Exhibit 99.1
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SALE AND SERVICING AGREEMENT
by and among
FORD CREDIT AUTO OWNER TRUST 2002-C,
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO LLC,
as Seller,
and
FORD MOTOR CREDIT COMPANY,
as Servicer
Dated as of June 1, 2002
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND USAGE
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property..................................................1
SECTION 2.2 Representations and Warranties of the Seller as
to the Receivables.........................................................2
SECTION 2.3 Repurchase upon Breach........................................................7
SECTION 2.4 Custody of Receivable Files...................................................7
SECTION 2.5 Duties of Servicer as Custodian...............................................8
SECTION 2.6 Instructions; Authority to Act................................................9
SECTION 2.7 Custodian's Indemnification...................................................9
SECTION 2.8 Effective Period and Termination.............................................10
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer...........................................................10
SECTION 3.2 Collection of Receivable Payments............................................11
SECTION 3.3 Realization Upon Receivables.................................................11
SECTION 3.4 Allocations of Collections...................................................12
SECTION 3.5 Maintenance of Security Interests in Financed Vehicles.......................12
SECTION 3.6 Covenants of Servicer........................................................12
SECTION 3.7 Purchase of Receivables Upon Breach..........................................12
SECTION 3.8 Servicer Fee.................................................................13
SECTION 3.9 Servicer's Certificate.......................................................13
SECTION 3.10 Annual Statement as to Compliance; Notice of Event of
Servicing Termination.....................................................14
SECTION 3.11 Annual Independent Certified Public
Accountant's Report..........................................................15
SECTION 3.12 Access to Certain Documentation and
Information Regarding Receivables............................................15
SECTION 3.13 Servicer Expenses............................................................16
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1 Accounts.....................................................................16
SECTION 4.2 Investment of funds on deposit in the Reserve
Account and the Collection Account and Payahead Account...................18
SECTION 4.3 Remittances..................................................................21
SECTION 4.4 Application of Collections...................................................22
SECTION 4.5 Advances.....................................................................22
SECTION 4.6 Additional Deposits to the Collection Account
and Withdrawals from the Reserve Account..................................24
SECTION 4.7 Distributions................................................................25
SECTION 4.8 Net Deposits.................................................................30
SECTION 4.9 Statements to Noteholders and Certificateholders.............................30
ARTICLE V
Intentionally Omitted
ARTICLE VI
THE SELLER
SECTION 6.1 Representations and Warranties of Seller.....................................32
SECTION 6.2 Liability of Seller; Indemnities.............................................34
SECTION 6.3 Merger or Consolidation of, or Assumption of
the Obligations of, Seller................................................36
SECTION 6.4 Limitation on Liability of Seller and Others.................................36
SECTION 6.5 Seller May Own Securities....................................................37
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer..................................................37
SECTION 7.2 Indemnities of Servicer......................................................39
SECTION 7.3 Merger or Consolidation of, or Assumption of
the Obligations of, Servicer..............................................40
SECTION 7.4 Limitation on Liability of Servicer and Others...............................41
SECTION 7.5 Delegation of Duties.........................................................42
SECTION 7.6 Ford Credit Not to Resign as Servicer........................................42
SECTION 7.7 Servicer May Own Securities..................................................42
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination..............................................43
SECTION 8.2 Appointment of Successor Servicer............................................45
SECTION 8.3 Repayment of Advances........................................................45
SECTION 8.4 Notification to Noteholders and Certificateholders...........................46
SECTION 8.5 Waiver of Past Events of Servicing Termination...............................46
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables.........................................46
SECTION 9.2. Succession Upon Satisfaction and Discharge of Indenture......................47
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment....................................................................47
SECTION 10.2 Protection of Title to Trust Property........................................49
SECTION 10.3 Governing Law................................................................52
SECTION 10.4 Notices......................................................................52
SECTION 10.5 Severability of Provisions...................................................53
SECTION 10.6 Assignment...................................................................53
SECTION 10.7 Further Assurances...........................................................53
SECTION 10.8 No Waiver; Cumulative Remedies...............................................53
SECTION 10.9 Third-Party Beneficiaries....................................................53
SECTION 10.10 Actions by Noteholders or Certificateholders.................................54
SECTION 10.11 Agent for Service............................................................54
SECTION 10.12 No Bankruptcy Petition.......................................................54
SECTION 10.13 Limitation of Liability of Owner Trustee and Indenture Trustee...............55
SECTION 10.14 Savings Clause...............................................................55
Schedule A Schedule of Receivables........................................................SA-1
Schedule B Location of Receivable Files at Third Party Custodians for Ford Credit .........B-1
Appendix A Definitions and Usage..........................................................AA-1
SALE AND SERVICING AGREEMENT, dated as of June 1, 2002 (as from
time to time amended, supplemented or otherwise modified and in effect, this
"Agreement"), by and among FORD CREDIT AUTO OWNER TRUST 2002-C (the
"Issuer"), a Delaware business trust, FORD CREDIT AUTO RECEIVABLES TWO LLC, a
Delaware limited liability company, as seller (the "Seller"), and FORD MOTOR
CREDIT COMPANY, a Delaware corporation, as servicer (the "Servicer").
WHEREAS, the Issuer desires to purchase a portfolio of
receivables and related property consisting of retail installment sale
contracts secured by new and used automobiles and light duty trucks generated
by Ford Motor Credit Company and PRIMUS in the ordinary course of their
business and conveyed to the Seller;
WHEREAS, the Seller is willing to sell such portfolio of
receivables and related property to the Issuer; and
WHEREAS, Ford Motor Credit Company is willing to service such
receivables on behalf of the Issuer;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS AND USAGE
Except as otherwise specified herein or as the context may
otherwise require, capitalized terms used but not otherwise defined herein
are defined in Appendix A hereto, which also contains rules as to usage that
are applicable herein.
ARTICLE II
TRUST PROPERTY
SECTION 2.1 Conveyance of Trust Property. In consideration of the
Issuer's sale and delivery to, or upon the order of, the Seller of the
Securities in an aggregate principal amount equal to 96.54% of the Initial
Pool Balance, the Seller does hereby irrevocably sell, transfer, assign and
otherwise convey to the Issuer without recourse (subject to the obligations
herein) all right, title and interest of the Seller, whether now owned or
hereafter acquired, in and to the Trust Property. The transfer, assignment
and conveyance made hereunder will not constitute and is not intended to
result in an assumption by the Issuer of any obligation of the Seller to the
Obligors, the Dealers or any other Person in connection with the Receivables
and the other Trust Property or any agreement, document or instrument related
thereto.
SECTION 2.2 Representations and Warranties of the Seller as to
the Receivables. The Seller makes the following representations and
warranties as to the Receivables on which the Issuer will be deemed to have
relied in accepting the Receivables. Such representations and warranties
speak as of the Closing Date, but will survive the transfer, assignment and
conveyance of the Receivables to the Issuer and the pledge thereof to the
Indenture Trustee pursuant to the Indenture.
(i) Characteristics of Receivables. Each Receivable (a) has been
originated in the United States of America by a Dealer for the retail sale of
a Financed Vehicle in the ordinary course of such Dealer's business, has been
fully and properly executed by the parties thereto, has been purchased either
(X) by the Seller from Ford Credit, which in turn has purchased such
Receivable from a Dealer under an existing dealer agreement with Ford Credit,
and which has been validly assigned by such Dealer to Ford Credit and which
in turn has been validly assigned by Ford Credit to the Seller in accordance
with its terms, or (Y) by the Seller from Ford Credit, which has been
assigned such Receivable by PRIMUS, which in turn has purchased such
Receivable from a Dealer or other finance source (provided that such purchase
relates to an individual Receivable and not a bulk purchase) under an
existing agreement with PRIMUS, and which has been validly assigned by such
Dealer or other finance source to PRIMUS and has been validly assigned by
PRIMUS to Ford Credit in the ordinary course of business and which in turn
has been validly assigned by Ford Credit to the Seller in accordance with its
terms, (b) creates or has created a valid, subsisting, and enforceable first
priority security interest in favor of Ford Credit in the Financed Vehicle,
which security interest has been assigned by Ford Credit to the Seller, which
in turn will be assignable by the Seller to the Issuer, (c) contains
customary and enforceable provisions such that the rights and remedies of the
holder thereof are adequate for realization against the collateral of the
benefits of the security, (d) provides for level monthly payments (provided
that the payment in the last month in the life of the Receivable may be
different but in no event more than twice the amount of the level payment)
that fully amortize the Amount Financed by maturity and yield interest at the
Annual Percentage Rate, (e) provides for, in the event that such contract is
prepaid, a prepayment that fully pays the Principal Balance, and (f) is an
Actuarial Receivable or a Simple Interest Receivable.
(ii) Schedule of Receivables. The information set forth in the
Schedule of Receivables is true and correct in all material respects as of
the opening of business on the Cutoff Date, and no selection procedures
believed to be adverse to the Noteholders or the Certificateholders have been
utilized in selecting the Receivables from those receivables which meet the
criteria contained herein. The computer tape or other listing regarding the
Receivables made available to the Issuer and its assigns (which computer tape
or other listing is required to be delivered as specified herein) is true and
correct in all material respects.
(iii) Compliance with Law. Each Receivable and the sale of the
Financed Vehicle complied at the time it was originated or made and at the
execution of this Agreement complies in all material respects with all
requirements of applicable federal, State, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportunity Act, the Fair Credit
Reporting Act, the Fair Debt Collection Practices Act, the Federal Trade
Commission Act, the Xxxxxxxx-Xxxx Warranty Act, the Federal Reserve Board's
Regulations B and Z, and State adaptations of the National Consumer Act and
of the Uniform Consumer Credit Code, and other consumer credit laws and equal
credit opportunity and disclosure laws.
(iv) Binding Obligation. Each Receivable represents the genuine,
legal, valid, and binding payment obligation of the Obligor, enforceable by
the holder thereof in accordance with its terms subject to the effect of
bankruptcy, insolvency, reorganization, or other similar laws affecting the
enforcement of creditors' rights generally.
(v) No Government Obligor. None of the Receivables are due from
the United States of America or any State or from any agency, department, or
instrumentality of the United States of America, any State or political
subdivision of either thereof.
(vi) Security Interest in Financed Vehicle. Immediately prior to
the transfer, assignment and conveyance thereof, each Receivable is secured
by a first priority, validly perfected security interest in the Financed
Vehicle in favor of Ford Credit as secured party or all necessary and
appropriate actions have been commenced that would result in a first
priority, validly perfected security interest in the Financed Vehicle in
favor of Ford Credit as secured party.
(vii) Receivables in Force. No Receivable has been satisfied,
subordinated, or rescinded, nor has any Financed Vehicle been released from
the lien granted by the related Receivable in whole or in part.
(viii) No Waiver. No provision of a Receivable has been waived.
(ix) No Defenses. No right of rescission, setoff, counterclaim,
or efense has been asserted or threatened with respect to any Receivable.
(x) No Liens. To the best of the Seller's knowledge, no liens or
claims have been filed for work, labor, or materials relating to a Financed
Vehicle that are liens prior to, or equal with, the security interest in the
Financed Vehicle granted by the Receivable.
(xi) No Default. Except for payment defaults continuing for a
period of not more than thirty (30) days as of the Cutoff Date, no default,
breach, violation, or event permitting acceleration under the terms of any
Receivable has occurred; and no continuing condition that with notice or the
lapse of time would constitute a default, breach, violation, or event
permitting acceleration under the terms of any Receivable has arisen; and
Ford Credit has not waived any of the foregoing.
(xii) Insurance. Ford Credit, in accordance with its customary
standards, policies and procedures, has determined that, as of the date of
origination of each Receivable, the Obligor had obtained or agreed to obtain
physical damage insurance covering the Financed Vehicle.
(xiii) Title. It is the intention of the Seller that the sale,
transfer, assignment and conveyance herein contemplated constitute an
absolute sale, transfer, assignment and conveyance of the Receivables from
the Seller to the Issuer and that the beneficial interest in and title to the
Receivables not be part of the Seller's estate in the event of the filing of
a bankruptcy petition by or against the Seller under any bankruptcy law. No
Receivable has been sold, transferred, assigned, conveyed or pledged by the
Seller to any Person other than the Issuer. Immediately prior to the sale and
transfer herein contemplated, the Seller had good and marketable title to
each Receivable free and clear of all Liens, encumbrances, security
interests, participations and rights of others and, immediately upon the sale
and transfer thereof, the Issuer will have good and marketable title to each
Receivable, free and clear of all Liens, encumbrances, security interests,
participations and rights of others; and the sale and transfer has been
perfected under the UCC.
(xiv) Valid Assignment. No Receivable has been originated in, or
is subject to the laws of, any jurisdiction under which the sale, transfer,
assignment and conveyance of such Receivable under this Agreement or pursuant
to transfers of the Securities would be unlawful, void, or voidable. The
Seller has not entered into any agreement with any account debtor that
prohibits, restricts or conditions the assignment of any portion of the
Receivables.
(xv) All Filings Made. All filings (including, without
limitation, UCC filings) necessary in any jurisdiction to give the Issuer a
first priority, validly perfected ownership interest in the Receivables, and
to give the Indenture Trustee a first perfected security interest therein,
will be made within ten days of the Closing Date.
(xvi) Priority. Other than the security interest granted to the
Issuer pursuant to this Agreement, the Seller has not pledged, assigned,
sold, granted a security interest in, or otherwise conveyed any of the
Receivables. The Seller has not authorized the filing of and is not aware of
any financing statements against the Seller that include a description of
collateral covering the Receivables other than any financing statement
relating to the security interest granted to the Issuer hereunder and by the
Issuer to the Indenture Trustee or that has been terminated.
(xvii) Chattel Paper. Each Receivable constitutes "tangible
chattel paper" as defined in the UCC.
(xviii) One Original. There is only one original executed copy of
each Receivable. The Seller, or its custodian, has possession of such
original with respect to each Receivable. Such original does not have any
marks or notations indicating that they have been pledged, assigned or
otherwise conveyed to any Person other than Ford Credit. All financing
statements filed or to be filed against the Seller in favor of the Issuer in
connection herewith describing the Receivables contain a statement to the
following effect: "A purchase of or security interest in any collateral
described in this financing statement will violate the rights of the Issuer."
(xix) New and Used Vehicles. 80.75% of the aggregate Principal
Balance of the Receivables, constituting 74.78% of the number of Receivables
as of the Cutoff Date, represent vehicles financed at new vehicle rates, and
the remainder of the Receivables represent vehicles financed at used vehicle
rates.
(xx) Amortization Type. By aggregate Principal Balance as of the
Cutoff Date, 0.03% of the Receivables constitute Actuarial Receivables and
99.97% of the Receivables constitute Simple Interest Receivables.
(xxi) Origination. Each Receivable has an origination date on or
after October 26, 1996.
(xxii) PRIMUS. 12.02% of the aggregate Principal Balance of the
Receivables as of the Cutoff Date represent Receivables originated through
PRIMUS and assigned to Ford Credit, and the remainder of the Receivables were
originated through Ford Credit (excluding PRIMUS).
(xxiii) Maturity of Receivables. Each Receivable has an original
maturity of not greater than seventy-two (72) months. The percentage of
Receivables by Principal Balance with original terms greater than 60 months
is 6.25%. The percentage of Receivables by Principal Balance with remaining
terms greater than 60 months is 4.09%.
(xxiv) Annual Percentage Rate. The Annual Percentage Rate of each
Receivable is between 0.00% to 29.99%.
(xxv) Scheduled Payments. Each Receivable has a first Scheduled
Payment due, in the case of Actuarial Receivables, or a first scheduled due
date, in the case of Simple Interest Receivables, on or prior to June 1, 2002
and no Receivable has a payment that is more than thirty (30) days overdue as
of the Cutoff Date.
(xxvi) Location of Receivable Files. The Receivable Files are
kept at one or more of the offices of the Servicer in the United States or
the offices of one of the custodians specified in Schedule B hereto.
(xxvii) No Extensions. The number of Scheduled Payments, in the
case of Actuarial Receivables, and the number of scheduled due dates, in the
case of Simple Interest Receivables, will not have been extended on or before
the Cutoff Date on any Receivable.
(xxviii) Rating Agencies. The rating agencies rating the Notes
are Xxxxx'x, Standard & Poor's and Fitch and the rating agencies rating the
Class D Certificates are Standard & Poor's and Fitch.
(xxix) Agreement. The representations and warranties of the
Seller in Section 6.1 are true and correct.
SECTION 2.3 Repurchase upon Breach. The Seller, the Servicer, the
Issuer or the Owner Trustee, as the case may be, will inform the other
parties to this Agreement, the Indenture Trustee and Ford Credit promptly, in
writing, upon the discovery of any breach of the Seller's representations and
warranties made by the Seller pursuant to Section 2.2. Unless the breach has
been cured by the last day of the second Collection Period following the
discovery, the Indenture Trustee will enforce the obligation of the Seller
under this Section 2.3, and, if necessary, the Seller or the Indenture
Trustee will enforce the obligation of Ford Credit under the Purchase
Agreement, to repurchase any Receivable materially and adversely affected by
the breach as of such last day (or, at the Seller's option, the last day of
the first Collection Period following the discovery). In consideration of the
purchase of the Receivable, the Seller will remit the Purchase Amount, in the
manner specified in Section 4.6. The sole remedy of the Issuer, the Owner
Trustee, the Indenture Trustee, the Noteholders or the Certificateholders
with respect to a breach of the Seller's representations and warranties
pursuant to Section 2.2 will be to require that the Seller repurchase such
Receivables pursuant to this Section 2.3 or to enforce the obligation of Ford
Credit to the Seller to repurchase such Receivables pursuant to the Purchase
Agreement. Neither the Owner Trustee nor the Indenture Trustee will have any
duty to conduct an affirmative investigation as to the occurrence of any
condition requiring the repurchase of any Receivable pursuant to this Section
2.3 or the eligibility of any Receivable for purposes of this Agreement.
SECTION 2.4 Custody of Receivable Files. To assure uniform
quality in servicing the Receivables and to reduce administrative costs, the
Issuer, upon the execution and delivery of this Agreement, hereby revocably
appoints the Servicer, and the Servicer hereby accepts such appointment, to
act as the agent of the Issuer and the Indenture Trustee as custodian of the
following documents or instruments, which are hereby constructively delivered
to the Indenture Trustee, as pledgee of the Issuer pursuant to the Indenture,
with respect to each Receivable:
(i) The original Receivable.
(ii) The original credit application fully
executed by the Obligor or a photocopy thereof or a record thereof
on a computer file, diskette or on microfiche.
(iii) The original certificate of title or such
documents that the Servicer or Ford Credit will keep on file, in
accordance with its customary standards, policies and procedures,
evidencing the security interest of Ford Credit in the Financed
Vehicle.
(iv) Any and all other documents (including any
computer file, diskette or microfiche) that the Servicer or the
Seller will keep on file, in accordance with its customary
procedures, relating to a Receivable, an Obligor, or a Financed
Vehicle.
The Servicer will provide an Officer's Certificate to the Issuer
and the Indenture Trustee confirming that the Servicer has received on behalf
of the Issuer and the Indenture Trustee all the documents and instruments
necessary for the Servicer to act as the agent of the Issuer and the
Indenture Trustee for the purposes set forth in this Section 2.4, including
the documents referred to herein, and the Issuer and the Indenture Trustee
are hereby authorized to rely on such Officer's Certificate.
SECTION 2.5 Duties of Servicer as Custodian.
(a) Safekeeping. The Servicer will hold the Receivable Files for
the benefit of the Issuer and the Indenture Trustee and maintain such
accurate and complete accounts, records, and computer systems pertaining to
each Receivable File as would enable the Servicer and the Issuer to comply
with the terms and conditions of this Agreement, and the Indenture Trustee to
comply with the terms and conditions of the Indenture. In performing its
duties as custodian the Servicer will act with reasonable care, using that
degree of skill and attention that the Servicer exercises with respect to the
receivable files relating to all comparable automotive receivables that the
Servicer services for itself or others and, consistent with such reasonable
care, the Servicer may utilize the services of third parties to act as
custodian of physical Receivable Files, subject to Section 7.5. In accordance
with its customary standards, policies and procedures with respect to its
retail installment sale contracts, the Servicer will conduct, or cause to be
conducted, periodic audits of the Receivable Files held by it under this
Agreement, and of the related accounts, records, and computer systems, in
such a manner as would enable the Issuer or the Indenture Trustee to verify
the accuracy of the Servicer's record keeping. The Servicer will promptly
report to the Issuer and the Indenture Trustee any failure on its part to
hold the Receivable Files and maintain its accounts, records, and computer
systems as herein provided and promptly take appropriate action to remedy any
such failure. Nothing herein will be deemed to require an initial review or
any periodic review by the Issuer, the Owner Trustee or the Indenture Trustee
of the Receivable Files.
(b) Maintenance of and Access to Records. The Servicer will
maintain each Receivable File at one of its offices in the United States or
the offices of one of its custodians specified in Schedule B of this
Agreement, or at such other office as specified to the Issuer and the
Indenture Trustee by written notice not later than ninety (90) days after any
change in location. The Servicer will make available to the Issuer and the
Indenture Trustee or their duly authorized representatives, attorneys, or
auditors a list of locations of the Receivable Files upon request. The
Servicer will provide access to the Receivable Files, and the related
accounts, records, and computer systems maintained by the Servicer at such
times as the Issuer or the Indenture Trustee direct, but only upon reasonable
notice and during the normal business hours at the respective offices of the
Servicer.
(c) Release of Documents. Upon written instructions from the
Indenture Trustee, the Servicer will release or cause to be released any
document in the Receivable Files to the Indenture Trustee, the Indenture
Trustee's agent or the Indenture Trustee's designee, as the case may be, at
such place or places as the Indenture Trustee may designate, as soon
thereafter as is practicable. Any document so released will be handled by the
Indenture Trustee with due care and returned to the Servicer for safekeeping
as soon as the Indenture Trustee or its agent or designee, as the case may
be, has no further need therefor.
SECTION 2.6 Instructions; Authority to Act. All instructions from
the Indenture Trustee will be in writing and signed by an Authorized Officer
of the Indenture Trustee, and the Servicer will be deemed to have received
proper instructions with respect to the Receivable Files upon its receipt of
such written instructions.
SECTION 2.7 Custodian's Indemnification. The Servicer as
custodian will indemnify the Issuer, the Owner Trustee and the Indenture
Trustee for any and all liabilities, obligations, losses, compensatory
damages, payments, costs, or expenses of any kind whatsoever that may be
imposed on, incurred, or asserted against the Issuer, the Owner Trustee or
the Indenture Trustee as the result of any improper act or omission in any
way relating to the maintenance and custody by the Servicer as custodian of
the Receivable Files; provided, however, that the Servicer will not be liable
(i) to the Issuer for any portion of any such amount resulting from the
willful misfeasance, bad faith, or negligence of the Indenture Trustee, the
Owner Trustee or the Issuer, (ii) to the Owner Trustee for any portion of any
such amount resulting from the willful misfeasance, bad faith, or negligence
of the Indenture Trustee, the Owner Trustee or the Issuer and (iii) to the
Indenture Trustee for any portion of any such amount resulting from the
willful misfeasance, bad faith, or negligence of the Indenture Trustee, the
Owner Trustee or the Issuer.
SECTION 2.8 Effective Period and Termination. The Servicer's
appointment as custodian will become effective as of the Cutoff Date and will
continue in full force and effect until terminated pursuant to this Section
2.8. If Ford Credit resigns as Servicer in accordance with the provisions of
this Agreement or if all of the rights and obligations of the Servicer have
been terminated under Section 8.1, the appointment of the Servicer as
custodian hereunder may be terminated by the Indenture Trustee, or by the
Noteholders of Notes evidencing not less than 25% of the Note Balance of the
Notes Outstanding or, with the consent of Noteholders of Notes evidencing not
less than 25% of the Note Balance of the Notes Outstanding, by the Owner
Trustee or by Certificateholders of Certificates evidencing not less than 25%
of the Aggregate Certificate Balance, in the same manner as the Indenture
Trustee or such Securityholders may terminate the rights and obligations of
the Servicer under Section 8.1. As soon as practicable after any termination
of such appointment, the Servicer will deliver to the Indenture Trustee or
the Indenture Trustee's agent the Receivable Files and the related accounts
and records maintained by the Servicer at such place or places as the
Indenture Trustee may reasonably designate.
ARTICLE III
ADMINISTRATION AND SERVICING OF
RECEIVABLES AND TRUST PROPERTY
SECTION 3.1 Duties of Servicer. The Servicer will manage,
service, administer, and make collections on the Receivables with reasonable
care, using that degree of skill and attention that the Servicer exercises
with respect to all comparable automotive receivables that it services for
itself or others. The Servicer's duties will include collection and posting
of all payments, responding to inquiries of Obligors on such Receivables,
investigating delinquencies, sending payment coupons to Obligors, reporting
tax information to Obligors, accounting for collections, furnishing monthly
and annual statements to the Owner Trustee and the Indenture Trustee with
respect to distributions, and making Advances pursuant to Section 4.5. The
Servicer will follow its customary standards, policies and procedures in
performing its duties as Servicer. Without limiting the generality of the
foregoing, the Servicer is hereby authorized and empowered to execute and
deliver, on behalf of itself, the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders, the Certificateholders, or any of them, any and all
instruments of satisfaction or cancellation, or partial or full release or
discharge, and all other comparable instruments, with respect to such
Receivables or to the Financed Vehicles securing such Receivables. If the
Servicer commences a legal proceeding to enforce a Receivable, the Owner
Trustee (in the case of a Receivable other than a Purchased Receivable) will
thereupon be deemed to have automatically assigned, solely for the purpose of
collection, such Receivable to the Servicer. If in any enforcement suit or
legal proceeding it is held that the Servicer may not enforce a Receivable on
the ground that it is not a real party in interest or a holder entitled to
enforce the Receivable, the Owner Trustee will, at the Servicer's expense and
direction, take steps to enforce the Receivable, including bringing suit in
its name or the names of the Indenture Trustee, the Noteholders, the
Certificateholders, or any of them. The Owner Trustee will furnish the
Servicer with any powers of attorney and other documents reasonably necessary
or appropriate to enable the Servicer to carry out its servicing and
administrative duties hereunder. The Servicer, at its expense, will obtain on
behalf of the Issuer and the Owner Trustee (or will cause the Owner Trustee
to obtain) all licenses, if any, required by the laws of any jurisdiction to
be held by the Issuer or the Owner Trustee in connection with ownership of
the Receivables, and will make all filings and pay all fees as may be
required in connection therewith during the term hereof.
SECTION 3.2 Collection of Receivable Payments. The Servicer will
make reasonable efforts to collect all payments called for under the terms
and provisions of the Receivables as and when the same becomes due and will
follow such collection procedures as it follows with respect to all
comparable receivables that it services for itself or others. Subject to
Sections 3.6(iii) and (iv), the Servicer may grant extensions, rebates, or
adjustments on a Receivable; provided, however, that if the Servicer extends
the date for final payment by the Obligor of any Receivable beyond 6 months
past the Final Scheduled Maturity Date, it will promptly purchase the
Receivable in the manner provided in Section 3.7. The Servicer may in its
discretion waive any late payment charge or any other fees that may be
collected in the ordinary course of servicing a Receivable.
SECTION 3.3 Realization Upon Receivables. On behalf of the
Issuer, the Servicer will use reasonable efforts, consistent with its
customary standards, policies and procedures, to repossess or otherwise
convert the ownership of the Financed Vehicle securing any Receivable as to
which the Servicer has determined eventual payment in full is unlikely. The
Servicer will follow such customary standards, policies and procedures as it
will deem necessary or advisable in its servicing of comparable receivables,
which may include reasonable efforts to realize upon any Dealer Recourse and
selling the Financed Vehicle at public or private sale. The foregoing will be
subject to the provision that, in any case in which the Financed Vehicle has
suffered damage, the Servicer will not be required to expend funds in
connection with the repair or the repossession of such Financed Vehicle
unless it determines in its discretion that such repair and/or repossession
will increase the Liquidation Proceeds by an amount greater than the amount
of such expenses.
SECTION 3.4 Allocations of Collections. If an Obligor is
obligated under one or more Receivables and also under one or more other
assets owned by Ford Credit or assigned by Ford Credit to third parties, then
any payment on any such asset received from or on behalf of such Obligor
will, if identified as being made with respect to a particular item or asset,
be applied to such item, and otherwise will be allocated by Ford Credit in
accordance with its customary standards, policies and procedures.
SECTION 3.5 Maintenance of Security Interests in Financed
Vehicles. The Servicer will, in accordance with its customary standards,
policies and procedures, take such steps as are necessary to maintain
perfection of the security interest created by each Receivable in the related
Financed Vehicle. The Issuer hereby authorizes the Servicer to take such
steps as are necessary to re-perfect such security interest on behalf of the
Issuer and the Indenture Trustee in the event of the relocation of a Financed
Vehicle or for any other reason.
SECTION 3.6 Covenants of Servicer. The Servicer will not (i)
release the Financed Vehicle securing each such Receivable from the security
interest granted by such Receivable in whole or in part except in the event
of payment in full by or on behalf of the Obligor thereunder or repossession,
(ii) impair the rights of the Noteholders or the Certificateholders in the
Receivables, (iii) change the Annual Percentage Rate with respect to any
Receivable, or (iv) modify the Amount Financed or the total number of
Scheduled Payments (in the case of an Actuarial Receivable) or the total
number of originally scheduled due dates (in the case of a Simple Interest
Receivable).
SECTION 3.7 Purchase of Receivables Upon Breach. (a) The Seller,
the Servicer or the Owner Trustee, as the case may be, promptly will inform
the other parties to this Agreement, in writing, upon the discovery of any
breach pursuant to Section 3.2, 3.5 or 3.6. Unless the breach has been cured
by the last day of the second Collection Period following such discovery (or,
at the Servicer's election, the last day of the first following Collection
Period), the Servicer will purchase any Receivable affected by such breach at
the Purchase Amount. In consideration of the purchase of such Receivable, the
Servicer will remit the Purchase Amount in the manner specified in Section
4.6. For purposes of this Section 3.7, the Purchase Amount will consist in
part of a release by the Servicer of all rights of reimbursement with respect
to Outstanding Advances on the Receivable. The sole remedy of the Issuer, the
Owner Trustee, the Indenture Trustee, the Noteholders or the
Certificateholders with respect to a breach pursuant to Section 3.2, 3.5 or
3.6 will be to require the Servicer to purchase Receivables pursuant to this
Section 3.7.
(b) The Seller, the Servicer or the Owner Trustee, as the case
may be, promptly will inform the other parties to this Agreement in writing,
upon the discovery of any breach of the representations and warranties of
Ford Credit, as seller, set forth in Section 3.2(b) of the Purchase
Agreement. Unless the breach has been cured by the last day of the second
Collection Period following the discovery, the Servicer will enforce the
obligation of Ford Credit under the Purchase Agreement to repurchase any
Receivable materially and adversely affected by the breach as of such last
day (or, at Ford Credit's option, the last day of the first Collection Period
following the discovery). In consideration of the purchase of the Receivable,
Ford Credit will remit, pursuant to Section 6.2 of the Purchase Agreement,
the Purchase Amount to the Servicer and the Servicer will remit the Purchase
Amount to the Collection Account as specified in Section 4.6 hereof.
(c) With respect to all Receivables purchased pursuant to this
Section 3.7, the Issuer will assign to the Servicer or the Seller, as
applicable, without recourse, representation or warranty, all of the Issuer's
right, title and interest in and to such Receivables and all security and
documents relating thereto.
SECTION 3.8 Servicer Fee. The Servicer will be entitled to retain
from Collections on the Receivables all late fees, prepayment charges,
extension fees and other administrative fees or similar charges allowed by
applicable law with respect to Receivables during each Collection Period (the
"Supplemental Servicing Fee"). The Servicer also will be entitled to receive
investment earnings (net of investment losses and expenses) on funds
deposited in the Trust Accounts during each Collection Period. The Servicer
also will be entitled to the Servicing Fee, as provided in Section 4.7(c).
SECTION 3.9 Servicer's Certificate. (a) On or about the tenth day
of each calendar month, the Servicer will deliver to the Owner Trustee, the
Note Paying Agent and Certificate Paying Agent, the Indenture Trustee, the
Swap Counterparty and the Seller, with a copy to the Rating Agencies, a
Servicer's Certificate containing all information (including all specific
dollar amounts) necessary to make the transfers and distributions pursuant to
Sections 4.4, 4.5, 4.6 and 4.7 for the Collection Period preceding the date
of such Servicer's Certificate, together with the written statements to be
furnished by the Owner Trustee to Certificateholders pursuant to Section 4.9
and by the Indenture Trustee to the Noteholders pursuant to Section 4.9
hereof and Section 6.6 of the Indenture. Receivables purchased or to be
purchased by the Servicer or the Seller will be identified by the Servicer by
the Seller's account number with respect to such Receivable (as specified in
the Schedule of Receivables).
(b) On or about the fifth (but in no event later than the tenth)
calendar day of each calendar month, the Servicer will deliver to the
respective underwriters of the Notes, the Note Pool Factor for each Class of
Notes as of the close of business on the Payment Date occurring in that
month.
SECTION 3.10 Annual Statement as to Compliance; Notice of Event
of Servicing Termination. (a) The Servicer will deliver to the Owner Trustee,
the Indenture Trustee and each Rating Agency on or before April 30 of each
year beginning April 30, 2003, an Officer's Certificate, dated as of December
31 of the preceding calendar year, stating that (i) a review of the
activities of the Servicer during the preceding 12-month (or shorter) period
and of its performance under this Agreement has been made under such
officer's supervision and (ii) to the best of such officer's knowledge, based
on such review, the Servicer has fulfilled all its obligations under this
Agreement throughout such year, or, if there has been a default in the
fulfillment of any such obligation, specifying each such default known to
such officer and the nature and status thereof. Upon the written request of
the Owner Trustee, the Indenture Trustee shall promptly furnish the Owner
Trustee a list of Noteholders as of the date specified by the Owner Trustee.
(b) The Servicer will deliver to the Owner Trustee, the Indenture
Trustee and each Rating Agency promptly after having obtained knowledge
thereof, but in no event later than five (5) Business Days thereafter,
written notice in an Officer's Certificate of any event which with the giving
of notice or lapse of time, or both, would become an Event of Servicing
Termination under Section 8.1. The Seller will deliver to the Owner Trustee,
the Indenture Trustee and each Rating Agency promptly after having obtained
knowledge thereof, but in no event later than five (5) Business Days
thereafter, written notice in an Officer's Certificate of any event which
with the giving of notice or lapse of time, or both, would become an Event of
Servicing Termination under clause (a)(ii) of Section 8.1.
SECTION 3.11 Annual Independent Certified Public Accountant's
Report. The Servicer will cause a firm of independent certified public
accountants, who may also render other services to the Servicer or to the
Seller or to Ford Credit, to deliver to the Owner Trustee and the Indenture
Trustee on or before April 30 of each year beginning April 30, 2003 with
respect to the prior calendar year a report addressed to the board of
directors of the Servicer and to the Owner Trustee and the Indenture Trustee,
to the effect that such firm has audited the financial statements of the
Servicer and issued its report thereon and that such audit (1) was made in
accordance with generally accepted auditing standards, (2) included tests
relating to automotive loans serviced for others in accordance with the
requirements of the Uniform Single Attestation Program for Mortgage Bankers
(the "Program"), to the extent the procedures in such Program are applicable
to the servicing obligations set forth in this Agreement, and (3) except as
described in the report, disclosed no exceptions or errors in the records
relating to automobile and light duty truck loans serviced for others that
such firm is required to report under the Program.
The report will also indicate that the firm is independent of the
Servicer within the meaning of the Code of Professional Ethics of the
American Institute of Certified Public Accountants.
A copy of the report referred to in this Section 3.11 may be
obtained by any Certificateholder by a request in writing to the Owner
Trustee, or by any Noteholder or Person certifying that it is a Note Owner by
a request in writing to the Indenture Trustee, in either case addressed to
the applicable Corporate Trust Office.
SECTION 3.12 Access to Certain Documentation and Information
Regarding Receivables. The Servicer will provide to the Certificateholders,
the Indenture Trustee and the Noteholders access to the Receivable Files in
such cases where the Certificateholders, the Indenture Trustee or the
Noteholders are required by applicable statutes or regulations to review such
documentation. Access will be afforded without charge, but only upon
reasonable request and during the normal business hours at the respective
offices of the Servicer. Nothing in this Section 3.12 will affect the
obligation of the Servicer to observe any applicable law prohibiting
disclosure of information regarding the Obligors, and the failure of the
Servicer to provide access to information as a result of such obligation will
not constitute a breach of this Section 3.12. The Servicer will provide such
information with respect to the Receivables as the Rating Agencies may
reasonably request, including as soon as practicable a periodic report of the
aggregate principal balance of Receivables which become Liquidated
Receivables during each Collection Period.
SECTION 3.13 Servicer Expenses. The Servicer will be required to
pay all expenses incurred by it in connection with its activities hereunder,
including fees and disbursements of the Owner Trustee, independent
accountants, taxes imposed on the Servicer and expenses incurred in
connection with distributions and reports to Noteholders and
Certificateholders.
ARTICLE IV
DISTRIBUTIONS; RESERVE ACCOUNT;
STATEMENTS TO NOTEHOLDERS AND CERTIFICATEHOLDERS
SECTION 4.1 Accounts.
(a) Collection Account. The Servicer will, prior to the Closing
Date, establish and maintain a segregated trust account in the name "The Bank
of New York as Indenture Trustee, as secured party for Ford Credit Auto Owner
Trust 2002- C", at a Qualified Institution or Qualified Trust Institution
(which will initially be the corporate trust department of The Bank of New
York), that will be designated as the "Collection Account". Initially, the
Collection Account will be account number 879335 and will include any
successor or replacement accounts thereto. The Collection Account will be
under the sole dominion and control of the Indenture Trustee; provided, that
the Servicer may make deposits to and direct the Indenture Trustee in writing
to make withdrawals from the Collection Account in accordance with the terms
hereof. The Servicer may direct the Indenture Trustee to withdraw from the
Collection Account and pay to the Servicer amounts received from or on behalf
of Obligors on the Receivables that do not constitute Available Collections
for any Collection Period or that were deposited to the Collection Account in
error. The Collection Account and all amounts, securities, investments,
financial assets and other property deposited in or credited to the
Collection Account will be held by the Indenture Trustee as secured party for
the benefit of the Noteholders and, after payment in full of the Notes, as
agent of the Trust and as part of the Trust Property and all deposits to and
withdrawals therefrom will be made subject to the terms hereof.
(b) Principal Distribution Account. The Servicer will, prior to
the Closing Date, establish and maintain a segregated subaccount within the
Collection Account at the bank or trust company then maintaining the
Collection Account, which subaccount will be designated as the "Principal
Distribution Account". The Principal Distribution Account is established and
maintained solely for administrative purposes.
(c) Certificate Distribution Accounts. The Servicer will, prior
to the Closing Date, establish and maintain two segregated trust accounts,
each in the name "Wachovia Bank of Delaware, National Association as Owner
Trustee" at a Qualified Institution or Qualified Trust Institution (initially
the corporate trust department of Wachovia Bank of Delaware, National
Association), that will be designated as the "Certificate Interest
Distribution Account" and the "Certificate Principal Distribution Account",
respectively. Each Certificate Distribution Account will be under the sole
dominion and control of the Owner Trustee. All monies deposited from time to
time in each Certificate Distribution Account pursuant to this Agreement and
the Indenture will be held by the Owner Trustee as part of the Trust Property
and will be applied as provided in this Agreement.
(d) Payahead Account. The Servicer will, prior to the Closing
Date, establish and maintain a segregated trust account in the name of "The
Bank of New York as Indenture Trustee" at a Qualified Institution or
Qualified Trust Institution (initially the corporate trust department of The
Bank of New York), that will be designated as the "Payahead Account". The
Payahead Account will be held in trust for the benefit of the Obligors. The
Payahead Account will be under the sole dominion and control of the Indenture
Trustee; provided that the Servicer may make deposits to and direct the
Indenture Trustee in writing to make withdrawals from the Payahead Account
subject to the terms hereof. The Payahead Account will not be a part of the
Trust Property.
(e)(i) Reserve Account. The Seller will, prior to the Closing
Date, establish and maintain an account in the name "The Bank of New York as
Indenture Trustee, as secured party for Ford Credit Auto Owner Trust 2002-C"
at a Qualified Institution or Qualified Trust Institution, that will be
designated as the "Reserve Account"(and together with the Collection Account,
including the Principal Distribution Account, the "Trust Accounts" and
together with the Payahead Account and the Certificate Distribution Accounts,
the "2002-C Bank Accounts"). The Reserve Account will be under the sole
dominion and control of the Indenture Trustee; provided, that the Servicer
may make deposits to and direct the Indenture Trustee in writing to make
withdrawals from the Reserve Account subject to the terms hereof. The Reserve
Account and all amounts, securities, investments, financial assets and other
property deposited in or credited to the Reserve Account will be held by the
Indenture Trustee as secured party for the benefit of the Noteholders and,
after payment in full of the Notes, as agent of the Owner Trustee and as part
of the Trust Property, and all deposits to and withdrawals therefrom will be
made subject to the terms hereof. The Seller will be permitted to sell,
transfer, convey or assign in any manner its rights in the Reserve Account
under this Section 4.1(e), together with its rights to receive amounts under
Section 4.7(c)(xii) of this Agreement and Sections 5.4(b)(xiv) and
8.2(c)(xii) of the Indenture, provided that each of the following is
satisfied:
(1) the Rating Agency Confirmation has been obtained with
respect to such action;
(2) such action will not, as evidenced by an Opinion of
Counsel, cause the Issuer to be characterized for federal or any
then Applicable Tax State income tax purposes as an association
taxable as a corporation; and
(3) the transferee or assignee agrees in writing to take
positions for federal and any Applicable Tax State income tax
purposes consistent with the tax positions taken previously by the
Seller.
(ii) Following the payment in full of the aggregate principal
amount of the Notes and the Aggregate Certificate Balance and of all other
amounts owing or to be distributed hereunder or under the Indenture or the
Trust Agreement to Noteholders and Certificateholders and the termination of
the Trust, the Indenture Trustee will distribute any remaining funds on
deposit in the Reserve Account to the Seller.
(f) Compliance. Each of the 2002-C Bank Accounts will be
established and maintained at a Qualified Institution or Qualified Trust
Institution pursuant to an account agreement that specifies New York law as
the governing law. The Servicer, with respect to the Collection Account, and
the Seller, with respect to the Reserve Account, will ensure that the account
agreement establishing the Collection Account and the Reserve Account,
respectively, requires the Qualified Institution or Qualified Trust
Institution maintaining such account to comply with entitlement orders (as
defined in Article 8 of the UCC) originated by the Indenture Trustee without
further consent of the Issuer for so long as the Notes are outstanding and to
act as a securities intermediary in accordance with the terms of the UCC. All
deposits to and withdrawals from the 2002-C Bank Accounts will be made only
upon the terms and conditions of the Basic Documents.
(g) Maintenance of Accounts. If at any time an institution
maintaining one of the 2002-C Bank Accounts ceases to be a Qualified
Institution or Qualified Trust Institution, the Servicer, with respect to the
Collection Account, including the Principal Distribution Account, the
Certificate Distribution Accounts and the Payahead Account, and the Seller,
with respect to the Reserve Account, will, with the Indenture Trustee's or
Owner Trustee's assistance as necessary, within ten (10) Business Days (or
such longer period not to exceed thirty (30) calendar days as to which each
Rating Agency may consent), move such 2002-C Bank Account to a Qualified
Institution or Qualified Trust Institution.
SECTION 4.2 Investment of Funds on Deposit in the Reserve
Account, the Collection Account and Payahead Account.
(a) On the Closing Date, the Seller will deposit the Reserve
Initial Deposit into the Reserve Account from the net proceeds of the sale of
the Securities. For so long as no Default or Event of Default has occurred
and is continuing, funds on deposit in the Reserve Account will, to the
extent permitted by applicable law, rules and regulations be invested, as
directed by the Seller or by any Person appointed by the Seller, by the
applicable Qualified Institution or Qualified Trust Institution maintaining
such account in Permitted Investments without requiring any action from the
Indenture Trustee. Funds on deposit in the Reserve Account may be invested in
Permitted Investments that mature not later than the Business Day preceding
the next Payment Date, and such Permitted Investments will be held to
maturity; provided, however, that upon receipt of Rating Agency Confirmation,
funds on deposit in the Reserve Account may be invested in Permitted
Investments that will not mature prior to the next Payment Date and will not
be sold or liquidated to meet any shortfalls that may occur. All interest and
other income (net of losses and investment expenses) on funds on deposit in
the Reserve Account will be deposited therein.
(b) For so long as no Default or Event of Default has occurred
and is continuing, funds on deposit held in the Collection Account and the
Payahead Account will, to the extent permitted by applicable law, rules and
regulations, be invested, as directed in writing by the Servicer, by the
Qualified Institution or Qualified Trust Institution maintaining such account
in Permitted Investments that mature not later than the Business Day
immediately prior to the Payment Date for the Collection Period to which such
amounts relate and such Permitted Investments will be held to maturity. All
interest and other income (net of losses and investment expenses) on funds on
deposit in the Collection Account and the Payahead Account will be withdrawn
from the Collection Account and the Payahead Account, as applicable, at the
written direction of the Servicer and will be paid to the Servicer.
(c) Neither the Seller, with respect to the Reserve Account, nor
the Servicer, with respect to the Collection Account or the Payahead Account,
will direct the Qualified Institution or Qualified Trust Institution
maintaining such account to make any investment of any funds or to sell any
investment held in the Reserve Account or the Collection Account unless the
security interest Granted and perfected in the Reserve Account and the
Collection Account in favor of the Indenture Trustee will continue to be
perfected in such investment or the proceeds of such sale, in either case
without any further action by any Person. In connection with any direction by
the Seller or the Servicer, as applicable, to make any such investment or
sale, if requested by the Indenture Trustee (acting at the direction of not
less than 50% of the Controlling Note Class), the Seller or the Servicer, as
applicable, will deliver an Opinion of Counsel to the Indenture Trustee, to
such effect.
(d) If (i) the Seller or the Servicer, as applicable, has failed
to give investment directions for any funds on deposit in the Reserve
Account, the Collection Account or the Payahead Account to the Qualified
Institution or Qualified Trust Institution maintaining such accounts by 11:00
a.m. New York Time (or such other time as may be agreed by the Issuer and
such Qualified Institution or Qualified Trust Institution) on the Business
Day preceding each Payment Date, (ii) a Default or Event of Default has
occurred and is continuing with respect to the Notes but the Notes have not
been declared due and payable pursuant to Section 5.2 of the Indenture
(notice of which will be provided to the Qualified Institution or Qualified
Trust Institution maintaining the Reserve Account, the Collection Account and
the Payahead Account by the Indenture Trustee) or (iii) the Notes have been
declared due and payable following an Event of Default and amounts collected
or received from the Indenture Trust Estate are being applied in accordance
with Section 5.4 of the Indenture as if there had not been such a declaration
(notice of which will be provided to the Qualified Institution or Qualified
Trust Institution maintaining the Reserve Account, the Collection Account and
the Payahead Account by the Indenture Trustee), the Qualified Institution or
Qualified Trust Institution will, to the fullest extent practicable, invest
and reinvest funds in the Reserve Account, the Collection Account and the
Payahead Account in one or more Permitted Investments described in clause (b)
of the definition thereof.
(e) With respect to funds on deposit in the Reserve Account, the
Collection Account and the Payahead Account:
(1) any such funds or property in such accounts that is a
"financial asset" as defined in Section 8-102(a)(9) of the UCC
will be physically delivered to, or credited to an account in
the name of, the Qualified Institution or Qualified Trust
Institution maintaining such account in accordance with such
institution's customary procedures such that such institution
establishes a "securities entitlement" in favor of the
Indenture Trustee with respect thereto; and
(2) any funds or property that are held in deposit accounts
will be held solely in the name of the Indenture Trustee at
one or more depository institutions having the Required Rating
and each such deposit account will be subject to the exclusive
custody and control of the Indenture Trustee and the Indenture
Trustee has sole signature authority with respect thereto.
(f) Except for any deposit accounts specified in clause (e)(2)
above, the funds on deposit in the Reserve Account, the Collection Account
and Payahead Account will only be invested in securities or in other assets
which the Qualified Institution or Qualified Trust Institution maintaining
such accounts agrees to treat as "financial assets" as defined in Section
8-102(a)(9) of the UCC.
SECTION 4.3 Remittances.
(a) Ford Credit will be required to remit payments it receives
from or on behalf Obligors on the Receivables (including Payaheads but
excluding payments on Purchased Receivables and amounts constituting the
Supplemental Servicing Fee) to the Collection Account (1) within two Business
Days of receipt, or (2) if Ford Credit's short term unsecured debt is rated
at least "P-1" by Xxxxx'x, "A-1" by S&P and "F1" by Fitch Ratings, on the
Business Day preceding each Payment Date (or, upon receipt of Rating Agency
Confirmation, each Payment Date) (this clause (2) is referred to as the
"Monthly Remittance Condition"); provided, however, if Ford Credit's short
term debt rating does not satisfy the levels specified for the Monthly
Remittance Condition for one or more of the Rating Agencies, Ford Credit may
remit collections less frequently than daily, but not later than the Payment
Date, if it provides to the Owner Trustee and Indenture Trustee written
confirmation from each Rating Agency that rates Ford Credit lower than the
rating required for the Monthly Remittance Condition that such alternative
remittance schedule will not result in a downgrade or withdrawal by such
Rating Agency of any of its ratings assigned to the Securities. If Ford
Credit is not the Servicer or an Event of Servicing Termination occurs, the
Servicer will be required to remit payments it receives from or on behalf of
Obligors on the Receivables (including Payaheads but excluding payments on
Purchased Receivables and amounts constituting the Supplemental Servicing
Fee), to the Collection Account within two Business Days of receipt. Pending
deposit into the Collection Account, such payments may be used by the
Servicer at its own risk and for its own benefit and are not required to be
segregated from its own funds.
(b) Subject to Section 4.3 (a), the Servicer will not be required
to segregate or otherwise hold separate any Payaheads but will be required to
remit Payaheads to the Collection Account in accordance with Section
4.7(a)(i). At any time that the Monthly Remittance Condition is not
satisfied, the Servicer will deposit into the Payahead Account the amount of
any Payaheads then held or received by it (which amount will be at least
equal to the Payahead Balance as of the close of business on the last day of
the immediately preceding Collection Period).
(c) The Trust and the Indenture Trustee will not be deemed to
have knowledge of any failure to satisfy the Monthly Remittance Condition or
any Event of Servicing Termination that would require remittances to the
Collection Account within two Business Days of receipt unless the Trust or
the Indenture Trustee has received notice of such event or circumstance from
the Seller or the Servicer in an Officer's Certificate or from the
Noteholders of Notes evidencing not less than 25% of the Note Balance of the
Notes Outstanding or from the Certificateholders of Certificates evidencing
not less than 25% of the Aggregate Certificate Balance or unless a Trustee
Officer in the Corporate Trust Office with knowledge thereof and familiarity
therewith has actual knowledge of such event or circumstance.
SECTION 4.4 Application of Collections. For the purposes of this
Agreement, as of the close of business on the last day of each Collection
Period, all collections for the Collection Period with respect to each
Receivable (other than a Purchased Receivable) will be applied by the
Servicer as follows:
(a) Payments by or on behalf of the Obligor that are not
late fees, prepayment charges, or other administrative fees and
expenses, or similar charges which constitute the Supplemental
Servicing Fee will be applied first to reduce Outstanding Advances
made with respect to such Receivable, as described in Sections
4.5(a) and (b) below; and
(b) Next, any excess will be applied (i) in the case of
Simple Interest Receivables, to interest and principal on the
Receivable in accordance with the Simple Interest Method and (ii) in
the case of Actuarial Receivables, to the Scheduled Payment with
respect to such Receivable and any remaining excess (except for
partial prepayments that cause a reduction in the Obligor's periodic
payment to below the Scheduled Payment as of the Cutoff Date) will
be added to the Payahead Balance, and will be applied to prepay the
Actuarial Receivable but only if the sum of such excess and the
previous Payahead Balance are sufficient to prepay the Actuarial
Receivable in full, otherwise such excess will constitute a Payahead,
and will increase the Payahead Balance.
SECTION 4.5 Advances. (a) Actuarial Advances. As of the close of
business on the last day of each Collection Period, if the payments by or on
behalf of the Obligor on an Actuarial Receivable (other than a Purchased
Receivable) after application under Section 4.4 (b) are less than the
Scheduled Payment, whether as a result of any extension granted to the
Obligor or otherwise, the Payahead Balance will be applied by the Indenture
Trustee to the extent of the shortfall, and such Payahead Balance will be
reduced accordingly. The Servicer will make an advance of any remaining
shortfall (such amount, an "Actuarial Advance"), to the extent that the
Servicer, in its sole discretion, determines that the Actuarial Advance will
be recoverable from subsequent collections from the related obligor or any
related Liquidation Proceeds. With respect to each Actuarial Receivable, the
Actuarial Advance will increase Outstanding Actuarial Advances. Outstanding
Actuarial Advances will be reduced by subsequent payments by or on behalf of
the Obligor, collections of Liquidation Proceeds and any payments of the
Purchase Amount. If the Servicer subsequently determines that an Outstanding
Actuarial Advance with respect to any Actuarial Receivable will not be
recoverable, the Servicer will be reimbursed from any collections made on
other Receivables in the Trust, and Outstanding Actuarial Advances with
respect to such Actuarial Receivable will be reduced accordingly.
(b) Simple Interest Advances. (i) Advance by Servicer for early
payment on Simple Interest Receivables. As of the close of business on the
last day of each Collection Period, the Servicer will advance an amount equal
to the amount of interest due on the Simple Interest Receivables at their
respective APRs for the related Collection Period (assuming the Simple
Interest Receivables pay on their respective due dates) minus the amount of
interest actually received on the Simple Interest Receivables during the
related Collection Period (such amount, a "Simple Interest Advance"). The
Servicer will be entitled to recoup this Simple Interest Advance to the
extent that subsequent payments of interest on any Simple Interest
Receivables received in any Collection Period exceed one month's interest on
the Simple Interest Receivable and will be entitled to all payments of
interest in excess of one month's interest.
(ii) Advance by Servicer for non-payment on Simple Interest
Receivables. The Servicer will make a Simple Interest Advance on a Simple
Interest Receivable for which no payment was received as of the close of
business on the last day of each Collection Period to the extent that the
Servicer, in its sole discretion, determines that the Simple Interest Advance
will be recoverable from subsequent collections from the related obligor or
any related Liquidation Proceeds. If the Servicer subsequently determines
that such Simple Interest Advance will be not be recoverable from these
sources, the Servicer will be entitled to recoup the Simple Interest Advance
from any collections made on the other Receivables in the Trust.
(iii) Mechanics. With respect to each Simple Interest Receivable,
the Simple Interest Advance will increase Outstanding Simple Interest
Advances. If such calculation results in a negative number, an amount equal
to such negative number will be paid to the Servicer and the amount of
Outstanding Simple Interest Advances will be reduced by such amount. The
Servicer will deposit Simple Interest Advances into the Collection Account on
the Business Day preceding the Payment Date or, with Rating Agency
Confirmation, on such Payment Date.
(iv) No Advances of Principal on Simple Interest Receivables.
The Servicer will not make any advance in respect of principal of Simple
Interest Receivables.
(c) Unreimbursable Advance by Servicer for full prepayment on a
Receivable. If an Obligor prepays a Receivable in full, and the related
contract did not require such Obligor to pay a full month's interest, for the
month of prepayment, at the APR, the Servicer will make an unreimbursable
advance of the amount of such interest.
(d) Payment of Advances from the Reserve Account. If the Servicer
determines on or before any Determination Date that it is required to make an
Advance and does not do so from its own funds, the Servicer will promptly
instruct the Indenture Trustee in writing to withdraw funds, in an amount
specified by the Servicer from funds in the Reserve Account and deposit them
in the Collection Account to cover any shortfall. Such payment will be deemed
to have been made by the Servicer pursuant to this Section 4.5 for purposes
of making distributions pursuant to this Agreement, but will not otherwise
satisfy the Servicer's obligation to deliver the amount of the Advances to
the Indenture Trustee. The Servicer will replace any funds in the Reserve
Account so used within two Business Days.
SECTION 4.6 Additional Deposits to the Collection Account and
Withdrawals from the Reserve Account. (a) The Servicer will deposit into the
Collection Account the aggregate Advances pursuant to Sections 4.5(a), (b)
and (c). The Servicer and the Seller will deposit into the Collection Account
the aggregate Purchase Amounts with respect to Purchased Receivables and the
Servicer will deposit into the Collection Account all amounts to be paid
under Section 9.1. All such deposits with respect to a Collection Period will
be made, in immediately available funds, on the Business Day preceding the
Payment Date (or, with Rating Agency Confirmation, on the Payment Date)
related to such Collection Period.
(b) The Indenture Trustee will, on the Payment Date relating to
each Collection Period, make withdrawals from the Reserve Account:
(i) first, in an amount equal to the Reserve Account Release
Amount,
(ii) second, in an amount equal to the amount (if positive),
calculated by the Servicer pursuant to Section 4.5(d),
(iii) third, in an amount equal to the amount (if positive)
calculated by the Servicer pursuant to Section 4.7(b)(ii),
(iv) fourth, in an amount equal to the amount (if positive)
calculated by the Servicer pursuant to the Section 4.7(b)(iii), and
(v) fifth in an amount equal to the amount (if positive)
calculated by the Servicer pursuant to the Section 4.7(b)(iv), and, in
each case, will deposit such funds in the Collection Account.
SECTION 4.7 Distributions. (a) On each Payment Date, the
Indenture Trustee will cause to be made the following transfers and
distributions in the amounts set forth in the Servicer's Certificate for such
Payment Date:
(i) From the Payahead Account, or from the Servicer in
accordance with Section 4.3, to the Collection Account, in immediately
available funds, (x) the portion of Payaheads constituting Scheduled
Payments or prepayments in full, required by Sections 4.4 and 4.5(a),
and (y) the Payahead Balance, if any, relating to any Purchased
Receivable.
(ii) From the Collection Account to the Payahead Account, or
to the Servicer in accordance with Section 4.3, in immediately
available funds, the aggregate Payaheads required by Section 4.4 for
the Collection Period related to such Payment Date.
(iii) From the Collection Account to the Servicer, in
immediately available funds, repayment of Outstanding Advances pursuant
to Sections 4.5(a) and (b).
(b) Prior to each Payment Date, the Servicer will on or before
each Determination Date calculate:
(i) the Available Collections, the Reserve Account Release
Amount, the Available Funds, the Servicing Fee and all unpaid Servicing
Fees from prior Collection Periods, if any, any Net Swap Payments, any
Net Swap Receipts, any Swap Termination Payments, the Accrued Class A
Note Interest, the First Priority Principal Distribution Amount, the
Accrued Class B Note Interest, the Second Priority Principal
Distribution Amount, the Accrued Class C Note Interest, the Third
Priority Principal Distribution Amount, the Accrued Class D Certificate
Interest and the Regular Principal Distribution Amount;
(ii) the difference, if any, between the Total Required
Payment over the Available Funds;
(iii) if such Determination Date is the Determination Date
immediately preceding the Final Scheduled Payment Date with respect to
any Class of Notes or the Class D Certificates, the difference, if any,
between (x) the amount required to pay such Class of Notes or the Class
D Certificates in full in accordance with the priorities set forth in
Sections 4.7(c) and (d), and (y) the sum of the Available Funds plus
the amount calculated in accordance with clause (ii) above; and
(iv) (x) the sum of the Available Funds plus the amounts
calculated in accordance with Section 4.7(b) (ii) and (iii) plus the
amount remaining on deposit in the Reserve Account after the withdrawal
of the amounts calculated in Section 4.7(b) (ii) and (iii), and (y) the
amount required to pay the Servicing Fee and principal and interest of
each Class of Notes and the Class D Certificates in full in accordance
with the priorities set forth in Sections 4.7(c) and (d).
(c) On each Payment Date, the Servicer will instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on or before the related Determination Date pursuant to
Section 3.9), to make the following withdrawals from the Collection Account
and make deposits, distributions and payments, to the extent of funds on
deposit in the Collection Account with respect to the Collection Period
preceding such Payment Date (including funds, if any, deposited therein from
the Reserve Account pursuant to Section 4.6(b) and from the Payahead Account
pursuant to Section 4.7(a)), in the following order of priority:
(i) first, to the Servicer, the Servicing Fee and all unpaid
Servicing Fees from prior Collection Periods;
(ii) second, to the Swap Counterparty, the amount of any Net
Swap Payments then due under the Interest Rate Swap Agreement
(exclusive of any Swap Termination Payments);
(iii) third, with the same priority and pro rata, in
accordance with the outstanding principal balance of the Class A Notes
and the amount of any Swap Termination Payments due and payable by the
Issuer to the Swap Counterparty:
(1) to the Noteholders of Class A Notes, the Accrued
Class A Note Interest, and
(2) to the Swap Counterparty, any Swap Termination
Payments;
provided, that, if any amounts allocable to the Class A
Notes are not needed to pay interest due on such Notes,
such amounts will be applied to pay the portion, if any, of
any Swap Termination Payments remaining unpaid, and
provided, further, that if there are not sufficient funds
available to pay the entire amount of the Accrued Class A
Note Interest, the amounts available will be applied to the
payment of such interest on the Class A Notes on a pro rata basis;
(iv) fourth, to the Principal Distribution Account, the First
Priority Principal Distribution Amount;
(v) fifth, to the Noteholders of Class B Notes, the Accrued
Class B Note Interest; provided that if there are not sufficient funds
available to pay the entire amount of the Accrued Class B Note
Interest, the amounts available will be applied to the payment of such
interest on the Class B Notes on a pro rata basis;
(vi) sixth, to the Principal Distribution Account, the Second
Priority Principal Distribution Amount, if any;
(vii) seventh, to the Noteholders of Class C Notes, the
Accrued Class C Note Interest; provided that if there are not
sufficient funds available to pay the entire amount of the Accrued
Class C Note Interest, the amounts available will be applied to the
payment of such interest on the Class C Notes on a pro rata basis;
(viii) eighth, to the Principal Distribution Account, the
Third Priority Principal Distribution Amount, if any;
(ix) ninth, to the Certificate Interest Distribution Account,
the Accrued Class D Certificate Interest;
(x) tenth, to the Reserve Account, the amount, if any,
required to bring the amount in the Reserve Account up to the Specified
Reserve Balance;
(xi) eleventh, to the Principal Distribution Account, the
Regular Principal Distribution Amount; and
(xii) twelfth, to the Seller, any funds remaining on deposit
in the Collection Account with respect to the Collection Period
preceding such Payment Date.
Notwithstanding the foregoing, (A) following the occurrence and
during the continuation of an Event of Default specified in Section 5.1(i),
5.1(ii), 5.1(iv) or 5.1(v) of the Indenture that has resulted in an
acceleration of the Notes (including the occurrence of such an Event of
Default following the occurrence of an Event of Default specified in Section
5.1(iii) of the Indenture that has resulted in an acceleration of the Notes),
the Servicer will instruct the Indenture Trustee to transfer the funds on
deposit in the Collection Account remaining after the distribution of amounts
pursuant to Section 4.7(c) (i), (ii) and (iii) above to the Principal
Distribution Account to the extent necessary to reduce the principal amount
of all the Class A Notes to zero, and then after payment of amounts pursuant
to Section 4.7(c)(v) above to the Principal Distribution Account to the
extent necessary to reduce the principal amount of all the Class B Notes to
zero, (B) following the occurrence and during the continuation of an Event of
Default specified in Section 5.1(iii) of the Indenture that has resulted in
an acceleration of the Notes, the Servicer will instruct the Indenture
Trustee to transfer the funds on deposit in the Collection Account remaining
after the distribution of amounts pursuant to Section 4.7(c) (i), (ii),
(iii), (iv), (v), (vi) and (vii) above to the Principal Distribution Account
to the extent necessary to reduce the principal amount of all the Notes to
zero, and (C) in the case of an event described in clause (A) or (B), the
Certificateholders will not receive any distributions of principal or
interest until the principal amount and accrued interest on all the Notes has
been paid in full.
(d) On each Payment Date, the Servicer will instruct the
Indenture Trustee (based on the information contained in the Servicer's
Certificate delivered on or before the related Determination Date pursuant to
Section 3.9), to withdraw the funds on deposit in the Principal Distribution
Account with respect to the Collection Period preceding such Payment Date and
make distributions and payments in the following order of priority:
(i) first, to the Noteholders of the Class A-1
Notes in reduction of principal until the principal amount of the
Outstanding Class A-1 Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal amount
of the Outstanding Class A-1 Notes in full, the amounts available
will be applied to the payment of principal on the Class X- 0 Notes
on a pro rata basis;
(ii) second, to the Noteholders of the Class A-2
Notes in reduction of principal until the principal amount of the
Outstanding Class A-2 Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal amount
of the Outstanding Class A-2 Notes in full, the amounts available
will be applied to the payment of principal on the Class A-2 Notes
on a pro rata basis based on the principal balances of the Class
A-2a Notes and the Class A-2b Notes;
(iii) third, to the Noteholders of the Class A-3
Notes in reduction of principal until the principal amount of the
Outstanding Class A-3 Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal amount
of the Outstanding Class A-3 Notes in full, the amounts available
will be applied to the payment of principal on the Class A-3 Notes
on a pro rata basis;
(iv) fourth, to the Noteholders of the Class A-4
Notes in reduction of principal until the principal amount of the
Outstanding Class A-4 Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal
amount of the Outstanding Class A-4 Notes in full, the amounts
available will be applied to the payment of principal on the
Class A-4 Notes on a pro rata basis;
(v) fifth, to the Noteholders of the Class B Notes
in reduction of principal until the principal amount of the
Outstanding Class B Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal amount
of the Outstanding Class B Notes in full, the amounts available will
be applied to the payment of principal on the Class B Notes on a pro
rata basis;
(vi) sixth, to the Noteholders of the Class C
Notes in reduction of principal until the principal amount of the
Outstanding Class C Notes has been paid in full; provided that if
there are not sufficient funds available to pay the principal amount
of the Outstanding Class C Notes in full, the amounts available will
be applied to the payment of principal on the Class C Notes on a pro
rata basis;
(vii) seventh, to the Certificate Principal
Distribution Account, in reduction of the Certificate Balance of the
Class D Certificates, until the Certificate Balance of the Class D
Certificates has been reduced to zero;
(viii) eighth, to the Seller, any funds remaining
on deposit in the Principal Distribution Account.
SECTION 4.8 Net Deposits. Ford Credit may make the remittances
pursuant to Sections 4.3(a) and 4.6(a), net of amounts to be distributed to
Ford Credit pursuant to Section 4.7(c). Nonetheless, the Servicer will
account for all of the above described remittances and distributions in the
Servicer's Certificate as if the amounts were deposited and/or transferred
separately.
SECTION 4.9 Statements to Noteholders and Certificateholders. On
each Payment Date, the Servicer will provide to the Indenture Trustee (with
copies to the Rating Agencies, the Swap Counterparty and each Note Paying
Agent) for the Indenture Trustee to forward to each Noteholder of record as
of the most recent Record Date (which delivery by the Indenture Trustee to
the Noteholders may be made by making such statement available to the
Noteholders through the Indenture Trustee's website, which initially is
located at xxx.xxxxxxxxxxxx.xxx and to the Owner Trustee (with copies to the
Rating Agencies and to each Certificate Paying Agent) for the Owner Trustee
to forward to each Certificateholder of record as of the most recent Record
Date a statement based on information in the Servicer's Certificate furnished
pursuant to Section 3.9, setting forth for the Collection Period relating to
such Payment Date the following information as to the Securities to the
extent applicable:
(i) the amount of such distribution allocable to
principal allocable to each Class of Securities;
(ii) the amount of such distribution allocable to
interest allocable to each Class of Securities;
(iii) the amount of such distribution allocable to
draws from the Reserve Account, if any;
(iv) the Pool Balance as of the close of business
on the last day of the preceding Collection Period;
(v) the Specified Overcollateralization Amount and
the Specified Credit Enhancement Amount as of such Payment Date;
(vi) the amount of the Servicing Fee paid to the
Servicer with respect to the related Collection Period and the
amount of any unpaid Servicing Fees and the change in such amount
from that of the prior Payment Date;
(vii) the amounts of the Noteholders' Interest
Carryover Shortfall and the Certificateholders' Interest Carryover
Shortfall, if any, on such Payment Date and the change in such
amounts from the preceding Payment Date;
(viii) the aggregate outstanding principal amount
of each Class of Notes, the Note Pool Factor for each Class of
Notes, the Certificate Balance of the Class D Certificates and the
Certificate Pool Factor of the Class D Certificates as of such
Payment Date;
(ix) the amount of any previously due and unpaid
payment of principal of the Notes or of the Certificate Balance, as
applicable, and the change in such amount from that of the prior
Payment Date;
(x) the balance of the Reserve Account on such
Payment Date, after giving effect to distributions made on such
Payment Date and the change in such balance from the preceding
Payment Date;
(xi) the amount of the aggregate Realized Losses,
if any, with respect to the related Collection Period;
(xii) the aggregate Purchase Amount of Receivables
repurchased by the Seller or purchased by the Servicer, if any, with
respect to the related Collection Period; and
(xiii) the amount of Advances, if any, on such
Payment Date (stating separately the amount of Actuarial Advances
and Simple Interest Advances).
Each amount set forth on the Payment Date statement pursuant to
clauses (i), (ii), (vii) and (ix) above will be expressed as a dollar amount
per $1,000 of original principal amount or original Certificate Balance of a
Note or a Certificate, as applicable.
ARTICLE V
Intentionally Omitted
ARTICLE VI
THE SELLER
SECTION 6.1 Representations and Warranties of Seller. The Seller
makes the following representations and warranties on which the Issuer will
be deemed to have relied in acquiring the Trust Property. The representations
and warranties speak as of the execution and delivery of this Agreement and
will survive the conveyance of the Trust Property to the Issuer and the
pledge thereof by the Issuer to the Indenture Trustee pursuant to the
Indenture:
(a) Organization and Good Standing. The Seller has been duly
organized and is validly existing as a limited liability company in good
standing under the laws of the State of Delaware, with power and authority to
own its properties and to conduct its business as such properties are
currently owned and such business is presently conducted, and had at all
relevant times, and will have, power, authority and legal right to acquire
and own the Receivables.
(b) Due Qualification. The Seller is duly qualified to do
business as a foreign limited liability company in good standing, and has
obtained all necessary licenses and approvals in all jurisdictions (including
Pennsylvania) in which the ownership or lease of property or the conduct of
its business requires such qualifications.
(c) Power and Authority. The Seller has the power and authority
to execute and deliver this Agreement and the other Basic Documents to which
it is a party and to carry out their respective terms. The Seller has full
power and authority to convey and assign the property to be conveyed and
assigned to and deposited with the Issuer and has duly authorized such
conveyance and assignment to the Issuer by all necessary action; and the
execution, delivery, and performance of this Agreement and the other Basic
Documents to which it is a party have been duly authorized, executed and
delivered by the Seller by all necessary action.
(d) Valid Conveyance; Binding Obligation. This Agreement
evidences a valid sale, transfer, assignment and conveyance of the
Receivables and the other Trust Property conveyed by the Seller to the Issuer
hereunder, enforceable against creditors of and purchasers from the Seller;
and this Agreement and the other Basic Documents to which the Seller is a
party constitute legal, valid, and binding obligations of the Seller,
enforceable against the Seller in accordance with their respective terms,
subject, as to enforceability, to applicable bankruptcy, insolvency,
reorganization, conservatorship, receivership, liquidation and other similar
laws and to general equitable principles.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which the
Seller is a party and the fulfillment of the terms hereof and thereof will
not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or both) a
default under the Certificate of Formation or Limited Liability Company
Agreement, any indenture, mortgage, deed of trust, loan agreement, guarantee,
lease financing agreement or similar agreement or instrument to which the
Seller is a party or by which the Seller is bound; nor result in the creation
or imposition of any lien, charge or encumbrance upon any of its properties
pursuant to the terms of any such indenture, mortgage, deed of trust, loan
agreement, guarantee, lease financing agreement or similar agreement or
instrument; nor violate any law or, to the best of the Seller's knowledge,
any order, rule, or regulation applicable to the Seller of any federal or
State regulatory body, administrative agency, or other governmental
instrumentality having jurisdiction over the Seller or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the Seller's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Seller or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents
or the Securities, (ii) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents or the Securities, or (iv) relating to the Seller that might
adversely affect the federal or Applicable Tax State income, excise,
franchise or similar tax attributes of the Securities.
(g) Valid Security Interest. This Agreement creates a valid and
continuing security interest (as defined in the applicable UCC) in the
Receivables, in favor of the Issuer which security interest is prior to all
other Liens and is enforceable as such as against all other creditors of and
purchasers from the Seller.
SECTION 6.2 Liability of Seller; Indemnities. The Seller will be
liable in accordance herewith only to the extent of the obligations
specifically undertaken by the Seller under this Agreement, and hereby agrees
to the following:
(a) The Seller will indemnify, defend, and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person with respect
to, and as of the date of, the conveyance of the Receivables to the Issuer or
the issuance and original sale of the Securities, including any sales, gross
receipts, general corporation, tangible personal property, privilege, or
license taxes (but, in the case of the Issuer, not including any taxes
asserted with respect to ownership of the Receivables or federal or other
Applicable Tax State income taxes arising out of the transactions
contemplated by this Agreement and the other Basic Documents) and costs and
expenses in defending against the same.
(b) The Seller will indemnify, defend, and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders and the
Certificateholders from and against any loss, liability or expense incurred
by reason of (i) the Seller's willful misfeasance, bad faith, or negligence
(other than errors in judgment) in the performance of its duties under this
Agreement, or by reason of reckless disregard of its obligations and duties
under this Agreement and (ii) the Seller's violation of federal or State
securities laws in connection with the registration or the sale of the
Securities.
(c) The Seller will indemnify, defend and hold harmless the Owner
Trustee and the Indenture Trustee and their respective officers, directors,
employees and agents from and against all costs, expenses, losses, claims,
damages and liabilities arising out of or incurred in connection with the
acceptance or performance of the trusts and duties contained herein and in
the Trust Agreement, in the case of the Owner Trustee, and in the Indenture,
in the case of the Indenture Trustee, except to the extent that such cost,
expense, loss, claim, damage or liability: (i) in the case of the Owner
Trustee, is due to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Owner Trustee or, in the case of the Indenture
Trustee, is due to the willful misfeasance, bad faith or negligence (except
for errors in judgment) of the Indenture Trustee; or (ii) in the case of the
Owner Trustee arises from the breach by the Owner Trustee of any of its
representations or warranties set forth in Section 7.3 of the Trust Agreement
or (iii) in the case of the Indenture Trustee arises from the breach by the
Indenture Trustee of any of its representations and warranties set forth in
the Indenture.
(d) The Seller will pay any and all taxes levied or assessed upon
all or any part of the Owner Trust Estate.
(e) The Seller will defend, indemnify, and hold harmless the
Issuer from and against any and all costs, expenses, losses, damages, claims
and liabilities, arising out of or resulting from the failure of a Receivable
to be originated in compliance with all requirements of law and for any
breach of any of the Seller's representations and warranties as set forth in
Section 2.2, provided, that any indemnification amounts owed pursuant to this
Section 6.2 with respect to a Receivable will give effect to and not be
duplicative of the Purchase Amount paid by the Seller pursuant to Section 2.3
hereof.
(f) Indemnification under this Section 6.2 will survive the
resignation or removal of the Owner Trustee or the Indenture Trustee and the
termination of this Agreement and will include, without limitation,
reasonable fees and expenses of counsel and expenses of litigation. If the
Seller has made any indemnity payments pursuant to this Section 6.2 and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person will promptly repay such amounts to
the Seller, without interest.
(g) The Seller's obligations under this Section 6.2 are
obligations solely of the Seller and will not constitute a claim against the
Seller to the extent that the Seller does not have funds sufficient to make
payment of such obligations. In furtherance of and not in derogation of the
foregoing, the Issuer, the Servicer, the Indenture Trustee and the Owner
Trustee, by entering into or accepting this agreement, acknowledge and agree
that they have no right, title or interest in or to the Other Assets of the
Seller. To the extent that, notwithstanding the agreements and provisions
contained in the preceding sentence, the Issuer, Servicer, Indenture Trustee
or Owner Trustee either (i) asserts an interest or claim to, or benefit from,
Other Assets, or (ii) is deemed to have any such interest, claim to, or
benefit in or from Other Assets, whether by operation of law, legal process,
pursuant to applicable provisions of insolvency laws or otherwise (including
by virtue of Section 1111(b) of the Bankruptcy Code or any successor
provision having similar effect under the Bankruptcy Code), then such Issuer,
Servicer, Indenture Trustee or Owner Trustee further acknowledges and agrees
that any such interest, claim or benefit in or from Other Assets is and will
be expressly subordinated to the indefeasible payment in full, which, under
the terms of the relevant documents relating to the securitization or
conveyance of such Other Assets, are entitled to be paid from, entitled to
the benefits of, or otherwise secured by such Other Assets (whether or not
any such entitlement or security interest is legally perfected or otherwise
entitled to a priority of distributions or application under applicable law,
including insolvency laws, and whether or not asserted against the Seller),
including the payment of post-petition interest on such other obligations and
liabilities. This subordination agreement will be deemed a subordination
agreement within the meaning of Section 510(a) of the Bankruptcy Code. The
Issuer, Servicer, Indenture Trustee and Owner Trustee each further
acknowledges and agrees that no adequate remedy at law exists for a breach of
this Section 6.2(g) and the terms of this Section 6.2(g) may be enforced by
an action for specific performance. The provisions of this Section 6.2(g)
will be for the third party benefit of those entitled to rely thereon and
will survive the termination of this Agreement.
SECTION 6.3 Merger or Consolidation of, or Assumption of the
Obligations of, Seller. Any Person (i) into which the Seller may be merged or
consolidated, (ii) resulting from any merger, conversion, or consolidation to
which the Seller is a party, (iii) succeeding to the business of the Seller,
or (iv) more than 50% of the voting stock or voting power and 50% or more of
the economic equity of which is owned directly or indirectly by Ford Motor
Company, which Person in any of the foregoing cases executes an agreement of
assumption to perform every obligation of the Seller under this Agreement,
will be the successor to the Seller under this Agreement without the
execution or filing of any document or any further act on the part of any of
the parties to this Agreement; provided, however, that (x) the Seller has
delivered to the Owner Trustee and the Indenture Trustee an Officer's
Certificate and an Opinion of Counsel each stating that such merger,
conversion, consolidation or succession and such agreement of assumption
comply with this Section 6.3 and that all conditions precedent, if any,
provided for in this Agreement relating to such transaction have been
complied with and (y) the Seller has delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully
to preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables and the other Trust Property, and reciting
the details of such filings, or (B) stating that, in the opinion of such
counsel, no such action is necessary to preserve and protect such interest.
The Seller will provide notice of any merger, conversion, consolidation, or
succession pursuant to this Section 6.3 to the Rating Agencies.
Notwithstanding anything herein to the contrary, the execution of the
foregoing agreement of assumption and compliance with clauses (x) and (y) of
this Section 6.3 will be conditions to the consummation of the transactions
referred to in clauses (i), (ii) or (iii) of this Section 6.3.
SECTION 6.4 Limitation on Liability of Seller and Others. The
Seller and any officer or employee or agent of the Seller may rely in good
faith on the advice of counsel or on any document of any kind, prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Seller will not be under any obligation to appear in,
prosecute, or defend any legal action that is not incidental to its
obligations under this Agreement, and that in its opinion may involve it in
any expense or liability.
SECTION 6.5 Seller May Own Securities. The Seller, and any
Affiliate of the Seller, may in its individual or any other capacity become
the owner or pledgee of Securities with the same rights as it would have if
it were not the Seller or an Affiliate thereof, except as otherwise expressly
provided herein or in the other Basic Documents. Except as set forth herein
or in the other Basic Documents, Securities so owned by or pledged to the
Seller or any such Affiliate will have an equal and proportionate benefit
under the provisions of this Agreement and the other Basic Documents, without
preference, priority, or distinction as among all of the Securities.
ARTICLE VII
THE SERVICER
SECTION 7.1 Representations of Servicer. The Servicer makes the
following representations on which the Issuer is deemed to have relied in
acquiring the Trust Property. The representations speak as of the execution
and delivery of this Agreement and will survive the conveyance of the Trust
Property to the Issuer and the pledge thereof by the Issuer pursuant to the
Indenture:
(a) Organization and Good Standing. The Servicer has been duly
organized and is validly existing as a corporation in good standing under the
laws of the State of its incorporation, with power and authority to own its
properties and to conduct its business in each jurisdiction in the United
States of America in which the conduct of its business or the ownership of
its properties requires such qualifications, and had at all relevant times,
and has, the power, authority, and legal right to acquire, own, sell and
service the Receivables and to hold the Receivable Files as custodian on
behalf of the Issuer and the Indenture Trustee.
(b) Due Qualification. The Servicer is duly qualified to do
business as a foreign corporation in good standing, and has obtained all
necessary licenses and approvals in all jurisdictions in which the ownership
or lease of property or the conduct of its business (including the servicing
of the Receivables as required by this Agreement) require such
qualifications.
(c) Power and Authority. The Servicer has the power and authority
to execute and deliver this Agreement and the other Basic Documents to which
it is a party and to carry out their respective terms, and the execution,
delivery and performance of this Agreement and the other Basic Documents to
which it is a party have been duly authorized, executed and delivered by the
Servicer by all necessary corporate action.
(d) Binding Obligation. This Agreement and the other Basic
Documents to which the Servicer is a party constitute legal, valid, and
binding obligations of the Servicer, enforceable against the Servicer in
accordance with their respective terms, subject, as to enforceability, to
applicable bankruptcy, insolvency, reorganization, conservatorship,
receivership, liquidation and other similar laws and to general equitable
principles.
(e) No Violation. The consummation of the transactions
contemplated by this Agreement and the other Basic Documents to which the
Servicer is a party and the fulfillment of the terms hereof and thereof will
not conflict with, result in any breach of any of the terms and provisions
of, nor constitute (with or without notice or lapse of time or both) a
default under (in each case material to the Servicer and its subsidiaries
considered as a whole), the articles of incorporation or by-laws of the
Servicer, or any indenture, mortgage, deed of trust, loan agreement,
guarantee, lease financing agreement or similar agreement or instrument to
which the Servicer is a party or by which it is bound, nor result in the
creation or imposition of any lien, charge or encumbrance (in each case
material to the Servicer and its subsidiaries considered as a whole) upon any
of its properties pursuant to the terms of any such indenture, mortgage, deed
of trust, loan agreement, guarantee, lease financing agreement or similar
agreement or instrument (other than this Agreement); nor violate any law or,
to the best of the Servicer's knowledge, any order, rule, or regulation
applicable to the Servicer of any court or any federal or State regulatory
body, administrative agency, or other governmental instrumentality having
jurisdiction over the Servicer or its properties.
(f) No Proceedings. There are no proceedings or investigations
pending, or, to the Servicer's best knowledge, threatened, before any court,
regulatory body, administrative agency, or other governmental instrumentality
having jurisdiction over the Servicer or its properties: (i) asserting the
invalidity of this Agreement, the Indenture, any of the other Basic Documents
or the Securities, (ii) seeking to prevent the issuance of the Securities or
the consummation of any of the transactions contemplated by this Agreement,
the Indenture or any of the other Basic Documents, (iii) seeking any
determination or ruling that might materially and adversely affect the
performance by the Servicer of its obligations under, or the validity or
enforceability of, this Agreement, the Indenture, any of the other Basic
Documents or the Securities, or (iv) relating to the Servicer that might
adversely affect the federal or Applicable Tax State income, excise,
franchise or similar tax attributes of the Securities.
SECTION 7.2 Indemnities of Servicer. The Servicer will be liable
in accordance herewith only to the extent of the obligations specifically
undertaken by the Servicer under this Agreement, and hereby agrees to the
following:
(a) The Servicer will defend, indemnify and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, damages, claims and liabilities, arising out of or
resulting from the use, ownership or operation by the Servicer or any
Affiliate thereof of a Financed Vehicle.
(b) The Servicer will indemnify, defend and hold harmless the
Issuer, the Owner Trustee and the Indenture Trustee from and against any
taxes that may at any time be asserted against any such Person with respect
to the transactions contemplated herein or in the other Basic Documents, if
any, including, without limitation, any sales, gross receipts, general
corporation, tangible personal property, privilege, or license taxes (but, in
the case of the Issuer, not including any taxes asserted with respect to, and
as of the date of, the conveyance of the Receivables to the Issuer or the
issuance and original sale of the Securities, or asserted with respect to
ownership of the Receivables, or federal or other Applicable Tax State income
taxes arising out of the transactions contemplated by this Agreement and the
other Basic Documents) and costs and expenses in defending against the same.
(c) The Servicer will indemnify, defend and hold harmless the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, the
Certificateholders and the Seller from and against any and all costs,
expenses, losses, claims, damages, and liabilities to the extent that such
cost, expense, loss, claim, damage, or liability arose out of, or was imposed
upon any such Person through, the negligence, willful misfeasance, or bad
faith (other than errors in judgment) of the Servicer in the performance of
its duties under this Agreement or any other Basic Document to which it is a
party, or by reason of reckless disregard of its obligations and duties under
this Agreement or any other Basic Document to which it is a party.
(d) The Servicer will indemnify, defend, and hold harmless the
Owner Trustee and the Indenture Trustee, as applicable, from and against all
costs, expenses, losses, claims, damages, and liabilities arising out of or
incurred in connection with the acceptance or performance of the trusts and
duties contained herein and in the other Basic Documents, if any, except to
the extent that such cost, expense, loss, claim, damage, or liability: (i) is
due to the willful misfeasance, bad faith, or negligence (except for errors
in judgment) of the Owner Trustee or the Indenture Trustee, as applicable;
(ii) in the case of the Owner Trustee, arises from the Owner Trustee's breach
of any of its representations or warranties set forth in Section 7.3 of the
Trust Agreement or, in the case of the Indenture Trustee, from the Indenture
Trustee's breach of any of its representations or warranties set forth in the
Indenture; or (iii) in the case of the Indenture Trustee, arises out of or is
incurred in connection with the performance by the Indenture Trustee of the
duties of a Successor Servicer hereunder.
For purposes of this Section 7.2, in the event of the termination
of the rights and obligations of Ford Credit (or any successor thereto
pursuant to Section 8.2) as Servicer pursuant to Section 8.1, or a
resignation by such Servicer pursuant to this Agreement, such Servicer will
be deemed to continue to be the Servicer pending appointment of a Successor
Servicer (other than the Indenture Trustee) pursuant to Section 8.2.
(e) Indemnification under this Section 7.2 by Ford Credit (or any
successor thereto pursuant to Section 8.2) as Servicer, with respect to the
period such Person was (or was deemed to be) the Servicer, will survive the
termination of such Person as Servicer or a resignation by such Person as
Servicer as well as the termination of this Agreement or the resignation or
removal of the Owner Trustee or the Indenture Trustee and will include
reasonable fees and expenses of counsel and expenses of litigation. If the
Servicer has made any indemnity payments pursuant to this Section 7.2 and the
Person to or on behalf of whom such payments are made thereafter collects any
of such amounts from others, such Person will promptly repay such amounts to
the Servicer, without interest.
SECTION 7.3 Merger or Consolidation of, or Assumption of the
Obligations of, Servicer. Any Person (i) into which the Servicer may be
merged or consolidated, (ii) resulting from any merger, conversion, or
consolidation to which the Servicer is a party, (iii) succeeding to the
business of the Servicer, or (iv) so long as Ford Credit acts as Servicer,
any company or other business entity of which Ford Motor Company owns,
directly or indirectly, more than 50% of the voting stock or voting power and
50% or more of the economic equity, which Person in any of the foregoing
cases executes an agreement of assumption to perform every obligation of the
Servicer under this Agreement, will be the successor to the Servicer under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties to this Agreement; provided, however,
that (x) the Servicer has delivered to the Owner Trustee and the Indenture
Trustee an Officer's Certificate and an Opinion of Counsel each stating that
such merger, conversion, consolidation, or succession and such agreement of
assumption comply with this Section 7.3 and that all conditions precedent
provided for in this Agreement relating to such transaction have been
complied with and (y) the Servicer has delivered to the Owner Trustee and the
Indenture Trustee an Opinion of Counsel either (A) stating that, in the
opinion of such counsel, all financing statements and continuation statements
and amendments thereto have been executed and filed that are necessary fully
to preserve and protect the interest of the Issuer and the Indenture Trustee,
respectively, in the Receivables, and reciting the details of such filings,
or (B) stating that, in the opinion of such counsel, no such action is
necessary to preserve and protect such interests. The Servicer will provide
notice of any merger, conversion, consolidation or succession pursuant to
this Section 7.3 to the Rating Agencies. Notwithstanding anything herein to
the contrary, the execution of the foregoing agreement or assumption and
compliance with clauses (x) and (y) of this Section 7.3 will be conditions to
the consummation of the transactions referred to in clauses (i), (ii), or
(iii) this Section 7.3.
SECTION 7.4 Limitation on Liability of Servicer and Others. (a)
Neither the Servicer nor any of the directors or officers or employees or
agents of the Servicer will be under any liability to the Issuer, the
Noteholders or the Certificateholders, except as provided under this
Agreement, for any action taken or for refraining from the taking of any
action pursuant to this Agreement or for errors in judgment; provided,
however, that this provision will not protect the Servicer or any such Person
against any liability that would otherwise be imposed by reason of willful
misfeasance or bad faith in the performance of duties or by reason of
reckless disregard of obligations and duties under this Agreement, or by
reason of negligence in the performance of its duties under this Agreement
(except for errors in judgment). The Servicer and any director, officer or
employee or agent of the Servicer may rely in good faith on any Opinion of
Counsel or on any Officer's Certificate of the Seller or certificate of
auditors believed to be genuine and to have been signed by the proper party
in respect of any matters arising under this Agreement.
(b) Except as provided in this Agreement, the Servicer will not
be under any obligation to appear in, prosecute, or defend any legal action
that is not incidental to its duties to service the Receivables in accordance
with this Agreement, and that in its opinion may involve it in any expense or
liability; provided, however, that the Servicer may undertake any reasonable
action that it may deem necessary or desirable in respect of this Agreement
and the rights and duties of the parties to this Agreement and the interests
of the Noteholders and Certificateholders under this Agreement. In such
event, the legal expenses and costs of such action and any liability
resulting therefrom will be expenses, costs and liabilities of the Servicer.
SECTION 7.5 Delegation of Duties. So long as Ford Credit acts as
Servicer, the Servicer may at any time without notice or consent delegate
some of or substantially all of its duties under this Agreement to Ford Motor
Company or any company or other business entity of which Ford Motor Company
owns, directly or indirectly, more than 50% of the voting stock or voting
power and 50% or more of the economic equity. The Servicer may at any time
perform specific duties as servicer under the Agreement through
sub-contractors; provided that no such delegation or subcontracting will
relieve the Servicer of its responsibilities with respect to such duties as
to which the Servicer will remain primarily responsible with respect thereto
and the Servicer will be solely responsible for the fees of any such
sub-contractors.
SECTION 7.6 Ford Credit Not to Resign as Servicer. Subject to the
provisions of Section 7.3, Ford Credit will not resign from the obligations
and duties hereby imposed on it as Servicer under this Agreement except upon
determination that the performance of its duties under this Agreement is no
longer permissible under applicable law. Notice of any such determination
permitting the resignation of Ford Credit will be communicated to the Owner
Trustee and the Indenture Trustee at the earliest practicable time (and, if
such communication is not in writing, will be confirmed in writing at the
earliest practicable time) and any such determination will be evidenced by an
Opinion of Counsel to such effect delivered to the Owner Trustee and the
Indenture Trustee concurrently with or promptly after such notice. No such
resignation will become effective until the Indenture Trustee or a Successor
Servicer has (i) taken the actions required by Section 8.1(b), (ii) assumed
the responsibilities and obligations of Ford Credit in accordance with
Section 8.2 and (iii) become the Administrator under the Administration
Agreement pursuant to Section 9 thereof.
SECTION 7.7 Servicer May Own Securities. The Servicer, and any
Affiliate of the Servicer, may, in its individual or any other capacity,
become the owner or pledgee of Securities with the same rights as it would
have if it were not the Servicer or an Affiliate thereof, except as otherwise
expressly provided herein or in the other Basic Documents. Except as set
forth herein or in the other Basic Documents, Securities so owned by or
pledged to the Servicer or such Affiliate will have an equal and
proportionate benefit under the provisions of this Agreement, without
preference, priority or distinction as among all of the Securities.
ARTICLE VIII
SERVICING TERMINATION
SECTION 8.1 Events of Servicing Termination. (a) If any one of
the following events ("Events of Servicing Termination") occur and be
continuing:
(i) Any failure by the Servicer or the Seller to deliver to
the Owner Trustee or the Indenture Trustee any proceeds or payment
required to be so delivered under the terms of the Securities and
this Agreement that continues unremedied for a period of three (3)
Business Days after written notice of such failure is received by
the Servicer or the Seller, as the case may be, from the Owner
Trustee or the Indenture Trustee or after discovery of such failure
by an officer of the Servicer or the Seller, as the case may be; or
(ii) Failure on the part of the Servicer or the Seller duly
to observe or to perform in any material respect any other covenants
or agreements of the Servicer or the Seller, as the case may be, set
forth in the Securities or in this Agreement, which failure (a)
materially and adversely affects the rights of Noteholders or
Certificateholders and (b) continues unremedied for a period of
ninety (90) days after the date on which written notice of such
failure, requiring the same to be remedied, has been given (1) to
the Servicer or the Seller, as the case may be, by the Owner Trustee
or the Indenture Trustee, or (2) to the Owner Trustee, the Indenture
Trustee, the Seller and the Servicer by the Noteholders of Notes
evidencing not less than 25% of the Note Balance of the Controlling
Note Class or, if no Notes are outstanding, by Certificateholders of
Certificates evidencing not less than 25% of the Certificate Balance
of the Controlling Certificate Class; or
(iii) The entry of a decree or order by a court or agency
or supervisory authority having jurisdiction in the premises for the
appointment of a conservator, receiver, or liquidator for the
Servicer or the Seller in any insolvency, readjustment of debt,
marshalling of assets and liabilities, or similar proceedings, or
for the winding up or liquidation of its respective affairs,
and the continuance of any such decree or order unstayed and in
effect for a period of sixty (60) consecutive days; or
(iv) The consent by the Servicer or the Seller to the
appointment of a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities, or similar proceedings of or relating to the Servicer
of or relating to substantially all of its property; or the Servicer
admits in writing its inability to pay its debts generally as they
become due, files a petition to take advantage of any applicable
insolvency or reorganization statute, makes an assignment for the
benefit of its creditors, or voluntary suspends payment of its
obligations or become insolvent;
then the Indenture Trustee will promptly notify each Rating Agency, and in
each and every case, so long as an Event of Servicing Termination has not
been remedied, either the Indenture Trustee or the Noteholders of Notes
evidencing not less than a majority of the Note Balance of the Controlling
Note Class (or, if no Notes are outstanding, the Owner Trustee or
Certificates evidencing not less than a majority of the Certificate Balance
of the Controlling Certificate Class), by notice given in writing to the
Servicer (and to the Indenture Trustee and the Owner Trustee if given by the
Noteholders and to the Owner Trustee if given by the Certificateholders)
(with a copy in either case to the Rating Agencies) may terminate all of the
rights and obligations of the Servicer under this Agreement. On or after the
receipt by the Servicer of such written notice, all authority and power of
the Servicer under this Agreement, whether with respect to the Securities or
the Trust Property or otherwise, will pass to and be vested in the Indenture
Trustee or such Successor Servicer as may be appointed under Section 8.2. In
such event, the Indenture Trustee and the Owner Trustee are hereby authorized
and empowered to execute and deliver, on behalf of the predecessor Servicer,
as attorney-in-fact or otherwise, any and all documents and other
instruments, and to do or accomplish all other acts or things necessary or
appropriate to effect the purposes of such notice of termination, whether to
complete the transfer and endorsement of the Receivables and related
documents, or otherwise.
(b) Upon termination of the Servicer under Section 8.1(a), the
predecessor Servicer will cooperate with the Indenture Trustee, the Owner
Trustee and such Successor Servicer in effecting the termination of the
responsibilities and rights of the predecessor Servicer under this Agreement,
including the transfer to the Indenture Trustee or such Successor Servicer
for administration of all cash amounts that are at the time held by the
predecessor Servicer for deposit, or will thereafter be received with respect
to a Receivable and the delivery of the Receivable Files and the related
accounts and records maintained by the Servicer. All reasonable costs and
expenses (including attorneys' fees) incurred in connection with transferring
the Receivable Files to the Successor Servicer and amending this Agreement to
reflect such succession as Servicer pursuant to this Section 8.1 will be paid
by the predecessor Servicer upon presentation of reasonable documentation of
such costs and expenses.
SECTION 8.2 Appointment of Successor Servicer.
(a) Upon the Servicer's receipt of notice of termination pursuant
to Section 8.1 or the Servicer's resignation in accordance with the terms of
this Agreement, the predecessor Servicer will continue to perform its
functions as Servicer under this Agreement, in the case of termination, only
until the date specified in such termination notice or, if no such date is
specified in a notice of termination, until receipt of such notice and, in
the case of resignation, until the later of (x) the date 45 days from the
delivery to the Indenture Trustee and the Owner Trustee of written notice of
such resignation (or written confirmation of such notice) in accordance with
the terms of this Agreement and (y) the date upon which the predecessor
Servicer is unable to act as Servicer, as specified in the notice of
resignation and accompanying Opinion of Counsel. If the Servicer resigns or
is terminated hereunder, the Issuer will appoint a Successor Servicer, and
the Successor Servicer will accept its appointment by a written assumption in
form acceptable to the Owner Trustee and the Indenture Trustee (with a copy
to each Rating Agency). If a Successor Servicer has not been appointed at the
time when the predecessor Servicer ceases to act as Servicer in accordance
with this Section 8.2, the Indenture Trustee without further action will
automatically be appointed the Successor Servicer. Notwithstanding the above,
the Indenture Trustee, if it is legally unable so to act, will appoint, or
petition a court of competent jurisdiction to appoint, any established
institution, having a net worth of not less than $100,000,000 and whose
regular business will include the servicing of automotive receivables, as the
successor to the Servicer under this Agreement.
(b) Upon appointment, the Successor Servicer will be the
successor in all respects to the predecessor Servicer and will be subject to
all the responsibilities, duties, and liabilities arising thereafter relating
thereto placed on the predecessor Servicer, by the terms and provisions of
this Agreement.
(c) In connection with such appointment, the Indenture Trustee
may make such arrangements for the compensation of such Successor Servicer
out of payments on Receivables as it and such Successor Servicer will agree;
provided, however, that no such compensation will be in excess of the amount
paid to the predecessor Servicer under this Agreement. The Indenture Trustee
and such Successor Servicer will take such action, consistent with this
Agreement, as will be necessary to effectuate any such succession.
SECTION 8.3 Repayment of Advances. The predecessor Servicer will
be entitled to receive, to the extent of available funds, reimbursement for
Outstanding Advances pursuant to Section 4.3 and 4.4, in the manner specified
in Section 4.6, with respect to all Advances made by the predecessor
Servicer.
SECTION 8.4 Notification to Noteholders and Certificateholders.
Upon any termination of, or appointment of a successor to, the Servicer
pursuant to this Article VIII, the Indenture Trustee will give prompt written
notice thereof to Noteholders, and the Owner Trustee will give prompt written
notice thereof to Certificateholders at their respective addresses of record
and to each Rating Agency.
SECTION 8.5 Waiver of Past Events of Servicing Termination. The
Noteholders of Notes evidencing not less than a majority of the Note Balance
of the Controlling Note Class (or, if no Notes are outstanding, the Owner
Trustee or Certificates evidencing not less than a majority of the
Certificate Balance of the Controlling Certificate Class) may, on behalf of
all Noteholders and Certificateholders, waive any Event of Servicing
Termination hereunder and its consequences, except an event resulting from
the failure to make any required deposits to or payments from any of the
Trust Accounts, either Certificate Distribution Account or the Payahead
Account in accordance with this Agreement. Upon any such waiver of a past
Event of Servicing Termination, such Event of Servicing Termination will
cease to exist, and will be deemed to have been remedied for every purpose of
this Agreement. No such waiver will extend to any subsequent or other event
or impair any right consequent thereon. The Issuer will provide written
notice of any such waiver to the Rating Agencies.
ARTICLE IX
TERMINATION
SECTION 9.1 Optional Purchase of All Receivables. On the last day
of any Collection Period as of which the Pool Factor is equal to or less than
the Optional Purchase Percentage, the Servicer has the option to purchase the
corpus of the Trust. To exercise such option, the Servicer will deposit
pursuant to Section 4.5 into the Collection Account an amount equal to the
aggregate Purchase Amount for the Receivables, plus the appraised value of
any other property held by the Trust, such value to be determined by an
appraiser mutually agreed upon by the Servicer, the Owner Trustee and the
Indenture Trustee, and will succeed to all interests in and to the Trust.
Notwithstanding the foregoing, the Servicer will not be permitted to exercise
such option unless the amount to be deposited in the Collection Account
pursuant to the preceding sentence is greater than or equal to the sum of the
outstanding principal amount of the Securities and all accrued but unpaid
interest (including any overdue interest) thereon. The amount deposited in
the Collection Account pursuant to this Section 9.1 will be used on the next
Payment Date to make payments in full to Noteholders and Certificateholders
in the manner set forth in Article IV.
SECTION 9.2. Succession Upon Satisfaction and Discharge of
Indenture. Following the satisfaction and discharge of the Indenture and the
payment in full of the principal of and interest on the Notes, to the extent
permitted by applicable law, the Indenture Trustee will continue to carry out
its obligations hereunder as agent for the Owner Trustee, including without
limitation making distributions from the Payahead Account and the Collection
Account in accordance with Section 4.7 and making withdrawals from the
Reserve Account in accordance with Section 4.1(e) and Section 4.6(b).
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1 Amendment. (a) This Agreement may be amended by the
Seller, the Servicer and the Issuer, with the consent of the Indenture
Trustee and the Owner Trustee to the extent that their respective rights or
obligations may be affected thereby (which consent may not be unreasonably
withheld), but without the consent of any of the Noteholders, the Swap
Counterparty or Certificateholders, to cure any ambiguity, to correct or
supplement any provisions in this Agreement, or to add any provisions to or
change or eliminate any provisions or to modify the rights of the
Noteholders, the Swap Counterparty or Certificateholders; provided, however,
that (i) such action will not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, materially and
adversely affect the interests of any Noteholder or Certificateholder and
(ii) either (x) such action will not, as evidenced by an Opinion of Counsel
delivered to the Owner Trustee and the Indenture Trustee, adversely affect
the rights or obligations of the Swap Counterparty under the Interest Rate
Swap Agreement or modify the obligations of, or impair the ability of the
Issuer to fully perform any of its obligations under, the Interest Rate Swap
Agreement, or (y) the Swap Counterparty has consented thereto (which consent
may not be unreasonably withheld and which consent will be deemed to have
been given if the Swap Counterparty does not object in writing within ten
(10) Business Days of receipt of a written request for such consent); and
provided further that such action will not, as evidenced by an Opinion of
Counsel, cause the Issuer to be characterized for federal or any then
Applicable Tax State income tax purposes as an association taxable as a
corporation.
(b) This Agreement may also be amended from time to time by the
Seller, the Servicer and the Issuer, with the consent of the Swap
Counterparty to the extent such amendment adversely affects the rights or
obligations of the Swap Counterparty under the Interest Rate Swap Agreement
or modifies the obligations of, or impairs the ability of the Issuer to fully
perform any of its obligations under, the Interest Rate Swap Agreement (which
consent may not be unreasonably withheld and which consent will be deemed to
have been given if the Swap Counterparty does not object in writing within
ten (10) Business Days of receipt of a written request for such consent), and
with the consent of the Owner Trustee to the extent that its rights or
obligations may be affected thereby (which consent may not be unreasonably
withheld) and with the consent of (i) the Indenture Trustee, to the extent
that its rights or obligations would be affected by such amendment, (ii) the
Noteholders of Notes evidencing not less than a majority of the Note Balance
of each Class of the Notes and (iii) the Certificateholders of Certificates
evidencing not less than a majority of the Aggregate Certificate Balance
(which consent of any Noteholder of a Note or Certificateholder of a
Certificate given pursuant to this Section 10.1 or pursuant to any other
provision of this Agreement will be conclusive and binding on such Note or
Certificate, as the case may be, and on all future Noteholders of such Note
or Certificateholders of such Certificate, as the case may be, and of any
Note or Certificate, as applicable, issued upon the transfer thereof or in
exchange thereof or in lieu thereof whether or not notation of such consent
is made upon such Note or the Certificate), for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of this Agreement, or of modifying in any manner the rights of the
Noteholders or the Certificateholders; provided, however, that no such
amendment may (A) increase or reduce in any manner the amount of, or
accelerate or delay the timing of, or change the allocation or priority of,
collections of payments on Receivables or distributions that are required to
be made on any Note or Certificate or change any Note Interest Rate or any
Certificate Rate or, without receipt of Rating Agency Confirmation, the
Specified Reserve Balance, without the consent of all adversely affected
Noteholders or Certificateholders or (B) reduce the aforesaid percentage
required to consent to any such amendment, without the consent of the
Noteholders of all Notes and Certificateholders of all Certificates affected
thereby; and provided further that such action will not, as evidenced by an
Opinion of Counsel, cause the Issuer to be characterized for federal or any
then Applicable Tax State income tax purposes as an association taxable as a
corporation.
(c) Prior to the execution of any such amendment or consent the
Servicer will provide, and the Owner Trustee will distribute, written
notification of the substance of such amendment or consent to each Rating
Agency.
(d) Promptly after the execution of any such amendment or
consent, the Owner Trustee will mail a copy to the Swap Counterparty and will
furnish written notification of the substance of such amendment or consent to
each Certificateholder, the Indenture Trustee and each Rating Agency and the
Indenture Trustee will provide notification of the substance of such
amendment or consent to each Noteholder. It will not be necessary for the
consent of Noteholders or the Certificateholders pursuant to this Section
10.1 to approve the particular form of any proposed amendment or consent, but
it will be sufficient if such consent approves the substance thereof. The
manner of obtaining such consents (and any other consents of Noteholders and
Certificateholders provided for in this Agreement) and of evidencing the
authorization of the execution thereof by Noteholders and Certificateholders
will be subject to such reasonable requirements as the Owner Trustee and the
Indenture Trustee may prescribe, including the establishment of record dates
pursuant to paragraph number 2 of the Note Depository Agreement.
(e) Prior to the execution of any amendment to this Agreement,
the Owner Trustee and the Indenture Trustee will be entitled to receive and
rely upon an Opinion of Counsel stating that the execution of such amendment
is authorized or permitted by this Agreement and the Opinion of Counsel
referred to in Section 10.2(i)(1). The Owner Trustee or the Indenture Trustee
may, but will not be obligated to, enter into any such amendment which
affects such Owner Trustee's or Indenture Trustee's own rights, duties or
immunities under this Agreement or otherwise.
SECTION 10.2 Protection of Title to Trust Property. (a) The
Seller will execute and file such financing statements and cause to be
executed and filed such continuation statements, all in such manner and in
such places as may be required by law fully to preserve, maintain, and
protect the interest of the Issuer and the Indenture Trustee for the benefit
of the Noteholders in the Receivables and in the proceeds thereof. The Seller
will deliver (or cause to be delivered) to the Owner Trustee and the
Indenture Trustee file-stamped copies of, or filing receipts for, any
document filed as provided above, as soon as available following such filing.
(b) Neither the Seller nor the Servicer will change its name,
identity, or corporate structure in any manner that would, could, or might
make any financing statement or continuation statement filed by the Seller in
accordance with paragraph (a) above seriously misleading within the meaning
of ss. 9-506 of the UCC, unless it has given the Owner Trustee and the
Indenture Trustee at least five (5) days' prior written notice thereof, with
a copy to the Rating Agencies, and has promptly filed appropriate amendments
to all previously filed financing statements or continuation statements.
(c) The Seller and the Servicer will give the Owner Trustee and
the Indenture Trustee at least sixty (60) days' prior written notice of any
relocation of its principal executive office if, as a result of such
relocation, the applicable provisions of the UCC would require the filing of
any amendment of any previously filed financing or continuation statement or
of any new financing statement and will promptly file any such amendment or
new financing statement. The Servicer will at all times maintain each office
from which it will service Receivables, and its principal executive office,
within the United States of America.
(d) The Servicer will maintain accounts and records as to each
Receivable accurately and in sufficient detail to permit (i) the reader
thereof to know at any time the status of such Receivable, including payments
and recoveries made and payments owing (and the nature of each) and (ii)
reconciliation between payments or recoveries on (or with respect to) each
Receivable and the amounts from time to time deposited in the Collection
Account, the Payahead Account and the Reserve Account in respect of such
Receivable.
(e) The Servicer will maintain its computer systems so that, from
and after the time of conveyance under this Agreement of the Receivables to
the Issuer, the Servicer's master computer records (including any back-up
archives) that refer to a Receivable will indicate clearly the interest of
the Issuer and the Indenture Trustee in such Receivable and that such
Receivable is owned by the Issuer and has been pledged to the Indenture
Trustee pursuant to the Indenture. Indication of the Issuer's and the
Indenture Trustee's interest in a Receivable will not be deleted from or
modified on the Servicer's computer systems until, and only until, the
Receivable has been paid in full or repurchased.
(f) If at any time the Seller or the Servicer proposes to sell,
grant a security interest in, or otherwise transfer any interest in
automotive receivables to any prospective purchaser, lender, or other
transferee, the Servicer will give to such prospective purchaser, lender, or
other transferee computer tapes, records, or print- outs (including any
restored from back-up archives) that, if they refer in any manner whatsoever
to any Receivable, will indicate clearly that such Receivable has been
conveyed to and is owned by the Issuer and has been pledged to the Indenture
Trustee.
(g) The Servicer, upon receipt of reasonable prior notice, will
permit the Owner Trustee, the Indenture Trustee and their respective agents
at any time during normal business hours to inspect, audit, and make copies
of and to obtain abstracts from the Servicer's records regarding any
Receivable.
(h) Upon request, the Servicer will furnish to the Owner Trustee
and the Indenture Trustee, within twenty (20) Business Days, a list of all
Receivables (by contract number and name of Obligor) then held as part of the
Trust, together with a reconciliation of such list to the Schedule of
Receivables and to each of the Servicer's Certificates furnished before such
request indicating removal of Receivables from the Trust.
(i) The Servicer will deliver to the Owner Trustee and the
Indenture Trustee:
(1) promptly after the execution and delivery of
this Agreement and of each amendment thereto, an Opinion of Counsel
either (A) stating that, in the opinion of such Counsel, all
financing statements and continuation statements have been executed
and filed that are necessary fully to preserve and protect the
interest of the Issuer and the Indenture Trustee in the Receivables,
and reciting the details of such filings or referring to prior
Opinions of Counsel in which such details are given, or (B) stating
that, in the opinion of such Counsel, no such action is necessary to
preserve and protect such interest; and
(2) within 120 days after the beginning of each
calendar year beginning with the first calendar year beginning more
than three months after the Cutoff Date, an Opinion of Counsel,
dated as of a date during such 120-day period, either (A) stating
that, in the opinion of such counsel, all financing statements and
continuation statements have been executed and filed that are
necessary fully to preserve and protect the interest of the Issuer
and the Indenture Trustee in the Receivables, and reciting the
details of such filings or referring to prior Opinions of Counsel in
which such details are given, or (B) stating that, in the opinion of
such Counsel, no such action is necessary to preserve and protect
such interest.
Each Opinion of Counsel referred to in clause (i)(1) or (i)(2)
above will specify any action necessary (as of the date of such opinion) to
be taken in the following year to preserve and protect such interest.
(j) The Seller will, to the extent required by applicable law,
cause the Securities to be registered with the Securities and Exchange
Commission pursuant to Section 12(b) or Section 12(g) of the Securities
Exchange Act of 1934 within the time periods specified in such sections.
(k) For the purpose of facilitating the execution of this
Agreement and for other purposes, this Agreement may be executed in any
number of counterparts, each of which counterparts will be deemed to be an
original, and all of which counterparts will constitute but one and the same
instrument.
SECTION 10.3 Governing Law. THIS AGREEMENT WILL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND THE OBLIGATIONS,
RIGHTS, AND REMEDIES OF THE PARTIES UNDER THIS AGREEMENT WILL BE DETERMINED
IN ACCORDANCE WITH SUCH LAWS.
SECTION 10.4 Notices. All demands, notices, and communications
under this Agreement will be in writing, personally delivered, sent by
telecopier, overnight courier or mailed by registered mail, and will be
deemed to have been duly given upon receipt:
(a) in the case of the Seller or the Servicer, to the agent for
service as specified in Section 10.11 hereof, or at such other address as may
be designated by such party in a written notice to the other parties to this
Agreement,
(b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee,
(c) in the case of the Indenture Trustee, at the Corporate Trust
Office of the Indenture Trustee,
(d) in the case of Xxxxx'x Investors Service, Inc., at the
following address: Xxxxx'x Investors Service, Inc., ABS Monitoring
Department, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
(e) in the case of Standard & Poor's, at the following address:
Standard & Poor's, 00 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Asset Backed Surveillance Department,
(f) in the case of Fitch, Inc., at the following address: Fitch,
Inc., 0 Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Asset Backed
Surveillance, and in the case of the Swap Counterparty, Bank of America,
N.A., Bank of America Corporate Center, 000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxx,
Xxxxx Xxxxxxxx 00000-0000, and
(g) in the case of the Swap Counterparty, at the following
address: Bank of America, N.A., Bank of America Corporate Xxxxxx,000 Xxxxx
Xxxxx Xxxxxx, Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000.
Any notice required or permitted to be mailed to a Noteholder or
Certificateholder will be given by first class mail, postage prepaid, at the
address of such Person as shown in the Note Register or the Certificate
Register, as applicable. Any notice so mailed within the time prescribed in
this Agreement will be conclusively presumed to have been duly given, whether
or not the Noteholder or Certificateholder receives such notice.
SECTION 10.5 Severability of Provisions. If any one or more of
the covenants, agreements, provisions, or terms of this Agreement is for any
reason whatsoever held invalid, then such covenants, agreements, provisions,
or terms will be deemed severable from the remaining covenants, agreements,
provisions, or terms of this Agreement and will in no way affect the validity
or enforceability of the other provisions of this Agreement or of the
Securities or the rights of the holders thereof.
SECTION 10.6 Assignment. Notwithstanding anything to the contrary
contained herein, except as provided in Sections 7.3 and 8.2 and as provided
in the provisions of this Agreement concerning the resignation of the
Servicer, this Agreement may not be assigned by the Seller or the Servicer
without the prior written consent of the Owner Trustee, the Indenture
Trustee, the Noteholders of Notes evidencing not less than 662/3% of the Note
Balance of the Notes Outstanding and the Certificateholders of Certificates
evidencing not less than 662/3% of the Aggregate Certificate Balance.
SECTION 10.7 Further Assurances. The Seller and the Servicer
agree to do and perform, from time to time, any and all acts and to execute
any and all further instruments required or reasonably requested by the Owner
Trustee or the Indenture Trustee more fully to effect the purposes of this
Agreement, including, without limitation, the execution of any financing
statements or continuation statements relating to the Receivables for filing
under the provisions of the UCC of any applicable jurisdiction.
SECTION 10.8 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of the Owner Trustee, the
Indenture Trustee, the Noteholders or the Certificateholders, any right,
remedy, power or privilege hereunder, will operate as a waiver thereof; nor
will any single or partial exercise of any right, remedy, power or privilege
hereunder preclude any other or further exercise thereof or the exercise of
any other right, remedy, power or privilege. The rights, remedies, powers and
privileges therein provided are cumulative and not exhaustive of any rights,
remedies, powers and privileges provided by law.
SECTION 10.9 Third-Party Beneficiaries. This Agreement will inure
to the benefit of and be binding upon the parties hereto, the Noteholders,
the Certificateholders, the Indenture Trustee and the Owner Trustee and their
respective successors and permitted assigns and each of the Indenture Trustee
and the Owner Trustee may enforce the provisions hereof as if they were
parties thereto. Except as otherwise provided in this Article X, no other
Person will have any right or obligation hereunder. The parties hereto hereby
acknowledge and consent to the pledge of this Agreement by the Issuer to the
Indenture Trustee for the benefit of the Noteholders pursuant to the
Indenture.
SECTION 10.10 Actions by Noteholders or Certificateholders. (a)
Wherever in this Agreement a provision is made that an action may be taken or
a notice, demand, or instruction given by Noteholders or Certificateholders,
such action, notice, or instruction may be taken or given by any Noteholder
or Certificateholder, as applicable, unless such provision requires a
specific percentage of Noteholders or Certificateholders.
(b) Any request, demand, authorization, direction, notice,
consent, waiver, or other act by a Noteholder or Certificateholder will bind
such Noteholder or Certificateholder and every subsequent holder of such Note
or Certificate issued upon the registration of transfer thereof or in
exchange therefor or in lieu thereof in respect of anything done or omitted
to be done by the Owner Trustee, the Indenture Trustee or the Servicer in
reliance thereon, whether or not notation of such action is made upon such
Note or Certificate.
SECTION 10.11 Agent for Service. The agent for service of the
Seller and the Servicer in respect of this Agreement will be Xxxxx X. Xxxxxx,
Esq., Office of the General Counsel, of Ford Motor Company, Ford Motor
Company World Headquarters, Office of the General Counsel, Xxx Xxxxxxxx Xxxx,
Xxxxx 0000-X0, Xxxxxxxx, Xxxxxxxx 00000.
SECTION 10.12 No Bankruptcy Petition. The Owner Trustee, the
Indenture Trustee, the Issuer and the Servicer each covenants and agrees
that, prior to the date which is one year and one day after the payment in
full of all securities issued by the Seller or by a trust for which the
Seller was the depositor which securities were rated by any nationally
recognized statistical rating organization it will not institute against, or
join any other Person in instituting against, the Seller any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any federal or State bankruptcy or similar law. This
Section 10.12 will survive the resignation or removal of the Owner Trustee
under the Trust Agreement or the Indenture Trustee under the Indenture or the
termination of this Agreement.
SECTION 10.13 Limitation of Liability of Owner Trustee and
Indenture Trustee. (a) Notwithstanding anything contained herein to the
contrary, this Agreement has been countersigned by Wachovia Bank of Delaware,
National Association not in its individual capacity but solely in its
capacity as Owner Trustee of the Issuer and in no event will Wachovia Bank of
Delaware, National Association in its individual capacity or, except as
expressly provided in the Trust Agreement, as Owner Trustee of the Issuer
have any liability for the representations, warranties, covenants, agreements
or other obligations of the Issuer hereunder or in any of the certificates,
notices or agreements delivered pursuant hereto, as to all of which recourse
will be had solely to the assets of the Issuer. For all purposes of this
Agreement, in the performance of its duties or obligations hereunder or in
the performance of any duties or obligations of the Issuer hereunder, the
Owner Trustee will be subject to, and entitled to the benefits of, the terms
and provisions of Articles VI, VII and VIII of the Trust Agreement.
(b) Notwithstanding anything contained herein to the contrary,
this Agreement has been accepted by The Bank of New York, not in its
individual capacity but solely as Indenture Trustee, and in no event will The
Bank of New York have any liability for the representations, warranties,
covenants, agreements or other obligations of the Issuer hereunder or in any
of the certificates, notices or agreements delivered pursuant hereto, as to
all of which recourse will be had solely to the assets of the Issuer.
SECTION 10.14 Savings Clause. It is the intention of the Seller
and the Issuer that the transfer of the Trust Property contemplated herein
constitute an absolute sale of the Trust Property, conveying good title to
the Trust Property from the Seller to the Issuer. However, in the event that
such sale is deemed to be a pledge, the Seller hereby grants to the Issuer a
first priority security interest in all of the Seller's right, title and
interest in, to and under the Trust Property, and all proceeds thereof, to
secure a loan in an amount equal to all amounts payable under the Securities,
and in such event, this Agreement will constitute a security agreement under
applicable law.
IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES TWO
LLC, as Seller
By: /s/ Xxxxx Xxxxxx
----------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
FORD CREDIT AUTO OWNER TRUST
2002-C, as Issuer
By: WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION,
not in its individual capacity but
solely asOwner Trustee
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Assistant Vice President
FORD MOTOR CREDIT COMPANY,
as Servicer
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Assistant Secretary
Accepted and agreed:
THE BANK OF NEW YORK,
not in its individual capacity
but solely as Indenture Trustee
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
Title: Assistant Treasurer
WACHOVIA BANK OF DELAWARE,
NATIONAL ASSOCIATION,
not in its individual capacity
but solely as Owner Trustee
By: /s/ Xxx X. Xxxxxx
-------------------------------------
Name: Xxx X. Xxxxxx
Title: Assistant Vice President
SCHEDULE A
SCHEDULE OF RECEIVABLES
Delivered to Indenture Trustee at Closing
SCHEDULE B
Location of Receivable Files
at Third Party Custodians for Ford Credit
Security Archives
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
MSX International, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxx Xxxxx, XX 00000
Iron Mountain Records Management
00000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
APPENDIX A
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Definitions and Usage
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