EXHIBIT 99.1
SALE AND SERVICING AGREEMENT, dated as of _______, 200_ (as
from time to time amended, supplemented or otherwise modified and in effect,
this "Agreement"), by and among FORD CREDIT AUTO OWNER TRUST 200_-_ (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 ____% 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 PRI MUS 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, in the event that
such contract is prepaid, a prepayment that fully pays the Principal Balance,
(d) provides for level monthly payments (provided that the payment in the last
month in the life of the Receivable may be up to twice the amount of the level
payment) that fully amortize the Amount
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Financed by maturity and yield interest at the Annual Percentage Rate, and (e)
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 applica ble federal, State, and local laws, and regulations
thereunder, including, without limitation, usury laws, the Federal
Truth-in-Lending Act, the Equal Credit Opportu nity 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.
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(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 defense 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, will 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.
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(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 will be 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. __% of the aggregate Principal
Balance of the Receivables, constituting __% of the number of Receivables as of
the Cutoff Date, represent vehicles financed at new vehicle rates, and the
remainder of the Receivables represent vehicles financed at used vehicle rates.
(xx) Amortization Type. By aggregate Principal Balance as of
the Cutoff Date, ___% of the Receivables constitute Actuarial Receivables and
___% of the Receivables constitute Simple Interest Receivables.
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(xxi) Origination. Each Receivable has an origination date on
or after [DATE].
(xxii) PRIMUS. __% 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 ________________ months. The percentage of
Receivables by Principal Balance with original terms greater than __ months is
__%. The percentage of Receivables by Principal Balance with remaining terms
greater than __ months is __%.
(xxiv) Annual Percentage Rate. The Annual Percentage Rate of
each Receivable is not less than __% and not greater than __%.
(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
________, 200_ and no Receivable has a payment that is more than _________ 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.
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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 4.5. The sole remedy of the Issuer, the Owner Trustee, the Indenture
Trustee, the Noteholders or the Certificateholders with respect to a breach of
the Seller's representations and warranties pursuant to Section 2.2 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.
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(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
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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.
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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 4.4. 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
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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
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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 4.5.
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
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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 4.5 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, each
Note Paying Agent and Certificate Paying Agent, the Indenture Trustee, each 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, 4.7 and 4.8 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
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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 _______ of
each year beginning _____________, 200_, an Officer's Certificate, dated as of
_________ 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 obliga tions under this Agreement
throughout such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the
nature and status thereof. A copy of the report referred to in Section 3.11 may
be obtained by any Certificateholder by a request in writing to the Owner
Trustee, or by any Noteholder or Person certifying that it is a Note Owner by a
request in writing to the Indenture Trustee, in either case addressed to the
applicable Corporate Trust Office. Upon the telephone request of the Owner
Trustee, the Indenture Trustee will 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.
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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 _______ of each year beginning ________, 200_ 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.
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.
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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
"[SECURED PARTY], as secured party for Ford Credit Auto Owner Trust 200_-_", at
a Qualified Institution or Qualified Trust Institution (which will initially be
the corporate trust department of ____________________), that will be designated
as the "Collection Account". Initially, the Collection Account will be account
number __ 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 Owner Trustee 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 Principal Distribution Accounts. The Servicer
will, prior to the Closing Date, establish and maintain two segregated trust
accounts, each in the name "[OWNER TRUSTEE], as Owner Trustee" at a Qualified
Institution or Qualified Trust Institution (initially the corporate trust
department of ____________), that will be designated as the "Certificate
Interest Distribution
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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 "
[INDENTURE TRUSTEE] as Indenture Trustee" at a Qualified Institution or
Qualified Trust Institution (initially the corporate trust department of
____________), 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 "[INDENTURE TRUSTEE] as
Indenture Trustee, as secured party for Ford Credit Auto Owner Trust 200_-_" 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 "200_-_ 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 ____ and ____ of the Indenture, provided that each of the following is
satisfied:
(1) the Rating Agency Condition is satisfied with respect such
action;
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(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 200_-_ 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 200_-_ 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 200_-_ 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 __ Business Days (or such longer
period not to exceed __ calendar days as to which each Rating Agency may
consent), move such 200_-_ 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.
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(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 satisfaction of the Rating Agency Condition, 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 applicable Qualified Institution or Qualified Trust
Institution, the Seller or the Servicer, as applicable, will deliver to such
Qualified Institution or
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Qualified Trust Institution an Opinion of Counsel, acceptable to such Qualified
Institution or Qualified Trust Institution, 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 _____
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 ___ of the Indenture 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 ___ of the Indenture as if there had not been such a
declaration, then the Qualified Institution or Qualified Trust Institution will,
to the fullest extent practicable, invest and reinvest funds in the Reserve
Account, the Collection Account or 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
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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 satisfaction of the Rating Agency
Condition, 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 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 Owner Trustee 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
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Account within two Business Days of receipt unless the Owner Trustee or the
Indenture Trustee has received notice of such event or circumstance from the
Seller or the Servicer in an Officer's Certificate or from the Noteholders of
Notes evidencing not less than 25% of the 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) 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
22
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 recoveries
on any Receivable. 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
and collections of Liquidation Proceeds. 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) 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"). 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 not make any
advance in respect of principal of Simple Interest Receivables. The Servicer
will deposit Simple Interest Advances into the Collection Account on or prior to
the Payment Date. The Servicer will be entitled to recoup its Simple Interest
Advances from subsequent payments of interest on Simple Interest Receivables and
from collections of Liquidation Proceeds attributable to interest (but not
including interest for the then current Collection Period).
If the Servicer subsequently determines that an Outstanding
Simple Interest Advance with respect to any Simple Interest Receivable will not
be recoverable, the Servicer will be reimbursed from any collections made on
other Receivables in the Trust, but only to the extent that such Outstanding
Simple Interest Advance represents accrued and unpaid interest on such Simple
Interest Receivable. Outstanding Simple Interest Advances with respect to such
Simple Interest Receivable will be reduced by the amount of such reimbursement.
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(c) 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) 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 in the Collection Account the
aggregate Purchase Amounts with respect to Purchased Receivables and the
Servicer will deposit in 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 the prior consent of the Rating Agencies, 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.
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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
25
(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
this 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 Counterparties, the amount
of any Net Swap Payments then due under the Interest Rate Swap
Agreements (exclusive of any Swap Termination Payments), pro rata,
based on the Net Swap Payments due to each Swap Counterparty;
(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 Counterparties,
(1) to the Noteholders of Class A Notes, the
Accrued Class A Note Interest, and
(2) to the Swap Counterparties, any Swap
Termination Payments;
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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, pro rata based on the
amount of the Swap Termination Payments, 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
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(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), ___ or ____ of the Indenture that has resulted in an acceleration of
the Notes (or following the occurrence of any such event after an Event of
Default specified in Section ____ of the Indenture has occurred and the Notes
have been accelerated), the Servicer will instruct the Indenture Trustee to
transfer the funds on deposit in the Collection Account remaining after the
application of amounts distributed 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, (B) following the
occurrence and during the continuation of an Event of Default specified in
Section ____ 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 application of amounts
distributed pursuant to Section 4.7(c) (i), (ii), (iii), (iv) and (v) 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 A-1 Notes on a pro
rata basis;
(ii) second, to the Noteholders of the Class A-2
Notes in reduction of principal until the principal amount of the
Outstanding Class A-2 Notes has been paid in full; provided that if
there are not sufficient funds
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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.
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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, each 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 [WEB
ADDRESS] 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;
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(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.
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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
32
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
33
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
34
forth in Section ___ 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
35
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 of the voting stock of which is owned directly or indirectly by
Ford Motor Company, which Person in any of the foregoing cases executes an
agreement of assumption to perform every obligation of the Seller under this
Agreement, will be the successor to the Seller under this Agreement without the
execution or filing of any document or any further act on the part of any of the
parties to this Agreement; provided, however, that (x) the Seller 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
36
(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.
37
(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
38
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
39
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
40
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 and 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.
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(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 and 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 __ 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
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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
43
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
44
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's 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
45
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 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
46
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 Notes and the
Aggregate Certificate Balance and all accrued but unpaid interest (including any
overdue interest) thereon. The amount deposited in the Collection Account
pursuant to this Section 9.1 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, Swap
Counterparties 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,
Swap Counterparties 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)(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
Counterparties under the Interest Rate Swap Agreements or modify the obligations
of, or impair the ability of
47
the Issuer to fully perform any of its obligations under, the Interest Rate Swap
Agreements, 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
Counterparties to the extent such amendment adversely affects the rights or
obligations of the Swap Counterparties under the Interest Rate Swap Agreements
or modifies the obligations of, or impairs the ability of the Issuer to fully
perform any of its obligations under, the Interest Rate Swap Agreements (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
satisfaction of the Rating Agency Condition, the Specified Reserve Balance,
without the consent of all adversely affected Noteholders or Certificateholders
or (B) reduce the aforesaid percentage required to consent to
48
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 Counterparties 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
49
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.
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(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 printouts (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
51
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, [e-mail], 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,
(b) in the case of the Owner Trustee, at the Corporate Trust
Office of the Owner Trustee,
52
(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, and
(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, _____.
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 66 2/3% of the Note Balance of
the Notes Outstanding and the Certificateholders of Certificates evidencing not
less than 66 2/3% 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
53
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.
54
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 [OWNER TRUSTEE] not in its
individual capacity but solely in its capacity as Owner Trustee of the Issuer
and in no event will [OWNER TRUSTEE] 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 [INDENTURE TRUSTEE], not in its individual
capacity but solely as Indenture Trustee, and in no event will [INDENTURE
TRUSTEE] 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.
55
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.
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IN WITNESS WHEREOF, the parties have caused this Sale and
Servicing Agreement to be duly executed by their respective officers thereunto
duly authorized as of the day and year first above written.
FORD CREDIT AUTO RECEIVABLES TWO
LLC, as Seller
By:
-----------------------------------
Name:
Title:
FORD CREDIT AUTO OWNER TRUST
200_-_, as Issuer
By: [OWNER TRUSTEE],
not in its individual capacity but solely as
Owner Trustee
By:
-----------------------------------
Name:
Title:
FORD MOTOR CREDIT COMPANY,
as Servicer
By:
-----------------------------------
Name:
Title:
Accepted and agreed:
[INDENTURE TRUSTEE],
not in its individual capacity
but solely as Indenture Trustee
By:
-------------------------------------------
Name:
Title:
[OWNER TRUSTEE],
not in its individual capacity
but solely as Owner Trustee
By:
---------------------------------------------
Name:
Title:
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
SB-1
APPENDIX A
Definitions and Usage
AA-1
