUST HAVE BEEN PLEDGED TO THE INDENTURE TRUSTEE TO SECURE THE PAYMENT OF
THE NOTES.
Under the Trust Agreement, there will be distributed on the
fifteenth day of each month or, if such fifteenth day is not a Business Day,
the next Business Day (each, a "Distribution Date"), commencing March 16, 1998,
to the Person in whose name this Certificate is registered at the close of
business on the last day of the preceding month (the "Record Date") such
Certificateholder's percentage interest in the amount to be distributed to
Class D Certificateholders on such Distribution Date; provided, however, that
principal will be distributed to the Class D Certificateholders on each
Distribution Date on (to the extent of funds remaining after all classes of the
Notes and the Class C Certificates have been paid in full) and after the date
on which all classes of the Notes and the Class C Certificates have been paid
in full. Notwithstanding the foregoing, following the occurrence and during
the continuation of an event of default under the Indenture which has resulted
in an acceleration of the Notes or following certain events of insolvency or a
dissolution with respect to the Depositor or the General Partner, no
distributions of principal or interest will be made on the Certificates until
all principal and interest on the Notes has been paid in full.
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THE HOLDER OF THIS CERTIFICATE ACKNOWLEDGES AND AGREES THAT
ITS RIGHTS TO RECEIVE DISTRIBUTIONS IN RESPECT OF THIS CERTIFICATE ARE
SUBORDINATED TO THE RIGHTS OF THE NOTEHOLDERS AND THE CLASS C
CERTIFICATEHOLDERS AS DESCRIBED IN THE SALE AND SERVICING AGREEMENT, THE
INDENTURE AND THE TRUST AGREEMENT.
It is the intent of the Depositor, the Servicer and the
Certificateholders that, for purposes of federal income, state and local
franchise and income tax and any other income taxes, the Trust will be treated
as a partnership and the Certificateholders (including the Depositor) will be
treated as partners in that partnership. The Depositor and the other
Certificateholders by acceptance of a Certificate agree to treat, and to take
no action inconsistent with the treatment of, the Certificates for such tax
purposes as partnership interests in the Trust.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not, until after the
Notes have been paid in full, institute against the Depositor, the General
Partner or the Trust, or join in any institution against the Depositor, the
General Partner or the Trust of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings, or other proceedings under any United
States federal or state bankruptcy or similar law in connection with any
obligations relating to the Notes, the Certificates, the Trust Agreement or any
of the other Basic Documents.
Distributions on this Certificate will be made as provided in
the Trust Agreement by the Owner Trustee or the Certificate Paying Agent by
wire transfer or check mailed to the Certificateholder of record in the
Certificate Register without the presentation or surrender of this Certificate
or the making of any notation hereon. Except as otherwise provided in the
Trust Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Owner Trustee of the pendency
of such distribution and only upon presentation and surrender of this
Certificate at the office or agency maintained for the purpose by the Owner
Trustee in Wilmington, Delaware.
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Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon shall have
been executed by an authorized officer of the Owner Trustee, by manual
signature, this Certificate shall not entitle the Certificateholder hereof to
any benefit under the Trust Agreement or the Sale and Servicing Agreement or be
valid for any purpose.
This Certificate shall be construed in accordance with the
laws of the State of Delaware and the obligations, rights and remedies of the
parties hereunder shall be determined in accordance with such laws.
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81
In WITNESS WHEREOF, the Owner Trustee, on behalf of the Trust
and not in its individual capacity, has caused this Class D Certificate to be
duly executed.
FORD CREDIT AUTO OWNER
TRUST 1998-A
By: PNC BANK, DELAWARE,
not in its individual capacity but
solely as Owner Trustee
By:
---------------------------------------
Authorized Officer
82
[REVERSE OF CERTIFICATE]
The Certificates do not represent an obligation of, or an
interest in, the Depositor, the General Partner, the Servicer, the
Administrator, the Owner Trustee or any Affiliates of any of them and no
recourse may be had against such parties or their assets, except as may be
expressly set forth or contemplated herein, in the Trust Agreement or in the
other Basic Documents. In addition, this Certificate is not guaranteed by any
governmental agency or instrumentality and is limited in right of payment to
certain collections with respect to the Receivables (and certain other
amounts), all as more specifically set forth herein and in the Sale and
Servicing Agreement. A registration statement, which includes the Trust
Agreement as an exhibit thereto, has been filed with the Securities and
Exchange Commission with respect to the Notes and the Class C Certificates.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the rights of the Certificateholders under the
Trust Agreement at any time by the Depositor and the Owner Trustee with the
consent of the Noteholders and the Certificateholders evidencing not less than
a majority of the principal amount of the Notes Outstanding and the Aggregate
Certificate Balance, respectively. Any such consent by the Certificateholder
of this Certificate shall be conclusive and binding on such Certificateholder
and on all future Certificateholders of this Certificate and of any Certificate
issued upon the registration of Transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Trust Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of any of the
Certificateholders.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the Transfer of the Certificates are registrable
in the Certificate Register upon surrender of this Certificate for registration
of Transfer at the offices or agencies maintained by PNC Bank, Delaware in its
capacity as Certificate Registrar, or by any successor Certificate Registrar,
in Wilmington, Delaware, accompanied by a written instrument of transfer in
form satisfactory to the Owner Trustee and the Certificate Registrar duly
executed by the holder
B-9
83
hereof or such holder's attorney duly authorized in writing, and thereupon one
or more new Certificates of authorized denominations evidencing the same
aggregate interest in the Trust will be issued to the designated transferee.
The Certificates are issuable as registered Certificates
without coupons in denominations of at least $20,000 and in integral multiples
of $1,000 in excess thereof. Certificates are exchangeable for new
Certificates of like Class and authorized denominations evidencing the same
aggregate denomination, as requested by the Certificateholder surrendering the
same. No service charge will be made for any such registration of Transfer or
exchange, but the Owner Trustee or the Certificate Registrar may require
payment of a sum sufficient to cover any tax or governmental charge payable in
connection therewith.
The Owner Trustee, the Certificate Registrar and any agent of
the Owner Trustee or the Certificate Registrar may treat the Person in whose
name this Certificate is registered as the owner hereof for all purposes, and
none of the Owner Trustee, the Certificate Registrar or any such agent shall be
affected by any notice to the contrary.
The Certificates may not be acquired by or on behalf of (A) an
employee benefit plan, as defined in Section 3(3) of ERISA, that is subject to
Title I of ERISA, (B) a plan described in Section 4975(e)(1) of the Code that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department
of Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or
(E) a person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company general
account, but excluding any entity registered under the Investment Company Act
of 1940, as amended).
In addition, the Certificates may not be acquired by or on
behalf of a Person other than (A) a citizen or resident of the United States,
(B) a corporation or partnership organized in or under the laws of the
X-00
00
Xxxxxx Xxxxxx or any political subdivision thereof, (C) an estate the income of
which is includible in gross income for United States tax purposes, regardless
of its source, (D) a trust if a U.S. court is able to exercise primary supervi-
sion over the administration of such trust and one or more Persons meeting the
conditions of this paragraph has the authority to control all substantial
decisions of the trust or (E) a Person not described in clauses (A) through (D)
above whose ownership of the Certificates is effectively connected with such
Person's conduct of a trade or business within the United States (within the
meaning of the Code) and who provides the Owner Trustee and the Depositor with
an IRS Form 4224 (and such other certifications, representations, or opinions
of counsel as may be requested by the Owner Trustee or the Depositor).
The obligations and responsibilities created by the Trust
Agreement and the Trust created thereby shall terminate (i) upon the maturity
or other liquidation of the last remaining Receivable and the disposition of
any amounts received upon such maturity or liquidation or (ii) upon the payment
to the Noteholders and the Certificateholders of all amounts required to be
paid to them pursuant to the Indenture, the Trust Agreement and the Sale and
Servicing Agreement, and upon such termination any remaining assets of the
Trust shall be distributed to the Depositor. The Servicer of the Receivables
may at its option purchase the assets of the Trust at a price specified in the
Sale and Servicing Agreement, and such purchase of the Receivables and other
property of the Trust will effect early retirement of the Notes and the
Certificates; however, such right of purchase is exercisable only as of the
last day of any Collection Period as of which the Pool Balance is less than or
equal to 10% of the Initial Pool Balance.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
--------------------------------------------------------------------------------
(Please print or type name and address, including postal zip code, of assignee)
--------------------------------------------------------------------------------
the within Certificate, and all rights thereunder, hereby irrevocably
constituting and appointing
_______________________________________________________________ Attorney to
transfer said Certificate on the books of the Certificate Registrar, with full
power of substitution in the premises.
Dated:
*/
-----------------------------------
Signature Guaranteed:
*/
-----------------------------------
-----------------------------------
*/ NOTICE: The signature to this assignment must correspond with the name as
it appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Such signature must be
guaranteed by a member firm of the New York Stock Exchange or a commercial bank
or trust company.
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EXHIBIT C
[FORM OF INVESTMENT LETTER - CLASS C CERTIFICATES]
[Date]
Ford Credit Auto Owner Trust 1998-A,
as Issuer
PNC Bank, Delaware,
as Owner Trustee and
as Certificate Registrar
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Ladies and Gentlemen:
In connection with our proposed purchase of the Class C 6.20% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-A
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor" or "Seller"), we confirm that:
1. We are not, and each account (if any) for which we are
purchasing the Certificates is not, (A) an employee benefit plan (as defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the "Code"), that
is subject to Section 4975 of the Code, (C) a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to
a material extent, similar to the provisions of Section 406 of ERISA or Section
4975 of the Code, (D) an entity whose underlying assets include plan assets by
reason of a plan's investment in the entity (within the meaning of Department
of Labor Regulation 29 C.F.R. Section 2510.3-101 or otherwise under ERISA) or
(E) a person investing "plan assets" of any such plan (including without
limitation, for purposes of this clause (E), any insurance company general
account, but excluding any entity registered under the Investment Company Act
of 1940, as amended).
2. We are, and each account (if any) for which we are
purchasing the Certificates is, a person who is (A) a citizen or resident of
the United States, (B) a corporation or partnership organized in or under the
laws of the United States or any political subdivision thereof, (C) an estate
the income of which is includible in gross income for United States tax
purposes, regardless of its source, (D) a trust if a U.S. court is able to
exercise primary supervision over the administration
C-1
87
of such trust and one or more Persons meeting the conditions of clause (A),
(B), (C) or (E) of this paragraph 2 has the authority to control all
substantial decisions of the trust or (E) a Person not described in clauses (A)
through (D) above whose ownership of the Certificates is effectively connected
with such Person's conduct of a trade or business within the United States
(within the meaning of the Code) and who provides the Issuer and the Depositor
with an IRS Form 4224 (and such other certifications, representations, or
opinions of counsel as may be requested by the Issuer or the Depositor).
3. We understand that any purported resale, transfer,
assignment, participation, pledge, or other disposal of (any such act, a
"Transfer") of any Certificate (or any interest therein) to any person who does
not meet the conditions of paragraphs 1 and 2 above shall be null and void
(each, a "Void Transfer"), and the purported transferee in a Void Transfer
shall not be recognized by the Issuer or any other person as a
Certificateholder for any purpose.
4. We agree that if we determine to Transfer any of the
Certificates we will cause our proposed transferee to provide to the Issuer and
the Certificate Registrar a letter substantially in the form of this letter.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
---------------------------
Name:
Title:
Securities To Be Purchased:
$ principal balance of Certificates
Annex A attached hereto lists the name of the account and principal balance of
Certificates purchased for each account (if any) for which we are purchasing
Certificates.
C-2
88
EXHIBIT D
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
QUALIFIED INSTITUTIONAL BUYER]
[Date]
Ford Credit Auto Owner Trust 1998-A
as Issuer
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx, Xxxxx & Co.
as Initial Purchaser in connection with
the Private Placement Memorandum referred to below
Asset Backed Operations
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Ford Credit Auto Owner Trust 1998-A
Class D 7.50% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 7.50% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-A
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated February 19, 1998, relating to
the Certificates and such other information as we deem necessary in order
to make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Private Placement
Memorandum and the undersigned agrees to the bound by, and not to resell,
transfer, assign, participate, pledge or otherwise dispose of (any such
act, a "Transfer") the Certificates
D-1
89
except in compliance with, such restrictions and conditions and the
Securities Act of 1933, as amended (the "Securities Act").
3. We understand that no subsequent Transfer of the Certificates
is permitted unless we cause our proposed transferee to provide to the
Issuer, the Certificate Registrar and the Initial Purchaser a letter
substantially in the form of Exhibit B or Exhibit C to the Private
Placement Memorandum, as applicable, or such other written statement as
the Depositor shall prescribe.
4. We are a "qualified institutional buyer" (within the meaning of
Rule 144A under the Securities Act) (a "QIB") and we are acquiring the
Certificates for our own account or for a single account (which is a QIB)
as to which we exercise sole investment discretion.
5. We are not (A) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") that is subject to Section 4975 of the Code, (C) a governmental
plan, as defined in Section 3(32) of ERISA, subject to any federal, State
or local law which is, to a material extent, similar to the provisions of
Section 406 of ERISA or Section 4975 of the Code, (D) an entity whose
underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29
C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a person
investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account,
but excluding any entity registered under the Investment Company Act of
1940, as amended).
6. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws
of the United States or any political subdivision thereof, (iii) an
estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, (iv) a trust if a U.S.
court is able to exercise primary supervision over the administration of
such trust and one or more persons described in clauses (i) to (iii)
above or clause (v) below has the authority to control all substantial
D-2
90
decisions of the trust or (v) a person not described in clauses (i) to
(iv) above whose ownership of the Certificates is effectively connected
with such person's conduct of a trade or business within the United
States (within the meaning of the Code) and who provides the Issuer and
the Depositor with a Form 4224 (and such other certifications,
representations, or opinions of counsel as may be requested by the Issuer
or the Depositor).
7. We understand that any purported Transfer of any Certificate
(or any interest therein) in contravention of the restrictions and
conditions above will be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer will not be recognized by the
Issuer or any other person as a Certificateholder for any purpose.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
D-3
91
EXHIBIT E
[FORM OF INVESTMENT LETTER - CLASS D CERTIFICATES
INSTITUTIONAL ACCREDITED INVESTOR]
[Date]
Ford Credit Auto Owner Trust 1998-A
as Issuer
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Xxxxxxx, Xxxxx & Co.
as Initial Purchaser in connection with
the Private Placement Memorandum referred to below
Asset Backed Operations
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Ford Credit Auto Owner Trust 1998-A
Class D 7.50% Asset Backed Certificates
Ladies and Gentlemen:
In connection with our proposed purchase of the Class D 7.50% Asset
Backed Certificates (the "Certificates") of Ford Credit Auto Owner Trust 1998-A
(the "Issuer"), a trust formed by Ford Credit Auto Receivables Two L.P. (the
"Depositor"), we confirm that:
1. We have received a copy of the Private Placement Memorandum
(the "Private Placement Memorandum") dated February 19, 1998, relating to
the Certificates and such other information as we deem necessary in order
to make our investment decision. We understand that the Private Placement
Memorandum speaks only as of its date and that the information contained
therein may not be correct or complete as of any time subsequent to such
date.
2. We agree to be bound by the restrictions and conditions set
forth under the heading "Notice to Investors" in the Private Placement
Memorandum and the undersigned agrees to the bound by, and not to resell,
transfer, assign, participate, pledge or otherwise
E-1
92
dispose of (any such act, a "Transfer") the Certificates except in
compliance with, such restrictions and conditions and the Securities Act
of 1933, as amended (the "Securities Act").
3. We understand that no subsequent Transfer of the Certificates
is permitted unless we cause our proposed transferee to provide to the
Issuer, the Certificate Registrar and the Initial Purchaser a letter
substantially in the form of Exhibit B or Exhibit C to the Private
Placement Memorandum, as applicable, or such other written statement as
the Depositor shall prescribe.
4. We are an institutional "accredited investor" (as defined in
Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and we are
acquiring the Certificates for our own account.
5. We are not (A) an employee benefit plan (as defined in Section
3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) that is subject to Title I of ERISA, (B) a plan described in
Section 4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code") that is subject to Section 4975 of the Code, (C) a governmental
plan, as defined in Section 3(32) of ERISA, subject to any federal, State
or local law which is, to a material extent, similar to the provisions of
Section 406 of ERISA or Section 4975 of the Code, (D) an entity whose
underlying assets include plan assets by reason of a plan's investment in
the entity (within the meaning of Department of Labor Regulation 29
C.F.R. Section 2510.3-101 or otherwise under ERISA) or (E) a person
investing "plan assets" of any such plan (including without limitation,
for purposes of this clause (E), any insurance company general account,
but excluding any entity registered under the Investment Company Act of
1940, as amended).
6. We are a person who is (i) a citizen or resident of the United
States, (ii) a corporation or partnership organized in or under the laws
of the United States or any political subdivision thereof, (iii) an
estate the income of which is includible in gross income for United
States tax purposes, regardless of its source, (iv) a trust if a U.S.
court is able to exercise primary supervision over the administration of
such trust and one or more persons described in clauses (i) to (iii)
above or clause (v) below has the authority to control all substantial
decisions of the trust or (v) a person not described
E-2
93
in clauses (i) to (iv) above whose ownership of the Certificates is
effectively connected with such person's conduct of a trade or business
within the United States (within the meaning of the Code) and who
provides the Issuer and the Depositor with a Form 4224 (and such other
certifications, representations, or opinions of counsel as may be
requested by the Issuer or the Depositor).
7. We understand that any purported Transfer of any Certificate
(or any interest therein) in contravention of the restrictions and
conditions above will be null and void (each, a "Void Transfer"), and the
purported transferee in a Void Transfer will not be recognized by the
Issuer or any other person as a Certificateholder for any purpose.
You are entitled to rely upon this letter and are irrevocably authorized
to produce this letter or a copy hereof to any interested party in any
administrative or legal proceedings or official inquiry with respect to the
matters covered hereby.
Very truly yours,
By:
----------------------------
Name:
Title:
Securities To Be Purchased:
$ principal amount of Certificates
X-0
00
XXXXXXX X
FORM OF RULE 144A TRANSFEROR CERTIFICATE -
CLASS D CERTIFICATES
[Date]
PNC Bank, Delaware
as Owner Trustee and
Certificate Registrar
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Re: Ford Credit Auto Owner Trust 1998-A
Class D 7.50% Asset Backed Certificates
Ladies and Gentlemen:
This is to notify you as to the transfer of $ [*] in denomination of Class
D 7.50% Asset Backed Certificates (the "Certificates") of Ford Credit Auto
Owner Trust 1998-A (the "Issuer").
The undersigned is the holder of the Certificates and with this notice
hereby deposits with the Owner Trustee $ [*] in denomination of Certificates
and requests that Certificates of the same class in the same aggregate
denomination be issued, executed and authenticated and registered to the
purchaser on , 199 , as specified in the Trust Agreement dated as of
February 1, 1998 relating to the Certificates, as follows:
Name: Denominations:
Address:
Taxpayer I.D. No:
The undersigned represents and warrants that the undersigned (i) reasonably
believes the purchaser is a "qualified institutional buyer," as defined in Rule
144A under the Securities Act of 1933 (the "Act"), (ii) such purchaser has
acquired the Certificates in a transaction effected in accordance with the
exemption from the registration requirements of the Act provided by Rule 144A,
(iii) if the purchaser has purchased the Certificates for an account for which
it is acting as fiduciary or agent, such account is a qualified institutional
buyer and (iv) the purchaser is acquiring Certificates for its own account
F-1
95
or for an institutional account for which it is acting as fiduciary or agent.
Very truly yours,
[NAME OF HOLDER OF CERTIFICATES]
By:
------------------------------------
Name:
Title:
[*] authorized denomination
F-2
96
EXHIBIT G
[FORM OF CERTIFICATE OF TRUST]
CERTIFICATE OF TRUST OF
FORD CREDIT AUTO OWNER TRUST 1998-A
This Certificate of Trust of FORD CREDIT AUTO OWNER TRUST
1998-A (the "TRUST"), dated as of February 1, 1998, is being duly executed and
filed by PNC Bank, Delaware, a Delaware banking corporation, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. Code,
Section 3801 et seq.).
1. Name. The name of the business trust formed hereby
is FORD CREDIT AUTO OWNER TRUST 1998-A.
2. Delaware Trustee. The name and business address of
the trustee of the Trust in the State of Delaware is PNC Bank, Delaware, 000
Xxxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx 00000.
IN WITNESS WHEREOF, the undersigned, being the sole trustee of
the Trust, has executed this Certificate of Trust as of the date first above
written.
PNC BANK, DELAWARE,
not in its individual capacity but
solely as owner trustee under a Trust
Agreement dated as of February 1, 1998
By:
-------------------------------------
Name:
Title:
G-1
97
APPENDIX A
Definitions and Usage
AA-1
