SALE AND SERVICING AGREEMENT among FORD CREDIT AUTO OWNER TRUST 2011-A, as Issuer, FORD CREDIT AUTO RECEIVABLES TWO LLC, as Depositor and FORD MOTOR CREDIT COMPANY LLC, as Servicer Dated as of January 1, 2011
EXHIBIT 99.1
EXECUTION VERSION
among
FORD CREDIT AUTO OWNER TRUST 2011-A,
as Issuer,
as Issuer,
FORD CREDIT AUTO RECEIVABLES TWO LLC,
as Depositor
as Depositor
and
FORD MOTOR CREDIT COMPANY LLC,
as Servicer
as Servicer
Dated as of January 1, 2011
TABLE OF CONTENTS
ARTICLE I USAGE AND DEFINITIONS |
1 | |||
Section 1.1. Usage and Definitions |
1 | |||
ARTICLE II TRUST PROPERTY; REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR; CUSTODIAN |
1 | |||
Section 2.1. Sale of Trust Property |
1 | |||
Section 2.2. Savings Clause |
1 | |||
Section 2.3. Representations and Warranties of the Depositor About the
Receivables |
2 | |||
Section 2.4. Repurchase of Receivables Upon Breach of Representations or
Warranties by the Depositor |
2 | |||
Section 2.5. Custodian |
3 | |||
ARTICLE III ADMINISTRATION AND SERVICING OF RECEIVABLES AND OTHER TRUST PROPERTY |
5 | |||
Section 3.1. Appointment; Duties of the Servicer with Respect to the
Servicing of the Receivables |
5 | |||
Section 3.2. Purchase of Receivables Upon Breach by the Servicer |
7 | |||
Section 3.3. Sales of Charged Off Receivables |
8 | |||
Section 3.4. Duties of the Servicer with Respect to the Servicing of the
Transaction; Annual Reports and Notices |
8 | |||
Section 3.5. Servicer’s Fees |
10 | |||
Section 3.6. Servicer’s Expenses |
10 | |||
ARTICLE IV TRUST ACCOUNTS; DISTRIBUTIONS; STATEMENTS TO NOTEHOLDERS AND THE DEPOSITOR |
11 | |||
Section 4.1. Accounts |
11 | |||
Section 4.2. Investment of Funds in the Bank Accounts |
12 | |||
Section 4.3. Remittances |
14 | |||
Section 4.4. Calculations and Distributions; Withdrawals from the Reserve
Account |
15 | |||
ARTICLE V THE DEPOSITOR |
15 | |||
Section 5.1. Representations and Warranties of the Depositor |
15 | |||
Section 5.2. Liability of the Depositor |
17 | |||
Section 5.3. Merger or Consolidation of, or Assumption of the Obligations
of, the Depositor |
17 | |||
Section 5.4. Depositor May Own Notes |
17 | |||
Section 5.5. Depositor’s Engagement of the Rating Agencies |
18 | |||
Section 5.6. Authorized Persons of the Depositor |
18 | |||
ARTICLE VI THE SERVICER |
18 | |||
Section 6.1. Representations and Warranties of the Servicer |
18 | |||
Section 6.2. Liability of the Servicer |
19 | |||
Section 6.3. Indemnities of the Servicer |
20 | |||
Section 6.4. Merger or Consolidation of, or Assumption of the Obligations
of, the Servicer; Assignment to Affiliate |
21 |
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Section 6.5. Delegation of Duties |
21 | |||
Section 6.6. Ford Credit Not to Resign as Servicer |
21 | |||
Section 6.7. Servicer May Own Notes |
22 | |||
ARTICLE VII SERVICER TERMINATION |
22 | |||
Section 7.1. Servicer Termination Events |
22 | |||
Section 7.2. Appointment of Successor Servicer |
23 | |||
Section 7.3. Notification to Secured Parties and the Holder of the Residual
Interest |
25 | |||
Section 7.4. Waiver of Servicer Termination Event |
25 | |||
ARTICLE VIII TERMINATION |
25 | |||
Section 8.1. Clean-Up Call |
25 | |||
ARTICLE IX MISCELLANEOUS PROVISIONS |
26 | |||
Section 9.1. Amendment |
26 | |||
Section 9.2. Protection of Right, Title and Interest to the Trust Property |
27 | |||
Section 9.3. Notices |
28 | |||
Section 9.4. Assignment by the Depositor or the Servicer |
29 | |||
Section 9.5. Third-Party Beneficiaries |
29 | |||
Section 9.6. GOVERNING LAW |
29 | |||
Section 9.7. Submission to Jurisdiction |
29 | |||
Section 9.8. WAIVER OF JURY TRIAL |
29 | |||
Section 9.9. Severability |
30 | |||
Section 9.10. Counterparts |
30 | |||
Section 9.11. Headings |
30 | |||
Section 9.12. No Waiver; Cumulative Remedies |
30 | |||
Section 9.13. Agent for Service |
30 | |||
Section 9.14. No Petition |
30 | |||
Section 9.15. Limitation of Liability of Owner Trustee and Indenture
Trustee |
31 | |||
Schedule A Schedule of Receivables |
SA-1 | |||
Schedule B Notice Addresses |
SB-1 | |||
Appendix A Usage and Definitions |
AA-1 | |||
Exhibit A Form of Monthly Investor Report |
EA-1 |
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SALE AND SERVICING AGREEMENT, dated as of January 1, 2011 (this “Agreement”), among
FORD CREDIT AUTO OWNER TRUST 2011-A, a Delaware statutory trust, as Issuer, FORD CREDIT AUTO
RECEIVABLES TWO LLC, a Delaware limited liability company, as Depositor, and FORD MOTOR CREDIT
COMPANY LLC, a Delaware limited liability company, as Servicer.
BACKGROUND
The Depositor has purchased a pool of retail installment sale contracts secured by new and
used cars, light trucks and utility vehicles from Ford Credit.
The Depositor wishes to sell and assign and the Issuer wishes to purchase from the Depositor
such contracts and related property on the terms and conditions in this Agreement.
The Issuer wishes to appoint the Servicer to service the contracts and the Servicer is willing
to service the contracts for the Issuer.
ARTICLE I
USAGE AND DEFINITIONS
USAGE AND DEFINITIONS
Section 1.1. Usage and Definitions. Capitalized terms used but not otherwise defined
in this Agreement are defined in Appendix A. Appendix A also contains rules as to usage applicable
to this Agreement. Appendix A is incorporated by reference into this Agreement.
ARTICLE II
TRUST PROPERTY; REPRESENTATIONS AND WARRANTIES
OF THE DEPOSITOR; CUSTODIAN
TRUST PROPERTY; REPRESENTATIONS AND WARRANTIES
OF THE DEPOSITOR; CUSTODIAN
Section 2.1. Sale of Trust Property. In consideration of the Issuer’s delivery to the
Depositor of Notes with an aggregate Note Balance of $1,137,110,000 and the rights to distributions
under Section 8.2 of the Indenture, the Depositor irrevocably sells and assigns to the Issuer,
without recourse (subject to the obligations of the Depositor under this Agreement), all right,
title and interest of the Depositor, whether now owned or hereafter acquired, in and to the
Receivables and the other Trust Property. The sale made under this Agreement does not constitute
and is not intended to result in an assumption by the Issuer of any obligation of the Depositor or
Ford Credit to the Obligors, the Dealers or any other Person in connection with the Receivables and
the other Trust Property.
Section 2.2. Savings Clause. It is the intention of the Depositor and the Issuer that
(i) the sale and assignment pursuant to Section 2.1 constitutes an absolute sale of the Trust
Property, conveying good title free and clear of any Lien, other than Permitted Liens, from the
Depositor to the Issuer, and (ii) the Trust Property not be a part of the Depositor’s estate in the
event of a bankruptcy or insolvency of the Depositor. If, notwithstanding the intention of the
Depositor and the Issuer, such transfer is deemed to be a pledge in connection with a financing or
is otherwise deemed not to be a sale and assignment, the Depositor Grants, and the parties intend
that the Depositor Grant, to the Issuer a first priority perfected security interest in all of the
Depositor’s right, title and interest in the Trust Property to secure a loan in an amount equal to
all amounts payable by the Depositor under this Agreement, all amounts payable as principal and
interest on
the Notes and all amounts payable as servicing fees under this Agreement and all fees and
expenses of the Indenture Trustee or the Owner Trustee, and in such event, this Agreement will
constitute a security agreement under applicable law and the Issuer will have all of the rights and
remedies of a secured party and creditor under the UCC.
Section 2.3. Representations and Warranties of the Depositor About the Receivables.
(a) Representations and Warranties from the Purchase Agreement. Ford Credit made the
representations and warranties set forth in Section 3.2 of the Purchase Agreement to the Depositor,
and has consented to the transfer by the Depositor to the Issuer of the Depositor’s rights with
respect to such representations and warranties on which the Issuer is relying in acquiring the
Receivables. Pursuant to Section 2.1, the Depositor has transferred to the Issuer all of the
Depositor’s rights under the Purchase Agreement, including the right to require Ford Credit to
repurchase Receivables in accordance with the Purchase Agreement if there is a breach of Ford
Credit’s representations and warranties. In addition, the Depositor represents and warrants as of
the Closing Date, which representations and warranties the Issuer has relied on in purchasing the
Receivables and will survive the sale of the Receivables to the Issuer and the pledge of the
Receivables to the Indenture Trustee pursuant to the Indenture, that the representations and
warranties set forth in Section 3.2 of the Purchase Agreement are true and correct in all material
respects.
(b) Representations and Warranties of the Depositor. The Depositor represents and
warrants as of the Closing Date, which representations and warranties the Issuer has relied on in
purchasing the Receivables and will survive the sale of the Receivables to the Issuer and the
pledge of the Receivables to the Indenture Trustee pursuant to the Indenture, that:
(i) immediately before the sale under this Agreement, the Depositor had good and
marketable title to the Receivables and other Trust Property free and clear of any Lien,
other than Permitted Liens; and
(ii) immediately upon the sale under this Agreement, the Issuer will have good and
marketable title to the Receivables and other Trust Property, free and clear of any Lien,
other than Permitted Liens.
Section 2.4. Repurchase of Receivables Upon Breach of Representations or Warranties by the
Depositor.
(a) If a Responsible Person of the Depositor has actual knowledge, or receives notice from the
Issuer, the Owner Trustee or the Indenture Trustee, of a breach of the representations or
warranties made by the Depositor pursuant to Section 2.3 that materially and adversely affects any
Receivable and such breach has not been cured in all material respects by the last day of the
second full Collection Period (or, at the Depositor’s option, the first full Collection Period)
after the Responsible Person obtains actual knowledge or is notified of such breach, the Depositor
will repurchase such Receivable by remitting (or causing to be remitted) the Purchase Amount for
such Receivable to the Collection Account on the Business Day preceding the Payment Date after such
Collection Period (or, with satisfaction of the Rating Agency Condition, on such
Payment Date). If Ford Credit is the Servicer, the Depositor may cause any Purchase Amount to
be remitted any in accordance with Section 4.3(c).
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(b) The sole remedy for a breach of the representations and warranties of the Depositor
contained in Section 2.3 and Section 5.1 is (i) to require the Depositor to repurchase such
materially and adversely affected Receivable, or (ii) to require the Depositor or the Indenture
Trustee to enforce the obligation of Ford Credit to repurchase such materially and adversely
affected Receivable pursuant to Section 3.3(a) of the Purchase Agreement. None of the Servicer,
the Owner Trustee, the Indenture Trustee, the Depositor or the Administrator will have any duty to
conduct an investigation as to the occurrence of any condition requiring the repurchase of any
Receivable pursuant to Section 2.4(a).
(c) When the Purchase Amount is included in Available Funds for a Payment Date, the Issuer
will, without further action, be deemed to have sold and assigned to the Depositor as of the last
day of the second preceding Collection Period all of the Issuer’s right, title and interest in and
to the Receivable repurchased by the Depositor pursuant to Section 2.4(a) and security and
documents relating to such Receivable. Such sale will not require any action by the Issuer and
will be without recourse, representation or warranty by the Issuer except the representation that
the Issuer owns the Receivables free and clear of any Liens other than Permitted Liens. Upon such
sale, the Servicer will xxxx its computer records to indicate that such receivable is no longer a
Receivable and take any action necessary or appropriate to evidence the sale of such receivable,
free from any Lien of the Issuer or the Indenture Trustee.
Section 2.5. Custodian.
(a) Appointment of Custodian. To reduce administrative costs and facilitate the
servicing of the Receivables by the Servicer, the Issuer appoints Ford Credit, in its capacity as
the Servicer, to act as the custodian of the Receivables for the Issuer and the Indenture Trustee.
Ford Credit accepts such appointment and agrees to perform the custodial duties set forth in this
Section 2.5. Ford Credit in its capacity as custodian under this Agreement is referred to as the
“Custodian.”
(b) Custody of Receivables Files. The Custodian will hold and maintain in safekeeping
the following documents and instruments for each Receivable (the “Receivables Files”) for
the benefit of the Issuer and the Indenture Trustee:
(i) the original Receivable;
(ii) the credit application executed by the Obligor;
(iii) the original certificate of title or such other documents evidencing the security
interest of Ford Credit in the Financed Vehicle; and
(iv) all other documents, notices and correspondence that the Servicer generates
relating to the Receivable, the Obligor or the Financed Vehicle.
Unless otherwise indicated above, any document or instrument in the Receivables Files may be a
photocopy or in electronic format. The Receivables Files are constructively delivered
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to the Indenture Trustee, as pledgee of the Issuer pursuant to the Indenture, and the
Custodian confirms to the Issuer and the Indenture Trustee that it has received the Receivables
Files. No initial review or any periodic review of the Receivables Files by the Issuer, the Owner
Trustee or the Indenture Trustee is required.
(c) Maintenance and Safekeeping of the Receivables Files. The Custodian will
accurately maintain and keep current the Receivables Files, including any computer systems on which
the Receivables Files are electronically stored, all in a manner that will permit the Servicer and
the Issuer to comply with this Agreement and the Indenture Trustee to comply with the Indenture.
The Custodian will act with reasonable care and in accordance with the Credit and Collection Policy
in performing its duties as custodian. The Custodian will promptly take appropriate action to
remedy any material failure on its part to hold the Receivables Files and maintain its computer
systems as provided in this Agreement and will report to the Issuer and the Indenture Trustee any
such material failure that it is unable to remedy within a reasonable time. The Custodian may
destroy any document (other than the original Receivable or certificate of title) in any Receivable
File and store such document in an electronic format in accordance with the Credit and Collection
Policy.
(d) Location of Receivables Files. The Custodian will maintain the Receivables Files
(or access to any Receivables Files stored in an electronic format) at one of its offices or the
offices of one of its custodians in the United States. Upon request, the Custodian will provide a
list of locations of the Receivables Files to the Depositor, the Issuer and the Indenture Trustee,
or their representatives, attorneys or auditors.
(e) Access to Receivables Files. The Custodian will provide the Depositor, the Issuer
and the Indenture Trustee with access to the Receivables Files and the related computer systems at
offices designated by the Custodian without charge, but only upon reasonable request, during normal
business hours. Such access will be subject to the Custodian’s security and confidentiality
procedures and the terms and conditions of a confidentiality agreement satisfactory to the
Custodian. Nothing in this Section 2.5(e) will affect the obligation of the Indenture Trustee or
the Custodian to observe any applicable privacy and confidentiality law prohibiting disclosures of
information regarding the Obligors and the failure of the Custodian to provide access as a result
of such obligations will not constitute a breach of this Section 2.5(e).
(f) Effective Period and Termination of Custodian. Ford Credit’s appointment as
custodian is effective as of the Cutoff Date and will continue until terminated pursuant to this
Section 2.5(f). If Ford Credit resigns as Servicer in accordance with Section 6.6 or the Servicer
is terminated pursuant to Section 7.1, the appointment of Ford Credit as custodian under this
Agreement may be terminated in the same manner as the Servicer may be terminated under Section 7.1.
As soon as practicable after any termination of its appointment as custodian, the Custodian will
deliver to the Indenture Trustee or its agent or designee the Receivables Files maintained by the
Custodian at such place as the Indenture Trustee may reasonably designate. All reasonable costs
and expenses incurred in connection with transferring the Receivables Files to the successor
custodian and amending this Agreement to reflect such successor as custodian will be paid by the
predecessor custodian upon presentation of documentation of such costs and expenses.
4
(g) Servicer’s Access to Receivables Files; Indemnity. Notwithstanding any
termination of the Custodian pursuant to Section 2.5(f), the Servicer will be entitled to access
the Receivables Files and, upon request from the Servicer, the successor custodian will promptly
release any document in the Receivables Files to the Servicer. The Issuer will indemnify, defend
and hold harmless the Servicer against any and all costs, expenses, losses, claims and liabilities
resulting from the failure by a successor custodian to release Receivables Files to the Servicer in
a timely manner.
(h) Custodian as Nominee Lienholder/Secured Party. For administrative convenience and
to further facilitate the servicing of the Receivables by the Servicer, the Issuer appoints Ford
Credit, in its capacity as Custodian and Servicer, as nominee lienholder/secured party to act for
the benefit and on behalf of the Issuer and the Indenture Trustee with respect to the original
certificates of title or such other documents evidencing the security interest of the Issuer in the
Financed Vehicles (the “Security Documents”). In addition, if the assignment of a
Receivable from Ford Credit to the Depositor pursuant to the Purchase Agreement and from the
Depositor to the Issuer pursuant to this Agreement is insufficient, without a notation on the
related Financed Vehicle’s certificate of title, to provide the Issuer a first priority perfect
security interest in the related Finance Vehicle, the Custodian, in its capacity as nominee
lienholder/secured party, agrees that it is acting as the agent of the Issuer for the purpose of
perfecting the security interest of the Issuer in such Financed Vehicle and agrees that Ford
Credit’s listing as the lienholder/secured party on such certificate of title is in its capacity as
agent of the Issuer. The Custodian agrees to serve as nominee lienholder/secured party and agent
with respect to the Financed Vehicles and will, as nominee lienholder/secured party and agent: (i)
act exclusively for the benefit and on behalf of the Issuer and the Indenture Trustee pursuant to
the terms of this Agreement, and (ii) take any and all actions necessary or advisable in order to
establish, maintain, preserve and protect the Issuer’s security interest in the Financed Vehicles.
The Custodian further acknowledges the right of the Issuer to treat the Security Documents in all
respects as if the name of the Issuer appeared on such documents as lienholder/secured party in
place of Ford Credit’s name.
ARTICLE III
ADMINISTRATION AND SERVICING OF RECEIVABLES
AND OTHER TRUST PROPERTY
ADMINISTRATION AND SERVICING OF RECEIVABLES
AND OTHER TRUST PROPERTY
Section 3.1. Appointment; Duties of the Servicer with Respect to the Servicing of the
Receivables.
(a) Appointment and General Duties. The Issuer appoints Ford Credit to act as the
Servicer of the Receivables for the Issuer and the Indenture Trustee. The Servicer will manage,
service, administer and collect 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 and in accordance with the Credit and Collection Policy. The
Servicer’s duties will include:
(i) collecting and applying all payments made on the Receivables;
(ii) investigating delinquencies;
5
(iii) sending invoices and responding to inquiries of Obligors;
(iv) processing requests for extensions and modifications;
(v) administering payoffs, defaults and delinquencies;
(vi) repossessing and then selling the Financed Vehicle securing any Receivable that
the Servicer determines is unlikely to eventually be paid in full;
(vii) maintaining accurate and complete accounts and computer systems pertaining to
servicing the Receivables;
(viii) providing to the Custodian copies, or access to, any documents, instruments,
notices and correspondence that modify information contained in the Receivables Files; and
(ix) furnishing Monthly Investor Reports and any other periodic reports required by the
transaction documents.
In performing its duties as servicer of the Receivables, the Servicer will comply with all
material requirements of federal and State laws and regulations.
(b) Collection of Receivable Payments; Extensions, Rebates and Adjustments on
Receivables. The Servicer will make reasonable efforts to collect all payments due under the
terms of the Receivables. The Servicer may waive any late payment charge or any other fees that may
be collected in the ordinary course of servicing a Receivable and may grant extensions, refunds,
rebates or adjustments with respect to any Receivable or amend any Receivable, in each case in
accordance with the Credit and Collection Policy, except that if the Servicer (i) grants payment
extensions on a Receivable that extend the final payment date of the Receivable more than six
months past the last original scheduled payment date of any Receivable in the securitized pool,
(ii) modifies the Amount Financed under a Receivable, (iii) modifies the APR of a Receivable, or
(iv) increases the number of originally scheduled due dates of the Receivable, it will purchase the
Receivable in the manner provided in Section 3.2, unless it is required to take such action under
law or pursuant to a court order.
(c) Maintenance of Security Interests in Financed Vehicles. The Servicer will take
all necessary steps to maintain perfection of the security interest created by each Receivable in
the related Financed Vehicle. The Issuer authorizes the Servicer to take all actions necessary to
continue perfection of such security interest on behalf of the Issuer and the Indenture Trustee if
a Financed Vehicle is relocated to another State or for any other reason. Unless required by law
or court order, the Servicer will not release any Financed Vehicle from the security interest
granted by the related Receivable, except (i) upon payment in full of the Receivable, (ii) in order
to receive proceeds from insurance covering such Financed Vehicle, (iii) upon repossession, (iv)
upon discounted settlement of the Receivable, or (v) upon abandonment, in each case in accordance
with the Credit and Collection Policy.
6
(d) No Impairment. The Servicer will not impair in any material respect the rights of
the Issuer or the Indenture Trustee in the Receivables except in accordance with the Credit and
Collection Policy or as otherwise permitted by this Agreement.
(e) Other Action.
(i) Effective as of the date of this Agreement, all Receivables are assigned to the
Servicer solely for the purpose of fulfilling the Servicer’s duties under this Agreement,
including commencement of or participation in legal proceedings to enforce a Receivable or
otherwise related to a Receivable. 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, on
behalf of the Issuer, will, at the Servicer’s expense and direction, assign the Receivable
to the Servicer solely for such purpose or take steps to enforce the Receivable, including
bringing suit in the names of the Indenture Trustee, the Noteholders, the Issuer or any of
them. On request of the Servicer, 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 under this Agreement.
(ii) The Servicer is authorized to execute and deliver, on behalf of itself, the
Issuer, the Owner Trustee, the Indenture Trustee, the Noteholders, or any of them, any
instruments of satisfaction, cancellation, partial or full release or discharge, and any
other comparable instruments, with respect to the Receivables and the Financed Vehicles.
Section 3.2. Purchase of Receivables Upon Breach by the Servicer.
(a) (i) If a Responsible Person of the Servicer has actual knowledge, or receives notice from
the Depositor, the Issuer, the Owner Trustee or the Indenture Trustee, of a breach of the covenants
set forth in Sections 3.1(c) or (d) and such breach is not cured in all material respects by the
end of the second full Collection Period (or, at the Servicer’s option, the first full Collection
Period) after the Responsible Person obtained actual knowledge or was notified of such breach, the
Servicer will purchase each Receivable materially and adversely affected by such breach by
remitting the Purchase Amount for such Receivable to the Collection Account on the Business Day
preceding the Payment Date after such Collection Period (or, with satisfaction of the Rating Agency
Condition, on such Payment Date).
(ii) Upon the occurrence of any of the conditions requiring purchase of a Receivable
set forth in Section 3.1(b), the Servicer will repurchase the Receivable affected by such
occurrence by remitting the Purchase Amount for such Receivable to the Collection Account on
the Business Day preceding the Payment Date after the Collection Period (or, with
satisfaction of the Rating Agency Condition, on such Payment Date) in which such
modification is made.
(iii) If the Servicer, in its sole discretion, determines that as a result of a
computer systems error or computer systems limitation or for any other reason the Servicer
is unable to service any Receivable in accordance with the Credit and Collection
7
Policy and the terms of this Agreement, the Servicer may purchase such Receivable by
remitting the Purchase Amount for such Receivable to the Collection Account on the Business
Day preceding the Payment Date after the Collection Period (or, with satisfaction of the
Rating Agency Condition, on such Payment Date) in which such determination is made.
(iv) If Ford Credit is the Servicer, it may remit any Purchase Amounts in accordance
with Section 4.3(c).
(b) The sole remedy (except as provided in Section 6.3) of the Issuer, the Indenture Trustee,
the Owner Trustee and the Secured Parties with respect to a breach of the covenants made by the
Servicer in Section 3.1(c) or (d) or the occurrence of a condition specified in Section 3.1(b) is
to require the Servicer to purchase the Receivable as set forth in Section 3.2(a). None of the
Owner Trustee, the Indenture Trustee, the Servicer, the Depositor or the Administrator will have
any duty to conduct an investigation as to the occurrence of any condition requiring the purchase
of any Receivable pursuant to Section 3.2(a).
(c) When the Purchase Amount is included in Available Funds for a Payment Date, the Issuer
will be deemed to have sold and assigned to the Servicer as of the last day of the second preceding
Collection Period all of the Issuer’s right, title and interest in and to the Receivable purchased
by the Servicer pursuant to Section 3.2(a), and all security and documents relating to such
Receivable. Such sale will not require any action by the Issuer and will be without recourse,
representation or warranty by the Issuer except the representation that the Issuer owns the
Receivables free and clear of any Liens other than Permitted Liens. Upon such sale, the Servicer
will xxxx its computer records indicating that any receivable purchased pursuant to Section 3.2(a)
is no longer a Receivable and take any action necessary or appropriate to evidence the transfer of
ownership of the Purchased Receivable free from any Lien of the Issuer or the Indenture Trustee.
Section 3.3. Sales of Charged Off Receivables. The Servicer, in its sole discretion,
may sell a Receivable that has been charged off in accordance with the Credit and Collection
Policy. Proceeds of any such sale allocable to the Receivable will constitute Recoveries. If the
Servicer elects to sell any charged off Receivable, such Receivable will be deemed to have been
sold and assigned by the Issuer to the Servicer immediately prior to the sale by the Servicer. The
sole right of the Issuer and the Indenture Trustee with respect to any Receivables sold pursuant to
this Section 3.3 will be to receive the Recoveries. Upon such sale, the Servicer will xxxx its
computer records indicating that any such receivable sold is no longer a Receivable and take any
action necessary or appropriate to evidence the sale of the receivable free from any Lien of the
Issuer or the Indenture Trustee.
Section 3.4. Duties of the Servicer with Respect to the Servicing of the Transaction;
Annual Reports and Notices.
(a) Monthly Investor Report. On or before each Determination Date, the Servicer will
deliver to the Owner Trustee, the Note Paying Agent, the Indenture Trustee, the Depositor and the
Rating Agencies, a servicing report substantially in the form of Exhibit A (the “Monthly
Investor Report”) with respect to the preceding Collection Period and the related Payment Date.
A Responsible Person of the Servicer will certify that the information in each Monthly
Investor Report is accurate in all material respects.
8
(b) Annual Statement as to Compliance. To the extent required by Regulation AB, the
Servicer will deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating
Agency within 90 days after the end of each calendar year beginning with the year after the Closing
Date, an Officer’s Certificate, dated as of December 31 of the preceding calendar year, signed by a
Responsible Person of the Servicer to the effect that (i) a review of the Servicer’s activities
during the preceding calendar year (or, in the case of the first certificate, the portion of the
preceding calendar year since the Closing Date) and of its performance under this Agreement has
been made under such Responsible Person’s supervision and (ii) to such Responsible Person’s
knowledge, based on such review, the Servicer has fulfilled in all material respects all of its
obligations under this Agreement throughout such calendar year (or applicable portion of such
calendar year), or, if there has been a failure to fulfill any such obligation in any material
respect, specifically identifying each such failure known to such Responsible Person and the nature
and status of such failure. If the Issuer is not required to file periodic reports under the
Exchange Act or otherwise required by law to file an Officer’s Certificate of the Servicer as to
compliance, the Servicer may deliver such Officer’s Certificate on or before April 30 of each
calendar year. A copy of the Officer’s Certificate referred to in this Section 3.4(b) may be
obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the
Indenture Trustee at its Corporate Trust Office.
(c) Notice of Servicer Termination Event. The Servicer will notify the Depositor, the
Owner Trustee, the Indenture Trustee and each Rating Agency of any Servicer Termination Event under
Section 7.1 or any event that with the giving of notice or lapse of time, or both, would become a
Servicer Termination Event under Section 7.1, no later than five Business Days after a Responsible
Person of the Servicer obtains actual knowledge of such event.
(d) Compliance with Obligations under Xxxxxxxx-Xxxxx Act. If directed by the
Administrator, the Servicer will prepare, execute and deliver all certificates or other documents
required to be delivered by the Issuer pursuant to the Xxxxxxxx-Xxxxx Act of 2002.
(e) Report on Assessment of Compliance with Servicing Criteria and Attestation. The
Servicer will:
(i) deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating
Agency, a report, dated as of December 31 of the preceding calendar year, on its assessment
of compliance with the minimum servicing criteria during the preceding calendar year,
including disclosure of any identified material instance of non-compliance identified by the
Servicer, as specified by Rule 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB under the Securities Act; and
(ii) cause a firm of registered public accountants that is qualified and independent
within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver an
attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the
Exchange Act and Item 1122 of Regulation AB, as applicable, on the assessment of compliance
with servicing criteria with respect to the prior calendar year.
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Such attestation report will be addressed to the board of directors of the Servicer and
the Servicer will deliver copies to the Issuer, the Owner Trustee, the Depositor and the
Indenture Trustee. Such attestation will be in accordance with Rules 1-02(a)(3) and 2-02(g)
of Regulation S-X under the Securities Act and the Exchange Act. The firm may render other
services to the Servicer, the Depositor or Ford Credit, but the firm must indicate in each
attestation report that it is qualified and independent within the meaning of Rule 2-01 of
Regulation S-X under the Securities Act.
The reports referred to in this Section 3.4(e) will be delivered within 90 days after the end
of each calendar year unless the Issuer is not required to file periodic reports under the Exchange
Act or any other law, in which case the reports may be delivered on or before April 30 of each
calendar year, beginning in the year after the Closing Date. A copy of the reports referred to in
this Section 3.4(e) may be obtained by any Noteholder or Person certifying it is a Note Owner by a
request in writing to the Indenture Trustee at its Corporate Trust Office.
(f) Delivery of Tax Related Information. To the extent required by law, the Servicer
will deliver to the Owner Trustee for distribution to the holder of the Residual Interest
information for the preparation of the holder of the Residual Interest’s federal and State income
tax returns.
(g) Termination of Reporting Obligation. The Servicer’s obligation to deliver or
cause the delivery of reports under this Section 3.4, other than tax reports under Section 3.4(f),
will terminate upon the payment in full of the Notes, including by redemption in whole as
contemplated by Section 8.1.
(h) Authorized Persons of Servicer. On or prior to the Closing Date, the Servicer
will provide notice to the Indenture Trustee and the Owner Trustee specifying (i) each Person who
will be authorized to provide instructions and directions to the Indenture Trustee and the Owner
Trustee on behalf of the Servicer, and (ii) each Person who is a Responsible Person with respect to
the Servicer, which Persons may be changed from time to time by notice to the Indenture Trustee and
the Owner Trustee.
Section 3.5. Servicer’s Fees. On each Payment Date, the Issuer will pay the Servicing
Fee to the Servicer in accordance with Section 8.2 of the Indenture. In addition, the Servicer
will be entitled to retain all Supplemental Servicing Fees and receive investment earnings (net of
investment losses and expenses) on funds in the Bank Accounts during each Collection Period.
Section 3.6. Servicer’s Expenses. Except as otherwise set forth in this Agreement,
the Servicer will pay all expenses incurred by it in connection with its activities under this
Agreement, including fees and disbursements of independent accountants, taxes imposed on the
Servicer and expenses incurred in connection with distributions and reports. The Servicer may
charge Obligors, and be reimbursed, for collection, repossession, transportation and remarketing
expenses in accordance with the Credit and Collection Policy.
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ARTICLE IV
TRUST ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO NOTEHOLDERS AND THE DEPOSITOR
TRUST ACCOUNTS; DISTRIBUTIONS;
STATEMENTS TO NOTEHOLDERS AND THE DEPOSITOR
Section 4.1. Accounts.
(a) Collection Account. Pursuant to Section 8.2 of the Indenture, the Indenture
Trustee will establish and maintain a segregated trust account in the name “The Bank of New York
Mellon as Indenture Trustee, as secured party for Ford Credit Auto Owner Trust 2011-A” at a
Qualified Institution (initially the corporate trust department of The Bank of New York Mellon),
that is designated as the “Collection Account”. The Collection Account will initially be
account number 879670. The Collection Account will be under the sole dominion and control of the
Indenture Trustee, except that the Servicer may make deposits to and direct the Indenture Trustee
to make deposits to and withdrawals from the Collection Account in accordance with this Agreement.
The Servicer may direct the Indenture Trustee to withdraw from the Collection Account and pay to
the Indenture Trustee or the Servicer, as applicable, amounts that do not constitute Available
Funds for any Collection Period or that were deposited into the Collection Account in error.
(b) Principal Payment Account. Pursuant to Section 8.2 of the Indenture, the
Indenture Trustee will establish and maintain a segregated trust account at a Qualified Institution
that is designated as the “Principal Payment Account”. The Principal Payment Account will
initially be account number 879772. The Principal Payment Account is established and maintained
solely for administrative purposes.
(c) Reserve Account.
(i) Pursuant to Section 8.2 of the Indenture, the Indenture Trustee will establish and
maintain a segregated trust account in the name “The Bank of New York Mellon as Indenture
Trustee, as secured party for Ford Credit Auto Owner Trust 2011-A” at a Qualified
Institution (initially the corporate trust department of The Bank of New York Mellon), that
is designated as the “Reserve Account”. The Reserve Account will initially be account
number 879771. On the Closing Date, the Depositor will deposit or cause to be deposited the
Specified Reserve Balance into the Reserve Account from the net proceeds of the sale of the
Notes. The Reserve Account will be under the sole dominion and control of the Indenture
Trustee, except that the Servicer may make deposits to and direct the Indenture Trustee to
make deposits to and withdrawals from the Reserve Account in accordance with this Agreement.
(ii) The Indenture Trustee will transfer all funds in the Reserve Account to the
Depositor, or if the Depositor has notified the Indenture Trustee of the establishment of
the Trust Distribution Account, to the Trust Distribution Account, on the earlier of: (i)
the first Payment Date on or after which the Servicer has deposited into the Collection
Account the amount specified in Section 8.1(a) in connection with its exercising its option
to acquire the Trust Property pursuant to Section 8.1 and (ii) the date on which the Note
Balance of the Notes and of all other amounts owing or to be distributed to the Secured
Parties under the Indenture and this Agreement are paid in full.
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(d) [Reserved].
(e) Benefit of Accounts; Deposits and Withdrawals. The Collection Account and the
Reserve Account and all amounts, securities, investments, financial assets and other property
deposited in or credited to them will be held by the Indenture Trustee as secured party for the
benefit of the Secured Parties and, after payment in full of the Notes, as agent of the Issuer and
as part of the Trust Property. All deposits to and withdrawals from the Collection Account, the
Principal Payment Account and the Reserve Account will be made in accordance with the Transaction
Documents.
(f) Maintenance of Accounts. If an institution maintaining one of the Bank Accounts
ceases to be a Qualified Institution, the Servicer, with respect to the Collection Account and the
Principal Payment Account, or the Depositor, with respect to the Reserve Account, will, with the
Indenture Trustee’s or Owner Trustee’s assistance as necessary, within 30 calendar days, move such
Bank Account to a Qualified Institution.
(g) Compliance. Each Bank Account will be established and maintained pursuant to the
Control Agreement. The Servicer, with respect to the Collection Account and the Principal Payment
Account, and the Depositor, with respect to the Reserve Account, will ensure that the Control
Agreement establishing each Bank Account requires the Qualified Institution maintaining each 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 UCC.
(h) Trust Distribution Account. The Depositor may cause the Owner Trustee to
establish and maintain a segregated trust account in the name “U.S. Bank Trust National Association
as Owner Trustee,” that is designated as the “Trust Distribution Account” and will promptly
notify the Owner Trustee and the Indenture Trustee after the establishment of the Trust
Distribution Account. The Trust Distribution Account will be under the sole dominion and control
of the Owner Trustee, except that the Indenture Trustee may make deposits to the Trust Distribution
Account in accordance with the Transaction Documents. All deposits to and withdrawals from the
Trust Distribution Account will be made in accordance with the Indenture and the Trust Agreement.
Section 4.2. Investment of Funds in the Bank Accounts.
(a) For so long as no Default or Event of Default has occurred and is continuing, funds in the
Collection Account (but not amounts in the Principal Payment Account) and in the Reserve Account
will, to the extent permitted by law, be invested in Permitted Investments by the Qualified
Institution maintaining such accounts as directed by the Servicer with respect to the Collection
Account, and as directed by the Depositor or by any Person appointed by the Depositor with respect
to the Reserve Account, in each case, without requiring any action by the Indenture Trustee. The
Servicer or the Depositor, as applicable, may direct the Indenture Trustee to consent, vote, waive
or take any other action, or not to take any such action, with respect to any matters available to
the holder of such Permitted Investments.
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(b) If (i) the Servicer, with respect to the Collection Account and the Principal Payment
Account, or the Depositor, with respect to the Reserve Account, fails to give investment directions
for any funds in a Bank Account to the Qualified Institution maintaining such Bank Account by 11:00
a.m. New York time (or such other time as may be agreed by the Issuer and such Qualified
Institution) on the Business Day preceding a Payment Date or (ii) a Default or Event of Default has
occurred and is continuing with respect to the Notes and the Indenture Trustee has provided notice
to the Qualified Institution maintaining such Bank Account, the Qualified Institution maintaining
such Bank Account will, pursuant to the Control Agreement, to the fullest extent practicable,
invest and reinvest funds in such Bank Account in one or more investments described in clause (b)
of the definition of Permitted Investments.
(c) Permitted Investments of funds in the Collection Account (or any reinvestments of such
Permitted Investments) will mature no later than the Business Day preceding the Payment Date on
which such Collections are required to be distributed under the Indenture. Permitted Investments
of funds in the Reserve Account will mature no later than the Business Day preceding the first
Payment Date on which Collections are required to be distributed following the date of investment,
except that such funds may be invested in Permitted Investments that will not mature before the
next Payment Date if the Rating Agency Condition has been satisfied with respect to the investment.
Permitted Investments will be held to their maturity, except that Permitted Investments may be
sold or disposed of before their maturity in connection with the sale or liquidation of the
Collateral following an Event of Default as provided in Section 5.6 of the Indenture. All interest
and other income (net of losses and investment expenses) on funds in the Bank Accounts will be paid
to the Servicer on each Payment Date pursuant to Section 3.5.
(d) None of the Depositor, the Servicer or the Qualified Institution maintaining any Bank
Account will be liable for the selection of Permitted Investments or for investment losses incurred
thereon (other than in the capacity as obligor thereon, if applicable).
(e) Neither the Servicer, with respect to the Collection Account and the Principal Payment
Account, nor the Depositor, with respect to the Reserve Account, will direct the Qualified
Institution maintaining such account to make any investment of any funds or to sell any investment
held in such account unless the security interest Granted and perfected in such account in favor of
the Indenture Trustee will continue to be perfected in such investment or the proceeds of such
sale, in each case without any further action by any Person.
(f) With respect to funds in the Bank Accounts:
(i) 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 maintaining the applicable account in accordance
with such institution’s customary procedures such that the institution establishes a
“securities entitlement” in favor of the Indenture Trustee with respect to such funds or
property; and
(ii) 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
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Required Ratings, each such deposit account will be subject to the exclusive custody
and control of the Indenture Trustee and the Indenture Trustee will have sole signature
authority with respect to each such deposit account.
(g) The Servicer, with respect to the Collection Account and the Principal Payment Account,
and the Depositor, with respect to the Reserve Account, will ensure that the Qualified Institution
maintaining each such account, in its capacity as securities intermediary, agrees in the Control
Agreement that each item of property credited to each such account will be treated as a “financial
asset” within the meaning of Section 8-102(a)(9) of the UCC.
Section 4.3. Remittances.
(a) If Ford Credit’s short term unsecured debt is rated at least “F1” by Fitch and “P-1” by
Xxxxx’x (this rating requirement, the “Monthly Remittance Required Ratings”), Ford Credit
may remit Collections on the Business Day preceding each Payment Date, or with satisfaction of the
Rating Agency Condition, on each Payment Date.
(b) If Ford Credit’s short term unsecured debt is not rated at least equal to the Monthly
Remittance Required Ratings or a Servicer Termination Event occurs:
(i) on the Closing Date, the Servicer will remit to the Collection Account all amounts
received and applied as interest or principal on the Receivables in accordance with the
Credit and Collection Policy during the period from the Cutoff Date to two Business Days
preceding the Closing Date; and
(ii) on and after the Closing Date, Ford Credit will remit to the Collection Account
all amounts received and applied as interest or principal on the Receivables in accordance
with the Credit and Collection Policy within two Business Days after such application.
(c) If Ford Credit is the Servicer and for any Payment Date, the sum of (i) Collections for
the related Collection Period, plus (ii) Purchase Amounts for such Payment Date, exceeds
the amounts remitted pursuant to Section 4.3(b) for the related Collection Period, Ford Credit will
remit an amount equal to such excess to the Collection Account on the Business Day preceding such
Payment Date or, with satisfaction of the Rating Agency Condition, on such Payment Date. If, for
any Payment Date, the amounts remitted pursuant to Section 4.3(b) for the related Collection Period
exceed the sum of (i) Collections for the related Collection Period, plus (ii) Purchase
Amounts for such Payment Date, the Indenture Trustee will pay to Ford Credit an amount equal to
such excess within two Business Days of Ford Credit’s request, but in no event later than such
Payment Date. Upon the Indenture Trustee’s request, Ford Credit will provide the Indenture Trustee
reasonable support for Ford Credit’s calculation of the amounts to be remitted or paid pursuant to
this Section 4.3(c).
(d) Ford Credit may make the remittances pursuant to this Section 4.3 net of Servicing Fees to
be paid to Ford Credit. Nonetheless, the Servicer will account for all of the above described
remittances and distributions in the Monthly Investor Report as if the amounts were remitted,
deposited and/or transferred separately.
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(e) If Ford Credit (or a successor of Ford Credit pursuant to Section 6.4) is not the
Servicer, the Servicer will be required to remit Collections to the Collection Account within two
Business Days after receipt and application.
(f) Pending deposit into the Collection Account, amounts collected by the Servicer may be used
by the Servicer at its own risk and for its own benefit and will not be segregated from its own
funds.
Section 4.4. Calculations and Distributions; Withdrawals from the Reserve Account.
(a) On or before each Determination Date, the Servicer will calculate the Reserve Account Draw
Amount for the following Payment Date and will instruct the Indenture Trustee to withdraw from the
Reserve Account and deposit the Reserve Account Draw Amount into the Collection Account on or
before such Payment Date.
(b) On or before each Determination Date, the Servicer will instruct the Indenture Trustee
(based on the most recent Monthly Investor Report) to make the withdrawals, deposits, distributions
and payments required to be made on the following Payment Date pursuant to Section 8.2 of the
Indenture.
ARTICLE V
THE DEPOSITOR
THE DEPOSITOR
Section 5.1. Representations and Warranties of the Depositor. The Depositor
represents and warrants to the Issuer as of the date of this Agreement and as of the Closing Date,
on which the Issuer is relying in acquiring the Trust Property and which will survive the sale of
the Trust Property to the Issuer and the pledge of the Trust Property by the Issuer to the
Indenture Trustee pursuant to the Indenture:
(a) Organization and Qualification. The Depositor is duly organized and validly
existing as a limited liability company in good standing under the laws of the State of Delaware.
The Depositor is qualified as a foreign limited liability company in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its
properties or the conduct of its activities requires such qualification, license or approval,
unless the failure to obtain such qualifications, licenses or approvals could not reasonably be
expected to have a material adverse effect on the Depositor’s ability to perform its obligations
under this Agreement or the other Transaction Documents to which it is a party.
(b) Power, Authorization and Enforceability. The Depositor has the power and
authority to execute deliver and perform the terms of each of the Transaction Documents to which it
is a party and to acquire, own and sell the Receivables and the other Trust Property and has duly
authorized the sale of the Receivables and other Trust Property to the Issuer by all necessary
action. The Depositor has authorized the execution, delivery and performance of the terms of each
of the Transaction Documents to which it is a party. Each of the Transaction Documents to which
the Depositor is a party is the legal, valid and binding obligation of the Depositor enforceable
against the Depositor, except as may be limited by insolvency, bankruptcy, reorganization or other
laws relating to the enforcement of creditors’ rights or by general equitable principles.
15
(c) Valid Sale. This Agreement evidences a valid sale of the Trust Property from the
Depositor to the Issuer, enforceable against creditors of and purchasers from the Depositor.
(d) No Conflicts and No Violation. The consummation of the transactions contemplated
by the Transaction Documents to which the Depositor is a party and the fulfillment of the terms of
the Transaction Documents to which the Depositor is a party will not (i) conflict with or result in
a breach of the terms or provisions of, or constitute a default under any indenture, mortgage, deed
of trust, loan agreement, guarantee or similar agreement or instrument under which the Depositor is
a debtor or guarantor, (ii) result in the creation or imposition of any Lien upon any of the
properties or assets of the Depositor pursuant to the terms of any such indenture, mortgage, deed
of trust, loan agreement, guarantee or similar agreement or instrument (other than this Agreement),
(iii) violate the Certificate of Formation or Limited Liability Company Agreement of the Depositor,
or (iv) violate any law or, to the Depositor’s knowledge, any order, rule or regulation applicable
to the Depositor of any court or of any federal or State regulatory body, administrative agency or
other governmental instrumentality having jurisdiction over the Depositor or its properties, in
each case which conflict, breach, default, Lien, or violation would reasonably be expected to have
a material adverse effect on the Depositor’s ability to perform its obligations under the
Transaction Documents.
(e) No Proceedings. To the Depositor’s knowledge, there are no proceedings or
investigations pending or overtly threatened in writing, before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction over the Depositor
or its properties: (i) asserting the invalidity of any of the Transaction Documents or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by any of the Transaction Documents, (iii) seeking any determination or ruling that
would reasonably be expected to have a material adverse effect on the Depositor’s ability to
perform its obligations under, or the validity or enforceability of, any of the Transaction
Documents or the Notes, or (iv) relating to Ford Credit or the Depositor that would reasonably be
expected to (A) affect the treatment of the Notes as indebtedness for U.S. federal income or
Applicable Tax State income or franchise tax purposes, (B) be deemed to cause a taxable exchange of
the Notes for U.S. federal income tax purposes, or (C) cause the Issuer to be treated as an
association or publicly traded partnership taxable as a corporation for U.S. federal income tax
purposes, in each case, other than such proceedings that would not reasonably be expected to have a
material adverse effect upon the Depositor or materially and adversely affect the performance by
the Depositor of its obligations under, or the validity and enforceability of, the Transaction
Documents or the Notes, or materially and adversely affect the tax treatment of the Issuer or the
Notes.
(f) Valid Security Interest. This Agreement creates a valid and continuing security
interest (as defined in the applicable UCC) in the Trust Property in favor of the Issuer that is
prior to all other Liens other than Permitted Liens and is enforceable as such against all other
creditors of and purchasers from the Depositor.
(g) Investment Company Act. The Depositor is not an “investment company” or a company
“controlled by an investment company” within the meaning of the Investment Company Act.
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Section 5.2. Liability of the Depositor. The Depositor will be liable in accordance
with this Agreement only to the extent of the obligations specifically undertaken by the Depositor
under this Agreement.
(a) The Depositor will not be liable to the Issuer, the Owner Trustee, the Indenture Trustee,
the Noteholders, the Servicer or any other Person for any action taken, or not taken, in good faith
pursuant to this Agreement or for errors in judgment. All such liability is expressly waived and
released as a condition of, and consideration for, the execution of this Agreement by the Depositor
and the issuance of the Notes. Notwithstanding the preceding two sentences, this Section 5.2 will
not protect the Depositor against any liability that would otherwise be imposed by reason of the
Depositor’s willful misconduct, bad faith or negligence in the performance of its duties under this
Agreement.
(b) The Depositor will pay any and all taxes levied or assessed upon the Issuer or upon all or
any part of the Trust Property.
(c) The Depositor and any officer, director, employee or agent of the Depositor may rely in
good faith on the advice of counsel or on any document believed to be genuine and to have been
executed by the proper party in respect of any matters arising under this Agreement.
(d) The Depositor will be under no obligation to appear in, prosecute or defend any legal
action that is unrelated to its obligations under this Agreement and that, in its opinion, may
cause it to incur any expense or liability.
Section 5.3. Merger or Consolidation of, or Assumption of the Obligations of, the
Depositor. Any Person (a) into which the Depositor is merged or consolidated, (b) resulting
from any merger or consolidation to which the Depositor is a party or (c) succeeding to the
business of the Depositor, if more than 50% of the voting stock or voting power and 50% or more of
the economic equity of such Person is owned, directly or indirectly, by Ford Motor Company, will be
the successor to the Depositor under this Agreement without the execution or filing of any document
or any further act except those actions required under this Section 5.3. Within 15 Business Days
after any such merger, consolidation or succession such Person will (i) execute an agreement of
assumption to perform every obligation of the Depositor under this Agreement, (ii) deliver to the
Owner Trustee and the Indenture Trustee an Officer’s Certificate and an Opinion of Counsel each
stating that such merger, consolidation or succession and such agreement of assumption comply with
this Section 5.3, (iii) deliver to the Owner Trustee and the Indenture Trustee an Opinion of
Counsel to the effect that either (A) upon the later of the attachment of the security interest and
the filing of the necessary financing statements, the security interest in favor of the Issuer in
the Trust Property and the Indenture Trustee in the Collateral will be perfected, or (B) no such
action is necessary to preserve and protect such security interest, and (iv) provide notice of such
merger, consolidation or succession to the Rating Agencies.
Section 5.4. Depositor May Own Notes. The Depositor and any Affiliate of the
Depositor, in its individual or any other capacity, may become the owner or pledgee of Notes with
the same rights as it would have if it were not the Depositor or an Affiliate of the Depositor
except as otherwise provided in any Transaction Document. Notes owned by or pledged to the
17
Depositor or any Affiliate of the Depositor will have an equal and proportionate benefit under
the Transaction Documents, without preference, priority or distinction, except as otherwise
provided in any Transaction Document.
Section 5.5. Depositor’s Engagement of the Rating Agencies. The Depositor has engaged
Xxxxx’x and Fitch as the Rating Agencies to rate the Notes.
Section 5.6. Authorized Persons of the Depositor. On or prior to the Closing Date,
the Depositor will provide notice to the Indenture Trustee and the Owner Trustee specifying (i)
each Person who will be authorized to provide instructions and directions to the Indenture Trustee
and the Owner Trustee on behalf of the Depositor, and (ii) each Person who is a Responsible Person
with respect to the Depositor, which Persons may be changed from time to time by notice to the
Indenture Trustee and the Owner Trustee.
ARTICLE VI
THE SERVICER
THE SERVICER
Section 6.1. Representations and Warranties of the Servicer. The Servicer represents
and warrants to the Issuer as of the date of this Agreement, on which the Issuer is relying in
acquiring the Trust Property and which will survive the sale of the Trust Property to the Issuer
and the pledge of the Trust Property by the Issuer to the Indenture Trustee pursuant to the
Indenture:
(a) Organization and Qualification. The Servicer is duly organized and validly
existing as a limited liability company in good standing under the laws of the State of Delaware.
The Servicer is qualified as a foreign limited liability company in good standing and has obtained
all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its
properties or the conduct of its activities requires such qualification, license or approval,
unless the failure to obtain such qualifications, licenses or approvals would not reasonably be
expected to have a material adverse effect on the Servicer’s ability to perform its obligations
under this Agreement or the other Transaction Documents to which it is a party.
(b) Power, Authorization and Enforceability. The Servicer has the power and authority
to execute deliver and perform the terms of each of the Transaction Documents to which it is a
party and to acquire, own, hold, service and sell the Receivables and to hold the Receivables Files
as custodian on behalf of the Issuer and the Indenture Trustee. The Servicer has authorized the
execution, delivery and performance of the terms of each of the Transaction Documents to which it
is a party. Each of the Transaction Documents to which the Servicer is a party is the legal, valid
and binding obligation of the Servicer enforceable against the Servicer, except as may be limited
by insolvency, bankruptcy, reorganization or other laws relating to the enforcement of creditors’
rights or by general equitable principles.
(c) No Conflicts and No Violation. The consummation of the transactions contemplated
by the Transaction Documents to which the Servicer is a party and the fulfillment of the terms of
the Transaction Documents to which the Servicer is a party will not (i) conflict with or result in
a breach of the terms or provisions of, or constitute a default under any indenture, mortgage, deed
of trust, loan agreement, guarantee or similar agreement or instrument
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under which the Servicer is a debtor or guarantor, (ii) result in the creation or imposition
of any Lien upon any of the properties or assets of the Servicer pursuant to the terms of any such
indenture, mortgage, deed of trust, loan agreement, guarantee or similar agreement or instrument,
(iii) violate the Certificate of Formation or the Limited Liability Company Agreement of the
Servicer, or (iv) violate any law or, to the Servicer’s knowledge, any order, rule or regulation
applicable to the Servicer of any court or of any federal or state regulatory body, administrative
agency or other governmental instrumentality having jurisdiction over the Servicer or its
properties, in each case, which conflict, breach, default, Lien, or violation would reasonably be
expected to have a material adverse effect on the Servicer’s ability to perform its obligations
under the Transaction Documents to which it is a party.
(d) No Proceedings. To the Servicer’s knowledge, there are no proceedings or
investigations pending or overtly threatened in writing before any court, regulatory body,
administrative agency, or other governmental instrumentality having jurisdiction over the Servicer
or its properties: (i) asserting the invalidity of any of the Transaction Documents or the Notes,
(ii) seeking to prevent the issuance of the Notes or the consummation of any of the transactions
contemplated by any of the Transaction Documents, (iii) seeking any determination or ruling that
would reasonably be expected to have a material adverse effect on the Servicer’s ability to perform
its obligations under, or the validity or enforceability of, any of the Transaction Documents or
the Notes, or (iv) relating to the Servicer that would reasonably be expected to (A) affect the
treatment of the Notes as indebtedness for U.S. federal income or Applicable Tax State income or
franchise tax purposes, (B) be deemed to cause a taxable exchange of the Notes for U.S. federal
income tax purposes, or (C) cause the Issuer to be treated as an association or publicly traded
partnership taxable as a corporation for U.S. federal income tax purposes, in each case, other than
such proceedings that, to the Servicer’s knowledge, would not reasonably be expected to have a
material adverse effect upon the Servicer and its subsidiaries considered as a whole or materially
and adversely affect the performance by the Servicer of its obligations under, or the validity and
enforceability of, any of the Transaction Documents or the Notes, or materially and adversely
affect the tax treatment of the Issuer or the Notes.
Section 6.2. Liability of the Servicer.
(a) The Servicer will be liable to the Issuer, the Owner Trustee, the Indenture Trustee, the
Noteholders and the Depositor only to the extent of the obligations specifically undertaken by the
Servicer under this Agreement. All other liability is expressly waived and released as a condition
of, and consideration for, the execution of this Agreement by the Servicer. This Section 6.2 will
not protect the Servicer against any liability that would otherwise be imposed by reason of the
Servicer’s willful misconduct, bad faith or negligence in the performance of its duties under this
Agreement. The Servicer and any subservicer may rely in good faith on any document of any kind
that appears on its face to be properly executed and submitted by any Person with respect to any
matters arising under this Agreement.
(b) The obligations of the Servicer under this Agreement are solely corporate obligations of
the Servicer, and no recourse may be taken, directly or indirectly, with respect to the obligations
of the Servicer against any owner, beneficiary, agent, officer, director, or employee of the
Servicer in their individual capacities except for any liability that would
otherwise be imposed by reason of such Person’s willful misconduct, bad faith or negligence in
the performance of its duties.
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(c) 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. The Servicer may in
its sole discretion (but will not be required to) undertake any legal action that it may deem
necessary or desirable to protect the interests of the Noteholders or the Depositor under the
Transaction Documents. In such event, the legal expenses, costs and liabilities of such action and
any liability resulting from such action will be expenses, costs and liabilities of the Servicer.
(d) The Servicer will not be in default under this Agreement if it is unable to perform any of
its obligations as a result of an act of God, act of war, terrorism, fires, earthquake or other
natural disaster. The Servicer will make commercially reasonable efforts to resume the performance
of its obligations under this Agreement as soon as reasonably practicable after any such event.
Section 6.3. Indemnities of the Servicer.
(a) The Servicer will indemnify, defend and hold harmless the Issuer, the Owner Trustee and
the Indenture Trustee, and their respective officers, directors, employees and agents from and
against any and all costs, losses, claims and liabilities arising out of, or imposed upon any such
Person through the Servicer’s (including in its capacity as Custodian) willful misconduct, bad
faith or negligence (except for errors in judgment) in the performance of its duties under any
Transaction Document to which it is a party.
(b) Promptly upon receipt by the Issuer, the Owner Trustee or the Indenture Trustee or any of
their respective officers, directors, employees and agents (each, for purposes of this Section
6.3(b), an “Indemnified Person”) of notice of the commencement of any Proceeding against
any such Indemnified Person, such Indemnified Person will, if a claim in respect of such Proceeding
will be made against the Servicer under this Section 6.3, notify the Servicer of the commencement
of such Proceeding. The Servicer may participate in and assume the defense and settlement of any
such Proceeding at the Servicer’s expense. No settlement of such Proceeding may be made without
the approval of the Servicer and such Indemnified Person, which approvals will not be unreasonably
withheld, delayed or conditioned. The Servicer’s indemnification obligation will include the
reasonable fees and expenses of counsel and the expenses of litigation. After notice from the
Servicer to such Indemnified Person of the Servicer’s intention to assume the defense of such
Proceeding with counsel reasonably satisfactory to such Indemnified Person, and so long as the
Servicer so assumes the defense of such Proceeding in a manner reasonably satisfactory to such
Indemnified Person, the Servicer will not be liable for any legal expenses of counsel to such
Indemnified Person unless there is a conflict between the interests of the Servicer and such
Indemnified Person, in which case the Servicer will pay for the separate counsel to such
Indemnified Person.
(c) For purposes of this Section 6.3, if the Servicer is terminated pursuant to Section 7.1 or
if the Servicer resigns pursuant to Section 6.6, such Servicer will be deemed to continue to
be the Servicer until a Successor Servicer (other than the Indenture Trustee) has assumed the
obligations of the Servicer in accordance with Section 7.2.
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(d) The Servicer’s obligations under this Section 6.3 with respect to the period such Person
was (or was deemed to be) the Servicer will survive the termination of or resignation by such
Person as Servicer, the termination of this Agreement and the resignation or removal of the Owner
Trustee or the Indenture Trustee or the termination of the Issuer. If the Servicer makes any
indemnity payments pursuant to this Section 6.3 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 6.4. Merger or Consolidation of, or Assumption of the Obligations of, the
Servicer; Assignment to Affiliate. Any Person (a) into which the Servicer is merged or
consolidated, (b) resulting from any merger or consolidation to which the Servicer is a party, (c)
succeeding to the business of the Servicer, or (d) that is an Affiliate of the Servicer to whom the
Servicer has assigned this Agreement, will be the successor to the Servicer under this Agreement
without the execution or filing of any document or any further act except those actions required
under this Section 6.4. Within 15 Business Days after any such merger, consolidation, succession
or assignment, such Person will (i) execute an agreement of assumption to perform every obligation
of the Servicer under this Agreement, (ii) deliver to the Owner Trustee and the Indenture Trustee
an Officer’s Certificate and an Opinion of Counsel each stating that such merger, consolidation,
succession or assignment and such agreement of assumption comply with this Section 6.4, (iii)
deliver to the Owner Trustee and the Indenture Trustee an Opinion of Counsel to the effect that
either (A) upon the later of the attachment of the security interest and the filing of the
necessary financing statements, the security interest in favor of the Issuer in the Trust Property
and the Indenture Trustee in the Collateral will be perfected, or (B) no such action is necessary
to preserve and protect such security interest, and (iv) provide notice of such merger,
consolidation, succession or assignment to the Rating Agencies.
Section 6.5. Delegation of Duties. So long as Ford Credit acts as Servicer or
Custodian, the Servicer or Custodian may without notice or consent delegate any or all of its
duties under this Agreement to Ford Motor Company or any company or other business entity of which
Ford Motor Company owns, directly or indirectly, more than 50% of the voting stock or voting power
and 50% or more of the economic equity. The Servicer or Custodian may perform any of its duties
through subcontractors. No such delegation or subcontracting will relieve the Servicer or
Custodian of its responsibilities with respect to such duties and the Servicer will remain
primarily responsible with respect to such duties. The Servicer or Custodian will be responsible
for the fees of any such subcontractors.
Section 6.6. Ford Credit Not to Resign as Servicer. Neither Ford Credit nor any
successor Servicer will resign as Servicer under this Agreement except upon determining that the
performance of its duties under this Agreement is no longer permissible under law. Notice of any
determination permitting the resignation of Ford Credit as Servicer or a successor Servicer will be
delivered to the Owner Trustee and the Indenture Trustee as soon as practicable (and, if not given
in writing, will be confirmed in writing as soon as practicable). Any determination permitting the
resignation of Ford Credit as Servicer or a successor Servicer will be evidenced by
an Opinion of Counsel to such effect delivered to the Owner Trustee and the Indenture Trustee
with or promptly following delivery of such notice.
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Section 6.7. Servicer May Own Notes. The Servicer and any Affiliate of the Servicer,
in its individual or any other capacity, may become the owner or pledgee of Notes with the same
rights as it would have if it were not the Servicer or an Affiliate of the Servicer, except as
otherwise provided in any Transaction Document. Notes owned by or pledged to the Servicer or any
Affiliate of the Servicer will have an equal and proportionate benefit under the Transaction
Document, without preference, priority or distinction, except as otherwise provided in any
Transaction Document.
ARTICLE VII
SERVICER TERMINATION
SERVICER TERMINATION
Section 7.1. Servicer Termination Events.
(a) The occurrence and continuation of any of the following events will be a “Servicer
Termination Event”:
(i) Any failure by the Servicer to deliver to the Owner Trustee or the Indenture
Trustee any proceeds or payment required to be delivered under this Agreement that continues
for a period of five Business Days after the earlier of the date on which (x) notice of such
failure is given to the Servicer by the Owner Trustee or the Indenture Trustee, or (y) a
Responsible Person of the Servicer learns of such failure, unless:
(1) | (A) such failure is caused by an event outside the control of the Servicer that the Servicer could not have avoided through the exercise of due care, (B) such failure does not continue for more than ten Business Days after the earlier of the date on which notice of such failure is given to the Servicer by the Owner Trustee or the Indenture Trustee or a Responsible Person of the Servicer learns of such failure, (C) during such period the Servicer uses all commercially reasonable efforts to perform its obligations under this Agreement, and (D) the Servicer provides the Owner Trustee, the Indenture Trustee, the Depositor and the Noteholders with prompt notice of such failure that includes a description of the Servicer’s efforts to remedy such failure; or | ||
(2) | (A) such failure would not reasonably be expected to, or upon investigation and quantification does not, result in the failure in paying or depositing an amount greater than 0.05% of the Note Balance of the Notes, and (B) such failure does not continue for more than (i) if the Servicer’s long-term debt is rated investment grade by all Rating Agencies, 90 days after a Responsible Person of the Servicer learns of such failure, or (ii) if the Servicer’s long-term debt is not so rated, 90 days after such failure; |
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(ii) Any failure by the Servicer to observe or to perform in any material respect any
other covenants or agreements of the Servicer set forth in this Agreement, which failure
materially and adversely affects the rights of the Noteholders and continues for 90 days
after the Servicer receives notice of such failure from the Owner Trustee, the Indenture
Trustee or the Noteholders of at least 25% of the Note Balance of the Controlling Class, or
(iii) The occurrence of an Insolvency Event with respect to the Servicer.
(b) If a Servicer Termination Event occurs, the Issuer will promptly notify each Rating
Agency. So long as such Servicer Termination Event has not been remedied, either the Indenture
Trustee or the Noteholders of a majority of the Note Balance of the Controlling Class (or, if no
Notes are Outstanding, the Owner Trustee, at the direction of the holder of the Residual Interest),
by notice to the Servicer and the Issuer (who will then promptly notify the Rating Agencies) (and
to the Indenture Trustee and the Owner Trustee if given by the Noteholders), may terminate all of
the rights and obligations (other than those set forth in Section 6.2 and Section 6.3) of the
Servicer under this Agreement. Upon the receipt by the Servicer of such notice (or such later date
as may be specified in such notice of termination), all authority and power of the Servicer under
this Agreement will pass to and be vested in the Indenture Trustee or such Successor Servicer as
may be appointed under Section 7.2. In such event, the Indenture Trustee and the Owner Trustee are
authorized 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 termination of the predecessor Servicer and to
complete the transfer of the Receivables Files and related documents to the Indenture Trustee or
the successor Servicer or the successor Custodian.
(c) Upon termination of the Servicer under this Section 7.1 or the Servicer’s resignation
under Section 6.6, the predecessor Servicer will cooperate with the Indenture Trustee, the Owner
Trustee and the Successor Servicer in effecting the termination of the responsibilities and rights
of the predecessor Servicer under this Agreement, including, as soon as practicable, the transfer
to the Indenture Trustee or such Successor Servicer of all cash amounts that are held by the
predecessor Servicer for deposit, or thereafter received with respect to a Receivable and the
delivery of the Receivables Files and the related accounts and records maintained by the Servicer.
In no event, however, will the Servicer be obligated to provide, license or assign its processes,
procedures, models, servicing software or other applications to any Successor Servicer or any other
third party, or provide anything covered by a restriction on transfer or assignment or a
confidentiality agreement. All reasonable costs and expenses (including attorneys’ fees) incurred
by the Indenture Trustee, the Owner Trustee and the Successor Servicer associated with (i) the
transition of servicing duties to the Successor Servicer, and (ii) amending this Agreement to
reflect a succession of the Servicer pursuant to this Section 7.1 will be paid by the predecessor
Servicer upon presentation of reasonable documentation of such costs and expenses.
Section 7.2. Appointment of Successor Servicer.
(a) If the Servicer is terminated pursuant to Section 7.1, it will continue to perform its
functions as Servicer under this Agreement until the date specified in the notice of termination.
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If the Servicer resigns pursuant to Section 6.6, it will continue to perform its functions as
Servicer under this Agreement until (i) if the resigning Servicer is Ford Credit, the earlier to
occur of (A) the Indenture Trustee or a Successor Servicer assuming the responsibilities and
obligations of Ford Credit as Servicer in accordance with this Section 7.2 and as the Administrator
in accordance with Section 5.2 of the Administration Agreement, or (B) the date upon which any
regulatory authority requires such resignation, and (ii) if the resigning Servicer is not Ford
Credit, the earlier to occur of (A) the date 45 days from the delivery to the Indenture Trustee and
the Owner Trustee of the notice of such resignation in accordance with Section 6.6, or (B) the date
upon which the Servicer is legally unable to act as Servicer as specified in the notice of
resignation and accompanying Opinion of Counsel.
(b) If the Servicer resigns or is terminated under this Agreement, the Indenture Trustee will
(i) provide notice of such termination or resignation to the Issuer, and (ii) as promptly as
possible, appoint an institution having a net worth of not less than $50,000,000 whose business
includes the servicing of motor vehicle receivables, as the successor to the Servicer under this
Agreement. Such successor will accept its appointment (including its appointment as Administrator
under the Administration Agreement as set forth in Section 7.2(d)) by (x) entering into a servicing
agreement with the Issuer having substantially the same provisions as the provisions of this
Agreement applicable to the Servicer, in a form acceptable to the Owner Trustee and the Indenture
Trustee, and (y) delivering a copy of such servicing agreement to the Indenture Trustee and the
Issuer (such a successor, a “Successor Servicer”). Promptly following a Successor
Servicer’s acceptance of its appointment, the Indenture Trustee will notify the Issuer of such
appointment, specifying in such notice the name and address of the Successor Servicer.
(c) If no Person has accepted its appointment as Successor Servicer when the predecessor
Servicer ceases to act as Servicer in accordance with this Section 7.2, the Indenture Trustee,
without further action, will be automatically appointed the Successor Servicer. However, if the
Indenture Trustee is unwilling or legally unable to act as Successor Servicer, it will appoint, or
petition a court of competent jurisdiction to appoint, an institution having a net worth of not
less than $50,000,000 whose business includes the servicing of motor vehicle receivables, as
successor. The Indenture Trustee will be released from its duties and obligations as Successor
Servicer on the date that a new servicer enters into a servicing agreement with the Issuer and
delivers a copy of such servicing agreement to the Indenture Trustee and the Issuer as provided in
Section 7.2(b).
(d) Upon acceptance of its appointment as Successor Servicer, the Successor Servicer will (i)
be the successor in all respects to the predecessor Servicer and will be subject to all of the
responsibilities, duties, and liabilities following such Successor Servicer’s appointment placed on
the predecessor Servicer relating to such predecessor Servicer’s performance of its duties as
Servicer, and (ii) become the Administrator under the Administration Agreement in accordance with
Section 5.2 of the Administration Agreement.
(e) In connection with any appointment of a Successor Servicer, 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 may agree; provided that no such compensation will be in
excess of the amount paid to the predecessor Servicer under this
Agreement. The Indenture Trustee and such Successor Servicer will take such action,
consistent with this Agreement, as will be necessary to effectuate any such succession.
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(f) If the Indenture Trustee succeeds to the Servicer’s duties as provided in Section 7.2(c),
it will do so in its individual capacity and not in its capacity as Indenture Trustee and,
accordingly, Article VI of the Indenture will be inapplicable to the Indenture Trustee in its
duties as Successor Servicer. In case the Indenture Trustee becomes Successor Servicer pursuant to
Section 7.2(c), the Indenture Trustee will be entitled to appoint as Servicer any one of its
Affiliates; provided that the Indenture Trustee, in its capacity as Successor Servicer,
will be liable for the actions and omissions of such Affiliate in its capacity as Servicer.
Section 7.3. Notification to Secured Parties and the Holder of the Residual Interest.
Upon any termination of the Servicer, or appointment of a Successor Servicer pursuant to this
Article VII, the Indenture Trustee will promptly notify the Secured Parties and the Issuer (who
will promptly notify each Rating Agency), and the Owner Trustee will promptly notify the holder of
the Residual Interest.
Section 7.4. Waiver of Servicer Termination Event. The Noteholders of a majority of
the Note Balance of the Controlling Class or, if no Notes are Outstanding, the Owner Trustee, at
the direction of the holder of the Residual Interest, may waive any Servicer Termination Event and
its consequences, except an event resulting from the failure to make any required deposits to or
payments from any of the Bank Accounts in accordance with this Agreement that resulted in an Event
of Default in the payment of principal or interest on any of the Notes (other than an Event of
Default relating to failure to pay principal due only by reason of acceleration) under the
Indenture. Upon any such waiver of a Servicer Termination Event, such Servicer Termination Event
will cease to exist and will be deemed to have been remedied for every purpose under this
Agreement. No such waiver will extend to any subsequent or other event or impair any right
resulting from such waiver. The Issuer will promptly notify the Rating Agencies of any such
waiver.
ARTICLE VIII
TERMINATION
TERMINATION
Section 8.1. Clean-Up Call.
(a) If the Pool Balance is equal to or less than 5% of the Initial Pool Balance on the last
day of any Collection Period, the Servicer has the option to purchase the Trust Property (other
than the amounts on deposit in or invested in Permitted Investments maturing on or before the
following Payment Date in the Trust Accounts). The Servicer may exercise its option to purchase
the Trust Property by (i) notifying the Indenture Trustee, the Owner Trustee and the Rating
Agencies at least ten days before the Payment Date related to such Collection Period, and (ii)
remitting to the Collection Account the purchase price for the Trust Property equal to the
aggregate Principal Balance of the Receivables as of the last day of such Collection Period in
immediately available funds by 10:00 a.m. (New York City time) on the Business Day preceding the
Payment Date (or, with satisfaction of the Rating Agency Condition, on the Payment Date) related to
such Collection Period. Notwithstanding the foregoing, the Servicer will not be permitted to
purchase the Trust Property unless the sum of (i) such purchase price, (ii) the
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Collections on deposit in the Collection Account for such Collection Period, and (iii) any
Purchase Amounts paid by the Depositor or the Servicer relating to such Collection Period is
greater than or equal to the sum of (i) the Note Balance of the Notes Outstanding, and all accrued
but unpaid interest thereon, and (ii) all amounts due to the Indenture Trustee under the Indenture.
(b) When the purchase price for the Trust Property is included in Available Funds for a
Payment Date, the Issuer will be deemed to have sold and assigned to the Servicer as of the last
day of the preceding Collection Period all of the Issuer’s right, title and interest in and to the
Trust Property, including the Receivables and all security and documents relating to such
Receivables. Such sale will not require any action by the Issuer and will be without recourse,
representation or warranty by the Issuer except the representation that the Issuer owns the
Receivables free and clear of any Liens other than Permitted Liens. Upon such sale, the Servicer
will xxxx its computer records indicating that any receivables purchased pursuant to Section 8.1(a)
are no longer Receivables, file UCC termination or amendment statements or take any other action
necessary or appropriate to evidence the transfer of ownership of the purchased Receivables free
from any Lien of the Issuer or the Indenture Trustee. The Issuer, the Owner Trustee or the
Indenture Trustee, as applicable, will execute such documents and instruments and any and all
further instruments, including any authorizations to file UCC financing statement amendments,
required or reasonably requested by the Servicer to effect such transfer.
ARTICLE IX
MISCELLANEOUS PROVISIONS
MISCELLANEOUS PROVISIONS
Section 9.1. Amendment.
(a) Subject to Section 9.1(f), this Agreement may be amended by the Depositor, the Servicer
and the Issuer, with ten Business Days’ prior notice by the Issuer to the Rating Agencies (and the
consent of the Indenture Trustee and the Owner Trustee to the extent that their respective rights
or obligations will be materially and adversely affected, which consent may not be unreasonably
withheld, delayed or conditioned), but without the consent of any of the Noteholders subject to the
following conditions:
(i) the Depositor, the Servicer or the Issuer delivers an Officer’s Certificate to the
Indenture Trustee and the Owner Trustee to the effect that such amendment will not
materially and adversely affect the interest of any Noteholder, and
(ii) the Depositor, the Servicer or the Issuer delivers an Opinion of Counsel to the
Indenture Trustee and the Owner Trustee to the effect that such amendment will not (A) cause
any Note to be deemed sold or exchanged for purposes of Section 1001 of the Code, (B) cause
the Issuer to be treated as an association or publicly traded partnership taxable as a
corporation for U.S. federal income tax purposes, or (C) adversely affect the treatment of
the Notes as debt for U.S. federal income tax purposes.
(b) Subject to Section 9.1(f), this Agreement also may be amended by the Depositor, the
Servicer and the Issuer, with ten Business Days’ prior notice by the Issuer to the Rating Agencies
and with the consent of (i) the Indenture Trustee, to the extent that its rights or obligations
will be materially and adversely affected by such amendment (which consent may
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not be unreasonably withheld, delayed or conditioned), (ii) the Owner Trustee, to the extent
that its rights and obligations will be materially and adversely affected by such amendment (which
consent may not be unreasonably withheld, delayed or conditioned), and (iii) the Noteholders of a
majority of the Note Balance of each Class of the Notes Outstanding (with each Class voting
separately, except that all Noteholders of the Class A Notes will vote together as a single class).
(c) Notwithstanding anything else stated in Section 9.1(a) or (b), no such amendment: may (i)
(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 or distributions that are required to be made for the
benefit of the Secured Parties, (B) change the percentage of the Initial Pool Balance at which the
Servicer may exercise its option to purchase the Trust Property pursuant to Section 8.1, or (C)
reduce the percentage of the Note Balance of the Notes Outstanding required to consent to any such
amendment, without the consent of all affected Noteholders, or (ii) change the Specified Reserve
Balance without receipt of the consent of all affected Noteholders.
(d) Promptly upon the execution of any amendment in accordance with this Section 9.1, the
Issuer will send a copy of such amendment to the Indenture Trustee and each Rating Agency, and the
Indenture Trustee will notify each Noteholder of the substance of such amendment.
(e) If the consent of the Owner Trustee, the Indenture Trustee or the Noteholders is required,
they do not need to approve the particular form of any proposed amendment so long as their consent
approves the substance of the proposed amendment.
(f) Before executing any amendment to this Agreement, the Owner Trustee and the Indenture
Trustee will be entitled to request, receive and rely upon an Opinion of Counsel delivered by the
Depositor stating that the execution of such amendment is authorized or permitted by this
Agreement.
Section 9.2. Protection of Right, Title and Interest to the Trust Property.
(a) The Depositor will file financing statements and continuation statements, in the manner
and place required by law to preserve, maintain and protect the interest of the Issuer and the
Indenture Trustee for the benefit of the Secured Parties in the Trust Property. The Depositor will
deliver to the Issuer and the Indenture Trustee file-stamped copies of, or filing receipts for, any
financing statement and continuation statement promptly upon such document becoming available
following filing. The Depositor authorizes the Issuer and the Indenture Trustee to file any
financing or continuation statements, and amendments to such statements, in all jurisdictions and
with all filing offices as the Issuer or the Indenture may determine are necessary or advisable to
preserve, maintain and protect the interest of the Issuer and the Indenture Trustee in the Trust
Property. Such financing and continuation statements may describe the Trust Property in any manner
as the Issuer or the Indenture Trustee may reasonably determine to ensure the perfection of the
interest of the Issuer and the Indenture Trustee in the Trust Property. The Issuer or the
Indenture Trustee, as applicable, will deliver to the Depositor file-stamped copies of, or filing
receipts for, any such financing statement and continuation statement promptly upon such document
becoming available following filing.
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(b) The (i) Depositor, the Issuer and the Indenture Trustee, if required or reasonably
requested by the other or by the Owner Trustee or the Indenture Trustee, and (ii) Owner Trustee, if
required or reasonably requested by the Indenture Trustee, agree to do and perform any and all acts
and to execute any and all further instruments to more fully effect the purposes of this Agreement.
(c) Each of the Depositor and the Servicer will give the Owner Trustee and the Indenture
Trustee at least 60 days’ prior notice of any change in its corporate structure, form of
organization or jurisdiction of organization if, as a result of such relocation or change, Section
9-307 of the UCC could require the filing of a new financing statement or an amendment to a
previously filed financing or continuation statement and will promptly file any such new financing
statement or amendment. Each of the Depositor and the Servicer will maintain its chief executive
office, and the Servicer will maintain each office from which it will service the Receivables,
within the United States and will maintain its jurisdiction of organization in only one State.
(d) Neither the Depositor nor the Servicer will change its name in any manner that could make
any financing statement or continuation statement filed by the Depositor, the Issuer or the
Indenture Trustee in accordance with Section 9.2(a) seriously misleading within the meaning of
Section 9-506 of the UCC, unless it has given the Owner Trustee and the Indenture Trustee at least
five days’ prior notice thereof and promptly files appropriate amendments to all previously filed
financing statements.
(e) On and after the Closing Date until a Receivable has been paid in full or repurchased, the
Servicer will maintain its computer systems to indicate clearly that such Receivable is owned by
the Issuer and has been pledged to the Indenture Trustee pursuant to the Indenture.
(f) At any time the Owner Trustee or the Indenture Trustee has reasonable grounds to believe
that a list of all Receivables (by contract number) then included in the Trust Property is
necessary in connection with the performance of its duties under any Transaction Document, the
Owner Trustee or the Indenture Trustee may request such a list from the Depositor and the Depositor
will furnish such list to the Owner Trustee and the Indenture Trustee within 30 Business Days of
the request.
(g) The Depositor will, to the extent required by applicable law, cause the Notes to be
registered with the Securities and Exchange Commission pursuant to Section 12(b) or Section 12(g)
of the Exchange Act, within the time periods specified in such sections.
Section 9.3. Notices.
(a) All notices, requests, demands, consents, waivers or other communications to or from the
parties to this Agreement must be in writing and will be deemed to have been given and made:
(i) upon delivery or, in the case of a letter mailed by registered first class mail,
postage prepaid, three days after deposit in the mail;
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(ii) in the case of a fax, when receipt is confirmed by telephone, reply email or reply
fax from the recipient;
(iii) in the case of an email, when receipt is confirmed by telephone or reply email
from the recipient; and
(iv) in the case of an electronic posting to a password-protected website to which the
recipient has been provided access, upon delivery of an email to such recipient stating that
such electronic posting has occurred.
Any such notice, request, demand, consent or other communication must be delivered or
addressed as set forth on Schedule B to this Agreement or at such other address as any party may
designate by notice to the other parties.
(b) Any notice required or permitted to be mailed to a Noteholder must be sent by overnight
delivery, mailed by registered first class mail, postage prepaid, or sent by fax, to the address of
such Person as shown in the Note Register. Any notice so mailed within the time prescribed in this
Agreement will be conclusively presumed to have been properly given, whether or not the Noteholder
receives such notice.
Section 9.4. Assignment by the Depositor or the Servicer. Except as provided in
Sections 6.4, 6.6 and 7.2, this Agreement may not be assigned by the Depositor or the Servicer
without the prior consent of the Owner Trustee, the Indenture Trustee, the holder of the Residual
Interest and the Noteholders of at least 66-2/3% of the Note Balance of the Notes Outstanding.
Section 9.5. Third-Party Beneficiaries. This Agreement will inure to the benefit of
and be binding upon the parties to this Agreement. The Owner Trustee and the Indenture Trustee for
the benefit of the Secured Parties will be third-party beneficiaries of this Agreement entitled to
enforce this Agreement against the Depositor and the Servicer. Except as otherwise provided in
this Agreement, no other Person will have any right or obligation under this Agreement.
Section 9.6. GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
Section 9.7. Submission to Jurisdiction. The parties submit to the nonexclusive
jurisdiction of the United States District Court for the Southern District of New York and of any
New York State Court sitting in New York, New York for purposes of all legal proceedings arising
out of or relating to this Agreement. The parties irrevocably waive, to the fullest extent they may
do so, any objection that they may now or hereafter have to the laying of the venue of any such
proceeding brought in such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
Section 9.8. WAIVER OF JURY TRIAL. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT.
29
Section 9.9. Severability. If any of the covenants, agreements or terms of this
Agreement is held invalid, illegal or unenforceable, then it will be deemed severable from the
remaining covenants, agreements or terms of this Agreement and will in no way affect the validity,
legality or enforceability of the remaining Agreement.
Section 9.10. Counterparts. This Agreement may be executed in any number of
counterparts. Each counterpart will be an original, and all counterparts will together constitute
one and the same instrument.
Section 9.11. Headings. The headings in this Agreement are included for convenience
only and will not affect the meaning or interpretation of this Agreement.
Section 9.12. No Waiver; Cumulative Remedies. No failure or delay of the Owner
Trustee, the Indenture Trustee or the Noteholders in exercising any power, right or remedy under
this Agreement will operate as a waiver. No single or partial exercise of any power, right or
remedy precludes any other or further exercise of such power, right or remedy or the exercise of
any other power, right or remedy. The powers, rights and remedies provided in this Agreement are
in addition to any powers, rights and remedies provided by law.
Section 9.13. Agent for Service.
(a) The agent for service of the Depositor in respect of this Agreement will be the person
holding the office of Corporate Secretary of the Depositor, at the following address:
Ford Credit Auto Receivables Two LLC
c/o Ford Motor Credit Company LLC
World Headquarters, Xxxxx 000-X0
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Securitization Operations Supervisor
Telephone: (000) 000-0000
Fax: (000) 000-0000
c/o Ford Motor Credit Company LLC
World Headquarters, Xxxxx 000-X0
Xxx Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Securitization Operations Supervisor
Telephone: (000) 000-0000
Fax: (000) 000-0000
(b) The agent for service of the Servicer in respect of this Agreement will be the person
holding the office of Corporate Secretary of the Servicer, at the following address:
Ford Motor Credit Company LLC
Xxx Xxxxxxxx Xxxx
Xxxxx 0000, Xxxxxx 000-000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
Xxx Xxxxxxxx Xxxx
Xxxxx 0000, Xxxxxx 000-000
Xxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Secretary
Telephone: (000) 000-0000
Fax: (000) 000-0000
Section 9.14. No Petition. The Owner Trustee, the Indenture Trustee, the Issuer and
the Servicer each covenants and agrees that, before the date that is one year and one day (or, if
longer, any applicable preference period) after the payment in full of (a) all securities issued by
the Depositor or by a trust for which the Depositor was a depositor or (b) the Notes, it will not
30
institute against, or join any other Person in instituting against, the Depositor or the
Issuer, respectively, any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings or other proceedings under any federal or State bankruptcy or similar law in connection
with any obligations relating to the Notes or any of the Transaction Documents. This Section 9.14
will survive the resignation or removal of the Owner Trustee under the Trust Agreement or the
Indenture Trustee under the Indenture and the termination of this Agreement.
Section 9.15. Limitation of Liability of Owner Trustee and Indenture Trustee.
(a) Notwithstanding anything contained in this Agreement to the contrary, this Agreement has
been countersigned by U.S. Bank Trust National Association, not in its individual capacity but
solely as Owner Trustee of the Issuer and in no event will U.S. Bank Trust National Association in
its individual capacity or, except as 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 under this Agreement or in any of the certificates, notices or agreements
delivered pursuant to this Agreement. For all purposes of this Agreement, in the performance of
its duties or obligations under this Agreement or in the performance of any duties or obligations
of the Issuer under this Agreement, the Owner Trustee will be subject to, and entitled to the
benefits of, Articles V, VI and VII of the Trust Agreement.
(b) Notwithstanding anything contained in this Agreement to the contrary, this Agreement has
been accepted by The Bank of New York Mellon, not in its individual capacity but solely as
Indenture Trustee, and in no event will The Bank of New York Mellon have any liability for the
representations, warranties, covenants, agreements or other obligations of the Issuer under this
Agreement or in any of the certificates, notices or agreements delivered pursuant to this
Agreement.
[Remainder of Page Intentionally Left Blank]
31
EXECUTED BY:
FORD CREDIT AUTO RECEIVABLES TWO LLC, | ||||||
as Depositor | ||||||
By: | /s/ Xxxxx X. Xxxxxx | |||||
Name: Xxxxx X. Xxxxxx | ||||||
Title: Secretary | ||||||
FORD CREDIT AUTO OWNER TRUST 2011-A, | ||||||
as Issuer | ||||||
By: | U.S. BANK TRUST NATIONAL ASSOCIATION, | |||||
not in its individual capacity but solely as Owner | ||||||
Trustee of Ford Credit Auto Owner Trust 2011-A | ||||||
By: | /s/ Xxxxxx Xxxxx | |||||
Name: Xxxxxx Xxxxx | ||||||
Title: Vice President | ||||||
FORD MOTOR CREDIT COMPANY LLC, | ||||||
as Servicer | ||||||
By: | /s/ Xxxxx X. Xxxxx | |||||
Name: Xxxxx X. Xxxxx | ||||||
Title: Assistant Treasurer |
[Signature Page to Sale and Servicing Agreement]
AGREED AND ACCEPTED BY: | ||||
THE BANK OF NEW YORK MELLON, | ||||
not in its individual capacity | ||||
but solely as Indenture Trustee | ||||
By: |
/s/ Xxxx Bourtman | |||
Name: Xxxx Bourtman | ||||
Title: Senior Associate | ||||
U.S. BANK TRUST NATIONAL ASSOCIATION, | ||||
not in its individual capacity | ||||
but solely as Owner Trustee | ||||
By: |
/s/ Xxxxxx Xxxxx | |||
Name: Xxxxxx Xxxxx | ||||
Title: Vice President | ||||
FORD MOTOR CREDIT COMPANY LLC, | ||||
as Custodian | ||||
By: |
/s/ Xxxxx X. Xxxxx | |||
Name: Xxxxx X. Xxxxx | ||||
Title: Assistant Treasurer |
[Signature Page to Sale and Servicing Agreement]
Schedule A
Schedule of Receivables
Delivered on CD-ROM to Indenture Trustee at Closing
SA-1
Schedule B
Notice Addresses
1. | If to Ford Credit, in its individual capacity or as Servicer, Custodian, Administrator or Sponsor under the Purchase Agreement: | |
Ford Motor Credit Company LLC c/o Ford Motor Company World Headquarters, Xxxxx 000-X0 Xxx Xxxxxxxx Xxxx Xxxxxxxx, Xxxxxxxx 00000 Attention: Securitization Operations Supervisor Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
With a copy to: | ||
Ford Motor Credit Company LLC Xxx Xxxxxxxx Xxxx Xxxxx 0000, Xxxxxx 000-000 Xxxxxxxx, Xxxxxxxx 00000 Attention: Corporate Secretary Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
2. | If to the Depositor: | |
Ford Credit Auto Receivables Two LLC c/o Ford Motor Company World Headquarters, Xxxxx 000-X0 Xxx Xxxxxxxx Xxxx Xxxxxxxx, Xxxxxxxx 00000 Attention: Ford Credit SPE Management Office Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
With a copy to: | ||
Ford Motor Credit Company LLC Xxx Xxxxxxxx Xxxx Xxxxx 0000, Xxxxxx 000-000 Xxxxxxxx, Xxxxxxxx 00000 Attention: Corporate Secretary Telephone: (000) 000-0000 Fax: (000) 000-0000 |
SB-1
3. | If to the Issuer: | |
c/o the Owner Trustee at the Corporate Trust Office of the Owner Trustee | ||
With copies to: | ||
Ford Motor Credit Company LLC c/o Ford Motor Company World Headquarters, Xxxxx 000-X0 Xxx Xxxxxxxx Xxxx Xxxxxxxx, Xxxxxxxx 00000 Attention: Ford Credit SPE Management Office Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
and | ||
Ford Motor Credit Company LLC Xxx Xxxxxxxx Xxxx Xxxxx 0000, Xxxxxx 000-000 Xxxxxxxx, Xxxxxxxx 00000 Attention: Corporate Secretary Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
4. | If to the Owner Trustee, at the Corporate Trust Office of the Owner Trustee | |
5. | If to the Indenture Trustee, at the Corporate Trust Office of the Indenture Trustee; | |
6. | If to Standard & Poor’s: | |
Standard & Poor’s Ratings Services, a Standard & Poor’s Financial Services LLC business, 00 Xxxxx Xxxxxx, 00xx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Asset Backed Surveillance Department Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
7. | If to Moody’s: | |
Xxxxx’x Investors Service, Inc. 7 World Trade Center 000 Xxxxxxxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Asset Finance Group — 24th floor Telephone: (000) 000-0000 Fax: (000) 000-0000 |
||
8. | If to Fitch: | |
Fitch, Inc. 0 Xxxxx Xxxxxx Xxxxx Xxx Xxxx, Xxx Xxxx 00000 Attention: Asset Backed Surveillance Telephone: (000) 000-0000 Fax: (000) 000-0000] |
SB-2
Appendix A
USAGE AND DEFINITIONS
Usage
The following rules of construction and usage apply to this Appendix, any agreement that
incorporates this Appendix and any document made or delivered pursuant to any such agreement:
(a) The term “documents” includes any and all documents, agreements, instruments,
certificates, notices, reports, statements or other writings however evidenced, whether in
electronic or physical form.
(b) Accounting terms not defined or not completely defined in this Appendix will be construed
in conformity with U.S. generally accepted accounting principles as in effect on the date of the
document that incorporates this Appendix.
(c) References to “Article,” “Section,” “Exhibit,” “Schedule,” “Appendix” or another
subdivision of or to an attachment are, unless otherwise specified, to an article, section,
exhibit, schedule, appendix or subdivision of or an attachment to the document in which such
reference appears.
(d) Any document defined or referred to in this Appendix or in any document that incorporates
this Appendix means such document as from time to time amended, modified, supplemented or replaced,
including by waiver or consent, and includes all attachments to and instruments incorporated in
such document.
(e) Any statute defined or referred to in this Appendix or in any document that incorporates
this Appendix means such statute as from time to time amended, modified, supplemented or replaced,
including by succession of comparable successor statutes, and includes any rules and regulations
promulgated under such statute and any judicial and administrative interpretations of such statute.
(f) Calculation of any amount on or as of any date will be determined at or as of the close of
business on such day after the application of any monies, payments and other transactions to be
applied on such day, except that calculations as of the Cutoff Date will be determined as of the
open of business on such day prior to the application of any monies, payments and other
transactions to be applied on such day.
(g) In the computation of periods of time from a specified date to a later specified date, the
word “from” means “from and including,” the word “to” means “to but excluding” and the word
“through” means “to and including.”
(h) All terms defined in this Appendix apply to the singular and plural forms of such terms
and the term “including” means “including without limitation.”
(i) | References to a Person are also to its permitted successors and assigns. |
AA-1
Definitions
“Accrued Note Interest” means, for a Class and a Payment Date, the sum of the Note
Monthly Interest and the Note Interest Shortfall.
“Act of Noteholders” has the meaning specified in Section 11.3(a) of the Indenture.
“Adjusted Pool Balance” means, on the Closing Date, an amount equal to:
(a) | the Initial Pool Balance, minus | ||
(b) | the Yield Supplement Overcollateralization Amount for the Closing Date, |
and means, on a Payment Date, an amount (not less than zero) equal to:
(a) | the Pool Balance as of the last day of the preceding Collection Period, minus | ||
(b) | the Yield Supplement Overcollateralization Amount for such Payment Date. |
“Administration Agreement” means the Administration Agreement, dated as of the Cutoff
Date, among the Administrator, the Issuer and the Indenture Trustee.
“Administrator” means Ford Credit, in its capacity as administrator under the
Administration Agreement.
“Affiliate” means, for a specified Person, any other Person controlling, controlled by
or under common control with such specified Person. For the purposes of this definition, “control”
when used with respect to any Person means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting securities, by contract or
otherwise.
“Amount Financed” means, for a Receivable, the amount financed by the Obligor for the
purchase of the Financed Vehicle, the purchase of service contracts, physical damage, credit life
and disability insurance and similar products, prior balances on trade-in vehicles and other
related fees and charges.
“Annual Percentage Rate” or “APR” of a Receivable means the annual rate of
finance charges stated in the Receivable or in any federal Truth In Lending Act correction notice
related to the Receivable.
“Applicable Tax State” means the State in which the Owner Trustee maintains its
Corporate Trust Office, the State in which the Owner Trustee maintains its principal executive
offices and the State of Michigan.
“Authenticating Agent” has the meaning specified in Section 2.12(a) of the Indenture.
AA-2
“Available Funds” means, for a Payment Date, the sum of the following amounts for such
Payment Date:
(a) | Collections for the related Collection Period in the Collection Account, plus | ||
(b) | Purchase Amounts received on Receivables that became Purchased Receivables during the related Collection Period, plus | ||
(c) | any amounts deposited by the Servicer to purchase the Trust Property on such Payment Date pursuant to Section 8.1 of the Sale and Servicing Agreement, plus | ||
(d) | the Reserve Account Draw Amount. |
“Bank Accounts” means the Reserve Account, the Collection Account and the Principal
Payment Account.
“Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C. 101 et
seq.
“Book-Entry Note” means a beneficial interest in any of the Notes issued in book-entry
form as described in Section 2.10 of the Indenture, which will initially include the Class A-1
Notes, the Class A-2 Notes, the Class A-3 Notes, the Class A-4 Notes, the Class B Notes, the Class
C Notes and the Class D Notes.
“Business Day” means any day other than a Saturday, a Sunday or a day on which banking
institutions or trust companies in New York, New York or the State of Delaware are authorized or
obligated by law, regulation or executive order to close.
“Certificate of Formation” means the Amended and Restated Certificate of Formation of
the Depositor or the Certificate of Formation of Ford Credit, as amended, as the context requires.
“Certificate of Trust” means the Certificate of Trust of Ford Credit Auto Owner Trust
2011-A.
“Class” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class B Notes, the Class C Notes or the Class D Notes, as applicable.
“Class A Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes
and the Class A-4 Notes.
“Class A-1 Note Transfer” has the meaning specified in Section 2.4(i) of the
Indenture.
“Class A-1 Note Purchase Agreement” means the Class A-1 Note Purchase Agreement, dated
January 25, 2011, among the Depositor, Ford Credit and Barclays Capital Inc., Citigroup Global
Markets Inc. and X.X. Xxxxxx Securities LLC, as the “Class A-1 Note Purchasers.”
“Class A-1 Notes” means the $255,000,000 Class A-1 0.28900% Asset Backed Notes issued
by the Issuer, substantially in the form of Exhibit A to the Indenture.
“Class A-1 Note Transfer” has the meaning specified in Section 2.4(i) of the
Indenture.
AA-3
“Class A-2 Notes” means the $276,800,000 Class A-2 0.62% Asset Backed Notes issued by
the Issuer, substantially in the form of Exhibit A to the Indenture.
“Class A-3 Notes” means the $335,300,000 Class A-3 0.97% Asset Backed Notes issued by
the Issuer, substantially in the form of Exhibit A to the Indenture.
“Class A-4 Notes” means the $191,990,000 Class A-4 1.65% Asset Backed Notes issued by
the Issuer, substantially in the form of Exhibit A to the Indenture.
“Class B Notes” means the $33,440,000 Class B 2.38% Asset Backed Notes issued by the
Issuer, substantially in the form of Exhibit B to the Indenture.
“Class C Notes” means the $22,290,000 Class C 2.62% Asset Backed Notes issued by the
Issuer, substantially in the form of Exhibit B to the Indenture.
“Class C Note Transfer” has the meaning specified in Section 2.4(i) of the Indenture.
“Class D Notes” means the $22,290,000 Class D 3.21% Asset Backed Notes issued by the
Issuer, substantially in the form of Exhibit B to the Indenture.
“Class D Note Transfer” has the meaning specified in Section 2.4(i) of the Indenture.
“Clearing Agency” means an organization registered as a “clearing agency” pursuant to
Section 17A of the Exchange Act.
“Closing Date” means January 28, 2011.
“Code” means the Internal Revenue Code of 1986.
“Collateral” means (a) the Trust Property, (b) the Issuer’s rights under the Sale and
Servicing Agreement, (c) all present and future claims, demands, causes of action and choses in
action in respect of the foregoing, and (d) all payments on or under and all proceeds of the
foregoing, but excluding, the Trust Distribution Account (if established) and all funds in the
Trust Distribution Account, if any.
“Collection Account” means the account or accounts established and maintained pursuant
to Section 4.1(a) of the Sale and Servicing Agreement.
“Collection Period” means each calendar month, commencing with the Cutoff Date. For
any Payment Date and Determination Date or for purposes of determining the Principal Balance, Pool
Balance or Note Pool Factor, the related Collection Period means the Collection Period preceding
(a) such Payment Date or Determination Date or (b) the month in which the Principal Balance, Pool
Balance or Note Pool Factor is determined.
“Collections” means, for a Collection Period, all amounts received and applied by the
Servicer on the Receivables during such Collection Period, including, without duplication:
(a) | payments received from Obligors, plus |
AA-4
(b) | payments received on behalf of Obligors, including amounts under physical damage, credit life and disability insurance, plus | ||
(c) | partial prepayments due to refunds of cancelled items originally included in the Amount Financed, such as service contracts, physical damage, credit life and disability insurance and similar products, plus | ||
(d) | Liquidation Proceeds, plus | ||
(e) | Recoveries, |
but excluding
(a) | amounts constituting the Supplemental Servicing Fee, plus | ||
(b) | amounts on any Receivable for which the Purchase Amount is included in the Available Funds for the related Payment Date. |
“Control Agreement” means the Account Control Agreement, dated as of the Cutoff Date,
among the Issuer, the Indenture Trustee and The Bank of New York Mellon, in its capacity as a
securities intermediary.
“Controlling Class” means (a) the Outstanding Class A Notes, (b) if no Class A Notes
are Outstanding, the Outstanding Class B Notes, (c) if no Class B Notes are Outstanding, the
Outstanding Class C Notes, and (d) if no Class C Notes are Outstanding, the Outstanding Class D
Notes.
“Corporate Trust Office” means,
(a) | with respect to the Owner Trustee: | ||
000 Xxxxxxxx Xxxxxx, 0xx Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000 Attention: Corporate Trust Services Telephone: (000) 000-0000 Fax: (000) 000-0000 |
or at such other address in the State of Delaware as the Owner Trustee may designate by notice to
the Indenture Trustee, the Administrator and the Depositor, and
(b) | with respect to the Indenture Trustee: | |||||
000 Xxxxxxx Xxxxxx | ||||||
Xxxxx 0 Xxxx | ||||||
Xxx Xxxx, Xxx Xxxx 00000 | ||||||
Attention: | Structured Finance Services — Asset Backed Securities | |||||
Ford Credit Auto Owner Trust 2011-A | ||||||
Telephone: (000) 000-0000 | ||||||
Fax: (000) 000-0000 |
AA-5
or at such other address as the Indenture Trustee may designate by notice to the Owner Trustee and
the Administrator.
“Credit and Collection Policy” means the credit and collection policies and procedures
of Ford Credit relating to retail installment sale contracts originated or purchased and serviced
by Ford Credit as they may change from time to time.
“Custodian” has the meaning specified in Section 2.5 of the Sale and Servicing
Agreement.
“Cutoff Date” means January 1, 2011.
“Dealer” means the seller of a Financed Vehicle, originator of the related Receivable
and seller of the Receivable to Ford Credit.
“Dealer Recourse” means all recourse rights against the originating Dealer on a
Receivable.
“Default” means any occurrence that with notice or the lapse of time or both would
become an Event of Default.
“Definitive Notes” has the meaning specified in Section 2.10 of the Indenture.
“Delaware Limited Liability Company Act” means Chapter 18 of Title 6 of the Delaware
Code.
“Delaware Statutory Trust Act” means Chapter 38 of Title 12 of the Delaware Code.
“Delinquent” means a Receivable on which more than $49.99 of the scheduled payment
required to be paid by the Obligor is past due.
“Depositor” means Ford Credit Auto Receivables Two LLC.
“Determination Date” means, for a Collection Period, the Business Day immediately
preceding the related Payment Date.
“DTC Letter” means the letter of representations for the Notes, dated January 28, 2011
between the Issuer and The Depository Trust Company.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“Event of Default” has the meaning specified in Section 5.1(a) of the Indenture.
“Exchange Act” means the Securities Exchange Act of 1934.
AA-6
“Final Scheduled Payment Date” means, for each Class, the Payment Date specified
below:
Class | Final Scheduled Payment Date | |||
Class A-1 |
February 15, 2012 | |||
Class A-2 |
July 15, 2013 | |||
Class A-3 |
January 15, 2015 | |||
Class A-4 |
May 15, 2016 | |||
Class B |
July 15, 2016 | |||
Class C |
October 15, 2016 | |||
Class D |
July 15, 2017 |
“Financed Vehicle” means a new or used car, light truck or utility vehicle and all
related accessories securing an Obligor’s indebtedness under a Receivable.
“First Priority Principal Payment” means, for a Payment Date, the greater of:
(a) an amount (not less than zero) equal to the Note Balance of the Class A Notes as of the
preceding Payment Date (or, in the case of the initial Payment Date, as of the Closing Date)
minus the Adjusted Pool Balance, and
(b) on and after the Final Scheduled Payment Date of any Class A Notes, the Note Balance of
such Class A Notes.
“Fitch” means Fitch, Inc., d/b/a Fitch Ratings.
“Ford Credit” means Ford Motor Credit Company LLC, a Delaware limited liability
company.
“Grant” means to mortgage, pledge, assign and to xxxxx x xxxx upon and a security
interest in the relevant property.
“Indemnified Person” has the meaning specified in Section 6.7(c) of the Indenture,
Section 6.3(b) of the Sale and Servicing Agreement and Section 7.2(b) of the Trust Agreement, as
applicable.
“Indenture” means the Indenture, dated as of the Cutoff Date, between the Issuer and
the Indenture Trustee.
“Indenture Trustee” means The Bank of New York Mellon, a New York banking corporation,
not in its individual capacity but solely as Indenture Trustee under the Indenture.
“Independent” means that the relevant Person (a) is independent of the Issuer, the
Depositor and their Affiliates, (b) does not have any direct financial interest or any material
indirect financial interest in the Issuer, the Depositor or their Affiliates, and (c) is not an
officer, employee, promoter, underwriter, trustee, partner, director or person performing similar
functions of or for the Issuer, the Depositor or their Affiliates.
AA-7
“Independent Certificate” means a certificate or opinion to be delivered to the
Indenture Trustee under Section 11.1 of the Indenture, signed by an Independent appraiser or other
expert appointed by an Issuer Order and approved by the Indenture Trustee in the exercise of
reasonable care, and stating that the signer has read the definition of “Independent” and that the
signer is Independent.
“Initial Pool Balance” means $1,219,072,241.43, the aggregate Principal Balance of the
Receivables as of the Cutoff Date.
“Initial Purchaser” means Ford Credit Auto Receivables Two LLC.
“Insolvency Event” means, for a Person, (a) the making of a general assignment for the
benefit of creditors, (b) the filing of a voluntary petition in bankruptcy, (c) being adjudged
bankrupt or insolvent, or having had an order entered against such Person for relief in any
bankruptcy or insolvency proceeding, (d) the filing by such Person of a petition or answer seeking
reorganization, liquidation, dissolution or similar relief under any statute, law or regulation,
(e) seeking, consenting to or acquiescing in the appointment of a trustee, liquidator, receiver or
similar official of such Person or of all or any substantial part of such Person’s assets, (f) the
failure to obtain dismissal or a stay within 60 days of the commencement of or the filing by such
Person of an answer or other pleading admitting or failing to contest the material allegations of a
petition filed against such Person in any proceeding against such Person seeking (i)
reorganization, liquidation, dissolution or similar relief under any statute, law or regulation, or
(ii) the appointment of a trustee, liquidator, receiver or similar official of such Person or of
all or any substantial part of such Person’s assets, or (g) the failure by such Person generally to
pay its debts as such debts become due.
“Interest Period” means, for a Payment Date, (a) for the Class A-1 Notes, from the
preceding Payment Date to the following Payment Date (or from the Closing Date to February 15,
2011, in the case of the first Payment Date) or, if the Class A-1 Notes are not paid in full prior
to their Final Scheduled Payment Date, to the Final Scheduled Payment Date for the Class A-1 Notes,
if earlier, and (b) for each other Class, from the 15th day of the calendar month preceding each
Payment Date to the 15th day of the following calendar month (or from the Closing Date to February
15, 2011 in the case of the first Payment Date).
“Investment Company Act” means the Investment Company Act of 1940.
“Issuer” means Ford Credit Auto Owner Trust 2011-A.
“Issuer Order” and “Issuer Request” has the meaning specified in Section
11.1(a) of the Indenture.
“Lien” means a security interest, lien, charge, pledge or encumbrance.
“Limited Liability Company Agreement” means the Amended and Restated Limited Liability
Company Agreement of the Depositor, dated as of March 1, 2001, executed by Ford Credit, as sole
member; or the Limited Liability Company Agreement of Ford Credit, dated as of April 30, 2007 and
effective on May 1, 2007, as the context requires.
AA-8
“Liquidated Receivable” means a Receivable for which the Servicer has received and
applied the proceeds of a sale by auction or other disposition of the related Financed Vehicle.
“Liquidation Proceeds” means, for a Collection Period and any Liquidated Receivable
and any other Receivable that is charged off during such Collection Period in accordance with the
Credit and Collection Policy, an amount equal to:
(a) | all amounts received and applied by the Servicer with respect to such Receivable from whatever source, whether allocable to interest or principal, during such Collection Period, minus | ||
(b) | Recoveries with respect to such Receivable, minus | ||
(c) | the sum of any amounts expended by the Servicer for the account of the related Obligor in accordance with the Credit and Collection Policy, including collection expenses and all amounts paid to third parties in connection with the repossession, transportation, reconditioning and disposition of the related Financed Vehicle, minus | ||
(d) | any amounts required by law or under the Credit and Collection Policy to be remitted to the related Obligor. |
“Monthly Investor Report” has the meaning specified in Section 3.4(a) of the Sale and
Servicing Agreement.
“Monthly Remittance Required Ratings” has the meaning specified in Section 4.3(a) of
the Sale and Servicing Agreement.
“Moody’s” means Xxxxx’x Investors Service, Inc.
“Note Balance” means, for a Note or Class, the initial aggregate principal amount of
such Note or Class minus all amounts distributed on such Note or Class that is allocable to
principal.
“Note Interest Rate” means, for each Class, the interest rate per annum specified
below:
Class | Note Interest Rate | |||
Class A-1 |
0.28900 | % | ||
Class A-2 |
0.62 | % | ||
Class A-3 |
0.97 | % | ||
Class A-4 |
1.65 | % | ||
Class B |
2.38 | % | ||
Class C |
2.62 | % | ||
Class D |
3.21 | % |
“Note Interest Shortfall” means, for a Class and a Payment Date, an amount equal to:
(a) | the Note Monthly Interest for such Class for the preceding Payment Date, plus |
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(b) | any Note Interest Shortfall for such Class for the preceding Payment Date together with interest on such Note Interest Shortfall, to the extent lawful, at the Note Interest Rate for such Class for the related Interest Period, minus | ||
(c) | the amount of interest that was paid to the Noteholders of such Class on such preceding Payment Date. |
“Note Monthly Interest” means, for a Class and a Payment Date, the aggregate amount of
interest accrued on the Note Balance of that Class at the Note Interest Rate for such Class for the
related Interest Period.
“Note Owner” means, for a Book-Entry Note, the Person who is the beneficial owner of a
Book-Entry Note as reflected on the books of the Clearing Agency or on the books of a Person
maintaining an account with such Clearing Agency (as a direct participant or as an indirect
participant, in each case in accordance with the rules of such Clearing Agency).
“Note Paying Agent” means the Indenture Trustee and any other Person appointed as Note
Paying Agent pursuant to Section 2.13 of the Indenture.
“Note Pool Factor” means, for a Class and a Payment Date, a seven-digit decimal figure
equal to the Note Balance of such Class after giving effect to any principal payments to be made on
such Class on that Payment Date divided by the initial Note Balance of such Class.
“Note Register” and “Note Registrar” have the meanings specified in Section
2.4 of the Indenture.
“Noteholder” means the Person in whose name a Note is registered on the Note Register.
“Notes” means the Class A-1 Notes, the Class A-2 Notes, the Class A-3 Notes, the Class
A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes, collectively.
“Obligor” means the purchaser or co-purchasers of the Financed Vehicle or any
guarantor or other Person who owes payments under the related Receivable (not including any Dealer
for Dealer Recourse).
“Officer’s Certificate” means (a) for the Issuer, a certificate signed by a
Responsible Person of the Issuer and (b) for the Depositor or the Servicer, a certificate signed by
any officer of the Depositor or the Servicer, as applicable.
“Opinion of Counsel” means a written opinion of counsel which counsel is reasonably
acceptable to the Indenture Trustee, the Owner Trustee and the Rating Agencies, as applicable.
“Other Assets” means any assets or interests in any assets (other than the Trust
Property) conveyed or purported to be conveyed by the Depositor to any Person other than the
Issuer, whether by way of a sale, capital contribution, the Grant of a Lien or otherwise.
“Outstanding” means, as of any date, all Notes authenticated and delivered under the
Indenture on or before such date except (a) Notes that have been cancelled by the Note Registrar
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or delivered to the Note Registrar for cancellation, (b) Notes or portions of Notes to the
extent an amount necessary to pay all or a portion of such Notes has been deposited with the
Indenture Trustee or any Note Paying Agent in trust for the Noteholders of such Notes on or before
such date; provided that if such Notes are to be redeemed, notice of such redemption has
been given pursuant to the Indenture or provision for such notice has been made in a manner
satisfactory to the Indenture Trustee, and (c) Notes in exchange for or in lieu of which other
Notes have been authenticated and delivered pursuant to the Indenture unless proof satisfactory to
the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser;
provided that in determining whether (i) Noteholders evidencing the required Note Balance
have given any request, demand, authorization, direction, notice, consent or waiver under any
Transaction Document, Notes owned by the Issuer, the Depositor, the Servicer or their Affiliates
will be deemed not to be Outstanding, and (ii) the Indenture Trustee is protected in relying on any
such request, demand, authorization, direction, notice, consent or waiver, only Notes that a
Responsible Person of the Indenture Trustee knows to be so owned will be deemed not to be
Outstanding; provided, however, that, notwithstanding the foregoing, Notes owned by
the Issuer, the Depositor, the Servicer or their Affiliates will be treated as Outstanding if (i)
no other Notes remain Outstanding or (ii) such Notes have been pledged in good faith and the
pledgee establishes to the satisfaction of the Indenture Trustee the pledgee’s right to act with
respect to such Notes and that the pledgee is not the Issuer, the Depositor, the Servicer or their
Affiliates.
“Owner Trustee” means U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Owner Trustee under the Trust Agreement.
“Payment Date” means the 15th day of each calendar month or, if not a Business Day,
the next Business Day, commencing in the first full month after the Closing Date.
“Permitted Investments” means book-entry securities, negotiable instruments or
securities represented by instruments in bearer or registered form that evidence:
(a) | direct non-callable obligations of, and obligations fully guaranteed as to timely payment by, the United States, | ||
(b) | demand deposits, time deposits, certificates of deposit or bankers’ acceptances of any depository institution or trust company (i) incorporated under the laws of the United States or any State or any United States branch or agency of a foreign bank, (ii) subject to supervision and examination by federal or State banking or depository institution authorities, and (iii) that at the time the investment or contractual commitment to invest is made, the commercial paper or other short-term unsecured debt obligations (other than obligations with a rating based on the credit of a Person other than such depository institution or trust company) of such depository institution or trust company have the Required Rating, | ||
(c) | commercial paper, including asset-backed commercial paper, having, at the time the investment or contractual commitment to invest is made, the Required Rating, |
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(d) | investments in money market funds having, at the time the investment or contractual commitment to invest is made, a rating in the highest investment grade category from each of the Rating Agencies (including funds for which the Indenture Trustee or the Owner Trustee or any of their Affiliates is investment manager or advisor), | ||
(e) | repurchase obligations with respect to any security that is a direct non-callable obligation of, or fully guaranteed by, the United States or any agency or instrumentality of the United States the obligations of which are backed by the full faith and credit of the United States, in either case entered into with a depository institution or trust company (acting as principal) described in clause (b) above, and | ||
(f) | any other investment that satisfied the Rating Agency Condition. |
“Permitted Lien” means a tax, mechanics’ or other Lien that attaches by operation of
law, or any security interest of the Depositor in the Purchased Property under the Purchase
Agreement, the Issuer in the Trust Property under the Sale and Servicing Agreement or the Indenture
Trustee in the Collateral under the Indenture.
“Person” means any legal person, including any corporation, natural person, joint
venture, limited liability company, partnership, trust, business trust, association, government,
any department or agency of any government or any other entity of whatever nature.
“Pool Balance” means, on the last day of a Collection Period, an amount equal to the
aggregate Principal Balance of the Receivables as of such day, excluding Purchased Receivables.
“Preliminary Prospectus” means the preliminary prospectus supplement, dated January
21, 2011, to the Depositor’s prospectus, dated January 21, 2011.
“Principal Balance” means, for a Receivable as of the last day of a month, an amount
(not less than zero) equal to:
(a) | the Amount Financed, minus | ||
(b) | the portion of all amounts applied on or prior to such date allocable to principal, minus | ||
(c) | Realized Losses. |
“Principal Payment Account” means the account established and maintained pursuant to
Section 4.1(b) of the Sale and Servicing Agreement.
“Proceeding” means any suit in equity, action at law or other judicial or
administrative proceeding, or governmental investigation.
“Prospectus” means (a) the final prospectus supplement, dated January 25, 2011, to the
Depositor’s prospectus, dated January 21, 2011, relating to the Class A-2 Notes, the Class A-3
Notes, the Class A-4 Notes, the Class B Notes, the Class C Notes and the Class D Notes and (b)
the final offering memorandum, dated January 25, 2011, relating to the Class A-1 Notes.
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“Purchase Agreement” means the Purchase Agreement, dated as of the Cutoff Date,
between the Sponsor and the Depositor.
“Purchase Amount” means, for a Receivable for which the Purchase Amount is to be
included in Available Funds for a Payment Date, the Principal Balance of the Receivable as of the
last day of the second preceding Collection Period plus 30 days of interest at the applicable APR
or, if such Receivable has been charged off, an amount equal to the Realized Loss on such
Receivable minus any Recoveries through the last day of the preceding Collection Period.
“Purchased Property” means (a) the Receivables, (b) all amounts received and applied
on the Receivables on or after the Cutoff Date, (c) the security interests in the Financed Vehicles
granted by Obligors pursuant to the Receivables and any other interest of Ford Credit in the
Financed Vehicles, (d) rights to receive proceeds from claims on any physical damage, credit life,
credit disability or other insurance policies covering Financed Vehicles or Obligors, (e) Dealer
Recourse, (f) the Receivables Files, (g) all property securing the Receivables, (h) rebates of
premiums and other amounts relating to insurance policies and other items financed under the
Receivables in effect as of the Cutoff Date, (i) all present and future claims, demands, causes of
action and choses in action in respect of any of the foregoing, and (j) all payments on or under
and all proceeds in respect of any of the foregoing.
“Purchased Receivable” means, for a Collection Period, a Receivable (a) purchased by
the Servicer pursuant to Section 3.2(a) of the Sale and Servicing Agreement, (b) repurchased by the
Depositor pursuant to Section 2.4(a) of the Sale and Servicing Agreement, or (c) repurchased by
Ford Credit pursuant to Section 3.3(a) of the Purchase Agreement and for which, in each case, the
Purchase Amount is included in Available Funds for the related Payment Date.
“QIB” has the meaning specified in Section 2.4 of the Indenture.
“Qualified Institution” means (a) any bank or depository institution organized under
the laws of the United States or any State or any United States branch or agency of a foreign bank
or depository institution that (i) is subject to supervision and examination by federal or State
banking authorities, (ii) has a short-term deposit rating of “P-1” from Moody’s, “A-1+” from
Standard & Poor’s and “F1” from Fitch (if rated by Fitch), (iii) if such institution holds any Bank
Accounts other than as segregated trust accounts and the deposits are to be held in such accounts
more than 30 days, has a long-term unsecured debt rating or issuer rating of “AA” from Standard &
Poor’s or “A” or better from Fitch (if rated by Fitch), and (iv) if such institution is organized
under the laws of the United States, whose deposits are insured by the Federal Deposit Insurance
Corporation, or (b) the corporate trust department of any bank or depository institution organized
under the laws of the United States or any State or any United States branch or agency of a foreign
bank or depository institution that is subject to supervision and examination by federal or State
banking authorities that (x) is authorized under such laws to act as a trustee or in any other
fiduciary capacity, and (y) has a long-term deposit rating of “Baa3” or better from Moody’s and “A”
or better from Fitch (if rated by Fitch).
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“Rating Agency” means, as of any date, each nationally recognized statistical rating
organization that has been engaged by the Depositor to provide a rating on the Notes and is then
rating the Notes.
“Rating Agency Condition” means, for an action or request, (a) with respect to
Standard & Poor’s, that Standard & Poor’s has notified the Depositor, the Servicer, the Owner
Trustee and the Indenture Trustee that the proposed action will not result in a downgrade or
withdrawal of the then current rating on any of the Notes, (b) with respect to Fitch, the Issuer
has given ten days prior written notice to Fitch and Fitch has not notified the Depositor, the
Servicer, the Owner Trustee and the Indenture Trustee before the end of such ten day period in
writing that such action will result in a downgrade or withdrawal of the then current rating on any
of the Notes, and (c) with respect to Moody’s, that (i) except as provided in clause (ii), the
Issuer has given ten days’ prior written notice to Moody’s and Moody’s has not notified the
Depositor, the Servicer, the Owner Trustee and the Indenture Trustee in writing that such action
will result in a downgrade or withdrawal of the then current rating on any of the Notes, and (ii)
in the case of an action described in clause (f) of the definition of “Permitted Investments” or in
connection with the remittance of amounts on the related Payment Date pursuant to the Sale and
Servicing Agreement, including Section 3.2 or 4.3 thereof, Moody’s has notified the Depositor, the
Servicer, the Owner Trustee and the Indenture Trustee in writing that such action will not result
in a reduction or withdrawal of its then current rating of the Notes.
“Realized Loss” means, for a Receivable that is charged off by the Servicer in
accordance with the Credit and Collection Policy, an amount (not less than zero) equal to:
(a) | the Principal Balance of such Receivable as of the last day of the Collection Period preceding the Collection Period in which the Receivable is charged off, minus | ||
(b) | any Liquidation Proceeds received in the Collection Period in which the Receivable is charged off. |
“Receivable” means, for a Collection Period, any retail installment sale contract or
finance contract listed on the Schedule of Receivables, excluding any such contract that became a
Purchased Receivable during a preceding Collection Period.
“Receivables Files” has the meaning specified in Section 2.5 of the Sale and Servicing
Agreement.
“Record Date” means, for a Payment Date and a Book-Entry Note, the close of business
on the day before such Payment Date and, for a Payment Date and a Definitive Note, the last day of
the month preceding the month in which such Payment Date occurs.
“Recoveries” means, for a Receivable that has been charged off in accordance with the
Credit and Collection Policy (whether or not such Receivable is a Liquidated Receivable) and a
Collection Period, an amount equal to:
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(a) | all amounts received and applied by the Servicer during such Collection Period with respect to such Receivable from whatever source, whether allocable to interest or principal, after the date it was charged off, minus | ||
(b) | the sum of any amounts expended by the Servicer for the account of the related Obligor in accordance with the Credit and Collection Policy, including collection expenses and all amounts paid to third parties in connection with the repossession, transportation, reconditioning and disposition of the related Financed Vehicle, to the extent such amounts have not been included in calculating Liquidation Proceeds for such Collection Period, minus | ||
(c) | any amounts required by law or under the Credit and Collection Policy to be remitted to the Obligor. |
“Redemption Date” means the Payment Date specified by the Servicer for a redemption of
the Notes pursuant to Section 10.1 of the Indenture.
“Registered Noteholder” means the Person in whose name a Note is registered on the
Note Register on the applicable Record Date.
“Regular Principal Payment” means, for a Payment Date, the greater of:
(a) | an amount (not less than zero) equal to: |
(i) | the greater of: |
(A) | the Note Balance of the Class A-1 Notes as of the preceding Payment Date or the Closing Date, as applicable, and | ||
(B) | an amount equal to: |
(1) | the aggregate Note Balances of all Notes as of the preceding Payment Date or the Closing Date, as applicable, minus | ||
(2) | the Pool Balance as of the last day of the preceding Collection Period minus the Targeted Overcollateralization Amount, minus |
(ii) | the sum of the First Priority Principal Payment, the Second Priority Principal Payment and the Third Priority Principal Payment; and |
(b) | on and after the Final Scheduled Payment Date of the Class D Notes, the Note Balance of the Class D Notes. |
“Regulation AB” means Subpart 229.1100 — Asset Backed Securities (Regulation AB), 17
C.F.R. §§229.1100-229.1123, as clarified and interpreted by the Securities and Exchange Commission
or its staff.
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“Required Rating” means, for short-term unsecured debt obligations, a rating of (a)
“P-1” from Moody’s, (b) “a-1+” from Standard & Poor’s and (c) if rated by Fitch, “F1+” from Fitch.
“Reserve Account” means the account established and maintained pursuant to Section
4.1(c) of the Sale and Servicing Agreement.
“Reserve Account Draw Amount” means, for a Payment Date, the lesser of:
(a) | an amount (not less than zero) equal to the Total Required Payment minus the Available Funds determined without regard to the Reserve Account Draw Amount, and | ||
(b) | the amount in the Reserve Account minus any net investment earnings. |
“Residual Interest” means a beneficial ownership interest in the Issuer, as recorded
on the Trust Register.
“Responsible Person” means:
(a) | for the Administrator, the Depositor, the Sponsor and the Servicer, any Person designated in an Officer’s Certificate of such Person or other notice signed by an officer of such Person as authorized to act for such Person, which Officer’s Certificate or other notice has been sent to all other transaction parties including the Owner Trustee and the Indenture Trustee, | ||
(b) | with respect to the Issuer, any officer within the Corporate Trust Office of the Owner Trustee, including any vice president, assistant vice president, secretary, assistant secretary, senior associate or any other officer of the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject, and for so long as the Administration Agreement is in effect, any Responsible Person of the Administrator, and | ||
(c) | with respect to the Indenture Trustee or the Owner Trustee, any officer within the Corporate Trust Office of the Indenture Trustee or the Owner Trustee, as the case may be, including any vice president, assistant vice president, secretary, assistant secretary or any other officer of the Indenture Trustee or the Owner Trustee, as the case may be, customarily performing functions similar to those performed by any of the above designated officers and also, with respect to a particular matter, any other officer to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject and also means, with respect to the Owner Trustee, for so long as the Administration Agreement is in effect, any Responsible Person of the Administrator. |
“Rule 144A” means Rule 144A under the Securities Act.
“Rule 144A Information” has the meaning specified in Section 2.4 of the Indenture.
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“Sale and Servicing Agreement” means the Sale and Servicing Agreement, dated as of the
Cutoff Date, among the Issuer, the Depositor and the Servicer.
“Schedule of Receivables” means the schedule or file identifying the Receivables
attached as Exhibit A to the Purchase Agreement and Schedule A to the Sale and Servicing Agreement
and the Indenture.
“Second Priority Principal Payment” means, for a Payment Date, the greater of:
(a) | an amount (not less than zero) equal to: |
(i) | the aggregate Note Balances of the Class A Notes and the Class B Notes as of the preceding Payment Date (or, in the case of the initial Payment Date, as of the Closing Date), minus | ||
(ii) | the Adjusted Pool Balance, minus | ||
(iii) | the First Priority Principal Payment, and |
(b) | on and after the Final Scheduled Payment Date of the Class B Notes, the Note Balance of the Class B Notes. |
“Secured Parties” means the Noteholders.
“Securities Account” means each account established and maintained pursuant to Section
2.1 of the Control Agreement.
“Securities Act” means the Securities Act of 1933.
“Security Documents” has the meaning specified in Section 2.5(h) of the Sale and
Servicing Agreement.
“Servicer” means Ford Credit or the Successor Servicer.
“Servicer Termination Event” has the meaning specified in Section 7.1 of the Sale and
Servicing Agreement.
“Servicing Fee” means, for a Collection Period, the fee payable to the Servicer for
services rendered during such Collection Period in an amount equal to the product of:
(a) | one-twelfth of 1.0%, times | ||
(b) | the Pool Balance as of the last day of the preceding Collection Period (or the Cutoff Date for the first month). |
“Similar Law” means any federal, state, local or non-U.S. law or regulation that is
substantially similar to Title I of ERISA or Section 4975 of the Code.
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“Specified Reserve Balance” means $12,190,722.41, or 1.00% of the Initial Pool
Balance.
“Sponsor” means Ford Credit.
“Standard & Poor’s” means Standard & Poor’s Ratings Services, a Standard & Poor’s
Financial Services LLC business.
“State” means any state or commonwealth of the United States, or the District of
Columbia.
“Successor Servicer” means a successor Servicer appointed pursuant to Section 7.2 of
the Sale and Servicing Agreement.
“Supplemental Servicing Fee” means, for a Collection Period, all late fees, prepayment
charges, extension fees and other administrative fees or similar charges on the Receivables.
“Targeted Credit Enhancement Amount” means, for a Payment Date, the greater of:
(a) | the Specified Reserve Balance, and | ||
(b) | 1.50% of the Pool Balance as of the last day of the preceding Collection Period. |
“Targeted Overcollateralization Amount” means, for a Payment Date, an amount equal to:
(a) | the Yield Supplement Overcollateralization Amount, plus | ||
(b) | the Targeted Credit Enhancement Amount, minus | ||
(c) | the Specified Reserve Balance. |
“Third Priority Principal Payment” means, for a Payment Date, the greater of
(a) | an amount (not less than zero) equal to: |
(i) | the aggregate Note Balances of the Class A Notes, the Class B Notes and the Class C Notes as of the preceding Payment Date (or, in the case of the initial Payment Date, as of the Closing Date), minus | ||
(ii) | the Adjusted Pool Balance, minus | ||
(iii) | the sum of the First Priority Principal Payment and the Second Priority Principal Payment, and |
(b) on and after the Final Scheduled Payment Date of the Class C Notes, the Note Balance of
the Class C Notes.
“Total Required Payment” means, for a Payment Date, the sum of
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(a) | the amount, up to a maximum of $150,000 per annum, payable to the Indenture Trustee under Section 6.7 of the Indenture and to the Owner Trustee under Sections 7.1 and 7.2 of the Trust Agreement, and for any expenses of the Issuer incurred in accordance with the Transaction Documents, plus | ||
(b) | the Servicing Fee and all unpaid Servicing Fees from preceding Collection Periods, plus | ||
(c) | the Accrued Note Interest for all Classes of Notes, plus | ||
(d) | the First Priority Principal Payment, plus | ||
(e) | the Second Priority Principal Payment, plus | ||
(f) | the Third Priority Principal Payment, plus | ||
(g) | on or after the Final Scheduled Payment Date of the Class D Notes, the Note Balance of the Class D Notes. |
Following an Event of Default and an acceleration of the Notes or an Insolvency Event or
dissolution of the Depositor, until the Note Balances of all Notes have been paid in full, the
Total Required Payment will also include the aggregate Note Balances of all Notes.
“Transaction Documents” means the Certificate of Formation and the Limited Liability
Company Agreement of the Depositor, the Certificate of Trust, the Trust Agreement, the Purchase
Agreement, the Sale and Servicing Agreement, the Indenture, the Administration Agreement, the DTC
Letter and the Control Agreement.
“Trust Accounts” means the Bank Accounts and the Trust Distribution Account (if
established).
“Trust Agreement” means the Amended and Restated Trust Agreement dated as of the
Cutoff Date, between the Depositor and the Owner Trustee.
“Trust Distribution Account” means the account that may be established and maintained
pursuant to Section 4.1(h) of the Sale and Servicing Agreement.
“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939.
“Trust Property” means (a) the Purchased Property, (b) the Depositor’s rights under
the Purchase Agreement, (c) the Depositor’s rights under the Sale and Servicing Agreement, (d) all
security entitlements relating to the Trust Accounts and the property deposited in or credited to
any of the Trust Accounts, (e) all present and future claims, demands, causes of action and choses
in action in respect of any of the foregoing, and (f) all payments on or under and all proceeds in
respect of any of the foregoing.
“Trust Register” and “Trust Registrar” have the meanings specified in Section
3.2 of the Trust Agreement.
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“UCC” means the Uniform Commercial Code as in effect in any relevant jurisdiction.
“Underwriting Agreement” means the Underwriting Agreement, dated January 25, 2011,
among the Depositor, Ford Credit and Barclays Capital Inc., Citigroup Global Markets Inc. and X.X.
Xxxxxx Securities LLC, as the representatives of the underwriters named in such agreement.
“U.S. Bank Trust” means U.S. Bank Trust National Association, a national banking
association.
“Void Class A-1 Note Transfer” has the meaning specified in Section 2.4(i) of the
Indenture.
“Yield Supplement Overcollateralization Amount” means, for the Closing Date and each
Payment Date, the amount specified on the Yield Supplement Overcollateralization Schedule for such
date. The Yield Supplement Overcollateralization Amount has been calculated for the Closing Date
and each Payment Date as the sum for each Receivable of the amount (not less than zero) equal to:
(a) | the future payments on the Receivable discounted to present value as of the last day of the preceding Collection Period (or the Cutoff Date, for the Closing Date) at the APR of the Receivable, minus | ||
(b) | the future payments on the Receivable discounted to present value as of the last day of the preceding Collection Period (or the Cutoff Date, for the Closing Date) at 8.50%. |
For purposes of this calculation, the future payments on each Receivable are the equal monthly
payments that would reduce the Receivable’s Principal Balance as of the Cutoff Date to zero on the
Receivable’s final scheduled payment date, at an interest rate equal to the APR of the Receivable
and without any delays, defaults or prepayments.
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“Yield Supplement Overcollateralization Schedule” means, for the Closing Date and each
Payment Date, the following schedule:
Closing Date |
$ | 104,264,562.34 | January 2014 | $ | 17,937,138.11 | |||||
February 2011 |
100,807,777.94 | February 2014 | 16,640,605.23 | |||||||
March 2011 |
97,411,098.97 | March 2014 | 15,394,901.83 | |||||||
April 2011 |
94,075,081.75 | April 2014 | 14,200,432.12 | |||||||
May 2011 |
90,800,050.26 | May 2014 | 13,057,595.52 | |||||||
June 2011 |
87,586,092.55 | June 2014 | 11,966,747.89 | |||||||
July 2011 |
84,432,976.42 | July 2014 | 10,928,175.67 | |||||||
August 2011 |
81,340,347.30 | August 2014 | 9,942,126.71 | |||||||
September 2011 |
78,307,291.09 | September 2014 | 9,008,788.52 | |||||||
October 2011 |
75,332,546.16 | October 2014 | 8,128,295.06 | |||||||
November 2011 |
72,416,503.99 | November 2014 | 7,300,583.42 | |||||||
December 2011 |
69,559,601.61 | December 2014 | 6,525,562.22 | |||||||
January 2012 |
66,762,212.67 | January 2015 | 5,802,822.20 | |||||||
February 2012 |
64,024,592.61 | February 2015 | 5,131,450.53 | |||||||
March 2012 |
61,347,053.44 | March 2015 | 4,509,897.71 | |||||||
April 2012 |
58,730,075.01 | April 2015 | 3,938,046.92 | |||||||
May 2012 |
56,174,164.89 | May 2015 | 3,415,807.44 | |||||||
June 2012 |
53,679,768.45 | June 2015 | 2,942,550.71 | |||||||
July 2012 |
51,247,149.15 | July 2015 | 2,517,166.89 | |||||||
August 2012 |
48,876,514.43 | August 2015 | 2,138,173.53 | |||||||
September 2012 |
46,567,820.40 | September 2015 | 1,804,325.98 | |||||||
October 2012 |
44,320,838.98 | October 2015 | 1,513,004.74 | |||||||
November 2012 |
42,135,776.93 | November 2015 | 1,260,340.41 | |||||||
December 2012 |
40,012,367.08 | December 2015 | 1,042,422.37 | |||||||
January 2013 |
37,950,778.62 | January 2016 | 854,410.13 | |||||||
February 2013 |
35,950,934.10 | February 2016 | 691,350.83 | |||||||
March 2013 |
34,012,377.99 | March 2016 | 547,034.10 | |||||||
April 2013 |
32,135,324.84 | April 2016 | 421,454.65 | |||||||
May 2013 |
30,319,792.63 | May 2016 | 314,427.82 | |||||||
June 2013 |
28,565,723.85 | June 2016 | 225,373.77 | |||||||
July 2013 |
26,872,791.54 | July 2016 | 153,351.11 | |||||||
August 2013 |
25,239,914.31 | August 2016 | 97,331.34 | |||||||
September 2013 |
23,665,974.65 | September 2016 | 56,388.25 | |||||||
October 2013 |
22,149,918.78 | October 2016 | 28,619.56 | |||||||
November 2013 |
20,690,476.37 | November 2016 | 11,604.97 | |||||||
December 2013 |
19,286,601.34 | December 2016 | 2,976.95 |
AA-21
Exhibit A
Form of Monthly Investor Report
Ford Credit Auto Owner Trust 2011-A
Monthly Investor Report
Monthly Investor Report
Collection Period
Payment Date
Transaction Month(s)
Payment Date
Transaction Month(s)
Additional information about the structure, cashflows, defined terms and parties for this
transaction can be found in the prospectus supplement, available on the SEC website
(xxxx://xxx.xxx.xxx) under the registration number 333-167489 and at
xxxx://xxx.xxxxxxxxxx.xxx/xxxxxxxxxxxxxxxxxxxxxxxx/xxxxx.xxxxx.
I. ORIGINAL DEAL PARAMETERS
Dollar Amount | # of Receivables | Weighted Avg Remaining | ||||||||||
Term at Cutoff | ||||||||||||
Initial Pool Balance | Note Interest | |||||||||||
Original Securities: | Dollar Amount | Rate | Legal Final Maturity | |||||||||
Class A-1 Notes |
% | |||||||||||
Class A-2 Notes |
% | |||||||||||
Class A-3 Notes |
% | |||||||||||
Class A-4 Notes |
% | |||||||||||
Class B Notes |
% | |||||||||||
Class C Notes |
% | |||||||||||
Class D Notes |
% | |||||||||||
Total |
II. AVAILABLE FUNDS
Interest:
Interest Collections
Principal:
Principal Collections
Prepayments in Full
Liquidation Proceeds
Recoveries
Liquidation Proceeds
Recoveries
Sub Total
Collections
EA-1
Purchase Amounts:
Purchase Amounts Related to Principal
Purchase Amounts Related to Interest
Purchase Amounts Related to Interest
Sub Total
Clean-up Call
Reserve Account Draw Amount
Available Funds — Total
III. DISTRIBUTIONS
Remaining | ||||||||||||||||||||
Calculated | Amount | Carryover | Available | |||||||||||||||||
Amount | Paid | Shortfall | Shortfall | Funds | ||||||||||||||||
Owner Trustee, Indenture
Trustee and Issuer Fees
and Expenses |
||||||||||||||||||||
Servicing Fee |
||||||||||||||||||||
Interest — Class A-1 Notes |
||||||||||||||||||||
Interest — Class A-2 Notes |
||||||||||||||||||||
Interest — Class A-3 Notes |
||||||||||||||||||||
Interest — Class A-4 Notes |
||||||||||||||||||||
First Priority Principal Payment |
||||||||||||||||||||
Interest — Class B Notes |
||||||||||||||||||||
Second Priority Principal Payment |
||||||||||||||||||||
Interest — Class C Notes |
||||||||||||||||||||
Third Priority Principal Payment |
||||||||||||||||||||
Interest — Class D Notes |
||||||||||||||||||||
Reserve Account Deposit |
||||||||||||||||||||
Regular Principal Payment |
||||||||||||||||||||
Additional Owner Trustee, Indenture
Trustee and Issuer Fees and Expenses |
||||||||||||||||||||
Collections Released to Depositor |
||||||||||||||||||||
Total |
||||||||||||||||||||
Principal Payment: |
||||||||||||||||||||
First Priority Principal Payment |
||||||||||||||||||||
Second Priority Principal Payment |
||||||||||||||||||||
Third Priority Principal Payment |
||||||||||||||||||||
Regular Principal Payment |
||||||||||||||||||||
Total |
EA-2
IV. NOTEHOLDER PAYMENTS
Noteholder Principal | Noteholder Interest | Total Payment | ||||||||||
Payments | Payments | |||||||||||
Actual Per $1,000 of | Actual Per $1,000 of | Actual Per $1,000 of | ||||||||||
Original Balance | Original Balance | Original Balance | ||||||||||
Class A-1 Notes |
||||||||||||
Class A-2 Notes |
||||||||||||
Class A-3 Notes |
||||||||||||
Class A-4 Notes |
||||||||||||
Class B Notes |
||||||||||||
Class C Notes |
||||||||||||
Class D Notes |
V. NOTE BALANCE AND POOL INFORMATION
Beginning of Period | End of Period | |||||||||||||||
Balance | Note Factor | Balance | Note Factor | |||||||||||||
Class A-1 Notes |
||||||||||||||||
Class A-2 Notes |
||||||||||||||||
Class A-3 Notes |
||||||||||||||||
Class A-4 Notes |
||||||||||||||||
Class B Notes |
||||||||||||||||
Class C Notes |
||||||||||||||||
Class D Notes |
||||||||||||||||
Total |
Pool Information
Weighted Average APR
Weighted Average Remaining Term
Number of Receivables Outstanding
Pool Balance
Adjusted Pool Balance (Pool Balance — YSOC Amount)
Pool Factor
Weighted Average Remaining Term
Number of Receivables Outstanding
Pool Balance
Adjusted Pool Balance (Pool Balance — YSOC Amount)
Pool Factor
VI. OVERCOLLATERALIZATION INFORMATION
Specified Reserve Balance
Targeted Credit Enhancement Amount
Yield Supplement Overcollateralization Amount
Targeted Overcollateralization Amount
Actual Overcollateralization Amount (EOP Pool Balance — EOP Note Balance)
Targeted Credit Enhancement Amount
Yield Supplement Overcollateralization Amount
Targeted Overcollateralization Amount
Actual Overcollateralization Amount (EOP Pool Balance — EOP Note Balance)
EA-3
VII. RECONCILIATION OF RESERVE ACCOUNT
Beginning Reserve Account Balance
Reserve Account Deposits Made
Reserve Account Draw Amount
Ending Reserve Account Balance
Change in Reserve Account Balance
Specified Reserve Balance
Reserve Account Deposits Made
Reserve Account Draw Amount
Ending Reserve Account Balance
Change in Reserve Account Balance
Specified Reserve Balance
VIII. NET LOSSES AND DELINQUENT ACCOUNTS
# of Receivables | Amount | |||||||
Realized Loss (Recoveries) |
||||||||
Net Losses for Current Collection Period |
||||||||
Cumulative Net Losses Last Collection |
||||||||
Cumulative Net Losses for all Collection Periods |
||||||||
Ratio of Net Losses for Current Collection Period to
Beginning of Period Pool Balance (annualized) |
Delinquent Receivables:
% of EOP Pool | # of Receivables | Amount | ||||||||||
31-60 Days Delinquent |
||||||||||||
61-90 Days Delinquent |
||||||||||||
Over 120 Days Delinquent |
||||||||||||
Total Delinquent Receivables |
Repossession Inventory:
Repossessed in Current Collection Period
Total Repossessed Inventory
Total Repossessed Inventory
Ratio of Net Losses to the Average Pool Balance for the Collection Period:
Second Preceding Collection Period
Preceding Collection Period
Current Collection Period
Three Month Average
Second Preceding Collection Period
Preceding Collection Period
Current Collection Period
Three Month Average
Number of 61+ Delinquent Receivables to EOP Number of Outstanding Receivables:
Second Preceding Collection Period
Preceding Collection Period
Current Collection Period
Three Month Average
Second Preceding Collection Period
Preceding Collection Period
Current Collection Period
Three Month Average
EA-4